My Size, Inc. Annual Report 2022

Plain-text annual report

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2022☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ________ to _________Commission file number 00137370MY SIZE, INC.(Exact name of registrant as specified in charter)Delaware510394637(State or jurisdiction ofIncorporation or organization)I.R.S EmployerIdentification No.4 Hayarden, POB 1026, Airport City, Israel7010000(Address of principal executive offices)(Zip code)+9723 6009030(Registrant’s telephone number, including area code)Securities registered pursuant to Section 12(b) of the Act:Title of each classTrading Symbol(s)Name of Each Exchange on Which RegisteredCommon Stock, par value $0.001 per shareMYSZThe Nasdaq Capital MarketSecurities registered pursuant to Section 12(g) of the Act: None.Indicate by check mark whether the registrant is a wellknown seasoned issuer as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes☒ No ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer, a smaller reporting company, or an emerginggrowth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 of theExchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☒Smaller Reporting Company☒Emerging Growth Company☐If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revisedfinancial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b2 of the Exchange Act) Yes ☐No☒Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control overfinancial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflectthe correction of an error to previously issued financial statements. ☐Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by anyof the registrant’s executive officers during the relevant recovery period pursuant to §240.10D1(b). ☐The aggregate market value of voting and nonvoting common equity held by nonaffiliates of the registrant as of June 30, 2022, the last business day of theregistrant’s most recently completed second fiscal quarter, was approximately $25,551,906.Number of shares of common stock outstanding as of March 31, 2023 was 2,446,780.Documents Incorporated by Reference: None.Table of ContentsPart IItem 1.Business2Item 1A.Risk Factors18Item 1B.Unresolved Staff Comments41Item 2.Properties41Item 3.Legal Proceedings41Item 4.Mine Safety Disclosures42Part IIItem 5.Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities43Item 6.Selected Financial Data43Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations43Item 7A.Quantitative and Qualitative Disclosures about Market Risk50Item 8.Financial Statements and Supplementary DataF1Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure51Item 9A.Controls and Procedures51Item 9B.Other Information51Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.51Part IIIItem 10.Directors, Executive Officers and Corporate Governance52Item 11.Executive Compensation57Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters60Item 13.Certain Relationships and Related Transactions, and Director Independence62Item 14.Principal Accounting Fees and Services65Part IVItem 15.Exhibits, Financial Statement Schedules66Signatures69iPART IIn this Annual Report on Form 10K, unless the context requires otherwise, the terms “we,” “our,” “us,” or “the Company” refer to MySize, Inc., a Delawarecorporation, and its subsidiaries, including MySize Israel 2014 Ltd. My Size LLC, Orgad International Marketing Ltd., or Orgad, and Naiz Bespoke Technologies, S.L,or Naiz, taken as a whole.References to “U.S. dollars” and “$” are to currency of the United States of America, and references to “NIS” are to New Israeli Shekels. Unless otherwiseindicated, U.S. dollar translations of NIS amounts presented in this Annual Report on Form 10K for the year ended on December 31, 2022 are translated using therate of NIS 3.358 to $1.00.All information in this Annual Report on Form 10K relating to shares or price per share reflects the 1for25 reverse stock split effected by us on December8, 2022.CAUTIONARY NOTE ON FORWARDLOOKING STATEMENTSThis Annual Report on Form 10K contains certain forwardlooking statements within the meaning of Section 27A of the Securities Act and Section 21E ofthe Exchange Act. Any statements in Annual Report on Form 10K about our expectations, beliefs, plans, objectives, assumptions or future events or performanceare not historical facts and are forwardlooking statements. These statements are often, but not always, made through the use of words or phrases such as“believe,” “will,” “expect,” “anticipate,” “estimate,” “intend,” “plan” and “would.” For example, statements concerning financial condition, possible or assumedfuture results of operations, growth opportunities, industry ranking, plans and objectives of management, markets for our common stock and future managementand organizational structure are all forwardlooking statements. Forwardlooking statements are not guarantees of performance. They involve known and unknownrisks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to differ materially from any results, levels ofactivity, performance or achievements expressed or implied by any forwardlooking statement.Any forwardlooking statements are qualified in their entirety by reference to the risk factors discussed throughout this Annual Report on Form 10K. Someof the risks, uncertainties and assumptions that could cause actual results to differ materially from estimates or projections contained in the forwardlookingstatements include but are not limited to:●our history of losses and needs for additional capital to fund our operations and our inability to obtain additional capital on acceptable terms, or at all;●risks related to our ability to continue as a going concern;●the new and unproven nature of the measurement technology markets;●our ability to achieve customer adoption of our products;●our ability to realize the benefits of our acquisitions of Orgad and Naiz;●our dependence on assets we purchased from a related party;●our ability to enhance our brand and increase market awareness;●our ability to introduce new products and continually enhance our product offerings;●the success of our strategic relationships with third parties;●information technology system failures or breaches of our network security;●competition from competitors;●our reliance on key members of our management team;●current or future litigation;●current or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated liquidityrisk; and●the impact of the political and security situation in Israel on our business.1The foregoing list sets forth some, but not all, of the factors that could affect our ability to achieve results described in any forwardlooking statements.You should read this Annual Report on Form 10K and the documents that we reference herein and have filed as exhibits to the Annual Report on Form 10K,completely and with the understanding that our actual future results may be materially different from what we expect. You should assume that the informationappearing in this Annual Report on Form 10K is accurate as of the date hereof. Because the risk factors referred to in this Annual Report on Form 10K, could causeactual results or outcomes to differ materially from those expressed in any forwardlooking statements made by us or on our behalf, you should not place unduereliance on any forwardlooking statements.Further, any forwardlooking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forwardlookingstatement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. New factors emergefrom time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extentto which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements. We qualify all ofthe information presented in this Annual Report on Form 10K, and particularly our forwardlooking statements, by these cautionary statements.ITEM 1. BUSINESSOverviewWe are an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile phone or through MySizeID Widget: a simple questionnaire which uses a database collected over the years.MySizeID syncs the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and only presents itemsfor purchase that match their measurements to ensure a correct fit.We are positioning ourselves as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empower brand design teams, which are designed to increase endconsumer satisfaction, contributing to a sustainable world and reduce operation costs.Recent DevelopmentsOrgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,602 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.2The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz, a limitedliability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.3The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Warehouse FireOn January 2, 2023, Orgad experienced a fire at its warehouse in Israel. we are not aware of any casualties or injuries associated with the fire. We shiftedOrgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incident did not affectthe future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of this incident on the otherparties that were involved in the incident (lessor and others that leased properties near the warehouse).January 2023 FinancingOn January 10, 2023, we entered into a securities purchase agreement, or the RD Purchase Agreement, pursuant to which we agreed to sell and issue in theRD Offering an aggregate of 162,000 of our shares of common stock, or the RD Shares, and prefunded warrants, or the Prefunded Warrants, to purchase up to279,899 shares of common stock and, in a concurrent private placement, unregistered warrants to purchase up to 883,798 shares of common stock, or the RDWarrants, consisting of Series A warrants, or Series A Warrants, to purchase up to 441,899 shares of common stock and Series B warrants, or Series B Warrants, topurchase up to 441,899 shares of common stock, at an offering price of $3.055 per RD Share and associated Series A and Series B Warrants and an offering price of$3.054 per Prefunded Warrant and associated Series A and Series B Warrants.4In addition, we entered into a securities purchase agreement, or the PIPE Purchase Agreement, and together with the RD Purchase Agreement, thePurchase Agreements, pursuant to which we agreed to sell and issue in the PIPE Offering an aggregate of up to 540,098 unregistered Prefunded Warrants andunregistered warrants to purchase up to an aggregate of 1,080,196 shares of common stock, or the PIPE Warrants and together with the RD Warrants, the Warrants,consisting of Series A Warrants to purchase up to 540,098 shares of common stock and Series B Warrants to purchase up to 540,098 shares of common stock at anoffering price of $3.054 per Prefunded Warrant and associated Series A and Series B Warrants.The Prefunded Warrants are immediately exercisable at an exercise price of $0.001 per share and will not expire until exercised in full. The Warrants areimmediately exercisable upon issuance at an exercise price of $2.805 per share, subject to adjustment as set forth therein. The Series A Warrants have a term of fiveand onehalf years from the date of issuance and the Series B Warrants have a term of 28 months from the date of issuance. The Warrants may be exercised on acashless basis if there is no effective registration statement registering the shares underlying the warrants.In connection with the PIPE Purchase Agreement, we entered into a registration rights agreement, or the Registration Rights Agreement. Pursuant to theRegistration Rights Agreement, we are required to file a resale registration statement, or the Registration Statement, with the Securities and Exchange Commission, orthe SEC, to register for resale the shares issuable upon exercise of the unregistered Prefunded Warrants and the Series A and Series B Warrants, within 20 days ofthe signing date of the PIPE Purchase Agreement, or the Signing Date, and to have such Registration Statement declared effective within 60 days after the SigningDate in the event the Registration Statement is not reviewed by the SEC, or 90 days of the Signing Date in the event the Registration Statement is reviewed by theSEC. we will be obligated to pay certain liquidated damages if we fail to maintain the effectiveness of the Registration Statement.The Purchase Agreements and the Registration Rights Agreements also contain representations, warranties, indemnification and other provisionscustomary for transactions of this nature. In addition, subject to limited exceptions, the Purchase Agreements provide that for a period of one year following theclosing of the Offerings, we will not effect or enter into an agreement to effect a “variable rate transaction” as defined in the Purchase Agreements.Aggregate gross proceeds to the Company in respect of the Offerings was approximately $3.0 million, before deducting fees payable to the placement agentand other offering expenses payable by the Company.We also entered into a letter agreement, or the Engagement Agreement, with H.C. Wainwright & Co., LLC, or Wainwright, pursuant to which Wainwrightagreed to serve as the exclusive placement agent for the Company in connection with the Offerings. We paid Wainwright a cash placement fee equal to 7% of theaggregate gross proceeds raised in the Offerings, a management fee of 1% of the aggregate gross proceeds raised in the Offerings, a nonaccountable expenseallowance of $85,000 and clearing fees of $15,950. Wainwright also received placement agent warrants, or the Placement Agent Warrants, with substantially the sameterms as the Series A Warrants issued in the Offering in an amount equal to 7% of the aggregate number of Shares and Prefunded Warrants sold in the Offerings, or68,740 shares, at an exercise price of $3.8188 per share and a term expiring on January 10, 2028.Our SolutionOur cloudbased software platform provides highly accurate sizing and measurement with broad applications including the online fashion/apparel industry,logistics and courier services and home DIY. Currently, we are mainly focusing on the ecommerce fashion/apparel industry. This proprietary technology is driven byseveral patented algorithms which are able to calculate and record measurements in a variety of novel ways. Although specific functionality varies by product, webelieve that our core solutions address the need for highly accurate measurements in a variety of consumer friendly, every day uses.5We have developed three products, MySizeID for the fashion/apparel industry, BoxSize for the logistics and courier services market and SizeUp for thehome DIY market.●MySizeID enables shoppers to generate highly accurate measurements of their body to find proper fitting clothes and accessories, through the use ofour application on their mobile phone or through a simple questionnaire if the user decides not to download the application. MySizeID syncs the user’smeasurement data to a sizing chart and presents items for purchase that match their measurements to ensure a correct fit. MySizeID is available forlicense by retailers and accessable by consumers through a web page.●BoxSize enables customers to quickly and easily measure the size and volume of a parcel to accurately calculate shipping fees. It also offers shippingcompanies a variety of precise logistical data for more efficiently managing their supply chain, providing them with an accurate way to compare thephysical package with what is in the shipping manifest. BoxSize solution is available for license on both iOS and Android operating systems. BoxSizeis available on the Honeywell Marketplace and in August 2019 was approved for Honeywell’s Independent Software Vendor Program, and MySize wasgranted an independent software vendor (ISV) status on the Zebra Technologies and on DataLogic platforms.●SizeUp is a digital tape measure that allows users to measure length, width and height of a surface by moving their smartphone from point to point ofan object or space. SizeUp is a valueadd for DIY and home improvement retailers whose customers struggle to find the appropriately sized items (likeblinds or curtains) for their homes or projects due to inaccurate measurements. SizeUp also is designed to replace rulers, tape measures and othermeasuring tools used for DIY projects. SizeUp is available for consumer download on both iOS and Android operating systems.The following are some select key features of our solutions:●Integration Capability. We design our solutions to be flexible and configurable, allowing our clients to match their use of our algorithms and softwarewith their specific business processes and workflows. Our platform has been organically developed from a common code base, data structure and userinterface, providing a consistent user experience with powerful features that are easily adaptable to our clients’ needs. The MySizeID widget can beintegrated via oneline JavaScript code, or through RESTful API;●Intuitive user experience. Our intuitive, easytouse interface is based on current technology, multiple focus groups and automatically adapts to users’devices, including mobile platforms, thereby significantly increasing accessibility of our solutions;●Big Data Generation. While we supply to the user the information he/she requires, we gather certain vital information such as body measurement andpackage volume which can be used anonymously to help the retailer acquire predictive size information on stocking, operations and consumers thatmay be in between sizes. All the information is being gathered and stored on our servers where it can be used by retailers;●NonInvasive. In taking measurements using our solution, the smartphone camera is not utilized; instead, the measurements are captured by scanningthe smartphone over the consumer’s body or package, thus ensuring greater privacy.Our Growth StrategyWe aim to drive revenue primarily through penetration of the U.S. and Europe markets through a business to business to consumer (B2B2C) model in theverticals we are targeting. We are pursuing the following growth strategies:●Sign Additional Commercial Agreements with U.S. Retailers. During 2022, we expanded our commercial agreements with Levi’s, introducing NorthAmerica (U.S. and Canada) and Latin America regions, and by extension Levis’ native apps in EU and U.S. regions. We also entered into commercialagreements with Baby Fresh, Galax, Punto Blanco, GEF France, Diesel, Gaala, Superdry, Uniontex Industries, and Temperlay London among others. Weare in various stages of discussions with U.S. and foreign retailers for the deployment of our size recommendation and measurement technology with aview to entering into additional commercial agreements.6●Pursue a TwoPronged Commercialization Strategy. We are seeking to accelerate adoption of our solutions both through direct partnerships with ecommerce websites as well as through thirdparty platform websites. While we seek to directly enter into partnerships with companies maintaining ecommerce websites in the apparel, courier and DIY markets, we are also seeking to deploy our solutions on thirdparty platforms. Furthermore, with theexpansion of MySizeID through the release of our FirstLook Smart Mirror, which we are offering to brick and mortar stores to digitize the physicalstores, MySizeID is now available for online retailers utilizing the WooCoomerce, Shopify, Lightspeed, PrestaShop, Bitrix and Wix platforms and tobrick and mortar stores through GK Software POS solution while BoxSize is available on the Honeywell, Zebra Technologies and Datalogic.●Ongoing Investment in our Technology Platform. We continue to invest in building new software capabilities and extending our platform to bring thepower of accurate measurement to a broader range of applications. In particular, we seek not only to deliver size recommendations but to provide arobust, endtoend,artificial intelligence, or AIdriven platform that inspires consumer confidence and drives revenue growth by providing a superiorconsumer journey to both online and the brick and mortar stores.●Grow our database. As the usage of our measurement apps increases, our database of information including user behaviour and body measurementsgenerates valuable statistics. Such data can be used in the big data market for targeted advertising and for blind consumer data mining.●Identify and acquire synergistic businesses. In order to reduce our time to market and obtain complementary technologies, we are seeking to acquiretechnologies and businesses that are synergistic to our product offering. We recently completed an acquisition of Orgad which operates anomnichannel ecommerce platform and Naiz which provides SaaS technology solutions that solve size and fit issues for fashion ecommerce companies.●Partnerships and cooperation. In order to bring a wider solution for the retail market we are working to partner and integrate our technology withpartners that can increase our penetration and offering to the market.Market OpportunityThe global ecommerce market was $5.7 trillion in 2022, and the industry is expected to grow significantly in the coming years with no signs of slowingdown. Market specialists expect a compound annual growth rate of 27.43% from 2023 to 2028: according to data from Statista, the market is expected to reach $6.5trillion in 2023. While many sectors have found ways to increase revenue through ecommerce, ecommerce is still plagued by issues that cut into profits andnegatively impact the bottom line, such as customer returns, low consumer conversion, and associated restocking and shipping costs.Fashion/ApparelSince the onset of the COVID19 pandemic, an immense shift to digital was recorded, with 85.9% growth vs. prepandemic, according to Mastercard, andover 2 billion people worldwide who shop online, according to data from Oberlo. In November 2022, online shoppers broke records with $11.3 billion in spending onCyber Monday, driving 5.8% yearoveryear growth and making the day the biggest online shopping day of all time, according to Adobe Analytics.In 2021, fashion companies invested between 1.6% and 1.8% of their revenues in technology, according to Mckinsey, and are expected to double theinvestment by 2030 in order to keep up with digital natives and keep a competitive edge. Personalization in ecommerce and hybrid connectivity in brickandmortarretail are two key themes in the future of fashtech, according to Mckinsey’s 2022 State of Fashion Technology.7In the upcoming years, inflation is expected to impact the fashion world. As prices for goods increase, the challenge will be to inspire confidence inconsumers, via different smart digital tools. Brands will need to embrace creative digital tools and new channels to deepen customer relationships, and as Mckinseyforecasts in their State of Fashion report for 2023, they will need to execute on priorities such as sustainability and digital acceleration.The global fashion ecommerce market size is expected to grow from $744.4 billion in 2022 to $821.19 billion in 2023 at a compound annual growth rate of10.3%. In 2027, the market size is expected to grow to $1,222.32 billion, at a compound annual growth rate of 10.5%, according to BRC.Based on the importance which shoppers attribute to free shipping 50% of cart abandonment rate is due to extra shipping costs (Baymard Institute) theneed for fashion retailers to substantiate the optimal size for a customer, thus minimizing returns, has never been more crucial.As brands move online or significantly expand their online presence, we believe that developing innovative ways to connect with shoppers, both onlineand offline, has become a top priority.Shipping/ParcelAccording to Pitney Bowes, parcel revenue in 13 major countries around the world increased by 17% year over year from $420 billion in 2020 (reflecting 131billion parcels) to $491 billion in 2021 (reflecting 159 billion parcels). In the shipping/parcel industry, the dimensions of a package are critical. It is not merely themeasurement of a package or box – but rather the amount of space that the package or box will take up on a truck, airplane, or ship that will be transporting thepackage or box. Far too often, retailers use unfit packaging for their items, adding additional costs in materials and shipping fees.DIYSimilar to issues in the apparel and fashion market, big box, hardware, furniture, and DIY stores are plagued by returns due to incorrect fit andmeasurements. In an industry where precise measurement for projects is an absolute necessity, ecommerce has not grown as quickly as in other industries which webelieve is due to lack of consumer confidence in measurements at home and buying the correct item online.MySizeIDWe have released the MySizeID app for both iOS and Android which assists consumers to take highly accurate measurement of their own body in order tosize clothing in the best way possible without the need to try the clothes on before purchasing. MySizeID is designed to simplify the process of purchasing clothesonline and significantly reduce the rate of returns of poorfitting clothing. During 2022, MySizeID delivered over 23.5 million size recommendations.The application is the result of a research and development effort that combines:●anthropometric research – analyses of information pertaining to body measurements derived from a survey and the subsequent determination ofcorrelations between body parts;●body measurement algorithm research – an algorithm created by us to measure body parts; and●retailers size chart analyses – adopting a deep understanding of the size charts of retailers and the corresponding “body to garment size.”MySizeID allows consumers to create a secure, online profile of their personal measurements, which can then be utilized, with partnered online retailers, toensure that no matter the manufacturer or size chart, they will get the right fit. MySizeID operates based on the use of existing sensors in smart phones which enable,through a specific purpose application, the measurement of the body of any consumer by moving the smartphone along his or her body. The MySizeID applicationdoes not rely on user photographs or any additional hardware; all a user needs to do is scan their body with their smartphone and the application records theirmeasurements. The measurements can then be saved in our database in the cloud, enabling the user to search for clothes in various retailer websites withoutworrying about size. When a search is made, the retailer will connect to our cloud database, and then provide results based on the user’s measurements and otherparameters as he or she may have defined. This data is also saved for use when a customer enters a brickandmortar store to help serve the customer moreefficiently and to provide a better shopping experience.8Figure 1: Screenshot of MySizeID on smartphone and ecommerce websiteAs part of the integration process, we offer to the retailer five main components:●Mobile App. MySizeID comes in the form of a native app or website. Our native app can be used “as is” integrated into the retailer’s ecommercewebsite. The website users can build a body profile on the app and receive size recommendations for their profile both in the app and on a widgetintegrated with their website.9●Widget. When a consumer enters into the retailer’s website and looks for a specific item, he or she can click on the MySizeID widget which will informthe consumer of his or her recommended size, based on his or her actual measurements, as measured using the app and the item he or she is looking at.The widget has two features:AI Wizard mode allows the user to obtain size from the following parameters: gender, height, weight, belly shape, hip shape and bra size only. Thegender, height and weight questions are mandatory, while the body shape questions are optional and can be added to increase accuracy for specificapparel categories.Guest mode allows a user that does not wish to sign up to MySizeID as a user to obtain size recommendations as well.●Analytic Pixel. MySizeID analytic pixel allows retailer to track and analyze the widget usage. By adding the pixel to the retailer’s website, MySizeID BIteam can track engagement, order, and return data and provide retailers with tools to understand the advantages and benefits of MySizeID.Use your own device using MySizeID instore solution, shoppers can receive size recommendations for all store items, when shopping in the offlinestores. The shoppers can build their body profile using an easy to use 3 to 6 questions form, scan an item barcode and receive a size recommendationfor the scanned item based on their body profile and the item’s size chart.Another feature we added is the “inbetween sizing” feature. Our system can detect a user that has body dimensions that place the user inbetweenthe clothes sizes being offered and lets the user know that. A user can then choose between the two sizes according to the user’s fit preference(tight/loose/average).In addition, we have recently released our InstantApp feature which allows shoppers to generate their body measurements directly from our widget,without the need to download our mobile app. Using this technology, the shoppers can create their online profile of their personal measurements andcomplete a purchase faster and easier with minimum distractions.The body profile can be created while shoppers are viewing the page from their mobile phone, or by scanning a QR code on desktop that will open thesame page on the mobile phone.Screenshot of InstantApp widget on desktop on yumyumfashion website10●MyDash Platform. The MyDash platform is a smart backoffice system where the retailer enters all the information regarding its size charts thatcorrelates to every product in its ecommerce site, and where the retailer can access the information on its users. This system is customizable based onthe retailer’s needs. In 2021, we changed the MyDash system to increase the system’s accessibility, added walkthroughs, user guides and changed theuser interface and much more for the ease of use. We added the option to use our generic size charts, added the option upload size chart files insteadof typing the size charts values manually, added more widget styling options and changed the pairing mechanism between the size chart and theproducts to be more userfriendly.Figure 3: Screenshot of BackOffice System●FirstLook Smart Mirror. The Smart Mirror provides an interactive, mirrorlike touch display that allows brands to provide instore customers with anenhanced, online shopping experience, contactless checkout and obtains the recommended size. The MySizeIDFirstLook Smart Mirror can be placedin numerous locations throughout a retail store, including the fitting rooms (without cameras) or other hightraffic locations of the store. Highlightcapabilities of the FirstLook Smart Mirror include a 3D “Tryiton” interactive avatar experience, personalized and highly accurate sizerecommendations by MySizeID, thirdparty point of sale systems integration, styling recommendations and contactless “select and collect” at theregister feature.Illustration of MySizeID “first look” smart mirror in a fashion store11We are currently offering MySizeID technology to retailers through either a payperuse model or a monthly subscription model. In our payperusebusiness model, every time the consumer obtains a recommended size, the retailer is charged for the usage.BoxSizeBoxSize is a parcel measurement application that can provide realtime logistic data on package volumes and transportation, resulting in improvedoperational efficiency and reduced operating expenses. In addition, BoxSize allows customers to easily measure the size of their parcel with their smartphone,calculate shipping costs and arrange for a convenient pickup time for the package. BoxSize is available both on iOS and Android.In 2020 we released the “One Click” feature on BoxSize that enables the user to measure a package with just one swipe of the handheld device. Previously,measurements through BoxSize would require three separate swipes.Figure 4: Screenshot of BoxSizeOur BoxSize mobile measurement solution is available on the Honeywell Marketplace. In addition, BoxSize was approved for Honeywell’s Global VendorProgram, and is available to provide highly accurate mobile measurement solutions for thousands of Honeywell clients. We also developed a new dashboard for thecourier companies to have all the required data about each package in one place. It includes package dimensions, pictures, scan geo location and more. Thedashboard also let the courier use Webhooks, which allows him to get the information from his own system.12In 2020, we announced our partnership with Datalogic, a company focused on the automatic data capture and process automation markets. The partnershipmakes our BoxSize measurement solution available to thousands of Datalogic customers in the Transportation and Logistics vertical.Agreement with Delhivery Private Limited, IndiaWe entered into an agreement with Delhivery Private Limited, one of the largest courier pickup, delivery, and online shipping services in India. Delhivery’sreputation as a frontrunner in delivery and logistics tech makes its decision to select Boxsize a particularly strong testament to the value the solution provides.BoxSize provides Delhivery’s employees on the B2B side with critical information that will allow them to effortlessly optimize loading efficiency and add even morerealtime visibility to operations.SizeUpWe are working on additional consumer applications, including a DIY application. Our SizeUp application is a smart tape measure for the business toconsumer market which allows users to utilize their smartphone as a tape measure. The application provides measurements with an accuracy of within twocentimeters. Through the use of SizeUp, users will be able to visualize how an object or a piece of furniture will fit in an existing room in their home or office. It alsoadded Google Vision for image content analysis, object detection, and title suggestions.Currently the SizeUp app for Android and iOS is available for free for the first 30 days, after which a user will be required to register via email and pay aonetime fee of $1.99 to continue using the application. To date, revenues from downloads have been minimal.Research and DevelopmentOur research and development team are responsible for the research, algorithm, design, development, and testing of all aspects of our measurementplatform technology. We invest in these efforts to continuously improve, innovate, and add new features to our solutions.We incurred research and development expenses of approximately $1.7 million in 2022 and $4.25 million in 2021, relating to the development of itsapplications and technologies. The decrease from the corresponding period primarily resulted from share based payment in amount of $2,618,000 attributed to theshare issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021. We intend to continue to invest in our research anddevelopment capabilities to extend our platform and bring our measurement technology to a broader range of applications.13In 2022, the R&D department experienced significant success in their efforts to improve the performance of their size recommendation system. Through acombination of optimized algorithms and the incorporation of cuttingedge technologies, the team was able to achieve a threefold increase in the system’s speed.This breakthrough not only makes the system one of the fastest and most accurate on the market, but also reduced the operation costs, making it more costeffective for businesses to use. Additionally, the solution is now highly scalable, allowing it to easily adapt to the needs of businesses of any size. The R&D team isnow focused on further improving the system and exploring new applications for the technology.Sales and MarketingIn 2019, we launched a commercialization strategy that directs our sales efforts toward both sales to ecommerce players in specific vertical markets such asfashion/apparel and shipping/delivery as well as to ecommerce thirdparty platform providers. As of March 15, 2023, our products are being sold in the followingcountries: US, UK, France, Netherlands, Spain, Portugal Turkey, Germany, Israel and Italy, generating customer leads, building out a sales pipeline, and developingcustomer relationships.We believe an effective method to market our suite of products is for users to actively use and explore its capabilities. We encourage free trials of one ormore of our products in order to successfully convert those accounts to paid subscriptions.Proprietary RightsWe rely on a combination of patent, copyright, trademark and trade secret laws in the United States and other jurisdictions, as well as contractualprotections, to protect our proprietary technology.As of December 31, 2022, we owned 18 issued patents: six in Europe, four in the U.S., three in each of Russia and Japan and one in each of Canada andIsrael which expire between January 20, 2033 and August 18, 2036, and we have two additional patent applications in process. As of such date, we do not have anyregistered trademarks.We cannot provide any assurance that our proprietary rights with respect to our products will be viable or have value in the future since the validity,enforceability and type of protection of proprietary rights in softwarerelated industries are uncertain and still evolving.Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products or to obtain and use informationthat we regard as proprietary. Policing unauthorized use of our products is difficult, and while we are unable to determine the extent to which piracy of our softwareproducts exists, software piracy can be expected to be a persistent problem. In addition, the laws of some foreign countries do not protect proprietary rights to asgreat an extent as do the laws of the United States, and effective copyright, trademark, trade secret and patent protection may not be available in those jurisdictions.Our means of protecting our proprietary rights may not be adequate to protect us from the infringement or misappropriation of such rights by others.Further, in recent years, there has been significant litigation in the United States involving patents and other intellectual property rights, particularly in thesoftware and Internetrelated industries. We can become subject to intellectual property infringement claims as the number of our competitors grows and ourproducts and services overlap with competitive offerings. These claims, even if not meritorious, could be expensive to defend and could divert management’sattention from operating our business. If we become liable to third parties for infringing their intellectual property rights, we could be required to pay a substantialaward of damages and to develop noninfringing technology, obtain a license or cease selling the products that contain the infringing intellectual property. We maybe unable to develop noninfringing technology or obtain a license on commercially reasonable terms, if at all.14Government RegulationWe are subject to a number foreign and domestic laws and regulations that involve matters central to our business. These laws and regulations mayinvolve privacy, data protection, intellectual property, or other subjects. Many of the laws and regulations to which we are subject are still evolving and being testedin courts and could be interpreted in ways that could harm our business. In addition, the application and interpretation of these laws and regulations often areuncertain, particularly in the new and rapidly evolving industry in which we operate. Because global laws and regulations have continued to develop and evolverapidly, it is possible that we, our products, or our platform may not be, or may not have been, compliant with each such applicable law or regulation.In particular, we are subject to a variety of federal, state and international laws and regulations governing the processing of personal data. Many U.S. stateshave passed laws requiring notification to data subjects when there is a security breach of personally identifiable data. There are also a number of legislativeproposals pending before the U.S. Congress, various state legislative bodies and foreign governments concerning data protection. In addition, data protection lawsin Europe and other jurisdictions outside the United States can be more restrictive than those within the United States, and the interpretation and application ofthese laws are still uncertain and in flux.For example, the General Data Protection Regulation, or GDPR, which took effect on May 25, 2018, enhances data protection obligations for entities thatprocess personal data about individuals, including obligations to cooperate with European data protection authorities, implement security measures and keeprecords of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to the greater of €20 million or 4% of global annual revenue. Inaddition, the California Consumer Privacy Act of 2018, or CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and requiredeletion of their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used.The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further,failure to comply with the Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may exposeus to administrative fines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the currentenforcement measures and sanctions. Given the breadth and depth of changes in data protection obligations, meeting the requirements of GDPR and otherapplicable laws and regulations has required significant time and resources, including a review of our technology and systems currently in use against therequirements of GDPR and other applicable laws and regulations. We have taken various steps to prepare for complying with GDPR and other applicable laws andregulations however there can be no assurance that these steps are sufficient to assure compliance. Further, additional EU laws and regulations (and member states’implementations thereof) further govern the protection of individuals and of electronic communications. If our efforts to comply with GDPR or other applicable lawsand regulations are not successful, we may be subject to penalties and fines that would adversely impact our business and results of operations, and our ability touse personal data of individuals could be significantly impaired.CompetitionWe operate in a highly competitive industry that is characterized by constant change and innovation. Changes in the applications and the programinglanguages used to develop applications, devices, operating systems, and technology landscape result in evolving customer requirements. Our competitors includeTrue Fit, Fit analytics and 3DLook.The principal competitive factors in our market include the following:●High Accuracy Size Recommendations: the highest accuracy and the lowest margin of error by combining patented technology including AI and ML,size chart or spec data, and MySizeID property body data measurement;●Integration○Fast 1 week integration including size chart size chart review and product mapping○Easy 1 line of “all included” script implementation●Technical Advantages○Very small library that weighs ±50kb (minimum widget loading time on product page)○UltraFast loading and size recommendation presenting○Restful API option (API integration with any website or app)15●Optimizations○Adjustments of size charts based on performance○Widget usage analysis by FashTech and BI teams○Automatic pairing of size charts with products/collections●User Experience○Easy to use interface (1015 seconds to receive size recommendations)○Option to add/deduct questions to/from widget wizards○Users automatically receive size recommendations on all products after initial sign up●Product and platform features, architecture, reliability, privacy and security, performance, effectiveness, and supported environments;●Product extensibility and ability to integrate with other technology infrastructures;●Digital operations expertise;●Ease of use of products and platform capabilities;●Total cost of ownership;●Adherence to industry standards and certifications;●Strength of sales and marketing efforts;●Brand awareness and reputation; and●Focus on customer successWe believe we generally compete favorably with our competitors on the basis of these factors. We expect competition to increase as other established andemerging companies enter our markets, as customer requirements evolve, and as new products and technologies are introduced. We expect this to be particularlytrue as we offer a smartphonebased offering that does not need to utilize the smartphone’s camera, and our competitors may also seek to repurpose their existingofferings to provide similar solutions. Many of our competitors have substantially greater financial, technical, and other resources, greater name recognition, largersales and marketing budgets, broader distribution, and larger and more mature intellectual property portfolios.Human Capital ManagementAs of March 31, 2023, we had a total of 35 employees, of which 30 were fulltime employees, including 9 in sales and marketing, 12 in technology anddevelopment and 9 in administration and finance.None of our employees are represented by a collective bargaining agreement, nor have we experienced any work stoppage. We consider our relationshipwith our employees to be good. Our future success depends on our continuing ability to attract and retain highly qualified engineers, sales and marketing, accountmanagement, and senior management personnel.We also believe we have built a strong sales team focused on expanding into new markets through the acquisition of Naiz and our current team.We believe that our future success will depend, in part, on our continued ability to attract, hire and retain qualified personnel. In particular, we depend onthe skills, experience and performance of our senior management and research personnel. We compete for qualified personnel with other hitech companies, as wellas universities and nonprofit research institutions.16We provide competitive compensation and benefits programs to help meet the needs of our employees. In addition to salaries, these programs (which varyby country/region and employment classification) include incentive compensation plan, pension, and insurance benefits, paid time off, , among others. We also usetargeted equitybased grants with vesting conditions to facilitate retention of personnel, particularly for our key employees.The success of our business is fundamentally connected to the wellbeing of our people. Accordingly, we implemented an hybrid work policy in which theemployees can work from home twice a week.We consider our employees to be a key factor to our success and we are focused on attracting and retaining the best employees at all levels of ourbusiness. Inclusion and diversity is a strategic, business priority. We employ people based on relevant qualifications, demonstrated skills, performance and otherjobrelated factors. We do not tolerate unlawful discrimination related to employment, and strive to ensure that employment decisions related to recruitment,selection, evaluation, compensation, and development, among others, are not influenced by race, color, religion, gender, age, ethnic origin, nationality, sexualorientation, marital status, or disability. Continuous monitoring to ensure pay equity has been a focus in 2022. We have continued to improve gender balance in 2022with a focus on increasing the representation of women hired as new college graduates. We are committed to creating a trusting environment where all ideas arewelcomed and employees feel comfortable and empowered to draw on their unique experiences and backgrounds.We consider our relations with our employees to be good.Company InformationOur principal executive offices are located at HaYarden 4 St., POB 1026, Airport City, Israel 7010000, and our telephone number is +97236009030. Ourwebsite address is www.mysizeid.com. Any information contained on, or that can be accessed through, our website is not incorporated by reference into, nor is it inany way a part of, this Annual Report on Form 10K.We use our website (www.mysizeid.com) as a channel of distribution of Company information. The information we post through this channel may bedeemed material. Accordingly, investors should monitor our website, in addition to following our press releases, SEC filings and public conference calls andwebcasts. The contents of our website are not, however, a part of this Annual Report on Form 10K.Corporate HistoryWe were incorporated in the State of Delaware on September 20, 1999 under the name Topspin Medical, Inc. In December 2013, we changed our name toKnowledgetree Ventures Inc. Subsequently, in February 2014, we changed our name to MySize, Inc. In 2020, we created a subsidiary in the Russian Federation, MySize LLC.From inception through 2012, we were engaged in research and development of a medical magnetic resonance imaging, or MRI, technology forinterventional cardiology and in the development of MRI technology for use in the diagnosis and treatment of prostate cancer. In January 2012, we acquiredMetamorefix Ltd., or Metamorefix. Metamorefix was incorporated in 2007, and was engaged in the development of innovative solutions for the rehabilitation oftissues, particularly skin tissues. By the end of 2012, we ceased operations and in January 2013, we sold our entire ownership interest in Metamorefix.In September 2013, Ronen Luzon, our Chief Executive Officer, acquired control of the Company from Asher Shmuelevitch, according to which Mr. Luzonpurchased 70,238 shares of common stock from Mr. Shmuelevitch, which shares represented approximately 40% of the issued and outstanding capital stock of theCompany at such time, thus becoming a controlling shareholder of the Company. In connection with the acquisition, Mr. Luzon reached a settlement with our thencreditors pursuant to which the main creditor, Mr. Shmuelevitch, was paid a total sum of approximately $140,000 in consideration for a full and final waiver of any andall his claims that he may have relating to any monetary indebtedness of the Company to the creditors.17In February 2014, My Size Israel, our wholly owned subsidiary, entered into a Purchase Agreement, or the Purchase Agreement, with Shoshana Zigdon,who at the time was a beneficial owner of more than 20% of our outstanding shares, with respect to the acquisition by us of certain rights related to the collection ofdata for measurement purposes including rights in the venture, the method and a patent application that had been filed by the Seller (PCT/IL2013/050056), or theAssets. In consideration for the sale of the Assets, we agreed to pay to Ms. Zigdon, 18% of our operating profit, directly or indirectly connected with the Assetstogether with valueadded tax in accordance with the law for a period of seven years from the end of the development period of the aforementioned venture. Inaddition to the foregoing, the Purchase Agreement provided that all developments, improvements, knowledge and knowhow developed and/or accumulated by usafter the execution of the Purchase Agreement will be owned by us. Further, Ms. Zigdon agreed not to compete, directly or indirectly, with us in any matter relatingto the Assets for a period of seven years from the end of the development period of the venture.On May 26, 2021, we, My Size Israel, and Ms. Zigdon entered into an Amendment to Purchase Agreement, or the Amendment, which made certainamendments to the Purchase Agreement. Pursuant to the Amendment, Ms. Zigdon agreed to irrevocably waive (i) the right to repurchase certain assets related tothe collection of data for measurement purposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which our business issubstantially dependent, or the Assets, and (ii) all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My SizeIsrael under the Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation, reward orany rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights, or the Waiver. Inconsideration of the Waiver, we issued 100,000 shares of common stock to Ms. Zigdon.In September 2005, we commenced trading on the Tel Aviv Stock Exchange, or TASE. Between 2007 and 2012 we reported as a public company with theSEC. In August 2012, we suspended our reporting obligations. In mid2015 we resumed reporting as a public company. On July 25, 2016, our common stock beganpublicly trading on the Nasdaq Capital Market under the symbol “MYSZ”.ITEM 1A. RISK FACTORSAn investment in our common stock involves a high degree of risk. You should carefully consider the following risk factors and the other information inthis Annual Report on Form 10K before investing in our common stock. Our business and results of operations could be seriously harmed by any of the followingrisks. The risks set out below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterialalso may materially adversely affect our business, financial condition and/or operating results. If any of the following events occur, our business, financial conditionand results of operations could be materially adversely affected. In such case, the value and trading price of our common stock could decline, and you may lose allor part of your investment.Summary Risk FactorsThe principal factors and uncertainties that make investing in our ordinary shares risky, include, among others:Risks Related to Our Financial Position and Capital Requirements●We have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.●Our limited operating history makes it difficult to evaluate our business and prospects.●We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive and maycause the market price of our common stock to decline.●The report of our independent registered public accounting firm contains an explanatory paragraph regarding substantial doubt about our ability tocontinue as a going concern.Risks Related to Our Company and Our Business●The market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and online thirdparty resellers adopting our flagship product, MySizeID.18●Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broader marketacceptance of our products.●We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which may makeit difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.●We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increase ourcapital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.●If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations and financialcondition may be adversely affected.●If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operations andfinancial condition could be adversely affected.●The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile device applications andcustom development services.●Our growth depends, in part, on the success of our strategic relationships with third parties.●Changes in economic conditions could materially affect our business, financial condition and results of operations.●We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.●We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significant interruptionin our network or hosting and cloud services could adversely impact our operations and harm our business.●Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.●We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.●A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.●Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, data protectionand information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive and confidentialinformation. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm our business,results of operations and financial condition.●We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect our business.●We may face intense competition and expect competition to increase in the future, which could limit us in developing a customer base and generatingrevenue.●Our business operations and future development could be significantly disrupted if we lose key members of our management team.19●If we are able to expand our operations, we may be unable to successfully manage our future growth.Risks Related to Our Operations in Israel and Russia●Our headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.●Russia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.Risks Related to Our Common Stock●A more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.●Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions and adversedevelopments with respect to financial institutions and associated liquidity risk;●Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.●Our securities are traded on more than one market which may result in price variations.●We are a former “shell company” and as such are subject to certain limitations not generally applicable to other public companies.Risks Related to Our Financial Position and Capital RequirementsWe have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.We realized a net loss of approximately $8.3 million and $10.5 million for the years ended December 31, 2022 and 2021 and had an accumulated deficit of$53.5 million as at December 31, 2022. Because of the numerous risks and uncertainties associated with the development and commercialization of our products andbusiness, we are unable to predict the extent of any future losses or when we will become profitable, if at all. Expected future operating losses will have an adverseeffect on our cash resources, shareholders’ equity and working capital. Our failure to become and remain profitable could depress the value of our stock and impairour ability to raise capital, expand our business, maintain our development efforts, or continue our operations. A decline in our value could also cause you to lose allor part of your investment in us.Our limited operating history makes it difficult to evaluate our business and prospects.We have only been developing our measurement technology since 2014. Since then, our operating history has been primarily limited to research anddevelopment, pilot studies, raising capital, and more recently acquisitions and sales and marketing efforts. Therefore, it may be difficult to evaluate our business andprospects. We have not yet demonstrated an ability to commercialize our products. Consequently, any predictions about our future performance may not beaccurate, and you may not be able to fully assess our ability to complete development and/or commercialize our products, and any future products.We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive andmay cause the market price of our common stock to decline.Based on our projected cash flows and the cash balances as of the date of this Annual Report on Form 10K, our existing cash is insufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. In order to meet ourbusiness objectives in the future, we will need to raise additional capital, which may not be available on reasonable terms or at all. Additional capital would be usedto accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;20●respond to competitive pressure;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, and a number of otherfactors, many of which are outside our control, and on our financial performance. Accordingly, we cannot assure you that we will be able to successfully raiseadditional capital at all or on terms that are acceptable to us. If we cannot raise additional capital when needed, it may have a material adverse effect on our business,results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.Management has concluded that there is substantial doubt about our ability to continue as a going concern which could prevent us from obtainingnew financing on reasonable terms or at all.We have incurred significant losses and negative cash flows from operations and have an accumulated deficit that raises substantial doubt about its abilityto continue as a going concern. Our audited consolidated financial statements for the year ended December 31, 2022 were prepared under the assumption that wewould continue our operations as a going concern. Our independent registered public accounting firm has included a “going concern” explanatory paragraph in itsreport on our financial statements for the year ended December 31, 2022. If we are unable to improve our liquidity position, by, among other things, raising capitalthrough public or private offerings or reducing our expenses, we may exhaust our cash resources and will be unable to continue our operations. If we cannotcontinue as a viable entity, our shareholders would likely lose most or all of their investment in us.Risks Related to Our Company and Our BusinessThe market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and onlinethirdparty resellers adopting our flagship product, MySizeID.The market for our measurement technology is relatively new and unproven and is subject to a number of risks and uncertainties. We believe that ourfuture success will depend in large part on market adoption of our flagship product, MySizeID, by U.S. retailers and online thirdparty resellers. In order to grow ourbusiness, we intend to focus on educating retailers and resellers and other potential customers about the benefits of our measurement technology, expanding thefunctionality of our products and bringing new products to market to increase market acceptance and use of our technology. Our ability to develop and expand themarket that our products address depends upon a number of factors, including the cost savings, performance and perceived value associated with such products.The market for our products could fail to develop or there could be a reduction in interest or demand for our products as a result of a lack of consumer acceptance,technological challenges, competing products and services, weakening economic conditions and other causes. We may never successfully commercialize ourproducts and if our products fail to achieve market acceptance, this would have a material adverse effect on our business, results of operations and financialcondition.21Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broadermarket acceptance of our products.Our ability to achieve customer adoption, especially among U.S. retailers will depend, in part, on our ability to effectively organize, focus and train our salesand marketing personnel. We have limited experience selling to U.S. retailers and only recently established a U.S. sales force. We believe that there is significantcompetition for experienced sales professionals with the skills and industry knowledge that we require. Our ability to achieve significant revenue growth in thefuture will depend, in part, on our ability to recruit, train and retain a sufficient number of experienced sales professionals, particularly those with experience sellingto U.S. retailers. In addition, even if we are successful in hiring qualified sales personnel, new hires require significant training and experience before they achievefull productivity, particularly for sales efforts targeted at U.S. retailers and new markets. Because we only recently started sales efforts, we cannot predict whether, orto what extent, our sales efforts will be successful.We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which maymake it difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.In this market segment, the decision to adopt our products may require the approval of multiple technical and business decision makers, including security,compliance, procurement, operations and IT. In addition, while U.S. retailers may be willing to deploy our products on a limited basis, before they will commit todeploying our products at scale, they often require extensive education about our products and significant customer support time, engage in protracted pricingnegotiations and seek to secure readily available development resources. As a result, it is difficult to predict when we will obtain new customers and begingenerating revenue from these customers. As part of our sales cycle, we may incur significant expenses before executing a definitive agreement with a prospectivecustomer and before we are able to generate any revenue from such agreement. We have no assurance that the substantial time and money spent on our salesefforts will generate significant revenue. If conditions in the marketplace generally or with a specific prospective customer change negatively, it is possible that nodefinitive agreement will be executed, and we will be unable to recover any of these expenses. If we are not successful in targeting, supporting and streamlining oursales processes and if revenue expected to be generated from a prospective customer is not realized in the time period expected or not realized at all, our ability togrow our business, and our operating results and financial condition may be adversely affected. If our sales cycles lengthen, our future revenue could be lower thanexpected, which would have an adverse impact on our operating results and could cause our stock price to decline.22We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increaseour capital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.In order to reduce time to market and obtain complementary technologies, we are seeking to acquire technologies and businesses that are synergistic to ourproduct offering. For example, we recently acquired Orgad which operates an omnichannel ecommerce platform and Naiz which provides SaaS technology solutionsthat solve size and fit issues for fashion ecommerce companies. We evaluate from time to time various acquisitions and collaborations, including licensing oracquiring complementary technologies, intellectual property rights, or businesses. The process for acquiring a company may take from several months up to a yearand costs can vary greatly. We may also compete with others to acquire companies, and such competition may result in decreased availability of, or an increase inprice for, suitable acquisition candidates. In addition, we may not be able to consummate acquisitions or investments that we have identified as crucial to theimplementation of our strategy for other commercial or economic reasons. As a result, it may be more difficult for us to identify suitable acquisition or investmenttargets or to consummate acquisitions or investments on acceptable terms or at all. If we are not able to execute on any acquisition, we may not be able to achieve afuture growth strategy and may lose market share.In addition, the acquisition of Orgad, Naiz and any potential future acquisition, joint venture or collaboration may entail numerous potential risks, including:●increased operating expenses and cash requirements;●the assumption of additional indebtedness or contingent liabilities;●assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel;●the diversion of our management’s attention from our existing programs and initiatives in pursuing such a strategic merger or acquisition;●retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships;●risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing technologies; and●our inability to generate revenue from acquired technologies or products sufficient to meet our objectives in undertaking the acquisition or even to offsetthe associated acquisition and maintenance costs.All of the foregoing risks may be magnified as the cost, size or complexity of an acquisition or acquired company increases, or where the acquiredcompany’s products, market or business are materially different from ours, or where more than one integration is occurring simultaneously or within a concentratedperiod of time. We may not be able to obtain the necessary regulatory approvals, including those of antitrust authorities and foreign investment authorities, incountries where we seek to consummate acquisitions or make investments. For those and other reasons, we may ultimately fail to consummate an acquisition, even ifwe announce the intended acquisition.In addition, we may require significant financing to complete an acquisition or investment, whether through bank loans, raising of equity or debt orotherwise. We cannot assure you that such financing options will be available to us on reasonable terms, or at all. If we are not able to obtain such necessaryfinancing, it could have an impact on our ability to consummate a substantial acquisition or investment and execute a future growth strategy. Alternatively, we mayissue a significant number of shares as consideration for an acquisition, which would have a dilutive effect on our existing shareholders. For example, in partialconsideration for the acquisition of Orgad, we agreed to issue up to 111,602 shares of our common stock and in the Naiz acquisition we issued 240,000 shares of ourcommon stock. Furthermore, if we undertake acquisitions, we may incur large onetime expenses and acquire intangible assets that could result in significant futureamortization expense.23If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations andfinancial condition may be adversely affected.We believe that enhancing the “MySize” brand identity and increasing market awareness of our company and products, particularly among U.S. retailers, iscritical to achieving widespread acceptance of our products. Our ability to successfully develop new retailers may be adversely affected by a lack of awareness oracceptance of our brand. To the extent that we are unable to foster name recognition and affinity for our brand, our growth may be significantly delayed or impaired.The successful promotion of our brand will depend largely on our continued marketing efforts, market adoption of our products, and our ability to successfullydifferentiate our products from competing products and services. Our brand promotion may not be successful or result in revenue generation. Any incident thaterodes consumer affinity for our brand could significantly reduce our brand value and damage our business. If consumers perceive or experience a reduction inquality, or in any way believe we fail to deliver a consistently positive experience, our brand value could suffer and our business may be adversely affected.In particular, adverse weather conditions can impact guest traffic at our retailers, and, in more severe cases, cause temporary retail closures, sometimes forprolonged periods. Our business is subject to seasonal fluctuations, with retail sales typically higher during certain months, such as December. Adverse weatherconditions during our most favorable months or periods may exacerbate the effect of adverse weather on consumer traffic and may cause fluctuations in ouroperating results from quartertoquarter within a fiscal year.If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operationsand financial condition could be adversely affected.Our ability to attract new customers depends in part on our ability to enhance and improve our existing products, increase adoption and usage of ourproducts and introduce new products. The success of any enhancements or new products depends on several factors, including timely completion, adequatequality testing, actual performance quality, and overall market acceptance. Enhancements and new products that we develop may not be introduced in a timely orcosteffective manner, may contain errors or defects, may have interoperability difficulties with our platform or other products or may not achieve the broad marketacceptance necessary to generate significant revenue. Furthermore, our ability to increase the usage of our products depends, in part, on the development of newuse cases for our products and may be outside of our control. If we are unable to successfully enhance our existing products to meet evolving customerrequirements, increase adoption and usage of our products, develop new products, then our business, results of operations and financial condition would beadversely affected.The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile Apps and customdevelopment services.We must continue to enhance and improve the performance, functionality and reliability of our products. The mobile technology industry is characterizedby rapid technological change, changes in user requirements and preferences, frequent new product and services introductions embodying new technologies andthe emergence of new industry standards and practices that could render our products obsolete. Our success will depend, in part, on our ability to both internallydevelop and enhance our existing products, develop new products that address the increasingly sophisticated and varied needs of our customers, and respond totechnological advances and emerging industry standards and practices on a costeffective and timely basis. The development of our technology involvessignificant technical and business risks. We may fail to use new technologies effectively or to adapt our proprietary technology and systems to customerrequirements or emerging industry standards. If we are unable to adapt to changing market conditions, customer requirements or emerging industry standards, wemay not be able to increase our revenue and expand our business.Changes in economic conditions could materially affect our business, financial condition and results of operations.Because our primary target customers include U.S. retailers , we, together with the rest of the fashion/apparel industry, will depend upon consumerdiscretionary spending. Increases in unemployment rates, reductions in home values, increases in home foreclosures, investment losses, personal bankruptcies andreductions in access to credit and reduced consumer confidence, may impact consumers’ ability and willingness to spend discretionary dollars. In addition, volatileeconomic conditions may repress consumer confidence and discretionary spending. Any of the foregoing may have a material adverse effect on our business,financial condition and results of operations.24Our growth depends, in part, on the success of our strategic relationships with third parties.To grow our business, we anticipate that we will continue to depend on relationships with third parties, such as our customers and thirdparty platforms.Identifying partners, and negotiating and documenting relationships with them, requires significant time and resources. If we are unsuccessful in establishing ormaintaining our relationships with third parties, our ability to compete in the marketplace or to grow our revenue could be impaired, and our results of operationsmay suffer. Even if we are successful, we cannot assure you that these relationships will result in increased customer usage of our products or increased revenue.We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.We currently utilize, and plan on continuing to utilize over the current fiscal year, thirdparty networking providers and distribution through companiesincluding, but not limited to, Apple and Google as well as Shopify, WooCommerce and, Datalogic, Honeywell and Zebra to distribute our technologies. If disruptionsor capacity constraints occur, we may have no means of replacing these services, on a timely basis or at all. This could cause a material adverse condition for ouroperations and financial earnings.We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significantinterruption in our network or hosting and cloud services could adversely impact our operations and harm our business.Our technology infrastructure is critical to the performance of our products and customer satisfaction. Our products run on a complex distributed system,or what is commonly known as cloud computing. We own, operate and maintain elements of this system, but significant elements of this system are operated bythirdparties that we do not control and which would require significant time to replace. We expect this dependence on thirdparties to continue. In particular, asignificant portion, if not almost all data storage, data processing and other computing services and systems is hosted by cloud computing providers. Anydisruptions, outages and other performance problems relating to such services, including infrastructure changes, human or software errors and capacity constraints,could adversely impact our business, financial condition or results of operations.Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.We update our products on a frequent basis. Despite efforts to test our updates, errors, failures or bugs may not be found in our products until after theyare deployed to a customer. We have discovered and expect we will continue to discover errors, failures and bugs in our products and anticipate that certain of theseerrors, failures and bugs will only be discovered and remediated after deployment. Real or perceived errors, failures or bugs in our platform could result in negativepublicity, government inquiries, loss of or delay in market acceptance of our products, loss of competitive position, or claims by customers for losses sustained bythem. In such an event, we may be required, or may choose, for customer relations or other reasons, to expend additional resources in order to help correct theproblem.We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.In connection with the operation of our business, we store, process and transmit data, including personal and payment information, about our employeesand customers, a portion of which is confidential and/or personally sensitive. Unauthorized disclosure or loss of sensitive or confidential data may occur through avariety of methods. These include, but are not limited to, systems failure, employee negligence, fraud or misappropriation, or unauthorized access to or through ourinformation systems, whether by our employees or third parties, including a cyberattack by computer programmers, hackers, members of organized crime and/orstatesponsored organizations, who may develop and deploy viruses, worms or other malicious software programs. Such disclosure, loss or breach could harm ourreputation and subject us to government sanctions and liability under our contracts and laws that protect sensitive or personal data and confidential information,resulting in increased costs or loss of revenues. It is possible that security controls over sensitive or confidential data and other practices we and our thirdpartyvendors follow may not prevent the improper access to, disclosure of, or loss of such information. The potential risk of security breaches and cyberattacks mayincrease as we introduce new products and offerings. Further, data privacy is subject to frequently changing rules and regulations, which sometimes conflict amongthe various jurisdictions in which we provide services. Any failure or perceived failure to successfully manage the collection, use, disclosure, or security of personalinformation or other privacy related matters, or any failure to comply with changing regulatory requirements in this area, could result in legal liability or impairment toour reputation in the marketplace.25A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.Information security risks have generally increased in recent years, in part because of the proliferation of new technologies and the use of the Internet, andthe increased sophistication and activity of organized crime, hackers, terrorists, activists, cybercriminals and other external parties, some of which may be linked toterrorist organizations or hostile foreign governments. For example, a cybercriminal could use cybersecurity threats to gain access to sensitive information aboutanother company or to alter or disrupt news or information to be distributed by PR Newswire. Cybersecurity attacks are becoming more sophisticated and includemalicious software, ransomware, attempts to gain unauthorized access to data and other electronic security breaches that could lead to disruptions in criticalsystems, unauthorized release of confidential or otherwise protected information and corruption of data, substantially damaging our reputation. Any person whocircumvents our security measures could steal proprietary or confidential customer information or cause interruptions in our operations. We incur significant coststo protect against security breaches, and may incur significant additional costs to alleviate problems caused by any breaches. Our failure to prevent securitybreaches, or wellpublicized security breaches affecting the Internet in general, could significantly harm our reputation and business and financial results.Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, dataprotection and information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive andconfidential information. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm ourbusiness, results of operations and financial condition.We and our customers that use our products may be subject to privacy and data protectionrelated laws and regulations that impose obligations inconnection with the collection, processing and use of personal data, financial data, health or other similar data. The U.S. federal and various state and foreigngovernments have adopted or proposed limitations on, or requirements regarding, the collection, distribution, use, security and storage of personally identifiableinformation of individuals. The U.S. Federal Trade Commission and numerous state attorneys general are applying federal and state consumer protection laws toimpose standards on the online collection, use and dissemination of data, and to the security measures applied to such data.Similarly, many foreign countries and governmental bodies, including the EU member states, have laws and regulations concerning the collection and useof personally identifiable information obtained from individuals located in the EU or by businesses operating within their jurisdiction, which are often morerestrictive than those in the United States. Laws and regulations in these jurisdictions apply broadly to the collection, use, storage, disclosure and security ofpersonally identifiable information that identifies or may be used to identify an individual, such as names, telephone numbers, email addresses and, in somejurisdictions, IP addresses and other online identifiers.For example, the GDPR, which took full effect on May 25, 2018. The GDPR enhances data protection obligations for businesses and requires serviceproviders (data processors) processing personal data on behalf of customers to cooperate with European data protection authorities, implement security measuresand keep records of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to or greater of €20 million or 4% of global annualrevenues. In addition, the CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and require deletion of their personalinformation, opt out of certain personal information sharing, and receive detailed information about how their personal information is used. The CCPA provides forcivil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further, failure to comply withthe Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may expose us to administrativefines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the current enforcementmeasures and sanctions. There are also additional laws and regulations in additional jurisdictions around the world which govern the protection of consumers andof electronic communications. If our efforts to comply with GDPR, CCPA or other applicable laws and regulations are not successful, we may be subject to penaltiesand fines that would adversely impact our business and results of operations, and our ability to conduct business could be significantly impaired.26Additionally, although we endeavor to have our products comply with applicable laws and regulations, these and other obligations may be modified, theymay be interpreted and applied in an inconsistent manner from one jurisdiction to another, and they may conflict with one another, other regulatory requirements,contractual commitments or our internal practices. We also may be bound by contractual obligations relating to our collection, use and disclosure of personal,financial and other data or may find it necessary or desirable to join industry or other selfregulatory bodies or other privacy or data protectionrelatedorganizations that require compliance with their rules pertaining to privacy and data protection.We expect that there will continue to be new proposed laws, rules of selfregulatory bodies, regulations and industry standards concerning privacy, dataprotection and information security in the United States, the European Union and other jurisdictions, and we cannot yet determine the impact such future laws,rules, regulations and standards may have on our business. Moreover, existing U.S. federal and various state and foreign privacy and data protectionrelated lawsand regulations are evolving and subject to potentially differing interpretations, and various legislative and regulatory bodies may expand current or enact new lawsand regulations regarding privacy and data protectionrelated matters. Because global laws, regulations and industry standards concerning privacy and datasecurity have continued to develop and evolve rapidly, it is possible that we or our products or platform may not be, or may not have been, compliant with eachsuch applicable law, regulation and industry standard and compliance with such new laws or to changes to existing laws may impact our business and practices,require us to expend significant resources to adapt to these changes, or to stop offering our products in certain countries. These developments could adverselyaffect our business, results of operations and financial condition.We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect ourbusiness.Our ability to implement our business plan successfully depends in part on our ability to build brand recognition using our trademarks, service marks andother proprietary intellectual property, including our names and logos. We currently have no registered trademarks. While we plan to register a number of ourtrademarks; however, no assurance can be given that our trademark applications will be approved. As of December 31, 2022, we own 18 issued patents: six in Europe,four in the U.S., three in each of Russia and Japan and one in each of Canada and Israel which expire between January 20, 2033 and August 18, 2036, and we havetwo additional patent applications in process. As of such date, we do not have any registered trademarks., No assurance can be given that our patent applicationswhich are in process will be approved. If our patent applications are not approved, our ability to expand or develop our business may be negatively affected.Third parties may also oppose our trademark or patent applications, or otherwise challenge our use of the trademarks or patents. In the event that ourtrademarks or patents are successfully challenged, we could be forced to rebrand our goods and services or redesign our technology, which could result in loss ofbrand recognition, and could require us to devote resources to advertising and marketing new brands and products.If our efforts to register, maintain and protect our intellectual property are inadequate, or if any thirdparty misappropriates, dilutes or infringes on ourintellectual property, the value of our brands may be harmed, which could have a material adverse effect on our business and might prevent our brands fromachieving or maintaining market acceptance. We may also face the risk of claims that we have infringed third parties’ intellectual property rights. If third parties claimthat we infringe upon their intellectual property rights, our operating profits could be adversely affected. Any claims of intellectual property infringement, eventhose without merit, could be expensive and time consuming to defend, require us to rebrand our services, if feasible, divert management’s attention and resourcesor require us to enter into royalty or licensing agreements in order to obtain the right to use a thirdparty’s intellectual property.Any royalty or licensing agreements, if required, may not be available to us on acceptable terms or at all. A successful claim of infringement against uscould result in our being required to pay significant damages, enter into costly license or royalty agreements, or stop the sale of certain products or services, any ofwhich could have a negative impact on our operating profits and harm our future prospects.We may face intense competition and expect competition to increase in the future, which could prohibit us from developing a customer base andgenerating revenue.We face significant competition in every aspect of our business. Our competitors include True Fit, Virtusize, EasyMeasure, AR MeasureKit, Smart Measureand 3DLook. These companies may already have an established market in our industry. Most of these companies have significantly greater financial and otherresources than us and have been developing their products and services longer than we have been developing ours.27In addition, some of our larger competitors have substantially broader product offerings and leverage their relationships based on other products orincorporate functionality into existing products to gain business in a manner that discourages potential customers from purchasing our products. Potentialcustomers may also prefer to purchase from their existing solution providers rather than a new solution provider regardless of product performance or features.These larger competitors often have broader product lines and market focus and will therefore not be as susceptible to downturns in a particular market. Conditionsin our market could change rapidly and significantly as a result of technological advancements, partnering by our competitors or continuing market consolidation.New startup companies that innovate and large competitors that are making significant investments in research and development may invent similar or superiorproducts and technologies that compete with our products. In addition, some of our competitors may enter into new alliances with each other or may establish orstrengthen cooperative relationships. Any such consolidation, acquisition, alliance or cooperative relationship could lead to pricing pressure and our loss of anyfuture market share and could result in a competitor with greater financial, technical, marketing, service and other resources, all of which could harm our ability tocompete. Furthermore, organizations may be more willing to incrementally add solutions to their existing infrastructure from competitors than to replace their existinginfrastructure with our products. Any failure to meet and address these factors could harm our business, results of operations and financial condition.Our business operations and future development could be significantly disrupted if we lose key members of our management team.The success of our business continues to depend to a significant degree upon the continued contributions of our senior officers and key employees, bothindividually and as a group. Our future performance will be substantially dependent in particular on our ability to retain and motivate Ronen Luzon, our ChiefExecutive Officer, and certain of our other senior executive officers. The loss of the services of our Chief Executive Officer, senior officers or other key employeescould have a material adverse effect on our business and plans for future development. We have no reason to believe that we will lose the services of any of theseindividuals in the foreseeable future; however, we currently have no effective replacement for any of these individuals due to their experience, reputation in theindustry and special role in our operations. We also do not maintain any key man life insurance policies for any of our employees.If we are able to expand our operations, we may be unable to successfully manage our future growth.Our growth may strain our infrastructure and resources. Any such growth could place increased strain on our management, operational, financial and otherresources, and we will need to train, motivate, and manage employees, as well as attract management, sales, finance and accounting, international, technical, andother professionals. Any failure to expand these areas and implement appropriate procedures and controls in an efficient manner and at a pace consistent with ourbusiness objectives could have a material adverse effect on our business, results of operations and financial condition.Our business operations are conducted in multiple languages and could be disrupted due to miscommunications or translation errors.The success of our business continues to depend on our marketing efforts in the United States, Europe and Israel, each of which is conducted in the locallanguage. Miscommunications or inaccurate foreign language translations could have a material adverse effect on our business operations and financial conditions.Additionally, contracts, communications and complex technical information must be accurately translated into foreign languages.We will continue to incur costs and be subject to various obligations as a result of being a public company, listed in the United States and in Israel.We will continue to incur significant legal, accounting and other expenses as a result of being a public company, listed in the United States and in Israel.Although we will incur costs each year associated with being a publiclytraded company, it is possible that our actual costs of being a publiclytraded company willvary from year to year and may be different than our estimates. In estimating these costs, we take into account expenses related to insurance, legal, accounting andcompliance activities.28Furthermore, the need to maintain the corporate infrastructure demanded of a public company may divert management’s attention from implementing ourgrowth strategy, which could prevent us from improving our business, results of operations and financial condition. We have made, and will continue to make,changes to our internal controls and procedures for financial reporting and accounting systems to meet our reporting obligations as a U.S. publicly traded company.However, the measures we take may not be sufficient to satisfy our obligations as a publicly traded company.Any future or current litigation could have a material adverse impact on our results of operations, financial condition and liquidity.From time to time, we may be subject to litigation, including, among others, potential stockholder derivative actions and class actions. Risks associatedwith legal liability are difficult to assess and quantify, and their existence and magnitude can remain unknown for significant periods of time. Subject to certainexceptions, our Amended and Restated Certificate of Incorporation, or Certificate of Incorporation, and Amended and Restated Bylaws, or Bylaws, require us toindemnify and advance expenses to our officers and directors involved in legal proceedings. To date we have obtained directors and officers’ liability, or D&O,insurance to cover some of the risk exposure for our directors and officers. Such insurance generally pays the expenses (including amounts paid to plaintiffs, fines,and expenses including attorneys’ fees) of officers and directors who are the subject of a lawsuit as a result of their service to us. There can be no assurance that wewill be able to continue to maintain this insurance at reasonable rates or at all, or in amounts adequate to cover such expenses should such a lawsuit occur. WithoutD&O insurance, the amounts we would pay to indemnify our officers and directors should they be subject to legal action based on their service to us could have amaterial adverse effect on our financial condition, results of operations and liquidity. Such lawsuits, and any related publicity, may result in substantial costs and,among other things, divert the attention of management and our employees. An unfavorable outcome in any claim or proceeding against us could have a materialadverse impact on our financial position and results of operations for the period in which the unfavorable outcome occurs, and potentially in future periods. Further,any settlement announced by us may expose us to further claims against us by third parties seeking monetary or other damages which, even if unsuccessful, woulddivert management attention from the business and cause us to incur costs, possibly material, to defend such matters, which could have a material adverse impacton our financial position. See “Legal Proceedings” for more information regarding our involvement in ongoing litigation matters.Federal, state and local or Israeli tax rules may adversely impact our results of operations and financial position.We are subject to federal, state and local taxes in the U.S., as well as local taxes in Israel in respect to our operations in Israel. Although we believe our taxestimates are reasonable, if the Internal Revenue Service or other taxing authority disagrees with the positions we have taken on our tax returns, we could faceadditional tax liability, including interest and penalties. If material, payment of such additional amounts upon final adjudication of any disputes could have a materialimpact on our results of operations and financial position. In addition, complying with new tax rules, laws or regulations could impact our financial condition, andincreases to federal or state statutory tax rates and other changes in tax laws, rules or regulations may increase our effective tax rate. Any increase in our effectivetax rate could have a material impact on our financial results.A significant majority of Orgad’s revenue is from sales of products on Amazon’s U.S. Marketplace and any change, limitation or restriction on ourability to operate on Amazon’s platform or any other marketplace could have a material adverse impact to our business, results of operations, financialcondition and prospects.Orgad, our wholly owned subsidiary, operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com, eBay and others. A substantial percentage of Orgad’s revenue is driven by sales on Amazon’s U.S. marketplace and Orgad is subject toterms of service of Amazon and other maketplaces and various other seller policies and services that apply to third parties selling products on Amazon and othermarketplaces. Generally, a marketplace has the right to terminate or suspend its agreement with Orgad at any time and for any reason. Such marketplace may takeother actions against Orgad such as suspending or terminating a seller account or product listing and withholding payments owed to Orgad indefinitely. Forexample, in July 2022, Amazon deactivated Orgad’s Amazon U.S. store as a result of complaints submitted due to an error in the listed manufacturer of certainproducts on Orgad’s store. Although its account was subsequently reinstated in September 2022, if the deactivation were to occur in the future for a prolongedperiod of time, or if Amazon were to terminate Orgad’s account, this would have a material adverse effect on our business, results of operations, financial conditionand prospects. While Orgad endeavors to materially comply with the terms of services of the marketplaces on which it operates, we can provide no assurance thatthese marketplaces will have the same determination with respect to our compliance.29In addition, Amazon and other marketplaces can make changes to its platform that could require Orgad to change the manner in which it operates, limit itsability to successfully launch new products or increase its costs to operate and such changes could have an adverse effect on our business, results of operations,financial condition and prospects. Examples of changes that could impact us relate to platform fee charges (i.e., selling commissions), exclusivity, inventorywarehouse availability, excluded products and limitations on sales and marketing. Any change, limitation or restriction on our ability to sell on Amazon’s platform orany other marketplace, even if temporary, could have a material impact on our business, results of operations, financial condition and prospects.Orgad also relies on services provided by Amazon’s fulfillment platform, including Prime Certification, which provides for expedited shipping to theconsumer, an important aspect in the buying decision for consumers. For products that Orgad fulfills itself, Orgad is qualified to offer our products for sale withPrime Certification delivery. Any inability to market our products for sale with expedited delivery provided under Prime Certification could have a material impact onour business, results of operations, financial condition and prospects. Failure to remain compliant with the best fulfillment practices on Amazon’s platform couldhave a material impact on our business, results of operations, financial condition and prospects. In addition, due to the COVID19 pandemic, Amazon has changedthe amount of inventory it accepts per product for a period of time. If this were to continue it could cause us to miss sales and/or pay additional shipping costswhich would harm our business operations and financial conditions.Orgad’s business depends on its ability to build and maintain strong product listings on ecommerce platforms. Orgad may not be able to maintain andenhance our product listings if it receives unfavorable customer complaints, negative publicity or otherwise fails to live up to consumers’ expectations, whichcould materially adversely affect our business, results of operations and growth prospects.Maintaining and enhancing Orgad’s product listings is critical in expanding and growing its business. However, a significant portion of Orgad’s perceivedperformance to the customer depends on third parties outside of its control, including suppliers and thirdparty delivery agents as well as online retailers such asAmazon and eBay. Because Orgad’s agreements with its online retail partners are generally terminable at will, it may be unable to maintain these relationships, andour results of operations could fluctuate significantly from period to period. Because Orgad relies on third parties to deliver its products, it is subject to shippingdelays or disruptions caused by inclement weather, natural disasters, labor activism, health epidemics or bioterrorism. It may also experience shipping delays ordisruptions due to other carrierrelated issues relating to their own internal operational capabilities. Further, Orgad relies on the business continuity plans of thesethird parties to operate during pandemics, like the COVID19 pandemic, and it has limited ability to influence their plans, prevent delays, and/or cost increases due toreduced availability and capacity and increased required safety measures.Customer complaints or negative publicity about its products, delivery times, or marketing strategies, even if not accurate, especially on blogs, social mediawebsites and thirdparty market sites, could rapidly and severely diminish consumer view of Orgad’s product listings and result in harm to its brand. Customers mayalso make safetyrelated or other types of claims regarding products sold through our online retail partners, such as Amazon, which may result in an online retailpartner removing the product from its marketplace. We also use and rely on other services from third parties, such as our telecommunications services, and thoseservices may be subject to outages and interruptions that are not within our control.Orgad faces risks related to successfully optimizing and operating its fulfillment and customer service operations.Failures to adequately predict customer demand or otherwise optimize and operate its fulfillment and customer service operations successfully from time totime result in excess or insufficient fulfillment or customer service capacity, increased costs, and impairment charges, any of which could materially harm ourbusiness. As Orgad continues to add fulfillment and customer service capability or add new businesses with different requirements, its fulfillment and customerservice operations become increasingly complex and operating them becomes more challenging. There can be no assurance that Orgad will be able to operate ouroperations effectively.30In addition, failure to optimize inventory in our fulfillment operations increases net shipping cost by requiring longzone or partial shipments. Orgad may beunable to adequately staff its fulfillment and customer service operations. Orgad’s failure to properly handle such inventory or to accurately forecast productdemand may result in it being unable to secure sufficient storage space or to optimize its fulfillment operations or cause other unexpected costs and other harm toour business and reputation.Orgad relies on a limited number of shipping companies to deliver inventory to it and completed orders to our customers. The inability to negotiateacceptable terms with these companies or performance problems or other difficulties experienced by these companies could negatively impact our operating resultsand customer experience. In addition, Orgad’s ability to receive inbound inventory efficiently and ship completed orders to customers also may be negativelyaffected by natural or manmade disasters, extreme weather, geopolitical events and security issues, labor or trade disputes, and similar events.The variability in Orgad’s retail business places increased strain on its operations.Demand for Orgad’s product listings can fluctuate significantly for many reasons, including as a result of seasonality, promotions, product launches, orunforeseeable events, such as in response to natural or manmade disasters, extreme weather, or geopolitical events. For example, Orgad expects a disproportionateamount of our retail sales to occur during our fourth quarter. Failure to stock or restock popular products in sufficient amounts such that Orgad fails to meetcustomer demand could significantly affect our revenue and our future growth. If too many customers access the websites on which Orgad engages in onlineretailing within a short period of time due to increased demand, Orgad may experience system interruptions that make the websites unavailable or prevent us fromefficiently fulfilling orders, which may reduce the volume of goods its offers or sell and the attractiveness of its products. In addition, Orgad may be unable toadequately staff for fulfillment of orders and customer service during these peak periods and delivery and other fulfillment companies and customer service cosourcers may be unable to meet the seasonal demand.Our business is subject to the risks of earthquakes, fire, power outages, floods, health risks and other catastrophic events, and to interruption by manmade problems such as terrorism.Natural disasters, such as fire or floods, a significant power outage, telecommunications failure, terrorism, an armed conflict, cyberattacks, epidemics andpandemics such as COVID19, or other geopolitical unrest could affect our supply chain, manufacturers, logistics providers, channel partners, or endcustomers orthe economy as a whole and such disruption could impact us and the shipments and sales. These risks may be further increased if the disaster recovery plans for usand our suppliers prove to be inadequate. To the extent that any of the above should result in delays or cancellations of customer orders, the loss of customers, orthe delay in the deployment or shipment of products, our business, financial condition, and operating results would be adversely affected.For example, on January 2, 2023, Orgad experienced a fire at its warehouse in Israel. We are not aware of any casualties or injuries associated with the fire.We shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incidentdid not affect the future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of thisincident on the other parties that were involved in the incident (lessor and others that leased properties near the warehouse).Our business could be negatively impacted by unsolicited takeover proposals, by shareholder activism or by proxy contests relating to the election ofdirectors or other matters.Our business could be negatively affected as a result of an unsolicited takeover proposal, by shareholder activism or a proxy contest. During 2021, anactivist shareholder sought to make changes to our board of directors, among other matters, which ultimately resulted in us entering into a settlement agreementwith the activist shareholder and another shareholder, and for which considerable costs were incurred and absorbed significant time and attention by managementand the board of directors. A future proxy contest, unsolicited takeover proposal, or other shareholder activism relating to the election of directors or other matterswould most likely require us to incur significant legal fees and proxy solicitation expenses and require significant time and attention by management and our Boardof Directors. The potential of a proxy contest, unsolicited takeover proposal, or other shareholder activism could interfere with our ability to execute our strategicplan, give rise to perceived uncertainties as to our future direction, result in the loss of potential business opportunities or make it more difficult to attract and retainqualified personnel, any of which could materially and adversely affect our business and operating results.31Environmental, social and corporate governance (ESG) issues, including those related to climate change and sustainability, may have an adverseeffect on our business, financial condition and results of operations and damage our reputation.There is an increasing focus from certain investors, customers, consumers, employees and other stakeholders concerning ESG matters. Additionally, publicinterest and legislative pressure related to public companies’ ESG practices continue to grow. If our ESG practices fail to meet regulatory requirements or investor,customer, consumer, employee or other shareholders’ evolving expectations and standards for responsible corporate citizenship in areas including environmentalstewardship, support for local communities, Board of Director and employee diversity, human capital management, employee health and safety practices, productquality, supply chain management, corporate governance and transparency, our reputation, brand and employee retention may be negatively impacted, and ourcustomers and suppliers may be unwilling to continue to do business with us.Customers, consumers, investors and other shareholders are increasingly focusing on environmental issues, including climate change, energy and wateruse, plastic waste and other sustainability concerns. Concern over climate change may result in new or increased legal and regulatory requirements to reduce ormitigate impacts to the environment. Changing customer and consumer preferences or increased regulatory requirements may result in increased demands orrequirements. Complying with these demands or requirements could cause us to incur additional manufacturing, operating or product development costs.If we do not adapt to or comply with new regulations, including the SEC’s published proposed rules that would require companies to provide significantlyexpanded climaterelated disclosures in their periodic reporting, which may require us to incur significant additional costs to comply and impose increased oversightobligations on our management and board of directors, or fail to meet evolving investor, industry or stakeholder expectations and concerns regarding ESG issues,investors may reconsider their capital investment in our company, we may become subject to penalties, and customers and consumers may choose to stoppurchasing our products, if approved for commercialization, which could have a material adverse effect on our reputation, business or financial condition.Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions andadverse developments with respect to financial institutions and associated liquidity risk.Our business depends on the economic health of the global economies. If the conditions in the global economies remain uncertain or continue to bevolatile, or if they deteriorate, including as a result of the impact of military conflict, such as the war between Russia and Ukraine, terrorism or other geopoliticalevents, our business, operating results and financial condition may be materially adversely affected. Economic weakness, inflation and increases in interest rates,limited availability of credit, liquidity shortages and constrained capital spending have at times in the past resulted, and may in the future result, in challenging anddelayed sales cycles, slower adoption of new technologies and increased price competition, and could negatively affect our ability to forecast future periods, whichcould result in an inability to satisfy demand for our products and a loss of market share.In addition, increases in inflation raise our costs for commodities, labor, materials and services and other costs required to grow and operate our business,and failure to secure these on reasonable terms may adversely impact our financial condition. Additionally, increases in inflation, along with the uncertaintiessurrounding COVID19, geopolitical developments and global supply chain disruptions, have caused, and may in the future cause, global economic uncertainty anduncertainty about the interest rate environment, which may make it more difficult, costly or dilutive for us to secure additional financing. A failure to adequatelyrespond to these risks could have a material adverse impact on our financial condition, results of operations or cash flows.More recently, the closures of SVB and Signature Bank and their placement into receivership with the FDIC created bankspecific and broader financialinstitution liquidity risk and concerns. Although the Department of the Treasury, the Federal Reserve and the FDIC jointly released a statement that depositors atSVB and Signature Bank would have access to their funds, even those in excess of the standard FDIC insurance limits, under a systemic risk exception, futureadverse developments with respect to specific financial institutions or the broader financial services industry may lead to marketwide liquidity shortages, impair theability of companies to access nearterm working capital needs, and create additional market and economic uncertainty. There can be no assurance that future creditand financial market instability and a deterioration in confidence in economic conditions will not occur. Our general business strategy may be adversely affected byany such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions. If the current equityand credit markets deteriorate, or if adverse developments are experienced by financial institutions, it may cause shortterm liquidity risk and also make anynecessary debt or equity financing more difficult, more costly, more onerous with respect to financial and operating covenants and more dilutive. Failure to secureany necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stockprice and could require us to alter our operating plans. In addition, there is a risk that one or more of our service providers, financial institutions, manufacturers,suppliers and other partners may be adversely affected by the foregoing risks, which could directly affect our ability to attain our operating goals on schedule andon budget.Our business may be adversely affected by the impact of any renewed outbreak of the COVID19 pandemic.Public health epidemics or outbreaks could adversely impact our business. In late 2019, a novel strain of COVID19, also known as coronavirus, wasreported in Wuhan, China. While initially the outbreak was largely concentrated in China, it spread worldwide. Many countries around the world, including in Israel,implemented significant governmental measures to control the spread of the virus, including temporary closure of businesses, severe restrictions on travel and themovement of people, and other material limitations on the conduct of business. These measures haven historically resulted in work stoppages and other disruptions.If there is a resurgence of the COVID19 pandemic, this could adversely impact our operations, including among others, our sales and marketing efforts and ourability to raise additional funds, and accordingly, the impact of COVID19 could have an adverse impact on our business and our financial results.32Risks Related to Our Operations in RussiaRussia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.In addition to our Israel operations, we have operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia and we engage two software developers through a third party who are based in Ukraine. On February 24,2022, Russia invaded Ukraine. The outbreak of hostilities between the two countries could result in more widespread conflict and could have a severe adverse effecton the region.Following Russia’s actions, various countries, including the U.S., Canada, the United Kingdom, Germany and France, as well as the European Union,issued broadranging economic sanctions against Russia. Such sanctions included, among other things, a prohibition on doing business with certain Russiancompanies, officials and oligarchs; a commitment by certain countries and the European Union to remove selected Russian banks from the Society for WorldwideInterbank Financial Telecommunications (SWIFT) electronic banking network that connects banks globally; and restrictive measures to prevent the Russian CentralBank from undermining the impact of the sanctions. In response to sanctions, the Russian Central Bank raised its interest rates and banned sales of local securitiesby foreigners. Russia may take additional counter measures or retaliatory actions in the future. While diplomatic efforts have been ongoing, the conflict betweenRussia and Ukraine is currently unpredictable and has the potential to result in broadened military actions. The duration of ongoing hostilities and such sanctionsand related events cannot be predicted. Uncertainty as to future relations between Russia and the U.S. and other countries in the west, or between Russia and othereastern European countries, may have a negative impact on our operations.Such international sanctions and potential responses to such sanctions, including those that may limit or restrict transfer funds into Russia, may in thefuture significantly affect our ability to conduct our activities in Russia including paying our personnel. To date, the conflict has had minimal impact on operations .Nevertheless, we have no way to predict the progress or outcome of the situation in Ukraine, as the conflict and governmental reactions are rapidly developing andbeyond our control. Prolonged unrest, intensified military activities or more extensive sanctions impacting the region could have a material adverse effect on ouroperations, results of operations, financial condition, liquidity and business outlook.Political, military conditions or other risks in Russia could adversely affect our business.Russia is a federative state consisting of 85 constituent entities, or “subjects.” The Russian Constitution reserves some governmental powers for theRussian Government, some for the subjects and some for areas of joint competence. In addition, eight “federal districts” (“federal’nye okruga”), which are overseenby a plenipotentiary representative of the President, supplement the country’s federal system. The delineation of authority among and within the subjects is, inmany instances, unclear and contested, particularly with respect to the division of tax revenues and authority over regulatory matters. For these reasons, theRussian political system is vulnerable to tension and conflict between federal, subject and local authorities. This tension creates uncertainties in the operatingenvironment in Russia, which may prevent us from carrying out our strategy effectively. The risks associated with these events or potential events could materiallyand adversely affect the investment environment and overall consumer and entrepreneurial confidence in Russia, and our business, prospects, financial condition,hiring ability, and results of operations could be materially and adversely affected.Furthermore, high levels of corruption reportedly exist in Russia, including the bribing of officials for the purpose of initiating investigations bygovernment agencies. Corruption and other illegal activities could disrupt our ability to conduct our business effectively, and claims that the we are involved in suchcorruption or illegal activities could generate negative publicity, of which could harm our development, financial condition, results of operations or prospects.Economic and other risks in Russia could adversely affect our business.Operating a business in an emerging market such as Russia can involve a greater degree of risk than operating a business in more developed markets.Over the last two decades, the Russian economy has experienced or continues to experience at various times:●significant volatility in its GDP;33●the impact of international sanctions;●high levels of inflation;●increases in, or high, interest rates;●sudden price declines in oil and other natural resources;●instability in the local currency market;●budget deficits;●the continued operation of lossmaking enterprises due to the lack of effective bankruptcy proceedings;●capital flight; and●significant increases in poverty rates, unemployment and underemployment.The Russian economy has been subject to abrupt downturns in the past, including as a result of the invasion of Ukraine, global financial crisis, and, as anemerging market, remains particularly vulnerable to further external shocks and any future fluctuations in the global markets. Any further deterioration in the generaleconomic conditions in Russia (whether or not as a result of the events mentioned above) could have a material adverse effect on the Russian economy and mayresult in hiring and operational difficulties, as well as potential flight of human capital, which could have a material adverse effect on our business, productdevelopment and results of operations.Legal risks in Russia could materially adversely affect our operations and Russian tax legislation is subject to frequent change.Among the risks of the Russian legal system are: inconsistencies among laws, presidential decrees, and government and ministerial orders and resolutions;conflicting local, regional and federal laws and regulations; the untested nature of the independence of the judiciary and its sensitivity to economic or politicalinfluences; substantial gaps in the regulatory structure due to the delay or absence of implementing legislation; a high degree of discretion on the part ofgovernmental authorities; reported corruption within governmental entities and other governmental authorities; the relative inexperience of judges and courts ininterpreting laws applicable to complex transactions; and the unpredictability of enforcement of foreign judgments and foreign arbitral awards. Many Russian lawsand regulations are construed in a way that provides for significant administrative discretion in application and enforcement. Unlawful, selective or arbitrary actionsof the Russian Government have reportedly included the denial or withdrawal of licenses, sudden and unexpected tax audits, criminal prosecutions, and civil claims.Any of the above events may have a material adverse effect on our product development and results of operations.Despite certain improvements in the taxation system made by the Russian Government over the past decade, Russian tax legislation is still subject tofrequent change, varying interpretations, and inconsistent and selective enforcement. There are currently no clear rules for distinguishing between lawful taxoptimization and tax evasion. In addition, Russian tax laws do not contain detailed rules on the taxation in Russia of foreign companies. As such, taxpayers oftenhave to resort to court proceedings to defend their position against the Russian tax authorities. However, in the absence of consistent court practice or bindingprecedents, there is inconsistency amongst court decisions. Further, the possibility exists that the Russian Federation would impose arbitrary or onerous taxes andpenalties in the future, which could have a material adverse effect on our product development and results of operations.34Risks Related to Our Operations In IsraelOur headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.Our headquarters and most of our operations are located in central Israel and our key employees, officers and directors are residents of Israel. Accordingly,political, economic and military conditions in Israel and the surrounding region may directly affect our business. Since the establishment of the State of Israel in1948, a number of armed conflicts have taken place between Israel and its Arab neighbors. Any hostilities involving Israel or the interruption or curtailment of tradewithin Israel or between Israel and its trading partners could adversely affect our operations and results of operations and could make it more difficult for us to raisecapital. During the winter of 2008, winter of 2012 and the summer of 2014, Israel was engaged in an armed conflict with Hamas, a militia group and political partyoperating in the Gaza Strip, and during the summer of 2006, Israel was engaged in an armed conflict with Hezbollah, a Lebanese Islamist Shiite militia group andpolitical party. Israel faces political tension with respect to its relationships with Turkey, Iran and certain Arab neighbor countries. In addition, recent conflictsinvolved missile strikes against civilian targets in various parts of Israel, and negatively affected business conditions in Israel. Recent political uprisings and socialunrest in various countries in the Middle East and North Africa are affecting the political stability of those countries. This instability may lead to deterioration of thepolitical relationships that exist between Israel and these countries, and have raised concerns regarding security in the region and the potential for armed conflict.Any armed conflicts, terrorist activities or political instability in the region could adversely affect business conditions and could harm our results of operations. Forexample, any major escalation in hostilities in the region could result in a portion of our employees and service providers being called up to perform military duty foran extended period of time. Parties with whom we do business have sometimes declined to travel to Israel during periods of heightened unrest or tension, forcing usto make alternative arrangements when necessary. In addition, the political and security situation in Israel may result in parties with whom we have agreementsinvolving performance in Israel claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions insuch agreements. Any future deterioration in the political and security situation in Israel will negatively impact our business.Our commercial insurance does not cover losses that may occur as a result of events associated with the security situation in the Middle East. Althoughthe Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that thisgovernment coverage will be maintained. Any losses or damages incurred by us could have a material adverse effect on our business. Any armed conflicts orpolitical instability in the region would likely negatively affect business conditions and could harm our results of operations.Further, in the past, the State of Israel and Israeli companies have been subjected to an economic boycott. Several countries still restrict business with theState of Israel and with Israeli companies. These restrictive laws and policies may have an adverse impact on our operating results, financial condition or theexpansion of our business.The legislative power of the State resides in the Knesset, a unicameral parliament that consists of 120 members elected by nationwide voting under asystem of proportional representation. Israel’s most recent general elections were held on April 9, 2019, September 17, 2019, March 2, 2020 and November 1, 2022.The uncertainty surrounding the results of the recent elections may continue. Actual or perceived political instability in Israel or any negative changes in thepolitical environment, may individually or in the aggregate adversely affect the Israeli economy and, in turn, our business, financial condition, results of operationsand prospects.Some of our employees are obligated to perform military reserve duty in Israel.Many Israeli citizens, including our employees are obligated to perform one month, and in some cases more, of annual military reserve duty until they reachthe age of 40 (or older, for reservists with certain occupations) and, in the event of a military conflict, may be called to active duty. In response to increases interrorist activity, there have been periods of significant callups of military reservists. It is possible that there will be military reserve duty callups in the future. Ouroperations could be disrupted by such callups. Such disruption could materially adversely affect our business, results of operations and financial condition.35It may be difficult to enforce a nonIsraeli judgment against the Company or its officers and directors.The operating subsidiary of ours is incorporated in Israel. All of our executive officers and directors are not residents of the United States, and asubstantial portion of our assets and the assets of our executive officers and directors are located outside the United States. Therefore, a judgment obtained againstus, or any of these persons, including a judgment based on the civil liability provisions of the U.S. federal securities laws, may not be collectible in the United Statesand may not necessarily be enforced by an Israeli court. It also may be difficult to affect service of process on these persons in the United States or to assert U.S.securities law claims in original actions instituted in Israel. Additionally, it may be difficult for an investor, or any other person or entity, to initiate an action withrespect to U.S. securities laws in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of U.S. securities laws reasoning that Israel is not themost appropriate forum in which to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law isapplicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law often involves the testimony of expert witnesses, which can be a timeconsuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel that addresses the mattersdescribed above. As a result of the difficulty associated with enforcing a judgment against us in Israel, it may be impossible to collect any damages awarded byeither a U.S. or foreign court.Our international operations could expose us to additional risks, including exchange rate fluctuations, legal regulations and political or economicinstability that could harm our business and operating results.Our international operations expose us to the following risks which may have a material adverse effect on our business and operating results:●devaluations and fluctuations in currency exchange rates including fluctuations between the U.S. dollar and the NIS and the Russian Ruble;●costs of compliance with local laws, including labor laws and intellectual property laws;●compliance with domestic and foreign government policies, including compliance with Israeli securities laws and TASE;●changes in trade regulations and procedures affecting approval, production, pricing, marketing, reimbursement for and access to, our products;●compliance with applicable foreign anticorruption laws, antitrust/competition laws, antiBoycott Israel law and antimoney laundering laws; and●economic and geopolitical developments and conditions, including ongoing instability in global economies and financial markets, international hostilities,acts of terrorism and governmental reactions, inflation, outbreaks of contagious disease (e.g., the COVID19 pandemic) and military and political alliances.Risks Related to Our Common StockA more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.Although our common stock is listed on the Nasdaq Capital Market, it has only been traded on the Nasdaq Capital Market since July 25, 2016. There hasbeen relatively limited trading volume in the market for our common stock, and a more active, liquid public trading market may not develop or may not be sustained.Limited liquidity in the trading market for our common stock may adversely affect a stockholder’s ability to sell its shares of common stock at the time it wishes tosell them or at a price that it considers acceptable. If a more active, liquid public trading market does not develop, we may be limited in our ability to raise capital byselling shares of common stock and our ability to acquire other companies or assets by using shares of our common stock as consideration. In addition, if there is athin trading market or “float” for our stock, the market price for our common stock may fluctuate significantly more than the stock market as a whole. Without a largefloat, our common stock would be less liquid than the stock of companies with broader public ownership and, as a result, the trading prices of our common stockmay be more volatile and it would be harder for you to liquidate any investment in our common stock. Furthermore, the stock market is subject to significant priceand volume fluctuations, and the price of our common stock could fluctuate widely in response to several factors, including:●our quarterly or annual operating results;●changes in our earnings estimates;●investment recommendations by securities analysts following our business or our industry;●additions or departures of key personnel;●changes in the business, earnings estimates or market perceptions of our competitors;36●our failure to achieve operating results consistent with securities analysts’ projections;●changes in industry, general market or economic conditions;●announcements of legislative or regulatory changes; and●natural disasters (including for example, the recent fire in the Orgad warehouse) and political and economic instability, including wars, terrorism, politicalunrest, results of certain elections and votes, emergence of a pandemic, or other widespread health emergencies (or concerns over the possibility of suchan emergency, including for example, the recent the COVID19 pandemic), boycotts, adoption or expansion of government trade restrictions, and otherbusiness restrictions.The stock market has experienced extreme price and volume fluctuations in recent years that have significantly affected the quoted prices of the securitiesof many companies. The changes often appear to occur without regard to specific operating performance. The price of our common stock could fluctuate basedupon factors that have little or nothing to do with us and these fluctuations could materially reduce our stock price.Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.If any of our shareholders were to decide to sell large amounts of stock over a short period of time (presuming such sales were permitted) such sales couldcause the market price of our common stock to drop significantly, even if our business is doing well. Further, the market price of our common stock could decline as aresult of the perception that such sales could occur. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equitysecurities in the future at a time and price that we deem appropriate.Our securities are traded on more than one market which may result in price variations.Our securities have been trading on the Nasdaq Capital Market since July 2016 and on TASE since September 2005. Trading in our securities on suchexchanges occurs in different currencies (U.S. dollars on the Nasdaq Capital Market and NIS on the TASE), and at different times (due to different time zones,trading days and public holidays in the United States and Israel). The trading prices of our securities on the two exchanges may differ due to the foregoing andother factors. Any decrease in the price of our shares on the TASE could cause a decrease in the trading price of our shares on the Nasdaq Capital Market and viceversa.We are a smaller reporting company and, as a result of the reduced disclosure and governance requirements applicable to such companies, ourcommon stock may be less attractive to investors.We are a smaller reporting company, (i.e. a company with “public float” held by nonaffiliates with a market value of less than $250 million) and we areeligible to take advantage of certain exemptions from various reporting requirements applicable to other public companies. We have elected to adopt these reduceddisclosure requirements. We cannot predict if investors will find our common stock less attractive as a result of our taking advantage of these exemptions. If someinvestors find our common stock less attractive as a result of our choices, there may be a less active trading market for our common stock and our stock price may bemore volatile.We do not expect to pay any cash dividends in the foreseeable future.We have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our board of directors deems relevant. Investors should not purchase our common stock expecting to receive cash dividends. Because we do notpay dividends, and there may be limited trading, investors may not have any manner to liquidate or receive any payment on their investment. Therefore, our failureto pay dividends may cause investors to not see any return on investment even if we are successful in our business operations. In addition, because we do not paydividends we may have trouble raising additional funds, which could affect our ability to expand our business operations.37UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2022☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ________ to _________Commission file number 00137370MY SIZE, INC.(Exact name of registrant as specified in charter)Delaware510394637(State or jurisdiction ofIncorporation or organization)I.R.S EmployerIdentification No.4 Hayarden, POB 1026, Airport City, Israel7010000(Address of principal executive offices)(Zip code)+9723 6009030(Registrant’s telephone number, including area code)Securities registered pursuant to Section 12(b) of the Act:Title of each classTrading Symbol(s)Name of Each Exchange on Which RegisteredCommon Stock, par value $0.001 per shareMYSZThe Nasdaq Capital MarketSecurities registered pursuant to Section 12(g) of the Act: None.Indicate by check mark whether the registrant is a wellknown seasoned issuer as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes☒ No ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer, a smaller reporting company, or an emerginggrowth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 of theExchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☒Smaller Reporting Company☒Emerging Growth Company☐If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revisedfinancial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b2 of the Exchange Act) Yes ☐No☒Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control overfinancial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflectthe correction of an error to previously issued financial statements. ☐Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by anyof the registrant’s executive officers during the relevant recovery period pursuant to §240.10D1(b). ☐The aggregate market value of voting and nonvoting common equity held by nonaffiliates of the registrant as of June 30, 2022, the last business day of theregistrant’s most recently completed second fiscal quarter, was approximately $25,551,906.Number of shares of common stock outstanding as of March 31, 2023 was 2,446,780.Documents Incorporated by Reference: None.Table of ContentsPart IItem 1.Business2Item 1A.Risk Factors18Item 1B.Unresolved Staff Comments41Item 2.Properties41Item 3.Legal Proceedings41Item 4.Mine Safety Disclosures42Part IIItem 5.Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities43Item 6.Selected Financial Data43Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations43Item 7A.Quantitative and Qualitative Disclosures about Market Risk50Item 8.Financial Statements and Supplementary DataF1Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure51Item 9A.Controls and Procedures51Item 9B.Other Information51Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.51Part IIIItem 10.Directors, Executive Officers and Corporate Governance52Item 11.Executive Compensation57Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters60Item 13.Certain Relationships and Related Transactions, and Director Independence62Item 14.Principal Accounting Fees and Services65Part IVItem 15.Exhibits, Financial Statement Schedules66Signatures69iPART IIn this Annual Report on Form 10K, unless the context requires otherwise, the terms “we,” “our,” “us,” or “the Company” refer to MySize, Inc., a Delawarecorporation, and its subsidiaries, including MySize Israel 2014 Ltd. My Size LLC, Orgad International Marketing Ltd., or Orgad, and Naiz Bespoke Technologies, S.L,or Naiz, taken as a whole.References to “U.S. dollars” and “$” are to currency of the United States of America, and references to “NIS” are to New Israeli Shekels. Unless otherwiseindicated, U.S. dollar translations of NIS amounts presented in this Annual Report on Form 10K for the year ended on December 31, 2022 are translated using therate of NIS 3.358 to $1.00.All information in this Annual Report on Form 10K relating to shares or price per share reflects the 1for25 reverse stock split effected by us on December8, 2022.CAUTIONARY NOTE ON FORWARDLOOKING STATEMENTSThis Annual Report on Form 10K contains certain forwardlooking statements within the meaning of Section 27A of the Securities Act and Section 21E ofthe Exchange Act. Any statements in Annual Report on Form 10K about our expectations, beliefs, plans, objectives, assumptions or future events or performanceare not historical facts and are forwardlooking statements. These statements are often, but not always, made through the use of words or phrases such as“believe,” “will,” “expect,” “anticipate,” “estimate,” “intend,” “plan” and “would.” For example, statements concerning financial condition, possible or assumedfuture results of operations, growth opportunities, industry ranking, plans and objectives of management, markets for our common stock and future managementand organizational structure are all forwardlooking statements. Forwardlooking statements are not guarantees of performance. They involve known and unknownrisks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to differ materially from any results, levels ofactivity, performance or achievements expressed or implied by any forwardlooking statement.Any forwardlooking statements are qualified in their entirety by reference to the risk factors discussed throughout this Annual Report on Form 10K. Someof the risks, uncertainties and assumptions that could cause actual results to differ materially from estimates or projections contained in the forwardlookingstatements include but are not limited to:●our history of losses and needs for additional capital to fund our operations and our inability to obtain additional capital on acceptable terms, or at all;●risks related to our ability to continue as a going concern;●the new and unproven nature of the measurement technology markets;●our ability to achieve customer adoption of our products;●our ability to realize the benefits of our acquisitions of Orgad and Naiz;●our dependence on assets we purchased from a related party;●our ability to enhance our brand and increase market awareness;●our ability to introduce new products and continually enhance our product offerings;●the success of our strategic relationships with third parties;●information technology system failures or breaches of our network security;●competition from competitors;●our reliance on key members of our management team;●current or future litigation;●current or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated liquidityrisk; and●the impact of the political and security situation in Israel on our business.1The foregoing list sets forth some, but not all, of the factors that could affect our ability to achieve results described in any forwardlooking statements.You should read this Annual Report on Form 10K and the documents that we reference herein and have filed as exhibits to the Annual Report on Form 10K,completely and with the understanding that our actual future results may be materially different from what we expect. You should assume that the informationappearing in this Annual Report on Form 10K is accurate as of the date hereof. Because the risk factors referred to in this Annual Report on Form 10K, could causeactual results or outcomes to differ materially from those expressed in any forwardlooking statements made by us or on our behalf, you should not place unduereliance on any forwardlooking statements.Further, any forwardlooking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forwardlookingstatement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. New factors emergefrom time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extentto which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements. We qualify all ofthe information presented in this Annual Report on Form 10K, and particularly our forwardlooking statements, by these cautionary statements.ITEM 1. BUSINESSOverviewWe are an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile phone or through MySizeID Widget: a simple questionnaire which uses a database collected over the years.MySizeID syncs the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and only presents itemsfor purchase that match their measurements to ensure a correct fit.We are positioning ourselves as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empower brand design teams, which are designed to increase endconsumer satisfaction, contributing to a sustainable world and reduce operation costs.Recent DevelopmentsOrgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,602 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.2The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz, a limitedliability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.3The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Warehouse FireOn January 2, 2023, Orgad experienced a fire at its warehouse in Israel. we are not aware of any casualties or injuries associated with the fire. We shiftedOrgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incident did not affectthe future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of this incident on the otherparties that were involved in the incident (lessor and others that leased properties near the warehouse).January 2023 FinancingOn January 10, 2023, we entered into a securities purchase agreement, or the RD Purchase Agreement, pursuant to which we agreed to sell and issue in theRD Offering an aggregate of 162,000 of our shares of common stock, or the RD Shares, and prefunded warrants, or the Prefunded Warrants, to purchase up to279,899 shares of common stock and, in a concurrent private placement, unregistered warrants to purchase up to 883,798 shares of common stock, or the RDWarrants, consisting of Series A warrants, or Series A Warrants, to purchase up to 441,899 shares of common stock and Series B warrants, or Series B Warrants, topurchase up to 441,899 shares of common stock, at an offering price of $3.055 per RD Share and associated Series A and Series B Warrants and an offering price of$3.054 per Prefunded Warrant and associated Series A and Series B Warrants.4In addition, we entered into a securities purchase agreement, or the PIPE Purchase Agreement, and together with the RD Purchase Agreement, thePurchase Agreements, pursuant to which we agreed to sell and issue in the PIPE Offering an aggregate of up to 540,098 unregistered Prefunded Warrants andunregistered warrants to purchase up to an aggregate of 1,080,196 shares of common stock, or the PIPE Warrants and together with the RD Warrants, the Warrants,consisting of Series A Warrants to purchase up to 540,098 shares of common stock and Series B Warrants to purchase up to 540,098 shares of common stock at anoffering price of $3.054 per Prefunded Warrant and associated Series A and Series B Warrants.The Prefunded Warrants are immediately exercisable at an exercise price of $0.001 per share and will not expire until exercised in full. The Warrants areimmediately exercisable upon issuance at an exercise price of $2.805 per share, subject to adjustment as set forth therein. The Series A Warrants have a term of fiveand onehalf years from the date of issuance and the Series B Warrants have a term of 28 months from the date of issuance. The Warrants may be exercised on acashless basis if there is no effective registration statement registering the shares underlying the warrants.In connection with the PIPE Purchase Agreement, we entered into a registration rights agreement, or the Registration Rights Agreement. Pursuant to theRegistration Rights Agreement, we are required to file a resale registration statement, or the Registration Statement, with the Securities and Exchange Commission, orthe SEC, to register for resale the shares issuable upon exercise of the unregistered Prefunded Warrants and the Series A and Series B Warrants, within 20 days ofthe signing date of the PIPE Purchase Agreement, or the Signing Date, and to have such Registration Statement declared effective within 60 days after the SigningDate in the event the Registration Statement is not reviewed by the SEC, or 90 days of the Signing Date in the event the Registration Statement is reviewed by theSEC. we will be obligated to pay certain liquidated damages if we fail to maintain the effectiveness of the Registration Statement.The Purchase Agreements and the Registration Rights Agreements also contain representations, warranties, indemnification and other provisionscustomary for transactions of this nature. In addition, subject to limited exceptions, the Purchase Agreements provide that for a period of one year following theclosing of the Offerings, we will not effect or enter into an agreement to effect a “variable rate transaction” as defined in the Purchase Agreements.Aggregate gross proceeds to the Company in respect of the Offerings was approximately $3.0 million, before deducting fees payable to the placement agentand other offering expenses payable by the Company.We also entered into a letter agreement, or the Engagement Agreement, with H.C. Wainwright & Co., LLC, or Wainwright, pursuant to which Wainwrightagreed to serve as the exclusive placement agent for the Company in connection with the Offerings. We paid Wainwright a cash placement fee equal to 7% of theaggregate gross proceeds raised in the Offerings, a management fee of 1% of the aggregate gross proceeds raised in the Offerings, a nonaccountable expenseallowance of $85,000 and clearing fees of $15,950. Wainwright also received placement agent warrants, or the Placement Agent Warrants, with substantially the sameterms as the Series A Warrants issued in the Offering in an amount equal to 7% of the aggregate number of Shares and Prefunded Warrants sold in the Offerings, or68,740 shares, at an exercise price of $3.8188 per share and a term expiring on January 10, 2028.Our SolutionOur cloudbased software platform provides highly accurate sizing and measurement with broad applications including the online fashion/apparel industry,logistics and courier services and home DIY. Currently, we are mainly focusing on the ecommerce fashion/apparel industry. This proprietary technology is driven byseveral patented algorithms which are able to calculate and record measurements in a variety of novel ways. Although specific functionality varies by product, webelieve that our core solutions address the need for highly accurate measurements in a variety of consumer friendly, every day uses.5We have developed three products, MySizeID for the fashion/apparel industry, BoxSize for the logistics and courier services market and SizeUp for thehome DIY market.●MySizeID enables shoppers to generate highly accurate measurements of their body to find proper fitting clothes and accessories, through the use ofour application on their mobile phone or through a simple questionnaire if the user decides not to download the application. MySizeID syncs the user’smeasurement data to a sizing chart and presents items for purchase that match their measurements to ensure a correct fit. MySizeID is available forlicense by retailers and accessable by consumers through a web page.●BoxSize enables customers to quickly and easily measure the size and volume of a parcel to accurately calculate shipping fees. It also offers shippingcompanies a variety of precise logistical data for more efficiently managing their supply chain, providing them with an accurate way to compare thephysical package with what is in the shipping manifest. BoxSize solution is available for license on both iOS and Android operating systems. BoxSizeis available on the Honeywell Marketplace and in August 2019 was approved for Honeywell’s Independent Software Vendor Program, and MySize wasgranted an independent software vendor (ISV) status on the Zebra Technologies and on DataLogic platforms.●SizeUp is a digital tape measure that allows users to measure length, width and height of a surface by moving their smartphone from point to point ofan object or space. SizeUp is a valueadd for DIY and home improvement retailers whose customers struggle to find the appropriately sized items (likeblinds or curtains) for their homes or projects due to inaccurate measurements. SizeUp also is designed to replace rulers, tape measures and othermeasuring tools used for DIY projects. SizeUp is available for consumer download on both iOS and Android operating systems.The following are some select key features of our solutions:●Integration Capability. We design our solutions to be flexible and configurable, allowing our clients to match their use of our algorithms and softwarewith their specific business processes and workflows. Our platform has been organically developed from a common code base, data structure and userinterface, providing a consistent user experience with powerful features that are easily adaptable to our clients’ needs. The MySizeID widget can beintegrated via oneline JavaScript code, or through RESTful API;●Intuitive user experience. Our intuitive, easytouse interface is based on current technology, multiple focus groups and automatically adapts to users’devices, including mobile platforms, thereby significantly increasing accessibility of our solutions;●Big Data Generation. While we supply to the user the information he/she requires, we gather certain vital information such as body measurement andpackage volume which can be used anonymously to help the retailer acquire predictive size information on stocking, operations and consumers thatmay be in between sizes. All the information is being gathered and stored on our servers where it can be used by retailers;●NonInvasive. In taking measurements using our solution, the smartphone camera is not utilized; instead, the measurements are captured by scanningthe smartphone over the consumer’s body or package, thus ensuring greater privacy.Our Growth StrategyWe aim to drive revenue primarily through penetration of the U.S. and Europe markets through a business to business to consumer (B2B2C) model in theverticals we are targeting. We are pursuing the following growth strategies:●Sign Additional Commercial Agreements with U.S. Retailers. During 2022, we expanded our commercial agreements with Levi’s, introducing NorthAmerica (U.S. and Canada) and Latin America regions, and by extension Levis’ native apps in EU and U.S. regions. We also entered into commercialagreements with Baby Fresh, Galax, Punto Blanco, GEF France, Diesel, Gaala, Superdry, Uniontex Industries, and Temperlay London among others. Weare in various stages of discussions with U.S. and foreign retailers for the deployment of our size recommendation and measurement technology with aview to entering into additional commercial agreements.6●Pursue a TwoPronged Commercialization Strategy. We are seeking to accelerate adoption of our solutions both through direct partnerships with ecommerce websites as well as through thirdparty platform websites. While we seek to directly enter into partnerships with companies maintaining ecommerce websites in the apparel, courier and DIY markets, we are also seeking to deploy our solutions on thirdparty platforms. Furthermore, with theexpansion of MySizeID through the release of our FirstLook Smart Mirror, which we are offering to brick and mortar stores to digitize the physicalstores, MySizeID is now available for online retailers utilizing the WooCoomerce, Shopify, Lightspeed, PrestaShop, Bitrix and Wix platforms and tobrick and mortar stores through GK Software POS solution while BoxSize is available on the Honeywell, Zebra Technologies and Datalogic.●Ongoing Investment in our Technology Platform. We continue to invest in building new software capabilities and extending our platform to bring thepower of accurate measurement to a broader range of applications. In particular, we seek not only to deliver size recommendations but to provide arobust, endtoend,artificial intelligence, or AIdriven platform that inspires consumer confidence and drives revenue growth by providing a superiorconsumer journey to both online and the brick and mortar stores.●Grow our database. As the usage of our measurement apps increases, our database of information including user behaviour and body measurementsgenerates valuable statistics. Such data can be used in the big data market for targeted advertising and for blind consumer data mining.●Identify and acquire synergistic businesses. In order to reduce our time to market and obtain complementary technologies, we are seeking to acquiretechnologies and businesses that are synergistic to our product offering. We recently completed an acquisition of Orgad which operates anomnichannel ecommerce platform and Naiz which provides SaaS technology solutions that solve size and fit issues for fashion ecommerce companies.●Partnerships and cooperation. In order to bring a wider solution for the retail market we are working to partner and integrate our technology withpartners that can increase our penetration and offering to the market.Market OpportunityThe global ecommerce market was $5.7 trillion in 2022, and the industry is expected to grow significantly in the coming years with no signs of slowingdown. Market specialists expect a compound annual growth rate of 27.43% from 2023 to 2028: according to data from Statista, the market is expected to reach $6.5trillion in 2023. While many sectors have found ways to increase revenue through ecommerce, ecommerce is still plagued by issues that cut into profits andnegatively impact the bottom line, such as customer returns, low consumer conversion, and associated restocking and shipping costs.Fashion/ApparelSince the onset of the COVID19 pandemic, an immense shift to digital was recorded, with 85.9% growth vs. prepandemic, according to Mastercard, andover 2 billion people worldwide who shop online, according to data from Oberlo. In November 2022, online shoppers broke records with $11.3 billion in spending onCyber Monday, driving 5.8% yearoveryear growth and making the day the biggest online shopping day of all time, according to Adobe Analytics.In 2021, fashion companies invested between 1.6% and 1.8% of their revenues in technology, according to Mckinsey, and are expected to double theinvestment by 2030 in order to keep up with digital natives and keep a competitive edge. Personalization in ecommerce and hybrid connectivity in brickandmortarretail are two key themes in the future of fashtech, according to Mckinsey’s 2022 State of Fashion Technology.7In the upcoming years, inflation is expected to impact the fashion world. As prices for goods increase, the challenge will be to inspire confidence inconsumers, via different smart digital tools. Brands will need to embrace creative digital tools and new channels to deepen customer relationships, and as Mckinseyforecasts in their State of Fashion report for 2023, they will need to execute on priorities such as sustainability and digital acceleration.The global fashion ecommerce market size is expected to grow from $744.4 billion in 2022 to $821.19 billion in 2023 at a compound annual growth rate of10.3%. In 2027, the market size is expected to grow to $1,222.32 billion, at a compound annual growth rate of 10.5%, according to BRC.Based on the importance which shoppers attribute to free shipping 50% of cart abandonment rate is due to extra shipping costs (Baymard Institute) theneed for fashion retailers to substantiate the optimal size for a customer, thus minimizing returns, has never been more crucial.As brands move online or significantly expand their online presence, we believe that developing innovative ways to connect with shoppers, both onlineand offline, has become a top priority.Shipping/ParcelAccording to Pitney Bowes, parcel revenue in 13 major countries around the world increased by 17% year over year from $420 billion in 2020 (reflecting 131billion parcels) to $491 billion in 2021 (reflecting 159 billion parcels). In the shipping/parcel industry, the dimensions of a package are critical. It is not merely themeasurement of a package or box – but rather the amount of space that the package or box will take up on a truck, airplane, or ship that will be transporting thepackage or box. Far too often, retailers use unfit packaging for their items, adding additional costs in materials and shipping fees.DIYSimilar to issues in the apparel and fashion market, big box, hardware, furniture, and DIY stores are plagued by returns due to incorrect fit andmeasurements. In an industry where precise measurement for projects is an absolute necessity, ecommerce has not grown as quickly as in other industries which webelieve is due to lack of consumer confidence in measurements at home and buying the correct item online.MySizeIDWe have released the MySizeID app for both iOS and Android which assists consumers to take highly accurate measurement of their own body in order tosize clothing in the best way possible without the need to try the clothes on before purchasing. MySizeID is designed to simplify the process of purchasing clothesonline and significantly reduce the rate of returns of poorfitting clothing. During 2022, MySizeID delivered over 23.5 million size recommendations.The application is the result of a research and development effort that combines:●anthropometric research – analyses of information pertaining to body measurements derived from a survey and the subsequent determination ofcorrelations between body parts;●body measurement algorithm research – an algorithm created by us to measure body parts; and●retailers size chart analyses – adopting a deep understanding of the size charts of retailers and the corresponding “body to garment size.”MySizeID allows consumers to create a secure, online profile of their personal measurements, which can then be utilized, with partnered online retailers, toensure that no matter the manufacturer or size chart, they will get the right fit. MySizeID operates based on the use of existing sensors in smart phones which enable,through a specific purpose application, the measurement of the body of any consumer by moving the smartphone along his or her body. The MySizeID applicationdoes not rely on user photographs or any additional hardware; all a user needs to do is scan their body with their smartphone and the application records theirmeasurements. The measurements can then be saved in our database in the cloud, enabling the user to search for clothes in various retailer websites withoutworrying about size. When a search is made, the retailer will connect to our cloud database, and then provide results based on the user’s measurements and otherparameters as he or she may have defined. This data is also saved for use when a customer enters a brickandmortar store to help serve the customer moreefficiently and to provide a better shopping experience.8Figure 1: Screenshot of MySizeID on smartphone and ecommerce websiteAs part of the integration process, we offer to the retailer five main components:●Mobile App. MySizeID comes in the form of a native app or website. Our native app can be used “as is” integrated into the retailer’s ecommercewebsite. The website users can build a body profile on the app and receive size recommendations for their profile both in the app and on a widgetintegrated with their website.9●Widget. When a consumer enters into the retailer’s website and looks for a specific item, he or she can click on the MySizeID widget which will informthe consumer of his or her recommended size, based on his or her actual measurements, as measured using the app and the item he or she is looking at.The widget has two features:AI Wizard mode allows the user to obtain size from the following parameters: gender, height, weight, belly shape, hip shape and bra size only. Thegender, height and weight questions are mandatory, while the body shape questions are optional and can be added to increase accuracy for specificapparel categories.Guest mode allows a user that does not wish to sign up to MySizeID as a user to obtain size recommendations as well.●Analytic Pixel. MySizeID analytic pixel allows retailer to track and analyze the widget usage. By adding the pixel to the retailer’s website, MySizeID BIteam can track engagement, order, and return data and provide retailers with tools to understand the advantages and benefits of MySizeID.Use your own device using MySizeID instore solution, shoppers can receive size recommendations for all store items, when shopping in the offlinestores. The shoppers can build their body profile using an easy to use 3 to 6 questions form, scan an item barcode and receive a size recommendationfor the scanned item based on their body profile and the item’s size chart.Another feature we added is the “inbetween sizing” feature. Our system can detect a user that has body dimensions that place the user inbetweenthe clothes sizes being offered and lets the user know that. A user can then choose between the two sizes according to the user’s fit preference(tight/loose/average).In addition, we have recently released our InstantApp feature which allows shoppers to generate their body measurements directly from our widget,without the need to download our mobile app. Using this technology, the shoppers can create their online profile of their personal measurements andcomplete a purchase faster and easier with minimum distractions.The body profile can be created while shoppers are viewing the page from their mobile phone, or by scanning a QR code on desktop that will open thesame page on the mobile phone.Screenshot of InstantApp widget on desktop on yumyumfashion website10●MyDash Platform. The MyDash platform is a smart backoffice system where the retailer enters all the information regarding its size charts thatcorrelates to every product in its ecommerce site, and where the retailer can access the information on its users. This system is customizable based onthe retailer’s needs. In 2021, we changed the MyDash system to increase the system’s accessibility, added walkthroughs, user guides and changed theuser interface and much more for the ease of use. We added the option to use our generic size charts, added the option upload size chart files insteadof typing the size charts values manually, added more widget styling options and changed the pairing mechanism between the size chart and theproducts to be more userfriendly.Figure 3: Screenshot of BackOffice System●FirstLook Smart Mirror. The Smart Mirror provides an interactive, mirrorlike touch display that allows brands to provide instore customers with anenhanced, online shopping experience, contactless checkout and obtains the recommended size. The MySizeIDFirstLook Smart Mirror can be placedin numerous locations throughout a retail store, including the fitting rooms (without cameras) or other hightraffic locations of the store. Highlightcapabilities of the FirstLook Smart Mirror include a 3D “Tryiton” interactive avatar experience, personalized and highly accurate sizerecommendations by MySizeID, thirdparty point of sale systems integration, styling recommendations and contactless “select and collect” at theregister feature.Illustration of MySizeID “first look” smart mirror in a fashion store11We are currently offering MySizeID technology to retailers through either a payperuse model or a monthly subscription model. In our payperusebusiness model, every time the consumer obtains a recommended size, the retailer is charged for the usage.BoxSizeBoxSize is a parcel measurement application that can provide realtime logistic data on package volumes and transportation, resulting in improvedoperational efficiency and reduced operating expenses. In addition, BoxSize allows customers to easily measure the size of their parcel with their smartphone,calculate shipping costs and arrange for a convenient pickup time for the package. BoxSize is available both on iOS and Android.In 2020 we released the “One Click” feature on BoxSize that enables the user to measure a package with just one swipe of the handheld device. Previously,measurements through BoxSize would require three separate swipes.Figure 4: Screenshot of BoxSizeOur BoxSize mobile measurement solution is available on the Honeywell Marketplace. In addition, BoxSize was approved for Honeywell’s Global VendorProgram, and is available to provide highly accurate mobile measurement solutions for thousands of Honeywell clients. We also developed a new dashboard for thecourier companies to have all the required data about each package in one place. It includes package dimensions, pictures, scan geo location and more. Thedashboard also let the courier use Webhooks, which allows him to get the information from his own system.12In 2020, we announced our partnership with Datalogic, a company focused on the automatic data capture and process automation markets. The partnershipmakes our BoxSize measurement solution available to thousands of Datalogic customers in the Transportation and Logistics vertical.Agreement with Delhivery Private Limited, IndiaWe entered into an agreement with Delhivery Private Limited, one of the largest courier pickup, delivery, and online shipping services in India. Delhivery’sreputation as a frontrunner in delivery and logistics tech makes its decision to select Boxsize a particularly strong testament to the value the solution provides.BoxSize provides Delhivery’s employees on the B2B side with critical information that will allow them to effortlessly optimize loading efficiency and add even morerealtime visibility to operations.SizeUpWe are working on additional consumer applications, including a DIY application. Our SizeUp application is a smart tape measure for the business toconsumer market which allows users to utilize their smartphone as a tape measure. The application provides measurements with an accuracy of within twocentimeters. Through the use of SizeUp, users will be able to visualize how an object or a piece of furniture will fit in an existing room in their home or office. It alsoadded Google Vision for image content analysis, object detection, and title suggestions.Currently the SizeUp app for Android and iOS is available for free for the first 30 days, after which a user will be required to register via email and pay aonetime fee of $1.99 to continue using the application. To date, revenues from downloads have been minimal.Research and DevelopmentOur research and development team are responsible for the research, algorithm, design, development, and testing of all aspects of our measurementplatform technology. We invest in these efforts to continuously improve, innovate, and add new features to our solutions.We incurred research and development expenses of approximately $1.7 million in 2022 and $4.25 million in 2021, relating to the development of itsapplications and technologies. The decrease from the corresponding period primarily resulted from share based payment in amount of $2,618,000 attributed to theshare issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021. We intend to continue to invest in our research anddevelopment capabilities to extend our platform and bring our measurement technology to a broader range of applications.13In 2022, the R&D department experienced significant success in their efforts to improve the performance of their size recommendation system. Through acombination of optimized algorithms and the incorporation of cuttingedge technologies, the team was able to achieve a threefold increase in the system’s speed.This breakthrough not only makes the system one of the fastest and most accurate on the market, but also reduced the operation costs, making it more costeffective for businesses to use. Additionally, the solution is now highly scalable, allowing it to easily adapt to the needs of businesses of any size. The R&D team isnow focused on further improving the system and exploring new applications for the technology.Sales and MarketingIn 2019, we launched a commercialization strategy that directs our sales efforts toward both sales to ecommerce players in specific vertical markets such asfashion/apparel and shipping/delivery as well as to ecommerce thirdparty platform providers. As of March 15, 2023, our products are being sold in the followingcountries: US, UK, France, Netherlands, Spain, Portugal Turkey, Germany, Israel and Italy, generating customer leads, building out a sales pipeline, and developingcustomer relationships.We believe an effective method to market our suite of products is for users to actively use and explore its capabilities. We encourage free trials of one ormore of our products in order to successfully convert those accounts to paid subscriptions.Proprietary RightsWe rely on a combination of patent, copyright, trademark and trade secret laws in the United States and other jurisdictions, as well as contractualprotections, to protect our proprietary technology.As of December 31, 2022, we owned 18 issued patents: six in Europe, four in the U.S., three in each of Russia and Japan and one in each of Canada andIsrael which expire between January 20, 2033 and August 18, 2036, and we have two additional patent applications in process. As of such date, we do not have anyregistered trademarks.We cannot provide any assurance that our proprietary rights with respect to our products will be viable or have value in the future since the validity,enforceability and type of protection of proprietary rights in softwarerelated industries are uncertain and still evolving.Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products or to obtain and use informationthat we regard as proprietary. Policing unauthorized use of our products is difficult, and while we are unable to determine the extent to which piracy of our softwareproducts exists, software piracy can be expected to be a persistent problem. In addition, the laws of some foreign countries do not protect proprietary rights to asgreat an extent as do the laws of the United States, and effective copyright, trademark, trade secret and patent protection may not be available in those jurisdictions.Our means of protecting our proprietary rights may not be adequate to protect us from the infringement or misappropriation of such rights by others.Further, in recent years, there has been significant litigation in the United States involving patents and other intellectual property rights, particularly in thesoftware and Internetrelated industries. We can become subject to intellectual property infringement claims as the number of our competitors grows and ourproducts and services overlap with competitive offerings. These claims, even if not meritorious, could be expensive to defend and could divert management’sattention from operating our business. If we become liable to third parties for infringing their intellectual property rights, we could be required to pay a substantialaward of damages and to develop noninfringing technology, obtain a license or cease selling the products that contain the infringing intellectual property. We maybe unable to develop noninfringing technology or obtain a license on commercially reasonable terms, if at all.14Government RegulationWe are subject to a number foreign and domestic laws and regulations that involve matters central to our business. These laws and regulations mayinvolve privacy, data protection, intellectual property, or other subjects. Many of the laws and regulations to which we are subject are still evolving and being testedin courts and could be interpreted in ways that could harm our business. In addition, the application and interpretation of these laws and regulations often areuncertain, particularly in the new and rapidly evolving industry in which we operate. Because global laws and regulations have continued to develop and evolverapidly, it is possible that we, our products, or our platform may not be, or may not have been, compliant with each such applicable law or regulation.In particular, we are subject to a variety of federal, state and international laws and regulations governing the processing of personal data. Many U.S. stateshave passed laws requiring notification to data subjects when there is a security breach of personally identifiable data. There are also a number of legislativeproposals pending before the U.S. Congress, various state legislative bodies and foreign governments concerning data protection. In addition, data protection lawsin Europe and other jurisdictions outside the United States can be more restrictive than those within the United States, and the interpretation and application ofthese laws are still uncertain and in flux.For example, the General Data Protection Regulation, or GDPR, which took effect on May 25, 2018, enhances data protection obligations for entities thatprocess personal data about individuals, including obligations to cooperate with European data protection authorities, implement security measures and keeprecords of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to the greater of €20 million or 4% of global annual revenue. Inaddition, the California Consumer Privacy Act of 2018, or CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and requiredeletion of their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used.The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further,failure to comply with the Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may exposeus to administrative fines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the currentenforcement measures and sanctions. Given the breadth and depth of changes in data protection obligations, meeting the requirements of GDPR and otherapplicable laws and regulations has required significant time and resources, including a review of our technology and systems currently in use against therequirements of GDPR and other applicable laws and regulations. We have taken various steps to prepare for complying with GDPR and other applicable laws andregulations however there can be no assurance that these steps are sufficient to assure compliance. Further, additional EU laws and regulations (and member states’implementations thereof) further govern the protection of individuals and of electronic communications. If our efforts to comply with GDPR or other applicable lawsand regulations are not successful, we may be subject to penalties and fines that would adversely impact our business and results of operations, and our ability touse personal data of individuals could be significantly impaired.CompetitionWe operate in a highly competitive industry that is characterized by constant change and innovation. Changes in the applications and the programinglanguages used to develop applications, devices, operating systems, and technology landscape result in evolving customer requirements. Our competitors includeTrue Fit, Fit analytics and 3DLook.The principal competitive factors in our market include the following:●High Accuracy Size Recommendations: the highest accuracy and the lowest margin of error by combining patented technology including AI and ML,size chart or spec data, and MySizeID property body data measurement;●Integration○Fast 1 week integration including size chart size chart review and product mapping○Easy 1 line of “all included” script implementation●Technical Advantages○Very small library that weighs ±50kb (minimum widget loading time on product page)○UltraFast loading and size recommendation presenting○Restful API option (API integration with any website or app)15●Optimizations○Adjustments of size charts based on performance○Widget usage analysis by FashTech and BI teams○Automatic pairing of size charts with products/collections●User Experience○Easy to use interface (1015 seconds to receive size recommendations)○Option to add/deduct questions to/from widget wizards○Users automatically receive size recommendations on all products after initial sign up●Product and platform features, architecture, reliability, privacy and security, performance, effectiveness, and supported environments;●Product extensibility and ability to integrate with other technology infrastructures;●Digital operations expertise;●Ease of use of products and platform capabilities;●Total cost of ownership;●Adherence to industry standards and certifications;●Strength of sales and marketing efforts;●Brand awareness and reputation; and●Focus on customer successWe believe we generally compete favorably with our competitors on the basis of these factors. We expect competition to increase as other established andemerging companies enter our markets, as customer requirements evolve, and as new products and technologies are introduced. We expect this to be particularlytrue as we offer a smartphonebased offering that does not need to utilize the smartphone’s camera, and our competitors may also seek to repurpose their existingofferings to provide similar solutions. Many of our competitors have substantially greater financial, technical, and other resources, greater name recognition, largersales and marketing budgets, broader distribution, and larger and more mature intellectual property portfolios.Human Capital ManagementAs of March 31, 2023, we had a total of 35 employees, of which 30 were fulltime employees, including 9 in sales and marketing, 12 in technology anddevelopment and 9 in administration and finance.None of our employees are represented by a collective bargaining agreement, nor have we experienced any work stoppage. We consider our relationshipwith our employees to be good. Our future success depends on our continuing ability to attract and retain highly qualified engineers, sales and marketing, accountmanagement, and senior management personnel.We also believe we have built a strong sales team focused on expanding into new markets through the acquisition of Naiz and our current team.We believe that our future success will depend, in part, on our continued ability to attract, hire and retain qualified personnel. In particular, we depend onthe skills, experience and performance of our senior management and research personnel. We compete for qualified personnel with other hitech companies, as wellas universities and nonprofit research institutions.16We provide competitive compensation and benefits programs to help meet the needs of our employees. In addition to salaries, these programs (which varyby country/region and employment classification) include incentive compensation plan, pension, and insurance benefits, paid time off, , among others. We also usetargeted equitybased grants with vesting conditions to facilitate retention of personnel, particularly for our key employees.The success of our business is fundamentally connected to the wellbeing of our people. Accordingly, we implemented an hybrid work policy in which theemployees can work from home twice a week.We consider our employees to be a key factor to our success and we are focused on attracting and retaining the best employees at all levels of ourbusiness. Inclusion and diversity is a strategic, business priority. We employ people based on relevant qualifications, demonstrated skills, performance and otherjobrelated factors. We do not tolerate unlawful discrimination related to employment, and strive to ensure that employment decisions related to recruitment,selection, evaluation, compensation, and development, among others, are not influenced by race, color, religion, gender, age, ethnic origin, nationality, sexualorientation, marital status, or disability. Continuous monitoring to ensure pay equity has been a focus in 2022. We have continued to improve gender balance in 2022with a focus on increasing the representation of women hired as new college graduates. We are committed to creating a trusting environment where all ideas arewelcomed and employees feel comfortable and empowered to draw on their unique experiences and backgrounds.We consider our relations with our employees to be good.Company InformationOur principal executive offices are located at HaYarden 4 St., POB 1026, Airport City, Israel 7010000, and our telephone number is +97236009030. Ourwebsite address is www.mysizeid.com. Any information contained on, or that can be accessed through, our website is not incorporated by reference into, nor is it inany way a part of, this Annual Report on Form 10K.We use our website (www.mysizeid.com) as a channel of distribution of Company information. The information we post through this channel may bedeemed material. Accordingly, investors should monitor our website, in addition to following our press releases, SEC filings and public conference calls andwebcasts. The contents of our website are not, however, a part of this Annual Report on Form 10K.Corporate HistoryWe were incorporated in the State of Delaware on September 20, 1999 under the name Topspin Medical, Inc. In December 2013, we changed our name toKnowledgetree Ventures Inc. Subsequently, in February 2014, we changed our name to MySize, Inc. In 2020, we created a subsidiary in the Russian Federation, MySize LLC.From inception through 2012, we were engaged in research and development of a medical magnetic resonance imaging, or MRI, technology forinterventional cardiology and in the development of MRI technology for use in the diagnosis and treatment of prostate cancer. In January 2012, we acquiredMetamorefix Ltd., or Metamorefix. Metamorefix was incorporated in 2007, and was engaged in the development of innovative solutions for the rehabilitation oftissues, particularly skin tissues. By the end of 2012, we ceased operations and in January 2013, we sold our entire ownership interest in Metamorefix.In September 2013, Ronen Luzon, our Chief Executive Officer, acquired control of the Company from Asher Shmuelevitch, according to which Mr. Luzonpurchased 70,238 shares of common stock from Mr. Shmuelevitch, which shares represented approximately 40% of the issued and outstanding capital stock of theCompany at such time, thus becoming a controlling shareholder of the Company. In connection with the acquisition, Mr. Luzon reached a settlement with our thencreditors pursuant to which the main creditor, Mr. Shmuelevitch, was paid a total sum of approximately $140,000 in consideration for a full and final waiver of any andall his claims that he may have relating to any monetary indebtedness of the Company to the creditors.17In February 2014, My Size Israel, our wholly owned subsidiary, entered into a Purchase Agreement, or the Purchase Agreement, with Shoshana Zigdon,who at the time was a beneficial owner of more than 20% of our outstanding shares, with respect to the acquisition by us of certain rights related to the collection ofdata for measurement purposes including rights in the venture, the method and a patent application that had been filed by the Seller (PCT/IL2013/050056), or theAssets. In consideration for the sale of the Assets, we agreed to pay to Ms. Zigdon, 18% of our operating profit, directly or indirectly connected with the Assetstogether with valueadded tax in accordance with the law for a period of seven years from the end of the development period of the aforementioned venture. Inaddition to the foregoing, the Purchase Agreement provided that all developments, improvements, knowledge and knowhow developed and/or accumulated by usafter the execution of the Purchase Agreement will be owned by us. Further, Ms. Zigdon agreed not to compete, directly or indirectly, with us in any matter relatingto the Assets for a period of seven years from the end of the development period of the venture.On May 26, 2021, we, My Size Israel, and Ms. Zigdon entered into an Amendment to Purchase Agreement, or the Amendment, which made certainamendments to the Purchase Agreement. Pursuant to the Amendment, Ms. Zigdon agreed to irrevocably waive (i) the right to repurchase certain assets related tothe collection of data for measurement purposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which our business issubstantially dependent, or the Assets, and (ii) all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My SizeIsrael under the Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation, reward orany rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights, or the Waiver. Inconsideration of the Waiver, we issued 100,000 shares of common stock to Ms. Zigdon.In September 2005, we commenced trading on the Tel Aviv Stock Exchange, or TASE. Between 2007 and 2012 we reported as a public company with theSEC. In August 2012, we suspended our reporting obligations. In mid2015 we resumed reporting as a public company. On July 25, 2016, our common stock beganpublicly trading on the Nasdaq Capital Market under the symbol “MYSZ”.ITEM 1A. RISK FACTORSAn investment in our common stock involves a high degree of risk. You should carefully consider the following risk factors and the other information inthis Annual Report on Form 10K before investing in our common stock. Our business and results of operations could be seriously harmed by any of the followingrisks. The risks set out below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterialalso may materially adversely affect our business, financial condition and/or operating results. If any of the following events occur, our business, financial conditionand results of operations could be materially adversely affected. In such case, the value and trading price of our common stock could decline, and you may lose allor part of your investment.Summary Risk FactorsThe principal factors and uncertainties that make investing in our ordinary shares risky, include, among others:Risks Related to Our Financial Position and Capital Requirements●We have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.●Our limited operating history makes it difficult to evaluate our business and prospects.●We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive and maycause the market price of our common stock to decline.●The report of our independent registered public accounting firm contains an explanatory paragraph regarding substantial doubt about our ability tocontinue as a going concern.Risks Related to Our Company and Our Business●The market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and online thirdparty resellers adopting our flagship product, MySizeID.18●Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broader marketacceptance of our products.●We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which may makeit difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.●We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increase ourcapital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.●If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations and financialcondition may be adversely affected.●If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operations andfinancial condition could be adversely affected.●The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile device applications andcustom development services.●Our growth depends, in part, on the success of our strategic relationships with third parties.●Changes in economic conditions could materially affect our business, financial condition and results of operations.●We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.●We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significant interruptionin our network or hosting and cloud services could adversely impact our operations and harm our business.●Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.●We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.●A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.●Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, data protectionand information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive and confidentialinformation. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm our business,results of operations and financial condition.●We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect our business.●We may face intense competition and expect competition to increase in the future, which could limit us in developing a customer base and generatingrevenue.●Our business operations and future development could be significantly disrupted if we lose key members of our management team.19●If we are able to expand our operations, we may be unable to successfully manage our future growth.Risks Related to Our Operations in Israel and Russia●Our headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.●Russia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.Risks Related to Our Common Stock●A more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.●Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions and adversedevelopments with respect to financial institutions and associated liquidity risk;●Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.●Our securities are traded on more than one market which may result in price variations.●We are a former “shell company” and as such are subject to certain limitations not generally applicable to other public companies.Risks Related to Our Financial Position and Capital RequirementsWe have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.We realized a net loss of approximately $8.3 million and $10.5 million for the years ended December 31, 2022 and 2021 and had an accumulated deficit of$53.5 million as at December 31, 2022. Because of the numerous risks and uncertainties associated with the development and commercialization of our products andbusiness, we are unable to predict the extent of any future losses or when we will become profitable, if at all. Expected future operating losses will have an adverseeffect on our cash resources, shareholders’ equity and working capital. Our failure to become and remain profitable could depress the value of our stock and impairour ability to raise capital, expand our business, maintain our development efforts, or continue our operations. A decline in our value could also cause you to lose allor part of your investment in us.Our limited operating history makes it difficult to evaluate our business and prospects.We have only been developing our measurement technology since 2014. Since then, our operating history has been primarily limited to research anddevelopment, pilot studies, raising capital, and more recently acquisitions and sales and marketing efforts. Therefore, it may be difficult to evaluate our business andprospects. We have not yet demonstrated an ability to commercialize our products. Consequently, any predictions about our future performance may not beaccurate, and you may not be able to fully assess our ability to complete development and/or commercialize our products, and any future products.We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive andmay cause the market price of our common stock to decline.Based on our projected cash flows and the cash balances as of the date of this Annual Report on Form 10K, our existing cash is insufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. In order to meet ourbusiness objectives in the future, we will need to raise additional capital, which may not be available on reasonable terms or at all. Additional capital would be usedto accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;20●respond to competitive pressure;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, and a number of otherfactors, many of which are outside our control, and on our financial performance. Accordingly, we cannot assure you that we will be able to successfully raiseadditional capital at all or on terms that are acceptable to us. If we cannot raise additional capital when needed, it may have a material adverse effect on our business,results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.Management has concluded that there is substantial doubt about our ability to continue as a going concern which could prevent us from obtainingnew financing on reasonable terms or at all.We have incurred significant losses and negative cash flows from operations and have an accumulated deficit that raises substantial doubt about its abilityto continue as a going concern. Our audited consolidated financial statements for the year ended December 31, 2022 were prepared under the assumption that wewould continue our operations as a going concern. Our independent registered public accounting firm has included a “going concern” explanatory paragraph in itsreport on our financial statements for the year ended December 31, 2022. If we are unable to improve our liquidity position, by, among other things, raising capitalthrough public or private offerings or reducing our expenses, we may exhaust our cash resources and will be unable to continue our operations. If we cannotcontinue as a viable entity, our shareholders would likely lose most or all of their investment in us.Risks Related to Our Company and Our BusinessThe market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and onlinethirdparty resellers adopting our flagship product, MySizeID.The market for our measurement technology is relatively new and unproven and is subject to a number of risks and uncertainties. We believe that ourfuture success will depend in large part on market adoption of our flagship product, MySizeID, by U.S. retailers and online thirdparty resellers. In order to grow ourbusiness, we intend to focus on educating retailers and resellers and other potential customers about the benefits of our measurement technology, expanding thefunctionality of our products and bringing new products to market to increase market acceptance and use of our technology. Our ability to develop and expand themarket that our products address depends upon a number of factors, including the cost savings, performance and perceived value associated with such products.The market for our products could fail to develop or there could be a reduction in interest or demand for our products as a result of a lack of consumer acceptance,technological challenges, competing products and services, weakening economic conditions and other causes. We may never successfully commercialize ourproducts and if our products fail to achieve market acceptance, this would have a material adverse effect on our business, results of operations and financialcondition.21Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broadermarket acceptance of our products.Our ability to achieve customer adoption, especially among U.S. retailers will depend, in part, on our ability to effectively organize, focus and train our salesand marketing personnel. We have limited experience selling to U.S. retailers and only recently established a U.S. sales force. We believe that there is significantcompetition for experienced sales professionals with the skills and industry knowledge that we require. Our ability to achieve significant revenue growth in thefuture will depend, in part, on our ability to recruit, train and retain a sufficient number of experienced sales professionals, particularly those with experience sellingto U.S. retailers. In addition, even if we are successful in hiring qualified sales personnel, new hires require significant training and experience before they achievefull productivity, particularly for sales efforts targeted at U.S. retailers and new markets. Because we only recently started sales efforts, we cannot predict whether, orto what extent, our sales efforts will be successful.We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which maymake it difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.In this market segment, the decision to adopt our products may require the approval of multiple technical and business decision makers, including security,compliance, procurement, operations and IT. In addition, while U.S. retailers may be willing to deploy our products on a limited basis, before they will commit todeploying our products at scale, they often require extensive education about our products and significant customer support time, engage in protracted pricingnegotiations and seek to secure readily available development resources. As a result, it is difficult to predict when we will obtain new customers and begingenerating revenue from these customers. As part of our sales cycle, we may incur significant expenses before executing a definitive agreement with a prospectivecustomer and before we are able to generate any revenue from such agreement. We have no assurance that the substantial time and money spent on our salesefforts will generate significant revenue. If conditions in the marketplace generally or with a specific prospective customer change negatively, it is possible that nodefinitive agreement will be executed, and we will be unable to recover any of these expenses. If we are not successful in targeting, supporting and streamlining oursales processes and if revenue expected to be generated from a prospective customer is not realized in the time period expected or not realized at all, our ability togrow our business, and our operating results and financial condition may be adversely affected. If our sales cycles lengthen, our future revenue could be lower thanexpected, which would have an adverse impact on our operating results and could cause our stock price to decline.22We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increaseour capital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.In order to reduce time to market and obtain complementary technologies, we are seeking to acquire technologies and businesses that are synergistic to ourproduct offering. For example, we recently acquired Orgad which operates an omnichannel ecommerce platform and Naiz which provides SaaS technology solutionsthat solve size and fit issues for fashion ecommerce companies. We evaluate from time to time various acquisitions and collaborations, including licensing oracquiring complementary technologies, intellectual property rights, or businesses. The process for acquiring a company may take from several months up to a yearand costs can vary greatly. We may also compete with others to acquire companies, and such competition may result in decreased availability of, or an increase inprice for, suitable acquisition candidates. In addition, we may not be able to consummate acquisitions or investments that we have identified as crucial to theimplementation of our strategy for other commercial or economic reasons. As a result, it may be more difficult for us to identify suitable acquisition or investmenttargets or to consummate acquisitions or investments on acceptable terms or at all. If we are not able to execute on any acquisition, we may not be able to achieve afuture growth strategy and may lose market share.In addition, the acquisition of Orgad, Naiz and any potential future acquisition, joint venture or collaboration may entail numerous potential risks, including:●increased operating expenses and cash requirements;●the assumption of additional indebtedness or contingent liabilities;●assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel;●the diversion of our management’s attention from our existing programs and initiatives in pursuing such a strategic merger or acquisition;●retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships;●risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing technologies; and●our inability to generate revenue from acquired technologies or products sufficient to meet our objectives in undertaking the acquisition or even to offsetthe associated acquisition and maintenance costs.All of the foregoing risks may be magnified as the cost, size or complexity of an acquisition or acquired company increases, or where the acquiredcompany’s products, market or business are materially different from ours, or where more than one integration is occurring simultaneously or within a concentratedperiod of time. We may not be able to obtain the necessary regulatory approvals, including those of antitrust authorities and foreign investment authorities, incountries where we seek to consummate acquisitions or make investments. For those and other reasons, we may ultimately fail to consummate an acquisition, even ifwe announce the intended acquisition.In addition, we may require significant financing to complete an acquisition or investment, whether through bank loans, raising of equity or debt orotherwise. We cannot assure you that such financing options will be available to us on reasonable terms, or at all. If we are not able to obtain such necessaryfinancing, it could have an impact on our ability to consummate a substantial acquisition or investment and execute a future growth strategy. Alternatively, we mayissue a significant number of shares as consideration for an acquisition, which would have a dilutive effect on our existing shareholders. For example, in partialconsideration for the acquisition of Orgad, we agreed to issue up to 111,602 shares of our common stock and in the Naiz acquisition we issued 240,000 shares of ourcommon stock. Furthermore, if we undertake acquisitions, we may incur large onetime expenses and acquire intangible assets that could result in significant futureamortization expense.23If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations andfinancial condition may be adversely affected.We believe that enhancing the “MySize” brand identity and increasing market awareness of our company and products, particularly among U.S. retailers, iscritical to achieving widespread acceptance of our products. Our ability to successfully develop new retailers may be adversely affected by a lack of awareness oracceptance of our brand. To the extent that we are unable to foster name recognition and affinity for our brand, our growth may be significantly delayed or impaired.The successful promotion of our brand will depend largely on our continued marketing efforts, market adoption of our products, and our ability to successfullydifferentiate our products from competing products and services. Our brand promotion may not be successful or result in revenue generation. Any incident thaterodes consumer affinity for our brand could significantly reduce our brand value and damage our business. If consumers perceive or experience a reduction inquality, or in any way believe we fail to deliver a consistently positive experience, our brand value could suffer and our business may be adversely affected.In particular, adverse weather conditions can impact guest traffic at our retailers, and, in more severe cases, cause temporary retail closures, sometimes forprolonged periods. Our business is subject to seasonal fluctuations, with retail sales typically higher during certain months, such as December. Adverse weatherconditions during our most favorable months or periods may exacerbate the effect of adverse weather on consumer traffic and may cause fluctuations in ouroperating results from quartertoquarter within a fiscal year.If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operationsand financial condition could be adversely affected.Our ability to attract new customers depends in part on our ability to enhance and improve our existing products, increase adoption and usage of ourproducts and introduce new products. The success of any enhancements or new products depends on several factors, including timely completion, adequatequality testing, actual performance quality, and overall market acceptance. Enhancements and new products that we develop may not be introduced in a timely orcosteffective manner, may contain errors or defects, may have interoperability difficulties with our platform or other products or may not achieve the broad marketacceptance necessary to generate significant revenue. Furthermore, our ability to increase the usage of our products depends, in part, on the development of newuse cases for our products and may be outside of our control. If we are unable to successfully enhance our existing products to meet evolving customerrequirements, increase adoption and usage of our products, develop new products, then our business, results of operations and financial condition would beadversely affected.The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile Apps and customdevelopment services.We must continue to enhance and improve the performance, functionality and reliability of our products. The mobile technology industry is characterizedby rapid technological change, changes in user requirements and preferences, frequent new product and services introductions embodying new technologies andthe emergence of new industry standards and practices that could render our products obsolete. Our success will depend, in part, on our ability to both internallydevelop and enhance our existing products, develop new products that address the increasingly sophisticated and varied needs of our customers, and respond totechnological advances and emerging industry standards and practices on a costeffective and timely basis. The development of our technology involvessignificant technical and business risks. We may fail to use new technologies effectively or to adapt our proprietary technology and systems to customerrequirements or emerging industry standards. If we are unable to adapt to changing market conditions, customer requirements or emerging industry standards, wemay not be able to increase our revenue and expand our business.Changes in economic conditions could materially affect our business, financial condition and results of operations.Because our primary target customers include U.S. retailers , we, together with the rest of the fashion/apparel industry, will depend upon consumerdiscretionary spending. Increases in unemployment rates, reductions in home values, increases in home foreclosures, investment losses, personal bankruptcies andreductions in access to credit and reduced consumer confidence, may impact consumers’ ability and willingness to spend discretionary dollars. In addition, volatileeconomic conditions may repress consumer confidence and discretionary spending. Any of the foregoing may have a material adverse effect on our business,financial condition and results of operations.24Our growth depends, in part, on the success of our strategic relationships with third parties.To grow our business, we anticipate that we will continue to depend on relationships with third parties, such as our customers and thirdparty platforms.Identifying partners, and negotiating and documenting relationships with them, requires significant time and resources. If we are unsuccessful in establishing ormaintaining our relationships with third parties, our ability to compete in the marketplace or to grow our revenue could be impaired, and our results of operationsmay suffer. Even if we are successful, we cannot assure you that these relationships will result in increased customer usage of our products or increased revenue.We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.We currently utilize, and plan on continuing to utilize over the current fiscal year, thirdparty networking providers and distribution through companiesincluding, but not limited to, Apple and Google as well as Shopify, WooCommerce and, Datalogic, Honeywell and Zebra to distribute our technologies. If disruptionsor capacity constraints occur, we may have no means of replacing these services, on a timely basis or at all. This could cause a material adverse condition for ouroperations and financial earnings.We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significantinterruption in our network or hosting and cloud services could adversely impact our operations and harm our business.Our technology infrastructure is critical to the performance of our products and customer satisfaction. Our products run on a complex distributed system,or what is commonly known as cloud computing. We own, operate and maintain elements of this system, but significant elements of this system are operated bythirdparties that we do not control and which would require significant time to replace. We expect this dependence on thirdparties to continue. In particular, asignificant portion, if not almost all data storage, data processing and other computing services and systems is hosted by cloud computing providers. Anydisruptions, outages and other performance problems relating to such services, including infrastructure changes, human or software errors and capacity constraints,could adversely impact our business, financial condition or results of operations.Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.We update our products on a frequent basis. Despite efforts to test our updates, errors, failures or bugs may not be found in our products until after theyare deployed to a customer. We have discovered and expect we will continue to discover errors, failures and bugs in our products and anticipate that certain of theseerrors, failures and bugs will only be discovered and remediated after deployment. Real or perceived errors, failures or bugs in our platform could result in negativepublicity, government inquiries, loss of or delay in market acceptance of our products, loss of competitive position, or claims by customers for losses sustained bythem. In such an event, we may be required, or may choose, for customer relations or other reasons, to expend additional resources in order to help correct theproblem.We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.In connection with the operation of our business, we store, process and transmit data, including personal and payment information, about our employeesand customers, a portion of which is confidential and/or personally sensitive. Unauthorized disclosure or loss of sensitive or confidential data may occur through avariety of methods. These include, but are not limited to, systems failure, employee negligence, fraud or misappropriation, or unauthorized access to or through ourinformation systems, whether by our employees or third parties, including a cyberattack by computer programmers, hackers, members of organized crime and/orstatesponsored organizations, who may develop and deploy viruses, worms or other malicious software programs. Such disclosure, loss or breach could harm ourreputation and subject us to government sanctions and liability under our contracts and laws that protect sensitive or personal data and confidential information,resulting in increased costs or loss of revenues. It is possible that security controls over sensitive or confidential data and other practices we and our thirdpartyvendors follow may not prevent the improper access to, disclosure of, or loss of such information. The potential risk of security breaches and cyberattacks mayincrease as we introduce new products and offerings. Further, data privacy is subject to frequently changing rules and regulations, which sometimes conflict amongthe various jurisdictions in which we provide services. Any failure or perceived failure to successfully manage the collection, use, disclosure, or security of personalinformation or other privacy related matters, or any failure to comply with changing regulatory requirements in this area, could result in legal liability or impairment toour reputation in the marketplace.25A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.Information security risks have generally increased in recent years, in part because of the proliferation of new technologies and the use of the Internet, andthe increased sophistication and activity of organized crime, hackers, terrorists, activists, cybercriminals and other external parties, some of which may be linked toterrorist organizations or hostile foreign governments. For example, a cybercriminal could use cybersecurity threats to gain access to sensitive information aboutanother company or to alter or disrupt news or information to be distributed by PR Newswire. Cybersecurity attacks are becoming more sophisticated and includemalicious software, ransomware, attempts to gain unauthorized access to data and other electronic security breaches that could lead to disruptions in criticalsystems, unauthorized release of confidential or otherwise protected information and corruption of data, substantially damaging our reputation. Any person whocircumvents our security measures could steal proprietary or confidential customer information or cause interruptions in our operations. We incur significant coststo protect against security breaches, and may incur significant additional costs to alleviate problems caused by any breaches. Our failure to prevent securitybreaches, or wellpublicized security breaches affecting the Internet in general, could significantly harm our reputation and business and financial results.Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, dataprotection and information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive andconfidential information. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm ourbusiness, results of operations and financial condition.We and our customers that use our products may be subject to privacy and data protectionrelated laws and regulations that impose obligations inconnection with the collection, processing and use of personal data, financial data, health or other similar data. The U.S. federal and various state and foreigngovernments have adopted or proposed limitations on, or requirements regarding, the collection, distribution, use, security and storage of personally identifiableinformation of individuals. The U.S. Federal Trade Commission and numerous state attorneys general are applying federal and state consumer protection laws toimpose standards on the online collection, use and dissemination of data, and to the security measures applied to such data.Similarly, many foreign countries and governmental bodies, including the EU member states, have laws and regulations concerning the collection and useof personally identifiable information obtained from individuals located in the EU or by businesses operating within their jurisdiction, which are often morerestrictive than those in the United States. Laws and regulations in these jurisdictions apply broadly to the collection, use, storage, disclosure and security ofpersonally identifiable information that identifies or may be used to identify an individual, such as names, telephone numbers, email addresses and, in somejurisdictions, IP addresses and other online identifiers.For example, the GDPR, which took full effect on May 25, 2018. The GDPR enhances data protection obligations for businesses and requires serviceproviders (data processors) processing personal data on behalf of customers to cooperate with European data protection authorities, implement security measuresand keep records of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to or greater of €20 million or 4% of global annualrevenues. In addition, the CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and require deletion of their personalinformation, opt out of certain personal information sharing, and receive detailed information about how their personal information is used. The CCPA provides forcivil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further, failure to comply withthe Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may expose us to administrativefines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the current enforcementmeasures and sanctions. There are also additional laws and regulations in additional jurisdictions around the world which govern the protection of consumers andof electronic communications. If our efforts to comply with GDPR, CCPA or other applicable laws and regulations are not successful, we may be subject to penaltiesand fines that would adversely impact our business and results of operations, and our ability to conduct business could be significantly impaired.26Additionally, although we endeavor to have our products comply with applicable laws and regulations, these and other obligations may be modified, theymay be interpreted and applied in an inconsistent manner from one jurisdiction to another, and they may conflict with one another, other regulatory requirements,contractual commitments or our internal practices. We also may be bound by contractual obligations relating to our collection, use and disclosure of personal,financial and other data or may find it necessary or desirable to join industry or other selfregulatory bodies or other privacy or data protectionrelatedorganizations that require compliance with their rules pertaining to privacy and data protection.We expect that there will continue to be new proposed laws, rules of selfregulatory bodies, regulations and industry standards concerning privacy, dataprotection and information security in the United States, the European Union and other jurisdictions, and we cannot yet determine the impact such future laws,rules, regulations and standards may have on our business. Moreover, existing U.S. federal and various state and foreign privacy and data protectionrelated lawsand regulations are evolving and subject to potentially differing interpretations, and various legislative and regulatory bodies may expand current or enact new lawsand regulations regarding privacy and data protectionrelated matters. Because global laws, regulations and industry standards concerning privacy and datasecurity have continued to develop and evolve rapidly, it is possible that we or our products or platform may not be, or may not have been, compliant with eachsuch applicable law, regulation and industry standard and compliance with such new laws or to changes to existing laws may impact our business and practices,require us to expend significant resources to adapt to these changes, or to stop offering our products in certain countries. These developments could adverselyaffect our business, results of operations and financial condition.We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect ourbusiness.Our ability to implement our business plan successfully depends in part on our ability to build brand recognition using our trademarks, service marks andother proprietary intellectual property, including our names and logos. We currently have no registered trademarks. While we plan to register a number of ourtrademarks; however, no assurance can be given that our trademark applications will be approved. As of December 31, 2022, we own 18 issued patents: six in Europe,four in the U.S., three in each of Russia and Japan and one in each of Canada and Israel which expire between January 20, 2033 and August 18, 2036, and we havetwo additional patent applications in process. As of such date, we do not have any registered trademarks., No assurance can be given that our patent applicationswhich are in process will be approved. If our patent applications are not approved, our ability to expand or develop our business may be negatively affected.Third parties may also oppose our trademark or patent applications, or otherwise challenge our use of the trademarks or patents. In the event that ourtrademarks or patents are successfully challenged, we could be forced to rebrand our goods and services or redesign our technology, which could result in loss ofbrand recognition, and could require us to devote resources to advertising and marketing new brands and products.If our efforts to register, maintain and protect our intellectual property are inadequate, or if any thirdparty misappropriates, dilutes or infringes on ourintellectual property, the value of our brands may be harmed, which could have a material adverse effect on our business and might prevent our brands fromachieving or maintaining market acceptance. We may also face the risk of claims that we have infringed third parties’ intellectual property rights. If third parties claimthat we infringe upon their intellectual property rights, our operating profits could be adversely affected. Any claims of intellectual property infringement, eventhose without merit, could be expensive and time consuming to defend, require us to rebrand our services, if feasible, divert management’s attention and resourcesor require us to enter into royalty or licensing agreements in order to obtain the right to use a thirdparty’s intellectual property.Any royalty or licensing agreements, if required, may not be available to us on acceptable terms or at all. A successful claim of infringement against uscould result in our being required to pay significant damages, enter into costly license or royalty agreements, or stop the sale of certain products or services, any ofwhich could have a negative impact on our operating profits and harm our future prospects.We may face intense competition and expect competition to increase in the future, which could prohibit us from developing a customer base andgenerating revenue.We face significant competition in every aspect of our business. Our competitors include True Fit, Virtusize, EasyMeasure, AR MeasureKit, Smart Measureand 3DLook. These companies may already have an established market in our industry. Most of these companies have significantly greater financial and otherresources than us and have been developing their products and services longer than we have been developing ours.27In addition, some of our larger competitors have substantially broader product offerings and leverage their relationships based on other products orincorporate functionality into existing products to gain business in a manner that discourages potential customers from purchasing our products. Potentialcustomers may also prefer to purchase from their existing solution providers rather than a new solution provider regardless of product performance or features.These larger competitors often have broader product lines and market focus and will therefore not be as susceptible to downturns in a particular market. Conditionsin our market could change rapidly and significantly as a result of technological advancements, partnering by our competitors or continuing market consolidation.New startup companies that innovate and large competitors that are making significant investments in research and development may invent similar or superiorproducts and technologies that compete with our products. In addition, some of our competitors may enter into new alliances with each other or may establish orstrengthen cooperative relationships. Any such consolidation, acquisition, alliance or cooperative relationship could lead to pricing pressure and our loss of anyfuture market share and could result in a competitor with greater financial, technical, marketing, service and other resources, all of which could harm our ability tocompete. Furthermore, organizations may be more willing to incrementally add solutions to their existing infrastructure from competitors than to replace their existinginfrastructure with our products. Any failure to meet and address these factors could harm our business, results of operations and financial condition.Our business operations and future development could be significantly disrupted if we lose key members of our management team.The success of our business continues to depend to a significant degree upon the continued contributions of our senior officers and key employees, bothindividually and as a group. Our future performance will be substantially dependent in particular on our ability to retain and motivate Ronen Luzon, our ChiefExecutive Officer, and certain of our other senior executive officers. The loss of the services of our Chief Executive Officer, senior officers or other key employeescould have a material adverse effect on our business and plans for future development. We have no reason to believe that we will lose the services of any of theseindividuals in the foreseeable future; however, we currently have no effective replacement for any of these individuals due to their experience, reputation in theindustry and special role in our operations. We also do not maintain any key man life insurance policies for any of our employees.If we are able to expand our operations, we may be unable to successfully manage our future growth.Our growth may strain our infrastructure and resources. Any such growth could place increased strain on our management, operational, financial and otherresources, and we will need to train, motivate, and manage employees, as well as attract management, sales, finance and accounting, international, technical, andother professionals. Any failure to expand these areas and implement appropriate procedures and controls in an efficient manner and at a pace consistent with ourbusiness objectives could have a material adverse effect on our business, results of operations and financial condition.Our business operations are conducted in multiple languages and could be disrupted due to miscommunications or translation errors.The success of our business continues to depend on our marketing efforts in the United States, Europe and Israel, each of which is conducted in the locallanguage. Miscommunications or inaccurate foreign language translations could have a material adverse effect on our business operations and financial conditions.Additionally, contracts, communications and complex technical information must be accurately translated into foreign languages.We will continue to incur costs and be subject to various obligations as a result of being a public company, listed in the United States and in Israel.We will continue to incur significant legal, accounting and other expenses as a result of being a public company, listed in the United States and in Israel.Although we will incur costs each year associated with being a publiclytraded company, it is possible that our actual costs of being a publiclytraded company willvary from year to year and may be different than our estimates. In estimating these costs, we take into account expenses related to insurance, legal, accounting andcompliance activities.28Furthermore, the need to maintain the corporate infrastructure demanded of a public company may divert management’s attention from implementing ourgrowth strategy, which could prevent us from improving our business, results of operations and financial condition. We have made, and will continue to make,changes to our internal controls and procedures for financial reporting and accounting systems to meet our reporting obligations as a U.S. publicly traded company.However, the measures we take may not be sufficient to satisfy our obligations as a publicly traded company.Any future or current litigation could have a material adverse impact on our results of operations, financial condition and liquidity.From time to time, we may be subject to litigation, including, among others, potential stockholder derivative actions and class actions. Risks associatedwith legal liability are difficult to assess and quantify, and their existence and magnitude can remain unknown for significant periods of time. Subject to certainexceptions, our Amended and Restated Certificate of Incorporation, or Certificate of Incorporation, and Amended and Restated Bylaws, or Bylaws, require us toindemnify and advance expenses to our officers and directors involved in legal proceedings. To date we have obtained directors and officers’ liability, or D&O,insurance to cover some of the risk exposure for our directors and officers. Such insurance generally pays the expenses (including amounts paid to plaintiffs, fines,and expenses including attorneys’ fees) of officers and directors who are the subject of a lawsuit as a result of their service to us. There can be no assurance that wewill be able to continue to maintain this insurance at reasonable rates or at all, or in amounts adequate to cover such expenses should such a lawsuit occur. WithoutD&O insurance, the amounts we would pay to indemnify our officers and directors should they be subject to legal action based on their service to us could have amaterial adverse effect on our financial condition, results of operations and liquidity. Such lawsuits, and any related publicity, may result in substantial costs and,among other things, divert the attention of management and our employees. An unfavorable outcome in any claim or proceeding against us could have a materialadverse impact on our financial position and results of operations for the period in which the unfavorable outcome occurs, and potentially in future periods. Further,any settlement announced by us may expose us to further claims against us by third parties seeking monetary or other damages which, even if unsuccessful, woulddivert management attention from the business and cause us to incur costs, possibly material, to defend such matters, which could have a material adverse impacton our financial position. See “Legal Proceedings” for more information regarding our involvement in ongoing litigation matters.Federal, state and local or Israeli tax rules may adversely impact our results of operations and financial position.We are subject to federal, state and local taxes in the U.S., as well as local taxes in Israel in respect to our operations in Israel. Although we believe our taxestimates are reasonable, if the Internal Revenue Service or other taxing authority disagrees with the positions we have taken on our tax returns, we could faceadditional tax liability, including interest and penalties. If material, payment of such additional amounts upon final adjudication of any disputes could have a materialimpact on our results of operations and financial position. In addition, complying with new tax rules, laws or regulations could impact our financial condition, andincreases to federal or state statutory tax rates and other changes in tax laws, rules or regulations may increase our effective tax rate. Any increase in our effectivetax rate could have a material impact on our financial results.A significant majority of Orgad’s revenue is from sales of products on Amazon’s U.S. Marketplace and any change, limitation or restriction on ourability to operate on Amazon’s platform or any other marketplace could have a material adverse impact to our business, results of operations, financialcondition and prospects.Orgad, our wholly owned subsidiary, operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com, eBay and others. A substantial percentage of Orgad’s revenue is driven by sales on Amazon’s U.S. marketplace and Orgad is subject toterms of service of Amazon and other maketplaces and various other seller policies and services that apply to third parties selling products on Amazon and othermarketplaces. Generally, a marketplace has the right to terminate or suspend its agreement with Orgad at any time and for any reason. Such marketplace may takeother actions against Orgad such as suspending or terminating a seller account or product listing and withholding payments owed to Orgad indefinitely. Forexample, in July 2022, Amazon deactivated Orgad’s Amazon U.S. store as a result of complaints submitted due to an error in the listed manufacturer of certainproducts on Orgad’s store. Although its account was subsequently reinstated in September 2022, if the deactivation were to occur in the future for a prolongedperiod of time, or if Amazon were to terminate Orgad’s account, this would have a material adverse effect on our business, results of operations, financial conditionand prospects. While Orgad endeavors to materially comply with the terms of services of the marketplaces on which it operates, we can provide no assurance thatthese marketplaces will have the same determination with respect to our compliance.29In addition, Amazon and other marketplaces can make changes to its platform that could require Orgad to change the manner in which it operates, limit itsability to successfully launch new products or increase its costs to operate and such changes could have an adverse effect on our business, results of operations,financial condition and prospects. Examples of changes that could impact us relate to platform fee charges (i.e., selling commissions), exclusivity, inventorywarehouse availability, excluded products and limitations on sales and marketing. Any change, limitation or restriction on our ability to sell on Amazon’s platform orany other marketplace, even if temporary, could have a material impact on our business, results of operations, financial condition and prospects.Orgad also relies on services provided by Amazon’s fulfillment platform, including Prime Certification, which provides for expedited shipping to theconsumer, an important aspect in the buying decision for consumers. For products that Orgad fulfills itself, Orgad is qualified to offer our products for sale withPrime Certification delivery. Any inability to market our products for sale with expedited delivery provided under Prime Certification could have a material impact onour business, results of operations, financial condition and prospects. Failure to remain compliant with the best fulfillment practices on Amazon’s platform couldhave a material impact on our business, results of operations, financial condition and prospects. In addition, due to the COVID19 pandemic, Amazon has changedthe amount of inventory it accepts per product for a period of time. If this were to continue it could cause us to miss sales and/or pay additional shipping costswhich would harm our business operations and financial conditions.Orgad’s business depends on its ability to build and maintain strong product listings on ecommerce platforms. Orgad may not be able to maintain andenhance our product listings if it receives unfavorable customer complaints, negative publicity or otherwise fails to live up to consumers’ expectations, whichcould materially adversely affect our business, results of operations and growth prospects.Maintaining and enhancing Orgad’s product listings is critical in expanding and growing its business. However, a significant portion of Orgad’s perceivedperformance to the customer depends on third parties outside of its control, including suppliers and thirdparty delivery agents as well as online retailers such asAmazon and eBay. Because Orgad’s agreements with its online retail partners are generally terminable at will, it may be unable to maintain these relationships, andour results of operations could fluctuate significantly from period to period. Because Orgad relies on third parties to deliver its products, it is subject to shippingdelays or disruptions caused by inclement weather, natural disasters, labor activism, health epidemics or bioterrorism. It may also experience shipping delays ordisruptions due to other carrierrelated issues relating to their own internal operational capabilities. Further, Orgad relies on the business continuity plans of thesethird parties to operate during pandemics, like the COVID19 pandemic, and it has limited ability to influence their plans, prevent delays, and/or cost increases due toreduced availability and capacity and increased required safety measures.Customer complaints or negative publicity about its products, delivery times, or marketing strategies, even if not accurate, especially on blogs, social mediawebsites and thirdparty market sites, could rapidly and severely diminish consumer view of Orgad’s product listings and result in harm to its brand. Customers mayalso make safetyrelated or other types of claims regarding products sold through our online retail partners, such as Amazon, which may result in an online retailpartner removing the product from its marketplace. We also use and rely on other services from third parties, such as our telecommunications services, and thoseservices may be subject to outages and interruptions that are not within our control.Orgad faces risks related to successfully optimizing and operating its fulfillment and customer service operations.Failures to adequately predict customer demand or otherwise optimize and operate its fulfillment and customer service operations successfully from time totime result in excess or insufficient fulfillment or customer service capacity, increased costs, and impairment charges, any of which could materially harm ourbusiness. As Orgad continues to add fulfillment and customer service capability or add new businesses with different requirements, its fulfillment and customerservice operations become increasingly complex and operating them becomes more challenging. There can be no assurance that Orgad will be able to operate ouroperations effectively.30In addition, failure to optimize inventory in our fulfillment operations increases net shipping cost by requiring longzone or partial shipments. Orgad may beunable to adequately staff its fulfillment and customer service operations. Orgad’s failure to properly handle such inventory or to accurately forecast productdemand may result in it being unable to secure sufficient storage space or to optimize its fulfillment operations or cause other unexpected costs and other harm toour business and reputation.Orgad relies on a limited number of shipping companies to deliver inventory to it and completed orders to our customers. The inability to negotiateacceptable terms with these companies or performance problems or other difficulties experienced by these companies could negatively impact our operating resultsand customer experience. In addition, Orgad’s ability to receive inbound inventory efficiently and ship completed orders to customers also may be negativelyaffected by natural or manmade disasters, extreme weather, geopolitical events and security issues, labor or trade disputes, and similar events.The variability in Orgad’s retail business places increased strain on its operations.Demand for Orgad’s product listings can fluctuate significantly for many reasons, including as a result of seasonality, promotions, product launches, orunforeseeable events, such as in response to natural or manmade disasters, extreme weather, or geopolitical events. For example, Orgad expects a disproportionateamount of our retail sales to occur during our fourth quarter. Failure to stock or restock popular products in sufficient amounts such that Orgad fails to meetcustomer demand could significantly affect our revenue and our future growth. If too many customers access the websites on which Orgad engages in onlineretailing within a short period of time due to increased demand, Orgad may experience system interruptions that make the websites unavailable or prevent us fromefficiently fulfilling orders, which may reduce the volume of goods its offers or sell and the attractiveness of its products. In addition, Orgad may be unable toadequately staff for fulfillment of orders and customer service during these peak periods and delivery and other fulfillment companies and customer service cosourcers may be unable to meet the seasonal demand.Our business is subject to the risks of earthquakes, fire, power outages, floods, health risks and other catastrophic events, and to interruption by manmade problems such as terrorism.Natural disasters, such as fire or floods, a significant power outage, telecommunications failure, terrorism, an armed conflict, cyberattacks, epidemics andpandemics such as COVID19, or other geopolitical unrest could affect our supply chain, manufacturers, logistics providers, channel partners, or endcustomers orthe economy as a whole and such disruption could impact us and the shipments and sales. These risks may be further increased if the disaster recovery plans for usand our suppliers prove to be inadequate. To the extent that any of the above should result in delays or cancellations of customer orders, the loss of customers, orthe delay in the deployment or shipment of products, our business, financial condition, and operating results would be adversely affected.For example, on January 2, 2023, Orgad experienced a fire at its warehouse in Israel. We are not aware of any casualties or injuries associated with the fire.We shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incidentdid not affect the future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of thisincident on the other parties that were involved in the incident (lessor and others that leased properties near the warehouse).Our business could be negatively impacted by unsolicited takeover proposals, by shareholder activism or by proxy contests relating to the election ofdirectors or other matters.Our business could be negatively affected as a result of an unsolicited takeover proposal, by shareholder activism or a proxy contest. During 2021, anactivist shareholder sought to make changes to our board of directors, among other matters, which ultimately resulted in us entering into a settlement agreementwith the activist shareholder and another shareholder, and for which considerable costs were incurred and absorbed significant time and attention by managementand the board of directors. A future proxy contest, unsolicited takeover proposal, or other shareholder activism relating to the election of directors or other matterswould most likely require us to incur significant legal fees and proxy solicitation expenses and require significant time and attention by management and our Boardof Directors. The potential of a proxy contest, unsolicited takeover proposal, or other shareholder activism could interfere with our ability to execute our strategicplan, give rise to perceived uncertainties as to our future direction, result in the loss of potential business opportunities or make it more difficult to attract and retainqualified personnel, any of which could materially and adversely affect our business and operating results.31Environmental, social and corporate governance (ESG) issues, including those related to climate change and sustainability, may have an adverseeffect on our business, financial condition and results of operations and damage our reputation.There is an increasing focus from certain investors, customers, consumers, employees and other stakeholders concerning ESG matters. Additionally, publicinterest and legislative pressure related to public companies’ ESG practices continue to grow. If our ESG practices fail to meet regulatory requirements or investor,customer, consumer, employee or other shareholders’ evolving expectations and standards for responsible corporate citizenship in areas including environmentalstewardship, support for local communities, Board of Director and employee diversity, human capital management, employee health and safety practices, productquality, supply chain management, corporate governance and transparency, our reputation, brand and employee retention may be negatively impacted, and ourcustomers and suppliers may be unwilling to continue to do business with us.Customers, consumers, investors and other shareholders are increasingly focusing on environmental issues, including climate change, energy and wateruse, plastic waste and other sustainability concerns. Concern over climate change may result in new or increased legal and regulatory requirements to reduce ormitigate impacts to the environment. Changing customer and consumer preferences or increased regulatory requirements may result in increased demands orrequirements. Complying with these demands or requirements could cause us to incur additional manufacturing, operating or product development costs.If we do not adapt to or comply with new regulations, including the SEC’s published proposed rules that would require companies to provide significantlyexpanded climaterelated disclosures in their periodic reporting, which may require us to incur significant additional costs to comply and impose increased oversightobligations on our management and board of directors, or fail to meet evolving investor, industry or stakeholder expectations and concerns regarding ESG issues,investors may reconsider their capital investment in our company, we may become subject to penalties, and customers and consumers may choose to stoppurchasing our products, if approved for commercialization, which could have a material adverse effect on our reputation, business or financial condition.Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions andadverse developments with respect to financial institutions and associated liquidity risk.Our business depends on the economic health of the global economies. If the conditions in the global economies remain uncertain or continue to bevolatile, or if they deteriorate, including as a result of the impact of military conflict, such as the war between Russia and Ukraine, terrorism or other geopoliticalevents, our business, operating results and financial condition may be materially adversely affected. Economic weakness, inflation and increases in interest rates,limited availability of credit, liquidity shortages and constrained capital spending have at times in the past resulted, and may in the future result, in challenging anddelayed sales cycles, slower adoption of new technologies and increased price competition, and could negatively affect our ability to forecast future periods, whichcould result in an inability to satisfy demand for our products and a loss of market share.In addition, increases in inflation raise our costs for commodities, labor, materials and services and other costs required to grow and operate our business,and failure to secure these on reasonable terms may adversely impact our financial condition. Additionally, increases in inflation, along with the uncertaintiessurrounding COVID19, geopolitical developments and global supply chain disruptions, have caused, and may in the future cause, global economic uncertainty anduncertainty about the interest rate environment, which may make it more difficult, costly or dilutive for us to secure additional financing. A failure to adequatelyrespond to these risks could have a material adverse impact on our financial condition, results of operations or cash flows.More recently, the closures of SVB and Signature Bank and their placement into receivership with the FDIC created bankspecific and broader financialinstitution liquidity risk and concerns. Although the Department of the Treasury, the Federal Reserve and the FDIC jointly released a statement that depositors atSVB and Signature Bank would have access to their funds, even those in excess of the standard FDIC insurance limits, under a systemic risk exception, futureadverse developments with respect to specific financial institutions or the broader financial services industry may lead to marketwide liquidity shortages, impair theability of companies to access nearterm working capital needs, and create additional market and economic uncertainty. There can be no assurance that future creditand financial market instability and a deterioration in confidence in economic conditions will not occur. Our general business strategy may be adversely affected byany such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions. If the current equityand credit markets deteriorate, or if adverse developments are experienced by financial institutions, it may cause shortterm liquidity risk and also make anynecessary debt or equity financing more difficult, more costly, more onerous with respect to financial and operating covenants and more dilutive. Failure to secureany necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stockprice and could require us to alter our operating plans. In addition, there is a risk that one or more of our service providers, financial institutions, manufacturers,suppliers and other partners may be adversely affected by the foregoing risks, which could directly affect our ability to attain our operating goals on schedule andon budget.Our business may be adversely affected by the impact of any renewed outbreak of the COVID19 pandemic.Public health epidemics or outbreaks could adversely impact our business. In late 2019, a novel strain of COVID19, also known as coronavirus, wasreported in Wuhan, China. While initially the outbreak was largely concentrated in China, it spread worldwide. Many countries around the world, including in Israel,implemented significant governmental measures to control the spread of the virus, including temporary closure of businesses, severe restrictions on travel and themovement of people, and other material limitations on the conduct of business. These measures haven historically resulted in work stoppages and other disruptions.If there is a resurgence of the COVID19 pandemic, this could adversely impact our operations, including among others, our sales and marketing efforts and ourability to raise additional funds, and accordingly, the impact of COVID19 could have an adverse impact on our business and our financial results.32Risks Related to Our Operations in RussiaRussia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.In addition to our Israel operations, we have operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia and we engage two software developers through a third party who are based in Ukraine. On February 24,2022, Russia invaded Ukraine. The outbreak of hostilities between the two countries could result in more widespread conflict and could have a severe adverse effecton the region.Following Russia’s actions, various countries, including the U.S., Canada, the United Kingdom, Germany and France, as well as the European Union,issued broadranging economic sanctions against Russia. Such sanctions included, among other things, a prohibition on doing business with certain Russiancompanies, officials and oligarchs; a commitment by certain countries and the European Union to remove selected Russian banks from the Society for WorldwideInterbank Financial Telecommunications (SWIFT) electronic banking network that connects banks globally; and restrictive measures to prevent the Russian CentralBank from undermining the impact of the sanctions. In response to sanctions, the Russian Central Bank raised its interest rates and banned sales of local securitiesby foreigners. Russia may take additional counter measures or retaliatory actions in the future. While diplomatic efforts have been ongoing, the conflict betweenRussia and Ukraine is currently unpredictable and has the potential to result in broadened military actions. The duration of ongoing hostilities and such sanctionsand related events cannot be predicted. Uncertainty as to future relations between Russia and the U.S. and other countries in the west, or between Russia and othereastern European countries, may have a negative impact on our operations.Such international sanctions and potential responses to such sanctions, including those that may limit or restrict transfer funds into Russia, may in thefuture significantly affect our ability to conduct our activities in Russia including paying our personnel. To date, the conflict has had minimal impact on operations .Nevertheless, we have no way to predict the progress or outcome of the situation in Ukraine, as the conflict and governmental reactions are rapidly developing andbeyond our control. Prolonged unrest, intensified military activities or more extensive sanctions impacting the region could have a material adverse effect on ouroperations, results of operations, financial condition, liquidity and business outlook.Political, military conditions or other risks in Russia could adversely affect our business.Russia is a federative state consisting of 85 constituent entities, or “subjects.” The Russian Constitution reserves some governmental powers for theRussian Government, some for the subjects and some for areas of joint competence. In addition, eight “federal districts” (“federal’nye okruga”), which are overseenby a plenipotentiary representative of the President, supplement the country’s federal system. The delineation of authority among and within the subjects is, inmany instances, unclear and contested, particularly with respect to the division of tax revenues and authority over regulatory matters. For these reasons, theRussian political system is vulnerable to tension and conflict between federal, subject and local authorities. This tension creates uncertainties in the operatingenvironment in Russia, which may prevent us from carrying out our strategy effectively. The risks associated with these events or potential events could materiallyand adversely affect the investment environment and overall consumer and entrepreneurial confidence in Russia, and our business, prospects, financial condition,hiring ability, and results of operations could be materially and adversely affected.Furthermore, high levels of corruption reportedly exist in Russia, including the bribing of officials for the purpose of initiating investigations bygovernment agencies. Corruption and other illegal activities could disrupt our ability to conduct our business effectively, and claims that the we are involved in suchcorruption or illegal activities could generate negative publicity, of which could harm our development, financial condition, results of operations or prospects.Economic and other risks in Russia could adversely affect our business.Operating a business in an emerging market such as Russia can involve a greater degree of risk than operating a business in more developed markets.Over the last two decades, the Russian economy has experienced or continues to experience at various times:●significant volatility in its GDP;33●the impact of international sanctions;●high levels of inflation;●increases in, or high, interest rates;●sudden price declines in oil and other natural resources;●instability in the local currency market;●budget deficits;●the continued operation of lossmaking enterprises due to the lack of effective bankruptcy proceedings;●capital flight; and●significant increases in poverty rates, unemployment and underemployment.The Russian economy has been subject to abrupt downturns in the past, including as a result of the invasion of Ukraine, global financial crisis, and, as anemerging market, remains particularly vulnerable to further external shocks and any future fluctuations in the global markets. Any further deterioration in the generaleconomic conditions in Russia (whether or not as a result of the events mentioned above) could have a material adverse effect on the Russian economy and mayresult in hiring and operational difficulties, as well as potential flight of human capital, which could have a material adverse effect on our business, productdevelopment and results of operations.Legal risks in Russia could materially adversely affect our operations and Russian tax legislation is subject to frequent change.Among the risks of the Russian legal system are: inconsistencies among laws, presidential decrees, and government and ministerial orders and resolutions;conflicting local, regional and federal laws and regulations; the untested nature of the independence of the judiciary and its sensitivity to economic or politicalinfluences; substantial gaps in the regulatory structure due to the delay or absence of implementing legislation; a high degree of discretion on the part ofgovernmental authorities; reported corruption within governmental entities and other governmental authorities; the relative inexperience of judges and courts ininterpreting laws applicable to complex transactions; and the unpredictability of enforcement of foreign judgments and foreign arbitral awards. Many Russian lawsand regulations are construed in a way that provides for significant administrative discretion in application and enforcement. Unlawful, selective or arbitrary actionsof the Russian Government have reportedly included the denial or withdrawal of licenses, sudden and unexpected tax audits, criminal prosecutions, and civil claims.Any of the above events may have a material adverse effect on our product development and results of operations.Despite certain improvements in the taxation system made by the Russian Government over the past decade, Russian tax legislation is still subject tofrequent change, varying interpretations, and inconsistent and selective enforcement. There are currently no clear rules for distinguishing between lawful taxoptimization and tax evasion. In addition, Russian tax laws do not contain detailed rules on the taxation in Russia of foreign companies. As such, taxpayers oftenhave to resort to court proceedings to defend their position against the Russian tax authorities. However, in the absence of consistent court practice or bindingprecedents, there is inconsistency amongst court decisions. Further, the possibility exists that the Russian Federation would impose arbitrary or onerous taxes andpenalties in the future, which could have a material adverse effect on our product development and results of operations.34Risks Related to Our Operations In IsraelOur headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.Our headquarters and most of our operations are located in central Israel and our key employees, officers and directors are residents of Israel. Accordingly,political, economic and military conditions in Israel and the surrounding region may directly affect our business. Since the establishment of the State of Israel in1948, a number of armed conflicts have taken place between Israel and its Arab neighbors. Any hostilities involving Israel or the interruption or curtailment of tradewithin Israel or between Israel and its trading partners could adversely affect our operations and results of operations and could make it more difficult for us to raisecapital. During the winter of 2008, winter of 2012 and the summer of 2014, Israel was engaged in an armed conflict with Hamas, a militia group and political partyoperating in the Gaza Strip, and during the summer of 2006, Israel was engaged in an armed conflict with Hezbollah, a Lebanese Islamist Shiite militia group andpolitical party. Israel faces political tension with respect to its relationships with Turkey, Iran and certain Arab neighbor countries. In addition, recent conflictsinvolved missile strikes against civilian targets in various parts of Israel, and negatively affected business conditions in Israel. Recent political uprisings and socialunrest in various countries in the Middle East and North Africa are affecting the political stability of those countries. This instability may lead to deterioration of thepolitical relationships that exist between Israel and these countries, and have raised concerns regarding security in the region and the potential for armed conflict.Any armed conflicts, terrorist activities or political instability in the region could adversely affect business conditions and could harm our results of operations. Forexample, any major escalation in hostilities in the region could result in a portion of our employees and service providers being called up to perform military duty foran extended period of time. Parties with whom we do business have sometimes declined to travel to Israel during periods of heightened unrest or tension, forcing usto make alternative arrangements when necessary. In addition, the political and security situation in Israel may result in parties with whom we have agreementsinvolving performance in Israel claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions insuch agreements. Any future deterioration in the political and security situation in Israel will negatively impact our business.Our commercial insurance does not cover losses that may occur as a result of events associated with the security situation in the Middle East. Althoughthe Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that thisgovernment coverage will be maintained. Any losses or damages incurred by us could have a material adverse effect on our business. Any armed conflicts orpolitical instability in the region would likely negatively affect business conditions and could harm our results of operations.Further, in the past, the State of Israel and Israeli companies have been subjected to an economic boycott. Several countries still restrict business with theState of Israel and with Israeli companies. These restrictive laws and policies may have an adverse impact on our operating results, financial condition or theexpansion of our business.The legislative power of the State resides in the Knesset, a unicameral parliament that consists of 120 members elected by nationwide voting under asystem of proportional representation. Israel’s most recent general elections were held on April 9, 2019, September 17, 2019, March 2, 2020 and November 1, 2022.The uncertainty surrounding the results of the recent elections may continue. Actual or perceived political instability in Israel or any negative changes in thepolitical environment, may individually or in the aggregate adversely affect the Israeli economy and, in turn, our business, financial condition, results of operationsand prospects.Some of our employees are obligated to perform military reserve duty in Israel.Many Israeli citizens, including our employees are obligated to perform one month, and in some cases more, of annual military reserve duty until they reachthe age of 40 (or older, for reservists with certain occupations) and, in the event of a military conflict, may be called to active duty. In response to increases interrorist activity, there have been periods of significant callups of military reservists. It is possible that there will be military reserve duty callups in the future. Ouroperations could be disrupted by such callups. Such disruption could materially adversely affect our business, results of operations and financial condition.35It may be difficult to enforce a nonIsraeli judgment against the Company or its officers and directors.The operating subsidiary of ours is incorporated in Israel. All of our executive officers and directors are not residents of the United States, and asubstantial portion of our assets and the assets of our executive officers and directors are located outside the United States. Therefore, a judgment obtained againstus, or any of these persons, including a judgment based on the civil liability provisions of the U.S. federal securities laws, may not be collectible in the United Statesand may not necessarily be enforced by an Israeli court. It also may be difficult to affect service of process on these persons in the United States or to assert U.S.securities law claims in original actions instituted in Israel. Additionally, it may be difficult for an investor, or any other person or entity, to initiate an action withrespect to U.S. securities laws in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of U.S. securities laws reasoning that Israel is not themost appropriate forum in which to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law isapplicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law often involves the testimony of expert witnesses, which can be a timeconsuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel that addresses the mattersdescribed above. As a result of the difficulty associated with enforcing a judgment against us in Israel, it may be impossible to collect any damages awarded byeither a U.S. or foreign court.Our international operations could expose us to additional risks, including exchange rate fluctuations, legal regulations and political or economicinstability that could harm our business and operating results.Our international operations expose us to the following risks which may have a material adverse effect on our business and operating results:●devaluations and fluctuations in currency exchange rates including fluctuations between the U.S. dollar and the NIS and the Russian Ruble;●costs of compliance with local laws, including labor laws and intellectual property laws;●compliance with domestic and foreign government policies, including compliance with Israeli securities laws and TASE;●changes in trade regulations and procedures affecting approval, production, pricing, marketing, reimbursement for and access to, our products;●compliance with applicable foreign anticorruption laws, antitrust/competition laws, antiBoycott Israel law and antimoney laundering laws; and●economic and geopolitical developments and conditions, including ongoing instability in global economies and financial markets, international hostilities,acts of terrorism and governmental reactions, inflation, outbreaks of contagious disease (e.g., the COVID19 pandemic) and military and political alliances.Risks Related to Our Common StockA more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.Although our common stock is listed on the Nasdaq Capital Market, it has only been traded on the Nasdaq Capital Market since July 25, 2016. There hasbeen relatively limited trading volume in the market for our common stock, and a more active, liquid public trading market may not develop or may not be sustained.Limited liquidity in the trading market for our common stock may adversely affect a stockholder’s ability to sell its shares of common stock at the time it wishes tosell them or at a price that it considers acceptable. If a more active, liquid public trading market does not develop, we may be limited in our ability to raise capital byselling shares of common stock and our ability to acquire other companies or assets by using shares of our common stock as consideration. In addition, if there is athin trading market or “float” for our stock, the market price for our common stock may fluctuate significantly more than the stock market as a whole. Without a largefloat, our common stock would be less liquid than the stock of companies with broader public ownership and, as a result, the trading prices of our common stockmay be more volatile and it would be harder for you to liquidate any investment in our common stock. Furthermore, the stock market is subject to significant priceand volume fluctuations, and the price of our common stock could fluctuate widely in response to several factors, including:●our quarterly or annual operating results;●changes in our earnings estimates;●investment recommendations by securities analysts following our business or our industry;●additions or departures of key personnel;●changes in the business, earnings estimates or market perceptions of our competitors;36●our failure to achieve operating results consistent with securities analysts’ projections;●changes in industry, general market or economic conditions;●announcements of legislative or regulatory changes; and●natural disasters (including for example, the recent fire in the Orgad warehouse) and political and economic instability, including wars, terrorism, politicalunrest, results of certain elections and votes, emergence of a pandemic, or other widespread health emergencies (or concerns over the possibility of suchan emergency, including for example, the recent the COVID19 pandemic), boycotts, adoption or expansion of government trade restrictions, and otherbusiness restrictions.The stock market has experienced extreme price and volume fluctuations in recent years that have significantly affected the quoted prices of the securitiesof many companies. The changes often appear to occur without regard to specific operating performance. The price of our common stock could fluctuate basedupon factors that have little or nothing to do with us and these fluctuations could materially reduce our stock price.Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.If any of our shareholders were to decide to sell large amounts of stock over a short period of time (presuming such sales were permitted) such sales couldcause the market price of our common stock to drop significantly, even if our business is doing well. Further, the market price of our common stock could decline as aresult of the perception that such sales could occur. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equitysecurities in the future at a time and price that we deem appropriate.Our securities are traded on more than one market which may result in price variations.Our securities have been trading on the Nasdaq Capital Market since July 2016 and on TASE since September 2005. Trading in our securities on suchexchanges occurs in different currencies (U.S. dollars on the Nasdaq Capital Market and NIS on the TASE), and at different times (due to different time zones,trading days and public holidays in the United States and Israel). The trading prices of our securities on the two exchanges may differ due to the foregoing andother factors. Any decrease in the price of our shares on the TASE could cause a decrease in the trading price of our shares on the Nasdaq Capital Market and viceversa.We are a smaller reporting company and, as a result of the reduced disclosure and governance requirements applicable to such companies, ourcommon stock may be less attractive to investors.We are a smaller reporting company, (i.e. a company with “public float” held by nonaffiliates with a market value of less than $250 million) and we areeligible to take advantage of certain exemptions from various reporting requirements applicable to other public companies. We have elected to adopt these reduceddisclosure requirements. We cannot predict if investors will find our common stock less attractive as a result of our taking advantage of these exemptions. If someinvestors find our common stock less attractive as a result of our choices, there may be a less active trading market for our common stock and our stock price may bemore volatile.We do not expect to pay any cash dividends in the foreseeable future.We have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our board of directors deems relevant. Investors should not purchase our common stock expecting to receive cash dividends. Because we do notpay dividends, and there may be limited trading, investors may not have any manner to liquidate or receive any payment on their investment. Therefore, our failureto pay dividends may cause investors to not see any return on investment even if we are successful in our business operations. In addition, because we do not paydividends we may have trouble raising additional funds, which could affect our ability to expand our business operations.37UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2022☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ________ to _________Commission file number 00137370MY SIZE, INC.(Exact name of registrant as specified in charter)Delaware510394637(State or jurisdiction ofIncorporation or organization)I.R.S EmployerIdentification No.4 Hayarden, POB 1026, Airport City, Israel7010000(Address of principal executive offices)(Zip code)+9723 6009030(Registrant’s telephone number, including area code)Securities registered pursuant to Section 12(b) of the Act:Title of each classTrading Symbol(s)Name of Each Exchange on Which RegisteredCommon Stock, par value $0.001 per shareMYSZThe Nasdaq Capital MarketSecurities registered pursuant to Section 12(g) of the Act: None.Indicate by check mark whether the registrant is a wellknown seasoned issuer as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes☒ No ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer, a smaller reporting company, or an emerginggrowth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 of theExchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☒Smaller Reporting Company☒Emerging Growth Company☐If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revisedfinancial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b2 of the Exchange Act) Yes ☐No☒Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control overfinancial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflectthe correction of an error to previously issued financial statements. ☐Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by anyof the registrant’s executive officers during the relevant recovery period pursuant to §240.10D1(b). ☐The aggregate market value of voting and nonvoting common equity held by nonaffiliates of the registrant as of June 30, 2022, the last business day of theregistrant’s most recently completed second fiscal quarter, was approximately $25,551,906.Number of shares of common stock outstanding as of March 31, 2023 was 2,446,780.Documents Incorporated by Reference: None.Table of ContentsPart IItem 1.Business2Item 1A.Risk Factors18Item 1B.Unresolved Staff Comments41Item 2.Properties41Item 3.Legal Proceedings41Item 4.Mine Safety Disclosures42Part IIItem 5.Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities43Item 6.Selected Financial Data43Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations43Item 7A.Quantitative and Qualitative Disclosures about Market Risk50Item 8.Financial Statements and Supplementary DataF1Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure51Item 9A.Controls and Procedures51Item 9B.Other Information51Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.51Part IIIItem 10.Directors, Executive Officers and Corporate Governance52Item 11.Executive Compensation57Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters60Item 13.Certain Relationships and Related Transactions, and Director Independence62Item 14.Principal Accounting Fees and Services65Part IVItem 15.Exhibits, Financial Statement Schedules66Signatures69iPART IIn this Annual Report on Form 10K, unless the context requires otherwise, the terms “we,” “our,” “us,” or “the Company” refer to MySize, Inc., a Delawarecorporation, and its subsidiaries, including MySize Israel 2014 Ltd. My Size LLC, Orgad International Marketing Ltd., or Orgad, and Naiz Bespoke Technologies, S.L,or Naiz, taken as a whole.References to “U.S. dollars” and “$” are to currency of the United States of America, and references to “NIS” are to New Israeli Shekels. Unless otherwiseindicated, U.S. dollar translations of NIS amounts presented in this Annual Report on Form 10K for the year ended on December 31, 2022 are translated using therate of NIS 3.358 to $1.00.All information in this Annual Report on Form 10K relating to shares or price per share reflects the 1for25 reverse stock split effected by us on December8, 2022.CAUTIONARY NOTE ON FORWARDLOOKING STATEMENTSThis Annual Report on Form 10K contains certain forwardlooking statements within the meaning of Section 27A of the Securities Act and Section 21E ofthe Exchange Act. Any statements in Annual Report on Form 10K about our expectations, beliefs, plans, objectives, assumptions or future events or performanceare not historical facts and are forwardlooking statements. These statements are often, but not always, made through the use of words or phrases such as“believe,” “will,” “expect,” “anticipate,” “estimate,” “intend,” “plan” and “would.” For example, statements concerning financial condition, possible or assumedfuture results of operations, growth opportunities, industry ranking, plans and objectives of management, markets for our common stock and future managementand organizational structure are all forwardlooking statements. Forwardlooking statements are not guarantees of performance. They involve known and unknownrisks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to differ materially from any results, levels ofactivity, performance or achievements expressed or implied by any forwardlooking statement.Any forwardlooking statements are qualified in their entirety by reference to the risk factors discussed throughout this Annual Report on Form 10K. Someof the risks, uncertainties and assumptions that could cause actual results to differ materially from estimates or projections contained in the forwardlookingstatements include but are not limited to:●our history of losses and needs for additional capital to fund our operations and our inability to obtain additional capital on acceptable terms, or at all;●risks related to our ability to continue as a going concern;●the new and unproven nature of the measurement technology markets;●our ability to achieve customer adoption of our products;●our ability to realize the benefits of our acquisitions of Orgad and Naiz;●our dependence on assets we purchased from a related party;●our ability to enhance our brand and increase market awareness;●our ability to introduce new products and continually enhance our product offerings;●the success of our strategic relationships with third parties;●information technology system failures or breaches of our network security;●competition from competitors;●our reliance on key members of our management team;●current or future litigation;●current or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated liquidityrisk; and●the impact of the political and security situation in Israel on our business.1The foregoing list sets forth some, but not all, of the factors that could affect our ability to achieve results described in any forwardlooking statements.You should read this Annual Report on Form 10K and the documents that we reference herein and have filed as exhibits to the Annual Report on Form 10K,completely and with the understanding that our actual future results may be materially different from what we expect. You should assume that the informationappearing in this Annual Report on Form 10K is accurate as of the date hereof. Because the risk factors referred to in this Annual Report on Form 10K, could causeactual results or outcomes to differ materially from those expressed in any forwardlooking statements made by us or on our behalf, you should not place unduereliance on any forwardlooking statements.Further, any forwardlooking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forwardlookingstatement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. New factors emergefrom time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extentto which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements. We qualify all ofthe information presented in this Annual Report on Form 10K, and particularly our forwardlooking statements, by these cautionary statements.ITEM 1. BUSINESSOverviewWe are an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile phone or through MySizeID Widget: a simple questionnaire which uses a database collected over the years.MySizeID syncs the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and only presents itemsfor purchase that match their measurements to ensure a correct fit.We are positioning ourselves as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empower brand design teams, which are designed to increase endconsumer satisfaction, contributing to a sustainable world and reduce operation costs.Recent DevelopmentsOrgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,602 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.2The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz, a limitedliability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.3The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Warehouse FireOn January 2, 2023, Orgad experienced a fire at its warehouse in Israel. we are not aware of any casualties or injuries associated with the fire. We shiftedOrgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incident did not affectthe future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of this incident on the otherparties that were involved in the incident (lessor and others that leased properties near the warehouse).January 2023 FinancingOn January 10, 2023, we entered into a securities purchase agreement, or the RD Purchase Agreement, pursuant to which we agreed to sell and issue in theRD Offering an aggregate of 162,000 of our shares of common stock, or the RD Shares, and prefunded warrants, or the Prefunded Warrants, to purchase up to279,899 shares of common stock and, in a concurrent private placement, unregistered warrants to purchase up to 883,798 shares of common stock, or the RDWarrants, consisting of Series A warrants, or Series A Warrants, to purchase up to 441,899 shares of common stock and Series B warrants, or Series B Warrants, topurchase up to 441,899 shares of common stock, at an offering price of $3.055 per RD Share and associated Series A and Series B Warrants and an offering price of$3.054 per Prefunded Warrant and associated Series A and Series B Warrants.4In addition, we entered into a securities purchase agreement, or the PIPE Purchase Agreement, and together with the RD Purchase Agreement, thePurchase Agreements, pursuant to which we agreed to sell and issue in the PIPE Offering an aggregate of up to 540,098 unregistered Prefunded Warrants andunregistered warrants to purchase up to an aggregate of 1,080,196 shares of common stock, or the PIPE Warrants and together with the RD Warrants, the Warrants,consisting of Series A Warrants to purchase up to 540,098 shares of common stock and Series B Warrants to purchase up to 540,098 shares of common stock at anoffering price of $3.054 per Prefunded Warrant and associated Series A and Series B Warrants.The Prefunded Warrants are immediately exercisable at an exercise price of $0.001 per share and will not expire until exercised in full. The Warrants areimmediately exercisable upon issuance at an exercise price of $2.805 per share, subject to adjustment as set forth therein. The Series A Warrants have a term of fiveand onehalf years from the date of issuance and the Series B Warrants have a term of 28 months from the date of issuance. The Warrants may be exercised on acashless basis if there is no effective registration statement registering the shares underlying the warrants.In connection with the PIPE Purchase Agreement, we entered into a registration rights agreement, or the Registration Rights Agreement. Pursuant to theRegistration Rights Agreement, we are required to file a resale registration statement, or the Registration Statement, with the Securities and Exchange Commission, orthe SEC, to register for resale the shares issuable upon exercise of the unregistered Prefunded Warrants and the Series A and Series B Warrants, within 20 days ofthe signing date of the PIPE Purchase Agreement, or the Signing Date, and to have such Registration Statement declared effective within 60 days after the SigningDate in the event the Registration Statement is not reviewed by the SEC, or 90 days of the Signing Date in the event the Registration Statement is reviewed by theSEC. we will be obligated to pay certain liquidated damages if we fail to maintain the effectiveness of the Registration Statement.The Purchase Agreements and the Registration Rights Agreements also contain representations, warranties, indemnification and other provisionscustomary for transactions of this nature. In addition, subject to limited exceptions, the Purchase Agreements provide that for a period of one year following theclosing of the Offerings, we will not effect or enter into an agreement to effect a “variable rate transaction” as defined in the Purchase Agreements.Aggregate gross proceeds to the Company in respect of the Offerings was approximately $3.0 million, before deducting fees payable to the placement agentand other offering expenses payable by the Company.We also entered into a letter agreement, or the Engagement Agreement, with H.C. Wainwright & Co., LLC, or Wainwright, pursuant to which Wainwrightagreed to serve as the exclusive placement agent for the Company in connection with the Offerings. We paid Wainwright a cash placement fee equal to 7% of theaggregate gross proceeds raised in the Offerings, a management fee of 1% of the aggregate gross proceeds raised in the Offerings, a nonaccountable expenseallowance of $85,000 and clearing fees of $15,950. Wainwright also received placement agent warrants, or the Placement Agent Warrants, with substantially the sameterms as the Series A Warrants issued in the Offering in an amount equal to 7% of the aggregate number of Shares and Prefunded Warrants sold in the Offerings, or68,740 shares, at an exercise price of $3.8188 per share and a term expiring on January 10, 2028.Our SolutionOur cloudbased software platform provides highly accurate sizing and measurement with broad applications including the online fashion/apparel industry,logistics and courier services and home DIY. Currently, we are mainly focusing on the ecommerce fashion/apparel industry. This proprietary technology is driven byseveral patented algorithms which are able to calculate and record measurements in a variety of novel ways. Although specific functionality varies by product, webelieve that our core solutions address the need for highly accurate measurements in a variety of consumer friendly, every day uses.5We have developed three products, MySizeID for the fashion/apparel industry, BoxSize for the logistics and courier services market and SizeUp for thehome DIY market.●MySizeID enables shoppers to generate highly accurate measurements of their body to find proper fitting clothes and accessories, through the use ofour application on their mobile phone or through a simple questionnaire if the user decides not to download the application. MySizeID syncs the user’smeasurement data to a sizing chart and presents items for purchase that match their measurements to ensure a correct fit. MySizeID is available forlicense by retailers and accessable by consumers through a web page.●BoxSize enables customers to quickly and easily measure the size and volume of a parcel to accurately calculate shipping fees. It also offers shippingcompanies a variety of precise logistical data for more efficiently managing their supply chain, providing them with an accurate way to compare thephysical package with what is in the shipping manifest. BoxSize solution is available for license on both iOS and Android operating systems. BoxSizeis available on the Honeywell Marketplace and in August 2019 was approved for Honeywell’s Independent Software Vendor Program, and MySize wasgranted an independent software vendor (ISV) status on the Zebra Technologies and on DataLogic platforms.●SizeUp is a digital tape measure that allows users to measure length, width and height of a surface by moving their smartphone from point to point ofan object or space. SizeUp is a valueadd for DIY and home improvement retailers whose customers struggle to find the appropriately sized items (likeblinds or curtains) for their homes or projects due to inaccurate measurements. SizeUp also is designed to replace rulers, tape measures and othermeasuring tools used for DIY projects. SizeUp is available for consumer download on both iOS and Android operating systems.The following are some select key features of our solutions:●Integration Capability. We design our solutions to be flexible and configurable, allowing our clients to match their use of our algorithms and softwarewith their specific business processes and workflows. Our platform has been organically developed from a common code base, data structure and userinterface, providing a consistent user experience with powerful features that are easily adaptable to our clients’ needs. The MySizeID widget can beintegrated via oneline JavaScript code, or through RESTful API;●Intuitive user experience. Our intuitive, easytouse interface is based on current technology, multiple focus groups and automatically adapts to users’devices, including mobile platforms, thereby significantly increasing accessibility of our solutions;●Big Data Generation. While we supply to the user the information he/she requires, we gather certain vital information such as body measurement andpackage volume which can be used anonymously to help the retailer acquire predictive size information on stocking, operations and consumers thatmay be in between sizes. All the information is being gathered and stored on our servers where it can be used by retailers;●NonInvasive. In taking measurements using our solution, the smartphone camera is not utilized; instead, the measurements are captured by scanningthe smartphone over the consumer’s body or package, thus ensuring greater privacy.Our Growth StrategyWe aim to drive revenue primarily through penetration of the U.S. and Europe markets through a business to business to consumer (B2B2C) model in theverticals we are targeting. We are pursuing the following growth strategies:●Sign Additional Commercial Agreements with U.S. Retailers. During 2022, we expanded our commercial agreements with Levi’s, introducing NorthAmerica (U.S. and Canada) and Latin America regions, and by extension Levis’ native apps in EU and U.S. regions. We also entered into commercialagreements with Baby Fresh, Galax, Punto Blanco, GEF France, Diesel, Gaala, Superdry, Uniontex Industries, and Temperlay London among others. Weare in various stages of discussions with U.S. and foreign retailers for the deployment of our size recommendation and measurement technology with aview to entering into additional commercial agreements.6●Pursue a TwoPronged Commercialization Strategy. We are seeking to accelerate adoption of our solutions both through direct partnerships with ecommerce websites as well as through thirdparty platform websites. While we seek to directly enter into partnerships with companies maintaining ecommerce websites in the apparel, courier and DIY markets, we are also seeking to deploy our solutions on thirdparty platforms. Furthermore, with theexpansion of MySizeID through the release of our FirstLook Smart Mirror, which we are offering to brick and mortar stores to digitize the physicalstores, MySizeID is now available for online retailers utilizing the WooCoomerce, Shopify, Lightspeed, PrestaShop, Bitrix and Wix platforms and tobrick and mortar stores through GK Software POS solution while BoxSize is available on the Honeywell, Zebra Technologies and Datalogic.●Ongoing Investment in our Technology Platform. We continue to invest in building new software capabilities and extending our platform to bring thepower of accurate measurement to a broader range of applications. In particular, we seek not only to deliver size recommendations but to provide arobust, endtoend,artificial intelligence, or AIdriven platform that inspires consumer confidence and drives revenue growth by providing a superiorconsumer journey to both online and the brick and mortar stores.●Grow our database. As the usage of our measurement apps increases, our database of information including user behaviour and body measurementsgenerates valuable statistics. Such data can be used in the big data market for targeted advertising and for blind consumer data mining.●Identify and acquire synergistic businesses. In order to reduce our time to market and obtain complementary technologies, we are seeking to acquiretechnologies and businesses that are synergistic to our product offering. We recently completed an acquisition of Orgad which operates anomnichannel ecommerce platform and Naiz which provides SaaS technology solutions that solve size and fit issues for fashion ecommerce companies.●Partnerships and cooperation. In order to bring a wider solution for the retail market we are working to partner and integrate our technology withpartners that can increase our penetration and offering to the market.Market OpportunityThe global ecommerce market was $5.7 trillion in 2022, and the industry is expected to grow significantly in the coming years with no signs of slowingdown. Market specialists expect a compound annual growth rate of 27.43% from 2023 to 2028: according to data from Statista, the market is expected to reach $6.5trillion in 2023. While many sectors have found ways to increase revenue through ecommerce, ecommerce is still plagued by issues that cut into profits andnegatively impact the bottom line, such as customer returns, low consumer conversion, and associated restocking and shipping costs.Fashion/ApparelSince the onset of the COVID19 pandemic, an immense shift to digital was recorded, with 85.9% growth vs. prepandemic, according to Mastercard, andover 2 billion people worldwide who shop online, according to data from Oberlo. In November 2022, online shoppers broke records with $11.3 billion in spending onCyber Monday, driving 5.8% yearoveryear growth and making the day the biggest online shopping day of all time, according to Adobe Analytics.In 2021, fashion companies invested between 1.6% and 1.8% of their revenues in technology, according to Mckinsey, and are expected to double theinvestment by 2030 in order to keep up with digital natives and keep a competitive edge. Personalization in ecommerce and hybrid connectivity in brickandmortarretail are two key themes in the future of fashtech, according to Mckinsey’s 2022 State of Fashion Technology.7In the upcoming years, inflation is expected to impact the fashion world. As prices for goods increase, the challenge will be to inspire confidence inconsumers, via different smart digital tools. Brands will need to embrace creative digital tools and new channels to deepen customer relationships, and as Mckinseyforecasts in their State of Fashion report for 2023, they will need to execute on priorities such as sustainability and digital acceleration.The global fashion ecommerce market size is expected to grow from $744.4 billion in 2022 to $821.19 billion in 2023 at a compound annual growth rate of10.3%. In 2027, the market size is expected to grow to $1,222.32 billion, at a compound annual growth rate of 10.5%, according to BRC.Based on the importance which shoppers attribute to free shipping 50% of cart abandonment rate is due to extra shipping costs (Baymard Institute) theneed for fashion retailers to substantiate the optimal size for a customer, thus minimizing returns, has never been more crucial.As brands move online or significantly expand their online presence, we believe that developing innovative ways to connect with shoppers, both onlineand offline, has become a top priority.Shipping/ParcelAccording to Pitney Bowes, parcel revenue in 13 major countries around the world increased by 17% year over year from $420 billion in 2020 (reflecting 131billion parcels) to $491 billion in 2021 (reflecting 159 billion parcels). In the shipping/parcel industry, the dimensions of a package are critical. It is not merely themeasurement of a package or box – but rather the amount of space that the package or box will take up on a truck, airplane, or ship that will be transporting thepackage or box. Far too often, retailers use unfit packaging for their items, adding additional costs in materials and shipping fees.DIYSimilar to issues in the apparel and fashion market, big box, hardware, furniture, and DIY stores are plagued by returns due to incorrect fit andmeasurements. In an industry where precise measurement for projects is an absolute necessity, ecommerce has not grown as quickly as in other industries which webelieve is due to lack of consumer confidence in measurements at home and buying the correct item online.MySizeIDWe have released the MySizeID app for both iOS and Android which assists consumers to take highly accurate measurement of their own body in order tosize clothing in the best way possible without the need to try the clothes on before purchasing. MySizeID is designed to simplify the process of purchasing clothesonline and significantly reduce the rate of returns of poorfitting clothing. During 2022, MySizeID delivered over 23.5 million size recommendations.The application is the result of a research and development effort that combines:●anthropometric research – analyses of information pertaining to body measurements derived from a survey and the subsequent determination ofcorrelations between body parts;●body measurement algorithm research – an algorithm created by us to measure body parts; and●retailers size chart analyses – adopting a deep understanding of the size charts of retailers and the corresponding “body to garment size.”MySizeID allows consumers to create a secure, online profile of their personal measurements, which can then be utilized, with partnered online retailers, toensure that no matter the manufacturer or size chart, they will get the right fit. MySizeID operates based on the use of existing sensors in smart phones which enable,through a specific purpose application, the measurement of the body of any consumer by moving the smartphone along his or her body. The MySizeID applicationdoes not rely on user photographs or any additional hardware; all a user needs to do is scan their body with their smartphone and the application records theirmeasurements. The measurements can then be saved in our database in the cloud, enabling the user to search for clothes in various retailer websites withoutworrying about size. When a search is made, the retailer will connect to our cloud database, and then provide results based on the user’s measurements and otherparameters as he or she may have defined. This data is also saved for use when a customer enters a brickandmortar store to help serve the customer moreefficiently and to provide a better shopping experience.8Figure 1: Screenshot of MySizeID on smartphone and ecommerce websiteAs part of the integration process, we offer to the retailer five main components:●Mobile App. MySizeID comes in the form of a native app or website. Our native app can be used “as is” integrated into the retailer’s ecommercewebsite. The website users can build a body profile on the app and receive size recommendations for their profile both in the app and on a widgetintegrated with their website.9●Widget. When a consumer enters into the retailer’s website and looks for a specific item, he or she can click on the MySizeID widget which will informthe consumer of his or her recommended size, based on his or her actual measurements, as measured using the app and the item he or she is looking at.The widget has two features:AI Wizard mode allows the user to obtain size from the following parameters: gender, height, weight, belly shape, hip shape and bra size only. Thegender, height and weight questions are mandatory, while the body shape questions are optional and can be added to increase accuracy for specificapparel categories.Guest mode allows a user that does not wish to sign up to MySizeID as a user to obtain size recommendations as well.●Analytic Pixel. MySizeID analytic pixel allows retailer to track and analyze the widget usage. By adding the pixel to the retailer’s website, MySizeID BIteam can track engagement, order, and return data and provide retailers with tools to understand the advantages and benefits of MySizeID.Use your own device using MySizeID instore solution, shoppers can receive size recommendations for all store items, when shopping in the offlinestores. The shoppers can build their body profile using an easy to use 3 to 6 questions form, scan an item barcode and receive a size recommendationfor the scanned item based on their body profile and the item’s size chart.Another feature we added is the “inbetween sizing” feature. Our system can detect a user that has body dimensions that place the user inbetweenthe clothes sizes being offered and lets the user know that. A user can then choose between the two sizes according to the user’s fit preference(tight/loose/average).In addition, we have recently released our InstantApp feature which allows shoppers to generate their body measurements directly from our widget,without the need to download our mobile app. Using this technology, the shoppers can create their online profile of their personal measurements andcomplete a purchase faster and easier with minimum distractions.The body profile can be created while shoppers are viewing the page from their mobile phone, or by scanning a QR code on desktop that will open thesame page on the mobile phone.Screenshot of InstantApp widget on desktop on yumyumfashion website10●MyDash Platform. The MyDash platform is a smart backoffice system where the retailer enters all the information regarding its size charts thatcorrelates to every product in its ecommerce site, and where the retailer can access the information on its users. This system is customizable based onthe retailer’s needs. In 2021, we changed the MyDash system to increase the system’s accessibility, added walkthroughs, user guides and changed theuser interface and much more for the ease of use. We added the option to use our generic size charts, added the option upload size chart files insteadof typing the size charts values manually, added more widget styling options and changed the pairing mechanism between the size chart and theproducts to be more userfriendly.Figure 3: Screenshot of BackOffice System●FirstLook Smart Mirror. The Smart Mirror provides an interactive, mirrorlike touch display that allows brands to provide instore customers with anenhanced, online shopping experience, contactless checkout and obtains the recommended size. The MySizeIDFirstLook Smart Mirror can be placedin numerous locations throughout a retail store, including the fitting rooms (without cameras) or other hightraffic locations of the store. Highlightcapabilities of the FirstLook Smart Mirror include a 3D “Tryiton” interactive avatar experience, personalized and highly accurate sizerecommendations by MySizeID, thirdparty point of sale systems integration, styling recommendations and contactless “select and collect” at theregister feature.Illustration of MySizeID “first look” smart mirror in a fashion store11We are currently offering MySizeID technology to retailers through either a payperuse model or a monthly subscription model. In our payperusebusiness model, every time the consumer obtains a recommended size, the retailer is charged for the usage.BoxSizeBoxSize is a parcel measurement application that can provide realtime logistic data on package volumes and transportation, resulting in improvedoperational efficiency and reduced operating expenses. In addition, BoxSize allows customers to easily measure the size of their parcel with their smartphone,calculate shipping costs and arrange for a convenient pickup time for the package. BoxSize is available both on iOS and Android.In 2020 we released the “One Click” feature on BoxSize that enables the user to measure a package with just one swipe of the handheld device. Previously,measurements through BoxSize would require three separate swipes.Figure 4: Screenshot of BoxSizeOur BoxSize mobile measurement solution is available on the Honeywell Marketplace. In addition, BoxSize was approved for Honeywell’s Global VendorProgram, and is available to provide highly accurate mobile measurement solutions for thousands of Honeywell clients. We also developed a new dashboard for thecourier companies to have all the required data about each package in one place. It includes package dimensions, pictures, scan geo location and more. Thedashboard also let the courier use Webhooks, which allows him to get the information from his own system.12In 2020, we announced our partnership with Datalogic, a company focused on the automatic data capture and process automation markets. The partnershipmakes our BoxSize measurement solution available to thousands of Datalogic customers in the Transportation and Logistics vertical.Agreement with Delhivery Private Limited, IndiaWe entered into an agreement with Delhivery Private Limited, one of the largest courier pickup, delivery, and online shipping services in India. Delhivery’sreputation as a frontrunner in delivery and logistics tech makes its decision to select Boxsize a particularly strong testament to the value the solution provides.BoxSize provides Delhivery’s employees on the B2B side with critical information that will allow them to effortlessly optimize loading efficiency and add even morerealtime visibility to operations.SizeUpWe are working on additional consumer applications, including a DIY application. Our SizeUp application is a smart tape measure for the business toconsumer market which allows users to utilize their smartphone as a tape measure. The application provides measurements with an accuracy of within twocentimeters. Through the use of SizeUp, users will be able to visualize how an object or a piece of furniture will fit in an existing room in their home or office. It alsoadded Google Vision for image content analysis, object detection, and title suggestions.Currently the SizeUp app for Android and iOS is available for free for the first 30 days, after which a user will be required to register via email and pay aonetime fee of $1.99 to continue using the application. To date, revenues from downloads have been minimal.Research and DevelopmentOur research and development team are responsible for the research, algorithm, design, development, and testing of all aspects of our measurementplatform technology. We invest in these efforts to continuously improve, innovate, and add new features to our solutions.We incurred research and development expenses of approximately $1.7 million in 2022 and $4.25 million in 2021, relating to the development of itsapplications and technologies. The decrease from the corresponding period primarily resulted from share based payment in amount of $2,618,000 attributed to theshare issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021. We intend to continue to invest in our research anddevelopment capabilities to extend our platform and bring our measurement technology to a broader range of applications.13In 2022, the R&D department experienced significant success in their efforts to improve the performance of their size recommendation system. Through acombination of optimized algorithms and the incorporation of cuttingedge technologies, the team was able to achieve a threefold increase in the system’s speed.This breakthrough not only makes the system one of the fastest and most accurate on the market, but also reduced the operation costs, making it more costeffective for businesses to use. Additionally, the solution is now highly scalable, allowing it to easily adapt to the needs of businesses of any size. The R&D team isnow focused on further improving the system and exploring new applications for the technology.Sales and MarketingIn 2019, we launched a commercialization strategy that directs our sales efforts toward both sales to ecommerce players in specific vertical markets such asfashion/apparel and shipping/delivery as well as to ecommerce thirdparty platform providers. As of March 15, 2023, our products are being sold in the followingcountries: US, UK, France, Netherlands, Spain, Portugal Turkey, Germany, Israel and Italy, generating customer leads, building out a sales pipeline, and developingcustomer relationships.We believe an effective method to market our suite of products is for users to actively use and explore its capabilities. We encourage free trials of one ormore of our products in order to successfully convert those accounts to paid subscriptions.Proprietary RightsWe rely on a combination of patent, copyright, trademark and trade secret laws in the United States and other jurisdictions, as well as contractualprotections, to protect our proprietary technology.As of December 31, 2022, we owned 18 issued patents: six in Europe, four in the U.S., three in each of Russia and Japan and one in each of Canada andIsrael which expire between January 20, 2033 and August 18, 2036, and we have two additional patent applications in process. As of such date, we do not have anyregistered trademarks.We cannot provide any assurance that our proprietary rights with respect to our products will be viable or have value in the future since the validity,enforceability and type of protection of proprietary rights in softwarerelated industries are uncertain and still evolving.Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products or to obtain and use informationthat we regard as proprietary. Policing unauthorized use of our products is difficult, and while we are unable to determine the extent to which piracy of our softwareproducts exists, software piracy can be expected to be a persistent problem. In addition, the laws of some foreign countries do not protect proprietary rights to asgreat an extent as do the laws of the United States, and effective copyright, trademark, trade secret and patent protection may not be available in those jurisdictions.Our means of protecting our proprietary rights may not be adequate to protect us from the infringement or misappropriation of such rights by others.Further, in recent years, there has been significant litigation in the United States involving patents and other intellectual property rights, particularly in thesoftware and Internetrelated industries. We can become subject to intellectual property infringement claims as the number of our competitors grows and ourproducts and services overlap with competitive offerings. These claims, even if not meritorious, could be expensive to defend and could divert management’sattention from operating our business. If we become liable to third parties for infringing their intellectual property rights, we could be required to pay a substantialaward of damages and to develop noninfringing technology, obtain a license or cease selling the products that contain the infringing intellectual property. We maybe unable to develop noninfringing technology or obtain a license on commercially reasonable terms, if at all.14Government RegulationWe are subject to a number foreign and domestic laws and regulations that involve matters central to our business. These laws and regulations mayinvolve privacy, data protection, intellectual property, or other subjects. Many of the laws and regulations to which we are subject are still evolving and being testedin courts and could be interpreted in ways that could harm our business. In addition, the application and interpretation of these laws and regulations often areuncertain, particularly in the new and rapidly evolving industry in which we operate. Because global laws and regulations have continued to develop and evolverapidly, it is possible that we, our products, or our platform may not be, or may not have been, compliant with each such applicable law or regulation.In particular, we are subject to a variety of federal, state and international laws and regulations governing the processing of personal data. Many U.S. stateshave passed laws requiring notification to data subjects when there is a security breach of personally identifiable data. There are also a number of legislativeproposals pending before the U.S. Congress, various state legislative bodies and foreign governments concerning data protection. In addition, data protection lawsin Europe and other jurisdictions outside the United States can be more restrictive than those within the United States, and the interpretation and application ofthese laws are still uncertain and in flux.For example, the General Data Protection Regulation, or GDPR, which took effect on May 25, 2018, enhances data protection obligations for entities thatprocess personal data about individuals, including obligations to cooperate with European data protection authorities, implement security measures and keeprecords of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to the greater of €20 million or 4% of global annual revenue. Inaddition, the California Consumer Privacy Act of 2018, or CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and requiredeletion of their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used.The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further,failure to comply with the Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may exposeus to administrative fines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the currentenforcement measures and sanctions. Given the breadth and depth of changes in data protection obligations, meeting the requirements of GDPR and otherapplicable laws and regulations has required significant time and resources, including a review of our technology and systems currently in use against therequirements of GDPR and other applicable laws and regulations. We have taken various steps to prepare for complying with GDPR and other applicable laws andregulations however there can be no assurance that these steps are sufficient to assure compliance. Further, additional EU laws and regulations (and member states’implementations thereof) further govern the protection of individuals and of electronic communications. If our efforts to comply with GDPR or other applicable lawsand regulations are not successful, we may be subject to penalties and fines that would adversely impact our business and results of operations, and our ability touse personal data of individuals could be significantly impaired.CompetitionWe operate in a highly competitive industry that is characterized by constant change and innovation. Changes in the applications and the programinglanguages used to develop applications, devices, operating systems, and technology landscape result in evolving customer requirements. Our competitors includeTrue Fit, Fit analytics and 3DLook.The principal competitive factors in our market include the following:●High Accuracy Size Recommendations: the highest accuracy and the lowest margin of error by combining patented technology including AI and ML,size chart or spec data, and MySizeID property body data measurement;●Integration○Fast 1 week integration including size chart size chart review and product mapping○Easy 1 line of “all included” script implementation●Technical Advantages○Very small library that weighs ±50kb (minimum widget loading time on product page)○UltraFast loading and size recommendation presenting○Restful API option (API integration with any website or app)15●Optimizations○Adjustments of size charts based on performance○Widget usage analysis by FashTech and BI teams○Automatic pairing of size charts with products/collections●User Experience○Easy to use interface (1015 seconds to receive size recommendations)○Option to add/deduct questions to/from widget wizards○Users automatically receive size recommendations on all products after initial sign up●Product and platform features, architecture, reliability, privacy and security, performance, effectiveness, and supported environments;●Product extensibility and ability to integrate with other technology infrastructures;●Digital operations expertise;●Ease of use of products and platform capabilities;●Total cost of ownership;●Adherence to industry standards and certifications;●Strength of sales and marketing efforts;●Brand awareness and reputation; and●Focus on customer successWe believe we generally compete favorably with our competitors on the basis of these factors. We expect competition to increase as other established andemerging companies enter our markets, as customer requirements evolve, and as new products and technologies are introduced. We expect this to be particularlytrue as we offer a smartphonebased offering that does not need to utilize the smartphone’s camera, and our competitors may also seek to repurpose their existingofferings to provide similar solutions. Many of our competitors have substantially greater financial, technical, and other resources, greater name recognition, largersales and marketing budgets, broader distribution, and larger and more mature intellectual property portfolios.Human Capital ManagementAs of March 31, 2023, we had a total of 35 employees, of which 30 were fulltime employees, including 9 in sales and marketing, 12 in technology anddevelopment and 9 in administration and finance.None of our employees are represented by a collective bargaining agreement, nor have we experienced any work stoppage. We consider our relationshipwith our employees to be good. Our future success depends on our continuing ability to attract and retain highly qualified engineers, sales and marketing, accountmanagement, and senior management personnel.We also believe we have built a strong sales team focused on expanding into new markets through the acquisition of Naiz and our current team.We believe that our future success will depend, in part, on our continued ability to attract, hire and retain qualified personnel. In particular, we depend onthe skills, experience and performance of our senior management and research personnel. We compete for qualified personnel with other hitech companies, as wellas universities and nonprofit research institutions.16We provide competitive compensation and benefits programs to help meet the needs of our employees. In addition to salaries, these programs (which varyby country/region and employment classification) include incentive compensation plan, pension, and insurance benefits, paid time off, , among others. We also usetargeted equitybased grants with vesting conditions to facilitate retention of personnel, particularly for our key employees.The success of our business is fundamentally connected to the wellbeing of our people. Accordingly, we implemented an hybrid work policy in which theemployees can work from home twice a week.We consider our employees to be a key factor to our success and we are focused on attracting and retaining the best employees at all levels of ourbusiness. Inclusion and diversity is a strategic, business priority. We employ people based on relevant qualifications, demonstrated skills, performance and otherjobrelated factors. We do not tolerate unlawful discrimination related to employment, and strive to ensure that employment decisions related to recruitment,selection, evaluation, compensation, and development, among others, are not influenced by race, color, religion, gender, age, ethnic origin, nationality, sexualorientation, marital status, or disability. Continuous monitoring to ensure pay equity has been a focus in 2022. We have continued to improve gender balance in 2022with a focus on increasing the representation of women hired as new college graduates. We are committed to creating a trusting environment where all ideas arewelcomed and employees feel comfortable and empowered to draw on their unique experiences and backgrounds.We consider our relations with our employees to be good.Company InformationOur principal executive offices are located at HaYarden 4 St., POB 1026, Airport City, Israel 7010000, and our telephone number is +97236009030. Ourwebsite address is www.mysizeid.com. Any information contained on, or that can be accessed through, our website is not incorporated by reference into, nor is it inany way a part of, this Annual Report on Form 10K.We use our website (www.mysizeid.com) as a channel of distribution of Company information. The information we post through this channel may bedeemed material. Accordingly, investors should monitor our website, in addition to following our press releases, SEC filings and public conference calls andwebcasts. The contents of our website are not, however, a part of this Annual Report on Form 10K.Corporate HistoryWe were incorporated in the State of Delaware on September 20, 1999 under the name Topspin Medical, Inc. In December 2013, we changed our name toKnowledgetree Ventures Inc. Subsequently, in February 2014, we changed our name to MySize, Inc. In 2020, we created a subsidiary in the Russian Federation, MySize LLC.From inception through 2012, we were engaged in research and development of a medical magnetic resonance imaging, or MRI, technology forinterventional cardiology and in the development of MRI technology for use in the diagnosis and treatment of prostate cancer. In January 2012, we acquiredMetamorefix Ltd., or Metamorefix. Metamorefix was incorporated in 2007, and was engaged in the development of innovative solutions for the rehabilitation oftissues, particularly skin tissues. By the end of 2012, we ceased operations and in January 2013, we sold our entire ownership interest in Metamorefix.In September 2013, Ronen Luzon, our Chief Executive Officer, acquired control of the Company from Asher Shmuelevitch, according to which Mr. Luzonpurchased 70,238 shares of common stock from Mr. Shmuelevitch, which shares represented approximately 40% of the issued and outstanding capital stock of theCompany at such time, thus becoming a controlling shareholder of the Company. In connection with the acquisition, Mr. Luzon reached a settlement with our thencreditors pursuant to which the main creditor, Mr. Shmuelevitch, was paid a total sum of approximately $140,000 in consideration for a full and final waiver of any andall his claims that he may have relating to any monetary indebtedness of the Company to the creditors.17In February 2014, My Size Israel, our wholly owned subsidiary, entered into a Purchase Agreement, or the Purchase Agreement, with Shoshana Zigdon,who at the time was a beneficial owner of more than 20% of our outstanding shares, with respect to the acquisition by us of certain rights related to the collection ofdata for measurement purposes including rights in the venture, the method and a patent application that had been filed by the Seller (PCT/IL2013/050056), or theAssets. In consideration for the sale of the Assets, we agreed to pay to Ms. Zigdon, 18% of our operating profit, directly or indirectly connected with the Assetstogether with valueadded tax in accordance with the law for a period of seven years from the end of the development period of the aforementioned venture. Inaddition to the foregoing, the Purchase Agreement provided that all developments, improvements, knowledge and knowhow developed and/or accumulated by usafter the execution of the Purchase Agreement will be owned by us. Further, Ms. Zigdon agreed not to compete, directly or indirectly, with us in any matter relatingto the Assets for a period of seven years from the end of the development period of the venture.On May 26, 2021, we, My Size Israel, and Ms. Zigdon entered into an Amendment to Purchase Agreement, or the Amendment, which made certainamendments to the Purchase Agreement. Pursuant to the Amendment, Ms. Zigdon agreed to irrevocably waive (i) the right to repurchase certain assets related tothe collection of data for measurement purposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which our business issubstantially dependent, or the Assets, and (ii) all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My SizeIsrael under the Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation, reward orany rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights, or the Waiver. Inconsideration of the Waiver, we issued 100,000 shares of common stock to Ms. Zigdon.In September 2005, we commenced trading on the Tel Aviv Stock Exchange, or TASE. Between 2007 and 2012 we reported as a public company with theSEC. In August 2012, we suspended our reporting obligations. In mid2015 we resumed reporting as a public company. On July 25, 2016, our common stock beganpublicly trading on the Nasdaq Capital Market under the symbol “MYSZ”.ITEM 1A. RISK FACTORSAn investment in our common stock involves a high degree of risk. You should carefully consider the following risk factors and the other information inthis Annual Report on Form 10K before investing in our common stock. Our business and results of operations could be seriously harmed by any of the followingrisks. The risks set out below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterialalso may materially adversely affect our business, financial condition and/or operating results. If any of the following events occur, our business, financial conditionand results of operations could be materially adversely affected. In such case, the value and trading price of our common stock could decline, and you may lose allor part of your investment.Summary Risk FactorsThe principal factors and uncertainties that make investing in our ordinary shares risky, include, among others:Risks Related to Our Financial Position and Capital Requirements●We have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.●Our limited operating history makes it difficult to evaluate our business and prospects.●We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive and maycause the market price of our common stock to decline.●The report of our independent registered public accounting firm contains an explanatory paragraph regarding substantial doubt about our ability tocontinue as a going concern.Risks Related to Our Company and Our Business●The market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and online thirdparty resellers adopting our flagship product, MySizeID.18●Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broader marketacceptance of our products.●We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which may makeit difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.●We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increase ourcapital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.●If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations and financialcondition may be adversely affected.●If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operations andfinancial condition could be adversely affected.●The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile device applications andcustom development services.●Our growth depends, in part, on the success of our strategic relationships with third parties.●Changes in economic conditions could materially affect our business, financial condition and results of operations.●We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.●We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significant interruptionin our network or hosting and cloud services could adversely impact our operations and harm our business.●Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.●We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.●A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.●Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, data protectionand information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive and confidentialinformation. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm our business,results of operations and financial condition.●We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect our business.●We may face intense competition and expect competition to increase in the future, which could limit us in developing a customer base and generatingrevenue.●Our business operations and future development could be significantly disrupted if we lose key members of our management team.19●If we are able to expand our operations, we may be unable to successfully manage our future growth.Risks Related to Our Operations in Israel and Russia●Our headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.●Russia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.Risks Related to Our Common Stock●A more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.●Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions and adversedevelopments with respect to financial institutions and associated liquidity risk;●Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.●Our securities are traded on more than one market which may result in price variations.●We are a former “shell company” and as such are subject to certain limitations not generally applicable to other public companies.Risks Related to Our Financial Position and Capital RequirementsWe have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.We realized a net loss of approximately $8.3 million and $10.5 million for the years ended December 31, 2022 and 2021 and had an accumulated deficit of$53.5 million as at December 31, 2022. Because of the numerous risks and uncertainties associated with the development and commercialization of our products andbusiness, we are unable to predict the extent of any future losses or when we will become profitable, if at all. Expected future operating losses will have an adverseeffect on our cash resources, shareholders’ equity and working capital. Our failure to become and remain profitable could depress the value of our stock and impairour ability to raise capital, expand our business, maintain our development efforts, or continue our operations. A decline in our value could also cause you to lose allor part of your investment in us.Our limited operating history makes it difficult to evaluate our business and prospects.We have only been developing our measurement technology since 2014. Since then, our operating history has been primarily limited to research anddevelopment, pilot studies, raising capital, and more recently acquisitions and sales and marketing efforts. Therefore, it may be difficult to evaluate our business andprospects. We have not yet demonstrated an ability to commercialize our products. Consequently, any predictions about our future performance may not beaccurate, and you may not be able to fully assess our ability to complete development and/or commercialize our products, and any future products.We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive andmay cause the market price of our common stock to decline.Based on our projected cash flows and the cash balances as of the date of this Annual Report on Form 10K, our existing cash is insufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. In order to meet ourbusiness objectives in the future, we will need to raise additional capital, which may not be available on reasonable terms or at all. Additional capital would be usedto accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;20●respond to competitive pressure;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, and a number of otherfactors, many of which are outside our control, and on our financial performance. Accordingly, we cannot assure you that we will be able to successfully raiseadditional capital at all or on terms that are acceptable to us. If we cannot raise additional capital when needed, it may have a material adverse effect on our business,results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.Management has concluded that there is substantial doubt about our ability to continue as a going concern which could prevent us from obtainingnew financing on reasonable terms or at all.We have incurred significant losses and negative cash flows from operations and have an accumulated deficit that raises substantial doubt about its abilityto continue as a going concern. Our audited consolidated financial statements for the year ended December 31, 2022 were prepared under the assumption that wewould continue our operations as a going concern. Our independent registered public accounting firm has included a “going concern” explanatory paragraph in itsreport on our financial statements for the year ended December 31, 2022. If we are unable to improve our liquidity position, by, among other things, raising capitalthrough public or private offerings or reducing our expenses, we may exhaust our cash resources and will be unable to continue our operations. If we cannotcontinue as a viable entity, our shareholders would likely lose most or all of their investment in us.Risks Related to Our Company and Our BusinessThe market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and onlinethirdparty resellers adopting our flagship product, MySizeID.The market for our measurement technology is relatively new and unproven and is subject to a number of risks and uncertainties. We believe that ourfuture success will depend in large part on market adoption of our flagship product, MySizeID, by U.S. retailers and online thirdparty resellers. In order to grow ourbusiness, we intend to focus on educating retailers and resellers and other potential customers about the benefits of our measurement technology, expanding thefunctionality of our products and bringing new products to market to increase market acceptance and use of our technology. Our ability to develop and expand themarket that our products address depends upon a number of factors, including the cost savings, performance and perceived value associated with such products.The market for our products could fail to develop or there could be a reduction in interest or demand for our products as a result of a lack of consumer acceptance,technological challenges, competing products and services, weakening economic conditions and other causes. We may never successfully commercialize ourproducts and if our products fail to achieve market acceptance, this would have a material adverse effect on our business, results of operations and financialcondition.21Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broadermarket acceptance of our products.Our ability to achieve customer adoption, especially among U.S. retailers will depend, in part, on our ability to effectively organize, focus and train our salesand marketing personnel. We have limited experience selling to U.S. retailers and only recently established a U.S. sales force. We believe that there is significantcompetition for experienced sales professionals with the skills and industry knowledge that we require. Our ability to achieve significant revenue growth in thefuture will depend, in part, on our ability to recruit, train and retain a sufficient number of experienced sales professionals, particularly those with experience sellingto U.S. retailers. In addition, even if we are successful in hiring qualified sales personnel, new hires require significant training and experience before they achievefull productivity, particularly for sales efforts targeted at U.S. retailers and new markets. Because we only recently started sales efforts, we cannot predict whether, orto what extent, our sales efforts will be successful.We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which maymake it difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.In this market segment, the decision to adopt our products may require the approval of multiple technical and business decision makers, including security,compliance, procurement, operations and IT. In addition, while U.S. retailers may be willing to deploy our products on a limited basis, before they will commit todeploying our products at scale, they often require extensive education about our products and significant customer support time, engage in protracted pricingnegotiations and seek to secure readily available development resources. As a result, it is difficult to predict when we will obtain new customers and begingenerating revenue from these customers. As part of our sales cycle, we may incur significant expenses before executing a definitive agreement with a prospectivecustomer and before we are able to generate any revenue from such agreement. We have no assurance that the substantial time and money spent on our salesefforts will generate significant revenue. If conditions in the marketplace generally or with a specific prospective customer change negatively, it is possible that nodefinitive agreement will be executed, and we will be unable to recover any of these expenses. If we are not successful in targeting, supporting and streamlining oursales processes and if revenue expected to be generated from a prospective customer is not realized in the time period expected or not realized at all, our ability togrow our business, and our operating results and financial condition may be adversely affected. If our sales cycles lengthen, our future revenue could be lower thanexpected, which would have an adverse impact on our operating results and could cause our stock price to decline.22We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increaseour capital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.In order to reduce time to market and obtain complementary technologies, we are seeking to acquire technologies and businesses that are synergistic to ourproduct offering. For example, we recently acquired Orgad which operates an omnichannel ecommerce platform and Naiz which provides SaaS technology solutionsthat solve size and fit issues for fashion ecommerce companies. We evaluate from time to time various acquisitions and collaborations, including licensing oracquiring complementary technologies, intellectual property rights, or businesses. The process for acquiring a company may take from several months up to a yearand costs can vary greatly. We may also compete with others to acquire companies, and such competition may result in decreased availability of, or an increase inprice for, suitable acquisition candidates. In addition, we may not be able to consummate acquisitions or investments that we have identified as crucial to theimplementation of our strategy for other commercial or economic reasons. As a result, it may be more difficult for us to identify suitable acquisition or investmenttargets or to consummate acquisitions or investments on acceptable terms or at all. If we are not able to execute on any acquisition, we may not be able to achieve afuture growth strategy and may lose market share.In addition, the acquisition of Orgad, Naiz and any potential future acquisition, joint venture or collaboration may entail numerous potential risks, including:●increased operating expenses and cash requirements;●the assumption of additional indebtedness or contingent liabilities;●assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel;●the diversion of our management’s attention from our existing programs and initiatives in pursuing such a strategic merger or acquisition;●retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships;●risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing technologies; and●our inability to generate revenue from acquired technologies or products sufficient to meet our objectives in undertaking the acquisition or even to offsetthe associated acquisition and maintenance costs.All of the foregoing risks may be magnified as the cost, size or complexity of an acquisition or acquired company increases, or where the acquiredcompany’s products, market or business are materially different from ours, or where more than one integration is occurring simultaneously or within a concentratedperiod of time. We may not be able to obtain the necessary regulatory approvals, including those of antitrust authorities and foreign investment authorities, incountries where we seek to consummate acquisitions or make investments. For those and other reasons, we may ultimately fail to consummate an acquisition, even ifwe announce the intended acquisition.In addition, we may require significant financing to complete an acquisition or investment, whether through bank loans, raising of equity or debt orotherwise. We cannot assure you that such financing options will be available to us on reasonable terms, or at all. If we are not able to obtain such necessaryfinancing, it could have an impact on our ability to consummate a substantial acquisition or investment and execute a future growth strategy. Alternatively, we mayissue a significant number of shares as consideration for an acquisition, which would have a dilutive effect on our existing shareholders. For example, in partialconsideration for the acquisition of Orgad, we agreed to issue up to 111,602 shares of our common stock and in the Naiz acquisition we issued 240,000 shares of ourcommon stock. Furthermore, if we undertake acquisitions, we may incur large onetime expenses and acquire intangible assets that could result in significant futureamortization expense.23If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations andfinancial condition may be adversely affected.We believe that enhancing the “MySize” brand identity and increasing market awareness of our company and products, particularly among U.S. retailers, iscritical to achieving widespread acceptance of our products. Our ability to successfully develop new retailers may be adversely affected by a lack of awareness oracceptance of our brand. To the extent that we are unable to foster name recognition and affinity for our brand, our growth may be significantly delayed or impaired.The successful promotion of our brand will depend largely on our continued marketing efforts, market adoption of our products, and our ability to successfullydifferentiate our products from competing products and services. Our brand promotion may not be successful or result in revenue generation. Any incident thaterodes consumer affinity for our brand could significantly reduce our brand value and damage our business. If consumers perceive or experience a reduction inquality, or in any way believe we fail to deliver a consistently positive experience, our brand value could suffer and our business may be adversely affected.In particular, adverse weather conditions can impact guest traffic at our retailers, and, in more severe cases, cause temporary retail closures, sometimes forprolonged periods. Our business is subject to seasonal fluctuations, with retail sales typically higher during certain months, such as December. Adverse weatherconditions during our most favorable months or periods may exacerbate the effect of adverse weather on consumer traffic and may cause fluctuations in ouroperating results from quartertoquarter within a fiscal year.If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operationsand financial condition could be adversely affected.Our ability to attract new customers depends in part on our ability to enhance and improve our existing products, increase adoption and usage of ourproducts and introduce new products. The success of any enhancements or new products depends on several factors, including timely completion, adequatequality testing, actual performance quality, and overall market acceptance. Enhancements and new products that we develop may not be introduced in a timely orcosteffective manner, may contain errors or defects, may have interoperability difficulties with our platform or other products or may not achieve the broad marketacceptance necessary to generate significant revenue. Furthermore, our ability to increase the usage of our products depends, in part, on the development of newuse cases for our products and may be outside of our control. If we are unable to successfully enhance our existing products to meet evolving customerrequirements, increase adoption and usage of our products, develop new products, then our business, results of operations and financial condition would beadversely affected.The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile Apps and customdevelopment services.We must continue to enhance and improve the performance, functionality and reliability of our products. The mobile technology industry is characterizedby rapid technological change, changes in user requirements and preferences, frequent new product and services introductions embodying new technologies andthe emergence of new industry standards and practices that could render our products obsolete. Our success will depend, in part, on our ability to both internallydevelop and enhance our existing products, develop new products that address the increasingly sophisticated and varied needs of our customers, and respond totechnological advances and emerging industry standards and practices on a costeffective and timely basis. The development of our technology involvessignificant technical and business risks. We may fail to use new technologies effectively or to adapt our proprietary technology and systems to customerrequirements or emerging industry standards. If we are unable to adapt to changing market conditions, customer requirements or emerging industry standards, wemay not be able to increase our revenue and expand our business.Changes in economic conditions could materially affect our business, financial condition and results of operations.Because our primary target customers include U.S. retailers , we, together with the rest of the fashion/apparel industry, will depend upon consumerdiscretionary spending. Increases in unemployment rates, reductions in home values, increases in home foreclosures, investment losses, personal bankruptcies andreductions in access to credit and reduced consumer confidence, may impact consumers’ ability and willingness to spend discretionary dollars. In addition, volatileeconomic conditions may repress consumer confidence and discretionary spending. Any of the foregoing may have a material adverse effect on our business,financial condition and results of operations.24Our growth depends, in part, on the success of our strategic relationships with third parties.To grow our business, we anticipate that we will continue to depend on relationships with third parties, such as our customers and thirdparty platforms.Identifying partners, and negotiating and documenting relationships with them, requires significant time and resources. If we are unsuccessful in establishing ormaintaining our relationships with third parties, our ability to compete in the marketplace or to grow our revenue could be impaired, and our results of operationsmay suffer. Even if we are successful, we cannot assure you that these relationships will result in increased customer usage of our products or increased revenue.We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.We currently utilize, and plan on continuing to utilize over the current fiscal year, thirdparty networking providers and distribution through companiesincluding, but not limited to, Apple and Google as well as Shopify, WooCommerce and, Datalogic, Honeywell and Zebra to distribute our technologies. If disruptionsor capacity constraints occur, we may have no means of replacing these services, on a timely basis or at all. This could cause a material adverse condition for ouroperations and financial earnings.We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significantinterruption in our network or hosting and cloud services could adversely impact our operations and harm our business.Our technology infrastructure is critical to the performance of our products and customer satisfaction. Our products run on a complex distributed system,or what is commonly known as cloud computing. We own, operate and maintain elements of this system, but significant elements of this system are operated bythirdparties that we do not control and which would require significant time to replace. We expect this dependence on thirdparties to continue. In particular, asignificant portion, if not almost all data storage, data processing and other computing services and systems is hosted by cloud computing providers. Anydisruptions, outages and other performance problems relating to such services, including infrastructure changes, human or software errors and capacity constraints,could adversely impact our business, financial condition or results of operations.Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.We update our products on a frequent basis. Despite efforts to test our updates, errors, failures or bugs may not be found in our products until after theyare deployed to a customer. We have discovered and expect we will continue to discover errors, failures and bugs in our products and anticipate that certain of theseerrors, failures and bugs will only be discovered and remediated after deployment. Real or perceived errors, failures or bugs in our platform could result in negativepublicity, government inquiries, loss of or delay in market acceptance of our products, loss of competitive position, or claims by customers for losses sustained bythem. In such an event, we may be required, or may choose, for customer relations or other reasons, to expend additional resources in order to help correct theproblem.We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.In connection with the operation of our business, we store, process and transmit data, including personal and payment information, about our employeesand customers, a portion of which is confidential and/or personally sensitive. Unauthorized disclosure or loss of sensitive or confidential data may occur through avariety of methods. These include, but are not limited to, systems failure, employee negligence, fraud or misappropriation, or unauthorized access to or through ourinformation systems, whether by our employees or third parties, including a cyberattack by computer programmers, hackers, members of organized crime and/orstatesponsored organizations, who may develop and deploy viruses, worms or other malicious software programs. Such disclosure, loss or breach could harm ourreputation and subject us to government sanctions and liability under our contracts and laws that protect sensitive or personal data and confidential information,resulting in increased costs or loss of revenues. It is possible that security controls over sensitive or confidential data and other practices we and our thirdpartyvendors follow may not prevent the improper access to, disclosure of, or loss of such information. The potential risk of security breaches and cyberattacks mayincrease as we introduce new products and offerings. Further, data privacy is subject to frequently changing rules and regulations, which sometimes conflict amongthe various jurisdictions in which we provide services. Any failure or perceived failure to successfully manage the collection, use, disclosure, or security of personalinformation or other privacy related matters, or any failure to comply with changing regulatory requirements in this area, could result in legal liability or impairment toour reputation in the marketplace.25A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.Information security risks have generally increased in recent years, in part because of the proliferation of new technologies and the use of the Internet, andthe increased sophistication and activity of organized crime, hackers, terrorists, activists, cybercriminals and other external parties, some of which may be linked toterrorist organizations or hostile foreign governments. For example, a cybercriminal could use cybersecurity threats to gain access to sensitive information aboutanother company or to alter or disrupt news or information to be distributed by PR Newswire. Cybersecurity attacks are becoming more sophisticated and includemalicious software, ransomware, attempts to gain unauthorized access to data and other electronic security breaches that could lead to disruptions in criticalsystems, unauthorized release of confidential or otherwise protected information and corruption of data, substantially damaging our reputation. Any person whocircumvents our security measures could steal proprietary or confidential customer information or cause interruptions in our operations. We incur significant coststo protect against security breaches, and may incur significant additional costs to alleviate problems caused by any breaches. Our failure to prevent securitybreaches, or wellpublicized security breaches affecting the Internet in general, could significantly harm our reputation and business and financial results.Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, dataprotection and information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive andconfidential information. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm ourbusiness, results of operations and financial condition.We and our customers that use our products may be subject to privacy and data protectionrelated laws and regulations that impose obligations inconnection with the collection, processing and use of personal data, financial data, health or other similar data. The U.S. federal and various state and foreigngovernments have adopted or proposed limitations on, or requirements regarding, the collection, distribution, use, security and storage of personally identifiableinformation of individuals. The U.S. Federal Trade Commission and numerous state attorneys general are applying federal and state consumer protection laws toimpose standards on the online collection, use and dissemination of data, and to the security measures applied to such data.Similarly, many foreign countries and governmental bodies, including the EU member states, have laws and regulations concerning the collection and useof personally identifiable information obtained from individuals located in the EU or by businesses operating within their jurisdiction, which are often morerestrictive than those in the United States. Laws and regulations in these jurisdictions apply broadly to the collection, use, storage, disclosure and security ofpersonally identifiable information that identifies or may be used to identify an individual, such as names, telephone numbers, email addresses and, in somejurisdictions, IP addresses and other online identifiers.For example, the GDPR, which took full effect on May 25, 2018. The GDPR enhances data protection obligations for businesses and requires serviceproviders (data processors) processing personal data on behalf of customers to cooperate with European data protection authorities, implement security measuresand keep records of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to or greater of €20 million or 4% of global annualrevenues. In addition, the CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and require deletion of their personalinformation, opt out of certain personal information sharing, and receive detailed information about how their personal information is used. The CCPA provides forcivil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further, failure to comply withthe Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may expose us to administrativefines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the current enforcementmeasures and sanctions. There are also additional laws and regulations in additional jurisdictions around the world which govern the protection of consumers andof electronic communications. If our efforts to comply with GDPR, CCPA or other applicable laws and regulations are not successful, we may be subject to penaltiesand fines that would adversely impact our business and results of operations, and our ability to conduct business could be significantly impaired.26Additionally, although we endeavor to have our products comply with applicable laws and regulations, these and other obligations may be modified, theymay be interpreted and applied in an inconsistent manner from one jurisdiction to another, and they may conflict with one another, other regulatory requirements,contractual commitments or our internal practices. We also may be bound by contractual obligations relating to our collection, use and disclosure of personal,financial and other data or may find it necessary or desirable to join industry or other selfregulatory bodies or other privacy or data protectionrelatedorganizations that require compliance with their rules pertaining to privacy and data protection.We expect that there will continue to be new proposed laws, rules of selfregulatory bodies, regulations and industry standards concerning privacy, dataprotection and information security in the United States, the European Union and other jurisdictions, and we cannot yet determine the impact such future laws,rules, regulations and standards may have on our business. Moreover, existing U.S. federal and various state and foreign privacy and data protectionrelated lawsand regulations are evolving and subject to potentially differing interpretations, and various legislative and regulatory bodies may expand current or enact new lawsand regulations regarding privacy and data protectionrelated matters. Because global laws, regulations and industry standards concerning privacy and datasecurity have continued to develop and evolve rapidly, it is possible that we or our products or platform may not be, or may not have been, compliant with eachsuch applicable law, regulation and industry standard and compliance with such new laws or to changes to existing laws may impact our business and practices,require us to expend significant resources to adapt to these changes, or to stop offering our products in certain countries. These developments could adverselyaffect our business, results of operations and financial condition.We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect ourbusiness.Our ability to implement our business plan successfully depends in part on our ability to build brand recognition using our trademarks, service marks andother proprietary intellectual property, including our names and logos. We currently have no registered trademarks. While we plan to register a number of ourtrademarks; however, no assurance can be given that our trademark applications will be approved. As of December 31, 2022, we own 18 issued patents: six in Europe,four in the U.S., three in each of Russia and Japan and one in each of Canada and Israel which expire between January 20, 2033 and August 18, 2036, and we havetwo additional patent applications in process. As of such date, we do not have any registered trademarks., No assurance can be given that our patent applicationswhich are in process will be approved. If our patent applications are not approved, our ability to expand or develop our business may be negatively affected.Third parties may also oppose our trademark or patent applications, or otherwise challenge our use of the trademarks or patents. In the event that ourtrademarks or patents are successfully challenged, we could be forced to rebrand our goods and services or redesign our technology, which could result in loss ofbrand recognition, and could require us to devote resources to advertising and marketing new brands and products.If our efforts to register, maintain and protect our intellectual property are inadequate, or if any thirdparty misappropriates, dilutes or infringes on ourintellectual property, the value of our brands may be harmed, which could have a material adverse effect on our business and might prevent our brands fromachieving or maintaining market acceptance. We may also face the risk of claims that we have infringed third parties’ intellectual property rights. If third parties claimthat we infringe upon their intellectual property rights, our operating profits could be adversely affected. Any claims of intellectual property infringement, eventhose without merit, could be expensive and time consuming to defend, require us to rebrand our services, if feasible, divert management’s attention and resourcesor require us to enter into royalty or licensing agreements in order to obtain the right to use a thirdparty’s intellectual property.Any royalty or licensing agreements, if required, may not be available to us on acceptable terms or at all. A successful claim of infringement against uscould result in our being required to pay significant damages, enter into costly license or royalty agreements, or stop the sale of certain products or services, any ofwhich could have a negative impact on our operating profits and harm our future prospects.We may face intense competition and expect competition to increase in the future, which could prohibit us from developing a customer base andgenerating revenue.We face significant competition in every aspect of our business. Our competitors include True Fit, Virtusize, EasyMeasure, AR MeasureKit, Smart Measureand 3DLook. These companies may already have an established market in our industry. Most of these companies have significantly greater financial and otherresources than us and have been developing their products and services longer than we have been developing ours.27In addition, some of our larger competitors have substantially broader product offerings and leverage their relationships based on other products orincorporate functionality into existing products to gain business in a manner that discourages potential customers from purchasing our products. Potentialcustomers may also prefer to purchase from their existing solution providers rather than a new solution provider regardless of product performance or features.These larger competitors often have broader product lines and market focus and will therefore not be as susceptible to downturns in a particular market. Conditionsin our market could change rapidly and significantly as a result of technological advancements, partnering by our competitors or continuing market consolidation.New startup companies that innovate and large competitors that are making significant investments in research and development may invent similar or superiorproducts and technologies that compete with our products. In addition, some of our competitors may enter into new alliances with each other or may establish orstrengthen cooperative relationships. Any such consolidation, acquisition, alliance or cooperative relationship could lead to pricing pressure and our loss of anyfuture market share and could result in a competitor with greater financial, technical, marketing, service and other resources, all of which could harm our ability tocompete. Furthermore, organizations may be more willing to incrementally add solutions to their existing infrastructure from competitors than to replace their existinginfrastructure with our products. Any failure to meet and address these factors could harm our business, results of operations and financial condition.Our business operations and future development could be significantly disrupted if we lose key members of our management team.The success of our business continues to depend to a significant degree upon the continued contributions of our senior officers and key employees, bothindividually and as a group. Our future performance will be substantially dependent in particular on our ability to retain and motivate Ronen Luzon, our ChiefExecutive Officer, and certain of our other senior executive officers. The loss of the services of our Chief Executive Officer, senior officers or other key employeescould have a material adverse effect on our business and plans for future development. We have no reason to believe that we will lose the services of any of theseindividuals in the foreseeable future; however, we currently have no effective replacement for any of these individuals due to their experience, reputation in theindustry and special role in our operations. We also do not maintain any key man life insurance policies for any of our employees.If we are able to expand our operations, we may be unable to successfully manage our future growth.Our growth may strain our infrastructure and resources. Any such growth could place increased strain on our management, operational, financial and otherresources, and we will need to train, motivate, and manage employees, as well as attract management, sales, finance and accounting, international, technical, andother professionals. Any failure to expand these areas and implement appropriate procedures and controls in an efficient manner and at a pace consistent with ourbusiness objectives could have a material adverse effect on our business, results of operations and financial condition.Our business operations are conducted in multiple languages and could be disrupted due to miscommunications or translation errors.The success of our business continues to depend on our marketing efforts in the United States, Europe and Israel, each of which is conducted in the locallanguage. Miscommunications or inaccurate foreign language translations could have a material adverse effect on our business operations and financial conditions.Additionally, contracts, communications and complex technical information must be accurately translated into foreign languages.We will continue to incur costs and be subject to various obligations as a result of being a public company, listed in the United States and in Israel.We will continue to incur significant legal, accounting and other expenses as a result of being a public company, listed in the United States and in Israel.Although we will incur costs each year associated with being a publiclytraded company, it is possible that our actual costs of being a publiclytraded company willvary from year to year and may be different than our estimates. In estimating these costs, we take into account expenses related to insurance, legal, accounting andcompliance activities.28Furthermore, the need to maintain the corporate infrastructure demanded of a public company may divert management’s attention from implementing ourgrowth strategy, which could prevent us from improving our business, results of operations and financial condition. We have made, and will continue to make,changes to our internal controls and procedures for financial reporting and accounting systems to meet our reporting obligations as a U.S. publicly traded company.However, the measures we take may not be sufficient to satisfy our obligations as a publicly traded company.Any future or current litigation could have a material adverse impact on our results of operations, financial condition and liquidity.From time to time, we may be subject to litigation, including, among others, potential stockholder derivative actions and class actions. Risks associatedwith legal liability are difficult to assess and quantify, and their existence and magnitude can remain unknown for significant periods of time. Subject to certainexceptions, our Amended and Restated Certificate of Incorporation, or Certificate of Incorporation, and Amended and Restated Bylaws, or Bylaws, require us toindemnify and advance expenses to our officers and directors involved in legal proceedings. To date we have obtained directors and officers’ liability, or D&O,insurance to cover some of the risk exposure for our directors and officers. Such insurance generally pays the expenses (including amounts paid to plaintiffs, fines,and expenses including attorneys’ fees) of officers and directors who are the subject of a lawsuit as a result of their service to us. There can be no assurance that wewill be able to continue to maintain this insurance at reasonable rates or at all, or in amounts adequate to cover such expenses should such a lawsuit occur. WithoutD&O insurance, the amounts we would pay to indemnify our officers and directors should they be subject to legal action based on their service to us could have amaterial adverse effect on our financial condition, results of operations and liquidity. Such lawsuits, and any related publicity, may result in substantial costs and,among other things, divert the attention of management and our employees. An unfavorable outcome in any claim or proceeding against us could have a materialadverse impact on our financial position and results of operations for the period in which the unfavorable outcome occurs, and potentially in future periods. Further,any settlement announced by us may expose us to further claims against us by third parties seeking monetary or other damages which, even if unsuccessful, woulddivert management attention from the business and cause us to incur costs, possibly material, to defend such matters, which could have a material adverse impacton our financial position. See “Legal Proceedings” for more information regarding our involvement in ongoing litigation matters.Federal, state and local or Israeli tax rules may adversely impact our results of operations and financial position.We are subject to federal, state and local taxes in the U.S., as well as local taxes in Israel in respect to our operations in Israel. Although we believe our taxestimates are reasonable, if the Internal Revenue Service or other taxing authority disagrees with the positions we have taken on our tax returns, we could faceadditional tax liability, including interest and penalties. If material, payment of such additional amounts upon final adjudication of any disputes could have a materialimpact on our results of operations and financial position. In addition, complying with new tax rules, laws or regulations could impact our financial condition, andincreases to federal or state statutory tax rates and other changes in tax laws, rules or regulations may increase our effective tax rate. Any increase in our effectivetax rate could have a material impact on our financial results.A significant majority of Orgad’s revenue is from sales of products on Amazon’s U.S. Marketplace and any change, limitation or restriction on ourability to operate on Amazon’s platform or any other marketplace could have a material adverse impact to our business, results of operations, financialcondition and prospects.Orgad, our wholly owned subsidiary, operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com, eBay and others. A substantial percentage of Orgad’s revenue is driven by sales on Amazon’s U.S. marketplace and Orgad is subject toterms of service of Amazon and other maketplaces and various other seller policies and services that apply to third parties selling products on Amazon and othermarketplaces. Generally, a marketplace has the right to terminate or suspend its agreement with Orgad at any time and for any reason. Such marketplace may takeother actions against Orgad such as suspending or terminating a seller account or product listing and withholding payments owed to Orgad indefinitely. Forexample, in July 2022, Amazon deactivated Orgad’s Amazon U.S. store as a result of complaints submitted due to an error in the listed manufacturer of certainproducts on Orgad’s store. Although its account was subsequently reinstated in September 2022, if the deactivation were to occur in the future for a prolongedperiod of time, or if Amazon were to terminate Orgad’s account, this would have a material adverse effect on our business, results of operations, financial conditionand prospects. While Orgad endeavors to materially comply with the terms of services of the marketplaces on which it operates, we can provide no assurance thatthese marketplaces will have the same determination with respect to our compliance.29In addition, Amazon and other marketplaces can make changes to its platform that could require Orgad to change the manner in which it operates, limit itsability to successfully launch new products or increase its costs to operate and such changes could have an adverse effect on our business, results of operations,financial condition and prospects. Examples of changes that could impact us relate to platform fee charges (i.e., selling commissions), exclusivity, inventorywarehouse availability, excluded products and limitations on sales and marketing. Any change, limitation or restriction on our ability to sell on Amazon’s platform orany other marketplace, even if temporary, could have a material impact on our business, results of operations, financial condition and prospects.Orgad also relies on services provided by Amazon’s fulfillment platform, including Prime Certification, which provides for expedited shipping to theconsumer, an important aspect in the buying decision for consumers. For products that Orgad fulfills itself, Orgad is qualified to offer our products for sale withPrime Certification delivery. Any inability to market our products for sale with expedited delivery provided under Prime Certification could have a material impact onour business, results of operations, financial condition and prospects. Failure to remain compliant with the best fulfillment practices on Amazon’s platform couldhave a material impact on our business, results of operations, financial condition and prospects. In addition, due to the COVID19 pandemic, Amazon has changedthe amount of inventory it accepts per product for a period of time. If this were to continue it could cause us to miss sales and/or pay additional shipping costswhich would harm our business operations and financial conditions.Orgad’s business depends on its ability to build and maintain strong product listings on ecommerce platforms. Orgad may not be able to maintain andenhance our product listings if it receives unfavorable customer complaints, negative publicity or otherwise fails to live up to consumers’ expectations, whichcould materially adversely affect our business, results of operations and growth prospects.Maintaining and enhancing Orgad’s product listings is critical in expanding and growing its business. However, a significant portion of Orgad’s perceivedperformance to the customer depends on third parties outside of its control, including suppliers and thirdparty delivery agents as well as online retailers such asAmazon and eBay. Because Orgad’s agreements with its online retail partners are generally terminable at will, it may be unable to maintain these relationships, andour results of operations could fluctuate significantly from period to period. Because Orgad relies on third parties to deliver its products, it is subject to shippingdelays or disruptions caused by inclement weather, natural disasters, labor activism, health epidemics or bioterrorism. It may also experience shipping delays ordisruptions due to other carrierrelated issues relating to their own internal operational capabilities. Further, Orgad relies on the business continuity plans of thesethird parties to operate during pandemics, like the COVID19 pandemic, and it has limited ability to influence their plans, prevent delays, and/or cost increases due toreduced availability and capacity and increased required safety measures.Customer complaints or negative publicity about its products, delivery times, or marketing strategies, even if not accurate, especially on blogs, social mediawebsites and thirdparty market sites, could rapidly and severely diminish consumer view of Orgad’s product listings and result in harm to its brand. Customers mayalso make safetyrelated or other types of claims regarding products sold through our online retail partners, such as Amazon, which may result in an online retailpartner removing the product from its marketplace. We also use and rely on other services from third parties, such as our telecommunications services, and thoseservices may be subject to outages and interruptions that are not within our control.Orgad faces risks related to successfully optimizing and operating its fulfillment and customer service operations.Failures to adequately predict customer demand or otherwise optimize and operate its fulfillment and customer service operations successfully from time totime result in excess or insufficient fulfillment or customer service capacity, increased costs, and impairment charges, any of which could materially harm ourbusiness. As Orgad continues to add fulfillment and customer service capability or add new businesses with different requirements, its fulfillment and customerservice operations become increasingly complex and operating them becomes more challenging. There can be no assurance that Orgad will be able to operate ouroperations effectively.30In addition, failure to optimize inventory in our fulfillment operations increases net shipping cost by requiring longzone or partial shipments. Orgad may beunable to adequately staff its fulfillment and customer service operations. Orgad’s failure to properly handle such inventory or to accurately forecast productdemand may result in it being unable to secure sufficient storage space or to optimize its fulfillment operations or cause other unexpected costs and other harm toour business and reputation.Orgad relies on a limited number of shipping companies to deliver inventory to it and completed orders to our customers. The inability to negotiateacceptable terms with these companies or performance problems or other difficulties experienced by these companies could negatively impact our operating resultsand customer experience. In addition, Orgad’s ability to receive inbound inventory efficiently and ship completed orders to customers also may be negativelyaffected by natural or manmade disasters, extreme weather, geopolitical events and security issues, labor or trade disputes, and similar events.The variability in Orgad’s retail business places increased strain on its operations.Demand for Orgad’s product listings can fluctuate significantly for many reasons, including as a result of seasonality, promotions, product launches, orunforeseeable events, such as in response to natural or manmade disasters, extreme weather, or geopolitical events. For example, Orgad expects a disproportionateamount of our retail sales to occur during our fourth quarter. Failure to stock or restock popular products in sufficient amounts such that Orgad fails to meetcustomer demand could significantly affect our revenue and our future growth. If too many customers access the websites on which Orgad engages in onlineretailing within a short period of time due to increased demand, Orgad may experience system interruptions that make the websites unavailable or prevent us fromefficiently fulfilling orders, which may reduce the volume of goods its offers or sell and the attractiveness of its products. In addition, Orgad may be unable toadequately staff for fulfillment of orders and customer service during these peak periods and delivery and other fulfillment companies and customer service cosourcers may be unable to meet the seasonal demand.Our business is subject to the risks of earthquakes, fire, power outages, floods, health risks and other catastrophic events, and to interruption by manmade problems such as terrorism.Natural disasters, such as fire or floods, a significant power outage, telecommunications failure, terrorism, an armed conflict, cyberattacks, epidemics andpandemics such as COVID19, or other geopolitical unrest could affect our supply chain, manufacturers, logistics providers, channel partners, or endcustomers orthe economy as a whole and such disruption could impact us and the shipments and sales. These risks may be further increased if the disaster recovery plans for usand our suppliers prove to be inadequate. To the extent that any of the above should result in delays or cancellations of customer orders, the loss of customers, orthe delay in the deployment or shipment of products, our business, financial condition, and operating results would be adversely affected.For example, on January 2, 2023, Orgad experienced a fire at its warehouse in Israel. We are not aware of any casualties or injuries associated with the fire.We shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incidentdid not affect the future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of thisincident on the other parties that were involved in the incident (lessor and others that leased properties near the warehouse).Our business could be negatively impacted by unsolicited takeover proposals, by shareholder activism or by proxy contests relating to the election ofdirectors or other matters.Our business could be negatively affected as a result of an unsolicited takeover proposal, by shareholder activism or a proxy contest. During 2021, anactivist shareholder sought to make changes to our board of directors, among other matters, which ultimately resulted in us entering into a settlement agreementwith the activist shareholder and another shareholder, and for which considerable costs were incurred and absorbed significant time and attention by managementand the board of directors. A future proxy contest, unsolicited takeover proposal, or other shareholder activism relating to the election of directors or other matterswould most likely require us to incur significant legal fees and proxy solicitation expenses and require significant time and attention by management and our Boardof Directors. The potential of a proxy contest, unsolicited takeover proposal, or other shareholder activism could interfere with our ability to execute our strategicplan, give rise to perceived uncertainties as to our future direction, result in the loss of potential business opportunities or make it more difficult to attract and retainqualified personnel, any of which could materially and adversely affect our business and operating results.31Environmental, social and corporate governance (ESG) issues, including those related to climate change and sustainability, may have an adverseeffect on our business, financial condition and results of operations and damage our reputation.There is an increasing focus from certain investors, customers, consumers, employees and other stakeholders concerning ESG matters. Additionally, publicinterest and legislative pressure related to public companies’ ESG practices continue to grow. If our ESG practices fail to meet regulatory requirements or investor,customer, consumer, employee or other shareholders’ evolving expectations and standards for responsible corporate citizenship in areas including environmentalstewardship, support for local communities, Board of Director and employee diversity, human capital management, employee health and safety practices, productquality, supply chain management, corporate governance and transparency, our reputation, brand and employee retention may be negatively impacted, and ourcustomers and suppliers may be unwilling to continue to do business with us.Customers, consumers, investors and other shareholders are increasingly focusing on environmental issues, including climate change, energy and wateruse, plastic waste and other sustainability concerns. Concern over climate change may result in new or increased legal and regulatory requirements to reduce ormitigate impacts to the environment. Changing customer and consumer preferences or increased regulatory requirements may result in increased demands orrequirements. Complying with these demands or requirements could cause us to incur additional manufacturing, operating or product development costs.If we do not adapt to or comply with new regulations, including the SEC’s published proposed rules that would require companies to provide significantlyexpanded climaterelated disclosures in their periodic reporting, which may require us to incur significant additional costs to comply and impose increased oversightobligations on our management and board of directors, or fail to meet evolving investor, industry or stakeholder expectations and concerns regarding ESG issues,investors may reconsider their capital investment in our company, we may become subject to penalties, and customers and consumers may choose to stoppurchasing our products, if approved for commercialization, which could have a material adverse effect on our reputation, business or financial condition.Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions andadverse developments with respect to financial institutions and associated liquidity risk.Our business depends on the economic health of the global economies. If the conditions in the global economies remain uncertain or continue to bevolatile, or if they deteriorate, including as a result of the impact of military conflict, such as the war between Russia and Ukraine, terrorism or other geopoliticalevents, our business, operating results and financial condition may be materially adversely affected. Economic weakness, inflation and increases in interest rates,limited availability of credit, liquidity shortages and constrained capital spending have at times in the past resulted, and may in the future result, in challenging anddelayed sales cycles, slower adoption of new technologies and increased price competition, and could negatively affect our ability to forecast future periods, whichcould result in an inability to satisfy demand for our products and a loss of market share.In addition, increases in inflation raise our costs for commodities, labor, materials and services and other costs required to grow and operate our business,and failure to secure these on reasonable terms may adversely impact our financial condition. Additionally, increases in inflation, along with the uncertaintiessurrounding COVID19, geopolitical developments and global supply chain disruptions, have caused, and may in the future cause, global economic uncertainty anduncertainty about the interest rate environment, which may make it more difficult, costly or dilutive for us to secure additional financing. A failure to adequatelyrespond to these risks could have a material adverse impact on our financial condition, results of operations or cash flows.More recently, the closures of SVB and Signature Bank and their placement into receivership with the FDIC created bankspecific and broader financialinstitution liquidity risk and concerns. Although the Department of the Treasury, the Federal Reserve and the FDIC jointly released a statement that depositors atSVB and Signature Bank would have access to their funds, even those in excess of the standard FDIC insurance limits, under a systemic risk exception, futureadverse developments with respect to specific financial institutions or the broader financial services industry may lead to marketwide liquidity shortages, impair theability of companies to access nearterm working capital needs, and create additional market and economic uncertainty. There can be no assurance that future creditand financial market instability and a deterioration in confidence in economic conditions will not occur. Our general business strategy may be adversely affected byany such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions. If the current equityand credit markets deteriorate, or if adverse developments are experienced by financial institutions, it may cause shortterm liquidity risk and also make anynecessary debt or equity financing more difficult, more costly, more onerous with respect to financial and operating covenants and more dilutive. Failure to secureany necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stockprice and could require us to alter our operating plans. In addition, there is a risk that one or more of our service providers, financial institutions, manufacturers,suppliers and other partners may be adversely affected by the foregoing risks, which could directly affect our ability to attain our operating goals on schedule andon budget.Our business may be adversely affected by the impact of any renewed outbreak of the COVID19 pandemic.Public health epidemics or outbreaks could adversely impact our business. In late 2019, a novel strain of COVID19, also known as coronavirus, wasreported in Wuhan, China. While initially the outbreak was largely concentrated in China, it spread worldwide. Many countries around the world, including in Israel,implemented significant governmental measures to control the spread of the virus, including temporary closure of businesses, severe restrictions on travel and themovement of people, and other material limitations on the conduct of business. These measures haven historically resulted in work stoppages and other disruptions.If there is a resurgence of the COVID19 pandemic, this could adversely impact our operations, including among others, our sales and marketing efforts and ourability to raise additional funds, and accordingly, the impact of COVID19 could have an adverse impact on our business and our financial results.32Risks Related to Our Operations in RussiaRussia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.In addition to our Israel operations, we have operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia and we engage two software developers through a third party who are based in Ukraine. On February 24,2022, Russia invaded Ukraine. The outbreak of hostilities between the two countries could result in more widespread conflict and could have a severe adverse effecton the region.Following Russia’s actions, various countries, including the U.S., Canada, the United Kingdom, Germany and France, as well as the European Union,issued broadranging economic sanctions against Russia. Such sanctions included, among other things, a prohibition on doing business with certain Russiancompanies, officials and oligarchs; a commitment by certain countries and the European Union to remove selected Russian banks from the Society for WorldwideInterbank Financial Telecommunications (SWIFT) electronic banking network that connects banks globally; and restrictive measures to prevent the Russian CentralBank from undermining the impact of the sanctions. In response to sanctions, the Russian Central Bank raised its interest rates and banned sales of local securitiesby foreigners. Russia may take additional counter measures or retaliatory actions in the future. While diplomatic efforts have been ongoing, the conflict betweenRussia and Ukraine is currently unpredictable and has the potential to result in broadened military actions. The duration of ongoing hostilities and such sanctionsand related events cannot be predicted. Uncertainty as to future relations between Russia and the U.S. and other countries in the west, or between Russia and othereastern European countries, may have a negative impact on our operations.Such international sanctions and potential responses to such sanctions, including those that may limit or restrict transfer funds into Russia, may in thefuture significantly affect our ability to conduct our activities in Russia including paying our personnel. To date, the conflict has had minimal impact on operations .Nevertheless, we have no way to predict the progress or outcome of the situation in Ukraine, as the conflict and governmental reactions are rapidly developing andbeyond our control. Prolonged unrest, intensified military activities or more extensive sanctions impacting the region could have a material adverse effect on ouroperations, results of operations, financial condition, liquidity and business outlook.Political, military conditions or other risks in Russia could adversely affect our business.Russia is a federative state consisting of 85 constituent entities, or “subjects.” The Russian Constitution reserves some governmental powers for theRussian Government, some for the subjects and some for areas of joint competence. In addition, eight “federal districts” (“federal’nye okruga”), which are overseenby a plenipotentiary representative of the President, supplement the country’s federal system. The delineation of authority among and within the subjects is, inmany instances, unclear and contested, particularly with respect to the division of tax revenues and authority over regulatory matters. For these reasons, theRussian political system is vulnerable to tension and conflict between federal, subject and local authorities. This tension creates uncertainties in the operatingenvironment in Russia, which may prevent us from carrying out our strategy effectively. The risks associated with these events or potential events could materiallyand adversely affect the investment environment and overall consumer and entrepreneurial confidence in Russia, and our business, prospects, financial condition,hiring ability, and results of operations could be materially and adversely affected.Furthermore, high levels of corruption reportedly exist in Russia, including the bribing of officials for the purpose of initiating investigations bygovernment agencies. Corruption and other illegal activities could disrupt our ability to conduct our business effectively, and claims that the we are involved in suchcorruption or illegal activities could generate negative publicity, of which could harm our development, financial condition, results of operations or prospects.Economic and other risks in Russia could adversely affect our business.Operating a business in an emerging market such as Russia can involve a greater degree of risk than operating a business in more developed markets.Over the last two decades, the Russian economy has experienced or continues to experience at various times:●significant volatility in its GDP;33●the impact of international sanctions;●high levels of inflation;●increases in, or high, interest rates;●sudden price declines in oil and other natural resources;●instability in the local currency market;●budget deficits;●the continued operation of lossmaking enterprises due to the lack of effective bankruptcy proceedings;●capital flight; and●significant increases in poverty rates, unemployment and underemployment.The Russian economy has been subject to abrupt downturns in the past, including as a result of the invasion of Ukraine, global financial crisis, and, as anemerging market, remains particularly vulnerable to further external shocks and any future fluctuations in the global markets. Any further deterioration in the generaleconomic conditions in Russia (whether or not as a result of the events mentioned above) could have a material adverse effect on the Russian economy and mayresult in hiring and operational difficulties, as well as potential flight of human capital, which could have a material adverse effect on our business, productdevelopment and results of operations.Legal risks in Russia could materially adversely affect our operations and Russian tax legislation is subject to frequent change.Among the risks of the Russian legal system are: inconsistencies among laws, presidential decrees, and government and ministerial orders and resolutions;conflicting local, regional and federal laws and regulations; the untested nature of the independence of the judiciary and its sensitivity to economic or politicalinfluences; substantial gaps in the regulatory structure due to the delay or absence of implementing legislation; a high degree of discretion on the part ofgovernmental authorities; reported corruption within governmental entities and other governmental authorities; the relative inexperience of judges and courts ininterpreting laws applicable to complex transactions; and the unpredictability of enforcement of foreign judgments and foreign arbitral awards. Many Russian lawsand regulations are construed in a way that provides for significant administrative discretion in application and enforcement. Unlawful, selective or arbitrary actionsof the Russian Government have reportedly included the denial or withdrawal of licenses, sudden and unexpected tax audits, criminal prosecutions, and civil claims.Any of the above events may have a material adverse effect on our product development and results of operations.Despite certain improvements in the taxation system made by the Russian Government over the past decade, Russian tax legislation is still subject tofrequent change, varying interpretations, and inconsistent and selective enforcement. There are currently no clear rules for distinguishing between lawful taxoptimization and tax evasion. In addition, Russian tax laws do not contain detailed rules on the taxation in Russia of foreign companies. As such, taxpayers oftenhave to resort to court proceedings to defend their position against the Russian tax authorities. However, in the absence of consistent court practice or bindingprecedents, there is inconsistency amongst court decisions. Further, the possibility exists that the Russian Federation would impose arbitrary or onerous taxes andpenalties in the future, which could have a material adverse effect on our product development and results of operations.34Risks Related to Our Operations In IsraelOur headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.Our headquarters and most of our operations are located in central Israel and our key employees, officers and directors are residents of Israel. Accordingly,political, economic and military conditions in Israel and the surrounding region may directly affect our business. Since the establishment of the State of Israel in1948, a number of armed conflicts have taken place between Israel and its Arab neighbors. Any hostilities involving Israel or the interruption or curtailment of tradewithin Israel or between Israel and its trading partners could adversely affect our operations and results of operations and could make it more difficult for us to raisecapital. During the winter of 2008, winter of 2012 and the summer of 2014, Israel was engaged in an armed conflict with Hamas, a militia group and political partyoperating in the Gaza Strip, and during the summer of 2006, Israel was engaged in an armed conflict with Hezbollah, a Lebanese Islamist Shiite militia group andpolitical party. Israel faces political tension with respect to its relationships with Turkey, Iran and certain Arab neighbor countries. In addition, recent conflictsinvolved missile strikes against civilian targets in various parts of Israel, and negatively affected business conditions in Israel. Recent political uprisings and socialunrest in various countries in the Middle East and North Africa are affecting the political stability of those countries. This instability may lead to deterioration of thepolitical relationships that exist between Israel and these countries, and have raised concerns regarding security in the region and the potential for armed conflict.Any armed conflicts, terrorist activities or political instability in the region could adversely affect business conditions and could harm our results of operations. Forexample, any major escalation in hostilities in the region could result in a portion of our employees and service providers being called up to perform military duty foran extended period of time. Parties with whom we do business have sometimes declined to travel to Israel during periods of heightened unrest or tension, forcing usto make alternative arrangements when necessary. In addition, the political and security situation in Israel may result in parties with whom we have agreementsinvolving performance in Israel claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions insuch agreements. Any future deterioration in the political and security situation in Israel will negatively impact our business.Our commercial insurance does not cover losses that may occur as a result of events associated with the security situation in the Middle East. Althoughthe Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that thisgovernment coverage will be maintained. Any losses or damages incurred by us could have a material adverse effect on our business. Any armed conflicts orpolitical instability in the region would likely negatively affect business conditions and could harm our results of operations.Further, in the past, the State of Israel and Israeli companies have been subjected to an economic boycott. Several countries still restrict business with theState of Israel and with Israeli companies. These restrictive laws and policies may have an adverse impact on our operating results, financial condition or theexpansion of our business.The legislative power of the State resides in the Knesset, a unicameral parliament that consists of 120 members elected by nationwide voting under asystem of proportional representation. Israel’s most recent general elections were held on April 9, 2019, September 17, 2019, March 2, 2020 and November 1, 2022.The uncertainty surrounding the results of the recent elections may continue. Actual or perceived political instability in Israel or any negative changes in thepolitical environment, may individually or in the aggregate adversely affect the Israeli economy and, in turn, our business, financial condition, results of operationsand prospects.Some of our employees are obligated to perform military reserve duty in Israel.Many Israeli citizens, including our employees are obligated to perform one month, and in some cases more, of annual military reserve duty until they reachthe age of 40 (or older, for reservists with certain occupations) and, in the event of a military conflict, may be called to active duty. In response to increases interrorist activity, there have been periods of significant callups of military reservists. It is possible that there will be military reserve duty callups in the future. Ouroperations could be disrupted by such callups. Such disruption could materially adversely affect our business, results of operations and financial condition.35It may be difficult to enforce a nonIsraeli judgment against the Company or its officers and directors.The operating subsidiary of ours is incorporated in Israel. All of our executive officers and directors are not residents of the United States, and asubstantial portion of our assets and the assets of our executive officers and directors are located outside the United States. Therefore, a judgment obtained againstus, or any of these persons, including a judgment based on the civil liability provisions of the U.S. federal securities laws, may not be collectible in the United Statesand may not necessarily be enforced by an Israeli court. It also may be difficult to affect service of process on these persons in the United States or to assert U.S.securities law claims in original actions instituted in Israel. Additionally, it may be difficult for an investor, or any other person or entity, to initiate an action withrespect to U.S. securities laws in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of U.S. securities laws reasoning that Israel is not themost appropriate forum in which to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law isapplicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law often involves the testimony of expert witnesses, which can be a timeconsuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel that addresses the mattersdescribed above. As a result of the difficulty associated with enforcing a judgment against us in Israel, it may be impossible to collect any damages awarded byeither a U.S. or foreign court.Our international operations could expose us to additional risks, including exchange rate fluctuations, legal regulations and political or economicinstability that could harm our business and operating results.Our international operations expose us to the following risks which may have a material adverse effect on our business and operating results:●devaluations and fluctuations in currency exchange rates including fluctuations between the U.S. dollar and the NIS and the Russian Ruble;●costs of compliance with local laws, including labor laws and intellectual property laws;●compliance with domestic and foreign government policies, including compliance with Israeli securities laws and TASE;●changes in trade regulations and procedures affecting approval, production, pricing, marketing, reimbursement for and access to, our products;●compliance with applicable foreign anticorruption laws, antitrust/competition laws, antiBoycott Israel law and antimoney laundering laws; and●economic and geopolitical developments and conditions, including ongoing instability in global economies and financial markets, international hostilities,acts of terrorism and governmental reactions, inflation, outbreaks of contagious disease (e.g., the COVID19 pandemic) and military and political alliances.Risks Related to Our Common StockA more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.Although our common stock is listed on the Nasdaq Capital Market, it has only been traded on the Nasdaq Capital Market since July 25, 2016. There hasbeen relatively limited trading volume in the market for our common stock, and a more active, liquid public trading market may not develop or may not be sustained.Limited liquidity in the trading market for our common stock may adversely affect a stockholder’s ability to sell its shares of common stock at the time it wishes tosell them or at a price that it considers acceptable. If a more active, liquid public trading market does not develop, we may be limited in our ability to raise capital byselling shares of common stock and our ability to acquire other companies or assets by using shares of our common stock as consideration. In addition, if there is athin trading market or “float” for our stock, the market price for our common stock may fluctuate significantly more than the stock market as a whole. Without a largefloat, our common stock would be less liquid than the stock of companies with broader public ownership and, as a result, the trading prices of our common stockmay be more volatile and it would be harder for you to liquidate any investment in our common stock. Furthermore, the stock market is subject to significant priceand volume fluctuations, and the price of our common stock could fluctuate widely in response to several factors, including:●our quarterly or annual operating results;●changes in our earnings estimates;●investment recommendations by securities analysts following our business or our industry;●additions or departures of key personnel;●changes in the business, earnings estimates or market perceptions of our competitors;36●our failure to achieve operating results consistent with securities analysts’ projections;●changes in industry, general market or economic conditions;●announcements of legislative or regulatory changes; and●natural disasters (including for example, the recent fire in the Orgad warehouse) and political and economic instability, including wars, terrorism, politicalunrest, results of certain elections and votes, emergence of a pandemic, or other widespread health emergencies (or concerns over the possibility of suchan emergency, including for example, the recent the COVID19 pandemic), boycotts, adoption or expansion of government trade restrictions, and otherbusiness restrictions.The stock market has experienced extreme price and volume fluctuations in recent years that have significantly affected the quoted prices of the securitiesof many companies. The changes often appear to occur without regard to specific operating performance. The price of our common stock could fluctuate basedupon factors that have little or nothing to do with us and these fluctuations could materially reduce our stock price.Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.If any of our shareholders were to decide to sell large amounts of stock over a short period of time (presuming such sales were permitted) such sales couldcause the market price of our common stock to drop significantly, even if our business is doing well. Further, the market price of our common stock could decline as aresult of the perception that such sales could occur. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equitysecurities in the future at a time and price that we deem appropriate.Our securities are traded on more than one market which may result in price variations.Our securities have been trading on the Nasdaq Capital Market since July 2016 and on TASE since September 2005. Trading in our securities on suchexchanges occurs in different currencies (U.S. dollars on the Nasdaq Capital Market and NIS on the TASE), and at different times (due to different time zones,trading days and public holidays in the United States and Israel). The trading prices of our securities on the two exchanges may differ due to the foregoing andother factors. Any decrease in the price of our shares on the TASE could cause a decrease in the trading price of our shares on the Nasdaq Capital Market and viceversa.We are a smaller reporting company and, as a result of the reduced disclosure and governance requirements applicable to such companies, ourcommon stock may be less attractive to investors.We are a smaller reporting company, (i.e. a company with “public float” held by nonaffiliates with a market value of less than $250 million) and we areeligible to take advantage of certain exemptions from various reporting requirements applicable to other public companies. We have elected to adopt these reduceddisclosure requirements. We cannot predict if investors will find our common stock less attractive as a result of our taking advantage of these exemptions. If someinvestors find our common stock less attractive as a result of our choices, there may be a less active trading market for our common stock and our stock price may bemore volatile.We do not expect to pay any cash dividends in the foreseeable future.We have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our board of directors deems relevant. Investors should not purchase our common stock expecting to receive cash dividends. Because we do notpay dividends, and there may be limited trading, investors may not have any manner to liquidate or receive any payment on their investment. Therefore, our failureto pay dividends may cause investors to not see any return on investment even if we are successful in our business operations. In addition, because we do not paydividends we may have trouble raising additional funds, which could affect our ability to expand our business operations.37UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2022☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ________ to _________Commission file number 00137370MY SIZE, INC.(Exact name of registrant as specified in charter)Delaware510394637(State or jurisdiction ofIncorporation or organization)I.R.S EmployerIdentification No.4 Hayarden, POB 1026, Airport City, Israel7010000(Address of principal executive offices)(Zip code)+9723 6009030(Registrant’s telephone number, including area code)Securities registered pursuant to Section 12(b) of the Act:Title of each classTrading Symbol(s)Name of Each Exchange on Which RegisteredCommon Stock, par value $0.001 per shareMYSZThe Nasdaq Capital MarketSecurities registered pursuant to Section 12(g) of the Act: None.Indicate by check mark whether the registrant is a wellknown seasoned issuer as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes☒ No ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer, a smaller reporting company, or an emerginggrowth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 of theExchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☒Smaller Reporting Company☒Emerging Growth Company☐If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revisedfinancial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b2 of the Exchange Act) Yes ☐No☒Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control overfinancial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflectthe correction of an error to previously issued financial statements. ☐Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by anyof the registrant’s executive officers during the relevant recovery period pursuant to §240.10D1(b). ☐The aggregate market value of voting and nonvoting common equity held by nonaffiliates of the registrant as of June 30, 2022, the last business day of theregistrant’s most recently completed second fiscal quarter, was approximately $25,551,906.Number of shares of common stock outstanding as of March 31, 2023 was 2,446,780.Documents Incorporated by Reference: None.Table of ContentsPart IItem 1.Business2Item 1A.Risk Factors18Item 1B.Unresolved Staff Comments41Item 2.Properties41Item 3.Legal Proceedings41Item 4.Mine Safety Disclosures42Part IIItem 5.Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities43Item 6.Selected Financial Data43Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations43Item 7A.Quantitative and Qualitative Disclosures about Market Risk50Item 8.Financial Statements and Supplementary DataF1Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure51Item 9A.Controls and Procedures51Item 9B.Other Information51Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.51Part IIIItem 10.Directors, Executive Officers and Corporate Governance52Item 11.Executive Compensation57Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters60Item 13.Certain Relationships and Related Transactions, and Director Independence62Item 14.Principal Accounting Fees and Services65Part IVItem 15.Exhibits, Financial Statement Schedules66Signatures69iPART IIn this Annual Report on Form 10K, unless the context requires otherwise, the terms “we,” “our,” “us,” or “the Company” refer to MySize, Inc., a Delawarecorporation, and its subsidiaries, including MySize Israel 2014 Ltd. My Size LLC, Orgad International Marketing Ltd., or Orgad, and Naiz Bespoke Technologies, S.L,or Naiz, taken as a whole.References to “U.S. dollars” and “$” are to currency of the United States of America, and references to “NIS” are to New Israeli Shekels. Unless otherwiseindicated, U.S. dollar translations of NIS amounts presented in this Annual Report on Form 10K for the year ended on December 31, 2022 are translated using therate of NIS 3.358 to $1.00.All information in this Annual Report on Form 10K relating to shares or price per share reflects the 1for25 reverse stock split effected by us on December8, 2022.CAUTIONARY NOTE ON FORWARDLOOKING STATEMENTSThis Annual Report on Form 10K contains certain forwardlooking statements within the meaning of Section 27A of the Securities Act and Section 21E ofthe Exchange Act. Any statements in Annual Report on Form 10K about our expectations, beliefs, plans, objectives, assumptions or future events or performanceare not historical facts and are forwardlooking statements. These statements are often, but not always, made through the use of words or phrases such as“believe,” “will,” “expect,” “anticipate,” “estimate,” “intend,” “plan” and “would.” For example, statements concerning financial condition, possible or assumedfuture results of operations, growth opportunities, industry ranking, plans and objectives of management, markets for our common stock and future managementand organizational structure are all forwardlooking statements. Forwardlooking statements are not guarantees of performance. They involve known and unknownrisks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to differ materially from any results, levels ofactivity, performance or achievements expressed or implied by any forwardlooking statement.Any forwardlooking statements are qualified in their entirety by reference to the risk factors discussed throughout this Annual Report on Form 10K. Someof the risks, uncertainties and assumptions that could cause actual results to differ materially from estimates or projections contained in the forwardlookingstatements include but are not limited to:●our history of losses and needs for additional capital to fund our operations and our inability to obtain additional capital on acceptable terms, or at all;●risks related to our ability to continue as a going concern;●the new and unproven nature of the measurement technology markets;●our ability to achieve customer adoption of our products;●our ability to realize the benefits of our acquisitions of Orgad and Naiz;●our dependence on assets we purchased from a related party;●our ability to enhance our brand and increase market awareness;●our ability to introduce new products and continually enhance our product offerings;●the success of our strategic relationships with third parties;●information technology system failures or breaches of our network security;●competition from competitors;●our reliance on key members of our management team;●current or future litigation;●current or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated liquidityrisk; and●the impact of the political and security situation in Israel on our business.1The foregoing list sets forth some, but not all, of the factors that could affect our ability to achieve results described in any forwardlooking statements.You should read this Annual Report on Form 10K and the documents that we reference herein and have filed as exhibits to the Annual Report on Form 10K,completely and with the understanding that our actual future results may be materially different from what we expect. You should assume that the informationappearing in this Annual Report on Form 10K is accurate as of the date hereof. Because the risk factors referred to in this Annual Report on Form 10K, could causeactual results or outcomes to differ materially from those expressed in any forwardlooking statements made by us or on our behalf, you should not place unduereliance on any forwardlooking statements.Further, any forwardlooking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forwardlookingstatement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. New factors emergefrom time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extentto which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements. We qualify all ofthe information presented in this Annual Report on Form 10K, and particularly our forwardlooking statements, by these cautionary statements.ITEM 1. BUSINESSOverviewWe are an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile phone or through MySizeID Widget: a simple questionnaire which uses a database collected over the years.MySizeID syncs the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and only presents itemsfor purchase that match their measurements to ensure a correct fit.We are positioning ourselves as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empower brand design teams, which are designed to increase endconsumer satisfaction, contributing to a sustainable world and reduce operation costs.Recent DevelopmentsOrgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,602 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.2The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz, a limitedliability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.3The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Warehouse FireOn January 2, 2023, Orgad experienced a fire at its warehouse in Israel. we are not aware of any casualties or injuries associated with the fire. We shiftedOrgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incident did not affectthe future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of this incident on the otherparties that were involved in the incident (lessor and others that leased properties near the warehouse).January 2023 FinancingOn January 10, 2023, we entered into a securities purchase agreement, or the RD Purchase Agreement, pursuant to which we agreed to sell and issue in theRD Offering an aggregate of 162,000 of our shares of common stock, or the RD Shares, and prefunded warrants, or the Prefunded Warrants, to purchase up to279,899 shares of common stock and, in a concurrent private placement, unregistered warrants to purchase up to 883,798 shares of common stock, or the RDWarrants, consisting of Series A warrants, or Series A Warrants, to purchase up to 441,899 shares of common stock and Series B warrants, or Series B Warrants, topurchase up to 441,899 shares of common stock, at an offering price of $3.055 per RD Share and associated Series A and Series B Warrants and an offering price of$3.054 per Prefunded Warrant and associated Series A and Series B Warrants.4In addition, we entered into a securities purchase agreement, or the PIPE Purchase Agreement, and together with the RD Purchase Agreement, thePurchase Agreements, pursuant to which we agreed to sell and issue in the PIPE Offering an aggregate of up to 540,098 unregistered Prefunded Warrants andunregistered warrants to purchase up to an aggregate of 1,080,196 shares of common stock, or the PIPE Warrants and together with the RD Warrants, the Warrants,consisting of Series A Warrants to purchase up to 540,098 shares of common stock and Series B Warrants to purchase up to 540,098 shares of common stock at anoffering price of $3.054 per Prefunded Warrant and associated Series A and Series B Warrants.The Prefunded Warrants are immediately exercisable at an exercise price of $0.001 per share and will not expire until exercised in full. The Warrants areimmediately exercisable upon issuance at an exercise price of $2.805 per share, subject to adjustment as set forth therein. The Series A Warrants have a term of fiveand onehalf years from the date of issuance and the Series B Warrants have a term of 28 months from the date of issuance. The Warrants may be exercised on acashless basis if there is no effective registration statement registering the shares underlying the warrants.In connection with the PIPE Purchase Agreement, we entered into a registration rights agreement, or the Registration Rights Agreement. Pursuant to theRegistration Rights Agreement, we are required to file a resale registration statement, or the Registration Statement, with the Securities and Exchange Commission, orthe SEC, to register for resale the shares issuable upon exercise of the unregistered Prefunded Warrants and the Series A and Series B Warrants, within 20 days ofthe signing date of the PIPE Purchase Agreement, or the Signing Date, and to have such Registration Statement declared effective within 60 days after the SigningDate in the event the Registration Statement is not reviewed by the SEC, or 90 days of the Signing Date in the event the Registration Statement is reviewed by theSEC. we will be obligated to pay certain liquidated damages if we fail to maintain the effectiveness of the Registration Statement.The Purchase Agreements and the Registration Rights Agreements also contain representations, warranties, indemnification and other provisionscustomary for transactions of this nature. In addition, subject to limited exceptions, the Purchase Agreements provide that for a period of one year following theclosing of the Offerings, we will not effect or enter into an agreement to effect a “variable rate transaction” as defined in the Purchase Agreements.Aggregate gross proceeds to the Company in respect of the Offerings was approximately $3.0 million, before deducting fees payable to the placement agentand other offering expenses payable by the Company.We also entered into a letter agreement, or the Engagement Agreement, with H.C. Wainwright & Co., LLC, or Wainwright, pursuant to which Wainwrightagreed to serve as the exclusive placement agent for the Company in connection with the Offerings. We paid Wainwright a cash placement fee equal to 7% of theaggregate gross proceeds raised in the Offerings, a management fee of 1% of the aggregate gross proceeds raised in the Offerings, a nonaccountable expenseallowance of $85,000 and clearing fees of $15,950. Wainwright also received placement agent warrants, or the Placement Agent Warrants, with substantially the sameterms as the Series A Warrants issued in the Offering in an amount equal to 7% of the aggregate number of Shares and Prefunded Warrants sold in the Offerings, or68,740 shares, at an exercise price of $3.8188 per share and a term expiring on January 10, 2028.Our SolutionOur cloudbased software platform provides highly accurate sizing and measurement with broad applications including the online fashion/apparel industry,logistics and courier services and home DIY. Currently, we are mainly focusing on the ecommerce fashion/apparel industry. This proprietary technology is driven byseveral patented algorithms which are able to calculate and record measurements in a variety of novel ways. Although specific functionality varies by product, webelieve that our core solutions address the need for highly accurate measurements in a variety of consumer friendly, every day uses.5We have developed three products, MySizeID for the fashion/apparel industry, BoxSize for the logistics and courier services market and SizeUp for thehome DIY market.●MySizeID enables shoppers to generate highly accurate measurements of their body to find proper fitting clothes and accessories, through the use ofour application on their mobile phone or through a simple questionnaire if the user decides not to download the application. MySizeID syncs the user’smeasurement data to a sizing chart and presents items for purchase that match their measurements to ensure a correct fit. MySizeID is available forlicense by retailers and accessable by consumers through a web page.●BoxSize enables customers to quickly and easily measure the size and volume of a parcel to accurately calculate shipping fees. It also offers shippingcompanies a variety of precise logistical data for more efficiently managing their supply chain, providing them with an accurate way to compare thephysical package with what is in the shipping manifest. BoxSize solution is available for license on both iOS and Android operating systems. BoxSizeis available on the Honeywell Marketplace and in August 2019 was approved for Honeywell’s Independent Software Vendor Program, and MySize wasgranted an independent software vendor (ISV) status on the Zebra Technologies and on DataLogic platforms.●SizeUp is a digital tape measure that allows users to measure length, width and height of a surface by moving their smartphone from point to point ofan object or space. SizeUp is a valueadd for DIY and home improvement retailers whose customers struggle to find the appropriately sized items (likeblinds or curtains) for their homes or projects due to inaccurate measurements. SizeUp also is designed to replace rulers, tape measures and othermeasuring tools used for DIY projects. SizeUp is available for consumer download on both iOS and Android operating systems.The following are some select key features of our solutions:●Integration Capability. We design our solutions to be flexible and configurable, allowing our clients to match their use of our algorithms and softwarewith their specific business processes and workflows. Our platform has been organically developed from a common code base, data structure and userinterface, providing a consistent user experience with powerful features that are easily adaptable to our clients’ needs. The MySizeID widget can beintegrated via oneline JavaScript code, or through RESTful API;●Intuitive user experience. Our intuitive, easytouse interface is based on current technology, multiple focus groups and automatically adapts to users’devices, including mobile platforms, thereby significantly increasing accessibility of our solutions;●Big Data Generation. While we supply to the user the information he/she requires, we gather certain vital information such as body measurement andpackage volume which can be used anonymously to help the retailer acquire predictive size information on stocking, operations and consumers thatmay be in between sizes. All the information is being gathered and stored on our servers where it can be used by retailers;●NonInvasive. In taking measurements using our solution, the smartphone camera is not utilized; instead, the measurements are captured by scanningthe smartphone over the consumer’s body or package, thus ensuring greater privacy.Our Growth StrategyWe aim to drive revenue primarily through penetration of the U.S. and Europe markets through a business to business to consumer (B2B2C) model in theverticals we are targeting. We are pursuing the following growth strategies:●Sign Additional Commercial Agreements with U.S. Retailers. During 2022, we expanded our commercial agreements with Levi’s, introducing NorthAmerica (U.S. and Canada) and Latin America regions, and by extension Levis’ native apps in EU and U.S. regions. We also entered into commercialagreements with Baby Fresh, Galax, Punto Blanco, GEF France, Diesel, Gaala, Superdry, Uniontex Industries, and Temperlay London among others. Weare in various stages of discussions with U.S. and foreign retailers for the deployment of our size recommendation and measurement technology with aview to entering into additional commercial agreements.6●Pursue a TwoPronged Commercialization Strategy. We are seeking to accelerate adoption of our solutions both through direct partnerships with ecommerce websites as well as through thirdparty platform websites. While we seek to directly enter into partnerships with companies maintaining ecommerce websites in the apparel, courier and DIY markets, we are also seeking to deploy our solutions on thirdparty platforms. Furthermore, with theexpansion of MySizeID through the release of our FirstLook Smart Mirror, which we are offering to brick and mortar stores to digitize the physicalstores, MySizeID is now available for online retailers utilizing the WooCoomerce, Shopify, Lightspeed, PrestaShop, Bitrix and Wix platforms and tobrick and mortar stores through GK Software POS solution while BoxSize is available on the Honeywell, Zebra Technologies and Datalogic.●Ongoing Investment in our Technology Platform. We continue to invest in building new software capabilities and extending our platform to bring thepower of accurate measurement to a broader range of applications. In particular, we seek not only to deliver size recommendations but to provide arobust, endtoend,artificial intelligence, or AIdriven platform that inspires consumer confidence and drives revenue growth by providing a superiorconsumer journey to both online and the brick and mortar stores.●Grow our database. As the usage of our measurement apps increases, our database of information including user behaviour and body measurementsgenerates valuable statistics. Such data can be used in the big data market for targeted advertising and for blind consumer data mining.●Identify and acquire synergistic businesses. In order to reduce our time to market and obtain complementary technologies, we are seeking to acquiretechnologies and businesses that are synergistic to our product offering. We recently completed an acquisition of Orgad which operates anomnichannel ecommerce platform and Naiz which provides SaaS technology solutions that solve size and fit issues for fashion ecommerce companies.●Partnerships and cooperation. In order to bring a wider solution for the retail market we are working to partner and integrate our technology withpartners that can increase our penetration and offering to the market.Market OpportunityThe global ecommerce market was $5.7 trillion in 2022, and the industry is expected to grow significantly in the coming years with no signs of slowingdown. Market specialists expect a compound annual growth rate of 27.43% from 2023 to 2028: according to data from Statista, the market is expected to reach $6.5trillion in 2023. While many sectors have found ways to increase revenue through ecommerce, ecommerce is still plagued by issues that cut into profits andnegatively impact the bottom line, such as customer returns, low consumer conversion, and associated restocking and shipping costs.Fashion/ApparelSince the onset of the COVID19 pandemic, an immense shift to digital was recorded, with 85.9% growth vs. prepandemic, according to Mastercard, andover 2 billion people worldwide who shop online, according to data from Oberlo. In November 2022, online shoppers broke records with $11.3 billion in spending onCyber Monday, driving 5.8% yearoveryear growth and making the day the biggest online shopping day of all time, according to Adobe Analytics.In 2021, fashion companies invested between 1.6% and 1.8% of their revenues in technology, according to Mckinsey, and are expected to double theinvestment by 2030 in order to keep up with digital natives and keep a competitive edge. Personalization in ecommerce and hybrid connectivity in brickandmortarretail are two key themes in the future of fashtech, according to Mckinsey’s 2022 State of Fashion Technology.7In the upcoming years, inflation is expected to impact the fashion world. As prices for goods increase, the challenge will be to inspire confidence inconsumers, via different smart digital tools. Brands will need to embrace creative digital tools and new channels to deepen customer relationships, and as Mckinseyforecasts in their State of Fashion report for 2023, they will need to execute on priorities such as sustainability and digital acceleration.The global fashion ecommerce market size is expected to grow from $744.4 billion in 2022 to $821.19 billion in 2023 at a compound annual growth rate of10.3%. In 2027, the market size is expected to grow to $1,222.32 billion, at a compound annual growth rate of 10.5%, according to BRC.Based on the importance which shoppers attribute to free shipping 50% of cart abandonment rate is due to extra shipping costs (Baymard Institute) theneed for fashion retailers to substantiate the optimal size for a customer, thus minimizing returns, has never been more crucial.As brands move online or significantly expand their online presence, we believe that developing innovative ways to connect with shoppers, both onlineand offline, has become a top priority.Shipping/ParcelAccording to Pitney Bowes, parcel revenue in 13 major countries around the world increased by 17% year over year from $420 billion in 2020 (reflecting 131billion parcels) to $491 billion in 2021 (reflecting 159 billion parcels). In the shipping/parcel industry, the dimensions of a package are critical. It is not merely themeasurement of a package or box – but rather the amount of space that the package or box will take up on a truck, airplane, or ship that will be transporting thepackage or box. Far too often, retailers use unfit packaging for their items, adding additional costs in materials and shipping fees.DIYSimilar to issues in the apparel and fashion market, big box, hardware, furniture, and DIY stores are plagued by returns due to incorrect fit andmeasurements. In an industry where precise measurement for projects is an absolute necessity, ecommerce has not grown as quickly as in other industries which webelieve is due to lack of consumer confidence in measurements at home and buying the correct item online.MySizeIDWe have released the MySizeID app for both iOS and Android which assists consumers to take highly accurate measurement of their own body in order tosize clothing in the best way possible without the need to try the clothes on before purchasing. MySizeID is designed to simplify the process of purchasing clothesonline and significantly reduce the rate of returns of poorfitting clothing. During 2022, MySizeID delivered over 23.5 million size recommendations.The application is the result of a research and development effort that combines:●anthropometric research – analyses of information pertaining to body measurements derived from a survey and the subsequent determination ofcorrelations between body parts;●body measurement algorithm research – an algorithm created by us to measure body parts; and●retailers size chart analyses – adopting a deep understanding of the size charts of retailers and the corresponding “body to garment size.”MySizeID allows consumers to create a secure, online profile of their personal measurements, which can then be utilized, with partnered online retailers, toensure that no matter the manufacturer or size chart, they will get the right fit. MySizeID operates based on the use of existing sensors in smart phones which enable,through a specific purpose application, the measurement of the body of any consumer by moving the smartphone along his or her body. The MySizeID applicationdoes not rely on user photographs or any additional hardware; all a user needs to do is scan their body with their smartphone and the application records theirmeasurements. The measurements can then be saved in our database in the cloud, enabling the user to search for clothes in various retailer websites withoutworrying about size. When a search is made, the retailer will connect to our cloud database, and then provide results based on the user’s measurements and otherparameters as he or she may have defined. This data is also saved for use when a customer enters a brickandmortar store to help serve the customer moreefficiently and to provide a better shopping experience.8Figure 1: Screenshot of MySizeID on smartphone and ecommerce websiteAs part of the integration process, we offer to the retailer five main components:●Mobile App. MySizeID comes in the form of a native app or website. Our native app can be used “as is” integrated into the retailer’s ecommercewebsite. The website users can build a body profile on the app and receive size recommendations for their profile both in the app and on a widgetintegrated with their website.9●Widget. When a consumer enters into the retailer’s website and looks for a specific item, he or she can click on the MySizeID widget which will informthe consumer of his or her recommended size, based on his or her actual measurements, as measured using the app and the item he or she is looking at.The widget has two features:AI Wizard mode allows the user to obtain size from the following parameters: gender, height, weight, belly shape, hip shape and bra size only. Thegender, height and weight questions are mandatory, while the body shape questions are optional and can be added to increase accuracy for specificapparel categories.Guest mode allows a user that does not wish to sign up to MySizeID as a user to obtain size recommendations as well.●Analytic Pixel. MySizeID analytic pixel allows retailer to track and analyze the widget usage. By adding the pixel to the retailer’s website, MySizeID BIteam can track engagement, order, and return data and provide retailers with tools to understand the advantages and benefits of MySizeID.Use your own device using MySizeID instore solution, shoppers can receive size recommendations for all store items, when shopping in the offlinestores. The shoppers can build their body profile using an easy to use 3 to 6 questions form, scan an item barcode and receive a size recommendationfor the scanned item based on their body profile and the item’s size chart.Another feature we added is the “inbetween sizing” feature. Our system can detect a user that has body dimensions that place the user inbetweenthe clothes sizes being offered and lets the user know that. A user can then choose between the two sizes according to the user’s fit preference(tight/loose/average).In addition, we have recently released our InstantApp feature which allows shoppers to generate their body measurements directly from our widget,without the need to download our mobile app. Using this technology, the shoppers can create their online profile of their personal measurements andcomplete a purchase faster and easier with minimum distractions.The body profile can be created while shoppers are viewing the page from their mobile phone, or by scanning a QR code on desktop that will open thesame page on the mobile phone.Screenshot of InstantApp widget on desktop on yumyumfashion website10●MyDash Platform. The MyDash platform is a smart backoffice system where the retailer enters all the information regarding its size charts thatcorrelates to every product in its ecommerce site, and where the retailer can access the information on its users. This system is customizable based onthe retailer’s needs. In 2021, we changed the MyDash system to increase the system’s accessibility, added walkthroughs, user guides and changed theuser interface and much more for the ease of use. We added the option to use our generic size charts, added the option upload size chart files insteadof typing the size charts values manually, added more widget styling options and changed the pairing mechanism between the size chart and theproducts to be more userfriendly.Figure 3: Screenshot of BackOffice System●FirstLook Smart Mirror. The Smart Mirror provides an interactive, mirrorlike touch display that allows brands to provide instore customers with anenhanced, online shopping experience, contactless checkout and obtains the recommended size. The MySizeIDFirstLook Smart Mirror can be placedin numerous locations throughout a retail store, including the fitting rooms (without cameras) or other hightraffic locations of the store. Highlightcapabilities of the FirstLook Smart Mirror include a 3D “Tryiton” interactive avatar experience, personalized and highly accurate sizerecommendations by MySizeID, thirdparty point of sale systems integration, styling recommendations and contactless “select and collect” at theregister feature.Illustration of MySizeID “first look” smart mirror in a fashion store11We are currently offering MySizeID technology to retailers through either a payperuse model or a monthly subscription model. In our payperusebusiness model, every time the consumer obtains a recommended size, the retailer is charged for the usage.BoxSizeBoxSize is a parcel measurement application that can provide realtime logistic data on package volumes and transportation, resulting in improvedoperational efficiency and reduced operating expenses. In addition, BoxSize allows customers to easily measure the size of their parcel with their smartphone,calculate shipping costs and arrange for a convenient pickup time for the package. BoxSize is available both on iOS and Android.In 2020 we released the “One Click” feature on BoxSize that enables the user to measure a package with just one swipe of the handheld device. Previously,measurements through BoxSize would require three separate swipes.Figure 4: Screenshot of BoxSizeOur BoxSize mobile measurement solution is available on the Honeywell Marketplace. In addition, BoxSize was approved for Honeywell’s Global VendorProgram, and is available to provide highly accurate mobile measurement solutions for thousands of Honeywell clients. We also developed a new dashboard for thecourier companies to have all the required data about each package in one place. It includes package dimensions, pictures, scan geo location and more. Thedashboard also let the courier use Webhooks, which allows him to get the information from his own system.12In 2020, we announced our partnership with Datalogic, a company focused on the automatic data capture and process automation markets. The partnershipmakes our BoxSize measurement solution available to thousands of Datalogic customers in the Transportation and Logistics vertical.Agreement with Delhivery Private Limited, IndiaWe entered into an agreement with Delhivery Private Limited, one of the largest courier pickup, delivery, and online shipping services in India. Delhivery’sreputation as a frontrunner in delivery and logistics tech makes its decision to select Boxsize a particularly strong testament to the value the solution provides.BoxSize provides Delhivery’s employees on the B2B side with critical information that will allow them to effortlessly optimize loading efficiency and add even morerealtime visibility to operations.SizeUpWe are working on additional consumer applications, including a DIY application. Our SizeUp application is a smart tape measure for the business toconsumer market which allows users to utilize their smartphone as a tape measure. The application provides measurements with an accuracy of within twocentimeters. Through the use of SizeUp, users will be able to visualize how an object or a piece of furniture will fit in an existing room in their home or office. It alsoadded Google Vision for image content analysis, object detection, and title suggestions.Currently the SizeUp app for Android and iOS is available for free for the first 30 days, after which a user will be required to register via email and pay aonetime fee of $1.99 to continue using the application. To date, revenues from downloads have been minimal.Research and DevelopmentOur research and development team are responsible for the research, algorithm, design, development, and testing of all aspects of our measurementplatform technology. We invest in these efforts to continuously improve, innovate, and add new features to our solutions.We incurred research and development expenses of approximately $1.7 million in 2022 and $4.25 million in 2021, relating to the development of itsapplications and technologies. The decrease from the corresponding period primarily resulted from share based payment in amount of $2,618,000 attributed to theshare issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021. We intend to continue to invest in our research anddevelopment capabilities to extend our platform and bring our measurement technology to a broader range of applications.13In 2022, the R&D department experienced significant success in their efforts to improve the performance of their size recommendation system. Through acombination of optimized algorithms and the incorporation of cuttingedge technologies, the team was able to achieve a threefold increase in the system’s speed.This breakthrough not only makes the system one of the fastest and most accurate on the market, but also reduced the operation costs, making it more costeffective for businesses to use. Additionally, the solution is now highly scalable, allowing it to easily adapt to the needs of businesses of any size. The R&D team isnow focused on further improving the system and exploring new applications for the technology.Sales and MarketingIn 2019, we launched a commercialization strategy that directs our sales efforts toward both sales to ecommerce players in specific vertical markets such asfashion/apparel and shipping/delivery as well as to ecommerce thirdparty platform providers. As of March 15, 2023, our products are being sold in the followingcountries: US, UK, France, Netherlands, Spain, Portugal Turkey, Germany, Israel and Italy, generating customer leads, building out a sales pipeline, and developingcustomer relationships.We believe an effective method to market our suite of products is for users to actively use and explore its capabilities. We encourage free trials of one ormore of our products in order to successfully convert those accounts to paid subscriptions.Proprietary RightsWe rely on a combination of patent, copyright, trademark and trade secret laws in the United States and other jurisdictions, as well as contractualprotections, to protect our proprietary technology.As of December 31, 2022, we owned 18 issued patents: six in Europe, four in the U.S., three in each of Russia and Japan and one in each of Canada andIsrael which expire between January 20, 2033 and August 18, 2036, and we have two additional patent applications in process. As of such date, we do not have anyregistered trademarks.We cannot provide any assurance that our proprietary rights with respect to our products will be viable or have value in the future since the validity,enforceability and type of protection of proprietary rights in softwarerelated industries are uncertain and still evolving.Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products or to obtain and use informationthat we regard as proprietary. Policing unauthorized use of our products is difficult, and while we are unable to determine the extent to which piracy of our softwareproducts exists, software piracy can be expected to be a persistent problem. In addition, the laws of some foreign countries do not protect proprietary rights to asgreat an extent as do the laws of the United States, and effective copyright, trademark, trade secret and patent protection may not be available in those jurisdictions.Our means of protecting our proprietary rights may not be adequate to protect us from the infringement or misappropriation of such rights by others.Further, in recent years, there has been significant litigation in the United States involving patents and other intellectual property rights, particularly in thesoftware and Internetrelated industries. We can become subject to intellectual property infringement claims as the number of our competitors grows and ourproducts and services overlap with competitive offerings. These claims, even if not meritorious, could be expensive to defend and could divert management’sattention from operating our business. If we become liable to third parties for infringing their intellectual property rights, we could be required to pay a substantialaward of damages and to develop noninfringing technology, obtain a license or cease selling the products that contain the infringing intellectual property. We maybe unable to develop noninfringing technology or obtain a license on commercially reasonable terms, if at all.14Government RegulationWe are subject to a number foreign and domestic laws and regulations that involve matters central to our business. These laws and regulations mayinvolve privacy, data protection, intellectual property, or other subjects. Many of the laws and regulations to which we are subject are still evolving and being testedin courts and could be interpreted in ways that could harm our business. In addition, the application and interpretation of these laws and regulations often areuncertain, particularly in the new and rapidly evolving industry in which we operate. Because global laws and regulations have continued to develop and evolverapidly, it is possible that we, our products, or our platform may not be, or may not have been, compliant with each such applicable law or regulation.In particular, we are subject to a variety of federal, state and international laws and regulations governing the processing of personal data. Many U.S. stateshave passed laws requiring notification to data subjects when there is a security breach of personally identifiable data. There are also a number of legislativeproposals pending before the U.S. Congress, various state legislative bodies and foreign governments concerning data protection. In addition, data protection lawsin Europe and other jurisdictions outside the United States can be more restrictive than those within the United States, and the interpretation and application ofthese laws are still uncertain and in flux.For example, the General Data Protection Regulation, or GDPR, which took effect on May 25, 2018, enhances data protection obligations for entities thatprocess personal data about individuals, including obligations to cooperate with European data protection authorities, implement security measures and keeprecords of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to the greater of €20 million or 4% of global annual revenue. Inaddition, the California Consumer Privacy Act of 2018, or CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and requiredeletion of their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used.The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further,failure to comply with the Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may exposeus to administrative fines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the currentenforcement measures and sanctions. Given the breadth and depth of changes in data protection obligations, meeting the requirements of GDPR and otherapplicable laws and regulations has required significant time and resources, including a review of our technology and systems currently in use against therequirements of GDPR and other applicable laws and regulations. We have taken various steps to prepare for complying with GDPR and other applicable laws andregulations however there can be no assurance that these steps are sufficient to assure compliance. Further, additional EU laws and regulations (and member states’implementations thereof) further govern the protection of individuals and of electronic communications. If our efforts to comply with GDPR or other applicable lawsand regulations are not successful, we may be subject to penalties and fines that would adversely impact our business and results of operations, and our ability touse personal data of individuals could be significantly impaired.CompetitionWe operate in a highly competitive industry that is characterized by constant change and innovation. Changes in the applications and the programinglanguages used to develop applications, devices, operating systems, and technology landscape result in evolving customer requirements. Our competitors includeTrue Fit, Fit analytics and 3DLook.The principal competitive factors in our market include the following:●High Accuracy Size Recommendations: the highest accuracy and the lowest margin of error by combining patented technology including AI and ML,size chart or spec data, and MySizeID property body data measurement;●Integration○Fast 1 week integration including size chart size chart review and product mapping○Easy 1 line of “all included” script implementation●Technical Advantages○Very small library that weighs ±50kb (minimum widget loading time on product page)○UltraFast loading and size recommendation presenting○Restful API option (API integration with any website or app)15●Optimizations○Adjustments of size charts based on performance○Widget usage analysis by FashTech and BI teams○Automatic pairing of size charts with products/collections●User Experience○Easy to use interface (1015 seconds to receive size recommendations)○Option to add/deduct questions to/from widget wizards○Users automatically receive size recommendations on all products after initial sign up●Product and platform features, architecture, reliability, privacy and security, performance, effectiveness, and supported environments;●Product extensibility and ability to integrate with other technology infrastructures;●Digital operations expertise;●Ease of use of products and platform capabilities;●Total cost of ownership;●Adherence to industry standards and certifications;●Strength of sales and marketing efforts;●Brand awareness and reputation; and●Focus on customer successWe believe we generally compete favorably with our competitors on the basis of these factors. We expect competition to increase as other established andemerging companies enter our markets, as customer requirements evolve, and as new products and technologies are introduced. We expect this to be particularlytrue as we offer a smartphonebased offering that does not need to utilize the smartphone’s camera, and our competitors may also seek to repurpose their existingofferings to provide similar solutions. Many of our competitors have substantially greater financial, technical, and other resources, greater name recognition, largersales and marketing budgets, broader distribution, and larger and more mature intellectual property portfolios.Human Capital ManagementAs of March 31, 2023, we had a total of 35 employees, of which 30 were fulltime employees, including 9 in sales and marketing, 12 in technology anddevelopment and 9 in administration and finance.None of our employees are represented by a collective bargaining agreement, nor have we experienced any work stoppage. We consider our relationshipwith our employees to be good. Our future success depends on our continuing ability to attract and retain highly qualified engineers, sales and marketing, accountmanagement, and senior management personnel.We also believe we have built a strong sales team focused on expanding into new markets through the acquisition of Naiz and our current team.We believe that our future success will depend, in part, on our continued ability to attract, hire and retain qualified personnel. In particular, we depend onthe skills, experience and performance of our senior management and research personnel. We compete for qualified personnel with other hitech companies, as wellas universities and nonprofit research institutions.16We provide competitive compensation and benefits programs to help meet the needs of our employees. In addition to salaries, these programs (which varyby country/region and employment classification) include incentive compensation plan, pension, and insurance benefits, paid time off, , among others. We also usetargeted equitybased grants with vesting conditions to facilitate retention of personnel, particularly for our key employees.The success of our business is fundamentally connected to the wellbeing of our people. Accordingly, we implemented an hybrid work policy in which theemployees can work from home twice a week.We consider our employees to be a key factor to our success and we are focused on attracting and retaining the best employees at all levels of ourbusiness. Inclusion and diversity is a strategic, business priority. We employ people based on relevant qualifications, demonstrated skills, performance and otherjobrelated factors. We do not tolerate unlawful discrimination related to employment, and strive to ensure that employment decisions related to recruitment,selection, evaluation, compensation, and development, among others, are not influenced by race, color, religion, gender, age, ethnic origin, nationality, sexualorientation, marital status, or disability. Continuous monitoring to ensure pay equity has been a focus in 2022. We have continued to improve gender balance in 2022with a focus on increasing the representation of women hired as new college graduates. We are committed to creating a trusting environment where all ideas arewelcomed and employees feel comfortable and empowered to draw on their unique experiences and backgrounds.We consider our relations with our employees to be good.Company InformationOur principal executive offices are located at HaYarden 4 St., POB 1026, Airport City, Israel 7010000, and our telephone number is +97236009030. Ourwebsite address is www.mysizeid.com. Any information contained on, or that can be accessed through, our website is not incorporated by reference into, nor is it inany way a part of, this Annual Report on Form 10K.We use our website (www.mysizeid.com) as a channel of distribution of Company information. The information we post through this channel may bedeemed material. Accordingly, investors should monitor our website, in addition to following our press releases, SEC filings and public conference calls andwebcasts. The contents of our website are not, however, a part of this Annual Report on Form 10K.Corporate HistoryWe were incorporated in the State of Delaware on September 20, 1999 under the name Topspin Medical, Inc. In December 2013, we changed our name toKnowledgetree Ventures Inc. Subsequently, in February 2014, we changed our name to MySize, Inc. In 2020, we created a subsidiary in the Russian Federation, MySize LLC.From inception through 2012, we were engaged in research and development of a medical magnetic resonance imaging, or MRI, technology forinterventional cardiology and in the development of MRI technology for use in the diagnosis and treatment of prostate cancer. In January 2012, we acquiredMetamorefix Ltd., or Metamorefix. Metamorefix was incorporated in 2007, and was engaged in the development of innovative solutions for the rehabilitation oftissues, particularly skin tissues. By the end of 2012, we ceased operations and in January 2013, we sold our entire ownership interest in Metamorefix.In September 2013, Ronen Luzon, our Chief Executive Officer, acquired control of the Company from Asher Shmuelevitch, according to which Mr. Luzonpurchased 70,238 shares of common stock from Mr. Shmuelevitch, which shares represented approximately 40% of the issued and outstanding capital stock of theCompany at such time, thus becoming a controlling shareholder of the Company. In connection with the acquisition, Mr. Luzon reached a settlement with our thencreditors pursuant to which the main creditor, Mr. Shmuelevitch, was paid a total sum of approximately $140,000 in consideration for a full and final waiver of any andall his claims that he may have relating to any monetary indebtedness of the Company to the creditors.17In February 2014, My Size Israel, our wholly owned subsidiary, entered into a Purchase Agreement, or the Purchase Agreement, with Shoshana Zigdon,who at the time was a beneficial owner of more than 20% of our outstanding shares, with respect to the acquisition by us of certain rights related to the collection ofdata for measurement purposes including rights in the venture, the method and a patent application that had been filed by the Seller (PCT/IL2013/050056), or theAssets. In consideration for the sale of the Assets, we agreed to pay to Ms. Zigdon, 18% of our operating profit, directly or indirectly connected with the Assetstogether with valueadded tax in accordance with the law for a period of seven years from the end of the development period of the aforementioned venture. Inaddition to the foregoing, the Purchase Agreement provided that all developments, improvements, knowledge and knowhow developed and/or accumulated by usafter the execution of the Purchase Agreement will be owned by us. Further, Ms. Zigdon agreed not to compete, directly or indirectly, with us in any matter relatingto the Assets for a period of seven years from the end of the development period of the venture.On May 26, 2021, we, My Size Israel, and Ms. Zigdon entered into an Amendment to Purchase Agreement, or the Amendment, which made certainamendments to the Purchase Agreement. Pursuant to the Amendment, Ms. Zigdon agreed to irrevocably waive (i) the right to repurchase certain assets related tothe collection of data for measurement purposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which our business issubstantially dependent, or the Assets, and (ii) all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My SizeIsrael under the Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation, reward orany rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights, or the Waiver. Inconsideration of the Waiver, we issued 100,000 shares of common stock to Ms. Zigdon.In September 2005, we commenced trading on the Tel Aviv Stock Exchange, or TASE. Between 2007 and 2012 we reported as a public company with theSEC. In August 2012, we suspended our reporting obligations. In mid2015 we resumed reporting as a public company. On July 25, 2016, our common stock beganpublicly trading on the Nasdaq Capital Market under the symbol “MYSZ”.ITEM 1A. RISK FACTORSAn investment in our common stock involves a high degree of risk. You should carefully consider the following risk factors and the other information inthis Annual Report on Form 10K before investing in our common stock. Our business and results of operations could be seriously harmed by any of the followingrisks. The risks set out below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterialalso may materially adversely affect our business, financial condition and/or operating results. If any of the following events occur, our business, financial conditionand results of operations could be materially adversely affected. In such case, the value and trading price of our common stock could decline, and you may lose allor part of your investment.Summary Risk FactorsThe principal factors and uncertainties that make investing in our ordinary shares risky, include, among others:Risks Related to Our Financial Position and Capital Requirements●We have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.●Our limited operating history makes it difficult to evaluate our business and prospects.●We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive and maycause the market price of our common stock to decline.●The report of our independent registered public accounting firm contains an explanatory paragraph regarding substantial doubt about our ability tocontinue as a going concern.Risks Related to Our Company and Our Business●The market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and online thirdparty resellers adopting our flagship product, MySizeID.18●Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broader marketacceptance of our products.●We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which may makeit difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.●We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increase ourcapital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.●If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations and financialcondition may be adversely affected.●If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operations andfinancial condition could be adversely affected.●The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile device applications andcustom development services.●Our growth depends, in part, on the success of our strategic relationships with third parties.●Changes in economic conditions could materially affect our business, financial condition and results of operations.●We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.●We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significant interruptionin our network or hosting and cloud services could adversely impact our operations and harm our business.●Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.●We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.●A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.●Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, data protectionand information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive and confidentialinformation. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm our business,results of operations and financial condition.●We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect our business.●We may face intense competition and expect competition to increase in the future, which could limit us in developing a customer base and generatingrevenue.●Our business operations and future development could be significantly disrupted if we lose key members of our management team.19●If we are able to expand our operations, we may be unable to successfully manage our future growth.Risks Related to Our Operations in Israel and Russia●Our headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.●Russia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.Risks Related to Our Common Stock●A more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.●Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions and adversedevelopments with respect to financial institutions and associated liquidity risk;●Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.●Our securities are traded on more than one market which may result in price variations.●We are a former “shell company” and as such are subject to certain limitations not generally applicable to other public companies.Risks Related to Our Financial Position and Capital RequirementsWe have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.We realized a net loss of approximately $8.3 million and $10.5 million for the years ended December 31, 2022 and 2021 and had an accumulated deficit of$53.5 million as at December 31, 2022. Because of the numerous risks and uncertainties associated with the development and commercialization of our products andbusiness, we are unable to predict the extent of any future losses or when we will become profitable, if at all. Expected future operating losses will have an adverseeffect on our cash resources, shareholders’ equity and working capital. Our failure to become and remain profitable could depress the value of our stock and impairour ability to raise capital, expand our business, maintain our development efforts, or continue our operations. A decline in our value could also cause you to lose allor part of your investment in us.Our limited operating history makes it difficult to evaluate our business and prospects.We have only been developing our measurement technology since 2014. Since then, our operating history has been primarily limited to research anddevelopment, pilot studies, raising capital, and more recently acquisitions and sales and marketing efforts. Therefore, it may be difficult to evaluate our business andprospects. We have not yet demonstrated an ability to commercialize our products. Consequently, any predictions about our future performance may not beaccurate, and you may not be able to fully assess our ability to complete development and/or commercialize our products, and any future products.We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive andmay cause the market price of our common stock to decline.Based on our projected cash flows and the cash balances as of the date of this Annual Report on Form 10K, our existing cash is insufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. In order to meet ourbusiness objectives in the future, we will need to raise additional capital, which may not be available on reasonable terms or at all. Additional capital would be usedto accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;20●respond to competitive pressure;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, and a number of otherfactors, many of which are outside our control, and on our financial performance. Accordingly, we cannot assure you that we will be able to successfully raiseadditional capital at all or on terms that are acceptable to us. If we cannot raise additional capital when needed, it may have a material adverse effect on our business,results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.Management has concluded that there is substantial doubt about our ability to continue as a going concern which could prevent us from obtainingnew financing on reasonable terms or at all.We have incurred significant losses and negative cash flows from operations and have an accumulated deficit that raises substantial doubt about its abilityto continue as a going concern. Our audited consolidated financial statements for the year ended December 31, 2022 were prepared under the assumption that wewould continue our operations as a going concern. Our independent registered public accounting firm has included a “going concern” explanatory paragraph in itsreport on our financial statements for the year ended December 31, 2022. If we are unable to improve our liquidity position, by, among other things, raising capitalthrough public or private offerings or reducing our expenses, we may exhaust our cash resources and will be unable to continue our operations. If we cannotcontinue as a viable entity, our shareholders would likely lose most or all of their investment in us.Risks Related to Our Company and Our BusinessThe market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and onlinethirdparty resellers adopting our flagship product, MySizeID.The market for our measurement technology is relatively new and unproven and is subject to a number of risks and uncertainties. We believe that ourfuture success will depend in large part on market adoption of our flagship product, MySizeID, by U.S. retailers and online thirdparty resellers. In order to grow ourbusiness, we intend to focus on educating retailers and resellers and other potential customers about the benefits of our measurement technology, expanding thefunctionality of our products and bringing new products to market to increase market acceptance and use of our technology. Our ability to develop and expand themarket that our products address depends upon a number of factors, including the cost savings, performance and perceived value associated with such products.The market for our products could fail to develop or there could be a reduction in interest or demand for our products as a result of a lack of consumer acceptance,technological challenges, competing products and services, weakening economic conditions and other causes. We may never successfully commercialize ourproducts and if our products fail to achieve market acceptance, this would have a material adverse effect on our business, results of operations and financialcondition.21Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broadermarket acceptance of our products.Our ability to achieve customer adoption, especially among U.S. retailers will depend, in part, on our ability to effectively organize, focus and train our salesand marketing personnel. We have limited experience selling to U.S. retailers and only recently established a U.S. sales force. We believe that there is significantcompetition for experienced sales professionals with the skills and industry knowledge that we require. Our ability to achieve significant revenue growth in thefuture will depend, in part, on our ability to recruit, train and retain a sufficient number of experienced sales professionals, particularly those with experience sellingto U.S. retailers. In addition, even if we are successful in hiring qualified sales personnel, new hires require significant training and experience before they achievefull productivity, particularly for sales efforts targeted at U.S. retailers and new markets. Because we only recently started sales efforts, we cannot predict whether, orto what extent, our sales efforts will be successful.We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which maymake it difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.In this market segment, the decision to adopt our products may require the approval of multiple technical and business decision makers, including security,compliance, procurement, operations and IT. In addition, while U.S. retailers may be willing to deploy our products on a limited basis, before they will commit todeploying our products at scale, they often require extensive education about our products and significant customer support time, engage in protracted pricingnegotiations and seek to secure readily available development resources. As a result, it is difficult to predict when we will obtain new customers and begingenerating revenue from these customers. As part of our sales cycle, we may incur significant expenses before executing a definitive agreement with a prospectivecustomer and before we are able to generate any revenue from such agreement. We have no assurance that the substantial time and money spent on our salesefforts will generate significant revenue. If conditions in the marketplace generally or with a specific prospective customer change negatively, it is possible that nodefinitive agreement will be executed, and we will be unable to recover any of these expenses. If we are not successful in targeting, supporting and streamlining oursales processes and if revenue expected to be generated from a prospective customer is not realized in the time period expected or not realized at all, our ability togrow our business, and our operating results and financial condition may be adversely affected. If our sales cycles lengthen, our future revenue could be lower thanexpected, which would have an adverse impact on our operating results and could cause our stock price to decline.22We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increaseour capital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.In order to reduce time to market and obtain complementary technologies, we are seeking to acquire technologies and businesses that are synergistic to ourproduct offering. For example, we recently acquired Orgad which operates an omnichannel ecommerce platform and Naiz which provides SaaS technology solutionsthat solve size and fit issues for fashion ecommerce companies. We evaluate from time to time various acquisitions and collaborations, including licensing oracquiring complementary technologies, intellectual property rights, or businesses. The process for acquiring a company may take from several months up to a yearand costs can vary greatly. We may also compete with others to acquire companies, and such competition may result in decreased availability of, or an increase inprice for, suitable acquisition candidates. In addition, we may not be able to consummate acquisitions or investments that we have identified as crucial to theimplementation of our strategy for other commercial or economic reasons. As a result, it may be more difficult for us to identify suitable acquisition or investmenttargets or to consummate acquisitions or investments on acceptable terms or at all. If we are not able to execute on any acquisition, we may not be able to achieve afuture growth strategy and may lose market share.In addition, the acquisition of Orgad, Naiz and any potential future acquisition, joint venture or collaboration may entail numerous potential risks, including:●increased operating expenses and cash requirements;●the assumption of additional indebtedness or contingent liabilities;●assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel;●the diversion of our management’s attention from our existing programs and initiatives in pursuing such a strategic merger or acquisition;●retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships;●risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing technologies; and●our inability to generate revenue from acquired technologies or products sufficient to meet our objectives in undertaking the acquisition or even to offsetthe associated acquisition and maintenance costs.All of the foregoing risks may be magnified as the cost, size or complexity of an acquisition or acquired company increases, or where the acquiredcompany’s products, market or business are materially different from ours, or where more than one integration is occurring simultaneously or within a concentratedperiod of time. We may not be able to obtain the necessary regulatory approvals, including those of antitrust authorities and foreign investment authorities, incountries where we seek to consummate acquisitions or make investments. For those and other reasons, we may ultimately fail to consummate an acquisition, even ifwe announce the intended acquisition.In addition, we may require significant financing to complete an acquisition or investment, whether through bank loans, raising of equity or debt orotherwise. We cannot assure you that such financing options will be available to us on reasonable terms, or at all. If we are not able to obtain such necessaryfinancing, it could have an impact on our ability to consummate a substantial acquisition or investment and execute a future growth strategy. Alternatively, we mayissue a significant number of shares as consideration for an acquisition, which would have a dilutive effect on our existing shareholders. For example, in partialconsideration for the acquisition of Orgad, we agreed to issue up to 111,602 shares of our common stock and in the Naiz acquisition we issued 240,000 shares of ourcommon stock. Furthermore, if we undertake acquisitions, we may incur large onetime expenses and acquire intangible assets that could result in significant futureamortization expense.23If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations andfinancial condition may be adversely affected.We believe that enhancing the “MySize” brand identity and increasing market awareness of our company and products, particularly among U.S. retailers, iscritical to achieving widespread acceptance of our products. Our ability to successfully develop new retailers may be adversely affected by a lack of awareness oracceptance of our brand. To the extent that we are unable to foster name recognition and affinity for our brand, our growth may be significantly delayed or impaired.The successful promotion of our brand will depend largely on our continued marketing efforts, market adoption of our products, and our ability to successfullydifferentiate our products from competing products and services. Our brand promotion may not be successful or result in revenue generation. Any incident thaterodes consumer affinity for our brand could significantly reduce our brand value and damage our business. If consumers perceive or experience a reduction inquality, or in any way believe we fail to deliver a consistently positive experience, our brand value could suffer and our business may be adversely affected.In particular, adverse weather conditions can impact guest traffic at our retailers, and, in more severe cases, cause temporary retail closures, sometimes forprolonged periods. Our business is subject to seasonal fluctuations, with retail sales typically higher during certain months, such as December. Adverse weatherconditions during our most favorable months or periods may exacerbate the effect of adverse weather on consumer traffic and may cause fluctuations in ouroperating results from quartertoquarter within a fiscal year.If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operationsand financial condition could be adversely affected.Our ability to attract new customers depends in part on our ability to enhance and improve our existing products, increase adoption and usage of ourproducts and introduce new products. The success of any enhancements or new products depends on several factors, including timely completion, adequatequality testing, actual performance quality, and overall market acceptance. Enhancements and new products that we develop may not be introduced in a timely orcosteffective manner, may contain errors or defects, may have interoperability difficulties with our platform or other products or may not achieve the broad marketacceptance necessary to generate significant revenue. Furthermore, our ability to increase the usage of our products depends, in part, on the development of newuse cases for our products and may be outside of our control. If we are unable to successfully enhance our existing products to meet evolving customerrequirements, increase adoption and usage of our products, develop new products, then our business, results of operations and financial condition would beadversely affected.The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile Apps and customdevelopment services.We must continue to enhance and improve the performance, functionality and reliability of our products. The mobile technology industry is characterizedby rapid technological change, changes in user requirements and preferences, frequent new product and services introductions embodying new technologies andthe emergence of new industry standards and practices that could render our products obsolete. Our success will depend, in part, on our ability to both internallydevelop and enhance our existing products, develop new products that address the increasingly sophisticated and varied needs of our customers, and respond totechnological advances and emerging industry standards and practices on a costeffective and timely basis. The development of our technology involvessignificant technical and business risks. We may fail to use new technologies effectively or to adapt our proprietary technology and systems to customerrequirements or emerging industry standards. If we are unable to adapt to changing market conditions, customer requirements or emerging industry standards, wemay not be able to increase our revenue and expand our business.Changes in economic conditions could materially affect our business, financial condition and results of operations.Because our primary target customers include U.S. retailers , we, together with the rest of the fashion/apparel industry, will depend upon consumerdiscretionary spending. Increases in unemployment rates, reductions in home values, increases in home foreclosures, investment losses, personal bankruptcies andreductions in access to credit and reduced consumer confidence, may impact consumers’ ability and willingness to spend discretionary dollars. In addition, volatileeconomic conditions may repress consumer confidence and discretionary spending. Any of the foregoing may have a material adverse effect on our business,financial condition and results of operations.24Our growth depends, in part, on the success of our strategic relationships with third parties.To grow our business, we anticipate that we will continue to depend on relationships with third parties, such as our customers and thirdparty platforms.Identifying partners, and negotiating and documenting relationships with them, requires significant time and resources. If we are unsuccessful in establishing ormaintaining our relationships with third parties, our ability to compete in the marketplace or to grow our revenue could be impaired, and our results of operationsmay suffer. Even if we are successful, we cannot assure you that these relationships will result in increased customer usage of our products or increased revenue.We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.We currently utilize, and plan on continuing to utilize over the current fiscal year, thirdparty networking providers and distribution through companiesincluding, but not limited to, Apple and Google as well as Shopify, WooCommerce and, Datalogic, Honeywell and Zebra to distribute our technologies. If disruptionsor capacity constraints occur, we may have no means of replacing these services, on a timely basis or at all. This could cause a material adverse condition for ouroperations and financial earnings.We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significantinterruption in our network or hosting and cloud services could adversely impact our operations and harm our business.Our technology infrastructure is critical to the performance of our products and customer satisfaction. Our products run on a complex distributed system,or what is commonly known as cloud computing. We own, operate and maintain elements of this system, but significant elements of this system are operated bythirdparties that we do not control and which would require significant time to replace. We expect this dependence on thirdparties to continue. In particular, asignificant portion, if not almost all data storage, data processing and other computing services and systems is hosted by cloud computing providers. Anydisruptions, outages and other performance problems relating to such services, including infrastructure changes, human or software errors and capacity constraints,could adversely impact our business, financial condition or results of operations.Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.We update our products on a frequent basis. Despite efforts to test our updates, errors, failures or bugs may not be found in our products until after theyare deployed to a customer. We have discovered and expect we will continue to discover errors, failures and bugs in our products and anticipate that certain of theseerrors, failures and bugs will only be discovered and remediated after deployment. Real or perceived errors, failures or bugs in our platform could result in negativepublicity, government inquiries, loss of or delay in market acceptance of our products, loss of competitive position, or claims by customers for losses sustained bythem. In such an event, we may be required, or may choose, for customer relations or other reasons, to expend additional resources in order to help correct theproblem.We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.In connection with the operation of our business, we store, process and transmit data, including personal and payment information, about our employeesand customers, a portion of which is confidential and/or personally sensitive. Unauthorized disclosure or loss of sensitive or confidential data may occur through avariety of methods. These include, but are not limited to, systems failure, employee negligence, fraud or misappropriation, or unauthorized access to or through ourinformation systems, whether by our employees or third parties, including a cyberattack by computer programmers, hackers, members of organized crime and/orstatesponsored organizations, who may develop and deploy viruses, worms or other malicious software programs. Such disclosure, loss or breach could harm ourreputation and subject us to government sanctions and liability under our contracts and laws that protect sensitive or personal data and confidential information,resulting in increased costs or loss of revenues. It is possible that security controls over sensitive or confidential data and other practices we and our thirdpartyvendors follow may not prevent the improper access to, disclosure of, or loss of such information. The potential risk of security breaches and cyberattacks mayincrease as we introduce new products and offerings. Further, data privacy is subject to frequently changing rules and regulations, which sometimes conflict amongthe various jurisdictions in which we provide services. Any failure or perceived failure to successfully manage the collection, use, disclosure, or security of personalinformation or other privacy related matters, or any failure to comply with changing regulatory requirements in this area, could result in legal liability or impairment toour reputation in the marketplace.25A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.Information security risks have generally increased in recent years, in part because of the proliferation of new technologies and the use of the Internet, andthe increased sophistication and activity of organized crime, hackers, terrorists, activists, cybercriminals and other external parties, some of which may be linked toterrorist organizations or hostile foreign governments. For example, a cybercriminal could use cybersecurity threats to gain access to sensitive information aboutanother company or to alter or disrupt news or information to be distributed by PR Newswire. Cybersecurity attacks are becoming more sophisticated and includemalicious software, ransomware, attempts to gain unauthorized access to data and other electronic security breaches that could lead to disruptions in criticalsystems, unauthorized release of confidential or otherwise protected information and corruption of data, substantially damaging our reputation. Any person whocircumvents our security measures could steal proprietary or confidential customer information or cause interruptions in our operations. We incur significant coststo protect against security breaches, and may incur significant additional costs to alleviate problems caused by any breaches. Our failure to prevent securitybreaches, or wellpublicized security breaches affecting the Internet in general, could significantly harm our reputation and business and financial results.Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, dataprotection and information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive andconfidential information. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm ourbusiness, results of operations and financial condition.We and our customers that use our products may be subject to privacy and data protectionrelated laws and regulations that impose obligations inconnection with the collection, processing and use of personal data, financial data, health or other similar data. The U.S. federal and various state and foreigngovernments have adopted or proposed limitations on, or requirements regarding, the collection, distribution, use, security and storage of personally identifiableinformation of individuals. The U.S. Federal Trade Commission and numerous state attorneys general are applying federal and state consumer protection laws toimpose standards on the online collection, use and dissemination of data, and to the security measures applied to such data.Similarly, many foreign countries and governmental bodies, including the EU member states, have laws and regulations concerning the collection and useof personally identifiable information obtained from individuals located in the EU or by businesses operating within their jurisdiction, which are often morerestrictive than those in the United States. Laws and regulations in these jurisdictions apply broadly to the collection, use, storage, disclosure and security ofpersonally identifiable information that identifies or may be used to identify an individual, such as names, telephone numbers, email addresses and, in somejurisdictions, IP addresses and other online identifiers.For example, the GDPR, which took full effect on May 25, 2018. The GDPR enhances data protection obligations for businesses and requires serviceproviders (data processors) processing personal data on behalf of customers to cooperate with European data protection authorities, implement security measuresand keep records of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to or greater of €20 million or 4% of global annualrevenues. In addition, the CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and require deletion of their personalinformation, opt out of certain personal information sharing, and receive detailed information about how their personal information is used. The CCPA provides forcivil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further, failure to comply withthe Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may expose us to administrativefines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the current enforcementmeasures and sanctions. There are also additional laws and regulations in additional jurisdictions around the world which govern the protection of consumers andof electronic communications. If our efforts to comply with GDPR, CCPA or other applicable laws and regulations are not successful, we may be subject to penaltiesand fines that would adversely impact our business and results of operations, and our ability to conduct business could be significantly impaired.26Additionally, although we endeavor to have our products comply with applicable laws and regulations, these and other obligations may be modified, theymay be interpreted and applied in an inconsistent manner from one jurisdiction to another, and they may conflict with one another, other regulatory requirements,contractual commitments or our internal practices. We also may be bound by contractual obligations relating to our collection, use and disclosure of personal,financial and other data or may find it necessary or desirable to join industry or other selfregulatory bodies or other privacy or data protectionrelatedorganizations that require compliance with their rules pertaining to privacy and data protection.We expect that there will continue to be new proposed laws, rules of selfregulatory bodies, regulations and industry standards concerning privacy, dataprotection and information security in the United States, the European Union and other jurisdictions, and we cannot yet determine the impact such future laws,rules, regulations and standards may have on our business. Moreover, existing U.S. federal and various state and foreign privacy and data protectionrelated lawsand regulations are evolving and subject to potentially differing interpretations, and various legislative and regulatory bodies may expand current or enact new lawsand regulations regarding privacy and data protectionrelated matters. Because global laws, regulations and industry standards concerning privacy and datasecurity have continued to develop and evolve rapidly, it is possible that we or our products or platform may not be, or may not have been, compliant with eachsuch applicable law, regulation and industry standard and compliance with such new laws or to changes to existing laws may impact our business and practices,require us to expend significant resources to adapt to these changes, or to stop offering our products in certain countries. These developments could adverselyaffect our business, results of operations and financial condition.We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect ourbusiness.Our ability to implement our business plan successfully depends in part on our ability to build brand recognition using our trademarks, service marks andother proprietary intellectual property, including our names and logos. We currently have no registered trademarks. While we plan to register a number of ourtrademarks; however, no assurance can be given that our trademark applications will be approved. As of December 31, 2022, we own 18 issued patents: six in Europe,four in the U.S., three in each of Russia and Japan and one in each of Canada and Israel which expire between January 20, 2033 and August 18, 2036, and we havetwo additional patent applications in process. As of such date, we do not have any registered trademarks., No assurance can be given that our patent applicationswhich are in process will be approved. If our patent applications are not approved, our ability to expand or develop our business may be negatively affected.Third parties may also oppose our trademark or patent applications, or otherwise challenge our use of the trademarks or patents. In the event that ourtrademarks or patents are successfully challenged, we could be forced to rebrand our goods and services or redesign our technology, which could result in loss ofbrand recognition, and could require us to devote resources to advertising and marketing new brands and products.If our efforts to register, maintain and protect our intellectual property are inadequate, or if any thirdparty misappropriates, dilutes or infringes on ourintellectual property, the value of our brands may be harmed, which could have a material adverse effect on our business and might prevent our brands fromachieving or maintaining market acceptance. We may also face the risk of claims that we have infringed third parties’ intellectual property rights. If third parties claimthat we infringe upon their intellectual property rights, our operating profits could be adversely affected. Any claims of intellectual property infringement, eventhose without merit, could be expensive and time consuming to defend, require us to rebrand our services, if feasible, divert management’s attention and resourcesor require us to enter into royalty or licensing agreements in order to obtain the right to use a thirdparty’s intellectual property.Any royalty or licensing agreements, if required, may not be available to us on acceptable terms or at all. A successful claim of infringement against uscould result in our being required to pay significant damages, enter into costly license or royalty agreements, or stop the sale of certain products or services, any ofwhich could have a negative impact on our operating profits and harm our future prospects.We may face intense competition and expect competition to increase in the future, which could prohibit us from developing a customer base andgenerating revenue.We face significant competition in every aspect of our business. Our competitors include True Fit, Virtusize, EasyMeasure, AR MeasureKit, Smart Measureand 3DLook. These companies may already have an established market in our industry. Most of these companies have significantly greater financial and otherresources than us and have been developing their products and services longer than we have been developing ours.27In addition, some of our larger competitors have substantially broader product offerings and leverage their relationships based on other products orincorporate functionality into existing products to gain business in a manner that discourages potential customers from purchasing our products. Potentialcustomers may also prefer to purchase from their existing solution providers rather than a new solution provider regardless of product performance or features.These larger competitors often have broader product lines and market focus and will therefore not be as susceptible to downturns in a particular market. Conditionsin our market could change rapidly and significantly as a result of technological advancements, partnering by our competitors or continuing market consolidation.New startup companies that innovate and large competitors that are making significant investments in research and development may invent similar or superiorproducts and technologies that compete with our products. In addition, some of our competitors may enter into new alliances with each other or may establish orstrengthen cooperative relationships. Any such consolidation, acquisition, alliance or cooperative relationship could lead to pricing pressure and our loss of anyfuture market share and could result in a competitor with greater financial, technical, marketing, service and other resources, all of which could harm our ability tocompete. Furthermore, organizations may be more willing to incrementally add solutions to their existing infrastructure from competitors than to replace their existinginfrastructure with our products. Any failure to meet and address these factors could harm our business, results of operations and financial condition.Our business operations and future development could be significantly disrupted if we lose key members of our management team.The success of our business continues to depend to a significant degree upon the continued contributions of our senior officers and key employees, bothindividually and as a group. Our future performance will be substantially dependent in particular on our ability to retain and motivate Ronen Luzon, our ChiefExecutive Officer, and certain of our other senior executive officers. The loss of the services of our Chief Executive Officer, senior officers or other key employeescould have a material adverse effect on our business and plans for future development. We have no reason to believe that we will lose the services of any of theseindividuals in the foreseeable future; however, we currently have no effective replacement for any of these individuals due to their experience, reputation in theindustry and special role in our operations. We also do not maintain any key man life insurance policies for any of our employees.If we are able to expand our operations, we may be unable to successfully manage our future growth.Our growth may strain our infrastructure and resources. Any such growth could place increased strain on our management, operational, financial and otherresources, and we will need to train, motivate, and manage employees, as well as attract management, sales, finance and accounting, international, technical, andother professionals. Any failure to expand these areas and implement appropriate procedures and controls in an efficient manner and at a pace consistent with ourbusiness objectives could have a material adverse effect on our business, results of operations and financial condition.Our business operations are conducted in multiple languages and could be disrupted due to miscommunications or translation errors.The success of our business continues to depend on our marketing efforts in the United States, Europe and Israel, each of which is conducted in the locallanguage. Miscommunications or inaccurate foreign language translations could have a material adverse effect on our business operations and financial conditions.Additionally, contracts, communications and complex technical information must be accurately translated into foreign languages.We will continue to incur costs and be subject to various obligations as a result of being a public company, listed in the United States and in Israel.We will continue to incur significant legal, accounting and other expenses as a result of being a public company, listed in the United States and in Israel.Although we will incur costs each year associated with being a publiclytraded company, it is possible that our actual costs of being a publiclytraded company willvary from year to year and may be different than our estimates. In estimating these costs, we take into account expenses related to insurance, legal, accounting andcompliance activities.28Furthermore, the need to maintain the corporate infrastructure demanded of a public company may divert management’s attention from implementing ourgrowth strategy, which could prevent us from improving our business, results of operations and financial condition. We have made, and will continue to make,changes to our internal controls and procedures for financial reporting and accounting systems to meet our reporting obligations as a U.S. publicly traded company.However, the measures we take may not be sufficient to satisfy our obligations as a publicly traded company.Any future or current litigation could have a material adverse impact on our results of operations, financial condition and liquidity.From time to time, we may be subject to litigation, including, among others, potential stockholder derivative actions and class actions. Risks associatedwith legal liability are difficult to assess and quantify, and their existence and magnitude can remain unknown for significant periods of time. Subject to certainexceptions, our Amended and Restated Certificate of Incorporation, or Certificate of Incorporation, and Amended and Restated Bylaws, or Bylaws, require us toindemnify and advance expenses to our officers and directors involved in legal proceedings. To date we have obtained directors and officers’ liability, or D&O,insurance to cover some of the risk exposure for our directors and officers. Such insurance generally pays the expenses (including amounts paid to plaintiffs, fines,and expenses including attorneys’ fees) of officers and directors who are the subject of a lawsuit as a result of their service to us. There can be no assurance that wewill be able to continue to maintain this insurance at reasonable rates or at all, or in amounts adequate to cover such expenses should such a lawsuit occur. WithoutD&O insurance, the amounts we would pay to indemnify our officers and directors should they be subject to legal action based on their service to us could have amaterial adverse effect on our financial condition, results of operations and liquidity. Such lawsuits, and any related publicity, may result in substantial costs and,among other things, divert the attention of management and our employees. An unfavorable outcome in any claim or proceeding against us could have a materialadverse impact on our financial position and results of operations for the period in which the unfavorable outcome occurs, and potentially in future periods. Further,any settlement announced by us may expose us to further claims against us by third parties seeking monetary or other damages which, even if unsuccessful, woulddivert management attention from the business and cause us to incur costs, possibly material, to defend such matters, which could have a material adverse impacton our financial position. See “Legal Proceedings” for more information regarding our involvement in ongoing litigation matters.Federal, state and local or Israeli tax rules may adversely impact our results of operations and financial position.We are subject to federal, state and local taxes in the U.S., as well as local taxes in Israel in respect to our operations in Israel. Although we believe our taxestimates are reasonable, if the Internal Revenue Service or other taxing authority disagrees with the positions we have taken on our tax returns, we could faceadditional tax liability, including interest and penalties. If material, payment of such additional amounts upon final adjudication of any disputes could have a materialimpact on our results of operations and financial position. In addition, complying with new tax rules, laws or regulations could impact our financial condition, andincreases to federal or state statutory tax rates and other changes in tax laws, rules or regulations may increase our effective tax rate. Any increase in our effectivetax rate could have a material impact on our financial results.A significant majority of Orgad’s revenue is from sales of products on Amazon’s U.S. Marketplace and any change, limitation or restriction on ourability to operate on Amazon’s platform or any other marketplace could have a material adverse impact to our business, results of operations, financialcondition and prospects.Orgad, our wholly owned subsidiary, operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com, eBay and others. A substantial percentage of Orgad’s revenue is driven by sales on Amazon’s U.S. marketplace and Orgad is subject toterms of service of Amazon and other maketplaces and various other seller policies and services that apply to third parties selling products on Amazon and othermarketplaces. Generally, a marketplace has the right to terminate or suspend its agreement with Orgad at any time and for any reason. Such marketplace may takeother actions against Orgad such as suspending or terminating a seller account or product listing and withholding payments owed to Orgad indefinitely. Forexample, in July 2022, Amazon deactivated Orgad’s Amazon U.S. store as a result of complaints submitted due to an error in the listed manufacturer of certainproducts on Orgad’s store. Although its account was subsequently reinstated in September 2022, if the deactivation were to occur in the future for a prolongedperiod of time, or if Amazon were to terminate Orgad’s account, this would have a material adverse effect on our business, results of operations, financial conditionand prospects. While Orgad endeavors to materially comply with the terms of services of the marketplaces on which it operates, we can provide no assurance thatthese marketplaces will have the same determination with respect to our compliance.29In addition, Amazon and other marketplaces can make changes to its platform that could require Orgad to change the manner in which it operates, limit itsability to successfully launch new products or increase its costs to operate and such changes could have an adverse effect on our business, results of operations,financial condition and prospects. Examples of changes that could impact us relate to platform fee charges (i.e., selling commissions), exclusivity, inventorywarehouse availability, excluded products and limitations on sales and marketing. Any change, limitation or restriction on our ability to sell on Amazon’s platform orany other marketplace, even if temporary, could have a material impact on our business, results of operations, financial condition and prospects.Orgad also relies on services provided by Amazon’s fulfillment platform, including Prime Certification, which provides for expedited shipping to theconsumer, an important aspect in the buying decision for consumers. For products that Orgad fulfills itself, Orgad is qualified to offer our products for sale withPrime Certification delivery. Any inability to market our products for sale with expedited delivery provided under Prime Certification could have a material impact onour business, results of operations, financial condition and prospects. Failure to remain compliant with the best fulfillment practices on Amazon’s platform couldhave a material impact on our business, results of operations, financial condition and prospects. In addition, due to the COVID19 pandemic, Amazon has changedthe amount of inventory it accepts per product for a period of time. If this were to continue it could cause us to miss sales and/or pay additional shipping costswhich would harm our business operations and financial conditions.Orgad’s business depends on its ability to build and maintain strong product listings on ecommerce platforms. Orgad may not be able to maintain andenhance our product listings if it receives unfavorable customer complaints, negative publicity or otherwise fails to live up to consumers’ expectations, whichcould materially adversely affect our business, results of operations and growth prospects.Maintaining and enhancing Orgad’s product listings is critical in expanding and growing its business. However, a significant portion of Orgad’s perceivedperformance to the customer depends on third parties outside of its control, including suppliers and thirdparty delivery agents as well as online retailers such asAmazon and eBay. Because Orgad’s agreements with its online retail partners are generally terminable at will, it may be unable to maintain these relationships, andour results of operations could fluctuate significantly from period to period. Because Orgad relies on third parties to deliver its products, it is subject to shippingdelays or disruptions caused by inclement weather, natural disasters, labor activism, health epidemics or bioterrorism. It may also experience shipping delays ordisruptions due to other carrierrelated issues relating to their own internal operational capabilities. Further, Orgad relies on the business continuity plans of thesethird parties to operate during pandemics, like the COVID19 pandemic, and it has limited ability to influence their plans, prevent delays, and/or cost increases due toreduced availability and capacity and increased required safety measures.Customer complaints or negative publicity about its products, delivery times, or marketing strategies, even if not accurate, especially on blogs, social mediawebsites and thirdparty market sites, could rapidly and severely diminish consumer view of Orgad’s product listings and result in harm to its brand. Customers mayalso make safetyrelated or other types of claims regarding products sold through our online retail partners, such as Amazon, which may result in an online retailpartner removing the product from its marketplace. We also use and rely on other services from third parties, such as our telecommunications services, and thoseservices may be subject to outages and interruptions that are not within our control.Orgad faces risks related to successfully optimizing and operating its fulfillment and customer service operations.Failures to adequately predict customer demand or otherwise optimize and operate its fulfillment and customer service operations successfully from time totime result in excess or insufficient fulfillment or customer service capacity, increased costs, and impairment charges, any of which could materially harm ourbusiness. As Orgad continues to add fulfillment and customer service capability or add new businesses with different requirements, its fulfillment and customerservice operations become increasingly complex and operating them becomes more challenging. There can be no assurance that Orgad will be able to operate ouroperations effectively.30In addition, failure to optimize inventory in our fulfillment operations increases net shipping cost by requiring longzone or partial shipments. Orgad may beunable to adequately staff its fulfillment and customer service operations. Orgad’s failure to properly handle such inventory or to accurately forecast productdemand may result in it being unable to secure sufficient storage space or to optimize its fulfillment operations or cause other unexpected costs and other harm toour business and reputation.Orgad relies on a limited number of shipping companies to deliver inventory to it and completed orders to our customers. The inability to negotiateacceptable terms with these companies or performance problems or other difficulties experienced by these companies could negatively impact our operating resultsand customer experience. In addition, Orgad’s ability to receive inbound inventory efficiently and ship completed orders to customers also may be negativelyaffected by natural or manmade disasters, extreme weather, geopolitical events and security issues, labor or trade disputes, and similar events.The variability in Orgad’s retail business places increased strain on its operations.Demand for Orgad’s product listings can fluctuate significantly for many reasons, including as a result of seasonality, promotions, product launches, orunforeseeable events, such as in response to natural or manmade disasters, extreme weather, or geopolitical events. For example, Orgad expects a disproportionateamount of our retail sales to occur during our fourth quarter. Failure to stock or restock popular products in sufficient amounts such that Orgad fails to meetcustomer demand could significantly affect our revenue and our future growth. If too many customers access the websites on which Orgad engages in onlineretailing within a short period of time due to increased demand, Orgad may experience system interruptions that make the websites unavailable or prevent us fromefficiently fulfilling orders, which may reduce the volume of goods its offers or sell and the attractiveness of its products. In addition, Orgad may be unable toadequately staff for fulfillment of orders and customer service during these peak periods and delivery and other fulfillment companies and customer service cosourcers may be unable to meet the seasonal demand.Our business is subject to the risks of earthquakes, fire, power outages, floods, health risks and other catastrophic events, and to interruption by manmade problems such as terrorism.Natural disasters, such as fire or floods, a significant power outage, telecommunications failure, terrorism, an armed conflict, cyberattacks, epidemics andpandemics such as COVID19, or other geopolitical unrest could affect our supply chain, manufacturers, logistics providers, channel partners, or endcustomers orthe economy as a whole and such disruption could impact us and the shipments and sales. These risks may be further increased if the disaster recovery plans for usand our suppliers prove to be inadequate. To the extent that any of the above should result in delays or cancellations of customer orders, the loss of customers, orthe delay in the deployment or shipment of products, our business, financial condition, and operating results would be adversely affected.For example, on January 2, 2023, Orgad experienced a fire at its warehouse in Israel. We are not aware of any casualties or injuries associated with the fire.We shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incidentdid not affect the future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of thisincident on the other parties that were involved in the incident (lessor and others that leased properties near the warehouse).Our business could be negatively impacted by unsolicited takeover proposals, by shareholder activism or by proxy contests relating to the election ofdirectors or other matters.Our business could be negatively affected as a result of an unsolicited takeover proposal, by shareholder activism or a proxy contest. During 2021, anactivist shareholder sought to make changes to our board of directors, among other matters, which ultimately resulted in us entering into a settlement agreementwith the activist shareholder and another shareholder, and for which considerable costs were incurred and absorbed significant time and attention by managementand the board of directors. A future proxy contest, unsolicited takeover proposal, or other shareholder activism relating to the election of directors or other matterswould most likely require us to incur significant legal fees and proxy solicitation expenses and require significant time and attention by management and our Boardof Directors. The potential of a proxy contest, unsolicited takeover proposal, or other shareholder activism could interfere with our ability to execute our strategicplan, give rise to perceived uncertainties as to our future direction, result in the loss of potential business opportunities or make it more difficult to attract and retainqualified personnel, any of which could materially and adversely affect our business and operating results.31Environmental, social and corporate governance (ESG) issues, including those related to climate change and sustainability, may have an adverseeffect on our business, financial condition and results of operations and damage our reputation.There is an increasing focus from certain investors, customers, consumers, employees and other stakeholders concerning ESG matters. Additionally, publicinterest and legislative pressure related to public companies’ ESG practices continue to grow. If our ESG practices fail to meet regulatory requirements or investor,customer, consumer, employee or other shareholders’ evolving expectations and standards for responsible corporate citizenship in areas including environmentalstewardship, support for local communities, Board of Director and employee diversity, human capital management, employee health and safety practices, productquality, supply chain management, corporate governance and transparency, our reputation, brand and employee retention may be negatively impacted, and ourcustomers and suppliers may be unwilling to continue to do business with us.Customers, consumers, investors and other shareholders are increasingly focusing on environmental issues, including climate change, energy and wateruse, plastic waste and other sustainability concerns. Concern over climate change may result in new or increased legal and regulatory requirements to reduce ormitigate impacts to the environment. Changing customer and consumer preferences or increased regulatory requirements may result in increased demands orrequirements. Complying with these demands or requirements could cause us to incur additional manufacturing, operating or product development costs.If we do not adapt to or comply with new regulations, including the SEC’s published proposed rules that would require companies to provide significantlyexpanded climaterelated disclosures in their periodic reporting, which may require us to incur significant additional costs to comply and impose increased oversightobligations on our management and board of directors, or fail to meet evolving investor, industry or stakeholder expectations and concerns regarding ESG issues,investors may reconsider their capital investment in our company, we may become subject to penalties, and customers and consumers may choose to stoppurchasing our products, if approved for commercialization, which could have a material adverse effect on our reputation, business or financial condition.Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions andadverse developments with respect to financial institutions and associated liquidity risk.Our business depends on the economic health of the global economies. If the conditions in the global economies remain uncertain or continue to bevolatile, or if they deteriorate, including as a result of the impact of military conflict, such as the war between Russia and Ukraine, terrorism or other geopoliticalevents, our business, operating results and financial condition may be materially adversely affected. Economic weakness, inflation and increases in interest rates,limited availability of credit, liquidity shortages and constrained capital spending have at times in the past resulted, and may in the future result, in challenging anddelayed sales cycles, slower adoption of new technologies and increased price competition, and could negatively affect our ability to forecast future periods, whichcould result in an inability to satisfy demand for our products and a loss of market share.In addition, increases in inflation raise our costs for commodities, labor, materials and services and other costs required to grow and operate our business,and failure to secure these on reasonable terms may adversely impact our financial condition. Additionally, increases in inflation, along with the uncertaintiessurrounding COVID19, geopolitical developments and global supply chain disruptions, have caused, and may in the future cause, global economic uncertainty anduncertainty about the interest rate environment, which may make it more difficult, costly or dilutive for us to secure additional financing. A failure to adequatelyrespond to these risks could have a material adverse impact on our financial condition, results of operations or cash flows.More recently, the closures of SVB and Signature Bank and their placement into receivership with the FDIC created bankspecific and broader financialinstitution liquidity risk and concerns. Although the Department of the Treasury, the Federal Reserve and the FDIC jointly released a statement that depositors atSVB and Signature Bank would have access to their funds, even those in excess of the standard FDIC insurance limits, under a systemic risk exception, futureadverse developments with respect to specific financial institutions or the broader financial services industry may lead to marketwide liquidity shortages, impair theability of companies to access nearterm working capital needs, and create additional market and economic uncertainty. There can be no assurance that future creditand financial market instability and a deterioration in confidence in economic conditions will not occur. Our general business strategy may be adversely affected byany such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions. If the current equityand credit markets deteriorate, or if adverse developments are experienced by financial institutions, it may cause shortterm liquidity risk and also make anynecessary debt or equity financing more difficult, more costly, more onerous with respect to financial and operating covenants and more dilutive. Failure to secureany necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stockprice and could require us to alter our operating plans. In addition, there is a risk that one or more of our service providers, financial institutions, manufacturers,suppliers and other partners may be adversely affected by the foregoing risks, which could directly affect our ability to attain our operating goals on schedule andon budget.Our business may be adversely affected by the impact of any renewed outbreak of the COVID19 pandemic.Public health epidemics or outbreaks could adversely impact our business. In late 2019, a novel strain of COVID19, also known as coronavirus, wasreported in Wuhan, China. While initially the outbreak was largely concentrated in China, it spread worldwide. Many countries around the world, including in Israel,implemented significant governmental measures to control the spread of the virus, including temporary closure of businesses, severe restrictions on travel and themovement of people, and other material limitations on the conduct of business. These measures haven historically resulted in work stoppages and other disruptions.If there is a resurgence of the COVID19 pandemic, this could adversely impact our operations, including among others, our sales and marketing efforts and ourability to raise additional funds, and accordingly, the impact of COVID19 could have an adverse impact on our business and our financial results.32Risks Related to Our Operations in RussiaRussia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.In addition to our Israel operations, we have operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia and we engage two software developers through a third party who are based in Ukraine. On February 24,2022, Russia invaded Ukraine. The outbreak of hostilities between the two countries could result in more widespread conflict and could have a severe adverse effecton the region.Following Russia’s actions, various countries, including the U.S., Canada, the United Kingdom, Germany and France, as well as the European Union,issued broadranging economic sanctions against Russia. Such sanctions included, among other things, a prohibition on doing business with certain Russiancompanies, officials and oligarchs; a commitment by certain countries and the European Union to remove selected Russian banks from the Society for WorldwideInterbank Financial Telecommunications (SWIFT) electronic banking network that connects banks globally; and restrictive measures to prevent the Russian CentralBank from undermining the impact of the sanctions. In response to sanctions, the Russian Central Bank raised its interest rates and banned sales of local securitiesby foreigners. Russia may take additional counter measures or retaliatory actions in the future. While diplomatic efforts have been ongoing, the conflict betweenRussia and Ukraine is currently unpredictable and has the potential to result in broadened military actions. The duration of ongoing hostilities and such sanctionsand related events cannot be predicted. Uncertainty as to future relations between Russia and the U.S. and other countries in the west, or between Russia and othereastern European countries, may have a negative impact on our operations.Such international sanctions and potential responses to such sanctions, including those that may limit or restrict transfer funds into Russia, may in thefuture significantly affect our ability to conduct our activities in Russia including paying our personnel. To date, the conflict has had minimal impact on operations .Nevertheless, we have no way to predict the progress or outcome of the situation in Ukraine, as the conflict and governmental reactions are rapidly developing andbeyond our control. Prolonged unrest, intensified military activities or more extensive sanctions impacting the region could have a material adverse effect on ouroperations, results of operations, financial condition, liquidity and business outlook.Political, military conditions or other risks in Russia could adversely affect our business.Russia is a federative state consisting of 85 constituent entities, or “subjects.” The Russian Constitution reserves some governmental powers for theRussian Government, some for the subjects and some for areas of joint competence. In addition, eight “federal districts” (“federal’nye okruga”), which are overseenby a plenipotentiary representative of the President, supplement the country’s federal system. The delineation of authority among and within the subjects is, inmany instances, unclear and contested, particularly with respect to the division of tax revenues and authority over regulatory matters. For these reasons, theRussian political system is vulnerable to tension and conflict between federal, subject and local authorities. This tension creates uncertainties in the operatingenvironment in Russia, which may prevent us from carrying out our strategy effectively. The risks associated with these events or potential events could materiallyand adversely affect the investment environment and overall consumer and entrepreneurial confidence in Russia, and our business, prospects, financial condition,hiring ability, and results of operations could be materially and adversely affected.Furthermore, high levels of corruption reportedly exist in Russia, including the bribing of officials for the purpose of initiating investigations bygovernment agencies. Corruption and other illegal activities could disrupt our ability to conduct our business effectively, and claims that the we are involved in suchcorruption or illegal activities could generate negative publicity, of which could harm our development, financial condition, results of operations or prospects.Economic and other risks in Russia could adversely affect our business.Operating a business in an emerging market such as Russia can involve a greater degree of risk than operating a business in more developed markets.Over the last two decades, the Russian economy has experienced or continues to experience at various times:●significant volatility in its GDP;33●the impact of international sanctions;●high levels of inflation;●increases in, or high, interest rates;●sudden price declines in oil and other natural resources;●instability in the local currency market;●budget deficits;●the continued operation of lossmaking enterprises due to the lack of effective bankruptcy proceedings;●capital flight; and●significant increases in poverty rates, unemployment and underemployment.The Russian economy has been subject to abrupt downturns in the past, including as a result of the invasion of Ukraine, global financial crisis, and, as anemerging market, remains particularly vulnerable to further external shocks and any future fluctuations in the global markets. Any further deterioration in the generaleconomic conditions in Russia (whether or not as a result of the events mentioned above) could have a material adverse effect on the Russian economy and mayresult in hiring and operational difficulties, as well as potential flight of human capital, which could have a material adverse effect on our business, productdevelopment and results of operations.Legal risks in Russia could materially adversely affect our operations and Russian tax legislation is subject to frequent change.Among the risks of the Russian legal system are: inconsistencies among laws, presidential decrees, and government and ministerial orders and resolutions;conflicting local, regional and federal laws and regulations; the untested nature of the independence of the judiciary and its sensitivity to economic or politicalinfluences; substantial gaps in the regulatory structure due to the delay or absence of implementing legislation; a high degree of discretion on the part ofgovernmental authorities; reported corruption within governmental entities and other governmental authorities; the relative inexperience of judges and courts ininterpreting laws applicable to complex transactions; and the unpredictability of enforcement of foreign judgments and foreign arbitral awards. Many Russian lawsand regulations are construed in a way that provides for significant administrative discretion in application and enforcement. Unlawful, selective or arbitrary actionsof the Russian Government have reportedly included the denial or withdrawal of licenses, sudden and unexpected tax audits, criminal prosecutions, and civil claims.Any of the above events may have a material adverse effect on our product development and results of operations.Despite certain improvements in the taxation system made by the Russian Government over the past decade, Russian tax legislation is still subject tofrequent change, varying interpretations, and inconsistent and selective enforcement. There are currently no clear rules for distinguishing between lawful taxoptimization and tax evasion. In addition, Russian tax laws do not contain detailed rules on the taxation in Russia of foreign companies. As such, taxpayers oftenhave to resort to court proceedings to defend their position against the Russian tax authorities. However, in the absence of consistent court practice or bindingprecedents, there is inconsistency amongst court decisions. Further, the possibility exists that the Russian Federation would impose arbitrary or onerous taxes andpenalties in the future, which could have a material adverse effect on our product development and results of operations.34Risks Related to Our Operations In IsraelOur headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.Our headquarters and most of our operations are located in central Israel and our key employees, officers and directors are residents of Israel. Accordingly,political, economic and military conditions in Israel and the surrounding region may directly affect our business. Since the establishment of the State of Israel in1948, a number of armed conflicts have taken place between Israel and its Arab neighbors. Any hostilities involving Israel or the interruption or curtailment of tradewithin Israel or between Israel and its trading partners could adversely affect our operations and results of operations and could make it more difficult for us to raisecapital. During the winter of 2008, winter of 2012 and the summer of 2014, Israel was engaged in an armed conflict with Hamas, a militia group and political partyoperating in the Gaza Strip, and during the summer of 2006, Israel was engaged in an armed conflict with Hezbollah, a Lebanese Islamist Shiite militia group andpolitical party. Israel faces political tension with respect to its relationships with Turkey, Iran and certain Arab neighbor countries. In addition, recent conflictsinvolved missile strikes against civilian targets in various parts of Israel, and negatively affected business conditions in Israel. Recent political uprisings and socialunrest in various countries in the Middle East and North Africa are affecting the political stability of those countries. This instability may lead to deterioration of thepolitical relationships that exist between Israel and these countries, and have raised concerns regarding security in the region and the potential for armed conflict.Any armed conflicts, terrorist activities or political instability in the region could adversely affect business conditions and could harm our results of operations. Forexample, any major escalation in hostilities in the region could result in a portion of our employees and service providers being called up to perform military duty foran extended period of time. Parties with whom we do business have sometimes declined to travel to Israel during periods of heightened unrest or tension, forcing usto make alternative arrangements when necessary. In addition, the political and security situation in Israel may result in parties with whom we have agreementsinvolving performance in Israel claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions insuch agreements. Any future deterioration in the political and security situation in Israel will negatively impact our business.Our commercial insurance does not cover losses that may occur as a result of events associated with the security situation in the Middle East. Althoughthe Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that thisgovernment coverage will be maintained. Any losses or damages incurred by us could have a material adverse effect on our business. Any armed conflicts orpolitical instability in the region would likely negatively affect business conditions and could harm our results of operations.Further, in the past, the State of Israel and Israeli companies have been subjected to an economic boycott. Several countries still restrict business with theState of Israel and with Israeli companies. These restrictive laws and policies may have an adverse impact on our operating results, financial condition or theexpansion of our business.The legislative power of the State resides in the Knesset, a unicameral parliament that consists of 120 members elected by nationwide voting under asystem of proportional representation. Israel’s most recent general elections were held on April 9, 2019, September 17, 2019, March 2, 2020 and November 1, 2022.The uncertainty surrounding the results of the recent elections may continue. Actual or perceived political instability in Israel or any negative changes in thepolitical environment, may individually or in the aggregate adversely affect the Israeli economy and, in turn, our business, financial condition, results of operationsand prospects.Some of our employees are obligated to perform military reserve duty in Israel.Many Israeli citizens, including our employees are obligated to perform one month, and in some cases more, of annual military reserve duty until they reachthe age of 40 (or older, for reservists with certain occupations) and, in the event of a military conflict, may be called to active duty. In response to increases interrorist activity, there have been periods of significant callups of military reservists. It is possible that there will be military reserve duty callups in the future. Ouroperations could be disrupted by such callups. Such disruption could materially adversely affect our business, results of operations and financial condition.35It may be difficult to enforce a nonIsraeli judgment against the Company or its officers and directors.The operating subsidiary of ours is incorporated in Israel. All of our executive officers and directors are not residents of the United States, and asubstantial portion of our assets and the assets of our executive officers and directors are located outside the United States. Therefore, a judgment obtained againstus, or any of these persons, including a judgment based on the civil liability provisions of the U.S. federal securities laws, may not be collectible in the United Statesand may not necessarily be enforced by an Israeli court. It also may be difficult to affect service of process on these persons in the United States or to assert U.S.securities law claims in original actions instituted in Israel. Additionally, it may be difficult for an investor, or any other person or entity, to initiate an action withrespect to U.S. securities laws in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of U.S. securities laws reasoning that Israel is not themost appropriate forum in which to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law isapplicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law often involves the testimony of expert witnesses, which can be a timeconsuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel that addresses the mattersdescribed above. As a result of the difficulty associated with enforcing a judgment against us in Israel, it may be impossible to collect any damages awarded byeither a U.S. or foreign court.Our international operations could expose us to additional risks, including exchange rate fluctuations, legal regulations and political or economicinstability that could harm our business and operating results.Our international operations expose us to the following risks which may have a material adverse effect on our business and operating results:●devaluations and fluctuations in currency exchange rates including fluctuations between the U.S. dollar and the NIS and the Russian Ruble;●costs of compliance with local laws, including labor laws and intellectual property laws;●compliance with domestic and foreign government policies, including compliance with Israeli securities laws and TASE;●changes in trade regulations and procedures affecting approval, production, pricing, marketing, reimbursement for and access to, our products;●compliance with applicable foreign anticorruption laws, antitrust/competition laws, antiBoycott Israel law and antimoney laundering laws; and●economic and geopolitical developments and conditions, including ongoing instability in global economies and financial markets, international hostilities,acts of terrorism and governmental reactions, inflation, outbreaks of contagious disease (e.g., the COVID19 pandemic) and military and political alliances.Risks Related to Our Common StockA more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.Although our common stock is listed on the Nasdaq Capital Market, it has only been traded on the Nasdaq Capital Market since July 25, 2016. There hasbeen relatively limited trading volume in the market for our common stock, and a more active, liquid public trading market may not develop or may not be sustained.Limited liquidity in the trading market for our common stock may adversely affect a stockholder’s ability to sell its shares of common stock at the time it wishes tosell them or at a price that it considers acceptable. If a more active, liquid public trading market does not develop, we may be limited in our ability to raise capital byselling shares of common stock and our ability to acquire other companies or assets by using shares of our common stock as consideration. In addition, if there is athin trading market or “float” for our stock, the market price for our common stock may fluctuate significantly more than the stock market as a whole. Without a largefloat, our common stock would be less liquid than the stock of companies with broader public ownership and, as a result, the trading prices of our common stockmay be more volatile and it would be harder for you to liquidate any investment in our common stock. Furthermore, the stock market is subject to significant priceand volume fluctuations, and the price of our common stock could fluctuate widely in response to several factors, including:●our quarterly or annual operating results;●changes in our earnings estimates;●investment recommendations by securities analysts following our business or our industry;●additions or departures of key personnel;●changes in the business, earnings estimates or market perceptions of our competitors;36●our failure to achieve operating results consistent with securities analysts’ projections;●changes in industry, general market or economic conditions;●announcements of legislative or regulatory changes; and●natural disasters (including for example, the recent fire in the Orgad warehouse) and political and economic instability, including wars, terrorism, politicalunrest, results of certain elections and votes, emergence of a pandemic, or other widespread health emergencies (or concerns over the possibility of suchan emergency, including for example, the recent the COVID19 pandemic), boycotts, adoption or expansion of government trade restrictions, and otherbusiness restrictions.The stock market has experienced extreme price and volume fluctuations in recent years that have significantly affected the quoted prices of the securitiesof many companies. The changes often appear to occur without regard to specific operating performance. The price of our common stock could fluctuate basedupon factors that have little or nothing to do with us and these fluctuations could materially reduce our stock price.Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.If any of our shareholders were to decide to sell large amounts of stock over a short period of time (presuming such sales were permitted) such sales couldcause the market price of our common stock to drop significantly, even if our business is doing well. Further, the market price of our common stock could decline as aresult of the perception that such sales could occur. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equitysecurities in the future at a time and price that we deem appropriate.Our securities are traded on more than one market which may result in price variations.Our securities have been trading on the Nasdaq Capital Market since July 2016 and on TASE since September 2005. Trading in our securities on suchexchanges occurs in different currencies (U.S. dollars on the Nasdaq Capital Market and NIS on the TASE), and at different times (due to different time zones,trading days and public holidays in the United States and Israel). The trading prices of our securities on the two exchanges may differ due to the foregoing andother factors. Any decrease in the price of our shares on the TASE could cause a decrease in the trading price of our shares on the Nasdaq Capital Market and viceversa.We are a smaller reporting company and, as a result of the reduced disclosure and governance requirements applicable to such companies, ourcommon stock may be less attractive to investors.We are a smaller reporting company, (i.e. a company with “public float” held by nonaffiliates with a market value of less than $250 million) and we areeligible to take advantage of certain exemptions from various reporting requirements applicable to other public companies. We have elected to adopt these reduceddisclosure requirements. We cannot predict if investors will find our common stock less attractive as a result of our taking advantage of these exemptions. If someinvestors find our common stock less attractive as a result of our choices, there may be a less active trading market for our common stock and our stock price may bemore volatile.We do not expect to pay any cash dividends in the foreseeable future.We have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our board of directors deems relevant. Investors should not purchase our common stock expecting to receive cash dividends. Because we do notpay dividends, and there may be limited trading, investors may not have any manner to liquidate or receive any payment on their investment. Therefore, our failureto pay dividends may cause investors to not see any return on investment even if we are successful in our business operations. In addition, because we do not paydividends we may have trouble raising additional funds, which could affect our ability to expand our business operations.37UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2022☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ________ to _________Commission file number 00137370MY SIZE, INC.(Exact name of registrant as specified in charter)Delaware510394637(State or jurisdiction ofIncorporation or organization)I.R.S EmployerIdentification No.4 Hayarden, POB 1026, Airport City, Israel7010000(Address of principal executive offices)(Zip code)+9723 6009030(Registrant’s telephone number, including area code)Securities registered pursuant to Section 12(b) of the Act:Title of each classTrading Symbol(s)Name of Each Exchange on Which RegisteredCommon Stock, par value $0.001 per shareMYSZThe Nasdaq Capital MarketSecurities registered pursuant to Section 12(g) of the Act: None.Indicate by check mark whether the registrant is a wellknown seasoned issuer as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes☒ No ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer, a smaller reporting company, or an emerginggrowth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 of theExchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☒Smaller Reporting Company☒Emerging Growth Company☐If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revisedfinancial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b2 of the Exchange Act) Yes ☐No☒Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control overfinancial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflectthe correction of an error to previously issued financial statements. ☐Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by anyof the registrant’s executive officers during the relevant recovery period pursuant to §240.10D1(b). ☐The aggregate market value of voting and nonvoting common equity held by nonaffiliates of the registrant as of June 30, 2022, the last business day of theregistrant’s most recently completed second fiscal quarter, was approximately $25,551,906.Number of shares of common stock outstanding as of March 31, 2023 was 2,446,780.Documents Incorporated by Reference: None.Table of ContentsPart IItem 1.Business2Item 1A.Risk Factors18Item 1B.Unresolved Staff Comments41Item 2.Properties41Item 3.Legal Proceedings41Item 4.Mine Safety Disclosures42Part IIItem 5.Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities43Item 6.Selected Financial Data43Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations43Item 7A.Quantitative and Qualitative Disclosures about Market Risk50Item 8.Financial Statements and Supplementary DataF1Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure51Item 9A.Controls and Procedures51Item 9B.Other Information51Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.51Part IIIItem 10.Directors, Executive Officers and Corporate Governance52Item 11.Executive Compensation57Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters60Item 13.Certain Relationships and Related Transactions, and Director Independence62Item 14.Principal Accounting Fees and Services65Part IVItem 15.Exhibits, Financial Statement Schedules66Signatures69iPART IIn this Annual Report on Form 10K, unless the context requires otherwise, the terms “we,” “our,” “us,” or “the Company” refer to MySize, Inc., a Delawarecorporation, and its subsidiaries, including MySize Israel 2014 Ltd. My Size LLC, Orgad International Marketing Ltd., or Orgad, and Naiz Bespoke Technologies, S.L,or Naiz, taken as a whole.References to “U.S. dollars” and “$” are to currency of the United States of America, and references to “NIS” are to New Israeli Shekels. Unless otherwiseindicated, U.S. dollar translations of NIS amounts presented in this Annual Report on Form 10K for the year ended on December 31, 2022 are translated using therate of NIS 3.358 to $1.00.All information in this Annual Report on Form 10K relating to shares or price per share reflects the 1for25 reverse stock split effected by us on December8, 2022.CAUTIONARY NOTE ON FORWARDLOOKING STATEMENTSThis Annual Report on Form 10K contains certain forwardlooking statements within the meaning of Section 27A of the Securities Act and Section 21E ofthe Exchange Act. Any statements in Annual Report on Form 10K about our expectations, beliefs, plans, objectives, assumptions or future events or performanceare not historical facts and are forwardlooking statements. These statements are often, but not always, made through the use of words or phrases such as“believe,” “will,” “expect,” “anticipate,” “estimate,” “intend,” “plan” and “would.” For example, statements concerning financial condition, possible or assumedfuture results of operations, growth opportunities, industry ranking, plans and objectives of management, markets for our common stock and future managementand organizational structure are all forwardlooking statements. Forwardlooking statements are not guarantees of performance. They involve known and unknownrisks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to differ materially from any results, levels ofactivity, performance or achievements expressed or implied by any forwardlooking statement.Any forwardlooking statements are qualified in their entirety by reference to the risk factors discussed throughout this Annual Report on Form 10K. Someof the risks, uncertainties and assumptions that could cause actual results to differ materially from estimates or projections contained in the forwardlookingstatements include but are not limited to:●our history of losses and needs for additional capital to fund our operations and our inability to obtain additional capital on acceptable terms, or at all;●risks related to our ability to continue as a going concern;●the new and unproven nature of the measurement technology markets;●our ability to achieve customer adoption of our products;●our ability to realize the benefits of our acquisitions of Orgad and Naiz;●our dependence on assets we purchased from a related party;●our ability to enhance our brand and increase market awareness;●our ability to introduce new products and continually enhance our product offerings;●the success of our strategic relationships with third parties;●information technology system failures or breaches of our network security;●competition from competitors;●our reliance on key members of our management team;●current or future litigation;●current or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated liquidityrisk; and●the impact of the political and security situation in Israel on our business.1The foregoing list sets forth some, but not all, of the factors that could affect our ability to achieve results described in any forwardlooking statements.You should read this Annual Report on Form 10K and the documents that we reference herein and have filed as exhibits to the Annual Report on Form 10K,completely and with the understanding that our actual future results may be materially different from what we expect. You should assume that the informationappearing in this Annual Report on Form 10K is accurate as of the date hereof. Because the risk factors referred to in this Annual Report on Form 10K, could causeactual results or outcomes to differ materially from those expressed in any forwardlooking statements made by us or on our behalf, you should not place unduereliance on any forwardlooking statements.Further, any forwardlooking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forwardlookingstatement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. New factors emergefrom time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extentto which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements. We qualify all ofthe information presented in this Annual Report on Form 10K, and particularly our forwardlooking statements, by these cautionary statements.ITEM 1. BUSINESSOverviewWe are an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile phone or through MySizeID Widget: a simple questionnaire which uses a database collected over the years.MySizeID syncs the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and only presents itemsfor purchase that match their measurements to ensure a correct fit.We are positioning ourselves as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empower brand design teams, which are designed to increase endconsumer satisfaction, contributing to a sustainable world and reduce operation costs.Recent DevelopmentsOrgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,602 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.2The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz, a limitedliability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.3The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Warehouse FireOn January 2, 2023, Orgad experienced a fire at its warehouse in Israel. we are not aware of any casualties or injuries associated with the fire. We shiftedOrgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incident did not affectthe future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of this incident on the otherparties that were involved in the incident (lessor and others that leased properties near the warehouse).January 2023 FinancingOn January 10, 2023, we entered into a securities purchase agreement, or the RD Purchase Agreement, pursuant to which we agreed to sell and issue in theRD Offering an aggregate of 162,000 of our shares of common stock, or the RD Shares, and prefunded warrants, or the Prefunded Warrants, to purchase up to279,899 shares of common stock and, in a concurrent private placement, unregistered warrants to purchase up to 883,798 shares of common stock, or the RDWarrants, consisting of Series A warrants, or Series A Warrants, to purchase up to 441,899 shares of common stock and Series B warrants, or Series B Warrants, topurchase up to 441,899 shares of common stock, at an offering price of $3.055 per RD Share and associated Series A and Series B Warrants and an offering price of$3.054 per Prefunded Warrant and associated Series A and Series B Warrants.4In addition, we entered into a securities purchase agreement, or the PIPE Purchase Agreement, and together with the RD Purchase Agreement, thePurchase Agreements, pursuant to which we agreed to sell and issue in the PIPE Offering an aggregate of up to 540,098 unregistered Prefunded Warrants andunregistered warrants to purchase up to an aggregate of 1,080,196 shares of common stock, or the PIPE Warrants and together with the RD Warrants, the Warrants,consisting of Series A Warrants to purchase up to 540,098 shares of common stock and Series B Warrants to purchase up to 540,098 shares of common stock at anoffering price of $3.054 per Prefunded Warrant and associated Series A and Series B Warrants.The Prefunded Warrants are immediately exercisable at an exercise price of $0.001 per share and will not expire until exercised in full. The Warrants areimmediately exercisable upon issuance at an exercise price of $2.805 per share, subject to adjustment as set forth therein. The Series A Warrants have a term of fiveand onehalf years from the date of issuance and the Series B Warrants have a term of 28 months from the date of issuance. The Warrants may be exercised on acashless basis if there is no effective registration statement registering the shares underlying the warrants.In connection with the PIPE Purchase Agreement, we entered into a registration rights agreement, or the Registration Rights Agreement. Pursuant to theRegistration Rights Agreement, we are required to file a resale registration statement, or the Registration Statement, with the Securities and Exchange Commission, orthe SEC, to register for resale the shares issuable upon exercise of the unregistered Prefunded Warrants and the Series A and Series B Warrants, within 20 days ofthe signing date of the PIPE Purchase Agreement, or the Signing Date, and to have such Registration Statement declared effective within 60 days after the SigningDate in the event the Registration Statement is not reviewed by the SEC, or 90 days of the Signing Date in the event the Registration Statement is reviewed by theSEC. we will be obligated to pay certain liquidated damages if we fail to maintain the effectiveness of the Registration Statement.The Purchase Agreements and the Registration Rights Agreements also contain representations, warranties, indemnification and other provisionscustomary for transactions of this nature. In addition, subject to limited exceptions, the Purchase Agreements provide that for a period of one year following theclosing of the Offerings, we will not effect or enter into an agreement to effect a “variable rate transaction” as defined in the Purchase Agreements.Aggregate gross proceeds to the Company in respect of the Offerings was approximately $3.0 million, before deducting fees payable to the placement agentand other offering expenses payable by the Company.We also entered into a letter agreement, or the Engagement Agreement, with H.C. Wainwright & Co., LLC, or Wainwright, pursuant to which Wainwrightagreed to serve as the exclusive placement agent for the Company in connection with the Offerings. We paid Wainwright a cash placement fee equal to 7% of theaggregate gross proceeds raised in the Offerings, a management fee of 1% of the aggregate gross proceeds raised in the Offerings, a nonaccountable expenseallowance of $85,000 and clearing fees of $15,950. Wainwright also received placement agent warrants, or the Placement Agent Warrants, with substantially the sameterms as the Series A Warrants issued in the Offering in an amount equal to 7% of the aggregate number of Shares and Prefunded Warrants sold in the Offerings, or68,740 shares, at an exercise price of $3.8188 per share and a term expiring on January 10, 2028.Our SolutionOur cloudbased software platform provides highly accurate sizing and measurement with broad applications including the online fashion/apparel industry,logistics and courier services and home DIY. Currently, we are mainly focusing on the ecommerce fashion/apparel industry. This proprietary technology is driven byseveral patented algorithms which are able to calculate and record measurements in a variety of novel ways. Although specific functionality varies by product, webelieve that our core solutions address the need for highly accurate measurements in a variety of consumer friendly, every day uses.5We have developed three products, MySizeID for the fashion/apparel industry, BoxSize for the logistics and courier services market and SizeUp for thehome DIY market.●MySizeID enables shoppers to generate highly accurate measurements of their body to find proper fitting clothes and accessories, through the use ofour application on their mobile phone or through a simple questionnaire if the user decides not to download the application. MySizeID syncs the user’smeasurement data to a sizing chart and presents items for purchase that match their measurements to ensure a correct fit. MySizeID is available forlicense by retailers and accessable by consumers through a web page.●BoxSize enables customers to quickly and easily measure the size and volume of a parcel to accurately calculate shipping fees. It also offers shippingcompanies a variety of precise logistical data for more efficiently managing their supply chain, providing them with an accurate way to compare thephysical package with what is in the shipping manifest. BoxSize solution is available for license on both iOS and Android operating systems. BoxSizeis available on the Honeywell Marketplace and in August 2019 was approved for Honeywell’s Independent Software Vendor Program, and MySize wasgranted an independent software vendor (ISV) status on the Zebra Technologies and on DataLogic platforms.●SizeUp is a digital tape measure that allows users to measure length, width and height of a surface by moving their smartphone from point to point ofan object or space. SizeUp is a valueadd for DIY and home improvement retailers whose customers struggle to find the appropriately sized items (likeblinds or curtains) for their homes or projects due to inaccurate measurements. SizeUp also is designed to replace rulers, tape measures and othermeasuring tools used for DIY projects. SizeUp is available for consumer download on both iOS and Android operating systems.The following are some select key features of our solutions:●Integration Capability. We design our solutions to be flexible and configurable, allowing our clients to match their use of our algorithms and softwarewith their specific business processes and workflows. Our platform has been organically developed from a common code base, data structure and userinterface, providing a consistent user experience with powerful features that are easily adaptable to our clients’ needs. The MySizeID widget can beintegrated via oneline JavaScript code, or through RESTful API;●Intuitive user experience. Our intuitive, easytouse interface is based on current technology, multiple focus groups and automatically adapts to users’devices, including mobile platforms, thereby significantly increasing accessibility of our solutions;●Big Data Generation. While we supply to the user the information he/she requires, we gather certain vital information such as body measurement andpackage volume which can be used anonymously to help the retailer acquire predictive size information on stocking, operations and consumers thatmay be in between sizes. All the information is being gathered and stored on our servers where it can be used by retailers;●NonInvasive. In taking measurements using our solution, the smartphone camera is not utilized; instead, the measurements are captured by scanningthe smartphone over the consumer’s body or package, thus ensuring greater privacy.Our Growth StrategyWe aim to drive revenue primarily through penetration of the U.S. and Europe markets through a business to business to consumer (B2B2C) model in theverticals we are targeting. We are pursuing the following growth strategies:●Sign Additional Commercial Agreements with U.S. Retailers. During 2022, we expanded our commercial agreements with Levi’s, introducing NorthAmerica (U.S. and Canada) and Latin America regions, and by extension Levis’ native apps in EU and U.S. regions. We also entered into commercialagreements with Baby Fresh, Galax, Punto Blanco, GEF France, Diesel, Gaala, Superdry, Uniontex Industries, and Temperlay London among others. Weare in various stages of discussions with U.S. and foreign retailers for the deployment of our size recommendation and measurement technology with aview to entering into additional commercial agreements.6●Pursue a TwoPronged Commercialization Strategy. We are seeking to accelerate adoption of our solutions both through direct partnerships with ecommerce websites as well as through thirdparty platform websites. While we seek to directly enter into partnerships with companies maintaining ecommerce websites in the apparel, courier and DIY markets, we are also seeking to deploy our solutions on thirdparty platforms. Furthermore, with theexpansion of MySizeID through the release of our FirstLook Smart Mirror, which we are offering to brick and mortar stores to digitize the physicalstores, MySizeID is now available for online retailers utilizing the WooCoomerce, Shopify, Lightspeed, PrestaShop, Bitrix and Wix platforms and tobrick and mortar stores through GK Software POS solution while BoxSize is available on the Honeywell, Zebra Technologies and Datalogic.●Ongoing Investment in our Technology Platform. We continue to invest in building new software capabilities and extending our platform to bring thepower of accurate measurement to a broader range of applications. In particular, we seek not only to deliver size recommendations but to provide arobust, endtoend,artificial intelligence, or AIdriven platform that inspires consumer confidence and drives revenue growth by providing a superiorconsumer journey to both online and the brick and mortar stores.●Grow our database. As the usage of our measurement apps increases, our database of information including user behaviour and body measurementsgenerates valuable statistics. Such data can be used in the big data market for targeted advertising and for blind consumer data mining.●Identify and acquire synergistic businesses. In order to reduce our time to market and obtain complementary technologies, we are seeking to acquiretechnologies and businesses that are synergistic to our product offering. We recently completed an acquisition of Orgad which operates anomnichannel ecommerce platform and Naiz which provides SaaS technology solutions that solve size and fit issues for fashion ecommerce companies.●Partnerships and cooperation. In order to bring a wider solution for the retail market we are working to partner and integrate our technology withpartners that can increase our penetration and offering to the market.Market OpportunityThe global ecommerce market was $5.7 trillion in 2022, and the industry is expected to grow significantly in the coming years with no signs of slowingdown. Market specialists expect a compound annual growth rate of 27.43% from 2023 to 2028: according to data from Statista, the market is expected to reach $6.5trillion in 2023. While many sectors have found ways to increase revenue through ecommerce, ecommerce is still plagued by issues that cut into profits andnegatively impact the bottom line, such as customer returns, low consumer conversion, and associated restocking and shipping costs.Fashion/ApparelSince the onset of the COVID19 pandemic, an immense shift to digital was recorded, with 85.9% growth vs. prepandemic, according to Mastercard, andover 2 billion people worldwide who shop online, according to data from Oberlo. In November 2022, online shoppers broke records with $11.3 billion in spending onCyber Monday, driving 5.8% yearoveryear growth and making the day the biggest online shopping day of all time, according to Adobe Analytics.In 2021, fashion companies invested between 1.6% and 1.8% of their revenues in technology, according to Mckinsey, and are expected to double theinvestment by 2030 in order to keep up with digital natives and keep a competitive edge. Personalization in ecommerce and hybrid connectivity in brickandmortarretail are two key themes in the future of fashtech, according to Mckinsey’s 2022 State of Fashion Technology.7In the upcoming years, inflation is expected to impact the fashion world. As prices for goods increase, the challenge will be to inspire confidence inconsumers, via different smart digital tools. Brands will need to embrace creative digital tools and new channels to deepen customer relationships, and as Mckinseyforecasts in their State of Fashion report for 2023, they will need to execute on priorities such as sustainability and digital acceleration.The global fashion ecommerce market size is expected to grow from $744.4 billion in 2022 to $821.19 billion in 2023 at a compound annual growth rate of10.3%. In 2027, the market size is expected to grow to $1,222.32 billion, at a compound annual growth rate of 10.5%, according to BRC.Based on the importance which shoppers attribute to free shipping 50% of cart abandonment rate is due to extra shipping costs (Baymard Institute) theneed for fashion retailers to substantiate the optimal size for a customer, thus minimizing returns, has never been more crucial.As brands move online or significantly expand their online presence, we believe that developing innovative ways to connect with shoppers, both onlineand offline, has become a top priority.Shipping/ParcelAccording to Pitney Bowes, parcel revenue in 13 major countries around the world increased by 17% year over year from $420 billion in 2020 (reflecting 131billion parcels) to $491 billion in 2021 (reflecting 159 billion parcels). In the shipping/parcel industry, the dimensions of a package are critical. It is not merely themeasurement of a package or box – but rather the amount of space that the package or box will take up on a truck, airplane, or ship that will be transporting thepackage or box. Far too often, retailers use unfit packaging for their items, adding additional costs in materials and shipping fees.DIYSimilar to issues in the apparel and fashion market, big box, hardware, furniture, and DIY stores are plagued by returns due to incorrect fit andmeasurements. In an industry where precise measurement for projects is an absolute necessity, ecommerce has not grown as quickly as in other industries which webelieve is due to lack of consumer confidence in measurements at home and buying the correct item online.MySizeIDWe have released the MySizeID app for both iOS and Android which assists consumers to take highly accurate measurement of their own body in order tosize clothing in the best way possible without the need to try the clothes on before purchasing. MySizeID is designed to simplify the process of purchasing clothesonline and significantly reduce the rate of returns of poorfitting clothing. During 2022, MySizeID delivered over 23.5 million size recommendations.The application is the result of a research and development effort that combines:●anthropometric research – analyses of information pertaining to body measurements derived from a survey and the subsequent determination ofcorrelations between body parts;●body measurement algorithm research – an algorithm created by us to measure body parts; and●retailers size chart analyses – adopting a deep understanding of the size charts of retailers and the corresponding “body to garment size.”MySizeID allows consumers to create a secure, online profile of their personal measurements, which can then be utilized, with partnered online retailers, toensure that no matter the manufacturer or size chart, they will get the right fit. MySizeID operates based on the use of existing sensors in smart phones which enable,through a specific purpose application, the measurement of the body of any consumer by moving the smartphone along his or her body. The MySizeID applicationdoes not rely on user photographs or any additional hardware; all a user needs to do is scan their body with their smartphone and the application records theirmeasurements. The measurements can then be saved in our database in the cloud, enabling the user to search for clothes in various retailer websites withoutworrying about size. When a search is made, the retailer will connect to our cloud database, and then provide results based on the user’s measurements and otherparameters as he or she may have defined. This data is also saved for use when a customer enters a brickandmortar store to help serve the customer moreefficiently and to provide a better shopping experience.8Figure 1: Screenshot of MySizeID on smartphone and ecommerce websiteAs part of the integration process, we offer to the retailer five main components:●Mobile App. MySizeID comes in the form of a native app or website. Our native app can be used “as is” integrated into the retailer’s ecommercewebsite. The website users can build a body profile on the app and receive size recommendations for their profile both in the app and on a widgetintegrated with their website.9●Widget. When a consumer enters into the retailer’s website and looks for a specific item, he or she can click on the MySizeID widget which will informthe consumer of his or her recommended size, based on his or her actual measurements, as measured using the app and the item he or she is looking at.The widget has two features:AI Wizard mode allows the user to obtain size from the following parameters: gender, height, weight, belly shape, hip shape and bra size only. Thegender, height and weight questions are mandatory, while the body shape questions are optional and can be added to increase accuracy for specificapparel categories.Guest mode allows a user that does not wish to sign up to MySizeID as a user to obtain size recommendations as well.●Analytic Pixel. MySizeID analytic pixel allows retailer to track and analyze the widget usage. By adding the pixel to the retailer’s website, MySizeID BIteam can track engagement, order, and return data and provide retailers with tools to understand the advantages and benefits of MySizeID.Use your own device using MySizeID instore solution, shoppers can receive size recommendations for all store items, when shopping in the offlinestores. The shoppers can build their body profile using an easy to use 3 to 6 questions form, scan an item barcode and receive a size recommendationfor the scanned item based on their body profile and the item’s size chart.Another feature we added is the “inbetween sizing” feature. Our system can detect a user that has body dimensions that place the user inbetweenthe clothes sizes being offered and lets the user know that. A user can then choose between the two sizes according to the user’s fit preference(tight/loose/average).In addition, we have recently released our InstantApp feature which allows shoppers to generate their body measurements directly from our widget,without the need to download our mobile app. Using this technology, the shoppers can create their online profile of their personal measurements andcomplete a purchase faster and easier with minimum distractions.The body profile can be created while shoppers are viewing the page from their mobile phone, or by scanning a QR code on desktop that will open thesame page on the mobile phone.Screenshot of InstantApp widget on desktop on yumyumfashion website10●MyDash Platform. The MyDash platform is a smart backoffice system where the retailer enters all the information regarding its size charts thatcorrelates to every product in its ecommerce site, and where the retailer can access the information on its users. This system is customizable based onthe retailer’s needs. In 2021, we changed the MyDash system to increase the system’s accessibility, added walkthroughs, user guides and changed theuser interface and much more for the ease of use. We added the option to use our generic size charts, added the option upload size chart files insteadof typing the size charts values manually, added more widget styling options and changed the pairing mechanism between the size chart and theproducts to be more userfriendly.Figure 3: Screenshot of BackOffice System●FirstLook Smart Mirror. The Smart Mirror provides an interactive, mirrorlike touch display that allows brands to provide instore customers with anenhanced, online shopping experience, contactless checkout and obtains the recommended size. The MySizeIDFirstLook Smart Mirror can be placedin numerous locations throughout a retail store, including the fitting rooms (without cameras) or other hightraffic locations of the store. Highlightcapabilities of the FirstLook Smart Mirror include a 3D “Tryiton” interactive avatar experience, personalized and highly accurate sizerecommendations by MySizeID, thirdparty point of sale systems integration, styling recommendations and contactless “select and collect” at theregister feature.Illustration of MySizeID “first look” smart mirror in a fashion store11We are currently offering MySizeID technology to retailers through either a payperuse model or a monthly subscription model. In our payperusebusiness model, every time the consumer obtains a recommended size, the retailer is charged for the usage.BoxSizeBoxSize is a parcel measurement application that can provide realtime logistic data on package volumes and transportation, resulting in improvedoperational efficiency and reduced operating expenses. In addition, BoxSize allows customers to easily measure the size of their parcel with their smartphone,calculate shipping costs and arrange for a convenient pickup time for the package. BoxSize is available both on iOS and Android.In 2020 we released the “One Click” feature on BoxSize that enables the user to measure a package with just one swipe of the handheld device. Previously,measurements through BoxSize would require three separate swipes.Figure 4: Screenshot of BoxSizeOur BoxSize mobile measurement solution is available on the Honeywell Marketplace. In addition, BoxSize was approved for Honeywell’s Global VendorProgram, and is available to provide highly accurate mobile measurement solutions for thousands of Honeywell clients. We also developed a new dashboard for thecourier companies to have all the required data about each package in one place. It includes package dimensions, pictures, scan geo location and more. Thedashboard also let the courier use Webhooks, which allows him to get the information from his own system.12In 2020, we announced our partnership with Datalogic, a company focused on the automatic data capture and process automation markets. The partnershipmakes our BoxSize measurement solution available to thousands of Datalogic customers in the Transportation and Logistics vertical.Agreement with Delhivery Private Limited, IndiaWe entered into an agreement with Delhivery Private Limited, one of the largest courier pickup, delivery, and online shipping services in India. Delhivery’sreputation as a frontrunner in delivery and logistics tech makes its decision to select Boxsize a particularly strong testament to the value the solution provides.BoxSize provides Delhivery’s employees on the B2B side with critical information that will allow them to effortlessly optimize loading efficiency and add even morerealtime visibility to operations.SizeUpWe are working on additional consumer applications, including a DIY application. Our SizeUp application is a smart tape measure for the business toconsumer market which allows users to utilize their smartphone as a tape measure. The application provides measurements with an accuracy of within twocentimeters. Through the use of SizeUp, users will be able to visualize how an object or a piece of furniture will fit in an existing room in their home or office. It alsoadded Google Vision for image content analysis, object detection, and title suggestions.Currently the SizeUp app for Android and iOS is available for free for the first 30 days, after which a user will be required to register via email and pay aonetime fee of $1.99 to continue using the application. To date, revenues from downloads have been minimal.Research and DevelopmentOur research and development team are responsible for the research, algorithm, design, development, and testing of all aspects of our measurementplatform technology. We invest in these efforts to continuously improve, innovate, and add new features to our solutions.We incurred research and development expenses of approximately $1.7 million in 2022 and $4.25 million in 2021, relating to the development of itsapplications and technologies. The decrease from the corresponding period primarily resulted from share based payment in amount of $2,618,000 attributed to theshare issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021. We intend to continue to invest in our research anddevelopment capabilities to extend our platform and bring our measurement technology to a broader range of applications.13In 2022, the R&D department experienced significant success in their efforts to improve the performance of their size recommendation system. Through acombination of optimized algorithms and the incorporation of cuttingedge technologies, the team was able to achieve a threefold increase in the system’s speed.This breakthrough not only makes the system one of the fastest and most accurate on the market, but also reduced the operation costs, making it more costeffective for businesses to use. Additionally, the solution is now highly scalable, allowing it to easily adapt to the needs of businesses of any size. The R&D team isnow focused on further improving the system and exploring new applications for the technology.Sales and MarketingIn 2019, we launched a commercialization strategy that directs our sales efforts toward both sales to ecommerce players in specific vertical markets such asfashion/apparel and shipping/delivery as well as to ecommerce thirdparty platform providers. As of March 15, 2023, our products are being sold in the followingcountries: US, UK, France, Netherlands, Spain, Portugal Turkey, Germany, Israel and Italy, generating customer leads, building out a sales pipeline, and developingcustomer relationships.We believe an effective method to market our suite of products is for users to actively use and explore its capabilities. We encourage free trials of one ormore of our products in order to successfully convert those accounts to paid subscriptions.Proprietary RightsWe rely on a combination of patent, copyright, trademark and trade secret laws in the United States and other jurisdictions, as well as contractualprotections, to protect our proprietary technology.As of December 31, 2022, we owned 18 issued patents: six in Europe, four in the U.S., three in each of Russia and Japan and one in each of Canada andIsrael which expire between January 20, 2033 and August 18, 2036, and we have two additional patent applications in process. As of such date, we do not have anyregistered trademarks.We cannot provide any assurance that our proprietary rights with respect to our products will be viable or have value in the future since the validity,enforceability and type of protection of proprietary rights in softwarerelated industries are uncertain and still evolving.Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products or to obtain and use informationthat we regard as proprietary. Policing unauthorized use of our products is difficult, and while we are unable to determine the extent to which piracy of our softwareproducts exists, software piracy can be expected to be a persistent problem. In addition, the laws of some foreign countries do not protect proprietary rights to asgreat an extent as do the laws of the United States, and effective copyright, trademark, trade secret and patent protection may not be available in those jurisdictions.Our means of protecting our proprietary rights may not be adequate to protect us from the infringement or misappropriation of such rights by others.Further, in recent years, there has been significant litigation in the United States involving patents and other intellectual property rights, particularly in thesoftware and Internetrelated industries. We can become subject to intellectual property infringement claims as the number of our competitors grows and ourproducts and services overlap with competitive offerings. These claims, even if not meritorious, could be expensive to defend and could divert management’sattention from operating our business. If we become liable to third parties for infringing their intellectual property rights, we could be required to pay a substantialaward of damages and to develop noninfringing technology, obtain a license or cease selling the products that contain the infringing intellectual property. We maybe unable to develop noninfringing technology or obtain a license on commercially reasonable terms, if at all.14Government RegulationWe are subject to a number foreign and domestic laws and regulations that involve matters central to our business. These laws and regulations mayinvolve privacy, data protection, intellectual property, or other subjects. Many of the laws and regulations to which we are subject are still evolving and being testedin courts and could be interpreted in ways that could harm our business. In addition, the application and interpretation of these laws and regulations often areuncertain, particularly in the new and rapidly evolving industry in which we operate. Because global laws and regulations have continued to develop and evolverapidly, it is possible that we, our products, or our platform may not be, or may not have been, compliant with each such applicable law or regulation.In particular, we are subject to a variety of federal, state and international laws and regulations governing the processing of personal data. Many U.S. stateshave passed laws requiring notification to data subjects when there is a security breach of personally identifiable data. There are also a number of legislativeproposals pending before the U.S. Congress, various state legislative bodies and foreign governments concerning data protection. In addition, data protection lawsin Europe and other jurisdictions outside the United States can be more restrictive than those within the United States, and the interpretation and application ofthese laws are still uncertain and in flux.For example, the General Data Protection Regulation, or GDPR, which took effect on May 25, 2018, enhances data protection obligations for entities thatprocess personal data about individuals, including obligations to cooperate with European data protection authorities, implement security measures and keeprecords of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to the greater of €20 million or 4% of global annual revenue. Inaddition, the California Consumer Privacy Act of 2018, or CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and requiredeletion of their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used.The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further,failure to comply with the Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may exposeus to administrative fines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the currentenforcement measures and sanctions. Given the breadth and depth of changes in data protection obligations, meeting the requirements of GDPR and otherapplicable laws and regulations has required significant time and resources, including a review of our technology and systems currently in use against therequirements of GDPR and other applicable laws and regulations. We have taken various steps to prepare for complying with GDPR and other applicable laws andregulations however there can be no assurance that these steps are sufficient to assure compliance. Further, additional EU laws and regulations (and member states’implementations thereof) further govern the protection of individuals and of electronic communications. If our efforts to comply with GDPR or other applicable lawsand regulations are not successful, we may be subject to penalties and fines that would adversely impact our business and results of operations, and our ability touse personal data of individuals could be significantly impaired.CompetitionWe operate in a highly competitive industry that is characterized by constant change and innovation. Changes in the applications and the programinglanguages used to develop applications, devices, operating systems, and technology landscape result in evolving customer requirements. Our competitors includeTrue Fit, Fit analytics and 3DLook.The principal competitive factors in our market include the following:●High Accuracy Size Recommendations: the highest accuracy and the lowest margin of error by combining patented technology including AI and ML,size chart or spec data, and MySizeID property body data measurement;●Integration○Fast 1 week integration including size chart size chart review and product mapping○Easy 1 line of “all included” script implementation●Technical Advantages○Very small library that weighs ±50kb (minimum widget loading time on product page)○UltraFast loading and size recommendation presenting○Restful API option (API integration with any website or app)15●Optimizations○Adjustments of size charts based on performance○Widget usage analysis by FashTech and BI teams○Automatic pairing of size charts with products/collections●User Experience○Easy to use interface (1015 seconds to receive size recommendations)○Option to add/deduct questions to/from widget wizards○Users automatically receive size recommendations on all products after initial sign up●Product and platform features, architecture, reliability, privacy and security, performance, effectiveness, and supported environments;●Product extensibility and ability to integrate with other technology infrastructures;●Digital operations expertise;●Ease of use of products and platform capabilities;●Total cost of ownership;●Adherence to industry standards and certifications;●Strength of sales and marketing efforts;●Brand awareness and reputation; and●Focus on customer successWe believe we generally compete favorably with our competitors on the basis of these factors. We expect competition to increase as other established andemerging companies enter our markets, as customer requirements evolve, and as new products and technologies are introduced. We expect this to be particularlytrue as we offer a smartphonebased offering that does not need to utilize the smartphone’s camera, and our competitors may also seek to repurpose their existingofferings to provide similar solutions. Many of our competitors have substantially greater financial, technical, and other resources, greater name recognition, largersales and marketing budgets, broader distribution, and larger and more mature intellectual property portfolios.Human Capital ManagementAs of March 31, 2023, we had a total of 35 employees, of which 30 were fulltime employees, including 9 in sales and marketing, 12 in technology anddevelopment and 9 in administration and finance.None of our employees are represented by a collective bargaining agreement, nor have we experienced any work stoppage. We consider our relationshipwith our employees to be good. Our future success depends on our continuing ability to attract and retain highly qualified engineers, sales and marketing, accountmanagement, and senior management personnel.We also believe we have built a strong sales team focused on expanding into new markets through the acquisition of Naiz and our current team.We believe that our future success will depend, in part, on our continued ability to attract, hire and retain qualified personnel. In particular, we depend onthe skills, experience and performance of our senior management and research personnel. We compete for qualified personnel with other hitech companies, as wellas universities and nonprofit research institutions.16We provide competitive compensation and benefits programs to help meet the needs of our employees. In addition to salaries, these programs (which varyby country/region and employment classification) include incentive compensation plan, pension, and insurance benefits, paid time off, , among others. We also usetargeted equitybased grants with vesting conditions to facilitate retention of personnel, particularly for our key employees.The success of our business is fundamentally connected to the wellbeing of our people. Accordingly, we implemented an hybrid work policy in which theemployees can work from home twice a week.We consider our employees to be a key factor to our success and we are focused on attracting and retaining the best employees at all levels of ourbusiness. Inclusion and diversity is a strategic, business priority. We employ people based on relevant qualifications, demonstrated skills, performance and otherjobrelated factors. We do not tolerate unlawful discrimination related to employment, and strive to ensure that employment decisions related to recruitment,selection, evaluation, compensation, and development, among others, are not influenced by race, color, religion, gender, age, ethnic origin, nationality, sexualorientation, marital status, or disability. Continuous monitoring to ensure pay equity has been a focus in 2022. We have continued to improve gender balance in 2022with a focus on increasing the representation of women hired as new college graduates. We are committed to creating a trusting environment where all ideas arewelcomed and employees feel comfortable and empowered to draw on their unique experiences and backgrounds.We consider our relations with our employees to be good.Company InformationOur principal executive offices are located at HaYarden 4 St., POB 1026, Airport City, Israel 7010000, and our telephone number is +97236009030. Ourwebsite address is www.mysizeid.com. Any information contained on, or that can be accessed through, our website is not incorporated by reference into, nor is it inany way a part of, this Annual Report on Form 10K.We use our website (www.mysizeid.com) as a channel of distribution of Company information. The information we post through this channel may bedeemed material. Accordingly, investors should monitor our website, in addition to following our press releases, SEC filings and public conference calls andwebcasts. The contents of our website are not, however, a part of this Annual Report on Form 10K.Corporate HistoryWe were incorporated in the State of Delaware on September 20, 1999 under the name Topspin Medical, Inc. In December 2013, we changed our name toKnowledgetree Ventures Inc. Subsequently, in February 2014, we changed our name to MySize, Inc. In 2020, we created a subsidiary in the Russian Federation, MySize LLC.From inception through 2012, we were engaged in research and development of a medical magnetic resonance imaging, or MRI, technology forinterventional cardiology and in the development of MRI technology for use in the diagnosis and treatment of prostate cancer. In January 2012, we acquiredMetamorefix Ltd., or Metamorefix. Metamorefix was incorporated in 2007, and was engaged in the development of innovative solutions for the rehabilitation oftissues, particularly skin tissues. By the end of 2012, we ceased operations and in January 2013, we sold our entire ownership interest in Metamorefix.In September 2013, Ronen Luzon, our Chief Executive Officer, acquired control of the Company from Asher Shmuelevitch, according to which Mr. Luzonpurchased 70,238 shares of common stock from Mr. Shmuelevitch, which shares represented approximately 40% of the issued and outstanding capital stock of theCompany at such time, thus becoming a controlling shareholder of the Company. In connection with the acquisition, Mr. Luzon reached a settlement with our thencreditors pursuant to which the main creditor, Mr. Shmuelevitch, was paid a total sum of approximately $140,000 in consideration for a full and final waiver of any andall his claims that he may have relating to any monetary indebtedness of the Company to the creditors.17In February 2014, My Size Israel, our wholly owned subsidiary, entered into a Purchase Agreement, or the Purchase Agreement, with Shoshana Zigdon,who at the time was a beneficial owner of more than 20% of our outstanding shares, with respect to the acquisition by us of certain rights related to the collection ofdata for measurement purposes including rights in the venture, the method and a patent application that had been filed by the Seller (PCT/IL2013/050056), or theAssets. In consideration for the sale of the Assets, we agreed to pay to Ms. Zigdon, 18% of our operating profit, directly or indirectly connected with the Assetstogether with valueadded tax in accordance with the law for a period of seven years from the end of the development period of the aforementioned venture. Inaddition to the foregoing, the Purchase Agreement provided that all developments, improvements, knowledge and knowhow developed and/or accumulated by usafter the execution of the Purchase Agreement will be owned by us. Further, Ms. Zigdon agreed not to compete, directly or indirectly, with us in any matter relatingto the Assets for a period of seven years from the end of the development period of the venture.On May 26, 2021, we, My Size Israel, and Ms. Zigdon entered into an Amendment to Purchase Agreement, or the Amendment, which made certainamendments to the Purchase Agreement. Pursuant to the Amendment, Ms. Zigdon agreed to irrevocably waive (i) the right to repurchase certain assets related tothe collection of data for measurement purposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which our business issubstantially dependent, or the Assets, and (ii) all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My SizeIsrael under the Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation, reward orany rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights, or the Waiver. Inconsideration of the Waiver, we issued 100,000 shares of common stock to Ms. Zigdon.In September 2005, we commenced trading on the Tel Aviv Stock Exchange, or TASE. Between 2007 and 2012 we reported as a public company with theSEC. In August 2012, we suspended our reporting obligations. In mid2015 we resumed reporting as a public company. On July 25, 2016, our common stock beganpublicly trading on the Nasdaq Capital Market under the symbol “MYSZ”.ITEM 1A. RISK FACTORSAn investment in our common stock involves a high degree of risk. You should carefully consider the following risk factors and the other information inthis Annual Report on Form 10K before investing in our common stock. Our business and results of operations could be seriously harmed by any of the followingrisks. The risks set out below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterialalso may materially adversely affect our business, financial condition and/or operating results. If any of the following events occur, our business, financial conditionand results of operations could be materially adversely affected. In such case, the value and trading price of our common stock could decline, and you may lose allor part of your investment.Summary Risk FactorsThe principal factors and uncertainties that make investing in our ordinary shares risky, include, among others:Risks Related to Our Financial Position and Capital Requirements●We have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.●Our limited operating history makes it difficult to evaluate our business and prospects.●We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive and maycause the market price of our common stock to decline.●The report of our independent registered public accounting firm contains an explanatory paragraph regarding substantial doubt about our ability tocontinue as a going concern.Risks Related to Our Company and Our Business●The market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and online thirdparty resellers adopting our flagship product, MySizeID.18●Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broader marketacceptance of our products.●We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which may makeit difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.●We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increase ourcapital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.●If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations and financialcondition may be adversely affected.●If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operations andfinancial condition could be adversely affected.●The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile device applications andcustom development services.●Our growth depends, in part, on the success of our strategic relationships with third parties.●Changes in economic conditions could materially affect our business, financial condition and results of operations.●We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.●We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significant interruptionin our network or hosting and cloud services could adversely impact our operations and harm our business.●Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.●We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.●A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.●Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, data protectionand information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive and confidentialinformation. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm our business,results of operations and financial condition.●We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect our business.●We may face intense competition and expect competition to increase in the future, which could limit us in developing a customer base and generatingrevenue.●Our business operations and future development could be significantly disrupted if we lose key members of our management team.19●If we are able to expand our operations, we may be unable to successfully manage our future growth.Risks Related to Our Operations in Israel and Russia●Our headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.●Russia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.Risks Related to Our Common Stock●A more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.●Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions and adversedevelopments with respect to financial institutions and associated liquidity risk;●Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.●Our securities are traded on more than one market which may result in price variations.●We are a former “shell company” and as such are subject to certain limitations not generally applicable to other public companies.Risks Related to Our Financial Position and Capital RequirementsWe have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.We realized a net loss of approximately $8.3 million and $10.5 million for the years ended December 31, 2022 and 2021 and had an accumulated deficit of$53.5 million as at December 31, 2022. Because of the numerous risks and uncertainties associated with the development and commercialization of our products andbusiness, we are unable to predict the extent of any future losses or when we will become profitable, if at all. Expected future operating losses will have an adverseeffect on our cash resources, shareholders’ equity and working capital. Our failure to become and remain profitable could depress the value of our stock and impairour ability to raise capital, expand our business, maintain our development efforts, or continue our operations. A decline in our value could also cause you to lose allor part of your investment in us.Our limited operating history makes it difficult to evaluate our business and prospects.We have only been developing our measurement technology since 2014. Since then, our operating history has been primarily limited to research anddevelopment, pilot studies, raising capital, and more recently acquisitions and sales and marketing efforts. Therefore, it may be difficult to evaluate our business andprospects. We have not yet demonstrated an ability to commercialize our products. Consequently, any predictions about our future performance may not beaccurate, and you may not be able to fully assess our ability to complete development and/or commercialize our products, and any future products.We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive andmay cause the market price of our common stock to decline.Based on our projected cash flows and the cash balances as of the date of this Annual Report on Form 10K, our existing cash is insufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. In order to meet ourbusiness objectives in the future, we will need to raise additional capital, which may not be available on reasonable terms or at all. Additional capital would be usedto accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;20●respond to competitive pressure;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, and a number of otherfactors, many of which are outside our control, and on our financial performance. Accordingly, we cannot assure you that we will be able to successfully raiseadditional capital at all or on terms that are acceptable to us. If we cannot raise additional capital when needed, it may have a material adverse effect on our business,results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.Management has concluded that there is substantial doubt about our ability to continue as a going concern which could prevent us from obtainingnew financing on reasonable terms or at all.We have incurred significant losses and negative cash flows from operations and have an accumulated deficit that raises substantial doubt about its abilityto continue as a going concern. Our audited consolidated financial statements for the year ended December 31, 2022 were prepared under the assumption that wewould continue our operations as a going concern. Our independent registered public accounting firm has included a “going concern” explanatory paragraph in itsreport on our financial statements for the year ended December 31, 2022. If we are unable to improve our liquidity position, by, among other things, raising capitalthrough public or private offerings or reducing our expenses, we may exhaust our cash resources and will be unable to continue our operations. If we cannotcontinue as a viable entity, our shareholders would likely lose most or all of their investment in us.Risks Related to Our Company and Our BusinessThe market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and onlinethirdparty resellers adopting our flagship product, MySizeID.The market for our measurement technology is relatively new and unproven and is subject to a number of risks and uncertainties. We believe that ourfuture success will depend in large part on market adoption of our flagship product, MySizeID, by U.S. retailers and online thirdparty resellers. In order to grow ourbusiness, we intend to focus on educating retailers and resellers and other potential customers about the benefits of our measurement technology, expanding thefunctionality of our products and bringing new products to market to increase market acceptance and use of our technology. Our ability to develop and expand themarket that our products address depends upon a number of factors, including the cost savings, performance and perceived value associated with such products.The market for our products could fail to develop or there could be a reduction in interest or demand for our products as a result of a lack of consumer acceptance,technological challenges, competing products and services, weakening economic conditions and other causes. We may never successfully commercialize ourproducts and if our products fail to achieve market acceptance, this would have a material adverse effect on our business, results of operations and financialcondition.21Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broadermarket acceptance of our products.Our ability to achieve customer adoption, especially among U.S. retailers will depend, in part, on our ability to effectively organize, focus and train our salesand marketing personnel. We have limited experience selling to U.S. retailers and only recently established a U.S. sales force. We believe that there is significantcompetition for experienced sales professionals with the skills and industry knowledge that we require. Our ability to achieve significant revenue growth in thefuture will depend, in part, on our ability to recruit, train and retain a sufficient number of experienced sales professionals, particularly those with experience sellingto U.S. retailers. In addition, even if we are successful in hiring qualified sales personnel, new hires require significant training and experience before they achievefull productivity, particularly for sales efforts targeted at U.S. retailers and new markets. Because we only recently started sales efforts, we cannot predict whether, orto what extent, our sales efforts will be successful.We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which maymake it difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.In this market segment, the decision to adopt our products may require the approval of multiple technical and business decision makers, including security,compliance, procurement, operations and IT. In addition, while U.S. retailers may be willing to deploy our products on a limited basis, before they will commit todeploying our products at scale, they often require extensive education about our products and significant customer support time, engage in protracted pricingnegotiations and seek to secure readily available development resources. As a result, it is difficult to predict when we will obtain new customers and begingenerating revenue from these customers. As part of our sales cycle, we may incur significant expenses before executing a definitive agreement with a prospectivecustomer and before we are able to generate any revenue from such agreement. We have no assurance that the substantial time and money spent on our salesefforts will generate significant revenue. If conditions in the marketplace generally or with a specific prospective customer change negatively, it is possible that nodefinitive agreement will be executed, and we will be unable to recover any of these expenses. If we are not successful in targeting, supporting and streamlining oursales processes and if revenue expected to be generated from a prospective customer is not realized in the time period expected or not realized at all, our ability togrow our business, and our operating results and financial condition may be adversely affected. If our sales cycles lengthen, our future revenue could be lower thanexpected, which would have an adverse impact on our operating results and could cause our stock price to decline.22We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increaseour capital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.In order to reduce time to market and obtain complementary technologies, we are seeking to acquire technologies and businesses that are synergistic to ourproduct offering. For example, we recently acquired Orgad which operates an omnichannel ecommerce platform and Naiz which provides SaaS technology solutionsthat solve size and fit issues for fashion ecommerce companies. We evaluate from time to time various acquisitions and collaborations, including licensing oracquiring complementary technologies, intellectual property rights, or businesses. The process for acquiring a company may take from several months up to a yearand costs can vary greatly. We may also compete with others to acquire companies, and such competition may result in decreased availability of, or an increase inprice for, suitable acquisition candidates. In addition, we may not be able to consummate acquisitions or investments that we have identified as crucial to theimplementation of our strategy for other commercial or economic reasons. As a result, it may be more difficult for us to identify suitable acquisition or investmenttargets or to consummate acquisitions or investments on acceptable terms or at all. If we are not able to execute on any acquisition, we may not be able to achieve afuture growth strategy and may lose market share.In addition, the acquisition of Orgad, Naiz and any potential future acquisition, joint venture or collaboration may entail numerous potential risks, including:●increased operating expenses and cash requirements;●the assumption of additional indebtedness or contingent liabilities;●assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel;●the diversion of our management’s attention from our existing programs and initiatives in pursuing such a strategic merger or acquisition;●retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships;●risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing technologies; and●our inability to generate revenue from acquired technologies or products sufficient to meet our objectives in undertaking the acquisition or even to offsetthe associated acquisition and maintenance costs.All of the foregoing risks may be magnified as the cost, size or complexity of an acquisition or acquired company increases, or where the acquiredcompany’s products, market or business are materially different from ours, or where more than one integration is occurring simultaneously or within a concentratedperiod of time. We may not be able to obtain the necessary regulatory approvals, including those of antitrust authorities and foreign investment authorities, incountries where we seek to consummate acquisitions or make investments. For those and other reasons, we may ultimately fail to consummate an acquisition, even ifwe announce the intended acquisition.In addition, we may require significant financing to complete an acquisition or investment, whether through bank loans, raising of equity or debt orotherwise. We cannot assure you that such financing options will be available to us on reasonable terms, or at all. If we are not able to obtain such necessaryfinancing, it could have an impact on our ability to consummate a substantial acquisition or investment and execute a future growth strategy. Alternatively, we mayissue a significant number of shares as consideration for an acquisition, which would have a dilutive effect on our existing shareholders. For example, in partialconsideration for the acquisition of Orgad, we agreed to issue up to 111,602 shares of our common stock and in the Naiz acquisition we issued 240,000 shares of ourcommon stock. Furthermore, if we undertake acquisitions, we may incur large onetime expenses and acquire intangible assets that could result in significant futureamortization expense.23If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations andfinancial condition may be adversely affected.We believe that enhancing the “MySize” brand identity and increasing market awareness of our company and products, particularly among U.S. retailers, iscritical to achieving widespread acceptance of our products. Our ability to successfully develop new retailers may be adversely affected by a lack of awareness oracceptance of our brand. To the extent that we are unable to foster name recognition and affinity for our brand, our growth may be significantly delayed or impaired.The successful promotion of our brand will depend largely on our continued marketing efforts, market adoption of our products, and our ability to successfullydifferentiate our products from competing products and services. Our brand promotion may not be successful or result in revenue generation. Any incident thaterodes consumer affinity for our brand could significantly reduce our brand value and damage our business. If consumers perceive or experience a reduction inquality, or in any way believe we fail to deliver a consistently positive experience, our brand value could suffer and our business may be adversely affected.In particular, adverse weather conditions can impact guest traffic at our retailers, and, in more severe cases, cause temporary retail closures, sometimes forprolonged periods. Our business is subject to seasonal fluctuations, with retail sales typically higher during certain months, such as December. Adverse weatherconditions during our most favorable months or periods may exacerbate the effect of adverse weather on consumer traffic and may cause fluctuations in ouroperating results from quartertoquarter within a fiscal year.If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operationsand financial condition could be adversely affected.Our ability to attract new customers depends in part on our ability to enhance and improve our existing products, increase adoption and usage of ourproducts and introduce new products. The success of any enhancements or new products depends on several factors, including timely completion, adequatequality testing, actual performance quality, and overall market acceptance. Enhancements and new products that we develop may not be introduced in a timely orcosteffective manner, may contain errors or defects, may have interoperability difficulties with our platform or other products or may not achieve the broad marketacceptance necessary to generate significant revenue. Furthermore, our ability to increase the usage of our products depends, in part, on the development of newuse cases for our products and may be outside of our control. If we are unable to successfully enhance our existing products to meet evolving customerrequirements, increase adoption and usage of our products, develop new products, then our business, results of operations and financial condition would beadversely affected.The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile Apps and customdevelopment services.We must continue to enhance and improve the performance, functionality and reliability of our products. The mobile technology industry is characterizedby rapid technological change, changes in user requirements and preferences, frequent new product and services introductions embodying new technologies andthe emergence of new industry standards and practices that could render our products obsolete. Our success will depend, in part, on our ability to both internallydevelop and enhance our existing products, develop new products that address the increasingly sophisticated and varied needs of our customers, and respond totechnological advances and emerging industry standards and practices on a costeffective and timely basis. The development of our technology involvessignificant technical and business risks. We may fail to use new technologies effectively or to adapt our proprietary technology and systems to customerrequirements or emerging industry standards. If we are unable to adapt to changing market conditions, customer requirements or emerging industry standards, wemay not be able to increase our revenue and expand our business.Changes in economic conditions could materially affect our business, financial condition and results of operations.Because our primary target customers include U.S. retailers , we, together with the rest of the fashion/apparel industry, will depend upon consumerdiscretionary spending. Increases in unemployment rates, reductions in home values, increases in home foreclosures, investment losses, personal bankruptcies andreductions in access to credit and reduced consumer confidence, may impact consumers’ ability and willingness to spend discretionary dollars. In addition, volatileeconomic conditions may repress consumer confidence and discretionary spending. Any of the foregoing may have a material adverse effect on our business,financial condition and results of operations.24Our growth depends, in part, on the success of our strategic relationships with third parties.To grow our business, we anticipate that we will continue to depend on relationships with third parties, such as our customers and thirdparty platforms.Identifying partners, and negotiating and documenting relationships with them, requires significant time and resources. If we are unsuccessful in establishing ormaintaining our relationships with third parties, our ability to compete in the marketplace or to grow our revenue could be impaired, and our results of operationsmay suffer. Even if we are successful, we cannot assure you that these relationships will result in increased customer usage of our products or increased revenue.We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.We currently utilize, and plan on continuing to utilize over the current fiscal year, thirdparty networking providers and distribution through companiesincluding, but not limited to, Apple and Google as well as Shopify, WooCommerce and, Datalogic, Honeywell and Zebra to distribute our technologies. If disruptionsor capacity constraints occur, we may have no means of replacing these services, on a timely basis or at all. This could cause a material adverse condition for ouroperations and financial earnings.We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significantinterruption in our network or hosting and cloud services could adversely impact our operations and harm our business.Our technology infrastructure is critical to the performance of our products and customer satisfaction. Our products run on a complex distributed system,or what is commonly known as cloud computing. We own, operate and maintain elements of this system, but significant elements of this system are operated bythirdparties that we do not control and which would require significant time to replace. We expect this dependence on thirdparties to continue. In particular, asignificant portion, if not almost all data storage, data processing and other computing services and systems is hosted by cloud computing providers. Anydisruptions, outages and other performance problems relating to such services, including infrastructure changes, human or software errors and capacity constraints,could adversely impact our business, financial condition or results of operations.Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.We update our products on a frequent basis. Despite efforts to test our updates, errors, failures or bugs may not be found in our products until after theyare deployed to a customer. We have discovered and expect we will continue to discover errors, failures and bugs in our products and anticipate that certain of theseerrors, failures and bugs will only be discovered and remediated after deployment. Real or perceived errors, failures or bugs in our platform could result in negativepublicity, government inquiries, loss of or delay in market acceptance of our products, loss of competitive position, or claims by customers for losses sustained bythem. In such an event, we may be required, or may choose, for customer relations or other reasons, to expend additional resources in order to help correct theproblem.We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.In connection with the operation of our business, we store, process and transmit data, including personal and payment information, about our employeesand customers, a portion of which is confidential and/or personally sensitive. Unauthorized disclosure or loss of sensitive or confidential data may occur through avariety of methods. These include, but are not limited to, systems failure, employee negligence, fraud or misappropriation, or unauthorized access to or through ourinformation systems, whether by our employees or third parties, including a cyberattack by computer programmers, hackers, members of organized crime and/orstatesponsored organizations, who may develop and deploy viruses, worms or other malicious software programs. Such disclosure, loss or breach could harm ourreputation and subject us to government sanctions and liability under our contracts and laws that protect sensitive or personal data and confidential information,resulting in increased costs or loss of revenues. It is possible that security controls over sensitive or confidential data and other practices we and our thirdpartyvendors follow may not prevent the improper access to, disclosure of, or loss of such information. The potential risk of security breaches and cyberattacks mayincrease as we introduce new products and offerings. Further, data privacy is subject to frequently changing rules and regulations, which sometimes conflict amongthe various jurisdictions in which we provide services. Any failure or perceived failure to successfully manage the collection, use, disclosure, or security of personalinformation or other privacy related matters, or any failure to comply with changing regulatory requirements in this area, could result in legal liability or impairment toour reputation in the marketplace.25A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.Information security risks have generally increased in recent years, in part because of the proliferation of new technologies and the use of the Internet, andthe increased sophistication and activity of organized crime, hackers, terrorists, activists, cybercriminals and other external parties, some of which may be linked toterrorist organizations or hostile foreign governments. For example, a cybercriminal could use cybersecurity threats to gain access to sensitive information aboutanother company or to alter or disrupt news or information to be distributed by PR Newswire. Cybersecurity attacks are becoming more sophisticated and includemalicious software, ransomware, attempts to gain unauthorized access to data and other electronic security breaches that could lead to disruptions in criticalsystems, unauthorized release of confidential or otherwise protected information and corruption of data, substantially damaging our reputation. Any person whocircumvents our security measures could steal proprietary or confidential customer information or cause interruptions in our operations. We incur significant coststo protect against security breaches, and may incur significant additional costs to alleviate problems caused by any breaches. Our failure to prevent securitybreaches, or wellpublicized security breaches affecting the Internet in general, could significantly harm our reputation and business and financial results.Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, dataprotection and information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive andconfidential information. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm ourbusiness, results of operations and financial condition.We and our customers that use our products may be subject to privacy and data protectionrelated laws and regulations that impose obligations inconnection with the collection, processing and use of personal data, financial data, health or other similar data. The U.S. federal and various state and foreigngovernments have adopted or proposed limitations on, or requirements regarding, the collection, distribution, use, security and storage of personally identifiableinformation of individuals. The U.S. Federal Trade Commission and numerous state attorneys general are applying federal and state consumer protection laws toimpose standards on the online collection, use and dissemination of data, and to the security measures applied to such data.Similarly, many foreign countries and governmental bodies, including the EU member states, have laws and regulations concerning the collection and useof personally identifiable information obtained from individuals located in the EU or by businesses operating within their jurisdiction, which are often morerestrictive than those in the United States. Laws and regulations in these jurisdictions apply broadly to the collection, use, storage, disclosure and security ofpersonally identifiable information that identifies or may be used to identify an individual, such as names, telephone numbers, email addresses and, in somejurisdictions, IP addresses and other online identifiers.For example, the GDPR, which took full effect on May 25, 2018. The GDPR enhances data protection obligations for businesses and requires serviceproviders (data processors) processing personal data on behalf of customers to cooperate with European data protection authorities, implement security measuresand keep records of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to or greater of €20 million or 4% of global annualrevenues. In addition, the CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and require deletion of their personalinformation, opt out of certain personal information sharing, and receive detailed information about how their personal information is used. The CCPA provides forcivil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further, failure to comply withthe Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may expose us to administrativefines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the current enforcementmeasures and sanctions. There are also additional laws and regulations in additional jurisdictions around the world which govern the protection of consumers andof electronic communications. If our efforts to comply with GDPR, CCPA or other applicable laws and regulations are not successful, we may be subject to penaltiesand fines that would adversely impact our business and results of operations, and our ability to conduct business could be significantly impaired.26Additionally, although we endeavor to have our products comply with applicable laws and regulations, these and other obligations may be modified, theymay be interpreted and applied in an inconsistent manner from one jurisdiction to another, and they may conflict with one another, other regulatory requirements,contractual commitments or our internal practices. We also may be bound by contractual obligations relating to our collection, use and disclosure of personal,financial and other data or may find it necessary or desirable to join industry or other selfregulatory bodies or other privacy or data protectionrelatedorganizations that require compliance with their rules pertaining to privacy and data protection.We expect that there will continue to be new proposed laws, rules of selfregulatory bodies, regulations and industry standards concerning privacy, dataprotection and information security in the United States, the European Union and other jurisdictions, and we cannot yet determine the impact such future laws,rules, regulations and standards may have on our business. Moreover, existing U.S. federal and various state and foreign privacy and data protectionrelated lawsand regulations are evolving and subject to potentially differing interpretations, and various legislative and regulatory bodies may expand current or enact new lawsand regulations regarding privacy and data protectionrelated matters. Because global laws, regulations and industry standards concerning privacy and datasecurity have continued to develop and evolve rapidly, it is possible that we or our products or platform may not be, or may not have been, compliant with eachsuch applicable law, regulation and industry standard and compliance with such new laws or to changes to existing laws may impact our business and practices,require us to expend significant resources to adapt to these changes, or to stop offering our products in certain countries. These developments could adverselyaffect our business, results of operations and financial condition.We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect ourbusiness.Our ability to implement our business plan successfully depends in part on our ability to build brand recognition using our trademarks, service marks andother proprietary intellectual property, including our names and logos. We currently have no registered trademarks. While we plan to register a number of ourtrademarks; however, no assurance can be given that our trademark applications will be approved. As of December 31, 2022, we own 18 issued patents: six in Europe,four in the U.S., three in each of Russia and Japan and one in each of Canada and Israel which expire between January 20, 2033 and August 18, 2036, and we havetwo additional patent applications in process. As of such date, we do not have any registered trademarks., No assurance can be given that our patent applicationswhich are in process will be approved. If our patent applications are not approved, our ability to expand or develop our business may be negatively affected.Third parties may also oppose our trademark or patent applications, or otherwise challenge our use of the trademarks or patents. In the event that ourtrademarks or patents are successfully challenged, we could be forced to rebrand our goods and services or redesign our technology, which could result in loss ofbrand recognition, and could require us to devote resources to advertising and marketing new brands and products.If our efforts to register, maintain and protect our intellectual property are inadequate, or if any thirdparty misappropriates, dilutes or infringes on ourintellectual property, the value of our brands may be harmed, which could have a material adverse effect on our business and might prevent our brands fromachieving or maintaining market acceptance. We may also face the risk of claims that we have infringed third parties’ intellectual property rights. If third parties claimthat we infringe upon their intellectual property rights, our operating profits could be adversely affected. Any claims of intellectual property infringement, eventhose without merit, could be expensive and time consuming to defend, require us to rebrand our services, if feasible, divert management’s attention and resourcesor require us to enter into royalty or licensing agreements in order to obtain the right to use a thirdparty’s intellectual property.Any royalty or licensing agreements, if required, may not be available to us on acceptable terms or at all. A successful claim of infringement against uscould result in our being required to pay significant damages, enter into costly license or royalty agreements, or stop the sale of certain products or services, any ofwhich could have a negative impact on our operating profits and harm our future prospects.We may face intense competition and expect competition to increase in the future, which could prohibit us from developing a customer base andgenerating revenue.We face significant competition in every aspect of our business. Our competitors include True Fit, Virtusize, EasyMeasure, AR MeasureKit, Smart Measureand 3DLook. These companies may already have an established market in our industry. Most of these companies have significantly greater financial and otherresources than us and have been developing their products and services longer than we have been developing ours.27In addition, some of our larger competitors have substantially broader product offerings and leverage their relationships based on other products orincorporate functionality into existing products to gain business in a manner that discourages potential customers from purchasing our products. Potentialcustomers may also prefer to purchase from their existing solution providers rather than a new solution provider regardless of product performance or features.These larger competitors often have broader product lines and market focus and will therefore not be as susceptible to downturns in a particular market. Conditionsin our market could change rapidly and significantly as a result of technological advancements, partnering by our competitors or continuing market consolidation.New startup companies that innovate and large competitors that are making significant investments in research and development may invent similar or superiorproducts and technologies that compete with our products. In addition, some of our competitors may enter into new alliances with each other or may establish orstrengthen cooperative relationships. Any such consolidation, acquisition, alliance or cooperative relationship could lead to pricing pressure and our loss of anyfuture market share and could result in a competitor with greater financial, technical, marketing, service and other resources, all of which could harm our ability tocompete. Furthermore, organizations may be more willing to incrementally add solutions to their existing infrastructure from competitors than to replace their existinginfrastructure with our products. Any failure to meet and address these factors could harm our business, results of operations and financial condition.Our business operations and future development could be significantly disrupted if we lose key members of our management team.The success of our business continues to depend to a significant degree upon the continued contributions of our senior officers and key employees, bothindividually and as a group. Our future performance will be substantially dependent in particular on our ability to retain and motivate Ronen Luzon, our ChiefExecutive Officer, and certain of our other senior executive officers. The loss of the services of our Chief Executive Officer, senior officers or other key employeescould have a material adverse effect on our business and plans for future development. We have no reason to believe that we will lose the services of any of theseindividuals in the foreseeable future; however, we currently have no effective replacement for any of these individuals due to their experience, reputation in theindustry and special role in our operations. We also do not maintain any key man life insurance policies for any of our employees.If we are able to expand our operations, we may be unable to successfully manage our future growth.Our growth may strain our infrastructure and resources. Any such growth could place increased strain on our management, operational, financial and otherresources, and we will need to train, motivate, and manage employees, as well as attract management, sales, finance and accounting, international, technical, andother professionals. Any failure to expand these areas and implement appropriate procedures and controls in an efficient manner and at a pace consistent with ourbusiness objectives could have a material adverse effect on our business, results of operations and financial condition.Our business operations are conducted in multiple languages and could be disrupted due to miscommunications or translation errors.The success of our business continues to depend on our marketing efforts in the United States, Europe and Israel, each of which is conducted in the locallanguage. Miscommunications or inaccurate foreign language translations could have a material adverse effect on our business operations and financial conditions.Additionally, contracts, communications and complex technical information must be accurately translated into foreign languages.We will continue to incur costs and be subject to various obligations as a result of being a public company, listed in the United States and in Israel.We will continue to incur significant legal, accounting and other expenses as a result of being a public company, listed in the United States and in Israel.Although we will incur costs each year associated with being a publiclytraded company, it is possible that our actual costs of being a publiclytraded company willvary from year to year and may be different than our estimates. In estimating these costs, we take into account expenses related to insurance, legal, accounting andcompliance activities.28Furthermore, the need to maintain the corporate infrastructure demanded of a public company may divert management’s attention from implementing ourgrowth strategy, which could prevent us from improving our business, results of operations and financial condition. We have made, and will continue to make,changes to our internal controls and procedures for financial reporting and accounting systems to meet our reporting obligations as a U.S. publicly traded company.However, the measures we take may not be sufficient to satisfy our obligations as a publicly traded company.Any future or current litigation could have a material adverse impact on our results of operations, financial condition and liquidity.From time to time, we may be subject to litigation, including, among others, potential stockholder derivative actions and class actions. Risks associatedwith legal liability are difficult to assess and quantify, and their existence and magnitude can remain unknown for significant periods of time. Subject to certainexceptions, our Amended and Restated Certificate of Incorporation, or Certificate of Incorporation, and Amended and Restated Bylaws, or Bylaws, require us toindemnify and advance expenses to our officers and directors involved in legal proceedings. To date we have obtained directors and officers’ liability, or D&O,insurance to cover some of the risk exposure for our directors and officers. Such insurance generally pays the expenses (including amounts paid to plaintiffs, fines,and expenses including attorneys’ fees) of officers and directors who are the subject of a lawsuit as a result of their service to us. There can be no assurance that wewill be able to continue to maintain this insurance at reasonable rates or at all, or in amounts adequate to cover such expenses should such a lawsuit occur. WithoutD&O insurance, the amounts we would pay to indemnify our officers and directors should they be subject to legal action based on their service to us could have amaterial adverse effect on our financial condition, results of operations and liquidity. Such lawsuits, and any related publicity, may result in substantial costs and,among other things, divert the attention of management and our employees. An unfavorable outcome in any claim or proceeding against us could have a materialadverse impact on our financial position and results of operations for the period in which the unfavorable outcome occurs, and potentially in future periods. Further,any settlement announced by us may expose us to further claims against us by third parties seeking monetary or other damages which, even if unsuccessful, woulddivert management attention from the business and cause us to incur costs, possibly material, to defend such matters, which could have a material adverse impacton our financial position. See “Legal Proceedings” for more information regarding our involvement in ongoing litigation matters.Federal, state and local or Israeli tax rules may adversely impact our results of operations and financial position.We are subject to federal, state and local taxes in the U.S., as well as local taxes in Israel in respect to our operations in Israel. Although we believe our taxestimates are reasonable, if the Internal Revenue Service or other taxing authority disagrees with the positions we have taken on our tax returns, we could faceadditional tax liability, including interest and penalties. If material, payment of such additional amounts upon final adjudication of any disputes could have a materialimpact on our results of operations and financial position. In addition, complying with new tax rules, laws or regulations could impact our financial condition, andincreases to federal or state statutory tax rates and other changes in tax laws, rules or regulations may increase our effective tax rate. Any increase in our effectivetax rate could have a material impact on our financial results.A significant majority of Orgad’s revenue is from sales of products on Amazon’s U.S. Marketplace and any change, limitation or restriction on ourability to operate on Amazon’s platform or any other marketplace could have a material adverse impact to our business, results of operations, financialcondition and prospects.Orgad, our wholly owned subsidiary, operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com, eBay and others. A substantial percentage of Orgad’s revenue is driven by sales on Amazon’s U.S. marketplace and Orgad is subject toterms of service of Amazon and other maketplaces and various other seller policies and services that apply to third parties selling products on Amazon and othermarketplaces. Generally, a marketplace has the right to terminate or suspend its agreement with Orgad at any time and for any reason. Such marketplace may takeother actions against Orgad such as suspending or terminating a seller account or product listing and withholding payments owed to Orgad indefinitely. Forexample, in July 2022, Amazon deactivated Orgad’s Amazon U.S. store as a result of complaints submitted due to an error in the listed manufacturer of certainproducts on Orgad’s store. Although its account was subsequently reinstated in September 2022, if the deactivation were to occur in the future for a prolongedperiod of time, or if Amazon were to terminate Orgad’s account, this would have a material adverse effect on our business, results of operations, financial conditionand prospects. While Orgad endeavors to materially comply with the terms of services of the marketplaces on which it operates, we can provide no assurance thatthese marketplaces will have the same determination with respect to our compliance.29In addition, Amazon and other marketplaces can make changes to its platform that could require Orgad to change the manner in which it operates, limit itsability to successfully launch new products or increase its costs to operate and such changes could have an adverse effect on our business, results of operations,financial condition and prospects. Examples of changes that could impact us relate to platform fee charges (i.e., selling commissions), exclusivity, inventorywarehouse availability, excluded products and limitations on sales and marketing. Any change, limitation or restriction on our ability to sell on Amazon’s platform orany other marketplace, even if temporary, could have a material impact on our business, results of operations, financial condition and prospects.Orgad also relies on services provided by Amazon’s fulfillment platform, including Prime Certification, which provides for expedited shipping to theconsumer, an important aspect in the buying decision for consumers. For products that Orgad fulfills itself, Orgad is qualified to offer our products for sale withPrime Certification delivery. Any inability to market our products for sale with expedited delivery provided under Prime Certification could have a material impact onour business, results of operations, financial condition and prospects. Failure to remain compliant with the best fulfillment practices on Amazon’s platform couldhave a material impact on our business, results of operations, financial condition and prospects. In addition, due to the COVID19 pandemic, Amazon has changedthe amount of inventory it accepts per product for a period of time. If this were to continue it could cause us to miss sales and/or pay additional shipping costswhich would harm our business operations and financial conditions.Orgad’s business depends on its ability to build and maintain strong product listings on ecommerce platforms. Orgad may not be able to maintain andenhance our product listings if it receives unfavorable customer complaints, negative publicity or otherwise fails to live up to consumers’ expectations, whichcould materially adversely affect our business, results of operations and growth prospects.Maintaining and enhancing Orgad’s product listings is critical in expanding and growing its business. However, a significant portion of Orgad’s perceivedperformance to the customer depends on third parties outside of its control, including suppliers and thirdparty delivery agents as well as online retailers such asAmazon and eBay. Because Orgad’s agreements with its online retail partners are generally terminable at will, it may be unable to maintain these relationships, andour results of operations could fluctuate significantly from period to period. Because Orgad relies on third parties to deliver its products, it is subject to shippingdelays or disruptions caused by inclement weather, natural disasters, labor activism, health epidemics or bioterrorism. It may also experience shipping delays ordisruptions due to other carrierrelated issues relating to their own internal operational capabilities. Further, Orgad relies on the business continuity plans of thesethird parties to operate during pandemics, like the COVID19 pandemic, and it has limited ability to influence their plans, prevent delays, and/or cost increases due toreduced availability and capacity and increased required safety measures.Customer complaints or negative publicity about its products, delivery times, or marketing strategies, even if not accurate, especially on blogs, social mediawebsites and thirdparty market sites, could rapidly and severely diminish consumer view of Orgad’s product listings and result in harm to its brand. Customers mayalso make safetyrelated or other types of claims regarding products sold through our online retail partners, such as Amazon, which may result in an online retailpartner removing the product from its marketplace. We also use and rely on other services from third parties, such as our telecommunications services, and thoseservices may be subject to outages and interruptions that are not within our control.Orgad faces risks related to successfully optimizing and operating its fulfillment and customer service operations.Failures to adequately predict customer demand or otherwise optimize and operate its fulfillment and customer service operations successfully from time totime result in excess or insufficient fulfillment or customer service capacity, increased costs, and impairment charges, any of which could materially harm ourbusiness. As Orgad continues to add fulfillment and customer service capability or add new businesses with different requirements, its fulfillment and customerservice operations become increasingly complex and operating them becomes more challenging. There can be no assurance that Orgad will be able to operate ouroperations effectively.30In addition, failure to optimize inventory in our fulfillment operations increases net shipping cost by requiring longzone or partial shipments. Orgad may beunable to adequately staff its fulfillment and customer service operations. Orgad’s failure to properly handle such inventory or to accurately forecast productdemand may result in it being unable to secure sufficient storage space or to optimize its fulfillment operations or cause other unexpected costs and other harm toour business and reputation.Orgad relies on a limited number of shipping companies to deliver inventory to it and completed orders to our customers. The inability to negotiateacceptable terms with these companies or performance problems or other difficulties experienced by these companies could negatively impact our operating resultsand customer experience. In addition, Orgad’s ability to receive inbound inventory efficiently and ship completed orders to customers also may be negativelyaffected by natural or manmade disasters, extreme weather, geopolitical events and security issues, labor or trade disputes, and similar events.The variability in Orgad’s retail business places increased strain on its operations.Demand for Orgad’s product listings can fluctuate significantly for many reasons, including as a result of seasonality, promotions, product launches, orunforeseeable events, such as in response to natural or manmade disasters, extreme weather, or geopolitical events. For example, Orgad expects a disproportionateamount of our retail sales to occur during our fourth quarter. Failure to stock or restock popular products in sufficient amounts such that Orgad fails to meetcustomer demand could significantly affect our revenue and our future growth. If too many customers access the websites on which Orgad engages in onlineretailing within a short period of time due to increased demand, Orgad may experience system interruptions that make the websites unavailable or prevent us fromefficiently fulfilling orders, which may reduce the volume of goods its offers or sell and the attractiveness of its products. In addition, Orgad may be unable toadequately staff for fulfillment of orders and customer service during these peak periods and delivery and other fulfillment companies and customer service cosourcers may be unable to meet the seasonal demand.Our business is subject to the risks of earthquakes, fire, power outages, floods, health risks and other catastrophic events, and to interruption by manmade problems such as terrorism.Natural disasters, such as fire or floods, a significant power outage, telecommunications failure, terrorism, an armed conflict, cyberattacks, epidemics andpandemics such as COVID19, or other geopolitical unrest could affect our supply chain, manufacturers, logistics providers, channel partners, or endcustomers orthe economy as a whole and such disruption could impact us and the shipments and sales. These risks may be further increased if the disaster recovery plans for usand our suppliers prove to be inadequate. To the extent that any of the above should result in delays or cancellations of customer orders, the loss of customers, orthe delay in the deployment or shipment of products, our business, financial condition, and operating results would be adversely affected.For example, on January 2, 2023, Orgad experienced a fire at its warehouse in Israel. We are not aware of any casualties or injuries associated with the fire.We shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incidentdid not affect the future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of thisincident on the other parties that were involved in the incident (lessor and others that leased properties near the warehouse).Our business could be negatively impacted by unsolicited takeover proposals, by shareholder activism or by proxy contests relating to the election ofdirectors or other matters.Our business could be negatively affected as a result of an unsolicited takeover proposal, by shareholder activism or a proxy contest. During 2021, anactivist shareholder sought to make changes to our board of directors, among other matters, which ultimately resulted in us entering into a settlement agreementwith the activist shareholder and another shareholder, and for which considerable costs were incurred and absorbed significant time and attention by managementand the board of directors. A future proxy contest, unsolicited takeover proposal, or other shareholder activism relating to the election of directors or other matterswould most likely require us to incur significant legal fees and proxy solicitation expenses and require significant time and attention by management and our Boardof Directors. The potential of a proxy contest, unsolicited takeover proposal, or other shareholder activism could interfere with our ability to execute our strategicplan, give rise to perceived uncertainties as to our future direction, result in the loss of potential business opportunities or make it more difficult to attract and retainqualified personnel, any of which could materially and adversely affect our business and operating results.31Environmental, social and corporate governance (ESG) issues, including those related to climate change and sustainability, may have an adverseeffect on our business, financial condition and results of operations and damage our reputation.There is an increasing focus from certain investors, customers, consumers, employees and other stakeholders concerning ESG matters. Additionally, publicinterest and legislative pressure related to public companies’ ESG practices continue to grow. If our ESG practices fail to meet regulatory requirements or investor,customer, consumer, employee or other shareholders’ evolving expectations and standards for responsible corporate citizenship in areas including environmentalstewardship, support for local communities, Board of Director and employee diversity, human capital management, employee health and safety practices, productquality, supply chain management, corporate governance and transparency, our reputation, brand and employee retention may be negatively impacted, and ourcustomers and suppliers may be unwilling to continue to do business with us.Customers, consumers, investors and other shareholders are increasingly focusing on environmental issues, including climate change, energy and wateruse, plastic waste and other sustainability concerns. Concern over climate change may result in new or increased legal and regulatory requirements to reduce ormitigate impacts to the environment. Changing customer and consumer preferences or increased regulatory requirements may result in increased demands orrequirements. Complying with these demands or requirements could cause us to incur additional manufacturing, operating or product development costs.If we do not adapt to or comply with new regulations, including the SEC’s published proposed rules that would require companies to provide significantlyexpanded climaterelated disclosures in their periodic reporting, which may require us to incur significant additional costs to comply and impose increased oversightobligations on our management and board of directors, or fail to meet evolving investor, industry or stakeholder expectations and concerns regarding ESG issues,investors may reconsider their capital investment in our company, we may become subject to penalties, and customers and consumers may choose to stoppurchasing our products, if approved for commercialization, which could have a material adverse effect on our reputation, business or financial condition.Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions andadverse developments with respect to financial institutions and associated liquidity risk.Our business depends on the economic health of the global economies. If the conditions in the global economies remain uncertain or continue to bevolatile, or if they deteriorate, including as a result of the impact of military conflict, such as the war between Russia and Ukraine, terrorism or other geopoliticalevents, our business, operating results and financial condition may be materially adversely affected. Economic weakness, inflation and increases in interest rates,limited availability of credit, liquidity shortages and constrained capital spending have at times in the past resulted, and may in the future result, in challenging anddelayed sales cycles, slower adoption of new technologies and increased price competition, and could negatively affect our ability to forecast future periods, whichcould result in an inability to satisfy demand for our products and a loss of market share.In addition, increases in inflation raise our costs for commodities, labor, materials and services and other costs required to grow and operate our business,and failure to secure these on reasonable terms may adversely impact our financial condition. Additionally, increases in inflation, along with the uncertaintiessurrounding COVID19, geopolitical developments and global supply chain disruptions, have caused, and may in the future cause, global economic uncertainty anduncertainty about the interest rate environment, which may make it more difficult, costly or dilutive for us to secure additional financing. A failure to adequatelyrespond to these risks could have a material adverse impact on our financial condition, results of operations or cash flows.More recently, the closures of SVB and Signature Bank and their placement into receivership with the FDIC created bankspecific and broader financialinstitution liquidity risk and concerns. Although the Department of the Treasury, the Federal Reserve and the FDIC jointly released a statement that depositors atSVB and Signature Bank would have access to their funds, even those in excess of the standard FDIC insurance limits, under a systemic risk exception, futureadverse developments with respect to specific financial institutions or the broader financial services industry may lead to marketwide liquidity shortages, impair theability of companies to access nearterm working capital needs, and create additional market and economic uncertainty. There can be no assurance that future creditand financial market instability and a deterioration in confidence in economic conditions will not occur. Our general business strategy may be adversely affected byany such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions. If the current equityand credit markets deteriorate, or if adverse developments are experienced by financial institutions, it may cause shortterm liquidity risk and also make anynecessary debt or equity financing more difficult, more costly, more onerous with respect to financial and operating covenants and more dilutive. Failure to secureany necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stockprice and could require us to alter our operating plans. In addition, there is a risk that one or more of our service providers, financial institutions, manufacturers,suppliers and other partners may be adversely affected by the foregoing risks, which could directly affect our ability to attain our operating goals on schedule andon budget.Our business may be adversely affected by the impact of any renewed outbreak of the COVID19 pandemic.Public health epidemics or outbreaks could adversely impact our business. In late 2019, a novel strain of COVID19, also known as coronavirus, wasreported in Wuhan, China. While initially the outbreak was largely concentrated in China, it spread worldwide. Many countries around the world, including in Israel,implemented significant governmental measures to control the spread of the virus, including temporary closure of businesses, severe restrictions on travel and themovement of people, and other material limitations on the conduct of business. These measures haven historically resulted in work stoppages and other disruptions.If there is a resurgence of the COVID19 pandemic, this could adversely impact our operations, including among others, our sales and marketing efforts and ourability to raise additional funds, and accordingly, the impact of COVID19 could have an adverse impact on our business and our financial results.32Risks Related to Our Operations in RussiaRussia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.In addition to our Israel operations, we have operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia and we engage two software developers through a third party who are based in Ukraine. On February 24,2022, Russia invaded Ukraine. The outbreak of hostilities between the two countries could result in more widespread conflict and could have a severe adverse effecton the region.Following Russia’s actions, various countries, including the U.S., Canada, the United Kingdom, Germany and France, as well as the European Union,issued broadranging economic sanctions against Russia. Such sanctions included, among other things, a prohibition on doing business with certain Russiancompanies, officials and oligarchs; a commitment by certain countries and the European Union to remove selected Russian banks from the Society for WorldwideInterbank Financial Telecommunications (SWIFT) electronic banking network that connects banks globally; and restrictive measures to prevent the Russian CentralBank from undermining the impact of the sanctions. In response to sanctions, the Russian Central Bank raised its interest rates and banned sales of local securitiesby foreigners. Russia may take additional counter measures or retaliatory actions in the future. While diplomatic efforts have been ongoing, the conflict betweenRussia and Ukraine is currently unpredictable and has the potential to result in broadened military actions. The duration of ongoing hostilities and such sanctionsand related events cannot be predicted. Uncertainty as to future relations between Russia and the U.S. and other countries in the west, or between Russia and othereastern European countries, may have a negative impact on our operations.Such international sanctions and potential responses to such sanctions, including those that may limit or restrict transfer funds into Russia, may in thefuture significantly affect our ability to conduct our activities in Russia including paying our personnel. To date, the conflict has had minimal impact on operations .Nevertheless, we have no way to predict the progress or outcome of the situation in Ukraine, as the conflict and governmental reactions are rapidly developing andbeyond our control. Prolonged unrest, intensified military activities or more extensive sanctions impacting the region could have a material adverse effect on ouroperations, results of operations, financial condition, liquidity and business outlook.Political, military conditions or other risks in Russia could adversely affect our business.Russia is a federative state consisting of 85 constituent entities, or “subjects.” The Russian Constitution reserves some governmental powers for theRussian Government, some for the subjects and some for areas of joint competence. In addition, eight “federal districts” (“federal’nye okruga”), which are overseenby a plenipotentiary representative of the President, supplement the country’s federal system. The delineation of authority among and within the subjects is, inmany instances, unclear and contested, particularly with respect to the division of tax revenues and authority over regulatory matters. For these reasons, theRussian political system is vulnerable to tension and conflict between federal, subject and local authorities. This tension creates uncertainties in the operatingenvironment in Russia, which may prevent us from carrying out our strategy effectively. The risks associated with these events or potential events could materiallyand adversely affect the investment environment and overall consumer and entrepreneurial confidence in Russia, and our business, prospects, financial condition,hiring ability, and results of operations could be materially and adversely affected.Furthermore, high levels of corruption reportedly exist in Russia, including the bribing of officials for the purpose of initiating investigations bygovernment agencies. Corruption and other illegal activities could disrupt our ability to conduct our business effectively, and claims that the we are involved in suchcorruption or illegal activities could generate negative publicity, of which could harm our development, financial condition, results of operations or prospects.Economic and other risks in Russia could adversely affect our business.Operating a business in an emerging market such as Russia can involve a greater degree of risk than operating a business in more developed markets.Over the last two decades, the Russian economy has experienced or continues to experience at various times:●significant volatility in its GDP;33●the impact of international sanctions;●high levels of inflation;●increases in, or high, interest rates;●sudden price declines in oil and other natural resources;●instability in the local currency market;●budget deficits;●the continued operation of lossmaking enterprises due to the lack of effective bankruptcy proceedings;●capital flight; and●significant increases in poverty rates, unemployment and underemployment.The Russian economy has been subject to abrupt downturns in the past, including as a result of the invasion of Ukraine, global financial crisis, and, as anemerging market, remains particularly vulnerable to further external shocks and any future fluctuations in the global markets. Any further deterioration in the generaleconomic conditions in Russia (whether or not as a result of the events mentioned above) could have a material adverse effect on the Russian economy and mayresult in hiring and operational difficulties, as well as potential flight of human capital, which could have a material adverse effect on our business, productdevelopment and results of operations.Legal risks in Russia could materially adversely affect our operations and Russian tax legislation is subject to frequent change.Among the risks of the Russian legal system are: inconsistencies among laws, presidential decrees, and government and ministerial orders and resolutions;conflicting local, regional and federal laws and regulations; the untested nature of the independence of the judiciary and its sensitivity to economic or politicalinfluences; substantial gaps in the regulatory structure due to the delay or absence of implementing legislation; a high degree of discretion on the part ofgovernmental authorities; reported corruption within governmental entities and other governmental authorities; the relative inexperience of judges and courts ininterpreting laws applicable to complex transactions; and the unpredictability of enforcement of foreign judgments and foreign arbitral awards. Many Russian lawsand regulations are construed in a way that provides for significant administrative discretion in application and enforcement. Unlawful, selective or arbitrary actionsof the Russian Government have reportedly included the denial or withdrawal of licenses, sudden and unexpected tax audits, criminal prosecutions, and civil claims.Any of the above events may have a material adverse effect on our product development and results of operations.Despite certain improvements in the taxation system made by the Russian Government over the past decade, Russian tax legislation is still subject tofrequent change, varying interpretations, and inconsistent and selective enforcement. There are currently no clear rules for distinguishing between lawful taxoptimization and tax evasion. In addition, Russian tax laws do not contain detailed rules on the taxation in Russia of foreign companies. As such, taxpayers oftenhave to resort to court proceedings to defend their position against the Russian tax authorities. However, in the absence of consistent court practice or bindingprecedents, there is inconsistency amongst court decisions. Further, the possibility exists that the Russian Federation would impose arbitrary or onerous taxes andpenalties in the future, which could have a material adverse effect on our product development and results of operations.34Risks Related to Our Operations In IsraelOur headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.Our headquarters and most of our operations are located in central Israel and our key employees, officers and directors are residents of Israel. Accordingly,political, economic and military conditions in Israel and the surrounding region may directly affect our business. Since the establishment of the State of Israel in1948, a number of armed conflicts have taken place between Israel and its Arab neighbors. Any hostilities involving Israel or the interruption or curtailment of tradewithin Israel or between Israel and its trading partners could adversely affect our operations and results of operations and could make it more difficult for us to raisecapital. During the winter of 2008, winter of 2012 and the summer of 2014, Israel was engaged in an armed conflict with Hamas, a militia group and political partyoperating in the Gaza Strip, and during the summer of 2006, Israel was engaged in an armed conflict with Hezbollah, a Lebanese Islamist Shiite militia group andpolitical party. Israel faces political tension with respect to its relationships with Turkey, Iran and certain Arab neighbor countries. In addition, recent conflictsinvolved missile strikes against civilian targets in various parts of Israel, and negatively affected business conditions in Israel. Recent political uprisings and socialunrest in various countries in the Middle East and North Africa are affecting the political stability of those countries. This instability may lead to deterioration of thepolitical relationships that exist between Israel and these countries, and have raised concerns regarding security in the region and the potential for armed conflict.Any armed conflicts, terrorist activities or political instability in the region could adversely affect business conditions and could harm our results of operations. Forexample, any major escalation in hostilities in the region could result in a portion of our employees and service providers being called up to perform military duty foran extended period of time. Parties with whom we do business have sometimes declined to travel to Israel during periods of heightened unrest or tension, forcing usto make alternative arrangements when necessary. In addition, the political and security situation in Israel may result in parties with whom we have agreementsinvolving performance in Israel claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions insuch agreements. Any future deterioration in the political and security situation in Israel will negatively impact our business.Our commercial insurance does not cover losses that may occur as a result of events associated with the security situation in the Middle East. Althoughthe Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that thisgovernment coverage will be maintained. Any losses or damages incurred by us could have a material adverse effect on our business. Any armed conflicts orpolitical instability in the region would likely negatively affect business conditions and could harm our results of operations.Further, in the past, the State of Israel and Israeli companies have been subjected to an economic boycott. Several countries still restrict business with theState of Israel and with Israeli companies. These restrictive laws and policies may have an adverse impact on our operating results, financial condition or theexpansion of our business.The legislative power of the State resides in the Knesset, a unicameral parliament that consists of 120 members elected by nationwide voting under asystem of proportional representation. Israel’s most recent general elections were held on April 9, 2019, September 17, 2019, March 2, 2020 and November 1, 2022.The uncertainty surrounding the results of the recent elections may continue. Actual or perceived political instability in Israel or any negative changes in thepolitical environment, may individually or in the aggregate adversely affect the Israeli economy and, in turn, our business, financial condition, results of operationsand prospects.Some of our employees are obligated to perform military reserve duty in Israel.Many Israeli citizens, including our employees are obligated to perform one month, and in some cases more, of annual military reserve duty until they reachthe age of 40 (or older, for reservists with certain occupations) and, in the event of a military conflict, may be called to active duty. In response to increases interrorist activity, there have been periods of significant callups of military reservists. It is possible that there will be military reserve duty callups in the future. Ouroperations could be disrupted by such callups. Such disruption could materially adversely affect our business, results of operations and financial condition.35It may be difficult to enforce a nonIsraeli judgment against the Company or its officers and directors.The operating subsidiary of ours is incorporated in Israel. All of our executive officers and directors are not residents of the United States, and asubstantial portion of our assets and the assets of our executive officers and directors are located outside the United States. Therefore, a judgment obtained againstus, or any of these persons, including a judgment based on the civil liability provisions of the U.S. federal securities laws, may not be collectible in the United Statesand may not necessarily be enforced by an Israeli court. It also may be difficult to affect service of process on these persons in the United States or to assert U.S.securities law claims in original actions instituted in Israel. Additionally, it may be difficult for an investor, or any other person or entity, to initiate an action withrespect to U.S. securities laws in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of U.S. securities laws reasoning that Israel is not themost appropriate forum in which to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law isapplicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law often involves the testimony of expert witnesses, which can be a timeconsuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel that addresses the mattersdescribed above. As a result of the difficulty associated with enforcing a judgment against us in Israel, it may be impossible to collect any damages awarded byeither a U.S. or foreign court.Our international operations could expose us to additional risks, including exchange rate fluctuations, legal regulations and political or economicinstability that could harm our business and operating results.Our international operations expose us to the following risks which may have a material adverse effect on our business and operating results:●devaluations and fluctuations in currency exchange rates including fluctuations between the U.S. dollar and the NIS and the Russian Ruble;●costs of compliance with local laws, including labor laws and intellectual property laws;●compliance with domestic and foreign government policies, including compliance with Israeli securities laws and TASE;●changes in trade regulations and procedures affecting approval, production, pricing, marketing, reimbursement for and access to, our products;●compliance with applicable foreign anticorruption laws, antitrust/competition laws, antiBoycott Israel law and antimoney laundering laws; and●economic and geopolitical developments and conditions, including ongoing instability in global economies and financial markets, international hostilities,acts of terrorism and governmental reactions, inflation, outbreaks of contagious disease (e.g., the COVID19 pandemic) and military and political alliances.Risks Related to Our Common StockA more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.Although our common stock is listed on the Nasdaq Capital Market, it has only been traded on the Nasdaq Capital Market since July 25, 2016. There hasbeen relatively limited trading volume in the market for our common stock, and a more active, liquid public trading market may not develop or may not be sustained.Limited liquidity in the trading market for our common stock may adversely affect a stockholder’s ability to sell its shares of common stock at the time it wishes tosell them or at a price that it considers acceptable. If a more active, liquid public trading market does not develop, we may be limited in our ability to raise capital byselling shares of common stock and our ability to acquire other companies or assets by using shares of our common stock as consideration. In addition, if there is athin trading market or “float” for our stock, the market price for our common stock may fluctuate significantly more than the stock market as a whole. Without a largefloat, our common stock would be less liquid than the stock of companies with broader public ownership and, as a result, the trading prices of our common stockmay be more volatile and it would be harder for you to liquidate any investment in our common stock. Furthermore, the stock market is subject to significant priceand volume fluctuations, and the price of our common stock could fluctuate widely in response to several factors, including:●our quarterly or annual operating results;●changes in our earnings estimates;●investment recommendations by securities analysts following our business or our industry;●additions or departures of key personnel;●changes in the business, earnings estimates or market perceptions of our competitors;36●our failure to achieve operating results consistent with securities analysts’ projections;●changes in industry, general market or economic conditions;●announcements of legislative or regulatory changes; and●natural disasters (including for example, the recent fire in the Orgad warehouse) and political and economic instability, including wars, terrorism, politicalunrest, results of certain elections and votes, emergence of a pandemic, or other widespread health emergencies (or concerns over the possibility of suchan emergency, including for example, the recent the COVID19 pandemic), boycotts, adoption or expansion of government trade restrictions, and otherbusiness restrictions.The stock market has experienced extreme price and volume fluctuations in recent years that have significantly affected the quoted prices of the securitiesof many companies. The changes often appear to occur without regard to specific operating performance. The price of our common stock could fluctuate basedupon factors that have little or nothing to do with us and these fluctuations could materially reduce our stock price.Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.If any of our shareholders were to decide to sell large amounts of stock over a short period of time (presuming such sales were permitted) such sales couldcause the market price of our common stock to drop significantly, even if our business is doing well. Further, the market price of our common stock could decline as aresult of the perception that such sales could occur. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equitysecurities in the future at a time and price that we deem appropriate.Our securities are traded on more than one market which may result in price variations.Our securities have been trading on the Nasdaq Capital Market since July 2016 and on TASE since September 2005. Trading in our securities on suchexchanges occurs in different currencies (U.S. dollars on the Nasdaq Capital Market and NIS on the TASE), and at different times (due to different time zones,trading days and public holidays in the United States and Israel). The trading prices of our securities on the two exchanges may differ due to the foregoing andother factors. Any decrease in the price of our shares on the TASE could cause a decrease in the trading price of our shares on the Nasdaq Capital Market and viceversa.We are a smaller reporting company and, as a result of the reduced disclosure and governance requirements applicable to such companies, ourcommon stock may be less attractive to investors.We are a smaller reporting company, (i.e. a company with “public float” held by nonaffiliates with a market value of less than $250 million) and we areeligible to take advantage of certain exemptions from various reporting requirements applicable to other public companies. We have elected to adopt these reduceddisclosure requirements. We cannot predict if investors will find our common stock less attractive as a result of our taking advantage of these exemptions. If someinvestors find our common stock less attractive as a result of our choices, there may be a less active trading market for our common stock and our stock price may bemore volatile.We do not expect to pay any cash dividends in the foreseeable future.We have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our board of directors deems relevant. Investors should not purchase our common stock expecting to receive cash dividends. Because we do notpay dividends, and there may be limited trading, investors may not have any manner to liquidate or receive any payment on their investment. Therefore, our failureto pay dividends may cause investors to not see any return on investment even if we are successful in our business operations. In addition, because we do not paydividends we may have trouble raising additional funds, which could affect our ability to expand our business operations.37UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2022☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ________ to _________Commission file number 00137370MY SIZE, INC.(Exact name of registrant as specified in charter)Delaware510394637(State or jurisdiction ofIncorporation or organization)I.R.S EmployerIdentification No.4 Hayarden, POB 1026, Airport City, Israel7010000(Address of principal executive offices)(Zip code)+9723 6009030(Registrant’s telephone number, including area code)Securities registered pursuant to Section 12(b) of the Act:Title of each classTrading Symbol(s)Name of Each Exchange on Which RegisteredCommon Stock, par value $0.001 per shareMYSZThe Nasdaq Capital MarketSecurities registered pursuant to Section 12(g) of the Act: None.Indicate by check mark whether the registrant is a wellknown seasoned issuer as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes☒ No ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer, a smaller reporting company, or an emerginggrowth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 of theExchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☒Smaller Reporting Company☒Emerging Growth Company☐If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revisedfinancial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b2 of the Exchange Act) Yes ☐No☒Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control overfinancial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflectthe correction of an error to previously issued financial statements. ☐Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by anyof the registrant’s executive officers during the relevant recovery period pursuant to §240.10D1(b). ☐The aggregate market value of voting and nonvoting common equity held by nonaffiliates of the registrant as of June 30, 2022, the last business day of theregistrant’s most recently completed second fiscal quarter, was approximately $25,551,906.Number of shares of common stock outstanding as of March 31, 2023 was 2,446,780.Documents Incorporated by Reference: None.Table of ContentsPart IItem 1.Business2Item 1A.Risk Factors18Item 1B.Unresolved Staff Comments41Item 2.Properties41Item 3.Legal Proceedings41Item 4.Mine Safety Disclosures42Part IIItem 5.Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities43Item 6.Selected Financial Data43Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations43Item 7A.Quantitative and Qualitative Disclosures about Market Risk50Item 8.Financial Statements and Supplementary DataF1Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure51Item 9A.Controls and Procedures51Item 9B.Other Information51Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.51Part IIIItem 10.Directors, Executive Officers and Corporate Governance52Item 11.Executive Compensation57Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters60Item 13.Certain Relationships and Related Transactions, and Director Independence62Item 14.Principal Accounting Fees and Services65Part IVItem 15.Exhibits, Financial Statement Schedules66Signatures69iPART IIn this Annual Report on Form 10K, unless the context requires otherwise, the terms “we,” “our,” “us,” or “the Company” refer to MySize, Inc., a Delawarecorporation, and its subsidiaries, including MySize Israel 2014 Ltd. My Size LLC, Orgad International Marketing Ltd., or Orgad, and Naiz Bespoke Technologies, S.L,or Naiz, taken as a whole.References to “U.S. dollars” and “$” are to currency of the United States of America, and references to “NIS” are to New Israeli Shekels. Unless otherwiseindicated, U.S. dollar translations of NIS amounts presented in this Annual Report on Form 10K for the year ended on December 31, 2022 are translated using therate of NIS 3.358 to $1.00.All information in this Annual Report on Form 10K relating to shares or price per share reflects the 1for25 reverse stock split effected by us on December8, 2022.CAUTIONARY NOTE ON FORWARDLOOKING STATEMENTSThis Annual Report on Form 10K contains certain forwardlooking statements within the meaning of Section 27A of the Securities Act and Section 21E ofthe Exchange Act. Any statements in Annual Report on Form 10K about our expectations, beliefs, plans, objectives, assumptions or future events or performanceare not historical facts and are forwardlooking statements. These statements are often, but not always, made through the use of words or phrases such as“believe,” “will,” “expect,” “anticipate,” “estimate,” “intend,” “plan” and “would.” For example, statements concerning financial condition, possible or assumedfuture results of operations, growth opportunities, industry ranking, plans and objectives of management, markets for our common stock and future managementand organizational structure are all forwardlooking statements. Forwardlooking statements are not guarantees of performance. They involve known and unknownrisks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to differ materially from any results, levels ofactivity, performance or achievements expressed or implied by any forwardlooking statement.Any forwardlooking statements are qualified in their entirety by reference to the risk factors discussed throughout this Annual Report on Form 10K. Someof the risks, uncertainties and assumptions that could cause actual results to differ materially from estimates or projections contained in the forwardlookingstatements include but are not limited to:●our history of losses and needs for additional capital to fund our operations and our inability to obtain additional capital on acceptable terms, or at all;●risks related to our ability to continue as a going concern;●the new and unproven nature of the measurement technology markets;●our ability to achieve customer adoption of our products;●our ability to realize the benefits of our acquisitions of Orgad and Naiz;●our dependence on assets we purchased from a related party;●our ability to enhance our brand and increase market awareness;●our ability to introduce new products and continually enhance our product offerings;●the success of our strategic relationships with third parties;●information technology system failures or breaches of our network security;●competition from competitors;●our reliance on key members of our management team;●current or future litigation;●current or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated liquidityrisk; and●the impact of the political and security situation in Israel on our business.1The foregoing list sets forth some, but not all, of the factors that could affect our ability to achieve results described in any forwardlooking statements.You should read this Annual Report on Form 10K and the documents that we reference herein and have filed as exhibits to the Annual Report on Form 10K,completely and with the understanding that our actual future results may be materially different from what we expect. You should assume that the informationappearing in this Annual Report on Form 10K is accurate as of the date hereof. Because the risk factors referred to in this Annual Report on Form 10K, could causeactual results or outcomes to differ materially from those expressed in any forwardlooking statements made by us or on our behalf, you should not place unduereliance on any forwardlooking statements.Further, any forwardlooking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forwardlookingstatement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. New factors emergefrom time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extentto which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements. We qualify all ofthe information presented in this Annual Report on Form 10K, and particularly our forwardlooking statements, by these cautionary statements.ITEM 1. BUSINESSOverviewWe are an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile phone or through MySizeID Widget: a simple questionnaire which uses a database collected over the years.MySizeID syncs the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and only presents itemsfor purchase that match their measurements to ensure a correct fit.We are positioning ourselves as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empower brand design teams, which are designed to increase endconsumer satisfaction, contributing to a sustainable world and reduce operation costs.Recent DevelopmentsOrgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,602 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.2The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz, a limitedliability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.3The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Warehouse FireOn January 2, 2023, Orgad experienced a fire at its warehouse in Israel. we are not aware of any casualties or injuries associated with the fire. We shiftedOrgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incident did not affectthe future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of this incident on the otherparties that were involved in the incident (lessor and others that leased properties near the warehouse).January 2023 FinancingOn January 10, 2023, we entered into a securities purchase agreement, or the RD Purchase Agreement, pursuant to which we agreed to sell and issue in theRD Offering an aggregate of 162,000 of our shares of common stock, or the RD Shares, and prefunded warrants, or the Prefunded Warrants, to purchase up to279,899 shares of common stock and, in a concurrent private placement, unregistered warrants to purchase up to 883,798 shares of common stock, or the RDWarrants, consisting of Series A warrants, or Series A Warrants, to purchase up to 441,899 shares of common stock and Series B warrants, or Series B Warrants, topurchase up to 441,899 shares of common stock, at an offering price of $3.055 per RD Share and associated Series A and Series B Warrants and an offering price of$3.054 per Prefunded Warrant and associated Series A and Series B Warrants.4In addition, we entered into a securities purchase agreement, or the PIPE Purchase Agreement, and together with the RD Purchase Agreement, thePurchase Agreements, pursuant to which we agreed to sell and issue in the PIPE Offering an aggregate of up to 540,098 unregistered Prefunded Warrants andunregistered warrants to purchase up to an aggregate of 1,080,196 shares of common stock, or the PIPE Warrants and together with the RD Warrants, the Warrants,consisting of Series A Warrants to purchase up to 540,098 shares of common stock and Series B Warrants to purchase up to 540,098 shares of common stock at anoffering price of $3.054 per Prefunded Warrant and associated Series A and Series B Warrants.The Prefunded Warrants are immediately exercisable at an exercise price of $0.001 per share and will not expire until exercised in full. The Warrants areimmediately exercisable upon issuance at an exercise price of $2.805 per share, subject to adjustment as set forth therein. The Series A Warrants have a term of fiveand onehalf years from the date of issuance and the Series B Warrants have a term of 28 months from the date of issuance. The Warrants may be exercised on acashless basis if there is no effective registration statement registering the shares underlying the warrants.In connection with the PIPE Purchase Agreement, we entered into a registration rights agreement, or the Registration Rights Agreement. Pursuant to theRegistration Rights Agreement, we are required to file a resale registration statement, or the Registration Statement, with the Securities and Exchange Commission, orthe SEC, to register for resale the shares issuable upon exercise of the unregistered Prefunded Warrants and the Series A and Series B Warrants, within 20 days ofthe signing date of the PIPE Purchase Agreement, or the Signing Date, and to have such Registration Statement declared effective within 60 days after the SigningDate in the event the Registration Statement is not reviewed by the SEC, or 90 days of the Signing Date in the event the Registration Statement is reviewed by theSEC. we will be obligated to pay certain liquidated damages if we fail to maintain the effectiveness of the Registration Statement.The Purchase Agreements and the Registration Rights Agreements also contain representations, warranties, indemnification and other provisionscustomary for transactions of this nature. In addition, subject to limited exceptions, the Purchase Agreements provide that for a period of one year following theclosing of the Offerings, we will not effect or enter into an agreement to effect a “variable rate transaction” as defined in the Purchase Agreements.Aggregate gross proceeds to the Company in respect of the Offerings was approximately $3.0 million, before deducting fees payable to the placement agentand other offering expenses payable by the Company.We also entered into a letter agreement, or the Engagement Agreement, with H.C. Wainwright & Co., LLC, or Wainwright, pursuant to which Wainwrightagreed to serve as the exclusive placement agent for the Company in connection with the Offerings. We paid Wainwright a cash placement fee equal to 7% of theaggregate gross proceeds raised in the Offerings, a management fee of 1% of the aggregate gross proceeds raised in the Offerings, a nonaccountable expenseallowance of $85,000 and clearing fees of $15,950. Wainwright also received placement agent warrants, or the Placement Agent Warrants, with substantially the sameterms as the Series A Warrants issued in the Offering in an amount equal to 7% of the aggregate number of Shares and Prefunded Warrants sold in the Offerings, or68,740 shares, at an exercise price of $3.8188 per share and a term expiring on January 10, 2028.Our SolutionOur cloudbased software platform provides highly accurate sizing and measurement with broad applications including the online fashion/apparel industry,logistics and courier services and home DIY. Currently, we are mainly focusing on the ecommerce fashion/apparel industry. This proprietary technology is driven byseveral patented algorithms which are able to calculate and record measurements in a variety of novel ways. Although specific functionality varies by product, webelieve that our core solutions address the need for highly accurate measurements in a variety of consumer friendly, every day uses.5We have developed three products, MySizeID for the fashion/apparel industry, BoxSize for the logistics and courier services market and SizeUp for thehome DIY market.●MySizeID enables shoppers to generate highly accurate measurements of their body to find proper fitting clothes and accessories, through the use ofour application on their mobile phone or through a simple questionnaire if the user decides not to download the application. MySizeID syncs the user’smeasurement data to a sizing chart and presents items for purchase that match their measurements to ensure a correct fit. MySizeID is available forlicense by retailers and accessable by consumers through a web page.●BoxSize enables customers to quickly and easily measure the size and volume of a parcel to accurately calculate shipping fees. It also offers shippingcompanies a variety of precise logistical data for more efficiently managing their supply chain, providing them with an accurate way to compare thephysical package with what is in the shipping manifest. BoxSize solution is available for license on both iOS and Android operating systems. BoxSizeis available on the Honeywell Marketplace and in August 2019 was approved for Honeywell’s Independent Software Vendor Program, and MySize wasgranted an independent software vendor (ISV) status on the Zebra Technologies and on DataLogic platforms.●SizeUp is a digital tape measure that allows users to measure length, width and height of a surface by moving their smartphone from point to point ofan object or space. SizeUp is a valueadd for DIY and home improvement retailers whose customers struggle to find the appropriately sized items (likeblinds or curtains) for their homes or projects due to inaccurate measurements. SizeUp also is designed to replace rulers, tape measures and othermeasuring tools used for DIY projects. SizeUp is available for consumer download on both iOS and Android operating systems.The following are some select key features of our solutions:●Integration Capability. We design our solutions to be flexible and configurable, allowing our clients to match their use of our algorithms and softwarewith their specific business processes and workflows. Our platform has been organically developed from a common code base, data structure and userinterface, providing a consistent user experience with powerful features that are easily adaptable to our clients’ needs. The MySizeID widget can beintegrated via oneline JavaScript code, or through RESTful API;●Intuitive user experience. Our intuitive, easytouse interface is based on current technology, multiple focus groups and automatically adapts to users’devices, including mobile platforms, thereby significantly increasing accessibility of our solutions;●Big Data Generation. While we supply to the user the information he/she requires, we gather certain vital information such as body measurement andpackage volume which can be used anonymously to help the retailer acquire predictive size information on stocking, operations and consumers thatmay be in between sizes. All the information is being gathered and stored on our servers where it can be used by retailers;●NonInvasive. In taking measurements using our solution, the smartphone camera is not utilized; instead, the measurements are captured by scanningthe smartphone over the consumer’s body or package, thus ensuring greater privacy.Our Growth StrategyWe aim to drive revenue primarily through penetration of the U.S. and Europe markets through a business to business to consumer (B2B2C) model in theverticals we are targeting. We are pursuing the following growth strategies:●Sign Additional Commercial Agreements with U.S. Retailers. During 2022, we expanded our commercial agreements with Levi’s, introducing NorthAmerica (U.S. and Canada) and Latin America regions, and by extension Levis’ native apps in EU and U.S. regions. We also entered into commercialagreements with Baby Fresh, Galax, Punto Blanco, GEF France, Diesel, Gaala, Superdry, Uniontex Industries, and Temperlay London among others. Weare in various stages of discussions with U.S. and foreign retailers for the deployment of our size recommendation and measurement technology with aview to entering into additional commercial agreements.6●Pursue a TwoPronged Commercialization Strategy. We are seeking to accelerate adoption of our solutions both through direct partnerships with ecommerce websites as well as through thirdparty platform websites. While we seek to directly enter into partnerships with companies maintaining ecommerce websites in the apparel, courier and DIY markets, we are also seeking to deploy our solutions on thirdparty platforms. Furthermore, with theexpansion of MySizeID through the release of our FirstLook Smart Mirror, which we are offering to brick and mortar stores to digitize the physicalstores, MySizeID is now available for online retailers utilizing the WooCoomerce, Shopify, Lightspeed, PrestaShop, Bitrix and Wix platforms and tobrick and mortar stores through GK Software POS solution while BoxSize is available on the Honeywell, Zebra Technologies and Datalogic.●Ongoing Investment in our Technology Platform. We continue to invest in building new software capabilities and extending our platform to bring thepower of accurate measurement to a broader range of applications. In particular, we seek not only to deliver size recommendations but to provide arobust, endtoend,artificial intelligence, or AIdriven platform that inspires consumer confidence and drives revenue growth by providing a superiorconsumer journey to both online and the brick and mortar stores.●Grow our database. As the usage of our measurement apps increases, our database of information including user behaviour and body measurementsgenerates valuable statistics. Such data can be used in the big data market for targeted advertising and for blind consumer data mining.●Identify and acquire synergistic businesses. In order to reduce our time to market and obtain complementary technologies, we are seeking to acquiretechnologies and businesses that are synergistic to our product offering. We recently completed an acquisition of Orgad which operates anomnichannel ecommerce platform and Naiz which provides SaaS technology solutions that solve size and fit issues for fashion ecommerce companies.●Partnerships and cooperation. In order to bring a wider solution for the retail market we are working to partner and integrate our technology withpartners that can increase our penetration and offering to the market.Market OpportunityThe global ecommerce market was $5.7 trillion in 2022, and the industry is expected to grow significantly in the coming years with no signs of slowingdown. Market specialists expect a compound annual growth rate of 27.43% from 2023 to 2028: according to data from Statista, the market is expected to reach $6.5trillion in 2023. While many sectors have found ways to increase revenue through ecommerce, ecommerce is still plagued by issues that cut into profits andnegatively impact the bottom line, such as customer returns, low consumer conversion, and associated restocking and shipping costs.Fashion/ApparelSince the onset of the COVID19 pandemic, an immense shift to digital was recorded, with 85.9% growth vs. prepandemic, according to Mastercard, andover 2 billion people worldwide who shop online, according to data from Oberlo. In November 2022, online shoppers broke records with $11.3 billion in spending onCyber Monday, driving 5.8% yearoveryear growth and making the day the biggest online shopping day of all time, according to Adobe Analytics.In 2021, fashion companies invested between 1.6% and 1.8% of their revenues in technology, according to Mckinsey, and are expected to double theinvestment by 2030 in order to keep up with digital natives and keep a competitive edge. Personalization in ecommerce and hybrid connectivity in brickandmortarretail are two key themes in the future of fashtech, according to Mckinsey’s 2022 State of Fashion Technology.7In the upcoming years, inflation is expected to impact the fashion world. As prices for goods increase, the challenge will be to inspire confidence inconsumers, via different smart digital tools. Brands will need to embrace creative digital tools and new channels to deepen customer relationships, and as Mckinseyforecasts in their State of Fashion report for 2023, they will need to execute on priorities such as sustainability and digital acceleration.The global fashion ecommerce market size is expected to grow from $744.4 billion in 2022 to $821.19 billion in 2023 at a compound annual growth rate of10.3%. In 2027, the market size is expected to grow to $1,222.32 billion, at a compound annual growth rate of 10.5%, according to BRC.Based on the importance which shoppers attribute to free shipping 50% of cart abandonment rate is due to extra shipping costs (Baymard Institute) theneed for fashion retailers to substantiate the optimal size for a customer, thus minimizing returns, has never been more crucial.As brands move online or significantly expand their online presence, we believe that developing innovative ways to connect with shoppers, both onlineand offline, has become a top priority.Shipping/ParcelAccording to Pitney Bowes, parcel revenue in 13 major countries around the world increased by 17% year over year from $420 billion in 2020 (reflecting 131billion parcels) to $491 billion in 2021 (reflecting 159 billion parcels). In the shipping/parcel industry, the dimensions of a package are critical. It is not merely themeasurement of a package or box – but rather the amount of space that the package or box will take up on a truck, airplane, or ship that will be transporting thepackage or box. Far too often, retailers use unfit packaging for their items, adding additional costs in materials and shipping fees.DIYSimilar to issues in the apparel and fashion market, big box, hardware, furniture, and DIY stores are plagued by returns due to incorrect fit andmeasurements. In an industry where precise measurement for projects is an absolute necessity, ecommerce has not grown as quickly as in other industries which webelieve is due to lack of consumer confidence in measurements at home and buying the correct item online.MySizeIDWe have released the MySizeID app for both iOS and Android which assists consumers to take highly accurate measurement of their own body in order tosize clothing in the best way possible without the need to try the clothes on before purchasing. MySizeID is designed to simplify the process of purchasing clothesonline and significantly reduce the rate of returns of poorfitting clothing. During 2022, MySizeID delivered over 23.5 million size recommendations.The application is the result of a research and development effort that combines:●anthropometric research – analyses of information pertaining to body measurements derived from a survey and the subsequent determination ofcorrelations between body parts;●body measurement algorithm research – an algorithm created by us to measure body parts; and●retailers size chart analyses – adopting a deep understanding of the size charts of retailers and the corresponding “body to garment size.”MySizeID allows consumers to create a secure, online profile of their personal measurements, which can then be utilized, with partnered online retailers, toensure that no matter the manufacturer or size chart, they will get the right fit. MySizeID operates based on the use of existing sensors in smart phones which enable,through a specific purpose application, the measurement of the body of any consumer by moving the smartphone along his or her body. The MySizeID applicationdoes not rely on user photographs or any additional hardware; all a user needs to do is scan their body with their smartphone and the application records theirmeasurements. The measurements can then be saved in our database in the cloud, enabling the user to search for clothes in various retailer websites withoutworrying about size. When a search is made, the retailer will connect to our cloud database, and then provide results based on the user’s measurements and otherparameters as he or she may have defined. This data is also saved for use when a customer enters a brickandmortar store to help serve the customer moreefficiently and to provide a better shopping experience.8Figure 1: Screenshot of MySizeID on smartphone and ecommerce websiteAs part of the integration process, we offer to the retailer five main components:●Mobile App. MySizeID comes in the form of a native app or website. Our native app can be used “as is” integrated into the retailer’s ecommercewebsite. The website users can build a body profile on the app and receive size recommendations for their profile both in the app and on a widgetintegrated with their website.9●Widget. When a consumer enters into the retailer’s website and looks for a specific item, he or she can click on the MySizeID widget which will informthe consumer of his or her recommended size, based on his or her actual measurements, as measured using the app and the item he or she is looking at.The widget has two features:AI Wizard mode allows the user to obtain size from the following parameters: gender, height, weight, belly shape, hip shape and bra size only. Thegender, height and weight questions are mandatory, while the body shape questions are optional and can be added to increase accuracy for specificapparel categories.Guest mode allows a user that does not wish to sign up to MySizeID as a user to obtain size recommendations as well.●Analytic Pixel. MySizeID analytic pixel allows retailer to track and analyze the widget usage. By adding the pixel to the retailer’s website, MySizeID BIteam can track engagement, order, and return data and provide retailers with tools to understand the advantages and benefits of MySizeID.Use your own device using MySizeID instore solution, shoppers can receive size recommendations for all store items, when shopping in the offlinestores. The shoppers can build their body profile using an easy to use 3 to 6 questions form, scan an item barcode and receive a size recommendationfor the scanned item based on their body profile and the item’s size chart.Another feature we added is the “inbetween sizing” feature. Our system can detect a user that has body dimensions that place the user inbetweenthe clothes sizes being offered and lets the user know that. A user can then choose between the two sizes according to the user’s fit preference(tight/loose/average).In addition, we have recently released our InstantApp feature which allows shoppers to generate their body measurements directly from our widget,without the need to download our mobile app. Using this technology, the shoppers can create their online profile of their personal measurements andcomplete a purchase faster and easier with minimum distractions.The body profile can be created while shoppers are viewing the page from their mobile phone, or by scanning a QR code on desktop that will open thesame page on the mobile phone.Screenshot of InstantApp widget on desktop on yumyumfashion website10●MyDash Platform. The MyDash platform is a smart backoffice system where the retailer enters all the information regarding its size charts thatcorrelates to every product in its ecommerce site, and where the retailer can access the information on its users. This system is customizable based onthe retailer’s needs. In 2021, we changed the MyDash system to increase the system’s accessibility, added walkthroughs, user guides and changed theuser interface and much more for the ease of use. We added the option to use our generic size charts, added the option upload size chart files insteadof typing the size charts values manually, added more widget styling options and changed the pairing mechanism between the size chart and theproducts to be more userfriendly.Figure 3: Screenshot of BackOffice System●FirstLook Smart Mirror. The Smart Mirror provides an interactive, mirrorlike touch display that allows brands to provide instore customers with anenhanced, online shopping experience, contactless checkout and obtains the recommended size. The MySizeIDFirstLook Smart Mirror can be placedin numerous locations throughout a retail store, including the fitting rooms (without cameras) or other hightraffic locations of the store. Highlightcapabilities of the FirstLook Smart Mirror include a 3D “Tryiton” interactive avatar experience, personalized and highly accurate sizerecommendations by MySizeID, thirdparty point of sale systems integration, styling recommendations and contactless “select and collect” at theregister feature.Illustration of MySizeID “first look” smart mirror in a fashion store11We are currently offering MySizeID technology to retailers through either a payperuse model or a monthly subscription model. In our payperusebusiness model, every time the consumer obtains a recommended size, the retailer is charged for the usage.BoxSizeBoxSize is a parcel measurement application that can provide realtime logistic data on package volumes and transportation, resulting in improvedoperational efficiency and reduced operating expenses. In addition, BoxSize allows customers to easily measure the size of their parcel with their smartphone,calculate shipping costs and arrange for a convenient pickup time for the package. BoxSize is available both on iOS and Android.In 2020 we released the “One Click” feature on BoxSize that enables the user to measure a package with just one swipe of the handheld device. Previously,measurements through BoxSize would require three separate swipes.Figure 4: Screenshot of BoxSizeOur BoxSize mobile measurement solution is available on the Honeywell Marketplace. In addition, BoxSize was approved for Honeywell’s Global VendorProgram, and is available to provide highly accurate mobile measurement solutions for thousands of Honeywell clients. We also developed a new dashboard for thecourier companies to have all the required data about each package in one place. It includes package dimensions, pictures, scan geo location and more. Thedashboard also let the courier use Webhooks, which allows him to get the information from his own system.12In 2020, we announced our partnership with Datalogic, a company focused on the automatic data capture and process automation markets. The partnershipmakes our BoxSize measurement solution available to thousands of Datalogic customers in the Transportation and Logistics vertical.Agreement with Delhivery Private Limited, IndiaWe entered into an agreement with Delhivery Private Limited, one of the largest courier pickup, delivery, and online shipping services in India. Delhivery’sreputation as a frontrunner in delivery and logistics tech makes its decision to select Boxsize a particularly strong testament to the value the solution provides.BoxSize provides Delhivery’s employees on the B2B side with critical information that will allow them to effortlessly optimize loading efficiency and add even morerealtime visibility to operations.SizeUpWe are working on additional consumer applications, including a DIY application. Our SizeUp application is a smart tape measure for the business toconsumer market which allows users to utilize their smartphone as a tape measure. The application provides measurements with an accuracy of within twocentimeters. Through the use of SizeUp, users will be able to visualize how an object or a piece of furniture will fit in an existing room in their home or office. It alsoadded Google Vision for image content analysis, object detection, and title suggestions.Currently the SizeUp app for Android and iOS is available for free for the first 30 days, after which a user will be required to register via email and pay aonetime fee of $1.99 to continue using the application. To date, revenues from downloads have been minimal.Research and DevelopmentOur research and development team are responsible for the research, algorithm, design, development, and testing of all aspects of our measurementplatform technology. We invest in these efforts to continuously improve, innovate, and add new features to our solutions.We incurred research and development expenses of approximately $1.7 million in 2022 and $4.25 million in 2021, relating to the development of itsapplications and technologies. The decrease from the corresponding period primarily resulted from share based payment in amount of $2,618,000 attributed to theshare issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021. We intend to continue to invest in our research anddevelopment capabilities to extend our platform and bring our measurement technology to a broader range of applications.13In 2022, the R&D department experienced significant success in their efforts to improve the performance of their size recommendation system. Through acombination of optimized algorithms and the incorporation of cuttingedge technologies, the team was able to achieve a threefold increase in the system’s speed.This breakthrough not only makes the system one of the fastest and most accurate on the market, but also reduced the operation costs, making it more costeffective for businesses to use. Additionally, the solution is now highly scalable, allowing it to easily adapt to the needs of businesses of any size. The R&D team isnow focused on further improving the system and exploring new applications for the technology.Sales and MarketingIn 2019, we launched a commercialization strategy that directs our sales efforts toward both sales to ecommerce players in specific vertical markets such asfashion/apparel and shipping/delivery as well as to ecommerce thirdparty platform providers. As of March 15, 2023, our products are being sold in the followingcountries: US, UK, France, Netherlands, Spain, Portugal Turkey, Germany, Israel and Italy, generating customer leads, building out a sales pipeline, and developingcustomer relationships.We believe an effective method to market our suite of products is for users to actively use and explore its capabilities. We encourage free trials of one ormore of our products in order to successfully convert those accounts to paid subscriptions.Proprietary RightsWe rely on a combination of patent, copyright, trademark and trade secret laws in the United States and other jurisdictions, as well as contractualprotections, to protect our proprietary technology.As of December 31, 2022, we owned 18 issued patents: six in Europe, four in the U.S., three in each of Russia and Japan and one in each of Canada andIsrael which expire between January 20, 2033 and August 18, 2036, and we have two additional patent applications in process. As of such date, we do not have anyregistered trademarks.We cannot provide any assurance that our proprietary rights with respect to our products will be viable or have value in the future since the validity,enforceability and type of protection of proprietary rights in softwarerelated industries are uncertain and still evolving.Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products or to obtain and use informationthat we regard as proprietary. Policing unauthorized use of our products is difficult, and while we are unable to determine the extent to which piracy of our softwareproducts exists, software piracy can be expected to be a persistent problem. In addition, the laws of some foreign countries do not protect proprietary rights to asgreat an extent as do the laws of the United States, and effective copyright, trademark, trade secret and patent protection may not be available in those jurisdictions.Our means of protecting our proprietary rights may not be adequate to protect us from the infringement or misappropriation of such rights by others.Further, in recent years, there has been significant litigation in the United States involving patents and other intellectual property rights, particularly in thesoftware and Internetrelated industries. We can become subject to intellectual property infringement claims as the number of our competitors grows and ourproducts and services overlap with competitive offerings. These claims, even if not meritorious, could be expensive to defend and could divert management’sattention from operating our business. If we become liable to third parties for infringing their intellectual property rights, we could be required to pay a substantialaward of damages and to develop noninfringing technology, obtain a license or cease selling the products that contain the infringing intellectual property. We maybe unable to develop noninfringing technology or obtain a license on commercially reasonable terms, if at all.14Government RegulationWe are subject to a number foreign and domestic laws and regulations that involve matters central to our business. These laws and regulations mayinvolve privacy, data protection, intellectual property, or other subjects. Many of the laws and regulations to which we are subject are still evolving and being testedin courts and could be interpreted in ways that could harm our business. In addition, the application and interpretation of these laws and regulations often areuncertain, particularly in the new and rapidly evolving industry in which we operate. Because global laws and regulations have continued to develop and evolverapidly, it is possible that we, our products, or our platform may not be, or may not have been, compliant with each such applicable law or regulation.In particular, we are subject to a variety of federal, state and international laws and regulations governing the processing of personal data. Many U.S. stateshave passed laws requiring notification to data subjects when there is a security breach of personally identifiable data. There are also a number of legislativeproposals pending before the U.S. Congress, various state legislative bodies and foreign governments concerning data protection. In addition, data protection lawsin Europe and other jurisdictions outside the United States can be more restrictive than those within the United States, and the interpretation and application ofthese laws are still uncertain and in flux.For example, the General Data Protection Regulation, or GDPR, which took effect on May 25, 2018, enhances data protection obligations for entities thatprocess personal data about individuals, including obligations to cooperate with European data protection authorities, implement security measures and keeprecords of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to the greater of €20 million or 4% of global annual revenue. Inaddition, the California Consumer Privacy Act of 2018, or CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and requiredeletion of their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used.The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further,failure to comply with the Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may exposeus to administrative fines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the currentenforcement measures and sanctions. Given the breadth and depth of changes in data protection obligations, meeting the requirements of GDPR and otherapplicable laws and regulations has required significant time and resources, including a review of our technology and systems currently in use against therequirements of GDPR and other applicable laws and regulations. We have taken various steps to prepare for complying with GDPR and other applicable laws andregulations however there can be no assurance that these steps are sufficient to assure compliance. Further, additional EU laws and regulations (and member states’implementations thereof) further govern the protection of individuals and of electronic communications. If our efforts to comply with GDPR or other applicable lawsand regulations are not successful, we may be subject to penalties and fines that would adversely impact our business and results of operations, and our ability touse personal data of individuals could be significantly impaired.CompetitionWe operate in a highly competitive industry that is characterized by constant change and innovation. Changes in the applications and the programinglanguages used to develop applications, devices, operating systems, and technology landscape result in evolving customer requirements. Our competitors includeTrue Fit, Fit analytics and 3DLook.The principal competitive factors in our market include the following:●High Accuracy Size Recommendations: the highest accuracy and the lowest margin of error by combining patented technology including AI and ML,size chart or spec data, and MySizeID property body data measurement;●Integration○Fast 1 week integration including size chart size chart review and product mapping○Easy 1 line of “all included” script implementation●Technical Advantages○Very small library that weighs ±50kb (minimum widget loading time on product page)○UltraFast loading and size recommendation presenting○Restful API option (API integration with any website or app)15●Optimizations○Adjustments of size charts based on performance○Widget usage analysis by FashTech and BI teams○Automatic pairing of size charts with products/collections●User Experience○Easy to use interface (1015 seconds to receive size recommendations)○Option to add/deduct questions to/from widget wizards○Users automatically receive size recommendations on all products after initial sign up●Product and platform features, architecture, reliability, privacy and security, performance, effectiveness, and supported environments;●Product extensibility and ability to integrate with other technology infrastructures;●Digital operations expertise;●Ease of use of products and platform capabilities;●Total cost of ownership;●Adherence to industry standards and certifications;●Strength of sales and marketing efforts;●Brand awareness and reputation; and●Focus on customer successWe believe we generally compete favorably with our competitors on the basis of these factors. We expect competition to increase as other established andemerging companies enter our markets, as customer requirements evolve, and as new products and technologies are introduced. We expect this to be particularlytrue as we offer a smartphonebased offering that does not need to utilize the smartphone’s camera, and our competitors may also seek to repurpose their existingofferings to provide similar solutions. Many of our competitors have substantially greater financial, technical, and other resources, greater name recognition, largersales and marketing budgets, broader distribution, and larger and more mature intellectual property portfolios.Human Capital ManagementAs of March 31, 2023, we had a total of 35 employees, of which 30 were fulltime employees, including 9 in sales and marketing, 12 in technology anddevelopment and 9 in administration and finance.None of our employees are represented by a collective bargaining agreement, nor have we experienced any work stoppage. We consider our relationshipwith our employees to be good. Our future success depends on our continuing ability to attract and retain highly qualified engineers, sales and marketing, accountmanagement, and senior management personnel.We also believe we have built a strong sales team focused on expanding into new markets through the acquisition of Naiz and our current team.We believe that our future success will depend, in part, on our continued ability to attract, hire and retain qualified personnel. In particular, we depend onthe skills, experience and performance of our senior management and research personnel. We compete for qualified personnel with other hitech companies, as wellas universities and nonprofit research institutions.16We provide competitive compensation and benefits programs to help meet the needs of our employees. In addition to salaries, these programs (which varyby country/region and employment classification) include incentive compensation plan, pension, and insurance benefits, paid time off, , among others. We also usetargeted equitybased grants with vesting conditions to facilitate retention of personnel, particularly for our key employees.The success of our business is fundamentally connected to the wellbeing of our people. Accordingly, we implemented an hybrid work policy in which theemployees can work from home twice a week.We consider our employees to be a key factor to our success and we are focused on attracting and retaining the best employees at all levels of ourbusiness. Inclusion and diversity is a strategic, business priority. We employ people based on relevant qualifications, demonstrated skills, performance and otherjobrelated factors. We do not tolerate unlawful discrimination related to employment, and strive to ensure that employment decisions related to recruitment,selection, evaluation, compensation, and development, among others, are not influenced by race, color, religion, gender, age, ethnic origin, nationality, sexualorientation, marital status, or disability. Continuous monitoring to ensure pay equity has been a focus in 2022. We have continued to improve gender balance in 2022with a focus on increasing the representation of women hired as new college graduates. We are committed to creating a trusting environment where all ideas arewelcomed and employees feel comfortable and empowered to draw on their unique experiences and backgrounds.We consider our relations with our employees to be good.Company InformationOur principal executive offices are located at HaYarden 4 St., POB 1026, Airport City, Israel 7010000, and our telephone number is +97236009030. Ourwebsite address is www.mysizeid.com. Any information contained on, or that can be accessed through, our website is not incorporated by reference into, nor is it inany way a part of, this Annual Report on Form 10K.We use our website (www.mysizeid.com) as a channel of distribution of Company information. The information we post through this channel may bedeemed material. Accordingly, investors should monitor our website, in addition to following our press releases, SEC filings and public conference calls andwebcasts. The contents of our website are not, however, a part of this Annual Report on Form 10K.Corporate HistoryWe were incorporated in the State of Delaware on September 20, 1999 under the name Topspin Medical, Inc. In December 2013, we changed our name toKnowledgetree Ventures Inc. Subsequently, in February 2014, we changed our name to MySize, Inc. In 2020, we created a subsidiary in the Russian Federation, MySize LLC.From inception through 2012, we were engaged in research and development of a medical magnetic resonance imaging, or MRI, technology forinterventional cardiology and in the development of MRI technology for use in the diagnosis and treatment of prostate cancer. In January 2012, we acquiredMetamorefix Ltd., or Metamorefix. Metamorefix was incorporated in 2007, and was engaged in the development of innovative solutions for the rehabilitation oftissues, particularly skin tissues. By the end of 2012, we ceased operations and in January 2013, we sold our entire ownership interest in Metamorefix.In September 2013, Ronen Luzon, our Chief Executive Officer, acquired control of the Company from Asher Shmuelevitch, according to which Mr. Luzonpurchased 70,238 shares of common stock from Mr. Shmuelevitch, which shares represented approximately 40% of the issued and outstanding capital stock of theCompany at such time, thus becoming a controlling shareholder of the Company. In connection with the acquisition, Mr. Luzon reached a settlement with our thencreditors pursuant to which the main creditor, Mr. Shmuelevitch, was paid a total sum of approximately $140,000 in consideration for a full and final waiver of any andall his claims that he may have relating to any monetary indebtedness of the Company to the creditors.17In February 2014, My Size Israel, our wholly owned subsidiary, entered into a Purchase Agreement, or the Purchase Agreement, with Shoshana Zigdon,who at the time was a beneficial owner of more than 20% of our outstanding shares, with respect to the acquisition by us of certain rights related to the collection ofdata for measurement purposes including rights in the venture, the method and a patent application that had been filed by the Seller (PCT/IL2013/050056), or theAssets. In consideration for the sale of the Assets, we agreed to pay to Ms. Zigdon, 18% of our operating profit, directly or indirectly connected with the Assetstogether with valueadded tax in accordance with the law for a period of seven years from the end of the development period of the aforementioned venture. Inaddition to the foregoing, the Purchase Agreement provided that all developments, improvements, knowledge and knowhow developed and/or accumulated by usafter the execution of the Purchase Agreement will be owned by us. Further, Ms. Zigdon agreed not to compete, directly or indirectly, with us in any matter relatingto the Assets for a period of seven years from the end of the development period of the venture.On May 26, 2021, we, My Size Israel, and Ms. Zigdon entered into an Amendment to Purchase Agreement, or the Amendment, which made certainamendments to the Purchase Agreement. Pursuant to the Amendment, Ms. Zigdon agreed to irrevocably waive (i) the right to repurchase certain assets related tothe collection of data for measurement purposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which our business issubstantially dependent, or the Assets, and (ii) all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My SizeIsrael under the Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation, reward orany rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights, or the Waiver. Inconsideration of the Waiver, we issued 100,000 shares of common stock to Ms. Zigdon.In September 2005, we commenced trading on the Tel Aviv Stock Exchange, or TASE. Between 2007 and 2012 we reported as a public company with theSEC. In August 2012, we suspended our reporting obligations. In mid2015 we resumed reporting as a public company. On July 25, 2016, our common stock beganpublicly trading on the Nasdaq Capital Market under the symbol “MYSZ”.ITEM 1A. RISK FACTORSAn investment in our common stock involves a high degree of risk. You should carefully consider the following risk factors and the other information inthis Annual Report on Form 10K before investing in our common stock. Our business and results of operations could be seriously harmed by any of the followingrisks. The risks set out below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterialalso may materially adversely affect our business, financial condition and/or operating results. If any of the following events occur, our business, financial conditionand results of operations could be materially adversely affected. In such case, the value and trading price of our common stock could decline, and you may lose allor part of your investment.Summary Risk FactorsThe principal factors and uncertainties that make investing in our ordinary shares risky, include, among others:Risks Related to Our Financial Position and Capital Requirements●We have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.●Our limited operating history makes it difficult to evaluate our business and prospects.●We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive and maycause the market price of our common stock to decline.●The report of our independent registered public accounting firm contains an explanatory paragraph regarding substantial doubt about our ability tocontinue as a going concern.Risks Related to Our Company and Our Business●The market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and online thirdparty resellers adopting our flagship product, MySizeID.18●Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broader marketacceptance of our products.●We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which may makeit difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.●We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increase ourcapital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.●If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations and financialcondition may be adversely affected.●If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operations andfinancial condition could be adversely affected.●The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile device applications andcustom development services.●Our growth depends, in part, on the success of our strategic relationships with third parties.●Changes in economic conditions could materially affect our business, financial condition and results of operations.●We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.●We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significant interruptionin our network or hosting and cloud services could adversely impact our operations and harm our business.●Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.●We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.●A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.●Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, data protectionand information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive and confidentialinformation. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm our business,results of operations and financial condition.●We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect our business.●We may face intense competition and expect competition to increase in the future, which could limit us in developing a customer base and generatingrevenue.●Our business operations and future development could be significantly disrupted if we lose key members of our management team.19●If we are able to expand our operations, we may be unable to successfully manage our future growth.Risks Related to Our Operations in Israel and Russia●Our headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.●Russia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.Risks Related to Our Common Stock●A more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.●Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions and adversedevelopments with respect to financial institutions and associated liquidity risk;●Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.●Our securities are traded on more than one market which may result in price variations.●We are a former “shell company” and as such are subject to certain limitations not generally applicable to other public companies.Risks Related to Our Financial Position and Capital RequirementsWe have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.We realized a net loss of approximately $8.3 million and $10.5 million for the years ended December 31, 2022 and 2021 and had an accumulated deficit of$53.5 million as at December 31, 2022. Because of the numerous risks and uncertainties associated with the development and commercialization of our products andbusiness, we are unable to predict the extent of any future losses or when we will become profitable, if at all. Expected future operating losses will have an adverseeffect on our cash resources, shareholders’ equity and working capital. Our failure to become and remain profitable could depress the value of our stock and impairour ability to raise capital, expand our business, maintain our development efforts, or continue our operations. A decline in our value could also cause you to lose allor part of your investment in us.Our limited operating history makes it difficult to evaluate our business and prospects.We have only been developing our measurement technology since 2014. Since then, our operating history has been primarily limited to research anddevelopment, pilot studies, raising capital, and more recently acquisitions and sales and marketing efforts. Therefore, it may be difficult to evaluate our business andprospects. We have not yet demonstrated an ability to commercialize our products. Consequently, any predictions about our future performance may not beaccurate, and you may not be able to fully assess our ability to complete development and/or commercialize our products, and any future products.We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive andmay cause the market price of our common stock to decline.Based on our projected cash flows and the cash balances as of the date of this Annual Report on Form 10K, our existing cash is insufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. In order to meet ourbusiness objectives in the future, we will need to raise additional capital, which may not be available on reasonable terms or at all. Additional capital would be usedto accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;20●respond to competitive pressure;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, and a number of otherfactors, many of which are outside our control, and on our financial performance. Accordingly, we cannot assure you that we will be able to successfully raiseadditional capital at all or on terms that are acceptable to us. If we cannot raise additional capital when needed, it may have a material adverse effect on our business,results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.Management has concluded that there is substantial doubt about our ability to continue as a going concern which could prevent us from obtainingnew financing on reasonable terms or at all.We have incurred significant losses and negative cash flows from operations and have an accumulated deficit that raises substantial doubt about its abilityto continue as a going concern. Our audited consolidated financial statements for the year ended December 31, 2022 were prepared under the assumption that wewould continue our operations as a going concern. Our independent registered public accounting firm has included a “going concern” explanatory paragraph in itsreport on our financial statements for the year ended December 31, 2022. If we are unable to improve our liquidity position, by, among other things, raising capitalthrough public or private offerings or reducing our expenses, we may exhaust our cash resources and will be unable to continue our operations. If we cannotcontinue as a viable entity, our shareholders would likely lose most or all of their investment in us.Risks Related to Our Company and Our BusinessThe market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and onlinethirdparty resellers adopting our flagship product, MySizeID.The market for our measurement technology is relatively new and unproven and is subject to a number of risks and uncertainties. We believe that ourfuture success will depend in large part on market adoption of our flagship product, MySizeID, by U.S. retailers and online thirdparty resellers. In order to grow ourbusiness, we intend to focus on educating retailers and resellers and other potential customers about the benefits of our measurement technology, expanding thefunctionality of our products and bringing new products to market to increase market acceptance and use of our technology. Our ability to develop and expand themarket that our products address depends upon a number of factors, including the cost savings, performance and perceived value associated with such products.The market for our products could fail to develop or there could be a reduction in interest or demand for our products as a result of a lack of consumer acceptance,technological challenges, competing products and services, weakening economic conditions and other causes. We may never successfully commercialize ourproducts and if our products fail to achieve market acceptance, this would have a material adverse effect on our business, results of operations and financialcondition.21Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broadermarket acceptance of our products.Our ability to achieve customer adoption, especially among U.S. retailers will depend, in part, on our ability to effectively organize, focus and train our salesand marketing personnel. We have limited experience selling to U.S. retailers and only recently established a U.S. sales force. We believe that there is significantcompetition for experienced sales professionals with the skills and industry knowledge that we require. Our ability to achieve significant revenue growth in thefuture will depend, in part, on our ability to recruit, train and retain a sufficient number of experienced sales professionals, particularly those with experience sellingto U.S. retailers. In addition, even if we are successful in hiring qualified sales personnel, new hires require significant training and experience before they achievefull productivity, particularly for sales efforts targeted at U.S. retailers and new markets. Because we only recently started sales efforts, we cannot predict whether, orto what extent, our sales efforts will be successful.We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which maymake it difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.In this market segment, the decision to adopt our products may require the approval of multiple technical and business decision makers, including security,compliance, procurement, operations and IT. In addition, while U.S. retailers may be willing to deploy our products on a limited basis, before they will commit todeploying our products at scale, they often require extensive education about our products and significant customer support time, engage in protracted pricingnegotiations and seek to secure readily available development resources. As a result, it is difficult to predict when we will obtain new customers and begingenerating revenue from these customers. As part of our sales cycle, we may incur significant expenses before executing a definitive agreement with a prospectivecustomer and before we are able to generate any revenue from such agreement. We have no assurance that the substantial time and money spent on our salesefforts will generate significant revenue. If conditions in the marketplace generally or with a specific prospective customer change negatively, it is possible that nodefinitive agreement will be executed, and we will be unable to recover any of these expenses. If we are not successful in targeting, supporting and streamlining oursales processes and if revenue expected to be generated from a prospective customer is not realized in the time period expected or not realized at all, our ability togrow our business, and our operating results and financial condition may be adversely affected. If our sales cycles lengthen, our future revenue could be lower thanexpected, which would have an adverse impact on our operating results and could cause our stock price to decline.22We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increaseour capital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.In order to reduce time to market and obtain complementary technologies, we are seeking to acquire technologies and businesses that are synergistic to ourproduct offering. For example, we recently acquired Orgad which operates an omnichannel ecommerce platform and Naiz which provides SaaS technology solutionsthat solve size and fit issues for fashion ecommerce companies. We evaluate from time to time various acquisitions and collaborations, including licensing oracquiring complementary technologies, intellectual property rights, or businesses. The process for acquiring a company may take from several months up to a yearand costs can vary greatly. We may also compete with others to acquire companies, and such competition may result in decreased availability of, or an increase inprice for, suitable acquisition candidates. In addition, we may not be able to consummate acquisitions or investments that we have identified as crucial to theimplementation of our strategy for other commercial or economic reasons. As a result, it may be more difficult for us to identify suitable acquisition or investmenttargets or to consummate acquisitions or investments on acceptable terms or at all. If we are not able to execute on any acquisition, we may not be able to achieve afuture growth strategy and may lose market share.In addition, the acquisition of Orgad, Naiz and any potential future acquisition, joint venture or collaboration may entail numerous potential risks, including:●increased operating expenses and cash requirements;●the assumption of additional indebtedness or contingent liabilities;●assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel;●the diversion of our management’s attention from our existing programs and initiatives in pursuing such a strategic merger or acquisition;●retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships;●risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing technologies; and●our inability to generate revenue from acquired technologies or products sufficient to meet our objectives in undertaking the acquisition or even to offsetthe associated acquisition and maintenance costs.All of the foregoing risks may be magnified as the cost, size or complexity of an acquisition or acquired company increases, or where the acquiredcompany’s products, market or business are materially different from ours, or where more than one integration is occurring simultaneously or within a concentratedperiod of time. We may not be able to obtain the necessary regulatory approvals, including those of antitrust authorities and foreign investment authorities, incountries where we seek to consummate acquisitions or make investments. For those and other reasons, we may ultimately fail to consummate an acquisition, even ifwe announce the intended acquisition.In addition, we may require significant financing to complete an acquisition or investment, whether through bank loans, raising of equity or debt orotherwise. We cannot assure you that such financing options will be available to us on reasonable terms, or at all. If we are not able to obtain such necessaryfinancing, it could have an impact on our ability to consummate a substantial acquisition or investment and execute a future growth strategy. Alternatively, we mayissue a significant number of shares as consideration for an acquisition, which would have a dilutive effect on our existing shareholders. For example, in partialconsideration for the acquisition of Orgad, we agreed to issue up to 111,602 shares of our common stock and in the Naiz acquisition we issued 240,000 shares of ourcommon stock. Furthermore, if we undertake acquisitions, we may incur large onetime expenses and acquire intangible assets that could result in significant futureamortization expense.23If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations andfinancial condition may be adversely affected.We believe that enhancing the “MySize” brand identity and increasing market awareness of our company and products, particularly among U.S. retailers, iscritical to achieving widespread acceptance of our products. Our ability to successfully develop new retailers may be adversely affected by a lack of awareness oracceptance of our brand. To the extent that we are unable to foster name recognition and affinity for our brand, our growth may be significantly delayed or impaired.The successful promotion of our brand will depend largely on our continued marketing efforts, market adoption of our products, and our ability to successfullydifferentiate our products from competing products and services. Our brand promotion may not be successful or result in revenue generation. Any incident thaterodes consumer affinity for our brand could significantly reduce our brand value and damage our business. If consumers perceive or experience a reduction inquality, or in any way believe we fail to deliver a consistently positive experience, our brand value could suffer and our business may be adversely affected.In particular, adverse weather conditions can impact guest traffic at our retailers, and, in more severe cases, cause temporary retail closures, sometimes forprolonged periods. Our business is subject to seasonal fluctuations, with retail sales typically higher during certain months, such as December. Adverse weatherconditions during our most favorable months or periods may exacerbate the effect of adverse weather on consumer traffic and may cause fluctuations in ouroperating results from quartertoquarter within a fiscal year.If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operationsand financial condition could be adversely affected.Our ability to attract new customers depends in part on our ability to enhance and improve our existing products, increase adoption and usage of ourproducts and introduce new products. The success of any enhancements or new products depends on several factors, including timely completion, adequatequality testing, actual performance quality, and overall market acceptance. Enhancements and new products that we develop may not be introduced in a timely orcosteffective manner, may contain errors or defects, may have interoperability difficulties with our platform or other products or may not achieve the broad marketacceptance necessary to generate significant revenue. Furthermore, our ability to increase the usage of our products depends, in part, on the development of newuse cases for our products and may be outside of our control. If we are unable to successfully enhance our existing products to meet evolving customerrequirements, increase adoption and usage of our products, develop new products, then our business, results of operations and financial condition would beadversely affected.The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile Apps and customdevelopment services.We must continue to enhance and improve the performance, functionality and reliability of our products. The mobile technology industry is characterizedby rapid technological change, changes in user requirements and preferences, frequent new product and services introductions embodying new technologies andthe emergence of new industry standards and practices that could render our products obsolete. Our success will depend, in part, on our ability to both internallydevelop and enhance our existing products, develop new products that address the increasingly sophisticated and varied needs of our customers, and respond totechnological advances and emerging industry standards and practices on a costeffective and timely basis. The development of our technology involvessignificant technical and business risks. We may fail to use new technologies effectively or to adapt our proprietary technology and systems to customerrequirements or emerging industry standards. If we are unable to adapt to changing market conditions, customer requirements or emerging industry standards, wemay not be able to increase our revenue and expand our business.Changes in economic conditions could materially affect our business, financial condition and results of operations.Because our primary target customers include U.S. retailers , we, together with the rest of the fashion/apparel industry, will depend upon consumerdiscretionary spending. Increases in unemployment rates, reductions in home values, increases in home foreclosures, investment losses, personal bankruptcies andreductions in access to credit and reduced consumer confidence, may impact consumers’ ability and willingness to spend discretionary dollars. In addition, volatileeconomic conditions may repress consumer confidence and discretionary spending. Any of the foregoing may have a material adverse effect on our business,financial condition and results of operations.24Our growth depends, in part, on the success of our strategic relationships with third parties.To grow our business, we anticipate that we will continue to depend on relationships with third parties, such as our customers and thirdparty platforms.Identifying partners, and negotiating and documenting relationships with them, requires significant time and resources. If we are unsuccessful in establishing ormaintaining our relationships with third parties, our ability to compete in the marketplace or to grow our revenue could be impaired, and our results of operationsmay suffer. Even if we are successful, we cannot assure you that these relationships will result in increased customer usage of our products or increased revenue.We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.We currently utilize, and plan on continuing to utilize over the current fiscal year, thirdparty networking providers and distribution through companiesincluding, but not limited to, Apple and Google as well as Shopify, WooCommerce and, Datalogic, Honeywell and Zebra to distribute our technologies. If disruptionsor capacity constraints occur, we may have no means of replacing these services, on a timely basis or at all. This could cause a material adverse condition for ouroperations and financial earnings.We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significantinterruption in our network or hosting and cloud services could adversely impact our operations and harm our business.Our technology infrastructure is critical to the performance of our products and customer satisfaction. Our products run on a complex distributed system,or what is commonly known as cloud computing. We own, operate and maintain elements of this system, but significant elements of this system are operated bythirdparties that we do not control and which would require significant time to replace. We expect this dependence on thirdparties to continue. In particular, asignificant portion, if not almost all data storage, data processing and other computing services and systems is hosted by cloud computing providers. Anydisruptions, outages and other performance problems relating to such services, including infrastructure changes, human or software errors and capacity constraints,could adversely impact our business, financial condition or results of operations.Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.We update our products on a frequent basis. Despite efforts to test our updates, errors, failures or bugs may not be found in our products until after theyare deployed to a customer. We have discovered and expect we will continue to discover errors, failures and bugs in our products and anticipate that certain of theseerrors, failures and bugs will only be discovered and remediated after deployment. Real or perceived errors, failures or bugs in our platform could result in negativepublicity, government inquiries, loss of or delay in market acceptance of our products, loss of competitive position, or claims by customers for losses sustained bythem. In such an event, we may be required, or may choose, for customer relations or other reasons, to expend additional resources in order to help correct theproblem.We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.In connection with the operation of our business, we store, process and transmit data, including personal and payment information, about our employeesand customers, a portion of which is confidential and/or personally sensitive. Unauthorized disclosure or loss of sensitive or confidential data may occur through avariety of methods. These include, but are not limited to, systems failure, employee negligence, fraud or misappropriation, or unauthorized access to or through ourinformation systems, whether by our employees or third parties, including a cyberattack by computer programmers, hackers, members of organized crime and/orstatesponsored organizations, who may develop and deploy viruses, worms or other malicious software programs. Such disclosure, loss or breach could harm ourreputation and subject us to government sanctions and liability under our contracts and laws that protect sensitive or personal data and confidential information,resulting in increased costs or loss of revenues. It is possible that security controls over sensitive or confidential data and other practices we and our thirdpartyvendors follow may not prevent the improper access to, disclosure of, or loss of such information. The potential risk of security breaches and cyberattacks mayincrease as we introduce new products and offerings. Further, data privacy is subject to frequently changing rules and regulations, which sometimes conflict amongthe various jurisdictions in which we provide services. Any failure or perceived failure to successfully manage the collection, use, disclosure, or security of personalinformation or other privacy related matters, or any failure to comply with changing regulatory requirements in this area, could result in legal liability or impairment toour reputation in the marketplace.25A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.Information security risks have generally increased in recent years, in part because of the proliferation of new technologies and the use of the Internet, andthe increased sophistication and activity of organized crime, hackers, terrorists, activists, cybercriminals and other external parties, some of which may be linked toterrorist organizations or hostile foreign governments. For example, a cybercriminal could use cybersecurity threats to gain access to sensitive information aboutanother company or to alter or disrupt news or information to be distributed by PR Newswire. Cybersecurity attacks are becoming more sophisticated and includemalicious software, ransomware, attempts to gain unauthorized access to data and other electronic security breaches that could lead to disruptions in criticalsystems, unauthorized release of confidential or otherwise protected information and corruption of data, substantially damaging our reputation. Any person whocircumvents our security measures could steal proprietary or confidential customer information or cause interruptions in our operations. We incur significant coststo protect against security breaches, and may incur significant additional costs to alleviate problems caused by any breaches. Our failure to prevent securitybreaches, or wellpublicized security breaches affecting the Internet in general, could significantly harm our reputation and business and financial results.Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, dataprotection and information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive andconfidential information. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm ourbusiness, results of operations and financial condition.We and our customers that use our products may be subject to privacy and data protectionrelated laws and regulations that impose obligations inconnection with the collection, processing and use of personal data, financial data, health or other similar data. The U.S. federal and various state and foreigngovernments have adopted or proposed limitations on, or requirements regarding, the collection, distribution, use, security and storage of personally identifiableinformation of individuals. The U.S. Federal Trade Commission and numerous state attorneys general are applying federal and state consumer protection laws toimpose standards on the online collection, use and dissemination of data, and to the security measures applied to such data.Similarly, many foreign countries and governmental bodies, including the EU member states, have laws and regulations concerning the collection and useof personally identifiable information obtained from individuals located in the EU or by businesses operating within their jurisdiction, which are often morerestrictive than those in the United States. Laws and regulations in these jurisdictions apply broadly to the collection, use, storage, disclosure and security ofpersonally identifiable information that identifies or may be used to identify an individual, such as names, telephone numbers, email addresses and, in somejurisdictions, IP addresses and other online identifiers.For example, the GDPR, which took full effect on May 25, 2018. The GDPR enhances data protection obligations for businesses and requires serviceproviders (data processors) processing personal data on behalf of customers to cooperate with European data protection authorities, implement security measuresand keep records of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to or greater of €20 million or 4% of global annualrevenues. In addition, the CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and require deletion of their personalinformation, opt out of certain personal information sharing, and receive detailed information about how their personal information is used. The CCPA provides forcivil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further, failure to comply withthe Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may expose us to administrativefines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the current enforcementmeasures and sanctions. There are also additional laws and regulations in additional jurisdictions around the world which govern the protection of consumers andof electronic communications. If our efforts to comply with GDPR, CCPA or other applicable laws and regulations are not successful, we may be subject to penaltiesand fines that would adversely impact our business and results of operations, and our ability to conduct business could be significantly impaired.26Additionally, although we endeavor to have our products comply with applicable laws and regulations, these and other obligations may be modified, theymay be interpreted and applied in an inconsistent manner from one jurisdiction to another, and they may conflict with one another, other regulatory requirements,contractual commitments or our internal practices. We also may be bound by contractual obligations relating to our collection, use and disclosure of personal,financial and other data or may find it necessary or desirable to join industry or other selfregulatory bodies or other privacy or data protectionrelatedorganizations that require compliance with their rules pertaining to privacy and data protection.We expect that there will continue to be new proposed laws, rules of selfregulatory bodies, regulations and industry standards concerning privacy, dataprotection and information security in the United States, the European Union and other jurisdictions, and we cannot yet determine the impact such future laws,rules, regulations and standards may have on our business. Moreover, existing U.S. federal and various state and foreign privacy and data protectionrelated lawsand regulations are evolving and subject to potentially differing interpretations, and various legislative and regulatory bodies may expand current or enact new lawsand regulations regarding privacy and data protectionrelated matters. Because global laws, regulations and industry standards concerning privacy and datasecurity have continued to develop and evolve rapidly, it is possible that we or our products or platform may not be, or may not have been, compliant with eachsuch applicable law, regulation and industry standard and compliance with such new laws or to changes to existing laws may impact our business and practices,require us to expend significant resources to adapt to these changes, or to stop offering our products in certain countries. These developments could adverselyaffect our business, results of operations and financial condition.We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect ourbusiness.Our ability to implement our business plan successfully depends in part on our ability to build brand recognition using our trademarks, service marks andother proprietary intellectual property, including our names and logos. We currently have no registered trademarks. While we plan to register a number of ourtrademarks; however, no assurance can be given that our trademark applications will be approved. As of December 31, 2022, we own 18 issued patents: six in Europe,four in the U.S., three in each of Russia and Japan and one in each of Canada and Israel which expire between January 20, 2033 and August 18, 2036, and we havetwo additional patent applications in process. As of such date, we do not have any registered trademarks., No assurance can be given that our patent applicationswhich are in process will be approved. If our patent applications are not approved, our ability to expand or develop our business may be negatively affected.Third parties may also oppose our trademark or patent applications, or otherwise challenge our use of the trademarks or patents. In the event that ourtrademarks or patents are successfully challenged, we could be forced to rebrand our goods and services or redesign our technology, which could result in loss ofbrand recognition, and could require us to devote resources to advertising and marketing new brands and products.If our efforts to register, maintain and protect our intellectual property are inadequate, or if any thirdparty misappropriates, dilutes or infringes on ourintellectual property, the value of our brands may be harmed, which could have a material adverse effect on our business and might prevent our brands fromachieving or maintaining market acceptance. We may also face the risk of claims that we have infringed third parties’ intellectual property rights. If third parties claimthat we infringe upon their intellectual property rights, our operating profits could be adversely affected. Any claims of intellectual property infringement, eventhose without merit, could be expensive and time consuming to defend, require us to rebrand our services, if feasible, divert management’s attention and resourcesor require us to enter into royalty or licensing agreements in order to obtain the right to use a thirdparty’s intellectual property.Any royalty or licensing agreements, if required, may not be available to us on acceptable terms or at all. A successful claim of infringement against uscould result in our being required to pay significant damages, enter into costly license or royalty agreements, or stop the sale of certain products or services, any ofwhich could have a negative impact on our operating profits and harm our future prospects.We may face intense competition and expect competition to increase in the future, which could prohibit us from developing a customer base andgenerating revenue.We face significant competition in every aspect of our business. Our competitors include True Fit, Virtusize, EasyMeasure, AR MeasureKit, Smart Measureand 3DLook. These companies may already have an established market in our industry. Most of these companies have significantly greater financial and otherresources than us and have been developing their products and services longer than we have been developing ours.27In addition, some of our larger competitors have substantially broader product offerings and leverage their relationships based on other products orincorporate functionality into existing products to gain business in a manner that discourages potential customers from purchasing our products. Potentialcustomers may also prefer to purchase from their existing solution providers rather than a new solution provider regardless of product performance or features.These larger competitors often have broader product lines and market focus and will therefore not be as susceptible to downturns in a particular market. Conditionsin our market could change rapidly and significantly as a result of technological advancements, partnering by our competitors or continuing market consolidation.New startup companies that innovate and large competitors that are making significant investments in research and development may invent similar or superiorproducts and technologies that compete with our products. In addition, some of our competitors may enter into new alliances with each other or may establish orstrengthen cooperative relationships. Any such consolidation, acquisition, alliance or cooperative relationship could lead to pricing pressure and our loss of anyfuture market share and could result in a competitor with greater financial, technical, marketing, service and other resources, all of which could harm our ability tocompete. Furthermore, organizations may be more willing to incrementally add solutions to their existing infrastructure from competitors than to replace their existinginfrastructure with our products. Any failure to meet and address these factors could harm our business, results of operations and financial condition.Our business operations and future development could be significantly disrupted if we lose key members of our management team.The success of our business continues to depend to a significant degree upon the continued contributions of our senior officers and key employees, bothindividually and as a group. Our future performance will be substantially dependent in particular on our ability to retain and motivate Ronen Luzon, our ChiefExecutive Officer, and certain of our other senior executive officers. The loss of the services of our Chief Executive Officer, senior officers or other key employeescould have a material adverse effect on our business and plans for future development. We have no reason to believe that we will lose the services of any of theseindividuals in the foreseeable future; however, we currently have no effective replacement for any of these individuals due to their experience, reputation in theindustry and special role in our operations. We also do not maintain any key man life insurance policies for any of our employees.If we are able to expand our operations, we may be unable to successfully manage our future growth.Our growth may strain our infrastructure and resources. Any such growth could place increased strain on our management, operational, financial and otherresources, and we will need to train, motivate, and manage employees, as well as attract management, sales, finance and accounting, international, technical, andother professionals. Any failure to expand these areas and implement appropriate procedures and controls in an efficient manner and at a pace consistent with ourbusiness objectives could have a material adverse effect on our business, results of operations and financial condition.Our business operations are conducted in multiple languages and could be disrupted due to miscommunications or translation errors.The success of our business continues to depend on our marketing efforts in the United States, Europe and Israel, each of which is conducted in the locallanguage. Miscommunications or inaccurate foreign language translations could have a material adverse effect on our business operations and financial conditions.Additionally, contracts, communications and complex technical information must be accurately translated into foreign languages.We will continue to incur costs and be subject to various obligations as a result of being a public company, listed in the United States and in Israel.We will continue to incur significant legal, accounting and other expenses as a result of being a public company, listed in the United States and in Israel.Although we will incur costs each year associated with being a publiclytraded company, it is possible that our actual costs of being a publiclytraded company willvary from year to year and may be different than our estimates. In estimating these costs, we take into account expenses related to insurance, legal, accounting andcompliance activities.28Furthermore, the need to maintain the corporate infrastructure demanded of a public company may divert management’s attention from implementing ourgrowth strategy, which could prevent us from improving our business, results of operations and financial condition. We have made, and will continue to make,changes to our internal controls and procedures for financial reporting and accounting systems to meet our reporting obligations as a U.S. publicly traded company.However, the measures we take may not be sufficient to satisfy our obligations as a publicly traded company.Any future or current litigation could have a material adverse impact on our results of operations, financial condition and liquidity.From time to time, we may be subject to litigation, including, among others, potential stockholder derivative actions and class actions. Risks associatedwith legal liability are difficult to assess and quantify, and their existence and magnitude can remain unknown for significant periods of time. Subject to certainexceptions, our Amended and Restated Certificate of Incorporation, or Certificate of Incorporation, and Amended and Restated Bylaws, or Bylaws, require us toindemnify and advance expenses to our officers and directors involved in legal proceedings. To date we have obtained directors and officers’ liability, or D&O,insurance to cover some of the risk exposure for our directors and officers. Such insurance generally pays the expenses (including amounts paid to plaintiffs, fines,and expenses including attorneys’ fees) of officers and directors who are the subject of a lawsuit as a result of their service to us. There can be no assurance that wewill be able to continue to maintain this insurance at reasonable rates or at all, or in amounts adequate to cover such expenses should such a lawsuit occur. WithoutD&O insurance, the amounts we would pay to indemnify our officers and directors should they be subject to legal action based on their service to us could have amaterial adverse effect on our financial condition, results of operations and liquidity. Such lawsuits, and any related publicity, may result in substantial costs and,among other things, divert the attention of management and our employees. An unfavorable outcome in any claim or proceeding against us could have a materialadverse impact on our financial position and results of operations for the period in which the unfavorable outcome occurs, and potentially in future periods. Further,any settlement announced by us may expose us to further claims against us by third parties seeking monetary or other damages which, even if unsuccessful, woulddivert management attention from the business and cause us to incur costs, possibly material, to defend such matters, which could have a material adverse impacton our financial position. See “Legal Proceedings” for more information regarding our involvement in ongoing litigation matters.Federal, state and local or Israeli tax rules may adversely impact our results of operations and financial position.We are subject to federal, state and local taxes in the U.S., as well as local taxes in Israel in respect to our operations in Israel. Although we believe our taxestimates are reasonable, if the Internal Revenue Service or other taxing authority disagrees with the positions we have taken on our tax returns, we could faceadditional tax liability, including interest and penalties. If material, payment of such additional amounts upon final adjudication of any disputes could have a materialimpact on our results of operations and financial position. In addition, complying with new tax rules, laws or regulations could impact our financial condition, andincreases to federal or state statutory tax rates and other changes in tax laws, rules or regulations may increase our effective tax rate. Any increase in our effectivetax rate could have a material impact on our financial results.A significant majority of Orgad’s revenue is from sales of products on Amazon’s U.S. Marketplace and any change, limitation or restriction on ourability to operate on Amazon’s platform or any other marketplace could have a material adverse impact to our business, results of operations, financialcondition and prospects.Orgad, our wholly owned subsidiary, operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com, eBay and others. A substantial percentage of Orgad’s revenue is driven by sales on Amazon’s U.S. marketplace and Orgad is subject toterms of service of Amazon and other maketplaces and various other seller policies and services that apply to third parties selling products on Amazon and othermarketplaces. Generally, a marketplace has the right to terminate or suspend its agreement with Orgad at any time and for any reason. Such marketplace may takeother actions against Orgad such as suspending or terminating a seller account or product listing and withholding payments owed to Orgad indefinitely. Forexample, in July 2022, Amazon deactivated Orgad’s Amazon U.S. store as a result of complaints submitted due to an error in the listed manufacturer of certainproducts on Orgad’s store. Although its account was subsequently reinstated in September 2022, if the deactivation were to occur in the future for a prolongedperiod of time, or if Amazon were to terminate Orgad’s account, this would have a material adverse effect on our business, results of operations, financial conditionand prospects. While Orgad endeavors to materially comply with the terms of services of the marketplaces on which it operates, we can provide no assurance thatthese marketplaces will have the same determination with respect to our compliance.29In addition, Amazon and other marketplaces can make changes to its platform that could require Orgad to change the manner in which it operates, limit itsability to successfully launch new products or increase its costs to operate and such changes could have an adverse effect on our business, results of operations,financial condition and prospects. Examples of changes that could impact us relate to platform fee charges (i.e., selling commissions), exclusivity, inventorywarehouse availability, excluded products and limitations on sales and marketing. Any change, limitation or restriction on our ability to sell on Amazon’s platform orany other marketplace, even if temporary, could have a material impact on our business, results of operations, financial condition and prospects.Orgad also relies on services provided by Amazon’s fulfillment platform, including Prime Certification, which provides for expedited shipping to theconsumer, an important aspect in the buying decision for consumers. For products that Orgad fulfills itself, Orgad is qualified to offer our products for sale withPrime Certification delivery. Any inability to market our products for sale with expedited delivery provided under Prime Certification could have a material impact onour business, results of operations, financial condition and prospects. Failure to remain compliant with the best fulfillment practices on Amazon’s platform couldhave a material impact on our business, results of operations, financial condition and prospects. In addition, due to the COVID19 pandemic, Amazon has changedthe amount of inventory it accepts per product for a period of time. If this were to continue it could cause us to miss sales and/or pay additional shipping costswhich would harm our business operations and financial conditions.Orgad’s business depends on its ability to build and maintain strong product listings on ecommerce platforms. Orgad may not be able to maintain andenhance our product listings if it receives unfavorable customer complaints, negative publicity or otherwise fails to live up to consumers’ expectations, whichcould materially adversely affect our business, results of operations and growth prospects.Maintaining and enhancing Orgad’s product listings is critical in expanding and growing its business. However, a significant portion of Orgad’s perceivedperformance to the customer depends on third parties outside of its control, including suppliers and thirdparty delivery agents as well as online retailers such asAmazon and eBay. Because Orgad’s agreements with its online retail partners are generally terminable at will, it may be unable to maintain these relationships, andour results of operations could fluctuate significantly from period to period. Because Orgad relies on third parties to deliver its products, it is subject to shippingdelays or disruptions caused by inclement weather, natural disasters, labor activism, health epidemics or bioterrorism. It may also experience shipping delays ordisruptions due to other carrierrelated issues relating to their own internal operational capabilities. Further, Orgad relies on the business continuity plans of thesethird parties to operate during pandemics, like the COVID19 pandemic, and it has limited ability to influence their plans, prevent delays, and/or cost increases due toreduced availability and capacity and increased required safety measures.Customer complaints or negative publicity about its products, delivery times, or marketing strategies, even if not accurate, especially on blogs, social mediawebsites and thirdparty market sites, could rapidly and severely diminish consumer view of Orgad’s product listings and result in harm to its brand. Customers mayalso make safetyrelated or other types of claims regarding products sold through our online retail partners, such as Amazon, which may result in an online retailpartner removing the product from its marketplace. We also use and rely on other services from third parties, such as our telecommunications services, and thoseservices may be subject to outages and interruptions that are not within our control.Orgad faces risks related to successfully optimizing and operating its fulfillment and customer service operations.Failures to adequately predict customer demand or otherwise optimize and operate its fulfillment and customer service operations successfully from time totime result in excess or insufficient fulfillment or customer service capacity, increased costs, and impairment charges, any of which could materially harm ourbusiness. As Orgad continues to add fulfillment and customer service capability or add new businesses with different requirements, its fulfillment and customerservice operations become increasingly complex and operating them becomes more challenging. There can be no assurance that Orgad will be able to operate ouroperations effectively.30In addition, failure to optimize inventory in our fulfillment operations increases net shipping cost by requiring longzone or partial shipments. Orgad may beunable to adequately staff its fulfillment and customer service operations. Orgad’s failure to properly handle such inventory or to accurately forecast productdemand may result in it being unable to secure sufficient storage space or to optimize its fulfillment operations or cause other unexpected costs and other harm toour business and reputation.Orgad relies on a limited number of shipping companies to deliver inventory to it and completed orders to our customers. The inability to negotiateacceptable terms with these companies or performance problems or other difficulties experienced by these companies could negatively impact our operating resultsand customer experience. In addition, Orgad’s ability to receive inbound inventory efficiently and ship completed orders to customers also may be negativelyaffected by natural or manmade disasters, extreme weather, geopolitical events and security issues, labor or trade disputes, and similar events.The variability in Orgad’s retail business places increased strain on its operations.Demand for Orgad’s product listings can fluctuate significantly for many reasons, including as a result of seasonality, promotions, product launches, orunforeseeable events, such as in response to natural or manmade disasters, extreme weather, or geopolitical events. For example, Orgad expects a disproportionateamount of our retail sales to occur during our fourth quarter. Failure to stock or restock popular products in sufficient amounts such that Orgad fails to meetcustomer demand could significantly affect our revenue and our future growth. If too many customers access the websites on which Orgad engages in onlineretailing within a short period of time due to increased demand, Orgad may experience system interruptions that make the websites unavailable or prevent us fromefficiently fulfilling orders, which may reduce the volume of goods its offers or sell and the attractiveness of its products. In addition, Orgad may be unable toadequately staff for fulfillment of orders and customer service during these peak periods and delivery and other fulfillment companies and customer service cosourcers may be unable to meet the seasonal demand.Our business is subject to the risks of earthquakes, fire, power outages, floods, health risks and other catastrophic events, and to interruption by manmade problems such as terrorism.Natural disasters, such as fire or floods, a significant power outage, telecommunications failure, terrorism, an armed conflict, cyberattacks, epidemics andpandemics such as COVID19, or other geopolitical unrest could affect our supply chain, manufacturers, logistics providers, channel partners, or endcustomers orthe economy as a whole and such disruption could impact us and the shipments and sales. These risks may be further increased if the disaster recovery plans for usand our suppliers prove to be inadequate. To the extent that any of the above should result in delays or cancellations of customer orders, the loss of customers, orthe delay in the deployment or shipment of products, our business, financial condition, and operating results would be adversely affected.For example, on January 2, 2023, Orgad experienced a fire at its warehouse in Israel. We are not aware of any casualties or injuries associated with the fire.We shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incidentdid not affect the future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of thisincident on the other parties that were involved in the incident (lessor and others that leased properties near the warehouse).Our business could be negatively impacted by unsolicited takeover proposals, by shareholder activism or by proxy contests relating to the election ofdirectors or other matters.Our business could be negatively affected as a result of an unsolicited takeover proposal, by shareholder activism or a proxy contest. During 2021, anactivist shareholder sought to make changes to our board of directors, among other matters, which ultimately resulted in us entering into a settlement agreementwith the activist shareholder and another shareholder, and for which considerable costs were incurred and absorbed significant time and attention by managementand the board of directors. A future proxy contest, unsolicited takeover proposal, or other shareholder activism relating to the election of directors or other matterswould most likely require us to incur significant legal fees and proxy solicitation expenses and require significant time and attention by management and our Boardof Directors. The potential of a proxy contest, unsolicited takeover proposal, or other shareholder activism could interfere with our ability to execute our strategicplan, give rise to perceived uncertainties as to our future direction, result in the loss of potential business opportunities or make it more difficult to attract and retainqualified personnel, any of which could materially and adversely affect our business and operating results.31Environmental, social and corporate governance (ESG) issues, including those related to climate change and sustainability, may have an adverseeffect on our business, financial condition and results of operations and damage our reputation.There is an increasing focus from certain investors, customers, consumers, employees and other stakeholders concerning ESG matters. Additionally, publicinterest and legislative pressure related to public companies’ ESG practices continue to grow. If our ESG practices fail to meet regulatory requirements or investor,customer, consumer, employee or other shareholders’ evolving expectations and standards for responsible corporate citizenship in areas including environmentalstewardship, support for local communities, Board of Director and employee diversity, human capital management, employee health and safety practices, productquality, supply chain management, corporate governance and transparency, our reputation, brand and employee retention may be negatively impacted, and ourcustomers and suppliers may be unwilling to continue to do business with us.Customers, consumers, investors and other shareholders are increasingly focusing on environmental issues, including climate change, energy and wateruse, plastic waste and other sustainability concerns. Concern over climate change may result in new or increased legal and regulatory requirements to reduce ormitigate impacts to the environment. Changing customer and consumer preferences or increased regulatory requirements may result in increased demands orrequirements. Complying with these demands or requirements could cause us to incur additional manufacturing, operating or product development costs.If we do not adapt to or comply with new regulations, including the SEC’s published proposed rules that would require companies to provide significantlyexpanded climaterelated disclosures in their periodic reporting, which may require us to incur significant additional costs to comply and impose increased oversightobligations on our management and board of directors, or fail to meet evolving investor, industry or stakeholder expectations and concerns regarding ESG issues,investors may reconsider their capital investment in our company, we may become subject to penalties, and customers and consumers may choose to stoppurchasing our products, if approved for commercialization, which could have a material adverse effect on our reputation, business or financial condition.Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions andadverse developments with respect to financial institutions and associated liquidity risk.Our business depends on the economic health of the global economies. If the conditions in the global economies remain uncertain or continue to bevolatile, or if they deteriorate, including as a result of the impact of military conflict, such as the war between Russia and Ukraine, terrorism or other geopoliticalevents, our business, operating results and financial condition may be materially adversely affected. Economic weakness, inflation and increases in interest rates,limited availability of credit, liquidity shortages and constrained capital spending have at times in the past resulted, and may in the future result, in challenging anddelayed sales cycles, slower adoption of new technologies and increased price competition, and could negatively affect our ability to forecast future periods, whichcould result in an inability to satisfy demand for our products and a loss of market share.In addition, increases in inflation raise our costs for commodities, labor, materials and services and other costs required to grow and operate our business,and failure to secure these on reasonable terms may adversely impact our financial condition. Additionally, increases in inflation, along with the uncertaintiessurrounding COVID19, geopolitical developments and global supply chain disruptions, have caused, and may in the future cause, global economic uncertainty anduncertainty about the interest rate environment, which may make it more difficult, costly or dilutive for us to secure additional financing. A failure to adequatelyrespond to these risks could have a material adverse impact on our financial condition, results of operations or cash flows.More recently, the closures of SVB and Signature Bank and their placement into receivership with the FDIC created bankspecific and broader financialinstitution liquidity risk and concerns. Although the Department of the Treasury, the Federal Reserve and the FDIC jointly released a statement that depositors atSVB and Signature Bank would have access to their funds, even those in excess of the standard FDIC insurance limits, under a systemic risk exception, futureadverse developments with respect to specific financial institutions or the broader financial services industry may lead to marketwide liquidity shortages, impair theability of companies to access nearterm working capital needs, and create additional market and economic uncertainty. There can be no assurance that future creditand financial market instability and a deterioration in confidence in economic conditions will not occur. Our general business strategy may be adversely affected byany such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions. If the current equityand credit markets deteriorate, or if adverse developments are experienced by financial institutions, it may cause shortterm liquidity risk and also make anynecessary debt or equity financing more difficult, more costly, more onerous with respect to financial and operating covenants and more dilutive. Failure to secureany necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stockprice and could require us to alter our operating plans. In addition, there is a risk that one or more of our service providers, financial institutions, manufacturers,suppliers and other partners may be adversely affected by the foregoing risks, which could directly affect our ability to attain our operating goals on schedule andon budget.Our business may be adversely affected by the impact of any renewed outbreak of the COVID19 pandemic.Public health epidemics or outbreaks could adversely impact our business. In late 2019, a novel strain of COVID19, also known as coronavirus, wasreported in Wuhan, China. While initially the outbreak was largely concentrated in China, it spread worldwide. Many countries around the world, including in Israel,implemented significant governmental measures to control the spread of the virus, including temporary closure of businesses, severe restrictions on travel and themovement of people, and other material limitations on the conduct of business. These measures haven historically resulted in work stoppages and other disruptions.If there is a resurgence of the COVID19 pandemic, this could adversely impact our operations, including among others, our sales and marketing efforts and ourability to raise additional funds, and accordingly, the impact of COVID19 could have an adverse impact on our business and our financial results.32Risks Related to Our Operations in RussiaRussia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.In addition to our Israel operations, we have operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia and we engage two software developers through a third party who are based in Ukraine. On February 24,2022, Russia invaded Ukraine. The outbreak of hostilities between the two countries could result in more widespread conflict and could have a severe adverse effecton the region.Following Russia’s actions, various countries, including the U.S., Canada, the United Kingdom, Germany and France, as well as the European Union,issued broadranging economic sanctions against Russia. Such sanctions included, among other things, a prohibition on doing business with certain Russiancompanies, officials and oligarchs; a commitment by certain countries and the European Union to remove selected Russian banks from the Society for WorldwideInterbank Financial Telecommunications (SWIFT) electronic banking network that connects banks globally; and restrictive measures to prevent the Russian CentralBank from undermining the impact of the sanctions. In response to sanctions, the Russian Central Bank raised its interest rates and banned sales of local securitiesby foreigners. Russia may take additional counter measures or retaliatory actions in the future. While diplomatic efforts have been ongoing, the conflict betweenRussia and Ukraine is currently unpredictable and has the potential to result in broadened military actions. The duration of ongoing hostilities and such sanctionsand related events cannot be predicted. Uncertainty as to future relations between Russia and the U.S. and other countries in the west, or between Russia and othereastern European countries, may have a negative impact on our operations.Such international sanctions and potential responses to such sanctions, including those that may limit or restrict transfer funds into Russia, may in thefuture significantly affect our ability to conduct our activities in Russia including paying our personnel. To date, the conflict has had minimal impact on operations .Nevertheless, we have no way to predict the progress or outcome of the situation in Ukraine, as the conflict and governmental reactions are rapidly developing andbeyond our control. Prolonged unrest, intensified military activities or more extensive sanctions impacting the region could have a material adverse effect on ouroperations, results of operations, financial condition, liquidity and business outlook.Political, military conditions or other risks in Russia could adversely affect our business.Russia is a federative state consisting of 85 constituent entities, or “subjects.” The Russian Constitution reserves some governmental powers for theRussian Government, some for the subjects and some for areas of joint competence. In addition, eight “federal districts” (“federal’nye okruga”), which are overseenby a plenipotentiary representative of the President, supplement the country’s federal system. The delineation of authority among and within the subjects is, inmany instances, unclear and contested, particularly with respect to the division of tax revenues and authority over regulatory matters. For these reasons, theRussian political system is vulnerable to tension and conflict between federal, subject and local authorities. This tension creates uncertainties in the operatingenvironment in Russia, which may prevent us from carrying out our strategy effectively. The risks associated with these events or potential events could materiallyand adversely affect the investment environment and overall consumer and entrepreneurial confidence in Russia, and our business, prospects, financial condition,hiring ability, and results of operations could be materially and adversely affected.Furthermore, high levels of corruption reportedly exist in Russia, including the bribing of officials for the purpose of initiating investigations bygovernment agencies. Corruption and other illegal activities could disrupt our ability to conduct our business effectively, and claims that the we are involved in suchcorruption or illegal activities could generate negative publicity, of which could harm our development, financial condition, results of operations or prospects.Economic and other risks in Russia could adversely affect our business.Operating a business in an emerging market such as Russia can involve a greater degree of risk than operating a business in more developed markets.Over the last two decades, the Russian economy has experienced or continues to experience at various times:●significant volatility in its GDP;33●the impact of international sanctions;●high levels of inflation;●increases in, or high, interest rates;●sudden price declines in oil and other natural resources;●instability in the local currency market;●budget deficits;●the continued operation of lossmaking enterprises due to the lack of effective bankruptcy proceedings;●capital flight; and●significant increases in poverty rates, unemployment and underemployment.The Russian economy has been subject to abrupt downturns in the past, including as a result of the invasion of Ukraine, global financial crisis, and, as anemerging market, remains particularly vulnerable to further external shocks and any future fluctuations in the global markets. Any further deterioration in the generaleconomic conditions in Russia (whether or not as a result of the events mentioned above) could have a material adverse effect on the Russian economy and mayresult in hiring and operational difficulties, as well as potential flight of human capital, which could have a material adverse effect on our business, productdevelopment and results of operations.Legal risks in Russia could materially adversely affect our operations and Russian tax legislation is subject to frequent change.Among the risks of the Russian legal system are: inconsistencies among laws, presidential decrees, and government and ministerial orders and resolutions;conflicting local, regional and federal laws and regulations; the untested nature of the independence of the judiciary and its sensitivity to economic or politicalinfluences; substantial gaps in the regulatory structure due to the delay or absence of implementing legislation; a high degree of discretion on the part ofgovernmental authorities; reported corruption within governmental entities and other governmental authorities; the relative inexperience of judges and courts ininterpreting laws applicable to complex transactions; and the unpredictability of enforcement of foreign judgments and foreign arbitral awards. Many Russian lawsand regulations are construed in a way that provides for significant administrative discretion in application and enforcement. Unlawful, selective or arbitrary actionsof the Russian Government have reportedly included the denial or withdrawal of licenses, sudden and unexpected tax audits, criminal prosecutions, and civil claims.Any of the above events may have a material adverse effect on our product development and results of operations.Despite certain improvements in the taxation system made by the Russian Government over the past decade, Russian tax legislation is still subject tofrequent change, varying interpretations, and inconsistent and selective enforcement. There are currently no clear rules for distinguishing between lawful taxoptimization and tax evasion. In addition, Russian tax laws do not contain detailed rules on the taxation in Russia of foreign companies. As such, taxpayers oftenhave to resort to court proceedings to defend their position against the Russian tax authorities. However, in the absence of consistent court practice or bindingprecedents, there is inconsistency amongst court decisions. Further, the possibility exists that the Russian Federation would impose arbitrary or onerous taxes andpenalties in the future, which could have a material adverse effect on our product development and results of operations.34Risks Related to Our Operations In IsraelOur headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.Our headquarters and most of our operations are located in central Israel and our key employees, officers and directors are residents of Israel. Accordingly,political, economic and military conditions in Israel and the surrounding region may directly affect our business. Since the establishment of the State of Israel in1948, a number of armed conflicts have taken place between Israel and its Arab neighbors. Any hostilities involving Israel or the interruption or curtailment of tradewithin Israel or between Israel and its trading partners could adversely affect our operations and results of operations and could make it more difficult for us to raisecapital. During the winter of 2008, winter of 2012 and the summer of 2014, Israel was engaged in an armed conflict with Hamas, a militia group and political partyoperating in the Gaza Strip, and during the summer of 2006, Israel was engaged in an armed conflict with Hezbollah, a Lebanese Islamist Shiite militia group andpolitical party. Israel faces political tension with respect to its relationships with Turkey, Iran and certain Arab neighbor countries. In addition, recent conflictsinvolved missile strikes against civilian targets in various parts of Israel, and negatively affected business conditions in Israel. Recent political uprisings and socialunrest in various countries in the Middle East and North Africa are affecting the political stability of those countries. This instability may lead to deterioration of thepolitical relationships that exist between Israel and these countries, and have raised concerns regarding security in the region and the potential for armed conflict.Any armed conflicts, terrorist activities or political instability in the region could adversely affect business conditions and could harm our results of operations. Forexample, any major escalation in hostilities in the region could result in a portion of our employees and service providers being called up to perform military duty foran extended period of time. Parties with whom we do business have sometimes declined to travel to Israel during periods of heightened unrest or tension, forcing usto make alternative arrangements when necessary. In addition, the political and security situation in Israel may result in parties with whom we have agreementsinvolving performance in Israel claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions insuch agreements. Any future deterioration in the political and security situation in Israel will negatively impact our business.Our commercial insurance does not cover losses that may occur as a result of events associated with the security situation in the Middle East. Althoughthe Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that thisgovernment coverage will be maintained. Any losses or damages incurred by us could have a material adverse effect on our business. Any armed conflicts orpolitical instability in the region would likely negatively affect business conditions and could harm our results of operations.Further, in the past, the State of Israel and Israeli companies have been subjected to an economic boycott. Several countries still restrict business with theState of Israel and with Israeli companies. These restrictive laws and policies may have an adverse impact on our operating results, financial condition or theexpansion of our business.The legislative power of the State resides in the Knesset, a unicameral parliament that consists of 120 members elected by nationwide voting under asystem of proportional representation. Israel’s most recent general elections were held on April 9, 2019, September 17, 2019, March 2, 2020 and November 1, 2022.The uncertainty surrounding the results of the recent elections may continue. Actual or perceived political instability in Israel or any negative changes in thepolitical environment, may individually or in the aggregate adversely affect the Israeli economy and, in turn, our business, financial condition, results of operationsand prospects.Some of our employees are obligated to perform military reserve duty in Israel.Many Israeli citizens, including our employees are obligated to perform one month, and in some cases more, of annual military reserve duty until they reachthe age of 40 (or older, for reservists with certain occupations) and, in the event of a military conflict, may be called to active duty. In response to increases interrorist activity, there have been periods of significant callups of military reservists. It is possible that there will be military reserve duty callups in the future. Ouroperations could be disrupted by such callups. Such disruption could materially adversely affect our business, results of operations and financial condition.35It may be difficult to enforce a nonIsraeli judgment against the Company or its officers and directors.The operating subsidiary of ours is incorporated in Israel. All of our executive officers and directors are not residents of the United States, and asubstantial portion of our assets and the assets of our executive officers and directors are located outside the United States. Therefore, a judgment obtained againstus, or any of these persons, including a judgment based on the civil liability provisions of the U.S. federal securities laws, may not be collectible in the United Statesand may not necessarily be enforced by an Israeli court. It also may be difficult to affect service of process on these persons in the United States or to assert U.S.securities law claims in original actions instituted in Israel. Additionally, it may be difficult for an investor, or any other person or entity, to initiate an action withrespect to U.S. securities laws in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of U.S. securities laws reasoning that Israel is not themost appropriate forum in which to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law isapplicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law often involves the testimony of expert witnesses, which can be a timeconsuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel that addresses the mattersdescribed above. As a result of the difficulty associated with enforcing a judgment against us in Israel, it may be impossible to collect any damages awarded byeither a U.S. or foreign court.Our international operations could expose us to additional risks, including exchange rate fluctuations, legal regulations and political or economicinstability that could harm our business and operating results.Our international operations expose us to the following risks which may have a material adverse effect on our business and operating results:●devaluations and fluctuations in currency exchange rates including fluctuations between the U.S. dollar and the NIS and the Russian Ruble;●costs of compliance with local laws, including labor laws and intellectual property laws;●compliance with domestic and foreign government policies, including compliance with Israeli securities laws and TASE;●changes in trade regulations and procedures affecting approval, production, pricing, marketing, reimbursement for and access to, our products;●compliance with applicable foreign anticorruption laws, antitrust/competition laws, antiBoycott Israel law and antimoney laundering laws; and●economic and geopolitical developments and conditions, including ongoing instability in global economies and financial markets, international hostilities,acts of terrorism and governmental reactions, inflation, outbreaks of contagious disease (e.g., the COVID19 pandemic) and military and political alliances.Risks Related to Our Common StockA more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.Although our common stock is listed on the Nasdaq Capital Market, it has only been traded on the Nasdaq Capital Market since July 25, 2016. There hasbeen relatively limited trading volume in the market for our common stock, and a more active, liquid public trading market may not develop or may not be sustained.Limited liquidity in the trading market for our common stock may adversely affect a stockholder’s ability to sell its shares of common stock at the time it wishes tosell them or at a price that it considers acceptable. If a more active, liquid public trading market does not develop, we may be limited in our ability to raise capital byselling shares of common stock and our ability to acquire other companies or assets by using shares of our common stock as consideration. In addition, if there is athin trading market or “float” for our stock, the market price for our common stock may fluctuate significantly more than the stock market as a whole. Without a largefloat, our common stock would be less liquid than the stock of companies with broader public ownership and, as a result, the trading prices of our common stockmay be more volatile and it would be harder for you to liquidate any investment in our common stock. Furthermore, the stock market is subject to significant priceand volume fluctuations, and the price of our common stock could fluctuate widely in response to several factors, including:●our quarterly or annual operating results;●changes in our earnings estimates;●investment recommendations by securities analysts following our business or our industry;●additions or departures of key personnel;●changes in the business, earnings estimates or market perceptions of our competitors;36●our failure to achieve operating results consistent with securities analysts’ projections;●changes in industry, general market or economic conditions;●announcements of legislative or regulatory changes; and●natural disasters (including for example, the recent fire in the Orgad warehouse) and political and economic instability, including wars, terrorism, politicalunrest, results of certain elections and votes, emergence of a pandemic, or other widespread health emergencies (or concerns over the possibility of suchan emergency, including for example, the recent the COVID19 pandemic), boycotts, adoption or expansion of government trade restrictions, and otherbusiness restrictions.The stock market has experienced extreme price and volume fluctuations in recent years that have significantly affected the quoted prices of the securitiesof many companies. The changes often appear to occur without regard to specific operating performance. The price of our common stock could fluctuate basedupon factors that have little or nothing to do with us and these fluctuations could materially reduce our stock price.Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.If any of our shareholders were to decide to sell large amounts of stock over a short period of time (presuming such sales were permitted) such sales couldcause the market price of our common stock to drop significantly, even if our business is doing well. Further, the market price of our common stock could decline as aresult of the perception that such sales could occur. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equitysecurities in the future at a time and price that we deem appropriate.Our securities are traded on more than one market which may result in price variations.Our securities have been trading on the Nasdaq Capital Market since July 2016 and on TASE since September 2005. Trading in our securities on suchexchanges occurs in different currencies (U.S. dollars on the Nasdaq Capital Market and NIS on the TASE), and at different times (due to different time zones,trading days and public holidays in the United States and Israel). The trading prices of our securities on the two exchanges may differ due to the foregoing andother factors. Any decrease in the price of our shares on the TASE could cause a decrease in the trading price of our shares on the Nasdaq Capital Market and viceversa.We are a smaller reporting company and, as a result of the reduced disclosure and governance requirements applicable to such companies, ourcommon stock may be less attractive to investors.We are a smaller reporting company, (i.e. a company with “public float” held by nonaffiliates with a market value of less than $250 million) and we areeligible to take advantage of certain exemptions from various reporting requirements applicable to other public companies. We have elected to adopt these reduceddisclosure requirements. We cannot predict if investors will find our common stock less attractive as a result of our taking advantage of these exemptions. If someinvestors find our common stock less attractive as a result of our choices, there may be a less active trading market for our common stock and our stock price may bemore volatile.We do not expect to pay any cash dividends in the foreseeable future.We have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our board of directors deems relevant. Investors should not purchase our common stock expecting to receive cash dividends. Because we do notpay dividends, and there may be limited trading, investors may not have any manner to liquidate or receive any payment on their investment. Therefore, our failureto pay dividends may cause investors to not see any return on investment even if we are successful in our business operations. In addition, because we do not paydividends we may have trouble raising additional funds, which could affect our ability to expand our business operations.37UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2022☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ________ to _________Commission file number 00137370MY SIZE, INC.(Exact name of registrant as specified in charter)Delaware510394637(State or jurisdiction ofIncorporation or organization)I.R.S EmployerIdentification No.4 Hayarden, POB 1026, Airport City, Israel7010000(Address of principal executive offices)(Zip code)+9723 6009030(Registrant’s telephone number, including area code)Securities registered pursuant to Section 12(b) of the Act:Title of each classTrading Symbol(s)Name of Each Exchange on Which RegisteredCommon Stock, par value $0.001 per shareMYSZThe Nasdaq Capital MarketSecurities registered pursuant to Section 12(g) of the Act: None.Indicate by check mark whether the registrant is a wellknown seasoned issuer as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes☒ No ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer, a smaller reporting company, or an emerginggrowth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 of theExchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☒Smaller Reporting Company☒Emerging Growth Company☐If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revisedfinancial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b2 of the Exchange Act) Yes ☐No☒Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control overfinancial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflectthe correction of an error to previously issued financial statements. ☐Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by anyof the registrant’s executive officers during the relevant recovery period pursuant to §240.10D1(b). ☐The aggregate market value of voting and nonvoting common equity held by nonaffiliates of the registrant as of June 30, 2022, the last business day of theregistrant’s most recently completed second fiscal quarter, was approximately $25,551,906.Number of shares of common stock outstanding as of March 31, 2023 was 2,446,780.Documents Incorporated by Reference: None.Table of ContentsPart IItem 1.Business2Item 1A.Risk Factors18Item 1B.Unresolved Staff Comments41Item 2.Properties41Item 3.Legal Proceedings41Item 4.Mine Safety Disclosures42Part IIItem 5.Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities43Item 6.Selected Financial Data43Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations43Item 7A.Quantitative and Qualitative Disclosures about Market Risk50Item 8.Financial Statements and Supplementary DataF1Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure51Item 9A.Controls and Procedures51Item 9B.Other Information51Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.51Part IIIItem 10.Directors, Executive Officers and Corporate Governance52Item 11.Executive Compensation57Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters60Item 13.Certain Relationships and Related Transactions, and Director Independence62Item 14.Principal Accounting Fees and Services65Part IVItem 15.Exhibits, Financial Statement Schedules66Signatures69iPART IIn this Annual Report on Form 10K, unless the context requires otherwise, the terms “we,” “our,” “us,” or “the Company” refer to MySize, Inc., a Delawarecorporation, and its subsidiaries, including MySize Israel 2014 Ltd. My Size LLC, Orgad International Marketing Ltd., or Orgad, and Naiz Bespoke Technologies, S.L,or Naiz, taken as a whole.References to “U.S. dollars” and “$” are to currency of the United States of America, and references to “NIS” are to New Israeli Shekels. Unless otherwiseindicated, U.S. dollar translations of NIS amounts presented in this Annual Report on Form 10K for the year ended on December 31, 2022 are translated using therate of NIS 3.358 to $1.00.All information in this Annual Report on Form 10K relating to shares or price per share reflects the 1for25 reverse stock split effected by us on December8, 2022.CAUTIONARY NOTE ON FORWARDLOOKING STATEMENTSThis Annual Report on Form 10K contains certain forwardlooking statements within the meaning of Section 27A of the Securities Act and Section 21E ofthe Exchange Act. Any statements in Annual Report on Form 10K about our expectations, beliefs, plans, objectives, assumptions or future events or performanceare not historical facts and are forwardlooking statements. These statements are often, but not always, made through the use of words or phrases such as“believe,” “will,” “expect,” “anticipate,” “estimate,” “intend,” “plan” and “would.” For example, statements concerning financial condition, possible or assumedfuture results of operations, growth opportunities, industry ranking, plans and objectives of management, markets for our common stock and future managementand organizational structure are all forwardlooking statements. Forwardlooking statements are not guarantees of performance. They involve known and unknownrisks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to differ materially from any results, levels ofactivity, performance or achievements expressed or implied by any forwardlooking statement.Any forwardlooking statements are qualified in their entirety by reference to the risk factors discussed throughout this Annual Report on Form 10K. Someof the risks, uncertainties and assumptions that could cause actual results to differ materially from estimates or projections contained in the forwardlookingstatements include but are not limited to:●our history of losses and needs for additional capital to fund our operations and our inability to obtain additional capital on acceptable terms, or at all;●risks related to our ability to continue as a going concern;●the new and unproven nature of the measurement technology markets;●our ability to achieve customer adoption of our products;●our ability to realize the benefits of our acquisitions of Orgad and Naiz;●our dependence on assets we purchased from a related party;●our ability to enhance our brand and increase market awareness;●our ability to introduce new products and continually enhance our product offerings;●the success of our strategic relationships with third parties;●information technology system failures or breaches of our network security;●competition from competitors;●our reliance on key members of our management team;●current or future litigation;●current or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated liquidityrisk; and●the impact of the political and security situation in Israel on our business.1The foregoing list sets forth some, but not all, of the factors that could affect our ability to achieve results described in any forwardlooking statements.You should read this Annual Report on Form 10K and the documents that we reference herein and have filed as exhibits to the Annual Report on Form 10K,completely and with the understanding that our actual future results may be materially different from what we expect. You should assume that the informationappearing in this Annual Report on Form 10K is accurate as of the date hereof. Because the risk factors referred to in this Annual Report on Form 10K, could causeactual results or outcomes to differ materially from those expressed in any forwardlooking statements made by us or on our behalf, you should not place unduereliance on any forwardlooking statements.Further, any forwardlooking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forwardlookingstatement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. New factors emergefrom time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extentto which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements. We qualify all ofthe information presented in this Annual Report on Form 10K, and particularly our forwardlooking statements, by these cautionary statements.ITEM 1. BUSINESSOverviewWe are an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile phone or through MySizeID Widget: a simple questionnaire which uses a database collected over the years.MySizeID syncs the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and only presents itemsfor purchase that match their measurements to ensure a correct fit.We are positioning ourselves as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empower brand design teams, which are designed to increase endconsumer satisfaction, contributing to a sustainable world and reduce operation costs.Recent DevelopmentsOrgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,602 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.2The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz, a limitedliability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.3The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Warehouse FireOn January 2, 2023, Orgad experienced a fire at its warehouse in Israel. we are not aware of any casualties or injuries associated with the fire. We shiftedOrgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incident did not affectthe future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of this incident on the otherparties that were involved in the incident (lessor and others that leased properties near the warehouse).January 2023 FinancingOn January 10, 2023, we entered into a securities purchase agreement, or the RD Purchase Agreement, pursuant to which we agreed to sell and issue in theRD Offering an aggregate of 162,000 of our shares of common stock, or the RD Shares, and prefunded warrants, or the Prefunded Warrants, to purchase up to279,899 shares of common stock and, in a concurrent private placement, unregistered warrants to purchase up to 883,798 shares of common stock, or the RDWarrants, consisting of Series A warrants, or Series A Warrants, to purchase up to 441,899 shares of common stock and Series B warrants, or Series B Warrants, topurchase up to 441,899 shares of common stock, at an offering price of $3.055 per RD Share and associated Series A and Series B Warrants and an offering price of$3.054 per Prefunded Warrant and associated Series A and Series B Warrants.4In addition, we entered into a securities purchase agreement, or the PIPE Purchase Agreement, and together with the RD Purchase Agreement, thePurchase Agreements, pursuant to which we agreed to sell and issue in the PIPE Offering an aggregate of up to 540,098 unregistered Prefunded Warrants andunregistered warrants to purchase up to an aggregate of 1,080,196 shares of common stock, or the PIPE Warrants and together with the RD Warrants, the Warrants,consisting of Series A Warrants to purchase up to 540,098 shares of common stock and Series B Warrants to purchase up to 540,098 shares of common stock at anoffering price of $3.054 per Prefunded Warrant and associated Series A and Series B Warrants.The Prefunded Warrants are immediately exercisable at an exercise price of $0.001 per share and will not expire until exercised in full. The Warrants areimmediately exercisable upon issuance at an exercise price of $2.805 per share, subject to adjustment as set forth therein. The Series A Warrants have a term of fiveand onehalf years from the date of issuance and the Series B Warrants have a term of 28 months from the date of issuance. The Warrants may be exercised on acashless basis if there is no effective registration statement registering the shares underlying the warrants.In connection with the PIPE Purchase Agreement, we entered into a registration rights agreement, or the Registration Rights Agreement. Pursuant to theRegistration Rights Agreement, we are required to file a resale registration statement, or the Registration Statement, with the Securities and Exchange Commission, orthe SEC, to register for resale the shares issuable upon exercise of the unregistered Prefunded Warrants and the Series A and Series B Warrants, within 20 days ofthe signing date of the PIPE Purchase Agreement, or the Signing Date, and to have such Registration Statement declared effective within 60 days after the SigningDate in the event the Registration Statement is not reviewed by the SEC, or 90 days of the Signing Date in the event the Registration Statement is reviewed by theSEC. we will be obligated to pay certain liquidated damages if we fail to maintain the effectiveness of the Registration Statement.The Purchase Agreements and the Registration Rights Agreements also contain representations, warranties, indemnification and other provisionscustomary for transactions of this nature. In addition, subject to limited exceptions, the Purchase Agreements provide that for a period of one year following theclosing of the Offerings, we will not effect or enter into an agreement to effect a “variable rate transaction” as defined in the Purchase Agreements.Aggregate gross proceeds to the Company in respect of the Offerings was approximately $3.0 million, before deducting fees payable to the placement agentand other offering expenses payable by the Company.We also entered into a letter agreement, or the Engagement Agreement, with H.C. Wainwright & Co., LLC, or Wainwright, pursuant to which Wainwrightagreed to serve as the exclusive placement agent for the Company in connection with the Offerings. We paid Wainwright a cash placement fee equal to 7% of theaggregate gross proceeds raised in the Offerings, a management fee of 1% of the aggregate gross proceeds raised in the Offerings, a nonaccountable expenseallowance of $85,000 and clearing fees of $15,950. Wainwright also received placement agent warrants, or the Placement Agent Warrants, with substantially the sameterms as the Series A Warrants issued in the Offering in an amount equal to 7% of the aggregate number of Shares and Prefunded Warrants sold in the Offerings, or68,740 shares, at an exercise price of $3.8188 per share and a term expiring on January 10, 2028.Our SolutionOur cloudbased software platform provides highly accurate sizing and measurement with broad applications including the online fashion/apparel industry,logistics and courier services and home DIY. Currently, we are mainly focusing on the ecommerce fashion/apparel industry. This proprietary technology is driven byseveral patented algorithms which are able to calculate and record measurements in a variety of novel ways. Although specific functionality varies by product, webelieve that our core solutions address the need for highly accurate measurements in a variety of consumer friendly, every day uses.5We have developed three products, MySizeID for the fashion/apparel industry, BoxSize for the logistics and courier services market and SizeUp for thehome DIY market.●MySizeID enables shoppers to generate highly accurate measurements of their body to find proper fitting clothes and accessories, through the use ofour application on their mobile phone or through a simple questionnaire if the user decides not to download the application. MySizeID syncs the user’smeasurement data to a sizing chart and presents items for purchase that match their measurements to ensure a correct fit. MySizeID is available forlicense by retailers and accessable by consumers through a web page.●BoxSize enables customers to quickly and easily measure the size and volume of a parcel to accurately calculate shipping fees. It also offers shippingcompanies a variety of precise logistical data for more efficiently managing their supply chain, providing them with an accurate way to compare thephysical package with what is in the shipping manifest. BoxSize solution is available for license on both iOS and Android operating systems. BoxSizeis available on the Honeywell Marketplace and in August 2019 was approved for Honeywell’s Independent Software Vendor Program, and MySize wasgranted an independent software vendor (ISV) status on the Zebra Technologies and on DataLogic platforms.●SizeUp is a digital tape measure that allows users to measure length, width and height of a surface by moving their smartphone from point to point ofan object or space. SizeUp is a valueadd for DIY and home improvement retailers whose customers struggle to find the appropriately sized items (likeblinds or curtains) for their homes or projects due to inaccurate measurements. SizeUp also is designed to replace rulers, tape measures and othermeasuring tools used for DIY projects. SizeUp is available for consumer download on both iOS and Android operating systems.The following are some select key features of our solutions:●Integration Capability. We design our solutions to be flexible and configurable, allowing our clients to match their use of our algorithms and softwarewith their specific business processes and workflows. Our platform has been organically developed from a common code base, data structure and userinterface, providing a consistent user experience with powerful features that are easily adaptable to our clients’ needs. The MySizeID widget can beintegrated via oneline JavaScript code, or through RESTful API;●Intuitive user experience. Our intuitive, easytouse interface is based on current technology, multiple focus groups and automatically adapts to users’devices, including mobile platforms, thereby significantly increasing accessibility of our solutions;●Big Data Generation. While we supply to the user the information he/she requires, we gather certain vital information such as body measurement andpackage volume which can be used anonymously to help the retailer acquire predictive size information on stocking, operations and consumers thatmay be in between sizes. All the information is being gathered and stored on our servers where it can be used by retailers;●NonInvasive. In taking measurements using our solution, the smartphone camera is not utilized; instead, the measurements are captured by scanningthe smartphone over the consumer’s body or package, thus ensuring greater privacy.Our Growth StrategyWe aim to drive revenue primarily through penetration of the U.S. and Europe markets through a business to business to consumer (B2B2C) model in theverticals we are targeting. We are pursuing the following growth strategies:●Sign Additional Commercial Agreements with U.S. Retailers. During 2022, we expanded our commercial agreements with Levi’s, introducing NorthAmerica (U.S. and Canada) and Latin America regions, and by extension Levis’ native apps in EU and U.S. regions. We also entered into commercialagreements with Baby Fresh, Galax, Punto Blanco, GEF France, Diesel, Gaala, Superdry, Uniontex Industries, and Temperlay London among others. Weare in various stages of discussions with U.S. and foreign retailers for the deployment of our size recommendation and measurement technology with aview to entering into additional commercial agreements.6●Pursue a TwoPronged Commercialization Strategy. We are seeking to accelerate adoption of our solutions both through direct partnerships with ecommerce websites as well as through thirdparty platform websites. While we seek to directly enter into partnerships with companies maintaining ecommerce websites in the apparel, courier and DIY markets, we are also seeking to deploy our solutions on thirdparty platforms. Furthermore, with theexpansion of MySizeID through the release of our FirstLook Smart Mirror, which we are offering to brick and mortar stores to digitize the physicalstores, MySizeID is now available for online retailers utilizing the WooCoomerce, Shopify, Lightspeed, PrestaShop, Bitrix and Wix platforms and tobrick and mortar stores through GK Software POS solution while BoxSize is available on the Honeywell, Zebra Technologies and Datalogic.●Ongoing Investment in our Technology Platform. We continue to invest in building new software capabilities and extending our platform to bring thepower of accurate measurement to a broader range of applications. In particular, we seek not only to deliver size recommendations but to provide arobust, endtoend,artificial intelligence, or AIdriven platform that inspires consumer confidence and drives revenue growth by providing a superiorconsumer journey to both online and the brick and mortar stores.●Grow our database. As the usage of our measurement apps increases, our database of information including user behaviour and body measurementsgenerates valuable statistics. Such data can be used in the big data market for targeted advertising and for blind consumer data mining.●Identify and acquire synergistic businesses. In order to reduce our time to market and obtain complementary technologies, we are seeking to acquiretechnologies and businesses that are synergistic to our product offering. We recently completed an acquisition of Orgad which operates anomnichannel ecommerce platform and Naiz which provides SaaS technology solutions that solve size and fit issues for fashion ecommerce companies.●Partnerships and cooperation. In order to bring a wider solution for the retail market we are working to partner and integrate our technology withpartners that can increase our penetration and offering to the market.Market OpportunityThe global ecommerce market was $5.7 trillion in 2022, and the industry is expected to grow significantly in the coming years with no signs of slowingdown. Market specialists expect a compound annual growth rate of 27.43% from 2023 to 2028: according to data from Statista, the market is expected to reach $6.5trillion in 2023. While many sectors have found ways to increase revenue through ecommerce, ecommerce is still plagued by issues that cut into profits andnegatively impact the bottom line, such as customer returns, low consumer conversion, and associated restocking and shipping costs.Fashion/ApparelSince the onset of the COVID19 pandemic, an immense shift to digital was recorded, with 85.9% growth vs. prepandemic, according to Mastercard, andover 2 billion people worldwide who shop online, according to data from Oberlo. In November 2022, online shoppers broke records with $11.3 billion in spending onCyber Monday, driving 5.8% yearoveryear growth and making the day the biggest online shopping day of all time, according to Adobe Analytics.In 2021, fashion companies invested between 1.6% and 1.8% of their revenues in technology, according to Mckinsey, and are expected to double theinvestment by 2030 in order to keep up with digital natives and keep a competitive edge. Personalization in ecommerce and hybrid connectivity in brickandmortarretail are two key themes in the future of fashtech, according to Mckinsey’s 2022 State of Fashion Technology.7In the upcoming years, inflation is expected to impact the fashion world. As prices for goods increase, the challenge will be to inspire confidence inconsumers, via different smart digital tools. Brands will need to embrace creative digital tools and new channels to deepen customer relationships, and as Mckinseyforecasts in their State of Fashion report for 2023, they will need to execute on priorities such as sustainability and digital acceleration.The global fashion ecommerce market size is expected to grow from $744.4 billion in 2022 to $821.19 billion in 2023 at a compound annual growth rate of10.3%. In 2027, the market size is expected to grow to $1,222.32 billion, at a compound annual growth rate of 10.5%, according to BRC.Based on the importance which shoppers attribute to free shipping 50% of cart abandonment rate is due to extra shipping costs (Baymard Institute) theneed for fashion retailers to substantiate the optimal size for a customer, thus minimizing returns, has never been more crucial.As brands move online or significantly expand their online presence, we believe that developing innovative ways to connect with shoppers, both onlineand offline, has become a top priority.Shipping/ParcelAccording to Pitney Bowes, parcel revenue in 13 major countries around the world increased by 17% year over year from $420 billion in 2020 (reflecting 131billion parcels) to $491 billion in 2021 (reflecting 159 billion parcels). In the shipping/parcel industry, the dimensions of a package are critical. It is not merely themeasurement of a package or box – but rather the amount of space that the package or box will take up on a truck, airplane, or ship that will be transporting thepackage or box. Far too often, retailers use unfit packaging for their items, adding additional costs in materials and shipping fees.DIYSimilar to issues in the apparel and fashion market, big box, hardware, furniture, and DIY stores are plagued by returns due to incorrect fit andmeasurements. In an industry where precise measurement for projects is an absolute necessity, ecommerce has not grown as quickly as in other industries which webelieve is due to lack of consumer confidence in measurements at home and buying the correct item online.MySizeIDWe have released the MySizeID app for both iOS and Android which assists consumers to take highly accurate measurement of their own body in order tosize clothing in the best way possible without the need to try the clothes on before purchasing. MySizeID is designed to simplify the process of purchasing clothesonline and significantly reduce the rate of returns of poorfitting clothing. During 2022, MySizeID delivered over 23.5 million size recommendations.The application is the result of a research and development effort that combines:●anthropometric research – analyses of information pertaining to body measurements derived from a survey and the subsequent determination ofcorrelations between body parts;●body measurement algorithm research – an algorithm created by us to measure body parts; and●retailers size chart analyses – adopting a deep understanding of the size charts of retailers and the corresponding “body to garment size.”MySizeID allows consumers to create a secure, online profile of their personal measurements, which can then be utilized, with partnered online retailers, toensure that no matter the manufacturer or size chart, they will get the right fit. MySizeID operates based on the use of existing sensors in smart phones which enable,through a specific purpose application, the measurement of the body of any consumer by moving the smartphone along his or her body. The MySizeID applicationdoes not rely on user photographs or any additional hardware; all a user needs to do is scan their body with their smartphone and the application records theirmeasurements. The measurements can then be saved in our database in the cloud, enabling the user to search for clothes in various retailer websites withoutworrying about size. When a search is made, the retailer will connect to our cloud database, and then provide results based on the user’s measurements and otherparameters as he or she may have defined. This data is also saved for use when a customer enters a brickandmortar store to help serve the customer moreefficiently and to provide a better shopping experience.8Figure 1: Screenshot of MySizeID on smartphone and ecommerce websiteAs part of the integration process, we offer to the retailer five main components:●Mobile App. MySizeID comes in the form of a native app or website. Our native app can be used “as is” integrated into the retailer’s ecommercewebsite. The website users can build a body profile on the app and receive size recommendations for their profile both in the app and on a widgetintegrated with their website.9●Widget. When a consumer enters into the retailer’s website and looks for a specific item, he or she can click on the MySizeID widget which will informthe consumer of his or her recommended size, based on his or her actual measurements, as measured using the app and the item he or she is looking at.The widget has two features:AI Wizard mode allows the user to obtain size from the following parameters: gender, height, weight, belly shape, hip shape and bra size only. Thegender, height and weight questions are mandatory, while the body shape questions are optional and can be added to increase accuracy for specificapparel categories.Guest mode allows a user that does not wish to sign up to MySizeID as a user to obtain size recommendations as well.●Analytic Pixel. MySizeID analytic pixel allows retailer to track and analyze the widget usage. By adding the pixel to the retailer’s website, MySizeID BIteam can track engagement, order, and return data and provide retailers with tools to understand the advantages and benefits of MySizeID.Use your own device using MySizeID instore solution, shoppers can receive size recommendations for all store items, when shopping in the offlinestores. The shoppers can build their body profile using an easy to use 3 to 6 questions form, scan an item barcode and receive a size recommendationfor the scanned item based on their body profile and the item’s size chart.Another feature we added is the “inbetween sizing” feature. Our system can detect a user that has body dimensions that place the user inbetweenthe clothes sizes being offered and lets the user know that. A user can then choose between the two sizes according to the user’s fit preference(tight/loose/average).In addition, we have recently released our InstantApp feature which allows shoppers to generate their body measurements directly from our widget,without the need to download our mobile app. Using this technology, the shoppers can create their online profile of their personal measurements andcomplete a purchase faster and easier with minimum distractions.The body profile can be created while shoppers are viewing the page from their mobile phone, or by scanning a QR code on desktop that will open thesame page on the mobile phone.Screenshot of InstantApp widget on desktop on yumyumfashion website10●MyDash Platform. The MyDash platform is a smart backoffice system where the retailer enters all the information regarding its size charts thatcorrelates to every product in its ecommerce site, and where the retailer can access the information on its users. This system is customizable based onthe retailer’s needs. In 2021, we changed the MyDash system to increase the system’s accessibility, added walkthroughs, user guides and changed theuser interface and much more for the ease of use. We added the option to use our generic size charts, added the option upload size chart files insteadof typing the size charts values manually, added more widget styling options and changed the pairing mechanism between the size chart and theproducts to be more userfriendly.Figure 3: Screenshot of BackOffice System●FirstLook Smart Mirror. The Smart Mirror provides an interactive, mirrorlike touch display that allows brands to provide instore customers with anenhanced, online shopping experience, contactless checkout and obtains the recommended size. The MySizeIDFirstLook Smart Mirror can be placedin numerous locations throughout a retail store, including the fitting rooms (without cameras) or other hightraffic locations of the store. Highlightcapabilities of the FirstLook Smart Mirror include a 3D “Tryiton” interactive avatar experience, personalized and highly accurate sizerecommendations by MySizeID, thirdparty point of sale systems integration, styling recommendations and contactless “select and collect” at theregister feature.Illustration of MySizeID “first look” smart mirror in a fashion store11We are currently offering MySizeID technology to retailers through either a payperuse model or a monthly subscription model. In our payperusebusiness model, every time the consumer obtains a recommended size, the retailer is charged for the usage.BoxSizeBoxSize is a parcel measurement application that can provide realtime logistic data on package volumes and transportation, resulting in improvedoperational efficiency and reduced operating expenses. In addition, BoxSize allows customers to easily measure the size of their parcel with their smartphone,calculate shipping costs and arrange for a convenient pickup time for the package. BoxSize is available both on iOS and Android.In 2020 we released the “One Click” feature on BoxSize that enables the user to measure a package with just one swipe of the handheld device. Previously,measurements through BoxSize would require three separate swipes.Figure 4: Screenshot of BoxSizeOur BoxSize mobile measurement solution is available on the Honeywell Marketplace. In addition, BoxSize was approved for Honeywell’s Global VendorProgram, and is available to provide highly accurate mobile measurement solutions for thousands of Honeywell clients. We also developed a new dashboard for thecourier companies to have all the required data about each package in one place. It includes package dimensions, pictures, scan geo location and more. Thedashboard also let the courier use Webhooks, which allows him to get the information from his own system.12In 2020, we announced our partnership with Datalogic, a company focused on the automatic data capture and process automation markets. The partnershipmakes our BoxSize measurement solution available to thousands of Datalogic customers in the Transportation and Logistics vertical.Agreement with Delhivery Private Limited, IndiaWe entered into an agreement with Delhivery Private Limited, one of the largest courier pickup, delivery, and online shipping services in India. Delhivery’sreputation as a frontrunner in delivery and logistics tech makes its decision to select Boxsize a particularly strong testament to the value the solution provides.BoxSize provides Delhivery’s employees on the B2B side with critical information that will allow them to effortlessly optimize loading efficiency and add even morerealtime visibility to operations.SizeUpWe are working on additional consumer applications, including a DIY application. Our SizeUp application is a smart tape measure for the business toconsumer market which allows users to utilize their smartphone as a tape measure. The application provides measurements with an accuracy of within twocentimeters. Through the use of SizeUp, users will be able to visualize how an object or a piece of furniture will fit in an existing room in their home or office. It alsoadded Google Vision for image content analysis, object detection, and title suggestions.Currently the SizeUp app for Android and iOS is available for free for the first 30 days, after which a user will be required to register via email and pay aonetime fee of $1.99 to continue using the application. To date, revenues from downloads have been minimal.Research and DevelopmentOur research and development team are responsible for the research, algorithm, design, development, and testing of all aspects of our measurementplatform technology. We invest in these efforts to continuously improve, innovate, and add new features to our solutions.We incurred research and development expenses of approximately $1.7 million in 2022 and $4.25 million in 2021, relating to the development of itsapplications and technologies. The decrease from the corresponding period primarily resulted from share based payment in amount of $2,618,000 attributed to theshare issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021. We intend to continue to invest in our research anddevelopment capabilities to extend our platform and bring our measurement technology to a broader range of applications.13In 2022, the R&D department experienced significant success in their efforts to improve the performance of their size recommendation system. Through acombination of optimized algorithms and the incorporation of cuttingedge technologies, the team was able to achieve a threefold increase in the system’s speed.This breakthrough not only makes the system one of the fastest and most accurate on the market, but also reduced the operation costs, making it more costeffective for businesses to use. Additionally, the solution is now highly scalable, allowing it to easily adapt to the needs of businesses of any size. The R&D team isnow focused on further improving the system and exploring new applications for the technology.Sales and MarketingIn 2019, we launched a commercialization strategy that directs our sales efforts toward both sales to ecommerce players in specific vertical markets such asfashion/apparel and shipping/delivery as well as to ecommerce thirdparty platform providers. As of March 15, 2023, our products are being sold in the followingcountries: US, UK, France, Netherlands, Spain, Portugal Turkey, Germany, Israel and Italy, generating customer leads, building out a sales pipeline, and developingcustomer relationships.We believe an effective method to market our suite of products is for users to actively use and explore its capabilities. We encourage free trials of one ormore of our products in order to successfully convert those accounts to paid subscriptions.Proprietary RightsWe rely on a combination of patent, copyright, trademark and trade secret laws in the United States and other jurisdictions, as well as contractualprotections, to protect our proprietary technology.As of December 31, 2022, we owned 18 issued patents: six in Europe, four in the U.S., three in each of Russia and Japan and one in each of Canada andIsrael which expire between January 20, 2033 and August 18, 2036, and we have two additional patent applications in process. As of such date, we do not have anyregistered trademarks.We cannot provide any assurance that our proprietary rights with respect to our products will be viable or have value in the future since the validity,enforceability and type of protection of proprietary rights in softwarerelated industries are uncertain and still evolving.Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products or to obtain and use informationthat we regard as proprietary. Policing unauthorized use of our products is difficult, and while we are unable to determine the extent to which piracy of our softwareproducts exists, software piracy can be expected to be a persistent problem. In addition, the laws of some foreign countries do not protect proprietary rights to asgreat an extent as do the laws of the United States, and effective copyright, trademark, trade secret and patent protection may not be available in those jurisdictions.Our means of protecting our proprietary rights may not be adequate to protect us from the infringement or misappropriation of such rights by others.Further, in recent years, there has been significant litigation in the United States involving patents and other intellectual property rights, particularly in thesoftware and Internetrelated industries. We can become subject to intellectual property infringement claims as the number of our competitors grows and ourproducts and services overlap with competitive offerings. These claims, even if not meritorious, could be expensive to defend and could divert management’sattention from operating our business. If we become liable to third parties for infringing their intellectual property rights, we could be required to pay a substantialaward of damages and to develop noninfringing technology, obtain a license or cease selling the products that contain the infringing intellectual property. We maybe unable to develop noninfringing technology or obtain a license on commercially reasonable terms, if at all.14Government RegulationWe are subject to a number foreign and domestic laws and regulations that involve matters central to our business. These laws and regulations mayinvolve privacy, data protection, intellectual property, or other subjects. Many of the laws and regulations to which we are subject are still evolving and being testedin courts and could be interpreted in ways that could harm our business. In addition, the application and interpretation of these laws and regulations often areuncertain, particularly in the new and rapidly evolving industry in which we operate. Because global laws and regulations have continued to develop and evolverapidly, it is possible that we, our products, or our platform may not be, or may not have been, compliant with each such applicable law or regulation.In particular, we are subject to a variety of federal, state and international laws and regulations governing the processing of personal data. Many U.S. stateshave passed laws requiring notification to data subjects when there is a security breach of personally identifiable data. There are also a number of legislativeproposals pending before the U.S. Congress, various state legislative bodies and foreign governments concerning data protection. In addition, data protection lawsin Europe and other jurisdictions outside the United States can be more restrictive than those within the United States, and the interpretation and application ofthese laws are still uncertain and in flux.For example, the General Data Protection Regulation, or GDPR, which took effect on May 25, 2018, enhances data protection obligations for entities thatprocess personal data about individuals, including obligations to cooperate with European data protection authorities, implement security measures and keeprecords of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to the greater of €20 million or 4% of global annual revenue. Inaddition, the California Consumer Privacy Act of 2018, or CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and requiredeletion of their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used.The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further,failure to comply with the Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may exposeus to administrative fines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the currentenforcement measures and sanctions. Given the breadth and depth of changes in data protection obligations, meeting the requirements of GDPR and otherapplicable laws and regulations has required significant time and resources, including a review of our technology and systems currently in use against therequirements of GDPR and other applicable laws and regulations. We have taken various steps to prepare for complying with GDPR and other applicable laws andregulations however there can be no assurance that these steps are sufficient to assure compliance. Further, additional EU laws and regulations (and member states’implementations thereof) further govern the protection of individuals and of electronic communications. If our efforts to comply with GDPR or other applicable lawsand regulations are not successful, we may be subject to penalties and fines that would adversely impact our business and results of operations, and our ability touse personal data of individuals could be significantly impaired.CompetitionWe operate in a highly competitive industry that is characterized by constant change and innovation. Changes in the applications and the programinglanguages used to develop applications, devices, operating systems, and technology landscape result in evolving customer requirements. Our competitors includeTrue Fit, Fit analytics and 3DLook.The principal competitive factors in our market include the following:●High Accuracy Size Recommendations: the highest accuracy and the lowest margin of error by combining patented technology including AI and ML,size chart or spec data, and MySizeID property body data measurement;●Integration○Fast 1 week integration including size chart size chart review and product mapping○Easy 1 line of “all included” script implementation●Technical Advantages○Very small library that weighs ±50kb (minimum widget loading time on product page)○UltraFast loading and size recommendation presenting○Restful API option (API integration with any website or app)15●Optimizations○Adjustments of size charts based on performance○Widget usage analysis by FashTech and BI teams○Automatic pairing of size charts with products/collections●User Experience○Easy to use interface (1015 seconds to receive size recommendations)○Option to add/deduct questions to/from widget wizards○Users automatically receive size recommendations on all products after initial sign up●Product and platform features, architecture, reliability, privacy and security, performance, effectiveness, and supported environments;●Product extensibility and ability to integrate with other technology infrastructures;●Digital operations expertise;●Ease of use of products and platform capabilities;●Total cost of ownership;●Adherence to industry standards and certifications;●Strength of sales and marketing efforts;●Brand awareness and reputation; and●Focus on customer successWe believe we generally compete favorably with our competitors on the basis of these factors. We expect competition to increase as other established andemerging companies enter our markets, as customer requirements evolve, and as new products and technologies are introduced. We expect this to be particularlytrue as we offer a smartphonebased offering that does not need to utilize the smartphone’s camera, and our competitors may also seek to repurpose their existingofferings to provide similar solutions. Many of our competitors have substantially greater financial, technical, and other resources, greater name recognition, largersales and marketing budgets, broader distribution, and larger and more mature intellectual property portfolios.Human Capital ManagementAs of March 31, 2023, we had a total of 35 employees, of which 30 were fulltime employees, including 9 in sales and marketing, 12 in technology anddevelopment and 9 in administration and finance.None of our employees are represented by a collective bargaining agreement, nor have we experienced any work stoppage. We consider our relationshipwith our employees to be good. Our future success depends on our continuing ability to attract and retain highly qualified engineers, sales and marketing, accountmanagement, and senior management personnel.We also believe we have built a strong sales team focused on expanding into new markets through the acquisition of Naiz and our current team.We believe that our future success will depend, in part, on our continued ability to attract, hire and retain qualified personnel. In particular, we depend onthe skills, experience and performance of our senior management and research personnel. We compete for qualified personnel with other hitech companies, as wellas universities and nonprofit research institutions.16We provide competitive compensation and benefits programs to help meet the needs of our employees. In addition to salaries, these programs (which varyby country/region and employment classification) include incentive compensation plan, pension, and insurance benefits, paid time off, , among others. We also usetargeted equitybased grants with vesting conditions to facilitate retention of personnel, particularly for our key employees.The success of our business is fundamentally connected to the wellbeing of our people. Accordingly, we implemented an hybrid work policy in which theemployees can work from home twice a week.We consider our employees to be a key factor to our success and we are focused on attracting and retaining the best employees at all levels of ourbusiness. Inclusion and diversity is a strategic, business priority. We employ people based on relevant qualifications, demonstrated skills, performance and otherjobrelated factors. We do not tolerate unlawful discrimination related to employment, and strive to ensure that employment decisions related to recruitment,selection, evaluation, compensation, and development, among others, are not influenced by race, color, religion, gender, age, ethnic origin, nationality, sexualorientation, marital status, or disability. Continuous monitoring to ensure pay equity has been a focus in 2022. We have continued to improve gender balance in 2022with a focus on increasing the representation of women hired as new college graduates. We are committed to creating a trusting environment where all ideas arewelcomed and employees feel comfortable and empowered to draw on their unique experiences and backgrounds.We consider our relations with our employees to be good.Company InformationOur principal executive offices are located at HaYarden 4 St., POB 1026, Airport City, Israel 7010000, and our telephone number is +97236009030. Ourwebsite address is www.mysizeid.com. Any information contained on, or that can be accessed through, our website is not incorporated by reference into, nor is it inany way a part of, this Annual Report on Form 10K.We use our website (www.mysizeid.com) as a channel of distribution of Company information. The information we post through this channel may bedeemed material. Accordingly, investors should monitor our website, in addition to following our press releases, SEC filings and public conference calls andwebcasts. The contents of our website are not, however, a part of this Annual Report on Form 10K.Corporate HistoryWe were incorporated in the State of Delaware on September 20, 1999 under the name Topspin Medical, Inc. In December 2013, we changed our name toKnowledgetree Ventures Inc. Subsequently, in February 2014, we changed our name to MySize, Inc. In 2020, we created a subsidiary in the Russian Federation, MySize LLC.From inception through 2012, we were engaged in research and development of a medical magnetic resonance imaging, or MRI, technology forinterventional cardiology and in the development of MRI technology for use in the diagnosis and treatment of prostate cancer. In January 2012, we acquiredMetamorefix Ltd., or Metamorefix. Metamorefix was incorporated in 2007, and was engaged in the development of innovative solutions for the rehabilitation oftissues, particularly skin tissues. By the end of 2012, we ceased operations and in January 2013, we sold our entire ownership interest in Metamorefix.In September 2013, Ronen Luzon, our Chief Executive Officer, acquired control of the Company from Asher Shmuelevitch, according to which Mr. Luzonpurchased 70,238 shares of common stock from Mr. Shmuelevitch, which shares represented approximately 40% of the issued and outstanding capital stock of theCompany at such time, thus becoming a controlling shareholder of the Company. In connection with the acquisition, Mr. Luzon reached a settlement with our thencreditors pursuant to which the main creditor, Mr. Shmuelevitch, was paid a total sum of approximately $140,000 in consideration for a full and final waiver of any andall his claims that he may have relating to any monetary indebtedness of the Company to the creditors.17In February 2014, My Size Israel, our wholly owned subsidiary, entered into a Purchase Agreement, or the Purchase Agreement, with Shoshana Zigdon,who at the time was a beneficial owner of more than 20% of our outstanding shares, with respect to the acquisition by us of certain rights related to the collection ofdata for measurement purposes including rights in the venture, the method and a patent application that had been filed by the Seller (PCT/IL2013/050056), or theAssets. In consideration for the sale of the Assets, we agreed to pay to Ms. Zigdon, 18% of our operating profit, directly or indirectly connected with the Assetstogether with valueadded tax in accordance with the law for a period of seven years from the end of the development period of the aforementioned venture. Inaddition to the foregoing, the Purchase Agreement provided that all developments, improvements, knowledge and knowhow developed and/or accumulated by usafter the execution of the Purchase Agreement will be owned by us. Further, Ms. Zigdon agreed not to compete, directly or indirectly, with us in any matter relatingto the Assets for a period of seven years from the end of the development period of the venture.On May 26, 2021, we, My Size Israel, and Ms. Zigdon entered into an Amendment to Purchase Agreement, or the Amendment, which made certainamendments to the Purchase Agreement. Pursuant to the Amendment, Ms. Zigdon agreed to irrevocably waive (i) the right to repurchase certain assets related tothe collection of data for measurement purposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which our business issubstantially dependent, or the Assets, and (ii) all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My SizeIsrael under the Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation, reward orany rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights, or the Waiver. Inconsideration of the Waiver, we issued 100,000 shares of common stock to Ms. Zigdon.In September 2005, we commenced trading on the Tel Aviv Stock Exchange, or TASE. Between 2007 and 2012 we reported as a public company with theSEC. In August 2012, we suspended our reporting obligations. In mid2015 we resumed reporting as a public company. On July 25, 2016, our common stock beganpublicly trading on the Nasdaq Capital Market under the symbol “MYSZ”.ITEM 1A. RISK FACTORSAn investment in our common stock involves a high degree of risk. You should carefully consider the following risk factors and the other information inthis Annual Report on Form 10K before investing in our common stock. Our business and results of operations could be seriously harmed by any of the followingrisks. The risks set out below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterialalso may materially adversely affect our business, financial condition and/or operating results. If any of the following events occur, our business, financial conditionand results of operations could be materially adversely affected. In such case, the value and trading price of our common stock could decline, and you may lose allor part of your investment.Summary Risk FactorsThe principal factors and uncertainties that make investing in our ordinary shares risky, include, among others:Risks Related to Our Financial Position and Capital Requirements●We have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.●Our limited operating history makes it difficult to evaluate our business and prospects.●We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive and maycause the market price of our common stock to decline.●The report of our independent registered public accounting firm contains an explanatory paragraph regarding substantial doubt about our ability tocontinue as a going concern.Risks Related to Our Company and Our Business●The market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and online thirdparty resellers adopting our flagship product, MySizeID.18●Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broader marketacceptance of our products.●We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which may makeit difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.●We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increase ourcapital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.●If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations and financialcondition may be adversely affected.●If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operations andfinancial condition could be adversely affected.●The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile device applications andcustom development services.●Our growth depends, in part, on the success of our strategic relationships with third parties.●Changes in economic conditions could materially affect our business, financial condition and results of operations.●We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.●We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significant interruptionin our network or hosting and cloud services could adversely impact our operations and harm our business.●Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.●We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.●A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.●Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, data protectionand information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive and confidentialinformation. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm our business,results of operations and financial condition.●We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect our business.●We may face intense competition and expect competition to increase in the future, which could limit us in developing a customer base and generatingrevenue.●Our business operations and future development could be significantly disrupted if we lose key members of our management team.19●If we are able to expand our operations, we may be unable to successfully manage our future growth.Risks Related to Our Operations in Israel and Russia●Our headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.●Russia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.Risks Related to Our Common Stock●A more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.●Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions and adversedevelopments with respect to financial institutions and associated liquidity risk;●Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.●Our securities are traded on more than one market which may result in price variations.●We are a former “shell company” and as such are subject to certain limitations not generally applicable to other public companies.Risks Related to Our Financial Position and Capital RequirementsWe have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.We realized a net loss of approximately $8.3 million and $10.5 million for the years ended December 31, 2022 and 2021 and had an accumulated deficit of$53.5 million as at December 31, 2022. Because of the numerous risks and uncertainties associated with the development and commercialization of our products andbusiness, we are unable to predict the extent of any future losses or when we will become profitable, if at all. Expected future operating losses will have an adverseeffect on our cash resources, shareholders’ equity and working capital. Our failure to become and remain profitable could depress the value of our stock and impairour ability to raise capital, expand our business, maintain our development efforts, or continue our operations. A decline in our value could also cause you to lose allor part of your investment in us.Our limited operating history makes it difficult to evaluate our business and prospects.We have only been developing our measurement technology since 2014. Since then, our operating history has been primarily limited to research anddevelopment, pilot studies, raising capital, and more recently acquisitions and sales and marketing efforts. Therefore, it may be difficult to evaluate our business andprospects. We have not yet demonstrated an ability to commercialize our products. Consequently, any predictions about our future performance may not beaccurate, and you may not be able to fully assess our ability to complete development and/or commercialize our products, and any future products.We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive andmay cause the market price of our common stock to decline.Based on our projected cash flows and the cash balances as of the date of this Annual Report on Form 10K, our existing cash is insufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. In order to meet ourbusiness objectives in the future, we will need to raise additional capital, which may not be available on reasonable terms or at all. Additional capital would be usedto accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;20●respond to competitive pressure;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, and a number of otherfactors, many of which are outside our control, and on our financial performance. Accordingly, we cannot assure you that we will be able to successfully raiseadditional capital at all or on terms that are acceptable to us. If we cannot raise additional capital when needed, it may have a material adverse effect on our business,results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.Management has concluded that there is substantial doubt about our ability to continue as a going concern which could prevent us from obtainingnew financing on reasonable terms or at all.We have incurred significant losses and negative cash flows from operations and have an accumulated deficit that raises substantial doubt about its abilityto continue as a going concern. Our audited consolidated financial statements for the year ended December 31, 2022 were prepared under the assumption that wewould continue our operations as a going concern. Our independent registered public accounting firm has included a “going concern” explanatory paragraph in itsreport on our financial statements for the year ended December 31, 2022. If we are unable to improve our liquidity position, by, among other things, raising capitalthrough public or private offerings or reducing our expenses, we may exhaust our cash resources and will be unable to continue our operations. If we cannotcontinue as a viable entity, our shareholders would likely lose most or all of their investment in us.Risks Related to Our Company and Our BusinessThe market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and onlinethirdparty resellers adopting our flagship product, MySizeID.The market for our measurement technology is relatively new and unproven and is subject to a number of risks and uncertainties. We believe that ourfuture success will depend in large part on market adoption of our flagship product, MySizeID, by U.S. retailers and online thirdparty resellers. In order to grow ourbusiness, we intend to focus on educating retailers and resellers and other potential customers about the benefits of our measurement technology, expanding thefunctionality of our products and bringing new products to market to increase market acceptance and use of our technology. Our ability to develop and expand themarket that our products address depends upon a number of factors, including the cost savings, performance and perceived value associated with such products.The market for our products could fail to develop or there could be a reduction in interest or demand for our products as a result of a lack of consumer acceptance,technological challenges, competing products and services, weakening economic conditions and other causes. We may never successfully commercialize ourproducts and if our products fail to achieve market acceptance, this would have a material adverse effect on our business, results of operations and financialcondition.21Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broadermarket acceptance of our products.Our ability to achieve customer adoption, especially among U.S. retailers will depend, in part, on our ability to effectively organize, focus and train our salesand marketing personnel. We have limited experience selling to U.S. retailers and only recently established a U.S. sales force. We believe that there is significantcompetition for experienced sales professionals with the skills and industry knowledge that we require. Our ability to achieve significant revenue growth in thefuture will depend, in part, on our ability to recruit, train and retain a sufficient number of experienced sales professionals, particularly those with experience sellingto U.S. retailers. In addition, even if we are successful in hiring qualified sales personnel, new hires require significant training and experience before they achievefull productivity, particularly for sales efforts targeted at U.S. retailers and new markets. Because we only recently started sales efforts, we cannot predict whether, orto what extent, our sales efforts will be successful.We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which maymake it difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.In this market segment, the decision to adopt our products may require the approval of multiple technical and business decision makers, including security,compliance, procurement, operations and IT. In addition, while U.S. retailers may be willing to deploy our products on a limited basis, before they will commit todeploying our products at scale, they often require extensive education about our products and significant customer support time, engage in protracted pricingnegotiations and seek to secure readily available development resources. As a result, it is difficult to predict when we will obtain new customers and begingenerating revenue from these customers. As part of our sales cycle, we may incur significant expenses before executing a definitive agreement with a prospectivecustomer and before we are able to generate any revenue from such agreement. We have no assurance that the substantial time and money spent on our salesefforts will generate significant revenue. If conditions in the marketplace generally or with a specific prospective customer change negatively, it is possible that nodefinitive agreement will be executed, and we will be unable to recover any of these expenses. If we are not successful in targeting, supporting and streamlining oursales processes and if revenue expected to be generated from a prospective customer is not realized in the time period expected or not realized at all, our ability togrow our business, and our operating results and financial condition may be adversely affected. If our sales cycles lengthen, our future revenue could be lower thanexpected, which would have an adverse impact on our operating results and could cause our stock price to decline.22We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increaseour capital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.In order to reduce time to market and obtain complementary technologies, we are seeking to acquire technologies and businesses that are synergistic to ourproduct offering. For example, we recently acquired Orgad which operates an omnichannel ecommerce platform and Naiz which provides SaaS technology solutionsthat solve size and fit issues for fashion ecommerce companies. We evaluate from time to time various acquisitions and collaborations, including licensing oracquiring complementary technologies, intellectual property rights, or businesses. The process for acquiring a company may take from several months up to a yearand costs can vary greatly. We may also compete with others to acquire companies, and such competition may result in decreased availability of, or an increase inprice for, suitable acquisition candidates. In addition, we may not be able to consummate acquisitions or investments that we have identified as crucial to theimplementation of our strategy for other commercial or economic reasons. As a result, it may be more difficult for us to identify suitable acquisition or investmenttargets or to consummate acquisitions or investments on acceptable terms or at all. If we are not able to execute on any acquisition, we may not be able to achieve afuture growth strategy and may lose market share.In addition, the acquisition of Orgad, Naiz and any potential future acquisition, joint venture or collaboration may entail numerous potential risks, including:●increased operating expenses and cash requirements;●the assumption of additional indebtedness or contingent liabilities;●assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel;●the diversion of our management’s attention from our existing programs and initiatives in pursuing such a strategic merger or acquisition;●retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships;●risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing technologies; and●our inability to generate revenue from acquired technologies or products sufficient to meet our objectives in undertaking the acquisition or even to offsetthe associated acquisition and maintenance costs.All of the foregoing risks may be magnified as the cost, size or complexity of an acquisition or acquired company increases, or where the acquiredcompany’s products, market or business are materially different from ours, or where more than one integration is occurring simultaneously or within a concentratedperiod of time. We may not be able to obtain the necessary regulatory approvals, including those of antitrust authorities and foreign investment authorities, incountries where we seek to consummate acquisitions or make investments. For those and other reasons, we may ultimately fail to consummate an acquisition, even ifwe announce the intended acquisition.In addition, we may require significant financing to complete an acquisition or investment, whether through bank loans, raising of equity or debt orotherwise. We cannot assure you that such financing options will be available to us on reasonable terms, or at all. If we are not able to obtain such necessaryfinancing, it could have an impact on our ability to consummate a substantial acquisition or investment and execute a future growth strategy. Alternatively, we mayissue a significant number of shares as consideration for an acquisition, which would have a dilutive effect on our existing shareholders. For example, in partialconsideration for the acquisition of Orgad, we agreed to issue up to 111,602 shares of our common stock and in the Naiz acquisition we issued 240,000 shares of ourcommon stock. Furthermore, if we undertake acquisitions, we may incur large onetime expenses and acquire intangible assets that could result in significant futureamortization expense.23If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations andfinancial condition may be adversely affected.We believe that enhancing the “MySize” brand identity and increasing market awareness of our company and products, particularly among U.S. retailers, iscritical to achieving widespread acceptance of our products. Our ability to successfully develop new retailers may be adversely affected by a lack of awareness oracceptance of our brand. To the extent that we are unable to foster name recognition and affinity for our brand, our growth may be significantly delayed or impaired.The successful promotion of our brand will depend largely on our continued marketing efforts, market adoption of our products, and our ability to successfullydifferentiate our products from competing products and services. Our brand promotion may not be successful or result in revenue generation. Any incident thaterodes consumer affinity for our brand could significantly reduce our brand value and damage our business. If consumers perceive or experience a reduction inquality, or in any way believe we fail to deliver a consistently positive experience, our brand value could suffer and our business may be adversely affected.In particular, adverse weather conditions can impact guest traffic at our retailers, and, in more severe cases, cause temporary retail closures, sometimes forprolonged periods. Our business is subject to seasonal fluctuations, with retail sales typically higher during certain months, such as December. Adverse weatherconditions during our most favorable months or periods may exacerbate the effect of adverse weather on consumer traffic and may cause fluctuations in ouroperating results from quartertoquarter within a fiscal year.If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operationsand financial condition could be adversely affected.Our ability to attract new customers depends in part on our ability to enhance and improve our existing products, increase adoption and usage of ourproducts and introduce new products. The success of any enhancements or new products depends on several factors, including timely completion, adequatequality testing, actual performance quality, and overall market acceptance. Enhancements and new products that we develop may not be introduced in a timely orcosteffective manner, may contain errors or defects, may have interoperability difficulties with our platform or other products or may not achieve the broad marketacceptance necessary to generate significant revenue. Furthermore, our ability to increase the usage of our products depends, in part, on the development of newuse cases for our products and may be outside of our control. If we are unable to successfully enhance our existing products to meet evolving customerrequirements, increase adoption and usage of our products, develop new products, then our business, results of operations and financial condition would beadversely affected.The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile Apps and customdevelopment services.We must continue to enhance and improve the performance, functionality and reliability of our products. The mobile technology industry is characterizedby rapid technological change, changes in user requirements and preferences, frequent new product and services introductions embodying new technologies andthe emergence of new industry standards and practices that could render our products obsolete. Our success will depend, in part, on our ability to both internallydevelop and enhance our existing products, develop new products that address the increasingly sophisticated and varied needs of our customers, and respond totechnological advances and emerging industry standards and practices on a costeffective and timely basis. The development of our technology involvessignificant technical and business risks. We may fail to use new technologies effectively or to adapt our proprietary technology and systems to customerrequirements or emerging industry standards. If we are unable to adapt to changing market conditions, customer requirements or emerging industry standards, wemay not be able to increase our revenue and expand our business.Changes in economic conditions could materially affect our business, financial condition and results of operations.Because our primary target customers include U.S. retailers , we, together with the rest of the fashion/apparel industry, will depend upon consumerdiscretionary spending. Increases in unemployment rates, reductions in home values, increases in home foreclosures, investment losses, personal bankruptcies andreductions in access to credit and reduced consumer confidence, may impact consumers’ ability and willingness to spend discretionary dollars. In addition, volatileeconomic conditions may repress consumer confidence and discretionary spending. Any of the foregoing may have a material adverse effect on our business,financial condition and results of operations.24Our growth depends, in part, on the success of our strategic relationships with third parties.To grow our business, we anticipate that we will continue to depend on relationships with third parties, such as our customers and thirdparty platforms.Identifying partners, and negotiating and documenting relationships with them, requires significant time and resources. If we are unsuccessful in establishing ormaintaining our relationships with third parties, our ability to compete in the marketplace or to grow our revenue could be impaired, and our results of operationsmay suffer. Even if we are successful, we cannot assure you that these relationships will result in increased customer usage of our products or increased revenue.We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.We currently utilize, and plan on continuing to utilize over the current fiscal year, thirdparty networking providers and distribution through companiesincluding, but not limited to, Apple and Google as well as Shopify, WooCommerce and, Datalogic, Honeywell and Zebra to distribute our technologies. If disruptionsor capacity constraints occur, we may have no means of replacing these services, on a timely basis or at all. This could cause a material adverse condition for ouroperations and financial earnings.We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significantinterruption in our network or hosting and cloud services could adversely impact our operations and harm our business.Our technology infrastructure is critical to the performance of our products and customer satisfaction. Our products run on a complex distributed system,or what is commonly known as cloud computing. We own, operate and maintain elements of this system, but significant elements of this system are operated bythirdparties that we do not control and which would require significant time to replace. We expect this dependence on thirdparties to continue. In particular, asignificant portion, if not almost all data storage, data processing and other computing services and systems is hosted by cloud computing providers. Anydisruptions, outages and other performance problems relating to such services, including infrastructure changes, human or software errors and capacity constraints,could adversely impact our business, financial condition or results of operations.Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.We update our products on a frequent basis. Despite efforts to test our updates, errors, failures or bugs may not be found in our products until after theyare deployed to a customer. We have discovered and expect we will continue to discover errors, failures and bugs in our products and anticipate that certain of theseerrors, failures and bugs will only be discovered and remediated after deployment. Real or perceived errors, failures or bugs in our platform could result in negativepublicity, government inquiries, loss of or delay in market acceptance of our products, loss of competitive position, or claims by customers for losses sustained bythem. In such an event, we may be required, or may choose, for customer relations or other reasons, to expend additional resources in order to help correct theproblem.We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.In connection with the operation of our business, we store, process and transmit data, including personal and payment information, about our employeesand customers, a portion of which is confidential and/or personally sensitive. Unauthorized disclosure or loss of sensitive or confidential data may occur through avariety of methods. These include, but are not limited to, systems failure, employee negligence, fraud or misappropriation, or unauthorized access to or through ourinformation systems, whether by our employees or third parties, including a cyberattack by computer programmers, hackers, members of organized crime and/orstatesponsored organizations, who may develop and deploy viruses, worms or other malicious software programs. Such disclosure, loss or breach could harm ourreputation and subject us to government sanctions and liability under our contracts and laws that protect sensitive or personal data and confidential information,resulting in increased costs or loss of revenues. It is possible that security controls over sensitive or confidential data and other practices we and our thirdpartyvendors follow may not prevent the improper access to, disclosure of, or loss of such information. The potential risk of security breaches and cyberattacks mayincrease as we introduce new products and offerings. Further, data privacy is subject to frequently changing rules and regulations, which sometimes conflict amongthe various jurisdictions in which we provide services. Any failure or perceived failure to successfully manage the collection, use, disclosure, or security of personalinformation or other privacy related matters, or any failure to comply with changing regulatory requirements in this area, could result in legal liability or impairment toour reputation in the marketplace.25A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.Information security risks have generally increased in recent years, in part because of the proliferation of new technologies and the use of the Internet, andthe increased sophistication and activity of organized crime, hackers, terrorists, activists, cybercriminals and other external parties, some of which may be linked toterrorist organizations or hostile foreign governments. For example, a cybercriminal could use cybersecurity threats to gain access to sensitive information aboutanother company or to alter or disrupt news or information to be distributed by PR Newswire. Cybersecurity attacks are becoming more sophisticated and includemalicious software, ransomware, attempts to gain unauthorized access to data and other electronic security breaches that could lead to disruptions in criticalsystems, unauthorized release of confidential or otherwise protected information and corruption of data, substantially damaging our reputation. Any person whocircumvents our security measures could steal proprietary or confidential customer information or cause interruptions in our operations. We incur significant coststo protect against security breaches, and may incur significant additional costs to alleviate problems caused by any breaches. Our failure to prevent securitybreaches, or wellpublicized security breaches affecting the Internet in general, could significantly harm our reputation and business and financial results.Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, dataprotection and information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive andconfidential information. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm ourbusiness, results of operations and financial condition.We and our customers that use our products may be subject to privacy and data protectionrelated laws and regulations that impose obligations inconnection with the collection, processing and use of personal data, financial data, health or other similar data. The U.S. federal and various state and foreigngovernments have adopted or proposed limitations on, or requirements regarding, the collection, distribution, use, security and storage of personally identifiableinformation of individuals. The U.S. Federal Trade Commission and numerous state attorneys general are applying federal and state consumer protection laws toimpose standards on the online collection, use and dissemination of data, and to the security measures applied to such data.Similarly, many foreign countries and governmental bodies, including the EU member states, have laws and regulations concerning the collection and useof personally identifiable information obtained from individuals located in the EU or by businesses operating within their jurisdiction, which are often morerestrictive than those in the United States. Laws and regulations in these jurisdictions apply broadly to the collection, use, storage, disclosure and security ofpersonally identifiable information that identifies or may be used to identify an individual, such as names, telephone numbers, email addresses and, in somejurisdictions, IP addresses and other online identifiers.For example, the GDPR, which took full effect on May 25, 2018. The GDPR enhances data protection obligations for businesses and requires serviceproviders (data processors) processing personal data on behalf of customers to cooperate with European data protection authorities, implement security measuresand keep records of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to or greater of €20 million or 4% of global annualrevenues. In addition, the CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and require deletion of their personalinformation, opt out of certain personal information sharing, and receive detailed information about how their personal information is used. The CCPA provides forcivil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further, failure to comply withthe Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may expose us to administrativefines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the current enforcementmeasures and sanctions. There are also additional laws and regulations in additional jurisdictions around the world which govern the protection of consumers andof electronic communications. If our efforts to comply with GDPR, CCPA or other applicable laws and regulations are not successful, we may be subject to penaltiesand fines that would adversely impact our business and results of operations, and our ability to conduct business could be significantly impaired.26Additionally, although we endeavor to have our products comply with applicable laws and regulations, these and other obligations may be modified, theymay be interpreted and applied in an inconsistent manner from one jurisdiction to another, and they may conflict with one another, other regulatory requirements,contractual commitments or our internal practices. We also may be bound by contractual obligations relating to our collection, use and disclosure of personal,financial and other data or may find it necessary or desirable to join industry or other selfregulatory bodies or other privacy or data protectionrelatedorganizations that require compliance with their rules pertaining to privacy and data protection.We expect that there will continue to be new proposed laws, rules of selfregulatory bodies, regulations and industry standards concerning privacy, dataprotection and information security in the United States, the European Union and other jurisdictions, and we cannot yet determine the impact such future laws,rules, regulations and standards may have on our business. Moreover, existing U.S. federal and various state and foreign privacy and data protectionrelated lawsand regulations are evolving and subject to potentially differing interpretations, and various legislative and regulatory bodies may expand current or enact new lawsand regulations regarding privacy and data protectionrelated matters. Because global laws, regulations and industry standards concerning privacy and datasecurity have continued to develop and evolve rapidly, it is possible that we or our products or platform may not be, or may not have been, compliant with eachsuch applicable law, regulation and industry standard and compliance with such new laws or to changes to existing laws may impact our business and practices,require us to expend significant resources to adapt to these changes, or to stop offering our products in certain countries. These developments could adverselyaffect our business, results of operations and financial condition.We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect ourbusiness.Our ability to implement our business plan successfully depends in part on our ability to build brand recognition using our trademarks, service marks andother proprietary intellectual property, including our names and logos. We currently have no registered trademarks. While we plan to register a number of ourtrademarks; however, no assurance can be given that our trademark applications will be approved. As of December 31, 2022, we own 18 issued patents: six in Europe,four in the U.S., three in each of Russia and Japan and one in each of Canada and Israel which expire between January 20, 2033 and August 18, 2036, and we havetwo additional patent applications in process. As of such date, we do not have any registered trademarks., No assurance can be given that our patent applicationswhich are in process will be approved. If our patent applications are not approved, our ability to expand or develop our business may be negatively affected.Third parties may also oppose our trademark or patent applications, or otherwise challenge our use of the trademarks or patents. In the event that ourtrademarks or patents are successfully challenged, we could be forced to rebrand our goods and services or redesign our technology, which could result in loss ofbrand recognition, and could require us to devote resources to advertising and marketing new brands and products.If our efforts to register, maintain and protect our intellectual property are inadequate, or if any thirdparty misappropriates, dilutes or infringes on ourintellectual property, the value of our brands may be harmed, which could have a material adverse effect on our business and might prevent our brands fromachieving or maintaining market acceptance. We may also face the risk of claims that we have infringed third parties’ intellectual property rights. If third parties claimthat we infringe upon their intellectual property rights, our operating profits could be adversely affected. Any claims of intellectual property infringement, eventhose without merit, could be expensive and time consuming to defend, require us to rebrand our services, if feasible, divert management’s attention and resourcesor require us to enter into royalty or licensing agreements in order to obtain the right to use a thirdparty’s intellectual property.Any royalty or licensing agreements, if required, may not be available to us on acceptable terms or at all. A successful claim of infringement against uscould result in our being required to pay significant damages, enter into costly license or royalty agreements, or stop the sale of certain products or services, any ofwhich could have a negative impact on our operating profits and harm our future prospects.We may face intense competition and expect competition to increase in the future, which could prohibit us from developing a customer base andgenerating revenue.We face significant competition in every aspect of our business. Our competitors include True Fit, Virtusize, EasyMeasure, AR MeasureKit, Smart Measureand 3DLook. These companies may already have an established market in our industry. Most of these companies have significantly greater financial and otherresources than us and have been developing their products and services longer than we have been developing ours.27In addition, some of our larger competitors have substantially broader product offerings and leverage their relationships based on other products orincorporate functionality into existing products to gain business in a manner that discourages potential customers from purchasing our products. Potentialcustomers may also prefer to purchase from their existing solution providers rather than a new solution provider regardless of product performance or features.These larger competitors often have broader product lines and market focus and will therefore not be as susceptible to downturns in a particular market. Conditionsin our market could change rapidly and significantly as a result of technological advancements, partnering by our competitors or continuing market consolidation.New startup companies that innovate and large competitors that are making significant investments in research and development may invent similar or superiorproducts and technologies that compete with our products. In addition, some of our competitors may enter into new alliances with each other or may establish orstrengthen cooperative relationships. Any such consolidation, acquisition, alliance or cooperative relationship could lead to pricing pressure and our loss of anyfuture market share and could result in a competitor with greater financial, technical, marketing, service and other resources, all of which could harm our ability tocompete. Furthermore, organizations may be more willing to incrementally add solutions to their existing infrastructure from competitors than to replace their existinginfrastructure with our products. Any failure to meet and address these factors could harm our business, results of operations and financial condition.Our business operations and future development could be significantly disrupted if we lose key members of our management team.The success of our business continues to depend to a significant degree upon the continued contributions of our senior officers and key employees, bothindividually and as a group. Our future performance will be substantially dependent in particular on our ability to retain and motivate Ronen Luzon, our ChiefExecutive Officer, and certain of our other senior executive officers. The loss of the services of our Chief Executive Officer, senior officers or other key employeescould have a material adverse effect on our business and plans for future development. We have no reason to believe that we will lose the services of any of theseindividuals in the foreseeable future; however, we currently have no effective replacement for any of these individuals due to their experience, reputation in theindustry and special role in our operations. We also do not maintain any key man life insurance policies for any of our employees.If we are able to expand our operations, we may be unable to successfully manage our future growth.Our growth may strain our infrastructure and resources. Any such growth could place increased strain on our management, operational, financial and otherresources, and we will need to train, motivate, and manage employees, as well as attract management, sales, finance and accounting, international, technical, andother professionals. Any failure to expand these areas and implement appropriate procedures and controls in an efficient manner and at a pace consistent with ourbusiness objectives could have a material adverse effect on our business, results of operations and financial condition.Our business operations are conducted in multiple languages and could be disrupted due to miscommunications or translation errors.The success of our business continues to depend on our marketing efforts in the United States, Europe and Israel, each of which is conducted in the locallanguage. Miscommunications or inaccurate foreign language translations could have a material adverse effect on our business operations and financial conditions.Additionally, contracts, communications and complex technical information must be accurately translated into foreign languages.We will continue to incur costs and be subject to various obligations as a result of being a public company, listed in the United States and in Israel.We will continue to incur significant legal, accounting and other expenses as a result of being a public company, listed in the United States and in Israel.Although we will incur costs each year associated with being a publiclytraded company, it is possible that our actual costs of being a publiclytraded company willvary from year to year and may be different than our estimates. In estimating these costs, we take into account expenses related to insurance, legal, accounting andcompliance activities.28Furthermore, the need to maintain the corporate infrastructure demanded of a public company may divert management’s attention from implementing ourgrowth strategy, which could prevent us from improving our business, results of operations and financial condition. We have made, and will continue to make,changes to our internal controls and procedures for financial reporting and accounting systems to meet our reporting obligations as a U.S. publicly traded company.However, the measures we take may not be sufficient to satisfy our obligations as a publicly traded company.Any future or current litigation could have a material adverse impact on our results of operations, financial condition and liquidity.From time to time, we may be subject to litigation, including, among others, potential stockholder derivative actions and class actions. Risks associatedwith legal liability are difficult to assess and quantify, and their existence and magnitude can remain unknown for significant periods of time. Subject to certainexceptions, our Amended and Restated Certificate of Incorporation, or Certificate of Incorporation, and Amended and Restated Bylaws, or Bylaws, require us toindemnify and advance expenses to our officers and directors involved in legal proceedings. To date we have obtained directors and officers’ liability, or D&O,insurance to cover some of the risk exposure for our directors and officers. Such insurance generally pays the expenses (including amounts paid to plaintiffs, fines,and expenses including attorneys’ fees) of officers and directors who are the subject of a lawsuit as a result of their service to us. There can be no assurance that wewill be able to continue to maintain this insurance at reasonable rates or at all, or in amounts adequate to cover such expenses should such a lawsuit occur. WithoutD&O insurance, the amounts we would pay to indemnify our officers and directors should they be subject to legal action based on their service to us could have amaterial adverse effect on our financial condition, results of operations and liquidity. Such lawsuits, and any related publicity, may result in substantial costs and,among other things, divert the attention of management and our employees. An unfavorable outcome in any claim or proceeding against us could have a materialadverse impact on our financial position and results of operations for the period in which the unfavorable outcome occurs, and potentially in future periods. Further,any settlement announced by us may expose us to further claims against us by third parties seeking monetary or other damages which, even if unsuccessful, woulddivert management attention from the business and cause us to incur costs, possibly material, to defend such matters, which could have a material adverse impacton our financial position. See “Legal Proceedings” for more information regarding our involvement in ongoing litigation matters.Federal, state and local or Israeli tax rules may adversely impact our results of operations and financial position.We are subject to federal, state and local taxes in the U.S., as well as local taxes in Israel in respect to our operations in Israel. Although we believe our taxestimates are reasonable, if the Internal Revenue Service or other taxing authority disagrees with the positions we have taken on our tax returns, we could faceadditional tax liability, including interest and penalties. If material, payment of such additional amounts upon final adjudication of any disputes could have a materialimpact on our results of operations and financial position. In addition, complying with new tax rules, laws or regulations could impact our financial condition, andincreases to federal or state statutory tax rates and other changes in tax laws, rules or regulations may increase our effective tax rate. Any increase in our effectivetax rate could have a material impact on our financial results.A significant majority of Orgad’s revenue is from sales of products on Amazon’s U.S. Marketplace and any change, limitation or restriction on ourability to operate on Amazon’s platform or any other marketplace could have a material adverse impact to our business, results of operations, financialcondition and prospects.Orgad, our wholly owned subsidiary, operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com, eBay and others. A substantial percentage of Orgad’s revenue is driven by sales on Amazon’s U.S. marketplace and Orgad is subject toterms of service of Amazon and other maketplaces and various other seller policies and services that apply to third parties selling products on Amazon and othermarketplaces. Generally, a marketplace has the right to terminate or suspend its agreement with Orgad at any time and for any reason. Such marketplace may takeother actions against Orgad such as suspending or terminating a seller account or product listing and withholding payments owed to Orgad indefinitely. Forexample, in July 2022, Amazon deactivated Orgad’s Amazon U.S. store as a result of complaints submitted due to an error in the listed manufacturer of certainproducts on Orgad’s store. Although its account was subsequently reinstated in September 2022, if the deactivation were to occur in the future for a prolongedperiod of time, or if Amazon were to terminate Orgad’s account, this would have a material adverse effect on our business, results of operations, financial conditionand prospects. While Orgad endeavors to materially comply with the terms of services of the marketplaces on which it operates, we can provide no assurance thatthese marketplaces will have the same determination with respect to our compliance.29In addition, Amazon and other marketplaces can make changes to its platform that could require Orgad to change the manner in which it operates, limit itsability to successfully launch new products or increase its costs to operate and such changes could have an adverse effect on our business, results of operations,financial condition and prospects. Examples of changes that could impact us relate to platform fee charges (i.e., selling commissions), exclusivity, inventorywarehouse availability, excluded products and limitations on sales and marketing. Any change, limitation or restriction on our ability to sell on Amazon’s platform orany other marketplace, even if temporary, could have a material impact on our business, results of operations, financial condition and prospects.Orgad also relies on services provided by Amazon’s fulfillment platform, including Prime Certification, which provides for expedited shipping to theconsumer, an important aspect in the buying decision for consumers. For products that Orgad fulfills itself, Orgad is qualified to offer our products for sale withPrime Certification delivery. Any inability to market our products for sale with expedited delivery provided under Prime Certification could have a material impact onour business, results of operations, financial condition and prospects. Failure to remain compliant with the best fulfillment practices on Amazon’s platform couldhave a material impact on our business, results of operations, financial condition and prospects. In addition, due to the COVID19 pandemic, Amazon has changedthe amount of inventory it accepts per product for a period of time. If this were to continue it could cause us to miss sales and/or pay additional shipping costswhich would harm our business operations and financial conditions.Orgad’s business depends on its ability to build and maintain strong product listings on ecommerce platforms. Orgad may not be able to maintain andenhance our product listings if it receives unfavorable customer complaints, negative publicity or otherwise fails to live up to consumers’ expectations, whichcould materially adversely affect our business, results of operations and growth prospects.Maintaining and enhancing Orgad’s product listings is critical in expanding and growing its business. However, a significant portion of Orgad’s perceivedperformance to the customer depends on third parties outside of its control, including suppliers and thirdparty delivery agents as well as online retailers such asAmazon and eBay. Because Orgad’s agreements with its online retail partners are generally terminable at will, it may be unable to maintain these relationships, andour results of operations could fluctuate significantly from period to period. Because Orgad relies on third parties to deliver its products, it is subject to shippingdelays or disruptions caused by inclement weather, natural disasters, labor activism, health epidemics or bioterrorism. It may also experience shipping delays ordisruptions due to other carrierrelated issues relating to their own internal operational capabilities. Further, Orgad relies on the business continuity plans of thesethird parties to operate during pandemics, like the COVID19 pandemic, and it has limited ability to influence their plans, prevent delays, and/or cost increases due toreduced availability and capacity and increased required safety measures.Customer complaints or negative publicity about its products, delivery times, or marketing strategies, even if not accurate, especially on blogs, social mediawebsites and thirdparty market sites, could rapidly and severely diminish consumer view of Orgad’s product listings and result in harm to its brand. Customers mayalso make safetyrelated or other types of claims regarding products sold through our online retail partners, such as Amazon, which may result in an online retailpartner removing the product from its marketplace. We also use and rely on other services from third parties, such as our telecommunications services, and thoseservices may be subject to outages and interruptions that are not within our control.Orgad faces risks related to successfully optimizing and operating its fulfillment and customer service operations.Failures to adequately predict customer demand or otherwise optimize and operate its fulfillment and customer service operations successfully from time totime result in excess or insufficient fulfillment or customer service capacity, increased costs, and impairment charges, any of which could materially harm ourbusiness. As Orgad continues to add fulfillment and customer service capability or add new businesses with different requirements, its fulfillment and customerservice operations become increasingly complex and operating them becomes more challenging. There can be no assurance that Orgad will be able to operate ouroperations effectively.30In addition, failure to optimize inventory in our fulfillment operations increases net shipping cost by requiring longzone or partial shipments. Orgad may beunable to adequately staff its fulfillment and customer service operations. Orgad’s failure to properly handle such inventory or to accurately forecast productdemand may result in it being unable to secure sufficient storage space or to optimize its fulfillment operations or cause other unexpected costs and other harm toour business and reputation.Orgad relies on a limited number of shipping companies to deliver inventory to it and completed orders to our customers. The inability to negotiateacceptable terms with these companies or performance problems or other difficulties experienced by these companies could negatively impact our operating resultsand customer experience. In addition, Orgad’s ability to receive inbound inventory efficiently and ship completed orders to customers also may be negativelyaffected by natural or manmade disasters, extreme weather, geopolitical events and security issues, labor or trade disputes, and similar events.The variability in Orgad’s retail business places increased strain on its operations.Demand for Orgad’s product listings can fluctuate significantly for many reasons, including as a result of seasonality, promotions, product launches, orunforeseeable events, such as in response to natural or manmade disasters, extreme weather, or geopolitical events. For example, Orgad expects a disproportionateamount of our retail sales to occur during our fourth quarter. Failure to stock or restock popular products in sufficient amounts such that Orgad fails to meetcustomer demand could significantly affect our revenue and our future growth. If too many customers access the websites on which Orgad engages in onlineretailing within a short period of time due to increased demand, Orgad may experience system interruptions that make the websites unavailable or prevent us fromefficiently fulfilling orders, which may reduce the volume of goods its offers or sell and the attractiveness of its products. In addition, Orgad may be unable toadequately staff for fulfillment of orders and customer service during these peak periods and delivery and other fulfillment companies and customer service cosourcers may be unable to meet the seasonal demand.Our business is subject to the risks of earthquakes, fire, power outages, floods, health risks and other catastrophic events, and to interruption by manmade problems such as terrorism.Natural disasters, such as fire or floods, a significant power outage, telecommunications failure, terrorism, an armed conflict, cyberattacks, epidemics andpandemics such as COVID19, or other geopolitical unrest could affect our supply chain, manufacturers, logistics providers, channel partners, or endcustomers orthe economy as a whole and such disruption could impact us and the shipments and sales. These risks may be further increased if the disaster recovery plans for usand our suppliers prove to be inadequate. To the extent that any of the above should result in delays or cancellations of customer orders, the loss of customers, orthe delay in the deployment or shipment of products, our business, financial condition, and operating results would be adversely affected.For example, on January 2, 2023, Orgad experienced a fire at its warehouse in Israel. We are not aware of any casualties or injuries associated with the fire.We shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incidentdid not affect the future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of thisincident on the other parties that were involved in the incident (lessor and others that leased properties near the warehouse).Our business could be negatively impacted by unsolicited takeover proposals, by shareholder activism or by proxy contests relating to the election ofdirectors or other matters.Our business could be negatively affected as a result of an unsolicited takeover proposal, by shareholder activism or a proxy contest. During 2021, anactivist shareholder sought to make changes to our board of directors, among other matters, which ultimately resulted in us entering into a settlement agreementwith the activist shareholder and another shareholder, and for which considerable costs were incurred and absorbed significant time and attention by managementand the board of directors. A future proxy contest, unsolicited takeover proposal, or other shareholder activism relating to the election of directors or other matterswould most likely require us to incur significant legal fees and proxy solicitation expenses and require significant time and attention by management and our Boardof Directors. The potential of a proxy contest, unsolicited takeover proposal, or other shareholder activism could interfere with our ability to execute our strategicplan, give rise to perceived uncertainties as to our future direction, result in the loss of potential business opportunities or make it more difficult to attract and retainqualified personnel, any of which could materially and adversely affect our business and operating results.31Environmental, social and corporate governance (ESG) issues, including those related to climate change and sustainability, may have an adverseeffect on our business, financial condition and results of operations and damage our reputation.There is an increasing focus from certain investors, customers, consumers, employees and other stakeholders concerning ESG matters. Additionally, publicinterest and legislative pressure related to public companies’ ESG practices continue to grow. If our ESG practices fail to meet regulatory requirements or investor,customer, consumer, employee or other shareholders’ evolving expectations and standards for responsible corporate citizenship in areas including environmentalstewardship, support for local communities, Board of Director and employee diversity, human capital management, employee health and safety practices, productquality, supply chain management, corporate governance and transparency, our reputation, brand and employee retention may be negatively impacted, and ourcustomers and suppliers may be unwilling to continue to do business with us.Customers, consumers, investors and other shareholders are increasingly focusing on environmental issues, including climate change, energy and wateruse, plastic waste and other sustainability concerns. Concern over climate change may result in new or increased legal and regulatory requirements to reduce ormitigate impacts to the environment. Changing customer and consumer preferences or increased regulatory requirements may result in increased demands orrequirements. Complying with these demands or requirements could cause us to incur additional manufacturing, operating or product development costs.If we do not adapt to or comply with new regulations, including the SEC’s published proposed rules that would require companies to provide significantlyexpanded climaterelated disclosures in their periodic reporting, which may require us to incur significant additional costs to comply and impose increased oversightobligations on our management and board of directors, or fail to meet evolving investor, industry or stakeholder expectations and concerns regarding ESG issues,investors may reconsider their capital investment in our company, we may become subject to penalties, and customers and consumers may choose to stoppurchasing our products, if approved for commercialization, which could have a material adverse effect on our reputation, business or financial condition.Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions andadverse developments with respect to financial institutions and associated liquidity risk.Our business depends on the economic health of the global economies. If the conditions in the global economies remain uncertain or continue to bevolatile, or if they deteriorate, including as a result of the impact of military conflict, such as the war between Russia and Ukraine, terrorism or other geopoliticalevents, our business, operating results and financial condition may be materially adversely affected. Economic weakness, inflation and increases in interest rates,limited availability of credit, liquidity shortages and constrained capital spending have at times in the past resulted, and may in the future result, in challenging anddelayed sales cycles, slower adoption of new technologies and increased price competition, and could negatively affect our ability to forecast future periods, whichcould result in an inability to satisfy demand for our products and a loss of market share.In addition, increases in inflation raise our costs for commodities, labor, materials and services and other costs required to grow and operate our business,and failure to secure these on reasonable terms may adversely impact our financial condition. Additionally, increases in inflation, along with the uncertaintiessurrounding COVID19, geopolitical developments and global supply chain disruptions, have caused, and may in the future cause, global economic uncertainty anduncertainty about the interest rate environment, which may make it more difficult, costly or dilutive for us to secure additional financing. A failure to adequatelyrespond to these risks could have a material adverse impact on our financial condition, results of operations or cash flows.More recently, the closures of SVB and Signature Bank and their placement into receivership with the FDIC created bankspecific and broader financialinstitution liquidity risk and concerns. Although the Department of the Treasury, the Federal Reserve and the FDIC jointly released a statement that depositors atSVB and Signature Bank would have access to their funds, even those in excess of the standard FDIC insurance limits, under a systemic risk exception, futureadverse developments with respect to specific financial institutions or the broader financial services industry may lead to marketwide liquidity shortages, impair theability of companies to access nearterm working capital needs, and create additional market and economic uncertainty. There can be no assurance that future creditand financial market instability and a deterioration in confidence in economic conditions will not occur. Our general business strategy may be adversely affected byany such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions. If the current equityand credit markets deteriorate, or if adverse developments are experienced by financial institutions, it may cause shortterm liquidity risk and also make anynecessary debt or equity financing more difficult, more costly, more onerous with respect to financial and operating covenants and more dilutive. Failure to secureany necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stockprice and could require us to alter our operating plans. In addition, there is a risk that one or more of our service providers, financial institutions, manufacturers,suppliers and other partners may be adversely affected by the foregoing risks, which could directly affect our ability to attain our operating goals on schedule andon budget.Our business may be adversely affected by the impact of any renewed outbreak of the COVID19 pandemic.Public health epidemics or outbreaks could adversely impact our business. In late 2019, a novel strain of COVID19, also known as coronavirus, wasreported in Wuhan, China. While initially the outbreak was largely concentrated in China, it spread worldwide. Many countries around the world, including in Israel,implemented significant governmental measures to control the spread of the virus, including temporary closure of businesses, severe restrictions on travel and themovement of people, and other material limitations on the conduct of business. These measures haven historically resulted in work stoppages and other disruptions.If there is a resurgence of the COVID19 pandemic, this could adversely impact our operations, including among others, our sales and marketing efforts and ourability to raise additional funds, and accordingly, the impact of COVID19 could have an adverse impact on our business and our financial results.32Risks Related to Our Operations in RussiaRussia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.In addition to our Israel operations, we have operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia and we engage two software developers through a third party who are based in Ukraine. On February 24,2022, Russia invaded Ukraine. The outbreak of hostilities between the two countries could result in more widespread conflict and could have a severe adverse effecton the region.Following Russia’s actions, various countries, including the U.S., Canada, the United Kingdom, Germany and France, as well as the European Union,issued broadranging economic sanctions against Russia. Such sanctions included, among other things, a prohibition on doing business with certain Russiancompanies, officials and oligarchs; a commitment by certain countries and the European Union to remove selected Russian banks from the Society for WorldwideInterbank Financial Telecommunications (SWIFT) electronic banking network that connects banks globally; and restrictive measures to prevent the Russian CentralBank from undermining the impact of the sanctions. In response to sanctions, the Russian Central Bank raised its interest rates and banned sales of local securitiesby foreigners. Russia may take additional counter measures or retaliatory actions in the future. While diplomatic efforts have been ongoing, the conflict betweenRussia and Ukraine is currently unpredictable and has the potential to result in broadened military actions. The duration of ongoing hostilities and such sanctionsand related events cannot be predicted. Uncertainty as to future relations between Russia and the U.S. and other countries in the west, or between Russia and othereastern European countries, may have a negative impact on our operations.Such international sanctions and potential responses to such sanctions, including those that may limit or restrict transfer funds into Russia, may in thefuture significantly affect our ability to conduct our activities in Russia including paying our personnel. To date, the conflict has had minimal impact on operations .Nevertheless, we have no way to predict the progress or outcome of the situation in Ukraine, as the conflict and governmental reactions are rapidly developing andbeyond our control. Prolonged unrest, intensified military activities or more extensive sanctions impacting the region could have a material adverse effect on ouroperations, results of operations, financial condition, liquidity and business outlook.Political, military conditions or other risks in Russia could adversely affect our business.Russia is a federative state consisting of 85 constituent entities, or “subjects.” The Russian Constitution reserves some governmental powers for theRussian Government, some for the subjects and some for areas of joint competence. In addition, eight “federal districts” (“federal’nye okruga”), which are overseenby a plenipotentiary representative of the President, supplement the country’s federal system. The delineation of authority among and within the subjects is, inmany instances, unclear and contested, particularly with respect to the division of tax revenues and authority over regulatory matters. For these reasons, theRussian political system is vulnerable to tension and conflict between federal, subject and local authorities. This tension creates uncertainties in the operatingenvironment in Russia, which may prevent us from carrying out our strategy effectively. The risks associated with these events or potential events could materiallyand adversely affect the investment environment and overall consumer and entrepreneurial confidence in Russia, and our business, prospects, financial condition,hiring ability, and results of operations could be materially and adversely affected.Furthermore, high levels of corruption reportedly exist in Russia, including the bribing of officials for the purpose of initiating investigations bygovernment agencies. Corruption and other illegal activities could disrupt our ability to conduct our business effectively, and claims that the we are involved in suchcorruption or illegal activities could generate negative publicity, of which could harm our development, financial condition, results of operations or prospects.Economic and other risks in Russia could adversely affect our business.Operating a business in an emerging market such as Russia can involve a greater degree of risk than operating a business in more developed markets.Over the last two decades, the Russian economy has experienced or continues to experience at various times:●significant volatility in its GDP;33●the impact of international sanctions;●high levels of inflation;●increases in, or high, interest rates;●sudden price declines in oil and other natural resources;●instability in the local currency market;●budget deficits;●the continued operation of lossmaking enterprises due to the lack of effective bankruptcy proceedings;●capital flight; and●significant increases in poverty rates, unemployment and underemployment.The Russian economy has been subject to abrupt downturns in the past, including as a result of the invasion of Ukraine, global financial crisis, and, as anemerging market, remains particularly vulnerable to further external shocks and any future fluctuations in the global markets. Any further deterioration in the generaleconomic conditions in Russia (whether or not as a result of the events mentioned above) could have a material adverse effect on the Russian economy and mayresult in hiring and operational difficulties, as well as potential flight of human capital, which could have a material adverse effect on our business, productdevelopment and results of operations.Legal risks in Russia could materially adversely affect our operations and Russian tax legislation is subject to frequent change.Among the risks of the Russian legal system are: inconsistencies among laws, presidential decrees, and government and ministerial orders and resolutions;conflicting local, regional and federal laws and regulations; the untested nature of the independence of the judiciary and its sensitivity to economic or politicalinfluences; substantial gaps in the regulatory structure due to the delay or absence of implementing legislation; a high degree of discretion on the part ofgovernmental authorities; reported corruption within governmental entities and other governmental authorities; the relative inexperience of judges and courts ininterpreting laws applicable to complex transactions; and the unpredictability of enforcement of foreign judgments and foreign arbitral awards. Many Russian lawsand regulations are construed in a way that provides for significant administrative discretion in application and enforcement. Unlawful, selective or arbitrary actionsof the Russian Government have reportedly included the denial or withdrawal of licenses, sudden and unexpected tax audits, criminal prosecutions, and civil claims.Any of the above events may have a material adverse effect on our product development and results of operations.Despite certain improvements in the taxation system made by the Russian Government over the past decade, Russian tax legislation is still subject tofrequent change, varying interpretations, and inconsistent and selective enforcement. There are currently no clear rules for distinguishing between lawful taxoptimization and tax evasion. In addition, Russian tax laws do not contain detailed rules on the taxation in Russia of foreign companies. As such, taxpayers oftenhave to resort to court proceedings to defend their position against the Russian tax authorities. However, in the absence of consistent court practice or bindingprecedents, there is inconsistency amongst court decisions. Further, the possibility exists that the Russian Federation would impose arbitrary or onerous taxes andpenalties in the future, which could have a material adverse effect on our product development and results of operations.34Risks Related to Our Operations In IsraelOur headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.Our headquarters and most of our operations are located in central Israel and our key employees, officers and directors are residents of Israel. Accordingly,political, economic and military conditions in Israel and the surrounding region may directly affect our business. Since the establishment of the State of Israel in1948, a number of armed conflicts have taken place between Israel and its Arab neighbors. Any hostilities involving Israel or the interruption or curtailment of tradewithin Israel or between Israel and its trading partners could adversely affect our operations and results of operations and could make it more difficult for us to raisecapital. During the winter of 2008, winter of 2012 and the summer of 2014, Israel was engaged in an armed conflict with Hamas, a militia group and political partyoperating in the Gaza Strip, and during the summer of 2006, Israel was engaged in an armed conflict with Hezbollah, a Lebanese Islamist Shiite militia group andpolitical party. Israel faces political tension with respect to its relationships with Turkey, Iran and certain Arab neighbor countries. In addition, recent conflictsinvolved missile strikes against civilian targets in various parts of Israel, and negatively affected business conditions in Israel. Recent political uprisings and socialunrest in various countries in the Middle East and North Africa are affecting the political stability of those countries. This instability may lead to deterioration of thepolitical relationships that exist between Israel and these countries, and have raised concerns regarding security in the region and the potential for armed conflict.Any armed conflicts, terrorist activities or political instability in the region could adversely affect business conditions and could harm our results of operations. Forexample, any major escalation in hostilities in the region could result in a portion of our employees and service providers being called up to perform military duty foran extended period of time. Parties with whom we do business have sometimes declined to travel to Israel during periods of heightened unrest or tension, forcing usto make alternative arrangements when necessary. In addition, the political and security situation in Israel may result in parties with whom we have agreementsinvolving performance in Israel claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions insuch agreements. Any future deterioration in the political and security situation in Israel will negatively impact our business.Our commercial insurance does not cover losses that may occur as a result of events associated with the security situation in the Middle East. Althoughthe Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that thisgovernment coverage will be maintained. Any losses or damages incurred by us could have a material adverse effect on our business. Any armed conflicts orpolitical instability in the region would likely negatively affect business conditions and could harm our results of operations.Further, in the past, the State of Israel and Israeli companies have been subjected to an economic boycott. Several countries still restrict business with theState of Israel and with Israeli companies. These restrictive laws and policies may have an adverse impact on our operating results, financial condition or theexpansion of our business.The legislative power of the State resides in the Knesset, a unicameral parliament that consists of 120 members elected by nationwide voting under asystem of proportional representation. Israel’s most recent general elections were held on April 9, 2019, September 17, 2019, March 2, 2020 and November 1, 2022.The uncertainty surrounding the results of the recent elections may continue. Actual or perceived political instability in Israel or any negative changes in thepolitical environment, may individually or in the aggregate adversely affect the Israeli economy and, in turn, our business, financial condition, results of operationsand prospects.Some of our employees are obligated to perform military reserve duty in Israel.Many Israeli citizens, including our employees are obligated to perform one month, and in some cases more, of annual military reserve duty until they reachthe age of 40 (or older, for reservists with certain occupations) and, in the event of a military conflict, may be called to active duty. In response to increases interrorist activity, there have been periods of significant callups of military reservists. It is possible that there will be military reserve duty callups in the future. Ouroperations could be disrupted by such callups. Such disruption could materially adversely affect our business, results of operations and financial condition.35It may be difficult to enforce a nonIsraeli judgment against the Company or its officers and directors.The operating subsidiary of ours is incorporated in Israel. All of our executive officers and directors are not residents of the United States, and asubstantial portion of our assets and the assets of our executive officers and directors are located outside the United States. Therefore, a judgment obtained againstus, or any of these persons, including a judgment based on the civil liability provisions of the U.S. federal securities laws, may not be collectible in the United Statesand may not necessarily be enforced by an Israeli court. It also may be difficult to affect service of process on these persons in the United States or to assert U.S.securities law claims in original actions instituted in Israel. Additionally, it may be difficult for an investor, or any other person or entity, to initiate an action withrespect to U.S. securities laws in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of U.S. securities laws reasoning that Israel is not themost appropriate forum in which to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law isapplicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law often involves the testimony of expert witnesses, which can be a timeconsuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel that addresses the mattersdescribed above. As a result of the difficulty associated with enforcing a judgment against us in Israel, it may be impossible to collect any damages awarded byeither a U.S. or foreign court.Our international operations could expose us to additional risks, including exchange rate fluctuations, legal regulations and political or economicinstability that could harm our business and operating results.Our international operations expose us to the following risks which may have a material adverse effect on our business and operating results:●devaluations and fluctuations in currency exchange rates including fluctuations between the U.S. dollar and the NIS and the Russian Ruble;●costs of compliance with local laws, including labor laws and intellectual property laws;●compliance with domestic and foreign government policies, including compliance with Israeli securities laws and TASE;●changes in trade regulations and procedures affecting approval, production, pricing, marketing, reimbursement for and access to, our products;●compliance with applicable foreign anticorruption laws, antitrust/competition laws, antiBoycott Israel law and antimoney laundering laws; and●economic and geopolitical developments and conditions, including ongoing instability in global economies and financial markets, international hostilities,acts of terrorism and governmental reactions, inflation, outbreaks of contagious disease (e.g., the COVID19 pandemic) and military and political alliances.Risks Related to Our Common StockA more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.Although our common stock is listed on the Nasdaq Capital Market, it has only been traded on the Nasdaq Capital Market since July 25, 2016. There hasbeen relatively limited trading volume in the market for our common stock, and a more active, liquid public trading market may not develop or may not be sustained.Limited liquidity in the trading market for our common stock may adversely affect a stockholder’s ability to sell its shares of common stock at the time it wishes tosell them or at a price that it considers acceptable. If a more active, liquid public trading market does not develop, we may be limited in our ability to raise capital byselling shares of common stock and our ability to acquire other companies or assets by using shares of our common stock as consideration. In addition, if there is athin trading market or “float” for our stock, the market price for our common stock may fluctuate significantly more than the stock market as a whole. Without a largefloat, our common stock would be less liquid than the stock of companies with broader public ownership and, as a result, the trading prices of our common stockmay be more volatile and it would be harder for you to liquidate any investment in our common stock. Furthermore, the stock market is subject to significant priceand volume fluctuations, and the price of our common stock could fluctuate widely in response to several factors, including:●our quarterly or annual operating results;●changes in our earnings estimates;●investment recommendations by securities analysts following our business or our industry;●additions or departures of key personnel;●changes in the business, earnings estimates or market perceptions of our competitors;36●our failure to achieve operating results consistent with securities analysts’ projections;●changes in industry, general market or economic conditions;●announcements of legislative or regulatory changes; and●natural disasters (including for example, the recent fire in the Orgad warehouse) and political and economic instability, including wars, terrorism, politicalunrest, results of certain elections and votes, emergence of a pandemic, or other widespread health emergencies (or concerns over the possibility of suchan emergency, including for example, the recent the COVID19 pandemic), boycotts, adoption or expansion of government trade restrictions, and otherbusiness restrictions.The stock market has experienced extreme price and volume fluctuations in recent years that have significantly affected the quoted prices of the securitiesof many companies. The changes often appear to occur without regard to specific operating performance. The price of our common stock could fluctuate basedupon factors that have little or nothing to do with us and these fluctuations could materially reduce our stock price.Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.If any of our shareholders were to decide to sell large amounts of stock over a short period of time (presuming such sales were permitted) such sales couldcause the market price of our common stock to drop significantly, even if our business is doing well. Further, the market price of our common stock could decline as aresult of the perception that such sales could occur. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equitysecurities in the future at a time and price that we deem appropriate.Our securities are traded on more than one market which may result in price variations.Our securities have been trading on the Nasdaq Capital Market since July 2016 and on TASE since September 2005. Trading in our securities on suchexchanges occurs in different currencies (U.S. dollars on the Nasdaq Capital Market and NIS on the TASE), and at different times (due to different time zones,trading days and public holidays in the United States and Israel). The trading prices of our securities on the two exchanges may differ due to the foregoing andother factors. Any decrease in the price of our shares on the TASE could cause a decrease in the trading price of our shares on the Nasdaq Capital Market and viceversa.We are a smaller reporting company and, as a result of the reduced disclosure and governance requirements applicable to such companies, ourcommon stock may be less attractive to investors.We are a smaller reporting company, (i.e. a company with “public float” held by nonaffiliates with a market value of less than $250 million) and we areeligible to take advantage of certain exemptions from various reporting requirements applicable to other public companies. We have elected to adopt these reduceddisclosure requirements. We cannot predict if investors will find our common stock less attractive as a result of our taking advantage of these exemptions. If someinvestors find our common stock less attractive as a result of our choices, there may be a less active trading market for our common stock and our stock price may bemore volatile.We do not expect to pay any cash dividends in the foreseeable future.We have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our board of directors deems relevant. Investors should not purchase our common stock expecting to receive cash dividends. Because we do notpay dividends, and there may be limited trading, investors may not have any manner to liquidate or receive any payment on their investment. Therefore, our failureto pay dividends may cause investors to not see any return on investment even if we are successful in our business operations. In addition, because we do not paydividends we may have trouble raising additional funds, which could affect our ability to expand our business operations.37UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2022☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ________ to _________Commission file number 00137370MY SIZE, INC.(Exact name of registrant as specified in charter)Delaware510394637(State or jurisdiction ofIncorporation or organization)I.R.S EmployerIdentification No.4 Hayarden, POB 1026, Airport City, Israel7010000(Address of principal executive offices)(Zip code)+9723 6009030(Registrant’s telephone number, including area code)Securities registered pursuant to Section 12(b) of the Act:Title of each classTrading Symbol(s)Name of Each Exchange on Which RegisteredCommon Stock, par value $0.001 per shareMYSZThe Nasdaq Capital MarketSecurities registered pursuant to Section 12(g) of the Act: None.Indicate by check mark whether the registrant is a wellknown seasoned issuer as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes☒ No ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer, a smaller reporting company, or an emerginggrowth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 of theExchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☒Smaller Reporting Company☒Emerging Growth Company☐If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revisedfinancial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b2 of the Exchange Act) Yes ☐No☒Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control overfinancial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflectthe correction of an error to previously issued financial statements. ☐Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by anyof the registrant’s executive officers during the relevant recovery period pursuant to §240.10D1(b). ☐The aggregate market value of voting and nonvoting common equity held by nonaffiliates of the registrant as of June 30, 2022, the last business day of theregistrant’s most recently completed second fiscal quarter, was approximately $25,551,906.Number of shares of common stock outstanding as of March 31, 2023 was 2,446,780.Documents Incorporated by Reference: None.Table of ContentsPart IItem 1.Business2Item 1A.Risk Factors18Item 1B.Unresolved Staff Comments41Item 2.Properties41Item 3.Legal Proceedings41Item 4.Mine Safety Disclosures42Part IIItem 5.Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities43Item 6.Selected Financial Data43Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations43Item 7A.Quantitative and Qualitative Disclosures about Market Risk50Item 8.Financial Statements and Supplementary DataF1Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure51Item 9A.Controls and Procedures51Item 9B.Other Information51Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.51Part IIIItem 10.Directors, Executive Officers and Corporate Governance52Item 11.Executive Compensation57Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters60Item 13.Certain Relationships and Related Transactions, and Director Independence62Item 14.Principal Accounting Fees and Services65Part IVItem 15.Exhibits, Financial Statement Schedules66Signatures69iPART IIn this Annual Report on Form 10K, unless the context requires otherwise, the terms “we,” “our,” “us,” or “the Company” refer to MySize, Inc., a Delawarecorporation, and its subsidiaries, including MySize Israel 2014 Ltd. My Size LLC, Orgad International Marketing Ltd., or Orgad, and Naiz Bespoke Technologies, S.L,or Naiz, taken as a whole.References to “U.S. dollars” and “$” are to currency of the United States of America, and references to “NIS” are to New Israeli Shekels. Unless otherwiseindicated, U.S. dollar translations of NIS amounts presented in this Annual Report on Form 10K for the year ended on December 31, 2022 are translated using therate of NIS 3.358 to $1.00.All information in this Annual Report on Form 10K relating to shares or price per share reflects the 1for25 reverse stock split effected by us on December8, 2022.CAUTIONARY NOTE ON FORWARDLOOKING STATEMENTSThis Annual Report on Form 10K contains certain forwardlooking statements within the meaning of Section 27A of the Securities Act and Section 21E ofthe Exchange Act. Any statements in Annual Report on Form 10K about our expectations, beliefs, plans, objectives, assumptions or future events or performanceare not historical facts and are forwardlooking statements. These statements are often, but not always, made through the use of words or phrases such as“believe,” “will,” “expect,” “anticipate,” “estimate,” “intend,” “plan” and “would.” For example, statements concerning financial condition, possible or assumedfuture results of operations, growth opportunities, industry ranking, plans and objectives of management, markets for our common stock and future managementand organizational structure are all forwardlooking statements. Forwardlooking statements are not guarantees of performance. They involve known and unknownrisks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to differ materially from any results, levels ofactivity, performance or achievements expressed or implied by any forwardlooking statement.Any forwardlooking statements are qualified in their entirety by reference to the risk factors discussed throughout this Annual Report on Form 10K. Someof the risks, uncertainties and assumptions that could cause actual results to differ materially from estimates or projections contained in the forwardlookingstatements include but are not limited to:●our history of losses and needs for additional capital to fund our operations and our inability to obtain additional capital on acceptable terms, or at all;●risks related to our ability to continue as a going concern;●the new and unproven nature of the measurement technology markets;●our ability to achieve customer adoption of our products;●our ability to realize the benefits of our acquisitions of Orgad and Naiz;●our dependence on assets we purchased from a related party;●our ability to enhance our brand and increase market awareness;●our ability to introduce new products and continually enhance our product offerings;●the success of our strategic relationships with third parties;●information technology system failures or breaches of our network security;●competition from competitors;●our reliance on key members of our management team;●current or future litigation;●current or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated liquidityrisk; and●the impact of the political and security situation in Israel on our business.1The foregoing list sets forth some, but not all, of the factors that could affect our ability to achieve results described in any forwardlooking statements.You should read this Annual Report on Form 10K and the documents that we reference herein and have filed as exhibits to the Annual Report on Form 10K,completely and with the understanding that our actual future results may be materially different from what we expect. You should assume that the informationappearing in this Annual Report on Form 10K is accurate as of the date hereof. Because the risk factors referred to in this Annual Report on Form 10K, could causeactual results or outcomes to differ materially from those expressed in any forwardlooking statements made by us or on our behalf, you should not place unduereliance on any forwardlooking statements.Further, any forwardlooking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forwardlookingstatement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. New factors emergefrom time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extentto which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements. We qualify all ofthe information presented in this Annual Report on Form 10K, and particularly our forwardlooking statements, by these cautionary statements.ITEM 1. BUSINESSOverviewWe are an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile phone or through MySizeID Widget: a simple questionnaire which uses a database collected over the years.MySizeID syncs the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and only presents itemsfor purchase that match their measurements to ensure a correct fit.We are positioning ourselves as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empower brand design teams, which are designed to increase endconsumer satisfaction, contributing to a sustainable world and reduce operation costs.Recent DevelopmentsOrgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,602 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.2The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz, a limitedliability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.3The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Warehouse FireOn January 2, 2023, Orgad experienced a fire at its warehouse in Israel. we are not aware of any casualties or injuries associated with the fire. We shiftedOrgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incident did not affectthe future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of this incident on the otherparties that were involved in the incident (lessor and others that leased properties near the warehouse).January 2023 FinancingOn January 10, 2023, we entered into a securities purchase agreement, or the RD Purchase Agreement, pursuant to which we agreed to sell and issue in theRD Offering an aggregate of 162,000 of our shares of common stock, or the RD Shares, and prefunded warrants, or the Prefunded Warrants, to purchase up to279,899 shares of common stock and, in a concurrent private placement, unregistered warrants to purchase up to 883,798 shares of common stock, or the RDWarrants, consisting of Series A warrants, or Series A Warrants, to purchase up to 441,899 shares of common stock and Series B warrants, or Series B Warrants, topurchase up to 441,899 shares of common stock, at an offering price of $3.055 per RD Share and associated Series A and Series B Warrants and an offering price of$3.054 per Prefunded Warrant and associated Series A and Series B Warrants.4In addition, we entered into a securities purchase agreement, or the PIPE Purchase Agreement, and together with the RD Purchase Agreement, thePurchase Agreements, pursuant to which we agreed to sell and issue in the PIPE Offering an aggregate of up to 540,098 unregistered Prefunded Warrants andunregistered warrants to purchase up to an aggregate of 1,080,196 shares of common stock, or the PIPE Warrants and together with the RD Warrants, the Warrants,consisting of Series A Warrants to purchase up to 540,098 shares of common stock and Series B Warrants to purchase up to 540,098 shares of common stock at anoffering price of $3.054 per Prefunded Warrant and associated Series A and Series B Warrants.The Prefunded Warrants are immediately exercisable at an exercise price of $0.001 per share and will not expire until exercised in full. The Warrants areimmediately exercisable upon issuance at an exercise price of $2.805 per share, subject to adjustment as set forth therein. The Series A Warrants have a term of fiveand onehalf years from the date of issuance and the Series B Warrants have a term of 28 months from the date of issuance. The Warrants may be exercised on acashless basis if there is no effective registration statement registering the shares underlying the warrants.In connection with the PIPE Purchase Agreement, we entered into a registration rights agreement, or the Registration Rights Agreement. Pursuant to theRegistration Rights Agreement, we are required to file a resale registration statement, or the Registration Statement, with the Securities and Exchange Commission, orthe SEC, to register for resale the shares issuable upon exercise of the unregistered Prefunded Warrants and the Series A and Series B Warrants, within 20 days ofthe signing date of the PIPE Purchase Agreement, or the Signing Date, and to have such Registration Statement declared effective within 60 days after the SigningDate in the event the Registration Statement is not reviewed by the SEC, or 90 days of the Signing Date in the event the Registration Statement is reviewed by theSEC. we will be obligated to pay certain liquidated damages if we fail to maintain the effectiveness of the Registration Statement.The Purchase Agreements and the Registration Rights Agreements also contain representations, warranties, indemnification and other provisionscustomary for transactions of this nature. In addition, subject to limited exceptions, the Purchase Agreements provide that for a period of one year following theclosing of the Offerings, we will not effect or enter into an agreement to effect a “variable rate transaction” as defined in the Purchase Agreements.Aggregate gross proceeds to the Company in respect of the Offerings was approximately $3.0 million, before deducting fees payable to the placement agentand other offering expenses payable by the Company.We also entered into a letter agreement, or the Engagement Agreement, with H.C. Wainwright & Co., LLC, or Wainwright, pursuant to which Wainwrightagreed to serve as the exclusive placement agent for the Company in connection with the Offerings. We paid Wainwright a cash placement fee equal to 7% of theaggregate gross proceeds raised in the Offerings, a management fee of 1% of the aggregate gross proceeds raised in the Offerings, a nonaccountable expenseallowance of $85,000 and clearing fees of $15,950. Wainwright also received placement agent warrants, or the Placement Agent Warrants, with substantially the sameterms as the Series A Warrants issued in the Offering in an amount equal to 7% of the aggregate number of Shares and Prefunded Warrants sold in the Offerings, or68,740 shares, at an exercise price of $3.8188 per share and a term expiring on January 10, 2028.Our SolutionOur cloudbased software platform provides highly accurate sizing and measurement with broad applications including the online fashion/apparel industry,logistics and courier services and home DIY. Currently, we are mainly focusing on the ecommerce fashion/apparel industry. This proprietary technology is driven byseveral patented algorithms which are able to calculate and record measurements in a variety of novel ways. Although specific functionality varies by product, webelieve that our core solutions address the need for highly accurate measurements in a variety of consumer friendly, every day uses.5We have developed three products, MySizeID for the fashion/apparel industry, BoxSize for the logistics and courier services market and SizeUp for thehome DIY market.●MySizeID enables shoppers to generate highly accurate measurements of their body to find proper fitting clothes and accessories, through the use ofour application on their mobile phone or through a simple questionnaire if the user decides not to download the application. MySizeID syncs the user’smeasurement data to a sizing chart and presents items for purchase that match their measurements to ensure a correct fit. MySizeID is available forlicense by retailers and accessable by consumers through a web page.●BoxSize enables customers to quickly and easily measure the size and volume of a parcel to accurately calculate shipping fees. It also offers shippingcompanies a variety of precise logistical data for more efficiently managing their supply chain, providing them with an accurate way to compare thephysical package with what is in the shipping manifest. BoxSize solution is available for license on both iOS and Android operating systems. BoxSizeis available on the Honeywell Marketplace and in August 2019 was approved for Honeywell’s Independent Software Vendor Program, and MySize wasgranted an independent software vendor (ISV) status on the Zebra Technologies and on DataLogic platforms.●SizeUp is a digital tape measure that allows users to measure length, width and height of a surface by moving their smartphone from point to point ofan object or space. SizeUp is a valueadd for DIY and home improvement retailers whose customers struggle to find the appropriately sized items (likeblinds or curtains) for their homes or projects due to inaccurate measurements. SizeUp also is designed to replace rulers, tape measures and othermeasuring tools used for DIY projects. SizeUp is available for consumer download on both iOS and Android operating systems.The following are some select key features of our solutions:●Integration Capability. We design our solutions to be flexible and configurable, allowing our clients to match their use of our algorithms and softwarewith their specific business processes and workflows. Our platform has been organically developed from a common code base, data structure and userinterface, providing a consistent user experience with powerful features that are easily adaptable to our clients’ needs. The MySizeID widget can beintegrated via oneline JavaScript code, or through RESTful API;●Intuitive user experience. Our intuitive, easytouse interface is based on current technology, multiple focus groups and automatically adapts to users’devices, including mobile platforms, thereby significantly increasing accessibility of our solutions;●Big Data Generation. While we supply to the user the information he/she requires, we gather certain vital information such as body measurement andpackage volume which can be used anonymously to help the retailer acquire predictive size information on stocking, operations and consumers thatmay be in between sizes. All the information is being gathered and stored on our servers where it can be used by retailers;●NonInvasive. In taking measurements using our solution, the smartphone camera is not utilized; instead, the measurements are captured by scanningthe smartphone over the consumer’s body or package, thus ensuring greater privacy.Our Growth StrategyWe aim to drive revenue primarily through penetration of the U.S. and Europe markets through a business to business to consumer (B2B2C) model in theverticals we are targeting. We are pursuing the following growth strategies:●Sign Additional Commercial Agreements with U.S. Retailers. During 2022, we expanded our commercial agreements with Levi’s, introducing NorthAmerica (U.S. and Canada) and Latin America regions, and by extension Levis’ native apps in EU and U.S. regions. We also entered into commercialagreements with Baby Fresh, Galax, Punto Blanco, GEF France, Diesel, Gaala, Superdry, Uniontex Industries, and Temperlay London among others. Weare in various stages of discussions with U.S. and foreign retailers for the deployment of our size recommendation and measurement technology with aview to entering into additional commercial agreements.6●Pursue a TwoPronged Commercialization Strategy. We are seeking to accelerate adoption of our solutions both through direct partnerships with ecommerce websites as well as through thirdparty platform websites. While we seek to directly enter into partnerships with companies maintaining ecommerce websites in the apparel, courier and DIY markets, we are also seeking to deploy our solutions on thirdparty platforms. Furthermore, with theexpansion of MySizeID through the release of our FirstLook Smart Mirror, which we are offering to brick and mortar stores to digitize the physicalstores, MySizeID is now available for online retailers utilizing the WooCoomerce, Shopify, Lightspeed, PrestaShop, Bitrix and Wix platforms and tobrick and mortar stores through GK Software POS solution while BoxSize is available on the Honeywell, Zebra Technologies and Datalogic.●Ongoing Investment in our Technology Platform. We continue to invest in building new software capabilities and extending our platform to bring thepower of accurate measurement to a broader range of applications. In particular, we seek not only to deliver size recommendations but to provide arobust, endtoend,artificial intelligence, or AIdriven platform that inspires consumer confidence and drives revenue growth by providing a superiorconsumer journey to both online and the brick and mortar stores.●Grow our database. As the usage of our measurement apps increases, our database of information including user behaviour and body measurementsgenerates valuable statistics. Such data can be used in the big data market for targeted advertising and for blind consumer data mining.●Identify and acquire synergistic businesses. In order to reduce our time to market and obtain complementary technologies, we are seeking to acquiretechnologies and businesses that are synergistic to our product offering. We recently completed an acquisition of Orgad which operates anomnichannel ecommerce platform and Naiz which provides SaaS technology solutions that solve size and fit issues for fashion ecommerce companies.●Partnerships and cooperation. In order to bring a wider solution for the retail market we are working to partner and integrate our technology withpartners that can increase our penetration and offering to the market.Market OpportunityThe global ecommerce market was $5.7 trillion in 2022, and the industry is expected to grow significantly in the coming years with no signs of slowingdown. Market specialists expect a compound annual growth rate of 27.43% from 2023 to 2028: according to data from Statista, the market is expected to reach $6.5trillion in 2023. While many sectors have found ways to increase revenue through ecommerce, ecommerce is still plagued by issues that cut into profits andnegatively impact the bottom line, such as customer returns, low consumer conversion, and associated restocking and shipping costs.Fashion/ApparelSince the onset of the COVID19 pandemic, an immense shift to digital was recorded, with 85.9% growth vs. prepandemic, according to Mastercard, andover 2 billion people worldwide who shop online, according to data from Oberlo. In November 2022, online shoppers broke records with $11.3 billion in spending onCyber Monday, driving 5.8% yearoveryear growth and making the day the biggest online shopping day of all time, according to Adobe Analytics.In 2021, fashion companies invested between 1.6% and 1.8% of their revenues in technology, according to Mckinsey, and are expected to double theinvestment by 2030 in order to keep up with digital natives and keep a competitive edge. Personalization in ecommerce and hybrid connectivity in brickandmortarretail are two key themes in the future of fashtech, according to Mckinsey’s 2022 State of Fashion Technology.7In the upcoming years, inflation is expected to impact the fashion world. As prices for goods increase, the challenge will be to inspire confidence inconsumers, via different smart digital tools. Brands will need to embrace creative digital tools and new channels to deepen customer relationships, and as Mckinseyforecasts in their State of Fashion report for 2023, they will need to execute on priorities such as sustainability and digital acceleration.The global fashion ecommerce market size is expected to grow from $744.4 billion in 2022 to $821.19 billion in 2023 at a compound annual growth rate of10.3%. In 2027, the market size is expected to grow to $1,222.32 billion, at a compound annual growth rate of 10.5%, according to BRC.Based on the importance which shoppers attribute to free shipping 50% of cart abandonment rate is due to extra shipping costs (Baymard Institute) theneed for fashion retailers to substantiate the optimal size for a customer, thus minimizing returns, has never been more crucial.As brands move online or significantly expand their online presence, we believe that developing innovative ways to connect with shoppers, both onlineand offline, has become a top priority.Shipping/ParcelAccording to Pitney Bowes, parcel revenue in 13 major countries around the world increased by 17% year over year from $420 billion in 2020 (reflecting 131billion parcels) to $491 billion in 2021 (reflecting 159 billion parcels). In the shipping/parcel industry, the dimensions of a package are critical. It is not merely themeasurement of a package or box – but rather the amount of space that the package or box will take up on a truck, airplane, or ship that will be transporting thepackage or box. Far too often, retailers use unfit packaging for their items, adding additional costs in materials and shipping fees.DIYSimilar to issues in the apparel and fashion market, big box, hardware, furniture, and DIY stores are plagued by returns due to incorrect fit andmeasurements. In an industry where precise measurement for projects is an absolute necessity, ecommerce has not grown as quickly as in other industries which webelieve is due to lack of consumer confidence in measurements at home and buying the correct item online.MySizeIDWe have released the MySizeID app for both iOS and Android which assists consumers to take highly accurate measurement of their own body in order tosize clothing in the best way possible without the need to try the clothes on before purchasing. MySizeID is designed to simplify the process of purchasing clothesonline and significantly reduce the rate of returns of poorfitting clothing. During 2022, MySizeID delivered over 23.5 million size recommendations.The application is the result of a research and development effort that combines:●anthropometric research – analyses of information pertaining to body measurements derived from a survey and the subsequent determination ofcorrelations between body parts;●body measurement algorithm research – an algorithm created by us to measure body parts; and●retailers size chart analyses – adopting a deep understanding of the size charts of retailers and the corresponding “body to garment size.”MySizeID allows consumers to create a secure, online profile of their personal measurements, which can then be utilized, with partnered online retailers, toensure that no matter the manufacturer or size chart, they will get the right fit. MySizeID operates based on the use of existing sensors in smart phones which enable,through a specific purpose application, the measurement of the body of any consumer by moving the smartphone along his or her body. The MySizeID applicationdoes not rely on user photographs or any additional hardware; all a user needs to do is scan their body with their smartphone and the application records theirmeasurements. The measurements can then be saved in our database in the cloud, enabling the user to search for clothes in various retailer websites withoutworrying about size. When a search is made, the retailer will connect to our cloud database, and then provide results based on the user’s measurements and otherparameters as he or she may have defined. This data is also saved for use when a customer enters a brickandmortar store to help serve the customer moreefficiently and to provide a better shopping experience.8Figure 1: Screenshot of MySizeID on smartphone and ecommerce websiteAs part of the integration process, we offer to the retailer five main components:●Mobile App. MySizeID comes in the form of a native app or website. Our native app can be used “as is” integrated into the retailer’s ecommercewebsite. The website users can build a body profile on the app and receive size recommendations for their profile both in the app and on a widgetintegrated with their website.9●Widget. When a consumer enters into the retailer’s website and looks for a specific item, he or she can click on the MySizeID widget which will informthe consumer of his or her recommended size, based on his or her actual measurements, as measured using the app and the item he or she is looking at.The widget has two features:AI Wizard mode allows the user to obtain size from the following parameters: gender, height, weight, belly shape, hip shape and bra size only. Thegender, height and weight questions are mandatory, while the body shape questions are optional and can be added to increase accuracy for specificapparel categories.Guest mode allows a user that does not wish to sign up to MySizeID as a user to obtain size recommendations as well.●Analytic Pixel. MySizeID analytic pixel allows retailer to track and analyze the widget usage. By adding the pixel to the retailer’s website, MySizeID BIteam can track engagement, order, and return data and provide retailers with tools to understand the advantages and benefits of MySizeID.Use your own device using MySizeID instore solution, shoppers can receive size recommendations for all store items, when shopping in the offlinestores. The shoppers can build their body profile using an easy to use 3 to 6 questions form, scan an item barcode and receive a size recommendationfor the scanned item based on their body profile and the item’s size chart.Another feature we added is the “inbetween sizing” feature. Our system can detect a user that has body dimensions that place the user inbetweenthe clothes sizes being offered and lets the user know that. A user can then choose between the two sizes according to the user’s fit preference(tight/loose/average).In addition, we have recently released our InstantApp feature which allows shoppers to generate their body measurements directly from our widget,without the need to download our mobile app. Using this technology, the shoppers can create their online profile of their personal measurements andcomplete a purchase faster and easier with minimum distractions.The body profile can be created while shoppers are viewing the page from their mobile phone, or by scanning a QR code on desktop that will open thesame page on the mobile phone.Screenshot of InstantApp widget on desktop on yumyumfashion website10●MyDash Platform. The MyDash platform is a smart backoffice system where the retailer enters all the information regarding its size charts thatcorrelates to every product in its ecommerce site, and where the retailer can access the information on its users. This system is customizable based onthe retailer’s needs. In 2021, we changed the MyDash system to increase the system’s accessibility, added walkthroughs, user guides and changed theuser interface and much more for the ease of use. We added the option to use our generic size charts, added the option upload size chart files insteadof typing the size charts values manually, added more widget styling options and changed the pairing mechanism between the size chart and theproducts to be more userfriendly.Figure 3: Screenshot of BackOffice System●FirstLook Smart Mirror. The Smart Mirror provides an interactive, mirrorlike touch display that allows brands to provide instore customers with anenhanced, online shopping experience, contactless checkout and obtains the recommended size. The MySizeIDFirstLook Smart Mirror can be placedin numerous locations throughout a retail store, including the fitting rooms (without cameras) or other hightraffic locations of the store. Highlightcapabilities of the FirstLook Smart Mirror include a 3D “Tryiton” interactive avatar experience, personalized and highly accurate sizerecommendations by MySizeID, thirdparty point of sale systems integration, styling recommendations and contactless “select and collect” at theregister feature.Illustration of MySizeID “first look” smart mirror in a fashion store11We are currently offering MySizeID technology to retailers through either a payperuse model or a monthly subscription model. In our payperusebusiness model, every time the consumer obtains a recommended size, the retailer is charged for the usage.BoxSizeBoxSize is a parcel measurement application that can provide realtime logistic data on package volumes and transportation, resulting in improvedoperational efficiency and reduced operating expenses. In addition, BoxSize allows customers to easily measure the size of their parcel with their smartphone,calculate shipping costs and arrange for a convenient pickup time for the package. BoxSize is available both on iOS and Android.In 2020 we released the “One Click” feature on BoxSize that enables the user to measure a package with just one swipe of the handheld device. Previously,measurements through BoxSize would require three separate swipes.Figure 4: Screenshot of BoxSizeOur BoxSize mobile measurement solution is available on the Honeywell Marketplace. In addition, BoxSize was approved for Honeywell’s Global VendorProgram, and is available to provide highly accurate mobile measurement solutions for thousands of Honeywell clients. We also developed a new dashboard for thecourier companies to have all the required data about each package in one place. It includes package dimensions, pictures, scan geo location and more. Thedashboard also let the courier use Webhooks, which allows him to get the information from his own system.12In 2020, we announced our partnership with Datalogic, a company focused on the automatic data capture and process automation markets. The partnershipmakes our BoxSize measurement solution available to thousands of Datalogic customers in the Transportation and Logistics vertical.Agreement with Delhivery Private Limited, IndiaWe entered into an agreement with Delhivery Private Limited, one of the largest courier pickup, delivery, and online shipping services in India. Delhivery’sreputation as a frontrunner in delivery and logistics tech makes its decision to select Boxsize a particularly strong testament to the value the solution provides.BoxSize provides Delhivery’s employees on the B2B side with critical information that will allow them to effortlessly optimize loading efficiency and add even morerealtime visibility to operations.SizeUpWe are working on additional consumer applications, including a DIY application. Our SizeUp application is a smart tape measure for the business toconsumer market which allows users to utilize their smartphone as a tape measure. The application provides measurements with an accuracy of within twocentimeters. Through the use of SizeUp, users will be able to visualize how an object or a piece of furniture will fit in an existing room in their home or office. It alsoadded Google Vision for image content analysis, object detection, and title suggestions.Currently the SizeUp app for Android and iOS is available for free for the first 30 days, after which a user will be required to register via email and pay aonetime fee of $1.99 to continue using the application. To date, revenues from downloads have been minimal.Research and DevelopmentOur research and development team are responsible for the research, algorithm, design, development, and testing of all aspects of our measurementplatform technology. We invest in these efforts to continuously improve, innovate, and add new features to our solutions.We incurred research and development expenses of approximately $1.7 million in 2022 and $4.25 million in 2021, relating to the development of itsapplications and technologies. The decrease from the corresponding period primarily resulted from share based payment in amount of $2,618,000 attributed to theshare issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021. We intend to continue to invest in our research anddevelopment capabilities to extend our platform and bring our measurement technology to a broader range of applications.13In 2022, the R&D department experienced significant success in their efforts to improve the performance of their size recommendation system. Through acombination of optimized algorithms and the incorporation of cuttingedge technologies, the team was able to achieve a threefold increase in the system’s speed.This breakthrough not only makes the system one of the fastest and most accurate on the market, but also reduced the operation costs, making it more costeffective for businesses to use. Additionally, the solution is now highly scalable, allowing it to easily adapt to the needs of businesses of any size. The R&D team isnow focused on further improving the system and exploring new applications for the technology.Sales and MarketingIn 2019, we launched a commercialization strategy that directs our sales efforts toward both sales to ecommerce players in specific vertical markets such asfashion/apparel and shipping/delivery as well as to ecommerce thirdparty platform providers. As of March 15, 2023, our products are being sold in the followingcountries: US, UK, France, Netherlands, Spain, Portugal Turkey, Germany, Israel and Italy, generating customer leads, building out a sales pipeline, and developingcustomer relationships.We believe an effective method to market our suite of products is for users to actively use and explore its capabilities. We encourage free trials of one ormore of our products in order to successfully convert those accounts to paid subscriptions.Proprietary RightsWe rely on a combination of patent, copyright, trademark and trade secret laws in the United States and other jurisdictions, as well as contractualprotections, to protect our proprietary technology.As of December 31, 2022, we owned 18 issued patents: six in Europe, four in the U.S., three in each of Russia and Japan and one in each of Canada andIsrael which expire between January 20, 2033 and August 18, 2036, and we have two additional patent applications in process. As of such date, we do not have anyregistered trademarks.We cannot provide any assurance that our proprietary rights with respect to our products will be viable or have value in the future since the validity,enforceability and type of protection of proprietary rights in softwarerelated industries are uncertain and still evolving.Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products or to obtain and use informationthat we regard as proprietary. Policing unauthorized use of our products is difficult, and while we are unable to determine the extent to which piracy of our softwareproducts exists, software piracy can be expected to be a persistent problem. In addition, the laws of some foreign countries do not protect proprietary rights to asgreat an extent as do the laws of the United States, and effective copyright, trademark, trade secret and patent protection may not be available in those jurisdictions.Our means of protecting our proprietary rights may not be adequate to protect us from the infringement or misappropriation of such rights by others.Further, in recent years, there has been significant litigation in the United States involving patents and other intellectual property rights, particularly in thesoftware and Internetrelated industries. We can become subject to intellectual property infringement claims as the number of our competitors grows and ourproducts and services overlap with competitive offerings. These claims, even if not meritorious, could be expensive to defend and could divert management’sattention from operating our business. If we become liable to third parties for infringing their intellectual property rights, we could be required to pay a substantialaward of damages and to develop noninfringing technology, obtain a license or cease selling the products that contain the infringing intellectual property. We maybe unable to develop noninfringing technology or obtain a license on commercially reasonable terms, if at all.14Government RegulationWe are subject to a number foreign and domestic laws and regulations that involve matters central to our business. These laws and regulations mayinvolve privacy, data protection, intellectual property, or other subjects. Many of the laws and regulations to which we are subject are still evolving and being testedin courts and could be interpreted in ways that could harm our business. In addition, the application and interpretation of these laws and regulations often areuncertain, particularly in the new and rapidly evolving industry in which we operate. Because global laws and regulations have continued to develop and evolverapidly, it is possible that we, our products, or our platform may not be, or may not have been, compliant with each such applicable law or regulation.In particular, we are subject to a variety of federal, state and international laws and regulations governing the processing of personal data. Many U.S. stateshave passed laws requiring notification to data subjects when there is a security breach of personally identifiable data. There are also a number of legislativeproposals pending before the U.S. Congress, various state legislative bodies and foreign governments concerning data protection. In addition, data protection lawsin Europe and other jurisdictions outside the United States can be more restrictive than those within the United States, and the interpretation and application ofthese laws are still uncertain and in flux.For example, the General Data Protection Regulation, or GDPR, which took effect on May 25, 2018, enhances data protection obligations for entities thatprocess personal data about individuals, including obligations to cooperate with European data protection authorities, implement security measures and keeprecords of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to the greater of €20 million or 4% of global annual revenue. Inaddition, the California Consumer Privacy Act of 2018, or CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and requiredeletion of their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used.The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further,failure to comply with the Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may exposeus to administrative fines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the currentenforcement measures and sanctions. Given the breadth and depth of changes in data protection obligations, meeting the requirements of GDPR and otherapplicable laws and regulations has required significant time and resources, including a review of our technology and systems currently in use against therequirements of GDPR and other applicable laws and regulations. We have taken various steps to prepare for complying with GDPR and other applicable laws andregulations however there can be no assurance that these steps are sufficient to assure compliance. Further, additional EU laws and regulations (and member states’implementations thereof) further govern the protection of individuals and of electronic communications. If our efforts to comply with GDPR or other applicable lawsand regulations are not successful, we may be subject to penalties and fines that would adversely impact our business and results of operations, and our ability touse personal data of individuals could be significantly impaired.CompetitionWe operate in a highly competitive industry that is characterized by constant change and innovation. Changes in the applications and the programinglanguages used to develop applications, devices, operating systems, and technology landscape result in evolving customer requirements. Our competitors includeTrue Fit, Fit analytics and 3DLook.The principal competitive factors in our market include the following:●High Accuracy Size Recommendations: the highest accuracy and the lowest margin of error by combining patented technology including AI and ML,size chart or spec data, and MySizeID property body data measurement;●Integration○Fast 1 week integration including size chart size chart review and product mapping○Easy 1 line of “all included” script implementation●Technical Advantages○Very small library that weighs ±50kb (minimum widget loading time on product page)○UltraFast loading and size recommendation presenting○Restful API option (API integration with any website or app)15●Optimizations○Adjustments of size charts based on performance○Widget usage analysis by FashTech and BI teams○Automatic pairing of size charts with products/collections●User Experience○Easy to use interface (1015 seconds to receive size recommendations)○Option to add/deduct questions to/from widget wizards○Users automatically receive size recommendations on all products after initial sign up●Product and platform features, architecture, reliability, privacy and security, performance, effectiveness, and supported environments;●Product extensibility and ability to integrate with other technology infrastructures;●Digital operations expertise;●Ease of use of products and platform capabilities;●Total cost of ownership;●Adherence to industry standards and certifications;●Strength of sales and marketing efforts;●Brand awareness and reputation; and●Focus on customer successWe believe we generally compete favorably with our competitors on the basis of these factors. We expect competition to increase as other established andemerging companies enter our markets, as customer requirements evolve, and as new products and technologies are introduced. We expect this to be particularlytrue as we offer a smartphonebased offering that does not need to utilize the smartphone’s camera, and our competitors may also seek to repurpose their existingofferings to provide similar solutions. Many of our competitors have substantially greater financial, technical, and other resources, greater name recognition, largersales and marketing budgets, broader distribution, and larger and more mature intellectual property portfolios.Human Capital ManagementAs of March 31, 2023, we had a total of 35 employees, of which 30 were fulltime employees, including 9 in sales and marketing, 12 in technology anddevelopment and 9 in administration and finance.None of our employees are represented by a collective bargaining agreement, nor have we experienced any work stoppage. We consider our relationshipwith our employees to be good. Our future success depends on our continuing ability to attract and retain highly qualified engineers, sales and marketing, accountmanagement, and senior management personnel.We also believe we have built a strong sales team focused on expanding into new markets through the acquisition of Naiz and our current team.We believe that our future success will depend, in part, on our continued ability to attract, hire and retain qualified personnel. In particular, we depend onthe skills, experience and performance of our senior management and research personnel. We compete for qualified personnel with other hitech companies, as wellas universities and nonprofit research institutions.16We provide competitive compensation and benefits programs to help meet the needs of our employees. In addition to salaries, these programs (which varyby country/region and employment classification) include incentive compensation plan, pension, and insurance benefits, paid time off, , among others. We also usetargeted equitybased grants with vesting conditions to facilitate retention of personnel, particularly for our key employees.The success of our business is fundamentally connected to the wellbeing of our people. Accordingly, we implemented an hybrid work policy in which theemployees can work from home twice a week.We consider our employees to be a key factor to our success and we are focused on attracting and retaining the best employees at all levels of ourbusiness. Inclusion and diversity is a strategic, business priority. We employ people based on relevant qualifications, demonstrated skills, performance and otherjobrelated factors. We do not tolerate unlawful discrimination related to employment, and strive to ensure that employment decisions related to recruitment,selection, evaluation, compensation, and development, among others, are not influenced by race, color, religion, gender, age, ethnic origin, nationality, sexualorientation, marital status, or disability. Continuous monitoring to ensure pay equity has been a focus in 2022. We have continued to improve gender balance in 2022with a focus on increasing the representation of women hired as new college graduates. We are committed to creating a trusting environment where all ideas arewelcomed and employees feel comfortable and empowered to draw on their unique experiences and backgrounds.We consider our relations with our employees to be good.Company InformationOur principal executive offices are located at HaYarden 4 St., POB 1026, Airport City, Israel 7010000, and our telephone number is +97236009030. Ourwebsite address is www.mysizeid.com. Any information contained on, or that can be accessed through, our website is not incorporated by reference into, nor is it inany way a part of, this Annual Report on Form 10K.We use our website (www.mysizeid.com) as a channel of distribution of Company information. The information we post through this channel may bedeemed material. Accordingly, investors should monitor our website, in addition to following our press releases, SEC filings and public conference calls andwebcasts. The contents of our website are not, however, a part of this Annual Report on Form 10K.Corporate HistoryWe were incorporated in the State of Delaware on September 20, 1999 under the name Topspin Medical, Inc. In December 2013, we changed our name toKnowledgetree Ventures Inc. Subsequently, in February 2014, we changed our name to MySize, Inc. In 2020, we created a subsidiary in the Russian Federation, MySize LLC.From inception through 2012, we were engaged in research and development of a medical magnetic resonance imaging, or MRI, technology forinterventional cardiology and in the development of MRI technology for use in the diagnosis and treatment of prostate cancer. In January 2012, we acquiredMetamorefix Ltd., or Metamorefix. Metamorefix was incorporated in 2007, and was engaged in the development of innovative solutions for the rehabilitation oftissues, particularly skin tissues. By the end of 2012, we ceased operations and in January 2013, we sold our entire ownership interest in Metamorefix.In September 2013, Ronen Luzon, our Chief Executive Officer, acquired control of the Company from Asher Shmuelevitch, according to which Mr. Luzonpurchased 70,238 shares of common stock from Mr. Shmuelevitch, which shares represented approximately 40% of the issued and outstanding capital stock of theCompany at such time, thus becoming a controlling shareholder of the Company. In connection with the acquisition, Mr. Luzon reached a settlement with our thencreditors pursuant to which the main creditor, Mr. Shmuelevitch, was paid a total sum of approximately $140,000 in consideration for a full and final waiver of any andall his claims that he may have relating to any monetary indebtedness of the Company to the creditors.17In February 2014, My Size Israel, our wholly owned subsidiary, entered into a Purchase Agreement, or the Purchase Agreement, with Shoshana Zigdon,who at the time was a beneficial owner of more than 20% of our outstanding shares, with respect to the acquisition by us of certain rights related to the collection ofdata for measurement purposes including rights in the venture, the method and a patent application that had been filed by the Seller (PCT/IL2013/050056), or theAssets. In consideration for the sale of the Assets, we agreed to pay to Ms. Zigdon, 18% of our operating profit, directly or indirectly connected with the Assetstogether with valueadded tax in accordance with the law for a period of seven years from the end of the development period of the aforementioned venture. Inaddition to the foregoing, the Purchase Agreement provided that all developments, improvements, knowledge and knowhow developed and/or accumulated by usafter the execution of the Purchase Agreement will be owned by us. Further, Ms. Zigdon agreed not to compete, directly or indirectly, with us in any matter relatingto the Assets for a period of seven years from the end of the development period of the venture.On May 26, 2021, we, My Size Israel, and Ms. Zigdon entered into an Amendment to Purchase Agreement, or the Amendment, which made certainamendments to the Purchase Agreement. Pursuant to the Amendment, Ms. Zigdon agreed to irrevocably waive (i) the right to repurchase certain assets related tothe collection of data for measurement purposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which our business issubstantially dependent, or the Assets, and (ii) all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My SizeIsrael under the Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation, reward orany rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights, or the Waiver. Inconsideration of the Waiver, we issued 100,000 shares of common stock to Ms. Zigdon.In September 2005, we commenced trading on the Tel Aviv Stock Exchange, or TASE. Between 2007 and 2012 we reported as a public company with theSEC. In August 2012, we suspended our reporting obligations. In mid2015 we resumed reporting as a public company. On July 25, 2016, our common stock beganpublicly trading on the Nasdaq Capital Market under the symbol “MYSZ”.ITEM 1A. RISK FACTORSAn investment in our common stock involves a high degree of risk. You should carefully consider the following risk factors and the other information inthis Annual Report on Form 10K before investing in our common stock. Our business and results of operations could be seriously harmed by any of the followingrisks. The risks set out below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterialalso may materially adversely affect our business, financial condition and/or operating results. If any of the following events occur, our business, financial conditionand results of operations could be materially adversely affected. In such case, the value and trading price of our common stock could decline, and you may lose allor part of your investment.Summary Risk FactorsThe principal factors and uncertainties that make investing in our ordinary shares risky, include, among others:Risks Related to Our Financial Position and Capital Requirements●We have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.●Our limited operating history makes it difficult to evaluate our business and prospects.●We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive and maycause the market price of our common stock to decline.●The report of our independent registered public accounting firm contains an explanatory paragraph regarding substantial doubt about our ability tocontinue as a going concern.Risks Related to Our Company and Our Business●The market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and online thirdparty resellers adopting our flagship product, MySizeID.18●Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broader marketacceptance of our products.●We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which may makeit difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.●We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increase ourcapital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.●If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations and financialcondition may be adversely affected.●If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operations andfinancial condition could be adversely affected.●The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile device applications andcustom development services.●Our growth depends, in part, on the success of our strategic relationships with third parties.●Changes in economic conditions could materially affect our business, financial condition and results of operations.●We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.●We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significant interruptionin our network or hosting and cloud services could adversely impact our operations and harm our business.●Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.●We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.●A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.●Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, data protectionand information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive and confidentialinformation. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm our business,results of operations and financial condition.●We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect our business.●We may face intense competition and expect competition to increase in the future, which could limit us in developing a customer base and generatingrevenue.●Our business operations and future development could be significantly disrupted if we lose key members of our management team.19●If we are able to expand our operations, we may be unable to successfully manage our future growth.Risks Related to Our Operations in Israel and Russia●Our headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.●Russia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.Risks Related to Our Common Stock●A more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.●Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions and adversedevelopments with respect to financial institutions and associated liquidity risk;●Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.●Our securities are traded on more than one market which may result in price variations.●We are a former “shell company” and as such are subject to certain limitations not generally applicable to other public companies.Risks Related to Our Financial Position and Capital RequirementsWe have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.We realized a net loss of approximately $8.3 million and $10.5 million for the years ended December 31, 2022 and 2021 and had an accumulated deficit of$53.5 million as at December 31, 2022. Because of the numerous risks and uncertainties associated with the development and commercialization of our products andbusiness, we are unable to predict the extent of any future losses or when we will become profitable, if at all. Expected future operating losses will have an adverseeffect on our cash resources, shareholders’ equity and working capital. Our failure to become and remain profitable could depress the value of our stock and impairour ability to raise capital, expand our business, maintain our development efforts, or continue our operations. A decline in our value could also cause you to lose allor part of your investment in us.Our limited operating history makes it difficult to evaluate our business and prospects.We have only been developing our measurement technology since 2014. Since then, our operating history has been primarily limited to research anddevelopment, pilot studies, raising capital, and more recently acquisitions and sales and marketing efforts. Therefore, it may be difficult to evaluate our business andprospects. We have not yet demonstrated an ability to commercialize our products. Consequently, any predictions about our future performance may not beaccurate, and you may not be able to fully assess our ability to complete development and/or commercialize our products, and any future products.We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive andmay cause the market price of our common stock to decline.Based on our projected cash flows and the cash balances as of the date of this Annual Report on Form 10K, our existing cash is insufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. In order to meet ourbusiness objectives in the future, we will need to raise additional capital, which may not be available on reasonable terms or at all. Additional capital would be usedto accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;20●respond to competitive pressure;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, and a number of otherfactors, many of which are outside our control, and on our financial performance. Accordingly, we cannot assure you that we will be able to successfully raiseadditional capital at all or on terms that are acceptable to us. If we cannot raise additional capital when needed, it may have a material adverse effect on our business,results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.Management has concluded that there is substantial doubt about our ability to continue as a going concern which could prevent us from obtainingnew financing on reasonable terms or at all.We have incurred significant losses and negative cash flows from operations and have an accumulated deficit that raises substantial doubt about its abilityto continue as a going concern. Our audited consolidated financial statements for the year ended December 31, 2022 were prepared under the assumption that wewould continue our operations as a going concern. Our independent registered public accounting firm has included a “going concern” explanatory paragraph in itsreport on our financial statements for the year ended December 31, 2022. If we are unable to improve our liquidity position, by, among other things, raising capitalthrough public or private offerings or reducing our expenses, we may exhaust our cash resources and will be unable to continue our operations. If we cannotcontinue as a viable entity, our shareholders would likely lose most or all of their investment in us.Risks Related to Our Company and Our BusinessThe market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and onlinethirdparty resellers adopting our flagship product, MySizeID.The market for our measurement technology is relatively new and unproven and is subject to a number of risks and uncertainties. We believe that ourfuture success will depend in large part on market adoption of our flagship product, MySizeID, by U.S. retailers and online thirdparty resellers. In order to grow ourbusiness, we intend to focus on educating retailers and resellers and other potential customers about the benefits of our measurement technology, expanding thefunctionality of our products and bringing new products to market to increase market acceptance and use of our technology. Our ability to develop and expand themarket that our products address depends upon a number of factors, including the cost savings, performance and perceived value associated with such products.The market for our products could fail to develop or there could be a reduction in interest or demand for our products as a result of a lack of consumer acceptance,technological challenges, competing products and services, weakening economic conditions and other causes. We may never successfully commercialize ourproducts and if our products fail to achieve market acceptance, this would have a material adverse effect on our business, results of operations and financialcondition.21Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broadermarket acceptance of our products.Our ability to achieve customer adoption, especially among U.S. retailers will depend, in part, on our ability to effectively organize, focus and train our salesand marketing personnel. We have limited experience selling to U.S. retailers and only recently established a U.S. sales force. We believe that there is significantcompetition for experienced sales professionals with the skills and industry knowledge that we require. Our ability to achieve significant revenue growth in thefuture will depend, in part, on our ability to recruit, train and retain a sufficient number of experienced sales professionals, particularly those with experience sellingto U.S. retailers. In addition, even if we are successful in hiring qualified sales personnel, new hires require significant training and experience before they achievefull productivity, particularly for sales efforts targeted at U.S. retailers and new markets. Because we only recently started sales efforts, we cannot predict whether, orto what extent, our sales efforts will be successful.We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which maymake it difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.In this market segment, the decision to adopt our products may require the approval of multiple technical and business decision makers, including security,compliance, procurement, operations and IT. In addition, while U.S. retailers may be willing to deploy our products on a limited basis, before they will commit todeploying our products at scale, they often require extensive education about our products and significant customer support time, engage in protracted pricingnegotiations and seek to secure readily available development resources. As a result, it is difficult to predict when we will obtain new customers and begingenerating revenue from these customers. As part of our sales cycle, we may incur significant expenses before executing a definitive agreement with a prospectivecustomer and before we are able to generate any revenue from such agreement. We have no assurance that the substantial time and money spent on our salesefforts will generate significant revenue. If conditions in the marketplace generally or with a specific prospective customer change negatively, it is possible that nodefinitive agreement will be executed, and we will be unable to recover any of these expenses. If we are not successful in targeting, supporting and streamlining oursales processes and if revenue expected to be generated from a prospective customer is not realized in the time period expected or not realized at all, our ability togrow our business, and our operating results and financial condition may be adversely affected. If our sales cycles lengthen, our future revenue could be lower thanexpected, which would have an adverse impact on our operating results and could cause our stock price to decline.22We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increaseour capital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.In order to reduce time to market and obtain complementary technologies, we are seeking to acquire technologies and businesses that are synergistic to ourproduct offering. For example, we recently acquired Orgad which operates an omnichannel ecommerce platform and Naiz which provides SaaS technology solutionsthat solve size and fit issues for fashion ecommerce companies. We evaluate from time to time various acquisitions and collaborations, including licensing oracquiring complementary technologies, intellectual property rights, or businesses. The process for acquiring a company may take from several months up to a yearand costs can vary greatly. We may also compete with others to acquire companies, and such competition may result in decreased availability of, or an increase inprice for, suitable acquisition candidates. In addition, we may not be able to consummate acquisitions or investments that we have identified as crucial to theimplementation of our strategy for other commercial or economic reasons. As a result, it may be more difficult for us to identify suitable acquisition or investmenttargets or to consummate acquisitions or investments on acceptable terms or at all. If we are not able to execute on any acquisition, we may not be able to achieve afuture growth strategy and may lose market share.In addition, the acquisition of Orgad, Naiz and any potential future acquisition, joint venture or collaboration may entail numerous potential risks, including:●increased operating expenses and cash requirements;●the assumption of additional indebtedness or contingent liabilities;●assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel;●the diversion of our management’s attention from our existing programs and initiatives in pursuing such a strategic merger or acquisition;●retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships;●risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing technologies; and●our inability to generate revenue from acquired technologies or products sufficient to meet our objectives in undertaking the acquisition or even to offsetthe associated acquisition and maintenance costs.All of the foregoing risks may be magnified as the cost, size or complexity of an acquisition or acquired company increases, or where the acquiredcompany’s products, market or business are materially different from ours, or where more than one integration is occurring simultaneously or within a concentratedperiod of time. We may not be able to obtain the necessary regulatory approvals, including those of antitrust authorities and foreign investment authorities, incountries where we seek to consummate acquisitions or make investments. For those and other reasons, we may ultimately fail to consummate an acquisition, even ifwe announce the intended acquisition.In addition, we may require significant financing to complete an acquisition or investment, whether through bank loans, raising of equity or debt orotherwise. We cannot assure you that such financing options will be available to us on reasonable terms, or at all. If we are not able to obtain such necessaryfinancing, it could have an impact on our ability to consummate a substantial acquisition or investment and execute a future growth strategy. Alternatively, we mayissue a significant number of shares as consideration for an acquisition, which would have a dilutive effect on our existing shareholders. For example, in partialconsideration for the acquisition of Orgad, we agreed to issue up to 111,602 shares of our common stock and in the Naiz acquisition we issued 240,000 shares of ourcommon stock. Furthermore, if we undertake acquisitions, we may incur large onetime expenses and acquire intangible assets that could result in significant futureamortization expense.23If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations andfinancial condition may be adversely affected.We believe that enhancing the “MySize” brand identity and increasing market awareness of our company and products, particularly among U.S. retailers, iscritical to achieving widespread acceptance of our products. Our ability to successfully develop new retailers may be adversely affected by a lack of awareness oracceptance of our brand. To the extent that we are unable to foster name recognition and affinity for our brand, our growth may be significantly delayed or impaired.The successful promotion of our brand will depend largely on our continued marketing efforts, market adoption of our products, and our ability to successfullydifferentiate our products from competing products and services. Our brand promotion may not be successful or result in revenue generation. Any incident thaterodes consumer affinity for our brand could significantly reduce our brand value and damage our business. If consumers perceive or experience a reduction inquality, or in any way believe we fail to deliver a consistently positive experience, our brand value could suffer and our business may be adversely affected.In particular, adverse weather conditions can impact guest traffic at our retailers, and, in more severe cases, cause temporary retail closures, sometimes forprolonged periods. Our business is subject to seasonal fluctuations, with retail sales typically higher during certain months, such as December. Adverse weatherconditions during our most favorable months or periods may exacerbate the effect of adverse weather on consumer traffic and may cause fluctuations in ouroperating results from quartertoquarter within a fiscal year.If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operationsand financial condition could be adversely affected.Our ability to attract new customers depends in part on our ability to enhance and improve our existing products, increase adoption and usage of ourproducts and introduce new products. The success of any enhancements or new products depends on several factors, including timely completion, adequatequality testing, actual performance quality, and overall market acceptance. Enhancements and new products that we develop may not be introduced in a timely orcosteffective manner, may contain errors or defects, may have interoperability difficulties with our platform or other products or may not achieve the broad marketacceptance necessary to generate significant revenue. Furthermore, our ability to increase the usage of our products depends, in part, on the development of newuse cases for our products and may be outside of our control. If we are unable to successfully enhance our existing products to meet evolving customerrequirements, increase adoption and usage of our products, develop new products, then our business, results of operations and financial condition would beadversely affected.The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile Apps and customdevelopment services.We must continue to enhance and improve the performance, functionality and reliability of our products. The mobile technology industry is characterizedby rapid technological change, changes in user requirements and preferences, frequent new product and services introductions embodying new technologies andthe emergence of new industry standards and practices that could render our products obsolete. Our success will depend, in part, on our ability to both internallydevelop and enhance our existing products, develop new products that address the increasingly sophisticated and varied needs of our customers, and respond totechnological advances and emerging industry standards and practices on a costeffective and timely basis. The development of our technology involvessignificant technical and business risks. We may fail to use new technologies effectively or to adapt our proprietary technology and systems to customerrequirements or emerging industry standards. If we are unable to adapt to changing market conditions, customer requirements or emerging industry standards, wemay not be able to increase our revenue and expand our business.Changes in economic conditions could materially affect our business, financial condition and results of operations.Because our primary target customers include U.S. retailers , we, together with the rest of the fashion/apparel industry, will depend upon consumerdiscretionary spending. Increases in unemployment rates, reductions in home values, increases in home foreclosures, investment losses, personal bankruptcies andreductions in access to credit and reduced consumer confidence, may impact consumers’ ability and willingness to spend discretionary dollars. In addition, volatileeconomic conditions may repress consumer confidence and discretionary spending. Any of the foregoing may have a material adverse effect on our business,financial condition and results of operations.24Our growth depends, in part, on the success of our strategic relationships with third parties.To grow our business, we anticipate that we will continue to depend on relationships with third parties, such as our customers and thirdparty platforms.Identifying partners, and negotiating and documenting relationships with them, requires significant time and resources. If we are unsuccessful in establishing ormaintaining our relationships with third parties, our ability to compete in the marketplace or to grow our revenue could be impaired, and our results of operationsmay suffer. Even if we are successful, we cannot assure you that these relationships will result in increased customer usage of our products or increased revenue.We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.We currently utilize, and plan on continuing to utilize over the current fiscal year, thirdparty networking providers and distribution through companiesincluding, but not limited to, Apple and Google as well as Shopify, WooCommerce and, Datalogic, Honeywell and Zebra to distribute our technologies. If disruptionsor capacity constraints occur, we may have no means of replacing these services, on a timely basis or at all. This could cause a material adverse condition for ouroperations and financial earnings.We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significantinterruption in our network or hosting and cloud services could adversely impact our operations and harm our business.Our technology infrastructure is critical to the performance of our products and customer satisfaction. Our products run on a complex distributed system,or what is commonly known as cloud computing. We own, operate and maintain elements of this system, but significant elements of this system are operated bythirdparties that we do not control and which would require significant time to replace. We expect this dependence on thirdparties to continue. In particular, asignificant portion, if not almost all data storage, data processing and other computing services and systems is hosted by cloud computing providers. Anydisruptions, outages and other performance problems relating to such services, including infrastructure changes, human or software errors and capacity constraints,could adversely impact our business, financial condition or results of operations.Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.We update our products on a frequent basis. Despite efforts to test our updates, errors, failures or bugs may not be found in our products until after theyare deployed to a customer. We have discovered and expect we will continue to discover errors, failures and bugs in our products and anticipate that certain of theseerrors, failures and bugs will only be discovered and remediated after deployment. Real or perceived errors, failures or bugs in our platform could result in negativepublicity, government inquiries, loss of or delay in market acceptance of our products, loss of competitive position, or claims by customers for losses sustained bythem. In such an event, we may be required, or may choose, for customer relations or other reasons, to expend additional resources in order to help correct theproblem.We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.In connection with the operation of our business, we store, process and transmit data, including personal and payment information, about our employeesand customers, a portion of which is confidential and/or personally sensitive. Unauthorized disclosure or loss of sensitive or confidential data may occur through avariety of methods. These include, but are not limited to, systems failure, employee negligence, fraud or misappropriation, or unauthorized access to or through ourinformation systems, whether by our employees or third parties, including a cyberattack by computer programmers, hackers, members of organized crime and/orstatesponsored organizations, who may develop and deploy viruses, worms or other malicious software programs. Such disclosure, loss or breach could harm ourreputation and subject us to government sanctions and liability under our contracts and laws that protect sensitive or personal data and confidential information,resulting in increased costs or loss of revenues. It is possible that security controls over sensitive or confidential data and other practices we and our thirdpartyvendors follow may not prevent the improper access to, disclosure of, or loss of such information. The potential risk of security breaches and cyberattacks mayincrease as we introduce new products and offerings. Further, data privacy is subject to frequently changing rules and regulations, which sometimes conflict amongthe various jurisdictions in which we provide services. Any failure or perceived failure to successfully manage the collection, use, disclosure, or security of personalinformation or other privacy related matters, or any failure to comply with changing regulatory requirements in this area, could result in legal liability or impairment toour reputation in the marketplace.25A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.Information security risks have generally increased in recent years, in part because of the proliferation of new technologies and the use of the Internet, andthe increased sophistication and activity of organized crime, hackers, terrorists, activists, cybercriminals and other external parties, some of which may be linked toterrorist organizations or hostile foreign governments. For example, a cybercriminal could use cybersecurity threats to gain access to sensitive information aboutanother company or to alter or disrupt news or information to be distributed by PR Newswire. Cybersecurity attacks are becoming more sophisticated and includemalicious software, ransomware, attempts to gain unauthorized access to data and other electronic security breaches that could lead to disruptions in criticalsystems, unauthorized release of confidential or otherwise protected information and corruption of data, substantially damaging our reputation. Any person whocircumvents our security measures could steal proprietary or confidential customer information or cause interruptions in our operations. We incur significant coststo protect against security breaches, and may incur significant additional costs to alleviate problems caused by any breaches. Our failure to prevent securitybreaches, or wellpublicized security breaches affecting the Internet in general, could significantly harm our reputation and business and financial results.Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, dataprotection and information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive andconfidential information. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm ourbusiness, results of operations and financial condition.We and our customers that use our products may be subject to privacy and data protectionrelated laws and regulations that impose obligations inconnection with the collection, processing and use of personal data, financial data, health or other similar data. The U.S. federal and various state and foreigngovernments have adopted or proposed limitations on, or requirements regarding, the collection, distribution, use, security and storage of personally identifiableinformation of individuals. The U.S. Federal Trade Commission and numerous state attorneys general are applying federal and state consumer protection laws toimpose standards on the online collection, use and dissemination of data, and to the security measures applied to such data.Similarly, many foreign countries and governmental bodies, including the EU member states, have laws and regulations concerning the collection and useof personally identifiable information obtained from individuals located in the EU or by businesses operating within their jurisdiction, which are often morerestrictive than those in the United States. Laws and regulations in these jurisdictions apply broadly to the collection, use, storage, disclosure and security ofpersonally identifiable information that identifies or may be used to identify an individual, such as names, telephone numbers, email addresses and, in somejurisdictions, IP addresses and other online identifiers.For example, the GDPR, which took full effect on May 25, 2018. The GDPR enhances data protection obligations for businesses and requires serviceproviders (data processors) processing personal data on behalf of customers to cooperate with European data protection authorities, implement security measuresand keep records of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to or greater of €20 million or 4% of global annualrevenues. In addition, the CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and require deletion of their personalinformation, opt out of certain personal information sharing, and receive detailed information about how their personal information is used. The CCPA provides forcivil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further, failure to comply withthe Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may expose us to administrativefines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the current enforcementmeasures and sanctions. There are also additional laws and regulations in additional jurisdictions around the world which govern the protection of consumers andof electronic communications. If our efforts to comply with GDPR, CCPA or other applicable laws and regulations are not successful, we may be subject to penaltiesand fines that would adversely impact our business and results of operations, and our ability to conduct business could be significantly impaired.26Additionally, although we endeavor to have our products comply with applicable laws and regulations, these and other obligations may be modified, theymay be interpreted and applied in an inconsistent manner from one jurisdiction to another, and they may conflict with one another, other regulatory requirements,contractual commitments or our internal practices. We also may be bound by contractual obligations relating to our collection, use and disclosure of personal,financial and other data or may find it necessary or desirable to join industry or other selfregulatory bodies or other privacy or data protectionrelatedorganizations that require compliance with their rules pertaining to privacy and data protection.We expect that there will continue to be new proposed laws, rules of selfregulatory bodies, regulations and industry standards concerning privacy, dataprotection and information security in the United States, the European Union and other jurisdictions, and we cannot yet determine the impact such future laws,rules, regulations and standards may have on our business. Moreover, existing U.S. federal and various state and foreign privacy and data protectionrelated lawsand regulations are evolving and subject to potentially differing interpretations, and various legislative and regulatory bodies may expand current or enact new lawsand regulations regarding privacy and data protectionrelated matters. Because global laws, regulations and industry standards concerning privacy and datasecurity have continued to develop and evolve rapidly, it is possible that we or our products or platform may not be, or may not have been, compliant with eachsuch applicable law, regulation and industry standard and compliance with such new laws or to changes to existing laws may impact our business and practices,require us to expend significant resources to adapt to these changes, or to stop offering our products in certain countries. These developments could adverselyaffect our business, results of operations and financial condition.We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect ourbusiness.Our ability to implement our business plan successfully depends in part on our ability to build brand recognition using our trademarks, service marks andother proprietary intellectual property, including our names and logos. We currently have no registered trademarks. While we plan to register a number of ourtrademarks; however, no assurance can be given that our trademark applications will be approved. As of December 31, 2022, we own 18 issued patents: six in Europe,four in the U.S., three in each of Russia and Japan and one in each of Canada and Israel which expire between January 20, 2033 and August 18, 2036, and we havetwo additional patent applications in process. As of such date, we do not have any registered trademarks., No assurance can be given that our patent applicationswhich are in process will be approved. If our patent applications are not approved, our ability to expand or develop our business may be negatively affected.Third parties may also oppose our trademark or patent applications, or otherwise challenge our use of the trademarks or patents. In the event that ourtrademarks or patents are successfully challenged, we could be forced to rebrand our goods and services or redesign our technology, which could result in loss ofbrand recognition, and could require us to devote resources to advertising and marketing new brands and products.If our efforts to register, maintain and protect our intellectual property are inadequate, or if any thirdparty misappropriates, dilutes or infringes on ourintellectual property, the value of our brands may be harmed, which could have a material adverse effect on our business and might prevent our brands fromachieving or maintaining market acceptance. We may also face the risk of claims that we have infringed third parties’ intellectual property rights. If third parties claimthat we infringe upon their intellectual property rights, our operating profits could be adversely affected. Any claims of intellectual property infringement, eventhose without merit, could be expensive and time consuming to defend, require us to rebrand our services, if feasible, divert management’s attention and resourcesor require us to enter into royalty or licensing agreements in order to obtain the right to use a thirdparty’s intellectual property.Any royalty or licensing agreements, if required, may not be available to us on acceptable terms or at all. A successful claim of infringement against uscould result in our being required to pay significant damages, enter into costly license or royalty agreements, or stop the sale of certain products or services, any ofwhich could have a negative impact on our operating profits and harm our future prospects.We may face intense competition and expect competition to increase in the future, which could prohibit us from developing a customer base andgenerating revenue.We face significant competition in every aspect of our business. Our competitors include True Fit, Virtusize, EasyMeasure, AR MeasureKit, Smart Measureand 3DLook. These companies may already have an established market in our industry. Most of these companies have significantly greater financial and otherresources than us and have been developing their products and services longer than we have been developing ours.27In addition, some of our larger competitors have substantially broader product offerings and leverage their relationships based on other products orincorporate functionality into existing products to gain business in a manner that discourages potential customers from purchasing our products. Potentialcustomers may also prefer to purchase from their existing solution providers rather than a new solution provider regardless of product performance or features.These larger competitors often have broader product lines and market focus and will therefore not be as susceptible to downturns in a particular market. Conditionsin our market could change rapidly and significantly as a result of technological advancements, partnering by our competitors or continuing market consolidation.New startup companies that innovate and large competitors that are making significant investments in research and development may invent similar or superiorproducts and technologies that compete with our products. In addition, some of our competitors may enter into new alliances with each other or may establish orstrengthen cooperative relationships. Any such consolidation, acquisition, alliance or cooperative relationship could lead to pricing pressure and our loss of anyfuture market share and could result in a competitor with greater financial, technical, marketing, service and other resources, all of which could harm our ability tocompete. Furthermore, organizations may be more willing to incrementally add solutions to their existing infrastructure from competitors than to replace their existinginfrastructure with our products. Any failure to meet and address these factors could harm our business, results of operations and financial condition.Our business operations and future development could be significantly disrupted if we lose key members of our management team.The success of our business continues to depend to a significant degree upon the continued contributions of our senior officers and key employees, bothindividually and as a group. Our future performance will be substantially dependent in particular on our ability to retain and motivate Ronen Luzon, our ChiefExecutive Officer, and certain of our other senior executive officers. The loss of the services of our Chief Executive Officer, senior officers or other key employeescould have a material adverse effect on our business and plans for future development. We have no reason to believe that we will lose the services of any of theseindividuals in the foreseeable future; however, we currently have no effective replacement for any of these individuals due to their experience, reputation in theindustry and special role in our operations. We also do not maintain any key man life insurance policies for any of our employees.If we are able to expand our operations, we may be unable to successfully manage our future growth.Our growth may strain our infrastructure and resources. Any such growth could place increased strain on our management, operational, financial and otherresources, and we will need to train, motivate, and manage employees, as well as attract management, sales, finance and accounting, international, technical, andother professionals. Any failure to expand these areas and implement appropriate procedures and controls in an efficient manner and at a pace consistent with ourbusiness objectives could have a material adverse effect on our business, results of operations and financial condition.Our business operations are conducted in multiple languages and could be disrupted due to miscommunications or translation errors.The success of our business continues to depend on our marketing efforts in the United States, Europe and Israel, each of which is conducted in the locallanguage. Miscommunications or inaccurate foreign language translations could have a material adverse effect on our business operations and financial conditions.Additionally, contracts, communications and complex technical information must be accurately translated into foreign languages.We will continue to incur costs and be subject to various obligations as a result of being a public company, listed in the United States and in Israel.We will continue to incur significant legal, accounting and other expenses as a result of being a public company, listed in the United States and in Israel.Although we will incur costs each year associated with being a publiclytraded company, it is possible that our actual costs of being a publiclytraded company willvary from year to year and may be different than our estimates. In estimating these costs, we take into account expenses related to insurance, legal, accounting andcompliance activities.28Furthermore, the need to maintain the corporate infrastructure demanded of a public company may divert management’s attention from implementing ourgrowth strategy, which could prevent us from improving our business, results of operations and financial condition. We have made, and will continue to make,changes to our internal controls and procedures for financial reporting and accounting systems to meet our reporting obligations as a U.S. publicly traded company.However, the measures we take may not be sufficient to satisfy our obligations as a publicly traded company.Any future or current litigation could have a material adverse impact on our results of operations, financial condition and liquidity.From time to time, we may be subject to litigation, including, among others, potential stockholder derivative actions and class actions. Risks associatedwith legal liability are difficult to assess and quantify, and their existence and magnitude can remain unknown for significant periods of time. Subject to certainexceptions, our Amended and Restated Certificate of Incorporation, or Certificate of Incorporation, and Amended and Restated Bylaws, or Bylaws, require us toindemnify and advance expenses to our officers and directors involved in legal proceedings. To date we have obtained directors and officers’ liability, or D&O,insurance to cover some of the risk exposure for our directors and officers. Such insurance generally pays the expenses (including amounts paid to plaintiffs, fines,and expenses including attorneys’ fees) of officers and directors who are the subject of a lawsuit as a result of their service to us. There can be no assurance that wewill be able to continue to maintain this insurance at reasonable rates or at all, or in amounts adequate to cover such expenses should such a lawsuit occur. WithoutD&O insurance, the amounts we would pay to indemnify our officers and directors should they be subject to legal action based on their service to us could have amaterial adverse effect on our financial condition, results of operations and liquidity. Such lawsuits, and any related publicity, may result in substantial costs and,among other things, divert the attention of management and our employees. An unfavorable outcome in any claim or proceeding against us could have a materialadverse impact on our financial position and results of operations for the period in which the unfavorable outcome occurs, and potentially in future periods. Further,any settlement announced by us may expose us to further claims against us by third parties seeking monetary or other damages which, even if unsuccessful, woulddivert management attention from the business and cause us to incur costs, possibly material, to defend such matters, which could have a material adverse impacton our financial position. See “Legal Proceedings” for more information regarding our involvement in ongoing litigation matters.Federal, state and local or Israeli tax rules may adversely impact our results of operations and financial position.We are subject to federal, state and local taxes in the U.S., as well as local taxes in Israel in respect to our operations in Israel. Although we believe our taxestimates are reasonable, if the Internal Revenue Service or other taxing authority disagrees with the positions we have taken on our tax returns, we could faceadditional tax liability, including interest and penalties. If material, payment of such additional amounts upon final adjudication of any disputes could have a materialimpact on our results of operations and financial position. In addition, complying with new tax rules, laws or regulations could impact our financial condition, andincreases to federal or state statutory tax rates and other changes in tax laws, rules or regulations may increase our effective tax rate. Any increase in our effectivetax rate could have a material impact on our financial results.A significant majority of Orgad’s revenue is from sales of products on Amazon’s U.S. Marketplace and any change, limitation or restriction on ourability to operate on Amazon’s platform or any other marketplace could have a material adverse impact to our business, results of operations, financialcondition and prospects.Orgad, our wholly owned subsidiary, operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com, eBay and others. A substantial percentage of Orgad’s revenue is driven by sales on Amazon’s U.S. marketplace and Orgad is subject toterms of service of Amazon and other maketplaces and various other seller policies and services that apply to third parties selling products on Amazon and othermarketplaces. Generally, a marketplace has the right to terminate or suspend its agreement with Orgad at any time and for any reason. Such marketplace may takeother actions against Orgad such as suspending or terminating a seller account or product listing and withholding payments owed to Orgad indefinitely. Forexample, in July 2022, Amazon deactivated Orgad’s Amazon U.S. store as a result of complaints submitted due to an error in the listed manufacturer of certainproducts on Orgad’s store. Although its account was subsequently reinstated in September 2022, if the deactivation were to occur in the future for a prolongedperiod of time, or if Amazon were to terminate Orgad’s account, this would have a material adverse effect on our business, results of operations, financial conditionand prospects. While Orgad endeavors to materially comply with the terms of services of the marketplaces on which it operates, we can provide no assurance thatthese marketplaces will have the same determination with respect to our compliance.29In addition, Amazon and other marketplaces can make changes to its platform that could require Orgad to change the manner in which it operates, limit itsability to successfully launch new products or increase its costs to operate and such changes could have an adverse effect on our business, results of operations,financial condition and prospects. Examples of changes that could impact us relate to platform fee charges (i.e., selling commissions), exclusivity, inventorywarehouse availability, excluded products and limitations on sales and marketing. Any change, limitation or restriction on our ability to sell on Amazon’s platform orany other marketplace, even if temporary, could have a material impact on our business, results of operations, financial condition and prospects.Orgad also relies on services provided by Amazon’s fulfillment platform, including Prime Certification, which provides for expedited shipping to theconsumer, an important aspect in the buying decision for consumers. For products that Orgad fulfills itself, Orgad is qualified to offer our products for sale withPrime Certification delivery. Any inability to market our products for sale with expedited delivery provided under Prime Certification could have a material impact onour business, results of operations, financial condition and prospects. Failure to remain compliant with the best fulfillment practices on Amazon’s platform couldhave a material impact on our business, results of operations, financial condition and prospects. In addition, due to the COVID19 pandemic, Amazon has changedthe amount of inventory it accepts per product for a period of time. If this were to continue it could cause us to miss sales and/or pay additional shipping costswhich would harm our business operations and financial conditions.Orgad’s business depends on its ability to build and maintain strong product listings on ecommerce platforms. Orgad may not be able to maintain andenhance our product listings if it receives unfavorable customer complaints, negative publicity or otherwise fails to live up to consumers’ expectations, whichcould materially adversely affect our business, results of operations and growth prospects.Maintaining and enhancing Orgad’s product listings is critical in expanding and growing its business. However, a significant portion of Orgad’s perceivedperformance to the customer depends on third parties outside of its control, including suppliers and thirdparty delivery agents as well as online retailers such asAmazon and eBay. Because Orgad’s agreements with its online retail partners are generally terminable at will, it may be unable to maintain these relationships, andour results of operations could fluctuate significantly from period to period. Because Orgad relies on third parties to deliver its products, it is subject to shippingdelays or disruptions caused by inclement weather, natural disasters, labor activism, health epidemics or bioterrorism. It may also experience shipping delays ordisruptions due to other carrierrelated issues relating to their own internal operational capabilities. Further, Orgad relies on the business continuity plans of thesethird parties to operate during pandemics, like the COVID19 pandemic, and it has limited ability to influence their plans, prevent delays, and/or cost increases due toreduced availability and capacity and increased required safety measures.Customer complaints or negative publicity about its products, delivery times, or marketing strategies, even if not accurate, especially on blogs, social mediawebsites and thirdparty market sites, could rapidly and severely diminish consumer view of Orgad’s product listings and result in harm to its brand. Customers mayalso make safetyrelated or other types of claims regarding products sold through our online retail partners, such as Amazon, which may result in an online retailpartner removing the product from its marketplace. We also use and rely on other services from third parties, such as our telecommunications services, and thoseservices may be subject to outages and interruptions that are not within our control.Orgad faces risks related to successfully optimizing and operating its fulfillment and customer service operations.Failures to adequately predict customer demand or otherwise optimize and operate its fulfillment and customer service operations successfully from time totime result in excess or insufficient fulfillment or customer service capacity, increased costs, and impairment charges, any of which could materially harm ourbusiness. As Orgad continues to add fulfillment and customer service capability or add new businesses with different requirements, its fulfillment and customerservice operations become increasingly complex and operating them becomes more challenging. There can be no assurance that Orgad will be able to operate ouroperations effectively.30In addition, failure to optimize inventory in our fulfillment operations increases net shipping cost by requiring longzone or partial shipments. Orgad may beunable to adequately staff its fulfillment and customer service operations. Orgad’s failure to properly handle such inventory or to accurately forecast productdemand may result in it being unable to secure sufficient storage space or to optimize its fulfillment operations or cause other unexpected costs and other harm toour business and reputation.Orgad relies on a limited number of shipping companies to deliver inventory to it and completed orders to our customers. The inability to negotiateacceptable terms with these companies or performance problems or other difficulties experienced by these companies could negatively impact our operating resultsand customer experience. In addition, Orgad’s ability to receive inbound inventory efficiently and ship completed orders to customers also may be negativelyaffected by natural or manmade disasters, extreme weather, geopolitical events and security issues, labor or trade disputes, and similar events.The variability in Orgad’s retail business places increased strain on its operations.Demand for Orgad’s product listings can fluctuate significantly for many reasons, including as a result of seasonality, promotions, product launches, orunforeseeable events, such as in response to natural or manmade disasters, extreme weather, or geopolitical events. For example, Orgad expects a disproportionateamount of our retail sales to occur during our fourth quarter. Failure to stock or restock popular products in sufficient amounts such that Orgad fails to meetcustomer demand could significantly affect our revenue and our future growth. If too many customers access the websites on which Orgad engages in onlineretailing within a short period of time due to increased demand, Orgad may experience system interruptions that make the websites unavailable or prevent us fromefficiently fulfilling orders, which may reduce the volume of goods its offers or sell and the attractiveness of its products. In addition, Orgad may be unable toadequately staff for fulfillment of orders and customer service during these peak periods and delivery and other fulfillment companies and customer service cosourcers may be unable to meet the seasonal demand.Our business is subject to the risks of earthquakes, fire, power outages, floods, health risks and other catastrophic events, and to interruption by manmade problems such as terrorism.Natural disasters, such as fire or floods, a significant power outage, telecommunications failure, terrorism, an armed conflict, cyberattacks, epidemics andpandemics such as COVID19, or other geopolitical unrest could affect our supply chain, manufacturers, logistics providers, channel partners, or endcustomers orthe economy as a whole and such disruption could impact us and the shipments and sales. These risks may be further increased if the disaster recovery plans for usand our suppliers prove to be inadequate. To the extent that any of the above should result in delays or cancellations of customer orders, the loss of customers, orthe delay in the deployment or shipment of products, our business, financial condition, and operating results would be adversely affected.For example, on January 2, 2023, Orgad experienced a fire at its warehouse in Israel. We are not aware of any casualties or injuries associated with the fire.We shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incidentdid not affect the future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of thisincident on the other parties that were involved in the incident (lessor and others that leased properties near the warehouse).Our business could be negatively impacted by unsolicited takeover proposals, by shareholder activism or by proxy contests relating to the election ofdirectors or other matters.Our business could be negatively affected as a result of an unsolicited takeover proposal, by shareholder activism or a proxy contest. During 2021, anactivist shareholder sought to make changes to our board of directors, among other matters, which ultimately resulted in us entering into a settlement agreementwith the activist shareholder and another shareholder, and for which considerable costs were incurred and absorbed significant time and attention by managementand the board of directors. A future proxy contest, unsolicited takeover proposal, or other shareholder activism relating to the election of directors or other matterswould most likely require us to incur significant legal fees and proxy solicitation expenses and require significant time and attention by management and our Boardof Directors. The potential of a proxy contest, unsolicited takeover proposal, or other shareholder activism could interfere with our ability to execute our strategicplan, give rise to perceived uncertainties as to our future direction, result in the loss of potential business opportunities or make it more difficult to attract and retainqualified personnel, any of which could materially and adversely affect our business and operating results.31Environmental, social and corporate governance (ESG) issues, including those related to climate change and sustainability, may have an adverseeffect on our business, financial condition and results of operations and damage our reputation.There is an increasing focus from certain investors, customers, consumers, employees and other stakeholders concerning ESG matters. Additionally, publicinterest and legislative pressure related to public companies’ ESG practices continue to grow. If our ESG practices fail to meet regulatory requirements or investor,customer, consumer, employee or other shareholders’ evolving expectations and standards for responsible corporate citizenship in areas including environmentalstewardship, support for local communities, Board of Director and employee diversity, human capital management, employee health and safety practices, productquality, supply chain management, corporate governance and transparency, our reputation, brand and employee retention may be negatively impacted, and ourcustomers and suppliers may be unwilling to continue to do business with us.Customers, consumers, investors and other shareholders are increasingly focusing on environmental issues, including climate change, energy and wateruse, plastic waste and other sustainability concerns. Concern over climate change may result in new or increased legal and regulatory requirements to reduce ormitigate impacts to the environment. Changing customer and consumer preferences or increased regulatory requirements may result in increased demands orrequirements. Complying with these demands or requirements could cause us to incur additional manufacturing, operating or product development costs.If we do not adapt to or comply with new regulations, including the SEC’s published proposed rules that would require companies to provide significantlyexpanded climaterelated disclosures in their periodic reporting, which may require us to incur significant additional costs to comply and impose increased oversightobligations on our management and board of directors, or fail to meet evolving investor, industry or stakeholder expectations and concerns regarding ESG issues,investors may reconsider their capital investment in our company, we may become subject to penalties, and customers and consumers may choose to stoppurchasing our products, if approved for commercialization, which could have a material adverse effect on our reputation, business or financial condition.Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions andadverse developments with respect to financial institutions and associated liquidity risk.Our business depends on the economic health of the global economies. If the conditions in the global economies remain uncertain or continue to bevolatile, or if they deteriorate, including as a result of the impact of military conflict, such as the war between Russia and Ukraine, terrorism or other geopoliticalevents, our business, operating results and financial condition may be materially adversely affected. Economic weakness, inflation and increases in interest rates,limited availability of credit, liquidity shortages and constrained capital spending have at times in the past resulted, and may in the future result, in challenging anddelayed sales cycles, slower adoption of new technologies and increased price competition, and could negatively affect our ability to forecast future periods, whichcould result in an inability to satisfy demand for our products and a loss of market share.In addition, increases in inflation raise our costs for commodities, labor, materials and services and other costs required to grow and operate our business,and failure to secure these on reasonable terms may adversely impact our financial condition. Additionally, increases in inflation, along with the uncertaintiessurrounding COVID19, geopolitical developments and global supply chain disruptions, have caused, and may in the future cause, global economic uncertainty anduncertainty about the interest rate environment, which may make it more difficult, costly or dilutive for us to secure additional financing. A failure to adequatelyrespond to these risks could have a material adverse impact on our financial condition, results of operations or cash flows.More recently, the closures of SVB and Signature Bank and their placement into receivership with the FDIC created bankspecific and broader financialinstitution liquidity risk and concerns. Although the Department of the Treasury, the Federal Reserve and the FDIC jointly released a statement that depositors atSVB and Signature Bank would have access to their funds, even those in excess of the standard FDIC insurance limits, under a systemic risk exception, futureadverse developments with respect to specific financial institutions or the broader financial services industry may lead to marketwide liquidity shortages, impair theability of companies to access nearterm working capital needs, and create additional market and economic uncertainty. There can be no assurance that future creditand financial market instability and a deterioration in confidence in economic conditions will not occur. Our general business strategy may be adversely affected byany such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions. If the current equityand credit markets deteriorate, or if adverse developments are experienced by financial institutions, it may cause shortterm liquidity risk and also make anynecessary debt or equity financing more difficult, more costly, more onerous with respect to financial and operating covenants and more dilutive. Failure to secureany necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stockprice and could require us to alter our operating plans. In addition, there is a risk that one or more of our service providers, financial institutions, manufacturers,suppliers and other partners may be adversely affected by the foregoing risks, which could directly affect our ability to attain our operating goals on schedule andon budget.Our business may be adversely affected by the impact of any renewed outbreak of the COVID19 pandemic.Public health epidemics or outbreaks could adversely impact our business. In late 2019, a novel strain of COVID19, also known as coronavirus, wasreported in Wuhan, China. While initially the outbreak was largely concentrated in China, it spread worldwide. Many countries around the world, including in Israel,implemented significant governmental measures to control the spread of the virus, including temporary closure of businesses, severe restrictions on travel and themovement of people, and other material limitations on the conduct of business. These measures haven historically resulted in work stoppages and other disruptions.If there is a resurgence of the COVID19 pandemic, this could adversely impact our operations, including among others, our sales and marketing efforts and ourability to raise additional funds, and accordingly, the impact of COVID19 could have an adverse impact on our business and our financial results.32Risks Related to Our Operations in RussiaRussia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.In addition to our Israel operations, we have operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia and we engage two software developers through a third party who are based in Ukraine. On February 24,2022, Russia invaded Ukraine. The outbreak of hostilities between the two countries could result in more widespread conflict and could have a severe adverse effecton the region.Following Russia’s actions, various countries, including the U.S., Canada, the United Kingdom, Germany and France, as well as the European Union,issued broadranging economic sanctions against Russia. Such sanctions included, among other things, a prohibition on doing business with certain Russiancompanies, officials and oligarchs; a commitment by certain countries and the European Union to remove selected Russian banks from the Society for WorldwideInterbank Financial Telecommunications (SWIFT) electronic banking network that connects banks globally; and restrictive measures to prevent the Russian CentralBank from undermining the impact of the sanctions. In response to sanctions, the Russian Central Bank raised its interest rates and banned sales of local securitiesby foreigners. Russia may take additional counter measures or retaliatory actions in the future. While diplomatic efforts have been ongoing, the conflict betweenRussia and Ukraine is currently unpredictable and has the potential to result in broadened military actions. The duration of ongoing hostilities and such sanctionsand related events cannot be predicted. Uncertainty as to future relations between Russia and the U.S. and other countries in the west, or between Russia and othereastern European countries, may have a negative impact on our operations.Such international sanctions and potential responses to such sanctions, including those that may limit or restrict transfer funds into Russia, may in thefuture significantly affect our ability to conduct our activities in Russia including paying our personnel. To date, the conflict has had minimal impact on operations .Nevertheless, we have no way to predict the progress or outcome of the situation in Ukraine, as the conflict and governmental reactions are rapidly developing andbeyond our control. Prolonged unrest, intensified military activities or more extensive sanctions impacting the region could have a material adverse effect on ouroperations, results of operations, financial condition, liquidity and business outlook.Political, military conditions or other risks in Russia could adversely affect our business.Russia is a federative state consisting of 85 constituent entities, or “subjects.” The Russian Constitution reserves some governmental powers for theRussian Government, some for the subjects and some for areas of joint competence. In addition, eight “federal districts” (“federal’nye okruga”), which are overseenby a plenipotentiary representative of the President, supplement the country’s federal system. The delineation of authority among and within the subjects is, inmany instances, unclear and contested, particularly with respect to the division of tax revenues and authority over regulatory matters. For these reasons, theRussian political system is vulnerable to tension and conflict between federal, subject and local authorities. This tension creates uncertainties in the operatingenvironment in Russia, which may prevent us from carrying out our strategy effectively. The risks associated with these events or potential events could materiallyand adversely affect the investment environment and overall consumer and entrepreneurial confidence in Russia, and our business, prospects, financial condition,hiring ability, and results of operations could be materially and adversely affected.Furthermore, high levels of corruption reportedly exist in Russia, including the bribing of officials for the purpose of initiating investigations bygovernment agencies. Corruption and other illegal activities could disrupt our ability to conduct our business effectively, and claims that the we are involved in suchcorruption or illegal activities could generate negative publicity, of which could harm our development, financial condition, results of operations or prospects.Economic and other risks in Russia could adversely affect our business.Operating a business in an emerging market such as Russia can involve a greater degree of risk than operating a business in more developed markets.Over the last two decades, the Russian economy has experienced or continues to experience at various times:●significant volatility in its GDP;33●the impact of international sanctions;●high levels of inflation;●increases in, or high, interest rates;●sudden price declines in oil and other natural resources;●instability in the local currency market;●budget deficits;●the continued operation of lossmaking enterprises due to the lack of effective bankruptcy proceedings;●capital flight; and●significant increases in poverty rates, unemployment and underemployment.The Russian economy has been subject to abrupt downturns in the past, including as a result of the invasion of Ukraine, global financial crisis, and, as anemerging market, remains particularly vulnerable to further external shocks and any future fluctuations in the global markets. Any further deterioration in the generaleconomic conditions in Russia (whether or not as a result of the events mentioned above) could have a material adverse effect on the Russian economy and mayresult in hiring and operational difficulties, as well as potential flight of human capital, which could have a material adverse effect on our business, productdevelopment and results of operations.Legal risks in Russia could materially adversely affect our operations and Russian tax legislation is subject to frequent change.Among the risks of the Russian legal system are: inconsistencies among laws, presidential decrees, and government and ministerial orders and resolutions;conflicting local, regional and federal laws and regulations; the untested nature of the independence of the judiciary and its sensitivity to economic or politicalinfluences; substantial gaps in the regulatory structure due to the delay or absence of implementing legislation; a high degree of discretion on the part ofgovernmental authorities; reported corruption within governmental entities and other governmental authorities; the relative inexperience of judges and courts ininterpreting laws applicable to complex transactions; and the unpredictability of enforcement of foreign judgments and foreign arbitral awards. Many Russian lawsand regulations are construed in a way that provides for significant administrative discretion in application and enforcement. Unlawful, selective or arbitrary actionsof the Russian Government have reportedly included the denial or withdrawal of licenses, sudden and unexpected tax audits, criminal prosecutions, and civil claims.Any of the above events may have a material adverse effect on our product development and results of operations.Despite certain improvements in the taxation system made by the Russian Government over the past decade, Russian tax legislation is still subject tofrequent change, varying interpretations, and inconsistent and selective enforcement. There are currently no clear rules for distinguishing between lawful taxoptimization and tax evasion. In addition, Russian tax laws do not contain detailed rules on the taxation in Russia of foreign companies. As such, taxpayers oftenhave to resort to court proceedings to defend their position against the Russian tax authorities. However, in the absence of consistent court practice or bindingprecedents, there is inconsistency amongst court decisions. Further, the possibility exists that the Russian Federation would impose arbitrary or onerous taxes andpenalties in the future, which could have a material adverse effect on our product development and results of operations.34Risks Related to Our Operations In IsraelOur headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.Our headquarters and most of our operations are located in central Israel and our key employees, officers and directors are residents of Israel. Accordingly,political, economic and military conditions in Israel and the surrounding region may directly affect our business. Since the establishment of the State of Israel in1948, a number of armed conflicts have taken place between Israel and its Arab neighbors. Any hostilities involving Israel or the interruption or curtailment of tradewithin Israel or between Israel and its trading partners could adversely affect our operations and results of operations and could make it more difficult for us to raisecapital. During the winter of 2008, winter of 2012 and the summer of 2014, Israel was engaged in an armed conflict with Hamas, a militia group and political partyoperating in the Gaza Strip, and during the summer of 2006, Israel was engaged in an armed conflict with Hezbollah, a Lebanese Islamist Shiite militia group andpolitical party. Israel faces political tension with respect to its relationships with Turkey, Iran and certain Arab neighbor countries. In addition, recent conflictsinvolved missile strikes against civilian targets in various parts of Israel, and negatively affected business conditions in Israel. Recent political uprisings and socialunrest in various countries in the Middle East and North Africa are affecting the political stability of those countries. This instability may lead to deterioration of thepolitical relationships that exist between Israel and these countries, and have raised concerns regarding security in the region and the potential for armed conflict.Any armed conflicts, terrorist activities or political instability in the region could adversely affect business conditions and could harm our results of operations. Forexample, any major escalation in hostilities in the region could result in a portion of our employees and service providers being called up to perform military duty foran extended period of time. Parties with whom we do business have sometimes declined to travel to Israel during periods of heightened unrest or tension, forcing usto make alternative arrangements when necessary. In addition, the political and security situation in Israel may result in parties with whom we have agreementsinvolving performance in Israel claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions insuch agreements. Any future deterioration in the political and security situation in Israel will negatively impact our business.Our commercial insurance does not cover losses that may occur as a result of events associated with the security situation in the Middle East. Althoughthe Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that thisgovernment coverage will be maintained. Any losses or damages incurred by us could have a material adverse effect on our business. Any armed conflicts orpolitical instability in the region would likely negatively affect business conditions and could harm our results of operations.Further, in the past, the State of Israel and Israeli companies have been subjected to an economic boycott. Several countries still restrict business with theState of Israel and with Israeli companies. These restrictive laws and policies may have an adverse impact on our operating results, financial condition or theexpansion of our business.The legislative power of the State resides in the Knesset, a unicameral parliament that consists of 120 members elected by nationwide voting under asystem of proportional representation. Israel’s most recent general elections were held on April 9, 2019, September 17, 2019, March 2, 2020 and November 1, 2022.The uncertainty surrounding the results of the recent elections may continue. Actual or perceived political instability in Israel or any negative changes in thepolitical environment, may individually or in the aggregate adversely affect the Israeli economy and, in turn, our business, financial condition, results of operationsand prospects.Some of our employees are obligated to perform military reserve duty in Israel.Many Israeli citizens, including our employees are obligated to perform one month, and in some cases more, of annual military reserve duty until they reachthe age of 40 (or older, for reservists with certain occupations) and, in the event of a military conflict, may be called to active duty. In response to increases interrorist activity, there have been periods of significant callups of military reservists. It is possible that there will be military reserve duty callups in the future. Ouroperations could be disrupted by such callups. Such disruption could materially adversely affect our business, results of operations and financial condition.35It may be difficult to enforce a nonIsraeli judgment against the Company or its officers and directors.The operating subsidiary of ours is incorporated in Israel. All of our executive officers and directors are not residents of the United States, and asubstantial portion of our assets and the assets of our executive officers and directors are located outside the United States. Therefore, a judgment obtained againstus, or any of these persons, including a judgment based on the civil liability provisions of the U.S. federal securities laws, may not be collectible in the United Statesand may not necessarily be enforced by an Israeli court. It also may be difficult to affect service of process on these persons in the United States or to assert U.S.securities law claims in original actions instituted in Israel. Additionally, it may be difficult for an investor, or any other person or entity, to initiate an action withrespect to U.S. securities laws in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of U.S. securities laws reasoning that Israel is not themost appropriate forum in which to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law isapplicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law often involves the testimony of expert witnesses, which can be a timeconsuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel that addresses the mattersdescribed above. As a result of the difficulty associated with enforcing a judgment against us in Israel, it may be impossible to collect any damages awarded byeither a U.S. or foreign court.Our international operations could expose us to additional risks, including exchange rate fluctuations, legal regulations and political or economicinstability that could harm our business and operating results.Our international operations expose us to the following risks which may have a material adverse effect on our business and operating results:●devaluations and fluctuations in currency exchange rates including fluctuations between the U.S. dollar and the NIS and the Russian Ruble;●costs of compliance with local laws, including labor laws and intellectual property laws;●compliance with domestic and foreign government policies, including compliance with Israeli securities laws and TASE;●changes in trade regulations and procedures affecting approval, production, pricing, marketing, reimbursement for and access to, our products;●compliance with applicable foreign anticorruption laws, antitrust/competition laws, antiBoycott Israel law and antimoney laundering laws; and●economic and geopolitical developments and conditions, including ongoing instability in global economies and financial markets, international hostilities,acts of terrorism and governmental reactions, inflation, outbreaks of contagious disease (e.g., the COVID19 pandemic) and military and political alliances.Risks Related to Our Common StockA more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.Although our common stock is listed on the Nasdaq Capital Market, it has only been traded on the Nasdaq Capital Market since July 25, 2016. There hasbeen relatively limited trading volume in the market for our common stock, and a more active, liquid public trading market may not develop or may not be sustained.Limited liquidity in the trading market for our common stock may adversely affect a stockholder’s ability to sell its shares of common stock at the time it wishes tosell them or at a price that it considers acceptable. If a more active, liquid public trading market does not develop, we may be limited in our ability to raise capital byselling shares of common stock and our ability to acquire other companies or assets by using shares of our common stock as consideration. In addition, if there is athin trading market or “float” for our stock, the market price for our common stock may fluctuate significantly more than the stock market as a whole. Without a largefloat, our common stock would be less liquid than the stock of companies with broader public ownership and, as a result, the trading prices of our common stockmay be more volatile and it would be harder for you to liquidate any investment in our common stock. Furthermore, the stock market is subject to significant priceand volume fluctuations, and the price of our common stock could fluctuate widely in response to several factors, including:●our quarterly or annual operating results;●changes in our earnings estimates;●investment recommendations by securities analysts following our business or our industry;●additions or departures of key personnel;●changes in the business, earnings estimates or market perceptions of our competitors;36●our failure to achieve operating results consistent with securities analysts’ projections;●changes in industry, general market or economic conditions;●announcements of legislative or regulatory changes; and●natural disasters (including for example, the recent fire in the Orgad warehouse) and political and economic instability, including wars, terrorism, politicalunrest, results of certain elections and votes, emergence of a pandemic, or other widespread health emergencies (or concerns over the possibility of suchan emergency, including for example, the recent the COVID19 pandemic), boycotts, adoption or expansion of government trade restrictions, and otherbusiness restrictions.The stock market has experienced extreme price and volume fluctuations in recent years that have significantly affected the quoted prices of the securitiesof many companies. The changes often appear to occur without regard to specific operating performance. The price of our common stock could fluctuate basedupon factors that have little or nothing to do with us and these fluctuations could materially reduce our stock price.Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.If any of our shareholders were to decide to sell large amounts of stock over a short period of time (presuming such sales were permitted) such sales couldcause the market price of our common stock to drop significantly, even if our business is doing well. Further, the market price of our common stock could decline as aresult of the perception that such sales could occur. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equitysecurities in the future at a time and price that we deem appropriate.Our securities are traded on more than one market which may result in price variations.Our securities have been trading on the Nasdaq Capital Market since July 2016 and on TASE since September 2005. Trading in our securities on suchexchanges occurs in different currencies (U.S. dollars on the Nasdaq Capital Market and NIS on the TASE), and at different times (due to different time zones,trading days and public holidays in the United States and Israel). The trading prices of our securities on the two exchanges may differ due to the foregoing andother factors. Any decrease in the price of our shares on the TASE could cause a decrease in the trading price of our shares on the Nasdaq Capital Market and viceversa.We are a smaller reporting company and, as a result of the reduced disclosure and governance requirements applicable to such companies, ourcommon stock may be less attractive to investors.We are a smaller reporting company, (i.e. a company with “public float” held by nonaffiliates with a market value of less than $250 million) and we areeligible to take advantage of certain exemptions from various reporting requirements applicable to other public companies. We have elected to adopt these reduceddisclosure requirements. We cannot predict if investors will find our common stock less attractive as a result of our taking advantage of these exemptions. If someinvestors find our common stock less attractive as a result of our choices, there may be a less active trading market for our common stock and our stock price may bemore volatile.We do not expect to pay any cash dividends in the foreseeable future.We have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our board of directors deems relevant. Investors should not purchase our common stock expecting to receive cash dividends. Because we do notpay dividends, and there may be limited trading, investors may not have any manner to liquidate or receive any payment on their investment. Therefore, our failureto pay dividends may cause investors to not see any return on investment even if we are successful in our business operations. In addition, because we do not paydividends we may have trouble raising additional funds, which could affect our ability to expand our business operations.37UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2022☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ________ to _________Commission file number 00137370MY SIZE, INC.(Exact name of registrant as specified in charter)Delaware510394637(State or jurisdiction ofIncorporation or organization)I.R.S EmployerIdentification No.4 Hayarden, POB 1026, Airport City, Israel7010000(Address of principal executive offices)(Zip code)+9723 6009030(Registrant’s telephone number, including area code)Securities registered pursuant to Section 12(b) of the Act:Title of each classTrading Symbol(s)Name of Each Exchange on Which RegisteredCommon Stock, par value $0.001 per shareMYSZThe Nasdaq Capital MarketSecurities registered pursuant to Section 12(g) of the Act: None.Indicate by check mark whether the registrant is a wellknown seasoned issuer as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes☒ No ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer, a smaller reporting company, or an emerginggrowth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 of theExchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☒Smaller Reporting Company☒Emerging Growth Company☐If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revisedfinancial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b2 of the Exchange Act) Yes ☐No☒Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control overfinancial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflectthe correction of an error to previously issued financial statements. ☐Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by anyof the registrant’s executive officers during the relevant recovery period pursuant to §240.10D1(b). ☐The aggregate market value of voting and nonvoting common equity held by nonaffiliates of the registrant as of June 30, 2022, the last business day of theregistrant’s most recently completed second fiscal quarter, was approximately $25,551,906.Number of shares of common stock outstanding as of March 31, 2023 was 2,446,780.Documents Incorporated by Reference: None.Table of ContentsPart IItem 1.Business2Item 1A.Risk Factors18Item 1B.Unresolved Staff Comments41Item 2.Properties41Item 3.Legal Proceedings41Item 4.Mine Safety Disclosures42Part IIItem 5.Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities43Item 6.Selected Financial Data43Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations43Item 7A.Quantitative and Qualitative Disclosures about Market Risk50Item 8.Financial Statements and Supplementary DataF1Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure51Item 9A.Controls and Procedures51Item 9B.Other Information51Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.51Part IIIItem 10.Directors, Executive Officers and Corporate Governance52Item 11.Executive Compensation57Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters60Item 13.Certain Relationships and Related Transactions, and Director Independence62Item 14.Principal Accounting Fees and Services65Part IVItem 15.Exhibits, Financial Statement Schedules66Signatures69iPART IIn this Annual Report on Form 10K, unless the context requires otherwise, the terms “we,” “our,” “us,” or “the Company” refer to MySize, Inc., a Delawarecorporation, and its subsidiaries, including MySize Israel 2014 Ltd. My Size LLC, Orgad International Marketing Ltd., or Orgad, and Naiz Bespoke Technologies, S.L,or Naiz, taken as a whole.References to “U.S. dollars” and “$” are to currency of the United States of America, and references to “NIS” are to New Israeli Shekels. Unless otherwiseindicated, U.S. dollar translations of NIS amounts presented in this Annual Report on Form 10K for the year ended on December 31, 2022 are translated using therate of NIS 3.358 to $1.00.All information in this Annual Report on Form 10K relating to shares or price per share reflects the 1for25 reverse stock split effected by us on December8, 2022.CAUTIONARY NOTE ON FORWARDLOOKING STATEMENTSThis Annual Report on Form 10K contains certain forwardlooking statements within the meaning of Section 27A of the Securities Act and Section 21E ofthe Exchange Act. Any statements in Annual Report on Form 10K about our expectations, beliefs, plans, objectives, assumptions or future events or performanceare not historical facts and are forwardlooking statements. These statements are often, but not always, made through the use of words or phrases such as“believe,” “will,” “expect,” “anticipate,” “estimate,” “intend,” “plan” and “would.” For example, statements concerning financial condition, possible or assumedfuture results of operations, growth opportunities, industry ranking, plans and objectives of management, markets for our common stock and future managementand organizational structure are all forwardlooking statements. Forwardlooking statements are not guarantees of performance. They involve known and unknownrisks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to differ materially from any results, levels ofactivity, performance or achievements expressed or implied by any forwardlooking statement.Any forwardlooking statements are qualified in their entirety by reference to the risk factors discussed throughout this Annual Report on Form 10K. Someof the risks, uncertainties and assumptions that could cause actual results to differ materially from estimates or projections contained in the forwardlookingstatements include but are not limited to:●our history of losses and needs for additional capital to fund our operations and our inability to obtain additional capital on acceptable terms, or at all;●risks related to our ability to continue as a going concern;●the new and unproven nature of the measurement technology markets;●our ability to achieve customer adoption of our products;●our ability to realize the benefits of our acquisitions of Orgad and Naiz;●our dependence on assets we purchased from a related party;●our ability to enhance our brand and increase market awareness;●our ability to introduce new products and continually enhance our product offerings;●the success of our strategic relationships with third parties;●information technology system failures or breaches of our network security;●competition from competitors;●our reliance on key members of our management team;●current or future litigation;●current or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated liquidityrisk; and●the impact of the political and security situation in Israel on our business.1The foregoing list sets forth some, but not all, of the factors that could affect our ability to achieve results described in any forwardlooking statements.You should read this Annual Report on Form 10K and the documents that we reference herein and have filed as exhibits to the Annual Report on Form 10K,completely and with the understanding that our actual future results may be materially different from what we expect. You should assume that the informationappearing in this Annual Report on Form 10K is accurate as of the date hereof. Because the risk factors referred to in this Annual Report on Form 10K, could causeactual results or outcomes to differ materially from those expressed in any forwardlooking statements made by us or on our behalf, you should not place unduereliance on any forwardlooking statements.Further, any forwardlooking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forwardlookingstatement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. New factors emergefrom time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extentto which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements. We qualify all ofthe information presented in this Annual Report on Form 10K, and particularly our forwardlooking statements, by these cautionary statements.ITEM 1. BUSINESSOverviewWe are an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile phone or through MySizeID Widget: a simple questionnaire which uses a database collected over the years.MySizeID syncs the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and only presents itemsfor purchase that match their measurements to ensure a correct fit.We are positioning ourselves as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empower brand design teams, which are designed to increase endconsumer satisfaction, contributing to a sustainable world and reduce operation costs.Recent DevelopmentsOrgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,602 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.2The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz, a limitedliability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.3The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Warehouse FireOn January 2, 2023, Orgad experienced a fire at its warehouse in Israel. we are not aware of any casualties or injuries associated with the fire. We shiftedOrgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incident did not affectthe future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of this incident on the otherparties that were involved in the incident (lessor and others that leased properties near the warehouse).January 2023 FinancingOn January 10, 2023, we entered into a securities purchase agreement, or the RD Purchase Agreement, pursuant to which we agreed to sell and issue in theRD Offering an aggregate of 162,000 of our shares of common stock, or the RD Shares, and prefunded warrants, or the Prefunded Warrants, to purchase up to279,899 shares of common stock and, in a concurrent private placement, unregistered warrants to purchase up to 883,798 shares of common stock, or the RDWarrants, consisting of Series A warrants, or Series A Warrants, to purchase up to 441,899 shares of common stock and Series B warrants, or Series B Warrants, topurchase up to 441,899 shares of common stock, at an offering price of $3.055 per RD Share and associated Series A and Series B Warrants and an offering price of$3.054 per Prefunded Warrant and associated Series A and Series B Warrants.4In addition, we entered into a securities purchase agreement, or the PIPE Purchase Agreement, and together with the RD Purchase Agreement, thePurchase Agreements, pursuant to which we agreed to sell and issue in the PIPE Offering an aggregate of up to 540,098 unregistered Prefunded Warrants andunregistered warrants to purchase up to an aggregate of 1,080,196 shares of common stock, or the PIPE Warrants and together with the RD Warrants, the Warrants,consisting of Series A Warrants to purchase up to 540,098 shares of common stock and Series B Warrants to purchase up to 540,098 shares of common stock at anoffering price of $3.054 per Prefunded Warrant and associated Series A and Series B Warrants.The Prefunded Warrants are immediately exercisable at an exercise price of $0.001 per share and will not expire until exercised in full. The Warrants areimmediately exercisable upon issuance at an exercise price of $2.805 per share, subject to adjustment as set forth therein. The Series A Warrants have a term of fiveand onehalf years from the date of issuance and the Series B Warrants have a term of 28 months from the date of issuance. The Warrants may be exercised on acashless basis if there is no effective registration statement registering the shares underlying the warrants.In connection with the PIPE Purchase Agreement, we entered into a registration rights agreement, or the Registration Rights Agreement. Pursuant to theRegistration Rights Agreement, we are required to file a resale registration statement, or the Registration Statement, with the Securities and Exchange Commission, orthe SEC, to register for resale the shares issuable upon exercise of the unregistered Prefunded Warrants and the Series A and Series B Warrants, within 20 days ofthe signing date of the PIPE Purchase Agreement, or the Signing Date, and to have such Registration Statement declared effective within 60 days after the SigningDate in the event the Registration Statement is not reviewed by the SEC, or 90 days of the Signing Date in the event the Registration Statement is reviewed by theSEC. we will be obligated to pay certain liquidated damages if we fail to maintain the effectiveness of the Registration Statement.The Purchase Agreements and the Registration Rights Agreements also contain representations, warranties, indemnification and other provisionscustomary for transactions of this nature. In addition, subject to limited exceptions, the Purchase Agreements provide that for a period of one year following theclosing of the Offerings, we will not effect or enter into an agreement to effect a “variable rate transaction” as defined in the Purchase Agreements.Aggregate gross proceeds to the Company in respect of the Offerings was approximately $3.0 million, before deducting fees payable to the placement agentand other offering expenses payable by the Company.We also entered into a letter agreement, or the Engagement Agreement, with H.C. Wainwright & Co., LLC, or Wainwright, pursuant to which Wainwrightagreed to serve as the exclusive placement agent for the Company in connection with the Offerings. We paid Wainwright a cash placement fee equal to 7% of theaggregate gross proceeds raised in the Offerings, a management fee of 1% of the aggregate gross proceeds raised in the Offerings, a nonaccountable expenseallowance of $85,000 and clearing fees of $15,950. Wainwright also received placement agent warrants, or the Placement Agent Warrants, with substantially the sameterms as the Series A Warrants issued in the Offering in an amount equal to 7% of the aggregate number of Shares and Prefunded Warrants sold in the Offerings, or68,740 shares, at an exercise price of $3.8188 per share and a term expiring on January 10, 2028.Our SolutionOur cloudbased software platform provides highly accurate sizing and measurement with broad applications including the online fashion/apparel industry,logistics and courier services and home DIY. Currently, we are mainly focusing on the ecommerce fashion/apparel industry. This proprietary technology is driven byseveral patented algorithms which are able to calculate and record measurements in a variety of novel ways. Although specific functionality varies by product, webelieve that our core solutions address the need for highly accurate measurements in a variety of consumer friendly, every day uses.5We have developed three products, MySizeID for the fashion/apparel industry, BoxSize for the logistics and courier services market and SizeUp for thehome DIY market.●MySizeID enables shoppers to generate highly accurate measurements of their body to find proper fitting clothes and accessories, through the use ofour application on their mobile phone or through a simple questionnaire if the user decides not to download the application. MySizeID syncs the user’smeasurement data to a sizing chart and presents items for purchase that match their measurements to ensure a correct fit. MySizeID is available forlicense by retailers and accessable by consumers through a web page.●BoxSize enables customers to quickly and easily measure the size and volume of a parcel to accurately calculate shipping fees. It also offers shippingcompanies a variety of precise logistical data for more efficiently managing their supply chain, providing them with an accurate way to compare thephysical package with what is in the shipping manifest. BoxSize solution is available for license on both iOS and Android operating systems. BoxSizeis available on the Honeywell Marketplace and in August 2019 was approved for Honeywell’s Independent Software Vendor Program, and MySize wasgranted an independent software vendor (ISV) status on the Zebra Technologies and on DataLogic platforms.●SizeUp is a digital tape measure that allows users to measure length, width and height of a surface by moving their smartphone from point to point ofan object or space. SizeUp is a valueadd for DIY and home improvement retailers whose customers struggle to find the appropriately sized items (likeblinds or curtains) for their homes or projects due to inaccurate measurements. SizeUp also is designed to replace rulers, tape measures and othermeasuring tools used for DIY projects. SizeUp is available for consumer download on both iOS and Android operating systems.The following are some select key features of our solutions:●Integration Capability. We design our solutions to be flexible and configurable, allowing our clients to match their use of our algorithms and softwarewith their specific business processes and workflows. Our platform has been organically developed from a common code base, data structure and userinterface, providing a consistent user experience with powerful features that are easily adaptable to our clients’ needs. The MySizeID widget can beintegrated via oneline JavaScript code, or through RESTful API;●Intuitive user experience. Our intuitive, easytouse interface is based on current technology, multiple focus groups and automatically adapts to users’devices, including mobile platforms, thereby significantly increasing accessibility of our solutions;●Big Data Generation. While we supply to the user the information he/she requires, we gather certain vital information such as body measurement andpackage volume which can be used anonymously to help the retailer acquire predictive size information on stocking, operations and consumers thatmay be in between sizes. All the information is being gathered and stored on our servers where it can be used by retailers;●NonInvasive. In taking measurements using our solution, the smartphone camera is not utilized; instead, the measurements are captured by scanningthe smartphone over the consumer’s body or package, thus ensuring greater privacy.Our Growth StrategyWe aim to drive revenue primarily through penetration of the U.S. and Europe markets through a business to business to consumer (B2B2C) model in theverticals we are targeting. We are pursuing the following growth strategies:●Sign Additional Commercial Agreements with U.S. Retailers. During 2022, we expanded our commercial agreements with Levi’s, introducing NorthAmerica (U.S. and Canada) and Latin America regions, and by extension Levis’ native apps in EU and U.S. regions. We also entered into commercialagreements with Baby Fresh, Galax, Punto Blanco, GEF France, Diesel, Gaala, Superdry, Uniontex Industries, and Temperlay London among others. Weare in various stages of discussions with U.S. and foreign retailers for the deployment of our size recommendation and measurement technology with aview to entering into additional commercial agreements.6●Pursue a TwoPronged Commercialization Strategy. We are seeking to accelerate adoption of our solutions both through direct partnerships with ecommerce websites as well as through thirdparty platform websites. While we seek to directly enter into partnerships with companies maintaining ecommerce websites in the apparel, courier and DIY markets, we are also seeking to deploy our solutions on thirdparty platforms. Furthermore, with theexpansion of MySizeID through the release of our FirstLook Smart Mirror, which we are offering to brick and mortar stores to digitize the physicalstores, MySizeID is now available for online retailers utilizing the WooCoomerce, Shopify, Lightspeed, PrestaShop, Bitrix and Wix platforms and tobrick and mortar stores through GK Software POS solution while BoxSize is available on the Honeywell, Zebra Technologies and Datalogic.●Ongoing Investment in our Technology Platform. We continue to invest in building new software capabilities and extending our platform to bring thepower of accurate measurement to a broader range of applications. In particular, we seek not only to deliver size recommendations but to provide arobust, endtoend,artificial intelligence, or AIdriven platform that inspires consumer confidence and drives revenue growth by providing a superiorconsumer journey to both online and the brick and mortar stores.●Grow our database. As the usage of our measurement apps increases, our database of information including user behaviour and body measurementsgenerates valuable statistics. Such data can be used in the big data market for targeted advertising and for blind consumer data mining.●Identify and acquire synergistic businesses. In order to reduce our time to market and obtain complementary technologies, we are seeking to acquiretechnologies and businesses that are synergistic to our product offering. We recently completed an acquisition of Orgad which operates anomnichannel ecommerce platform and Naiz which provides SaaS technology solutions that solve size and fit issues for fashion ecommerce companies.●Partnerships and cooperation. In order to bring a wider solution for the retail market we are working to partner and integrate our technology withpartners that can increase our penetration and offering to the market.Market OpportunityThe global ecommerce market was $5.7 trillion in 2022, and the industry is expected to grow significantly in the coming years with no signs of slowingdown. Market specialists expect a compound annual growth rate of 27.43% from 2023 to 2028: according to data from Statista, the market is expected to reach $6.5trillion in 2023. While many sectors have found ways to increase revenue through ecommerce, ecommerce is still plagued by issues that cut into profits andnegatively impact the bottom line, such as customer returns, low consumer conversion, and associated restocking and shipping costs.Fashion/ApparelSince the onset of the COVID19 pandemic, an immense shift to digital was recorded, with 85.9% growth vs. prepandemic, according to Mastercard, andover 2 billion people worldwide who shop online, according to data from Oberlo. In November 2022, online shoppers broke records with $11.3 billion in spending onCyber Monday, driving 5.8% yearoveryear growth and making the day the biggest online shopping day of all time, according to Adobe Analytics.In 2021, fashion companies invested between 1.6% and 1.8% of their revenues in technology, according to Mckinsey, and are expected to double theinvestment by 2030 in order to keep up with digital natives and keep a competitive edge. Personalization in ecommerce and hybrid connectivity in brickandmortarretail are two key themes in the future of fashtech, according to Mckinsey’s 2022 State of Fashion Technology.7In the upcoming years, inflation is expected to impact the fashion world. As prices for goods increase, the challenge will be to inspire confidence inconsumers, via different smart digital tools. Brands will need to embrace creative digital tools and new channels to deepen customer relationships, and as Mckinseyforecasts in their State of Fashion report for 2023, they will need to execute on priorities such as sustainability and digital acceleration.The global fashion ecommerce market size is expected to grow from $744.4 billion in 2022 to $821.19 billion in 2023 at a compound annual growth rate of10.3%. In 2027, the market size is expected to grow to $1,222.32 billion, at a compound annual growth rate of 10.5%, according to BRC.Based on the importance which shoppers attribute to free shipping 50% of cart abandonment rate is due to extra shipping costs (Baymard Institute) theneed for fashion retailers to substantiate the optimal size for a customer, thus minimizing returns, has never been more crucial.As brands move online or significantly expand their online presence, we believe that developing innovative ways to connect with shoppers, both onlineand offline, has become a top priority.Shipping/ParcelAccording to Pitney Bowes, parcel revenue in 13 major countries around the world increased by 17% year over year from $420 billion in 2020 (reflecting 131billion parcels) to $491 billion in 2021 (reflecting 159 billion parcels). In the shipping/parcel industry, the dimensions of a package are critical. It is not merely themeasurement of a package or box – but rather the amount of space that the package or box will take up on a truck, airplane, or ship that will be transporting thepackage or box. Far too often, retailers use unfit packaging for their items, adding additional costs in materials and shipping fees.DIYSimilar to issues in the apparel and fashion market, big box, hardware, furniture, and DIY stores are plagued by returns due to incorrect fit andmeasurements. In an industry where precise measurement for projects is an absolute necessity, ecommerce has not grown as quickly as in other industries which webelieve is due to lack of consumer confidence in measurements at home and buying the correct item online.MySizeIDWe have released the MySizeID app for both iOS and Android which assists consumers to take highly accurate measurement of their own body in order tosize clothing in the best way possible without the need to try the clothes on before purchasing. MySizeID is designed to simplify the process of purchasing clothesonline and significantly reduce the rate of returns of poorfitting clothing. During 2022, MySizeID delivered over 23.5 million size recommendations.The application is the result of a research and development effort that combines:●anthropometric research – analyses of information pertaining to body measurements derived from a survey and the subsequent determination ofcorrelations between body parts;●body measurement algorithm research – an algorithm created by us to measure body parts; and●retailers size chart analyses – adopting a deep understanding of the size charts of retailers and the corresponding “body to garment size.”MySizeID allows consumers to create a secure, online profile of their personal measurements, which can then be utilized, with partnered online retailers, toensure that no matter the manufacturer or size chart, they will get the right fit. MySizeID operates based on the use of existing sensors in smart phones which enable,through a specific purpose application, the measurement of the body of any consumer by moving the smartphone along his or her body. The MySizeID applicationdoes not rely on user photographs or any additional hardware; all a user needs to do is scan their body with their smartphone and the application records theirmeasurements. The measurements can then be saved in our database in the cloud, enabling the user to search for clothes in various retailer websites withoutworrying about size. When a search is made, the retailer will connect to our cloud database, and then provide results based on the user’s measurements and otherparameters as he or she may have defined. This data is also saved for use when a customer enters a brickandmortar store to help serve the customer moreefficiently and to provide a better shopping experience.8Figure 1: Screenshot of MySizeID on smartphone and ecommerce websiteAs part of the integration process, we offer to the retailer five main components:●Mobile App. MySizeID comes in the form of a native app or website. Our native app can be used “as is” integrated into the retailer’s ecommercewebsite. The website users can build a body profile on the app and receive size recommendations for their profile both in the app and on a widgetintegrated with their website.9●Widget. When a consumer enters into the retailer’s website and looks for a specific item, he or she can click on the MySizeID widget which will informthe consumer of his or her recommended size, based on his or her actual measurements, as measured using the app and the item he or she is looking at.The widget has two features:AI Wizard mode allows the user to obtain size from the following parameters: gender, height, weight, belly shape, hip shape and bra size only. Thegender, height and weight questions are mandatory, while the body shape questions are optional and can be added to increase accuracy for specificapparel categories.Guest mode allows a user that does not wish to sign up to MySizeID as a user to obtain size recommendations as well.●Analytic Pixel. MySizeID analytic pixel allows retailer to track and analyze the widget usage. By adding the pixel to the retailer’s website, MySizeID BIteam can track engagement, order, and return data and provide retailers with tools to understand the advantages and benefits of MySizeID.Use your own device using MySizeID instore solution, shoppers can receive size recommendations for all store items, when shopping in the offlinestores. The shoppers can build their body profile using an easy to use 3 to 6 questions form, scan an item barcode and receive a size recommendationfor the scanned item based on their body profile and the item’s size chart.Another feature we added is the “inbetween sizing” feature. Our system can detect a user that has body dimensions that place the user inbetweenthe clothes sizes being offered and lets the user know that. A user can then choose between the two sizes according to the user’s fit preference(tight/loose/average).In addition, we have recently released our InstantApp feature which allows shoppers to generate their body measurements directly from our widget,without the need to download our mobile app. Using this technology, the shoppers can create their online profile of their personal measurements andcomplete a purchase faster and easier with minimum distractions.The body profile can be created while shoppers are viewing the page from their mobile phone, or by scanning a QR code on desktop that will open thesame page on the mobile phone.Screenshot of InstantApp widget on desktop on yumyumfashion website10●MyDash Platform. The MyDash platform is a smart backoffice system where the retailer enters all the information regarding its size charts thatcorrelates to every product in its ecommerce site, and where the retailer can access the information on its users. This system is customizable based onthe retailer’s needs. In 2021, we changed the MyDash system to increase the system’s accessibility, added walkthroughs, user guides and changed theuser interface and much more for the ease of use. We added the option to use our generic size charts, added the option upload size chart files insteadof typing the size charts values manually, added more widget styling options and changed the pairing mechanism between the size chart and theproducts to be more userfriendly.Figure 3: Screenshot of BackOffice System●FirstLook Smart Mirror. The Smart Mirror provides an interactive, mirrorlike touch display that allows brands to provide instore customers with anenhanced, online shopping experience, contactless checkout and obtains the recommended size. The MySizeIDFirstLook Smart Mirror can be placedin numerous locations throughout a retail store, including the fitting rooms (without cameras) or other hightraffic locations of the store. Highlightcapabilities of the FirstLook Smart Mirror include a 3D “Tryiton” interactive avatar experience, personalized and highly accurate sizerecommendations by MySizeID, thirdparty point of sale systems integration, styling recommendations and contactless “select and collect” at theregister feature.Illustration of MySizeID “first look” smart mirror in a fashion store11We are currently offering MySizeID technology to retailers through either a payperuse model or a monthly subscription model. In our payperusebusiness model, every time the consumer obtains a recommended size, the retailer is charged for the usage.BoxSizeBoxSize is a parcel measurement application that can provide realtime logistic data on package volumes and transportation, resulting in improvedoperational efficiency and reduced operating expenses. In addition, BoxSize allows customers to easily measure the size of their parcel with their smartphone,calculate shipping costs and arrange for a convenient pickup time for the package. BoxSize is available both on iOS and Android.In 2020 we released the “One Click” feature on BoxSize that enables the user to measure a package with just one swipe of the handheld device. Previously,measurements through BoxSize would require three separate swipes.Figure 4: Screenshot of BoxSizeOur BoxSize mobile measurement solution is available on the Honeywell Marketplace. In addition, BoxSize was approved for Honeywell’s Global VendorProgram, and is available to provide highly accurate mobile measurement solutions for thousands of Honeywell clients. We also developed a new dashboard for thecourier companies to have all the required data about each package in one place. It includes package dimensions, pictures, scan geo location and more. Thedashboard also let the courier use Webhooks, which allows him to get the information from his own system.12In 2020, we announced our partnership with Datalogic, a company focused on the automatic data capture and process automation markets. The partnershipmakes our BoxSize measurement solution available to thousands of Datalogic customers in the Transportation and Logistics vertical.Agreement with Delhivery Private Limited, IndiaWe entered into an agreement with Delhivery Private Limited, one of the largest courier pickup, delivery, and online shipping services in India. Delhivery’sreputation as a frontrunner in delivery and logistics tech makes its decision to select Boxsize a particularly strong testament to the value the solution provides.BoxSize provides Delhivery’s employees on the B2B side with critical information that will allow them to effortlessly optimize loading efficiency and add even morerealtime visibility to operations.SizeUpWe are working on additional consumer applications, including a DIY application. Our SizeUp application is a smart tape measure for the business toconsumer market which allows users to utilize their smartphone as a tape measure. The application provides measurements with an accuracy of within twocentimeters. Through the use of SizeUp, users will be able to visualize how an object or a piece of furniture will fit in an existing room in their home or office. It alsoadded Google Vision for image content analysis, object detection, and title suggestions.Currently the SizeUp app for Android and iOS is available for free for the first 30 days, after which a user will be required to register via email and pay aonetime fee of $1.99 to continue using the application. To date, revenues from downloads have been minimal.Research and DevelopmentOur research and development team are responsible for the research, algorithm, design, development, and testing of all aspects of our measurementplatform technology. We invest in these efforts to continuously improve, innovate, and add new features to our solutions.We incurred research and development expenses of approximately $1.7 million in 2022 and $4.25 million in 2021, relating to the development of itsapplications and technologies. The decrease from the corresponding period primarily resulted from share based payment in amount of $2,618,000 attributed to theshare issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021. We intend to continue to invest in our research anddevelopment capabilities to extend our platform and bring our measurement technology to a broader range of applications.13In 2022, the R&D department experienced significant success in their efforts to improve the performance of their size recommendation system. Through acombination of optimized algorithms and the incorporation of cuttingedge technologies, the team was able to achieve a threefold increase in the system’s speed.This breakthrough not only makes the system one of the fastest and most accurate on the market, but also reduced the operation costs, making it more costeffective for businesses to use. Additionally, the solution is now highly scalable, allowing it to easily adapt to the needs of businesses of any size. The R&D team isnow focused on further improving the system and exploring new applications for the technology.Sales and MarketingIn 2019, we launched a commercialization strategy that directs our sales efforts toward both sales to ecommerce players in specific vertical markets such asfashion/apparel and shipping/delivery as well as to ecommerce thirdparty platform providers. As of March 15, 2023, our products are being sold in the followingcountries: US, UK, France, Netherlands, Spain, Portugal Turkey, Germany, Israel and Italy, generating customer leads, building out a sales pipeline, and developingcustomer relationships.We believe an effective method to market our suite of products is for users to actively use and explore its capabilities. We encourage free trials of one ormore of our products in order to successfully convert those accounts to paid subscriptions.Proprietary RightsWe rely on a combination of patent, copyright, trademark and trade secret laws in the United States and other jurisdictions, as well as contractualprotections, to protect our proprietary technology.As of December 31, 2022, we owned 18 issued patents: six in Europe, four in the U.S., three in each of Russia and Japan and one in each of Canada andIsrael which expire between January 20, 2033 and August 18, 2036, and we have two additional patent applications in process. As of such date, we do not have anyregistered trademarks.We cannot provide any assurance that our proprietary rights with respect to our products will be viable or have value in the future since the validity,enforceability and type of protection of proprietary rights in softwarerelated industries are uncertain and still evolving.Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products or to obtain and use informationthat we regard as proprietary. Policing unauthorized use of our products is difficult, and while we are unable to determine the extent to which piracy of our softwareproducts exists, software piracy can be expected to be a persistent problem. In addition, the laws of some foreign countries do not protect proprietary rights to asgreat an extent as do the laws of the United States, and effective copyright, trademark, trade secret and patent protection may not be available in those jurisdictions.Our means of protecting our proprietary rights may not be adequate to protect us from the infringement or misappropriation of such rights by others.Further, in recent years, there has been significant litigation in the United States involving patents and other intellectual property rights, particularly in thesoftware and Internetrelated industries. We can become subject to intellectual property infringement claims as the number of our competitors grows and ourproducts and services overlap with competitive offerings. These claims, even if not meritorious, could be expensive to defend and could divert management’sattention from operating our business. If we become liable to third parties for infringing their intellectual property rights, we could be required to pay a substantialaward of damages and to develop noninfringing technology, obtain a license or cease selling the products that contain the infringing intellectual property. We maybe unable to develop noninfringing technology or obtain a license on commercially reasonable terms, if at all.14Government RegulationWe are subject to a number foreign and domestic laws and regulations that involve matters central to our business. These laws and regulations mayinvolve privacy, data protection, intellectual property, or other subjects. Many of the laws and regulations to which we are subject are still evolving and being testedin courts and could be interpreted in ways that could harm our business. In addition, the application and interpretation of these laws and regulations often areuncertain, particularly in the new and rapidly evolving industry in which we operate. Because global laws and regulations have continued to develop and evolverapidly, it is possible that we, our products, or our platform may not be, or may not have been, compliant with each such applicable law or regulation.In particular, we are subject to a variety of federal, state and international laws and regulations governing the processing of personal data. Many U.S. stateshave passed laws requiring notification to data subjects when there is a security breach of personally identifiable data. There are also a number of legislativeproposals pending before the U.S. Congress, various state legislative bodies and foreign governments concerning data protection. In addition, data protection lawsin Europe and other jurisdictions outside the United States can be more restrictive than those within the United States, and the interpretation and application ofthese laws are still uncertain and in flux.For example, the General Data Protection Regulation, or GDPR, which took effect on May 25, 2018, enhances data protection obligations for entities thatprocess personal data about individuals, including obligations to cooperate with European data protection authorities, implement security measures and keeprecords of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to the greater of €20 million or 4% of global annual revenue. Inaddition, the California Consumer Privacy Act of 2018, or CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and requiredeletion of their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used.The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further,failure to comply with the Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may exposeus to administrative fines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the currentenforcement measures and sanctions. Given the breadth and depth of changes in data protection obligations, meeting the requirements of GDPR and otherapplicable laws and regulations has required significant time and resources, including a review of our technology and systems currently in use against therequirements of GDPR and other applicable laws and regulations. We have taken various steps to prepare for complying with GDPR and other applicable laws andregulations however there can be no assurance that these steps are sufficient to assure compliance. Further, additional EU laws and regulations (and member states’implementations thereof) further govern the protection of individuals and of electronic communications. If our efforts to comply with GDPR or other applicable lawsand regulations are not successful, we may be subject to penalties and fines that would adversely impact our business and results of operations, and our ability touse personal data of individuals could be significantly impaired.CompetitionWe operate in a highly competitive industry that is characterized by constant change and innovation. Changes in the applications and the programinglanguages used to develop applications, devices, operating systems, and technology landscape result in evolving customer requirements. Our competitors includeTrue Fit, Fit analytics and 3DLook.The principal competitive factors in our market include the following:●High Accuracy Size Recommendations: the highest accuracy and the lowest margin of error by combining patented technology including AI and ML,size chart or spec data, and MySizeID property body data measurement;●Integration○Fast 1 week integration including size chart size chart review and product mapping○Easy 1 line of “all included” script implementation●Technical Advantages○Very small library that weighs ±50kb (minimum widget loading time on product page)○UltraFast loading and size recommendation presenting○Restful API option (API integration with any website or app)15●Optimizations○Adjustments of size charts based on performance○Widget usage analysis by FashTech and BI teams○Automatic pairing of size charts with products/collections●User Experience○Easy to use interface (1015 seconds to receive size recommendations)○Option to add/deduct questions to/from widget wizards○Users automatically receive size recommendations on all products after initial sign up●Product and platform features, architecture, reliability, privacy and security, performance, effectiveness, and supported environments;●Product extensibility and ability to integrate with other technology infrastructures;●Digital operations expertise;●Ease of use of products and platform capabilities;●Total cost of ownership;●Adherence to industry standards and certifications;●Strength of sales and marketing efforts;●Brand awareness and reputation; and●Focus on customer successWe believe we generally compete favorably with our competitors on the basis of these factors. We expect competition to increase as other established andemerging companies enter our markets, as customer requirements evolve, and as new products and technologies are introduced. We expect this to be particularlytrue as we offer a smartphonebased offering that does not need to utilize the smartphone’s camera, and our competitors may also seek to repurpose their existingofferings to provide similar solutions. Many of our competitors have substantially greater financial, technical, and other resources, greater name recognition, largersales and marketing budgets, broader distribution, and larger and more mature intellectual property portfolios.Human Capital ManagementAs of March 31, 2023, we had a total of 35 employees, of which 30 were fulltime employees, including 9 in sales and marketing, 12 in technology anddevelopment and 9 in administration and finance.None of our employees are represented by a collective bargaining agreement, nor have we experienced any work stoppage. We consider our relationshipwith our employees to be good. Our future success depends on our continuing ability to attract and retain highly qualified engineers, sales and marketing, accountmanagement, and senior management personnel.We also believe we have built a strong sales team focused on expanding into new markets through the acquisition of Naiz and our current team.We believe that our future success will depend, in part, on our continued ability to attract, hire and retain qualified personnel. In particular, we depend onthe skills, experience and performance of our senior management and research personnel. We compete for qualified personnel with other hitech companies, as wellas universities and nonprofit research institutions.16We provide competitive compensation and benefits programs to help meet the needs of our employees. In addition to salaries, these programs (which varyby country/region and employment classification) include incentive compensation plan, pension, and insurance benefits, paid time off, , among others. We also usetargeted equitybased grants with vesting conditions to facilitate retention of personnel, particularly for our key employees.The success of our business is fundamentally connected to the wellbeing of our people. Accordingly, we implemented an hybrid work policy in which theemployees can work from home twice a week.We consider our employees to be a key factor to our success and we are focused on attracting and retaining the best employees at all levels of ourbusiness. Inclusion and diversity is a strategic, business priority. We employ people based on relevant qualifications, demonstrated skills, performance and otherjobrelated factors. We do not tolerate unlawful discrimination related to employment, and strive to ensure that employment decisions related to recruitment,selection, evaluation, compensation, and development, among others, are not influenced by race, color, religion, gender, age, ethnic origin, nationality, sexualorientation, marital status, or disability. Continuous monitoring to ensure pay equity has been a focus in 2022. We have continued to improve gender balance in 2022with a focus on increasing the representation of women hired as new college graduates. We are committed to creating a trusting environment where all ideas arewelcomed and employees feel comfortable and empowered to draw on their unique experiences and backgrounds.We consider our relations with our employees to be good.Company InformationOur principal executive offices are located at HaYarden 4 St., POB 1026, Airport City, Israel 7010000, and our telephone number is +97236009030. Ourwebsite address is www.mysizeid.com. Any information contained on, or that can be accessed through, our website is not incorporated by reference into, nor is it inany way a part of, this Annual Report on Form 10K.We use our website (www.mysizeid.com) as a channel of distribution of Company information. The information we post through this channel may bedeemed material. Accordingly, investors should monitor our website, in addition to following our press releases, SEC filings and public conference calls andwebcasts. The contents of our website are not, however, a part of this Annual Report on Form 10K.Corporate HistoryWe were incorporated in the State of Delaware on September 20, 1999 under the name Topspin Medical, Inc. In December 2013, we changed our name toKnowledgetree Ventures Inc. Subsequently, in February 2014, we changed our name to MySize, Inc. In 2020, we created a subsidiary in the Russian Federation, MySize LLC.From inception through 2012, we were engaged in research and development of a medical magnetic resonance imaging, or MRI, technology forinterventional cardiology and in the development of MRI technology for use in the diagnosis and treatment of prostate cancer. In January 2012, we acquiredMetamorefix Ltd., or Metamorefix. Metamorefix was incorporated in 2007, and was engaged in the development of innovative solutions for the rehabilitation oftissues, particularly skin tissues. By the end of 2012, we ceased operations and in January 2013, we sold our entire ownership interest in Metamorefix.In September 2013, Ronen Luzon, our Chief Executive Officer, acquired control of the Company from Asher Shmuelevitch, according to which Mr. Luzonpurchased 70,238 shares of common stock from Mr. Shmuelevitch, which shares represented approximately 40% of the issued and outstanding capital stock of theCompany at such time, thus becoming a controlling shareholder of the Company. In connection with the acquisition, Mr. Luzon reached a settlement with our thencreditors pursuant to which the main creditor, Mr. Shmuelevitch, was paid a total sum of approximately $140,000 in consideration for a full and final waiver of any andall his claims that he may have relating to any monetary indebtedness of the Company to the creditors.17In February 2014, My Size Israel, our wholly owned subsidiary, entered into a Purchase Agreement, or the Purchase Agreement, with Shoshana Zigdon,who at the time was a beneficial owner of more than 20% of our outstanding shares, with respect to the acquisition by us of certain rights related to the collection ofdata for measurement purposes including rights in the venture, the method and a patent application that had been filed by the Seller (PCT/IL2013/050056), or theAssets. In consideration for the sale of the Assets, we agreed to pay to Ms. Zigdon, 18% of our operating profit, directly or indirectly connected with the Assetstogether with valueadded tax in accordance with the law for a period of seven years from the end of the development period of the aforementioned venture. Inaddition to the foregoing, the Purchase Agreement provided that all developments, improvements, knowledge and knowhow developed and/or accumulated by usafter the execution of the Purchase Agreement will be owned by us. Further, Ms. Zigdon agreed not to compete, directly or indirectly, with us in any matter relatingto the Assets for a period of seven years from the end of the development period of the venture.On May 26, 2021, we, My Size Israel, and Ms. Zigdon entered into an Amendment to Purchase Agreement, or the Amendment, which made certainamendments to the Purchase Agreement. Pursuant to the Amendment, Ms. Zigdon agreed to irrevocably waive (i) the right to repurchase certain assets related tothe collection of data for measurement purposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which our business issubstantially dependent, or the Assets, and (ii) all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My SizeIsrael under the Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation, reward orany rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights, or the Waiver. Inconsideration of the Waiver, we issued 100,000 shares of common stock to Ms. Zigdon.In September 2005, we commenced trading on the Tel Aviv Stock Exchange, or TASE. Between 2007 and 2012 we reported as a public company with theSEC. In August 2012, we suspended our reporting obligations. In mid2015 we resumed reporting as a public company. On July 25, 2016, our common stock beganpublicly trading on the Nasdaq Capital Market under the symbol “MYSZ”.ITEM 1A. RISK FACTORSAn investment in our common stock involves a high degree of risk. You should carefully consider the following risk factors and the other information inthis Annual Report on Form 10K before investing in our common stock. Our business and results of operations could be seriously harmed by any of the followingrisks. The risks set out below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterialalso may materially adversely affect our business, financial condition and/or operating results. If any of the following events occur, our business, financial conditionand results of operations could be materially adversely affected. In such case, the value and trading price of our common stock could decline, and you may lose allor part of your investment.Summary Risk FactorsThe principal factors and uncertainties that make investing in our ordinary shares risky, include, among others:Risks Related to Our Financial Position and Capital Requirements●We have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.●Our limited operating history makes it difficult to evaluate our business and prospects.●We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive and maycause the market price of our common stock to decline.●The report of our independent registered public accounting firm contains an explanatory paragraph regarding substantial doubt about our ability tocontinue as a going concern.Risks Related to Our Company and Our Business●The market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and online thirdparty resellers adopting our flagship product, MySizeID.18●Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broader marketacceptance of our products.●We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which may makeit difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.●We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increase ourcapital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.●If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations and financialcondition may be adversely affected.●If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operations andfinancial condition could be adversely affected.●The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile device applications andcustom development services.●Our growth depends, in part, on the success of our strategic relationships with third parties.●Changes in economic conditions could materially affect our business, financial condition and results of operations.●We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.●We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significant interruptionin our network or hosting and cloud services could adversely impact our operations and harm our business.●Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.●We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.●A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.●Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, data protectionand information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive and confidentialinformation. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm our business,results of operations and financial condition.●We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect our business.●We may face intense competition and expect competition to increase in the future, which could limit us in developing a customer base and generatingrevenue.●Our business operations and future development could be significantly disrupted if we lose key members of our management team.19●If we are able to expand our operations, we may be unable to successfully manage our future growth.Risks Related to Our Operations in Israel and Russia●Our headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.●Russia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.Risks Related to Our Common Stock●A more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.●Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions and adversedevelopments with respect to financial institutions and associated liquidity risk;●Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.●Our securities are traded on more than one market which may result in price variations.●We are a former “shell company” and as such are subject to certain limitations not generally applicable to other public companies.Risks Related to Our Financial Position and Capital RequirementsWe have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.We realized a net loss of approximately $8.3 million and $10.5 million for the years ended December 31, 2022 and 2021 and had an accumulated deficit of$53.5 million as at December 31, 2022. Because of the numerous risks and uncertainties associated with the development and commercialization of our products andbusiness, we are unable to predict the extent of any future losses or when we will become profitable, if at all. Expected future operating losses will have an adverseeffect on our cash resources, shareholders’ equity and working capital. Our failure to become and remain profitable could depress the value of our stock and impairour ability to raise capital, expand our business, maintain our development efforts, or continue our operations. A decline in our value could also cause you to lose allor part of your investment in us.Our limited operating history makes it difficult to evaluate our business and prospects.We have only been developing our measurement technology since 2014. Since then, our operating history has been primarily limited to research anddevelopment, pilot studies, raising capital, and more recently acquisitions and sales and marketing efforts. Therefore, it may be difficult to evaluate our business andprospects. We have not yet demonstrated an ability to commercialize our products. Consequently, any predictions about our future performance may not beaccurate, and you may not be able to fully assess our ability to complete development and/or commercialize our products, and any future products.We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive andmay cause the market price of our common stock to decline.Based on our projected cash flows and the cash balances as of the date of this Annual Report on Form 10K, our existing cash is insufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. In order to meet ourbusiness objectives in the future, we will need to raise additional capital, which may not be available on reasonable terms or at all. Additional capital would be usedto accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;20●respond to competitive pressure;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, and a number of otherfactors, many of which are outside our control, and on our financial performance. Accordingly, we cannot assure you that we will be able to successfully raiseadditional capital at all or on terms that are acceptable to us. If we cannot raise additional capital when needed, it may have a material adverse effect on our business,results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.Management has concluded that there is substantial doubt about our ability to continue as a going concern which could prevent us from obtainingnew financing on reasonable terms or at all.We have incurred significant losses and negative cash flows from operations and have an accumulated deficit that raises substantial doubt about its abilityto continue as a going concern. Our audited consolidated financial statements for the year ended December 31, 2022 were prepared under the assumption that wewould continue our operations as a going concern. Our independent registered public accounting firm has included a “going concern” explanatory paragraph in itsreport on our financial statements for the year ended December 31, 2022. If we are unable to improve our liquidity position, by, among other things, raising capitalthrough public or private offerings or reducing our expenses, we may exhaust our cash resources and will be unable to continue our operations. If we cannotcontinue as a viable entity, our shareholders would likely lose most or all of their investment in us.Risks Related to Our Company and Our BusinessThe market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and onlinethirdparty resellers adopting our flagship product, MySizeID.The market for our measurement technology is relatively new and unproven and is subject to a number of risks and uncertainties. We believe that ourfuture success will depend in large part on market adoption of our flagship product, MySizeID, by U.S. retailers and online thirdparty resellers. In order to grow ourbusiness, we intend to focus on educating retailers and resellers and other potential customers about the benefits of our measurement technology, expanding thefunctionality of our products and bringing new products to market to increase market acceptance and use of our technology. Our ability to develop and expand themarket that our products address depends upon a number of factors, including the cost savings, performance and perceived value associated with such products.The market for our products could fail to develop or there could be a reduction in interest or demand for our products as a result of a lack of consumer acceptance,technological challenges, competing products and services, weakening economic conditions and other causes. We may never successfully commercialize ourproducts and if our products fail to achieve market acceptance, this would have a material adverse effect on our business, results of operations and financialcondition.21Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broadermarket acceptance of our products.Our ability to achieve customer adoption, especially among U.S. retailers will depend, in part, on our ability to effectively organize, focus and train our salesand marketing personnel. We have limited experience selling to U.S. retailers and only recently established a U.S. sales force. We believe that there is significantcompetition for experienced sales professionals with the skills and industry knowledge that we require. Our ability to achieve significant revenue growth in thefuture will depend, in part, on our ability to recruit, train and retain a sufficient number of experienced sales professionals, particularly those with experience sellingto U.S. retailers. In addition, even if we are successful in hiring qualified sales personnel, new hires require significant training and experience before they achievefull productivity, particularly for sales efforts targeted at U.S. retailers and new markets. Because we only recently started sales efforts, we cannot predict whether, orto what extent, our sales efforts will be successful.We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which maymake it difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.In this market segment, the decision to adopt our products may require the approval of multiple technical and business decision makers, including security,compliance, procurement, operations and IT. In addition, while U.S. retailers may be willing to deploy our products on a limited basis, before they will commit todeploying our products at scale, they often require extensive education about our products and significant customer support time, engage in protracted pricingnegotiations and seek to secure readily available development resources. As a result, it is difficult to predict when we will obtain new customers and begingenerating revenue from these customers. As part of our sales cycle, we may incur significant expenses before executing a definitive agreement with a prospectivecustomer and before we are able to generate any revenue from such agreement. We have no assurance that the substantial time and money spent on our salesefforts will generate significant revenue. If conditions in the marketplace generally or with a specific prospective customer change negatively, it is possible that nodefinitive agreement will be executed, and we will be unable to recover any of these expenses. If we are not successful in targeting, supporting and streamlining oursales processes and if revenue expected to be generated from a prospective customer is not realized in the time period expected or not realized at all, our ability togrow our business, and our operating results and financial condition may be adversely affected. If our sales cycles lengthen, our future revenue could be lower thanexpected, which would have an adverse impact on our operating results and could cause our stock price to decline.22We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increaseour capital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.In order to reduce time to market and obtain complementary technologies, we are seeking to acquire technologies and businesses that are synergistic to ourproduct offering. For example, we recently acquired Orgad which operates an omnichannel ecommerce platform and Naiz which provides SaaS technology solutionsthat solve size and fit issues for fashion ecommerce companies. We evaluate from time to time various acquisitions and collaborations, including licensing oracquiring complementary technologies, intellectual property rights, or businesses. The process for acquiring a company may take from several months up to a yearand costs can vary greatly. We may also compete with others to acquire companies, and such competition may result in decreased availability of, or an increase inprice for, suitable acquisition candidates. In addition, we may not be able to consummate acquisitions or investments that we have identified as crucial to theimplementation of our strategy for other commercial or economic reasons. As a result, it may be more difficult for us to identify suitable acquisition or investmenttargets or to consummate acquisitions or investments on acceptable terms or at all. If we are not able to execute on any acquisition, we may not be able to achieve afuture growth strategy and may lose market share.In addition, the acquisition of Orgad, Naiz and any potential future acquisition, joint venture or collaboration may entail numerous potential risks, including:●increased operating expenses and cash requirements;●the assumption of additional indebtedness or contingent liabilities;●assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel;●the diversion of our management’s attention from our existing programs and initiatives in pursuing such a strategic merger or acquisition;●retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships;●risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing technologies; and●our inability to generate revenue from acquired technologies or products sufficient to meet our objectives in undertaking the acquisition or even to offsetthe associated acquisition and maintenance costs.All of the foregoing risks may be magnified as the cost, size or complexity of an acquisition or acquired company increases, or where the acquiredcompany’s products, market or business are materially different from ours, or where more than one integration is occurring simultaneously or within a concentratedperiod of time. We may not be able to obtain the necessary regulatory approvals, including those of antitrust authorities and foreign investment authorities, incountries where we seek to consummate acquisitions or make investments. For those and other reasons, we may ultimately fail to consummate an acquisition, even ifwe announce the intended acquisition.In addition, we may require significant financing to complete an acquisition or investment, whether through bank loans, raising of equity or debt orotherwise. We cannot assure you that such financing options will be available to us on reasonable terms, or at all. If we are not able to obtain such necessaryfinancing, it could have an impact on our ability to consummate a substantial acquisition or investment and execute a future growth strategy. Alternatively, we mayissue a significant number of shares as consideration for an acquisition, which would have a dilutive effect on our existing shareholders. For example, in partialconsideration for the acquisition of Orgad, we agreed to issue up to 111,602 shares of our common stock and in the Naiz acquisition we issued 240,000 shares of ourcommon stock. Furthermore, if we undertake acquisitions, we may incur large onetime expenses and acquire intangible assets that could result in significant futureamortization expense.23If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations andfinancial condition may be adversely affected.We believe that enhancing the “MySize” brand identity and increasing market awareness of our company and products, particularly among U.S. retailers, iscritical to achieving widespread acceptance of our products. Our ability to successfully develop new retailers may be adversely affected by a lack of awareness oracceptance of our brand. To the extent that we are unable to foster name recognition and affinity for our brand, our growth may be significantly delayed or impaired.The successful promotion of our brand will depend largely on our continued marketing efforts, market adoption of our products, and our ability to successfullydifferentiate our products from competing products and services. Our brand promotion may not be successful or result in revenue generation. Any incident thaterodes consumer affinity for our brand could significantly reduce our brand value and damage our business. If consumers perceive or experience a reduction inquality, or in any way believe we fail to deliver a consistently positive experience, our brand value could suffer and our business may be adversely affected.In particular, adverse weather conditions can impact guest traffic at our retailers, and, in more severe cases, cause temporary retail closures, sometimes forprolonged periods. Our business is subject to seasonal fluctuations, with retail sales typically higher during certain months, such as December. Adverse weatherconditions during our most favorable months or periods may exacerbate the effect of adverse weather on consumer traffic and may cause fluctuations in ouroperating results from quartertoquarter within a fiscal year.If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operationsand financial condition could be adversely affected.Our ability to attract new customers depends in part on our ability to enhance and improve our existing products, increase adoption and usage of ourproducts and introduce new products. The success of any enhancements or new products depends on several factors, including timely completion, adequatequality testing, actual performance quality, and overall market acceptance. Enhancements and new products that we develop may not be introduced in a timely orcosteffective manner, may contain errors or defects, may have interoperability difficulties with our platform or other products or may not achieve the broad marketacceptance necessary to generate significant revenue. Furthermore, our ability to increase the usage of our products depends, in part, on the development of newuse cases for our products and may be outside of our control. If we are unable to successfully enhance our existing products to meet evolving customerrequirements, increase adoption and usage of our products, develop new products, then our business, results of operations and financial condition would beadversely affected.The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile Apps and customdevelopment services.We must continue to enhance and improve the performance, functionality and reliability of our products. The mobile technology industry is characterizedby rapid technological change, changes in user requirements and preferences, frequent new product and services introductions embodying new technologies andthe emergence of new industry standards and practices that could render our products obsolete. Our success will depend, in part, on our ability to both internallydevelop and enhance our existing products, develop new products that address the increasingly sophisticated and varied needs of our customers, and respond totechnological advances and emerging industry standards and practices on a costeffective and timely basis. The development of our technology involvessignificant technical and business risks. We may fail to use new technologies effectively or to adapt our proprietary technology and systems to customerrequirements or emerging industry standards. If we are unable to adapt to changing market conditions, customer requirements or emerging industry standards, wemay not be able to increase our revenue and expand our business.Changes in economic conditions could materially affect our business, financial condition and results of operations.Because our primary target customers include U.S. retailers , we, together with the rest of the fashion/apparel industry, will depend upon consumerdiscretionary spending. Increases in unemployment rates, reductions in home values, increases in home foreclosures, investment losses, personal bankruptcies andreductions in access to credit and reduced consumer confidence, may impact consumers’ ability and willingness to spend discretionary dollars. In addition, volatileeconomic conditions may repress consumer confidence and discretionary spending. Any of the foregoing may have a material adverse effect on our business,financial condition and results of operations.24Our growth depends, in part, on the success of our strategic relationships with third parties.To grow our business, we anticipate that we will continue to depend on relationships with third parties, such as our customers and thirdparty platforms.Identifying partners, and negotiating and documenting relationships with them, requires significant time and resources. If we are unsuccessful in establishing ormaintaining our relationships with third parties, our ability to compete in the marketplace or to grow our revenue could be impaired, and our results of operationsmay suffer. Even if we are successful, we cannot assure you that these relationships will result in increased customer usage of our products or increased revenue.We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.We currently utilize, and plan on continuing to utilize over the current fiscal year, thirdparty networking providers and distribution through companiesincluding, but not limited to, Apple and Google as well as Shopify, WooCommerce and, Datalogic, Honeywell and Zebra to distribute our technologies. If disruptionsor capacity constraints occur, we may have no means of replacing these services, on a timely basis or at all. This could cause a material adverse condition for ouroperations and financial earnings.We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significantinterruption in our network or hosting and cloud services could adversely impact our operations and harm our business.Our technology infrastructure is critical to the performance of our products and customer satisfaction. Our products run on a complex distributed system,or what is commonly known as cloud computing. We own, operate and maintain elements of this system, but significant elements of this system are operated bythirdparties that we do not control and which would require significant time to replace. We expect this dependence on thirdparties to continue. In particular, asignificant portion, if not almost all data storage, data processing and other computing services and systems is hosted by cloud computing providers. Anydisruptions, outages and other performance problems relating to such services, including infrastructure changes, human or software errors and capacity constraints,could adversely impact our business, financial condition or results of operations.Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.We update our products on a frequent basis. Despite efforts to test our updates, errors, failures or bugs may not be found in our products until after theyare deployed to a customer. We have discovered and expect we will continue to discover errors, failures and bugs in our products and anticipate that certain of theseerrors, failures and bugs will only be discovered and remediated after deployment. Real or perceived errors, failures or bugs in our platform could result in negativepublicity, government inquiries, loss of or delay in market acceptance of our products, loss of competitive position, or claims by customers for losses sustained bythem. In such an event, we may be required, or may choose, for customer relations or other reasons, to expend additional resources in order to help correct theproblem.We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.In connection with the operation of our business, we store, process and transmit data, including personal and payment information, about our employeesand customers, a portion of which is confidential and/or personally sensitive. Unauthorized disclosure or loss of sensitive or confidential data may occur through avariety of methods. These include, but are not limited to, systems failure, employee negligence, fraud or misappropriation, or unauthorized access to or through ourinformation systems, whether by our employees or third parties, including a cyberattack by computer programmers, hackers, members of organized crime and/orstatesponsored organizations, who may develop and deploy viruses, worms or other malicious software programs. Such disclosure, loss or breach could harm ourreputation and subject us to government sanctions and liability under our contracts and laws that protect sensitive or personal data and confidential information,resulting in increased costs or loss of revenues. It is possible that security controls over sensitive or confidential data and other practices we and our thirdpartyvendors follow may not prevent the improper access to, disclosure of, or loss of such information. The potential risk of security breaches and cyberattacks mayincrease as we introduce new products and offerings. Further, data privacy is subject to frequently changing rules and regulations, which sometimes conflict amongthe various jurisdictions in which we provide services. Any failure or perceived failure to successfully manage the collection, use, disclosure, or security of personalinformation or other privacy related matters, or any failure to comply with changing regulatory requirements in this area, could result in legal liability or impairment toour reputation in the marketplace.25A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.Information security risks have generally increased in recent years, in part because of the proliferation of new technologies and the use of the Internet, andthe increased sophistication and activity of organized crime, hackers, terrorists, activists, cybercriminals and other external parties, some of which may be linked toterrorist organizations or hostile foreign governments. For example, a cybercriminal could use cybersecurity threats to gain access to sensitive information aboutanother company or to alter or disrupt news or information to be distributed by PR Newswire. Cybersecurity attacks are becoming more sophisticated and includemalicious software, ransomware, attempts to gain unauthorized access to data and other electronic security breaches that could lead to disruptions in criticalsystems, unauthorized release of confidential or otherwise protected information and corruption of data, substantially damaging our reputation. Any person whocircumvents our security measures could steal proprietary or confidential customer information or cause interruptions in our operations. We incur significant coststo protect against security breaches, and may incur significant additional costs to alleviate problems caused by any breaches. Our failure to prevent securitybreaches, or wellpublicized security breaches affecting the Internet in general, could significantly harm our reputation and business and financial results.Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, dataprotection and information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive andconfidential information. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm ourbusiness, results of operations and financial condition.We and our customers that use our products may be subject to privacy and data protectionrelated laws and regulations that impose obligations inconnection with the collection, processing and use of personal data, financial data, health or other similar data. The U.S. federal and various state and foreigngovernments have adopted or proposed limitations on, or requirements regarding, the collection, distribution, use, security and storage of personally identifiableinformation of individuals. The U.S. Federal Trade Commission and numerous state attorneys general are applying federal and state consumer protection laws toimpose standards on the online collection, use and dissemination of data, and to the security measures applied to such data.Similarly, many foreign countries and governmental bodies, including the EU member states, have laws and regulations concerning the collection and useof personally identifiable information obtained from individuals located in the EU or by businesses operating within their jurisdiction, which are often morerestrictive than those in the United States. Laws and regulations in these jurisdictions apply broadly to the collection, use, storage, disclosure and security ofpersonally identifiable information that identifies or may be used to identify an individual, such as names, telephone numbers, email addresses and, in somejurisdictions, IP addresses and other online identifiers.For example, the GDPR, which took full effect on May 25, 2018. The GDPR enhances data protection obligations for businesses and requires serviceproviders (data processors) processing personal data on behalf of customers to cooperate with European data protection authorities, implement security measuresand keep records of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to or greater of €20 million or 4% of global annualrevenues. In addition, the CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and require deletion of their personalinformation, opt out of certain personal information sharing, and receive detailed information about how their personal information is used. The CCPA provides forcivil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further, failure to comply withthe Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may expose us to administrativefines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the current enforcementmeasures and sanctions. There are also additional laws and regulations in additional jurisdictions around the world which govern the protection of consumers andof electronic communications. If our efforts to comply with GDPR, CCPA or other applicable laws and regulations are not successful, we may be subject to penaltiesand fines that would adversely impact our business and results of operations, and our ability to conduct business could be significantly impaired.26Additionally, although we endeavor to have our products comply with applicable laws and regulations, these and other obligations may be modified, theymay be interpreted and applied in an inconsistent manner from one jurisdiction to another, and they may conflict with one another, other regulatory requirements,contractual commitments or our internal practices. We also may be bound by contractual obligations relating to our collection, use and disclosure of personal,financial and other data or may find it necessary or desirable to join industry or other selfregulatory bodies or other privacy or data protectionrelatedorganizations that require compliance with their rules pertaining to privacy and data protection.We expect that there will continue to be new proposed laws, rules of selfregulatory bodies, regulations and industry standards concerning privacy, dataprotection and information security in the United States, the European Union and other jurisdictions, and we cannot yet determine the impact such future laws,rules, regulations and standards may have on our business. Moreover, existing U.S. federal and various state and foreign privacy and data protectionrelated lawsand regulations are evolving and subject to potentially differing interpretations, and various legislative and regulatory bodies may expand current or enact new lawsand regulations regarding privacy and data protectionrelated matters. Because global laws, regulations and industry standards concerning privacy and datasecurity have continued to develop and evolve rapidly, it is possible that we or our products or platform may not be, or may not have been, compliant with eachsuch applicable law, regulation and industry standard and compliance with such new laws or to changes to existing laws may impact our business and practices,require us to expend significant resources to adapt to these changes, or to stop offering our products in certain countries. These developments could adverselyaffect our business, results of operations and financial condition.We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect ourbusiness.Our ability to implement our business plan successfully depends in part on our ability to build brand recognition using our trademarks, service marks andother proprietary intellectual property, including our names and logos. We currently have no registered trademarks. While we plan to register a number of ourtrademarks; however, no assurance can be given that our trademark applications will be approved. As of December 31, 2022, we own 18 issued patents: six in Europe,four in the U.S., three in each of Russia and Japan and one in each of Canada and Israel which expire between January 20, 2033 and August 18, 2036, and we havetwo additional patent applications in process. As of such date, we do not have any registered trademarks., No assurance can be given that our patent applicationswhich are in process will be approved. If our patent applications are not approved, our ability to expand or develop our business may be negatively affected.Third parties may also oppose our trademark or patent applications, or otherwise challenge our use of the trademarks or patents. In the event that ourtrademarks or patents are successfully challenged, we could be forced to rebrand our goods and services or redesign our technology, which could result in loss ofbrand recognition, and could require us to devote resources to advertising and marketing new brands and products.If our efforts to register, maintain and protect our intellectual property are inadequate, or if any thirdparty misappropriates, dilutes or infringes on ourintellectual property, the value of our brands may be harmed, which could have a material adverse effect on our business and might prevent our brands fromachieving or maintaining market acceptance. We may also face the risk of claims that we have infringed third parties’ intellectual property rights. If third parties claimthat we infringe upon their intellectual property rights, our operating profits could be adversely affected. Any claims of intellectual property infringement, eventhose without merit, could be expensive and time consuming to defend, require us to rebrand our services, if feasible, divert management’s attention and resourcesor require us to enter into royalty or licensing agreements in order to obtain the right to use a thirdparty’s intellectual property.Any royalty or licensing agreements, if required, may not be available to us on acceptable terms or at all. A successful claim of infringement against uscould result in our being required to pay significant damages, enter into costly license or royalty agreements, or stop the sale of certain products or services, any ofwhich could have a negative impact on our operating profits and harm our future prospects.We may face intense competition and expect competition to increase in the future, which could prohibit us from developing a customer base andgenerating revenue.We face significant competition in every aspect of our business. Our competitors include True Fit, Virtusize, EasyMeasure, AR MeasureKit, Smart Measureand 3DLook. These companies may already have an established market in our industry. Most of these companies have significantly greater financial and otherresources than us and have been developing their products and services longer than we have been developing ours.27In addition, some of our larger competitors have substantially broader product offerings and leverage their relationships based on other products orincorporate functionality into existing products to gain business in a manner that discourages potential customers from purchasing our products. Potentialcustomers may also prefer to purchase from their existing solution providers rather than a new solution provider regardless of product performance or features.These larger competitors often have broader product lines and market focus and will therefore not be as susceptible to downturns in a particular market. Conditionsin our market could change rapidly and significantly as a result of technological advancements, partnering by our competitors or continuing market consolidation.New startup companies that innovate and large competitors that are making significant investments in research and development may invent similar or superiorproducts and technologies that compete with our products. In addition, some of our competitors may enter into new alliances with each other or may establish orstrengthen cooperative relationships. Any such consolidation, acquisition, alliance or cooperative relationship could lead to pricing pressure and our loss of anyfuture market share and could result in a competitor with greater financial, technical, marketing, service and other resources, all of which could harm our ability tocompete. Furthermore, organizations may be more willing to incrementally add solutions to their existing infrastructure from competitors than to replace their existinginfrastructure with our products. Any failure to meet and address these factors could harm our business, results of operations and financial condition.Our business operations and future development could be significantly disrupted if we lose key members of our management team.The success of our business continues to depend to a significant degree upon the continued contributions of our senior officers and key employees, bothindividually and as a group. Our future performance will be substantially dependent in particular on our ability to retain and motivate Ronen Luzon, our ChiefExecutive Officer, and certain of our other senior executive officers. The loss of the services of our Chief Executive Officer, senior officers or other key employeescould have a material adverse effect on our business and plans for future development. We have no reason to believe that we will lose the services of any of theseindividuals in the foreseeable future; however, we currently have no effective replacement for any of these individuals due to their experience, reputation in theindustry and special role in our operations. We also do not maintain any key man life insurance policies for any of our employees.If we are able to expand our operations, we may be unable to successfully manage our future growth.Our growth may strain our infrastructure and resources. Any such growth could place increased strain on our management, operational, financial and otherresources, and we will need to train, motivate, and manage employees, as well as attract management, sales, finance and accounting, international, technical, andother professionals. Any failure to expand these areas and implement appropriate procedures and controls in an efficient manner and at a pace consistent with ourbusiness objectives could have a material adverse effect on our business, results of operations and financial condition.Our business operations are conducted in multiple languages and could be disrupted due to miscommunications or translation errors.The success of our business continues to depend on our marketing efforts in the United States, Europe and Israel, each of which is conducted in the locallanguage. Miscommunications or inaccurate foreign language translations could have a material adverse effect on our business operations and financial conditions.Additionally, contracts, communications and complex technical information must be accurately translated into foreign languages.We will continue to incur costs and be subject to various obligations as a result of being a public company, listed in the United States and in Israel.We will continue to incur significant legal, accounting and other expenses as a result of being a public company, listed in the United States and in Israel.Although we will incur costs each year associated with being a publiclytraded company, it is possible that our actual costs of being a publiclytraded company willvary from year to year and may be different than our estimates. In estimating these costs, we take into account expenses related to insurance, legal, accounting andcompliance activities.28Furthermore, the need to maintain the corporate infrastructure demanded of a public company may divert management’s attention from implementing ourgrowth strategy, which could prevent us from improving our business, results of operations and financial condition. We have made, and will continue to make,changes to our internal controls and procedures for financial reporting and accounting systems to meet our reporting obligations as a U.S. publicly traded company.However, the measures we take may not be sufficient to satisfy our obligations as a publicly traded company.Any future or current litigation could have a material adverse impact on our results of operations, financial condition and liquidity.From time to time, we may be subject to litigation, including, among others, potential stockholder derivative actions and class actions. Risks associatedwith legal liability are difficult to assess and quantify, and their existence and magnitude can remain unknown for significant periods of time. Subject to certainexceptions, our Amended and Restated Certificate of Incorporation, or Certificate of Incorporation, and Amended and Restated Bylaws, or Bylaws, require us toindemnify and advance expenses to our officers and directors involved in legal proceedings. To date we have obtained directors and officers’ liability, or D&O,insurance to cover some of the risk exposure for our directors and officers. Such insurance generally pays the expenses (including amounts paid to plaintiffs, fines,and expenses including attorneys’ fees) of officers and directors who are the subject of a lawsuit as a result of their service to us. There can be no assurance that wewill be able to continue to maintain this insurance at reasonable rates or at all, or in amounts adequate to cover such expenses should such a lawsuit occur. WithoutD&O insurance, the amounts we would pay to indemnify our officers and directors should they be subject to legal action based on their service to us could have amaterial adverse effect on our financial condition, results of operations and liquidity. Such lawsuits, and any related publicity, may result in substantial costs and,among other things, divert the attention of management and our employees. An unfavorable outcome in any claim or proceeding against us could have a materialadverse impact on our financial position and results of operations for the period in which the unfavorable outcome occurs, and potentially in future periods. Further,any settlement announced by us may expose us to further claims against us by third parties seeking monetary or other damages which, even if unsuccessful, woulddivert management attention from the business and cause us to incur costs, possibly material, to defend such matters, which could have a material adverse impacton our financial position. See “Legal Proceedings” for more information regarding our involvement in ongoing litigation matters.Federal, state and local or Israeli tax rules may adversely impact our results of operations and financial position.We are subject to federal, state and local taxes in the U.S., as well as local taxes in Israel in respect to our operations in Israel. Although we believe our taxestimates are reasonable, if the Internal Revenue Service or other taxing authority disagrees with the positions we have taken on our tax returns, we could faceadditional tax liability, including interest and penalties. If material, payment of such additional amounts upon final adjudication of any disputes could have a materialimpact on our results of operations and financial position. In addition, complying with new tax rules, laws or regulations could impact our financial condition, andincreases to federal or state statutory tax rates and other changes in tax laws, rules or regulations may increase our effective tax rate. Any increase in our effectivetax rate could have a material impact on our financial results.A significant majority of Orgad’s revenue is from sales of products on Amazon’s U.S. Marketplace and any change, limitation or restriction on ourability to operate on Amazon’s platform or any other marketplace could have a material adverse impact to our business, results of operations, financialcondition and prospects.Orgad, our wholly owned subsidiary, operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com, eBay and others. A substantial percentage of Orgad’s revenue is driven by sales on Amazon’s U.S. marketplace and Orgad is subject toterms of service of Amazon and other maketplaces and various other seller policies and services that apply to third parties selling products on Amazon and othermarketplaces. Generally, a marketplace has the right to terminate or suspend its agreement with Orgad at any time and for any reason. Such marketplace may takeother actions against Orgad such as suspending or terminating a seller account or product listing and withholding payments owed to Orgad indefinitely. Forexample, in July 2022, Amazon deactivated Orgad’s Amazon U.S. store as a result of complaints submitted due to an error in the listed manufacturer of certainproducts on Orgad’s store. Although its account was subsequently reinstated in September 2022, if the deactivation were to occur in the future for a prolongedperiod of time, or if Amazon were to terminate Orgad’s account, this would have a material adverse effect on our business, results of operations, financial conditionand prospects. While Orgad endeavors to materially comply with the terms of services of the marketplaces on which it operates, we can provide no assurance thatthese marketplaces will have the same determination with respect to our compliance.29In addition, Amazon and other marketplaces can make changes to its platform that could require Orgad to change the manner in which it operates, limit itsability to successfully launch new products or increase its costs to operate and such changes could have an adverse effect on our business, results of operations,financial condition and prospects. Examples of changes that could impact us relate to platform fee charges (i.e., selling commissions), exclusivity, inventorywarehouse availability, excluded products and limitations on sales and marketing. Any change, limitation or restriction on our ability to sell on Amazon’s platform orany other marketplace, even if temporary, could have a material impact on our business, results of operations, financial condition and prospects.Orgad also relies on services provided by Amazon’s fulfillment platform, including Prime Certification, which provides for expedited shipping to theconsumer, an important aspect in the buying decision for consumers. For products that Orgad fulfills itself, Orgad is qualified to offer our products for sale withPrime Certification delivery. Any inability to market our products for sale with expedited delivery provided under Prime Certification could have a material impact onour business, results of operations, financial condition and prospects. Failure to remain compliant with the best fulfillment practices on Amazon’s platform couldhave a material impact on our business, results of operations, financial condition and prospects. In addition, due to the COVID19 pandemic, Amazon has changedthe amount of inventory it accepts per product for a period of time. If this were to continue it could cause us to miss sales and/or pay additional shipping costswhich would harm our business operations and financial conditions.Orgad’s business depends on its ability to build and maintain strong product listings on ecommerce platforms. Orgad may not be able to maintain andenhance our product listings if it receives unfavorable customer complaints, negative publicity or otherwise fails to live up to consumers’ expectations, whichcould materially adversely affect our business, results of operations and growth prospects.Maintaining and enhancing Orgad’s product listings is critical in expanding and growing its business. However, a significant portion of Orgad’s perceivedperformance to the customer depends on third parties outside of its control, including suppliers and thirdparty delivery agents as well as online retailers such asAmazon and eBay. Because Orgad’s agreements with its online retail partners are generally terminable at will, it may be unable to maintain these relationships, andour results of operations could fluctuate significantly from period to period. Because Orgad relies on third parties to deliver its products, it is subject to shippingdelays or disruptions caused by inclement weather, natural disasters, labor activism, health epidemics or bioterrorism. It may also experience shipping delays ordisruptions due to other carrierrelated issues relating to their own internal operational capabilities. Further, Orgad relies on the business continuity plans of thesethird parties to operate during pandemics, like the COVID19 pandemic, and it has limited ability to influence their plans, prevent delays, and/or cost increases due toreduced availability and capacity and increased required safety measures.Customer complaints or negative publicity about its products, delivery times, or marketing strategies, even if not accurate, especially on blogs, social mediawebsites and thirdparty market sites, could rapidly and severely diminish consumer view of Orgad’s product listings and result in harm to its brand. Customers mayalso make safetyrelated or other types of claims regarding products sold through our online retail partners, such as Amazon, which may result in an online retailpartner removing the product from its marketplace. We also use and rely on other services from third parties, such as our telecommunications services, and thoseservices may be subject to outages and interruptions that are not within our control.Orgad faces risks related to successfully optimizing and operating its fulfillment and customer service operations.Failures to adequately predict customer demand or otherwise optimize and operate its fulfillment and customer service operations successfully from time totime result in excess or insufficient fulfillment or customer service capacity, increased costs, and impairment charges, any of which could materially harm ourbusiness. As Orgad continues to add fulfillment and customer service capability or add new businesses with different requirements, its fulfillment and customerservice operations become increasingly complex and operating them becomes more challenging. There can be no assurance that Orgad will be able to operate ouroperations effectively.30In addition, failure to optimize inventory in our fulfillment operations increases net shipping cost by requiring longzone or partial shipments. Orgad may beunable to adequately staff its fulfillment and customer service operations. Orgad’s failure to properly handle such inventory or to accurately forecast productdemand may result in it being unable to secure sufficient storage space or to optimize its fulfillment operations or cause other unexpected costs and other harm toour business and reputation.Orgad relies on a limited number of shipping companies to deliver inventory to it and completed orders to our customers. The inability to negotiateacceptable terms with these companies or performance problems or other difficulties experienced by these companies could negatively impact our operating resultsand customer experience. In addition, Orgad’s ability to receive inbound inventory efficiently and ship completed orders to customers also may be negativelyaffected by natural or manmade disasters, extreme weather, geopolitical events and security issues, labor or trade disputes, and similar events.The variability in Orgad’s retail business places increased strain on its operations.Demand for Orgad’s product listings can fluctuate significantly for many reasons, including as a result of seasonality, promotions, product launches, orunforeseeable events, such as in response to natural or manmade disasters, extreme weather, or geopolitical events. For example, Orgad expects a disproportionateamount of our retail sales to occur during our fourth quarter. Failure to stock or restock popular products in sufficient amounts such that Orgad fails to meetcustomer demand could significantly affect our revenue and our future growth. If too many customers access the websites on which Orgad engages in onlineretailing within a short period of time due to increased demand, Orgad may experience system interruptions that make the websites unavailable or prevent us fromefficiently fulfilling orders, which may reduce the volume of goods its offers or sell and the attractiveness of its products. In addition, Orgad may be unable toadequately staff for fulfillment of orders and customer service during these peak periods and delivery and other fulfillment companies and customer service cosourcers may be unable to meet the seasonal demand.Our business is subject to the risks of earthquakes, fire, power outages, floods, health risks and other catastrophic events, and to interruption by manmade problems such as terrorism.Natural disasters, such as fire or floods, a significant power outage, telecommunications failure, terrorism, an armed conflict, cyberattacks, epidemics andpandemics such as COVID19, or other geopolitical unrest could affect our supply chain, manufacturers, logistics providers, channel partners, or endcustomers orthe economy as a whole and such disruption could impact us and the shipments and sales. These risks may be further increased if the disaster recovery plans for usand our suppliers prove to be inadequate. To the extent that any of the above should result in delays or cancellations of customer orders, the loss of customers, orthe delay in the deployment or shipment of products, our business, financial condition, and operating results would be adversely affected.For example, on January 2, 2023, Orgad experienced a fire at its warehouse in Israel. We are not aware of any casualties or injuries associated with the fire.We shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incidentdid not affect the future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of thisincident on the other parties that were involved in the incident (lessor and others that leased properties near the warehouse).Our business could be negatively impacted by unsolicited takeover proposals, by shareholder activism or by proxy contests relating to the election ofdirectors or other matters.Our business could be negatively affected as a result of an unsolicited takeover proposal, by shareholder activism or a proxy contest. During 2021, anactivist shareholder sought to make changes to our board of directors, among other matters, which ultimately resulted in us entering into a settlement agreementwith the activist shareholder and another shareholder, and for which considerable costs were incurred and absorbed significant time and attention by managementand the board of directors. A future proxy contest, unsolicited takeover proposal, or other shareholder activism relating to the election of directors or other matterswould most likely require us to incur significant legal fees and proxy solicitation expenses and require significant time and attention by management and our Boardof Directors. The potential of a proxy contest, unsolicited takeover proposal, or other shareholder activism could interfere with our ability to execute our strategicplan, give rise to perceived uncertainties as to our future direction, result in the loss of potential business opportunities or make it more difficult to attract and retainqualified personnel, any of which could materially and adversely affect our business and operating results.31Environmental, social and corporate governance (ESG) issues, including those related to climate change and sustainability, may have an adverseeffect on our business, financial condition and results of operations and damage our reputation.There is an increasing focus from certain investors, customers, consumers, employees and other stakeholders concerning ESG matters. Additionally, publicinterest and legislative pressure related to public companies’ ESG practices continue to grow. If our ESG practices fail to meet regulatory requirements or investor,customer, consumer, employee or other shareholders’ evolving expectations and standards for responsible corporate citizenship in areas including environmentalstewardship, support for local communities, Board of Director and employee diversity, human capital management, employee health and safety practices, productquality, supply chain management, corporate governance and transparency, our reputation, brand and employee retention may be negatively impacted, and ourcustomers and suppliers may be unwilling to continue to do business with us.Customers, consumers, investors and other shareholders are increasingly focusing on environmental issues, including climate change, energy and wateruse, plastic waste and other sustainability concerns. Concern over climate change may result in new or increased legal and regulatory requirements to reduce ormitigate impacts to the environment. Changing customer and consumer preferences or increased regulatory requirements may result in increased demands orrequirements. Complying with these demands or requirements could cause us to incur additional manufacturing, operating or product development costs.If we do not adapt to or comply with new regulations, including the SEC’s published proposed rules that would require companies to provide significantlyexpanded climaterelated disclosures in their periodic reporting, which may require us to incur significant additional costs to comply and impose increased oversightobligations on our management and board of directors, or fail to meet evolving investor, industry or stakeholder expectations and concerns regarding ESG issues,investors may reconsider their capital investment in our company, we may become subject to penalties, and customers and consumers may choose to stoppurchasing our products, if approved for commercialization, which could have a material adverse effect on our reputation, business or financial condition.Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions andadverse developments with respect to financial institutions and associated liquidity risk.Our business depends on the economic health of the global economies. If the conditions in the global economies remain uncertain or continue to bevolatile, or if they deteriorate, including as a result of the impact of military conflict, such as the war between Russia and Ukraine, terrorism or other geopoliticalevents, our business, operating results and financial condition may be materially adversely affected. Economic weakness, inflation and increases in interest rates,limited availability of credit, liquidity shortages and constrained capital spending have at times in the past resulted, and may in the future result, in challenging anddelayed sales cycles, slower adoption of new technologies and increased price competition, and could negatively affect our ability to forecast future periods, whichcould result in an inability to satisfy demand for our products and a loss of market share.In addition, increases in inflation raise our costs for commodities, labor, materials and services and other costs required to grow and operate our business,and failure to secure these on reasonable terms may adversely impact our financial condition. Additionally, increases in inflation, along with the uncertaintiessurrounding COVID19, geopolitical developments and global supply chain disruptions, have caused, and may in the future cause, global economic uncertainty anduncertainty about the interest rate environment, which may make it more difficult, costly or dilutive for us to secure additional financing. A failure to adequatelyrespond to these risks could have a material adverse impact on our financial condition, results of operations or cash flows.More recently, the closures of SVB and Signature Bank and their placement into receivership with the FDIC created bankspecific and broader financialinstitution liquidity risk and concerns. Although the Department of the Treasury, the Federal Reserve and the FDIC jointly released a statement that depositors atSVB and Signature Bank would have access to their funds, even those in excess of the standard FDIC insurance limits, under a systemic risk exception, futureadverse developments with respect to specific financial institutions or the broader financial services industry may lead to marketwide liquidity shortages, impair theability of companies to access nearterm working capital needs, and create additional market and economic uncertainty. There can be no assurance that future creditand financial market instability and a deterioration in confidence in economic conditions will not occur. Our general business strategy may be adversely affected byany such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions. If the current equityand credit markets deteriorate, or if adverse developments are experienced by financial institutions, it may cause shortterm liquidity risk and also make anynecessary debt or equity financing more difficult, more costly, more onerous with respect to financial and operating covenants and more dilutive. Failure to secureany necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stockprice and could require us to alter our operating plans. In addition, there is a risk that one or more of our service providers, financial institutions, manufacturers,suppliers and other partners may be adversely affected by the foregoing risks, which could directly affect our ability to attain our operating goals on schedule andon budget.Our business may be adversely affected by the impact of any renewed outbreak of the COVID19 pandemic.Public health epidemics or outbreaks could adversely impact our business. In late 2019, a novel strain of COVID19, also known as coronavirus, wasreported in Wuhan, China. While initially the outbreak was largely concentrated in China, it spread worldwide. Many countries around the world, including in Israel,implemented significant governmental measures to control the spread of the virus, including temporary closure of businesses, severe restrictions on travel and themovement of people, and other material limitations on the conduct of business. These measures haven historically resulted in work stoppages and other disruptions.If there is a resurgence of the COVID19 pandemic, this could adversely impact our operations, including among others, our sales and marketing efforts and ourability to raise additional funds, and accordingly, the impact of COVID19 could have an adverse impact on our business and our financial results.32Risks Related to Our Operations in RussiaRussia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.In addition to our Israel operations, we have operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia and we engage two software developers through a third party who are based in Ukraine. On February 24,2022, Russia invaded Ukraine. The outbreak of hostilities between the two countries could result in more widespread conflict and could have a severe adverse effecton the region.Following Russia’s actions, various countries, including the U.S., Canada, the United Kingdom, Germany and France, as well as the European Union,issued broadranging economic sanctions against Russia. Such sanctions included, among other things, a prohibition on doing business with certain Russiancompanies, officials and oligarchs; a commitment by certain countries and the European Union to remove selected Russian banks from the Society for WorldwideInterbank Financial Telecommunications (SWIFT) electronic banking network that connects banks globally; and restrictive measures to prevent the Russian CentralBank from undermining the impact of the sanctions. In response to sanctions, the Russian Central Bank raised its interest rates and banned sales of local securitiesby foreigners. Russia may take additional counter measures or retaliatory actions in the future. While diplomatic efforts have been ongoing, the conflict betweenRussia and Ukraine is currently unpredictable and has the potential to result in broadened military actions. The duration of ongoing hostilities and such sanctionsand related events cannot be predicted. Uncertainty as to future relations between Russia and the U.S. and other countries in the west, or between Russia and othereastern European countries, may have a negative impact on our operations.Such international sanctions and potential responses to such sanctions, including those that may limit or restrict transfer funds into Russia, may in thefuture significantly affect our ability to conduct our activities in Russia including paying our personnel. To date, the conflict has had minimal impact on operations .Nevertheless, we have no way to predict the progress or outcome of the situation in Ukraine, as the conflict and governmental reactions are rapidly developing andbeyond our control. Prolonged unrest, intensified military activities or more extensive sanctions impacting the region could have a material adverse effect on ouroperations, results of operations, financial condition, liquidity and business outlook.Political, military conditions or other risks in Russia could adversely affect our business.Russia is a federative state consisting of 85 constituent entities, or “subjects.” The Russian Constitution reserves some governmental powers for theRussian Government, some for the subjects and some for areas of joint competence. In addition, eight “federal districts” (“federal’nye okruga”), which are overseenby a plenipotentiary representative of the President, supplement the country’s federal system. The delineation of authority among and within the subjects is, inmany instances, unclear and contested, particularly with respect to the division of tax revenues and authority over regulatory matters. For these reasons, theRussian political system is vulnerable to tension and conflict between federal, subject and local authorities. This tension creates uncertainties in the operatingenvironment in Russia, which may prevent us from carrying out our strategy effectively. The risks associated with these events or potential events could materiallyand adversely affect the investment environment and overall consumer and entrepreneurial confidence in Russia, and our business, prospects, financial condition,hiring ability, and results of operations could be materially and adversely affected.Furthermore, high levels of corruption reportedly exist in Russia, including the bribing of officials for the purpose of initiating investigations bygovernment agencies. Corruption and other illegal activities could disrupt our ability to conduct our business effectively, and claims that the we are involved in suchcorruption or illegal activities could generate negative publicity, of which could harm our development, financial condition, results of operations or prospects.Economic and other risks in Russia could adversely affect our business.Operating a business in an emerging market such as Russia can involve a greater degree of risk than operating a business in more developed markets.Over the last two decades, the Russian economy has experienced or continues to experience at various times:●significant volatility in its GDP;33●the impact of international sanctions;●high levels of inflation;●increases in, or high, interest rates;●sudden price declines in oil and other natural resources;●instability in the local currency market;●budget deficits;●the continued operation of lossmaking enterprises due to the lack of effective bankruptcy proceedings;●capital flight; and●significant increases in poverty rates, unemployment and underemployment.The Russian economy has been subject to abrupt downturns in the past, including as a result of the invasion of Ukraine, global financial crisis, and, as anemerging market, remains particularly vulnerable to further external shocks and any future fluctuations in the global markets. Any further deterioration in the generaleconomic conditions in Russia (whether or not as a result of the events mentioned above) could have a material adverse effect on the Russian economy and mayresult in hiring and operational difficulties, as well as potential flight of human capital, which could have a material adverse effect on our business, productdevelopment and results of operations.Legal risks in Russia could materially adversely affect our operations and Russian tax legislation is subject to frequent change.Among the risks of the Russian legal system are: inconsistencies among laws, presidential decrees, and government and ministerial orders and resolutions;conflicting local, regional and federal laws and regulations; the untested nature of the independence of the judiciary and its sensitivity to economic or politicalinfluences; substantial gaps in the regulatory structure due to the delay or absence of implementing legislation; a high degree of discretion on the part ofgovernmental authorities; reported corruption within governmental entities and other governmental authorities; the relative inexperience of judges and courts ininterpreting laws applicable to complex transactions; and the unpredictability of enforcement of foreign judgments and foreign arbitral awards. Many Russian lawsand regulations are construed in a way that provides for significant administrative discretion in application and enforcement. Unlawful, selective or arbitrary actionsof the Russian Government have reportedly included the denial or withdrawal of licenses, sudden and unexpected tax audits, criminal prosecutions, and civil claims.Any of the above events may have a material adverse effect on our product development and results of operations.Despite certain improvements in the taxation system made by the Russian Government over the past decade, Russian tax legislation is still subject tofrequent change, varying interpretations, and inconsistent and selective enforcement. There are currently no clear rules for distinguishing between lawful taxoptimization and tax evasion. In addition, Russian tax laws do not contain detailed rules on the taxation in Russia of foreign companies. As such, taxpayers oftenhave to resort to court proceedings to defend their position against the Russian tax authorities. However, in the absence of consistent court practice or bindingprecedents, there is inconsistency amongst court decisions. Further, the possibility exists that the Russian Federation would impose arbitrary or onerous taxes andpenalties in the future, which could have a material adverse effect on our product development and results of operations.34Risks Related to Our Operations In IsraelOur headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.Our headquarters and most of our operations are located in central Israel and our key employees, officers and directors are residents of Israel. Accordingly,political, economic and military conditions in Israel and the surrounding region may directly affect our business. Since the establishment of the State of Israel in1948, a number of armed conflicts have taken place between Israel and its Arab neighbors. Any hostilities involving Israel or the interruption or curtailment of tradewithin Israel or between Israel and its trading partners could adversely affect our operations and results of operations and could make it more difficult for us to raisecapital. During the winter of 2008, winter of 2012 and the summer of 2014, Israel was engaged in an armed conflict with Hamas, a militia group and political partyoperating in the Gaza Strip, and during the summer of 2006, Israel was engaged in an armed conflict with Hezbollah, a Lebanese Islamist Shiite militia group andpolitical party. Israel faces political tension with respect to its relationships with Turkey, Iran and certain Arab neighbor countries. In addition, recent conflictsinvolved missile strikes against civilian targets in various parts of Israel, and negatively affected business conditions in Israel. Recent political uprisings and socialunrest in various countries in the Middle East and North Africa are affecting the political stability of those countries. This instability may lead to deterioration of thepolitical relationships that exist between Israel and these countries, and have raised concerns regarding security in the region and the potential for armed conflict.Any armed conflicts, terrorist activities or political instability in the region could adversely affect business conditions and could harm our results of operations. Forexample, any major escalation in hostilities in the region could result in a portion of our employees and service providers being called up to perform military duty foran extended period of time. Parties with whom we do business have sometimes declined to travel to Israel during periods of heightened unrest or tension, forcing usto make alternative arrangements when necessary. In addition, the political and security situation in Israel may result in parties with whom we have agreementsinvolving performance in Israel claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions insuch agreements. Any future deterioration in the political and security situation in Israel will negatively impact our business.Our commercial insurance does not cover losses that may occur as a result of events associated with the security situation in the Middle East. Althoughthe Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that thisgovernment coverage will be maintained. Any losses or damages incurred by us could have a material adverse effect on our business. Any armed conflicts orpolitical instability in the region would likely negatively affect business conditions and could harm our results of operations.Further, in the past, the State of Israel and Israeli companies have been subjected to an economic boycott. Several countries still restrict business with theState of Israel and with Israeli companies. These restrictive laws and policies may have an adverse impact on our operating results, financial condition or theexpansion of our business.The legislative power of the State resides in the Knesset, a unicameral parliament that consists of 120 members elected by nationwide voting under asystem of proportional representation. Israel’s most recent general elections were held on April 9, 2019, September 17, 2019, March 2, 2020 and November 1, 2022.The uncertainty surrounding the results of the recent elections may continue. Actual or perceived political instability in Israel or any negative changes in thepolitical environment, may individually or in the aggregate adversely affect the Israeli economy and, in turn, our business, financial condition, results of operationsand prospects.Some of our employees are obligated to perform military reserve duty in Israel.Many Israeli citizens, including our employees are obligated to perform one month, and in some cases more, of annual military reserve duty until they reachthe age of 40 (or older, for reservists with certain occupations) and, in the event of a military conflict, may be called to active duty. In response to increases interrorist activity, there have been periods of significant callups of military reservists. It is possible that there will be military reserve duty callups in the future. Ouroperations could be disrupted by such callups. Such disruption could materially adversely affect our business, results of operations and financial condition.35It may be difficult to enforce a nonIsraeli judgment against the Company or its officers and directors.The operating subsidiary of ours is incorporated in Israel. All of our executive officers and directors are not residents of the United States, and asubstantial portion of our assets and the assets of our executive officers and directors are located outside the United States. Therefore, a judgment obtained againstus, or any of these persons, including a judgment based on the civil liability provisions of the U.S. federal securities laws, may not be collectible in the United Statesand may not necessarily be enforced by an Israeli court. It also may be difficult to affect service of process on these persons in the United States or to assert U.S.securities law claims in original actions instituted in Israel. Additionally, it may be difficult for an investor, or any other person or entity, to initiate an action withrespect to U.S. securities laws in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of U.S. securities laws reasoning that Israel is not themost appropriate forum in which to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law isapplicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law often involves the testimony of expert witnesses, which can be a timeconsuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel that addresses the mattersdescribed above. As a result of the difficulty associated with enforcing a judgment against us in Israel, it may be impossible to collect any damages awarded byeither a U.S. or foreign court.Our international operations could expose us to additional risks, including exchange rate fluctuations, legal regulations and political or economicinstability that could harm our business and operating results.Our international operations expose us to the following risks which may have a material adverse effect on our business and operating results:●devaluations and fluctuations in currency exchange rates including fluctuations between the U.S. dollar and the NIS and the Russian Ruble;●costs of compliance with local laws, including labor laws and intellectual property laws;●compliance with domestic and foreign government policies, including compliance with Israeli securities laws and TASE;●changes in trade regulations and procedures affecting approval, production, pricing, marketing, reimbursement for and access to, our products;●compliance with applicable foreign anticorruption laws, antitrust/competition laws, antiBoycott Israel law and antimoney laundering laws; and●economic and geopolitical developments and conditions, including ongoing instability in global economies and financial markets, international hostilities,acts of terrorism and governmental reactions, inflation, outbreaks of contagious disease (e.g., the COVID19 pandemic) and military and political alliances.Risks Related to Our Common StockA more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.Although our common stock is listed on the Nasdaq Capital Market, it has only been traded on the Nasdaq Capital Market since July 25, 2016. There hasbeen relatively limited trading volume in the market for our common stock, and a more active, liquid public trading market may not develop or may not be sustained.Limited liquidity in the trading market for our common stock may adversely affect a stockholder’s ability to sell its shares of common stock at the time it wishes tosell them or at a price that it considers acceptable. If a more active, liquid public trading market does not develop, we may be limited in our ability to raise capital byselling shares of common stock and our ability to acquire other companies or assets by using shares of our common stock as consideration. In addition, if there is athin trading market or “float” for our stock, the market price for our common stock may fluctuate significantly more than the stock market as a whole. Without a largefloat, our common stock would be less liquid than the stock of companies with broader public ownership and, as a result, the trading prices of our common stockmay be more volatile and it would be harder for you to liquidate any investment in our common stock. Furthermore, the stock market is subject to significant priceand volume fluctuations, and the price of our common stock could fluctuate widely in response to several factors, including:●our quarterly or annual operating results;●changes in our earnings estimates;●investment recommendations by securities analysts following our business or our industry;●additions or departures of key personnel;●changes in the business, earnings estimates or market perceptions of our competitors;36●our failure to achieve operating results consistent with securities analysts’ projections;●changes in industry, general market or economic conditions;●announcements of legislative or regulatory changes; and●natural disasters (including for example, the recent fire in the Orgad warehouse) and political and economic instability, including wars, terrorism, politicalunrest, results of certain elections and votes, emergence of a pandemic, or other widespread health emergencies (or concerns over the possibility of suchan emergency, including for example, the recent the COVID19 pandemic), boycotts, adoption or expansion of government trade restrictions, and otherbusiness restrictions.The stock market has experienced extreme price and volume fluctuations in recent years that have significantly affected the quoted prices of the securitiesof many companies. The changes often appear to occur without regard to specific operating performance. The price of our common stock could fluctuate basedupon factors that have little or nothing to do with us and these fluctuations could materially reduce our stock price.Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.If any of our shareholders were to decide to sell large amounts of stock over a short period of time (presuming such sales were permitted) such sales couldcause the market price of our common stock to drop significantly, even if our business is doing well. Further, the market price of our common stock could decline as aresult of the perception that such sales could occur. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equitysecurities in the future at a time and price that we deem appropriate.Our securities are traded on more than one market which may result in price variations.Our securities have been trading on the Nasdaq Capital Market since July 2016 and on TASE since September 2005. Trading in our securities on suchexchanges occurs in different currencies (U.S. dollars on the Nasdaq Capital Market and NIS on the TASE), and at different times (due to different time zones,trading days and public holidays in the United States and Israel). The trading prices of our securities on the two exchanges may differ due to the foregoing andother factors. Any decrease in the price of our shares on the TASE could cause a decrease in the trading price of our shares on the Nasdaq Capital Market and viceversa.We are a smaller reporting company and, as a result of the reduced disclosure and governance requirements applicable to such companies, ourcommon stock may be less attractive to investors.We are a smaller reporting company, (i.e. a company with “public float” held by nonaffiliates with a market value of less than $250 million) and we areeligible to take advantage of certain exemptions from various reporting requirements applicable to other public companies. We have elected to adopt these reduceddisclosure requirements. We cannot predict if investors will find our common stock less attractive as a result of our taking advantage of these exemptions. If someinvestors find our common stock less attractive as a result of our choices, there may be a less active trading market for our common stock and our stock price may bemore volatile.We do not expect to pay any cash dividends in the foreseeable future.We have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our board of directors deems relevant. Investors should not purchase our common stock expecting to receive cash dividends. Because we do notpay dividends, and there may be limited trading, investors may not have any manner to liquidate or receive any payment on their investment. Therefore, our failureto pay dividends may cause investors to not see any return on investment even if we are successful in our business operations. In addition, because we do not paydividends we may have trouble raising additional funds, which could affect our ability to expand our business operations.37UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2022☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ________ to _________Commission file number 00137370MY SIZE, INC.(Exact name of registrant as specified in charter)Delaware510394637(State or jurisdiction ofIncorporation or organization)I.R.S EmployerIdentification No.4 Hayarden, POB 1026, Airport City, Israel7010000(Address of principal executive offices)(Zip code)+9723 6009030(Registrant’s telephone number, including area code)Securities registered pursuant to Section 12(b) of the Act:Title of each classTrading Symbol(s)Name of Each Exchange on Which RegisteredCommon Stock, par value $0.001 per shareMYSZThe Nasdaq Capital MarketSecurities registered pursuant to Section 12(g) of the Act: None.Indicate by check mark whether the registrant is a wellknown seasoned issuer as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes☒ No ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer, a smaller reporting company, or an emerginggrowth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 of theExchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☒Smaller Reporting Company☒Emerging Growth Company☐If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revisedfinancial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b2 of the Exchange Act) Yes ☐No☒Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control overfinancial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflectthe correction of an error to previously issued financial statements. ☐Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by anyof the registrant’s executive officers during the relevant recovery period pursuant to §240.10D1(b). ☐The aggregate market value of voting and nonvoting common equity held by nonaffiliates of the registrant as of June 30, 2022, the last business day of theregistrant’s most recently completed second fiscal quarter, was approximately $25,551,906.Number of shares of common stock outstanding as of March 31, 2023 was 2,446,780.Documents Incorporated by Reference: None.Table of ContentsPart IItem 1.Business2Item 1A.Risk Factors18Item 1B.Unresolved Staff Comments41Item 2.Properties41Item 3.Legal Proceedings41Item 4.Mine Safety Disclosures42Part IIItem 5.Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities43Item 6.Selected Financial Data43Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations43Item 7A.Quantitative and Qualitative Disclosures about Market Risk50Item 8.Financial Statements and Supplementary DataF1Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure51Item 9A.Controls and Procedures51Item 9B.Other Information51Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.51Part IIIItem 10.Directors, Executive Officers and Corporate Governance52Item 11.Executive Compensation57Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters60Item 13.Certain Relationships and Related Transactions, and Director Independence62Item 14.Principal Accounting Fees and Services65Part IVItem 15.Exhibits, Financial Statement Schedules66Signatures69iPART IIn this Annual Report on Form 10K, unless the context requires otherwise, the terms “we,” “our,” “us,” or “the Company” refer to MySize, Inc., a Delawarecorporation, and its subsidiaries, including MySize Israel 2014 Ltd. My Size LLC, Orgad International Marketing Ltd., or Orgad, and Naiz Bespoke Technologies, S.L,or Naiz, taken as a whole.References to “U.S. dollars” and “$” are to currency of the United States of America, and references to “NIS” are to New Israeli Shekels. Unless otherwiseindicated, U.S. dollar translations of NIS amounts presented in this Annual Report on Form 10K for the year ended on December 31, 2022 are translated using therate of NIS 3.358 to $1.00.All information in this Annual Report on Form 10K relating to shares or price per share reflects the 1for25 reverse stock split effected by us on December8, 2022.CAUTIONARY NOTE ON FORWARDLOOKING STATEMENTSThis Annual Report on Form 10K contains certain forwardlooking statements within the meaning of Section 27A of the Securities Act and Section 21E ofthe Exchange Act. Any statements in Annual Report on Form 10K about our expectations, beliefs, plans, objectives, assumptions or future events or performanceare not historical facts and are forwardlooking statements. These statements are often, but not always, made through the use of words or phrases such as“believe,” “will,” “expect,” “anticipate,” “estimate,” “intend,” “plan” and “would.” For example, statements concerning financial condition, possible or assumedfuture results of operations, growth opportunities, industry ranking, plans and objectives of management, markets for our common stock and future managementand organizational structure are all forwardlooking statements. Forwardlooking statements are not guarantees of performance. They involve known and unknownrisks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to differ materially from any results, levels ofactivity, performance or achievements expressed or implied by any forwardlooking statement.Any forwardlooking statements are qualified in their entirety by reference to the risk factors discussed throughout this Annual Report on Form 10K. Someof the risks, uncertainties and assumptions that could cause actual results to differ materially from estimates or projections contained in the forwardlookingstatements include but are not limited to:●our history of losses and needs for additional capital to fund our operations and our inability to obtain additional capital on acceptable terms, or at all;●risks related to our ability to continue as a going concern;●the new and unproven nature of the measurement technology markets;●our ability to achieve customer adoption of our products;●our ability to realize the benefits of our acquisitions of Orgad and Naiz;●our dependence on assets we purchased from a related party;●our ability to enhance our brand and increase market awareness;●our ability to introduce new products and continually enhance our product offerings;●the success of our strategic relationships with third parties;●information technology system failures or breaches of our network security;●competition from competitors;●our reliance on key members of our management team;●current or future litigation;●current or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated liquidityrisk; and●the impact of the political and security situation in Israel on our business.1The foregoing list sets forth some, but not all, of the factors that could affect our ability to achieve results described in any forwardlooking statements.You should read this Annual Report on Form 10K and the documents that we reference herein and have filed as exhibits to the Annual Report on Form 10K,completely and with the understanding that our actual future results may be materially different from what we expect. You should assume that the informationappearing in this Annual Report on Form 10K is accurate as of the date hereof. Because the risk factors referred to in this Annual Report on Form 10K, could causeactual results or outcomes to differ materially from those expressed in any forwardlooking statements made by us or on our behalf, you should not place unduereliance on any forwardlooking statements.Further, any forwardlooking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forwardlookingstatement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. New factors emergefrom time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extentto which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements. We qualify all ofthe information presented in this Annual Report on Form 10K, and particularly our forwardlooking statements, by these cautionary statements.ITEM 1. BUSINESSOverviewWe are an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile phone or through MySizeID Widget: a simple questionnaire which uses a database collected over the years.MySizeID syncs the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and only presents itemsfor purchase that match their measurements to ensure a correct fit.We are positioning ourselves as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empower brand design teams, which are designed to increase endconsumer satisfaction, contributing to a sustainable world and reduce operation costs.Recent DevelopmentsOrgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,602 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.2The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz, a limitedliability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.3The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Warehouse FireOn January 2, 2023, Orgad experienced a fire at its warehouse in Israel. we are not aware of any casualties or injuries associated with the fire. We shiftedOrgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incident did not affectthe future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of this incident on the otherparties that were involved in the incident (lessor and others that leased properties near the warehouse).January 2023 FinancingOn January 10, 2023, we entered into a securities purchase agreement, or the RD Purchase Agreement, pursuant to which we agreed to sell and issue in theRD Offering an aggregate of 162,000 of our shares of common stock, or the RD Shares, and prefunded warrants, or the Prefunded Warrants, to purchase up to279,899 shares of common stock and, in a concurrent private placement, unregistered warrants to purchase up to 883,798 shares of common stock, or the RDWarrants, consisting of Series A warrants, or Series A Warrants, to purchase up to 441,899 shares of common stock and Series B warrants, or Series B Warrants, topurchase up to 441,899 shares of common stock, at an offering price of $3.055 per RD Share and associated Series A and Series B Warrants and an offering price of$3.054 per Prefunded Warrant and associated Series A and Series B Warrants.4In addition, we entered into a securities purchase agreement, or the PIPE Purchase Agreement, and together with the RD Purchase Agreement, thePurchase Agreements, pursuant to which we agreed to sell and issue in the PIPE Offering an aggregate of up to 540,098 unregistered Prefunded Warrants andunregistered warrants to purchase up to an aggregate of 1,080,196 shares of common stock, or the PIPE Warrants and together with the RD Warrants, the Warrants,consisting of Series A Warrants to purchase up to 540,098 shares of common stock and Series B Warrants to purchase up to 540,098 shares of common stock at anoffering price of $3.054 per Prefunded Warrant and associated Series A and Series B Warrants.The Prefunded Warrants are immediately exercisable at an exercise price of $0.001 per share and will not expire until exercised in full. The Warrants areimmediately exercisable upon issuance at an exercise price of $2.805 per share, subject to adjustment as set forth therein. The Series A Warrants have a term of fiveand onehalf years from the date of issuance and the Series B Warrants have a term of 28 months from the date of issuance. The Warrants may be exercised on acashless basis if there is no effective registration statement registering the shares underlying the warrants.In connection with the PIPE Purchase Agreement, we entered into a registration rights agreement, or the Registration Rights Agreement. Pursuant to theRegistration Rights Agreement, we are required to file a resale registration statement, or the Registration Statement, with the Securities and Exchange Commission, orthe SEC, to register for resale the shares issuable upon exercise of the unregistered Prefunded Warrants and the Series A and Series B Warrants, within 20 days ofthe signing date of the PIPE Purchase Agreement, or the Signing Date, and to have such Registration Statement declared effective within 60 days after the SigningDate in the event the Registration Statement is not reviewed by the SEC, or 90 days of the Signing Date in the event the Registration Statement is reviewed by theSEC. we will be obligated to pay certain liquidated damages if we fail to maintain the effectiveness of the Registration Statement.The Purchase Agreements and the Registration Rights Agreements also contain representations, warranties, indemnification and other provisionscustomary for transactions of this nature. In addition, subject to limited exceptions, the Purchase Agreements provide that for a period of one year following theclosing of the Offerings, we will not effect or enter into an agreement to effect a “variable rate transaction” as defined in the Purchase Agreements.Aggregate gross proceeds to the Company in respect of the Offerings was approximately $3.0 million, before deducting fees payable to the placement agentand other offering expenses payable by the Company.We also entered into a letter agreement, or the Engagement Agreement, with H.C. Wainwright & Co., LLC, or Wainwright, pursuant to which Wainwrightagreed to serve as the exclusive placement agent for the Company in connection with the Offerings. We paid Wainwright a cash placement fee equal to 7% of theaggregate gross proceeds raised in the Offerings, a management fee of 1% of the aggregate gross proceeds raised in the Offerings, a nonaccountable expenseallowance of $85,000 and clearing fees of $15,950. Wainwright also received placement agent warrants, or the Placement Agent Warrants, with substantially the sameterms as the Series A Warrants issued in the Offering in an amount equal to 7% of the aggregate number of Shares and Prefunded Warrants sold in the Offerings, or68,740 shares, at an exercise price of $3.8188 per share and a term expiring on January 10, 2028.Our SolutionOur cloudbased software platform provides highly accurate sizing and measurement with broad applications including the online fashion/apparel industry,logistics and courier services and home DIY. Currently, we are mainly focusing on the ecommerce fashion/apparel industry. This proprietary technology is driven byseveral patented algorithms which are able to calculate and record measurements in a variety of novel ways. Although specific functionality varies by product, webelieve that our core solutions address the need for highly accurate measurements in a variety of consumer friendly, every day uses.5We have developed three products, MySizeID for the fashion/apparel industry, BoxSize for the logistics and courier services market and SizeUp for thehome DIY market.●MySizeID enables shoppers to generate highly accurate measurements of their body to find proper fitting clothes and accessories, through the use ofour application on their mobile phone or through a simple questionnaire if the user decides not to download the application. MySizeID syncs the user’smeasurement data to a sizing chart and presents items for purchase that match their measurements to ensure a correct fit. MySizeID is available forlicense by retailers and accessable by consumers through a web page.●BoxSize enables customers to quickly and easily measure the size and volume of a parcel to accurately calculate shipping fees. It also offers shippingcompanies a variety of precise logistical data for more efficiently managing their supply chain, providing them with an accurate way to compare thephysical package with what is in the shipping manifest. BoxSize solution is available for license on both iOS and Android operating systems. BoxSizeis available on the Honeywell Marketplace and in August 2019 was approved for Honeywell’s Independent Software Vendor Program, and MySize wasgranted an independent software vendor (ISV) status on the Zebra Technologies and on DataLogic platforms.●SizeUp is a digital tape measure that allows users to measure length, width and height of a surface by moving their smartphone from point to point ofan object or space. SizeUp is a valueadd for DIY and home improvement retailers whose customers struggle to find the appropriately sized items (likeblinds or curtains) for their homes or projects due to inaccurate measurements. SizeUp also is designed to replace rulers, tape measures and othermeasuring tools used for DIY projects. SizeUp is available for consumer download on both iOS and Android operating systems.The following are some select key features of our solutions:●Integration Capability. We design our solutions to be flexible and configurable, allowing our clients to match their use of our algorithms and softwarewith their specific business processes and workflows. Our platform has been organically developed from a common code base, data structure and userinterface, providing a consistent user experience with powerful features that are easily adaptable to our clients’ needs. The MySizeID widget can beintegrated via oneline JavaScript code, or through RESTful API;●Intuitive user experience. Our intuitive, easytouse interface is based on current technology, multiple focus groups and automatically adapts to users’devices, including mobile platforms, thereby significantly increasing accessibility of our solutions;●Big Data Generation. While we supply to the user the information he/she requires, we gather certain vital information such as body measurement andpackage volume which can be used anonymously to help the retailer acquire predictive size information on stocking, operations and consumers thatmay be in between sizes. All the information is being gathered and stored on our servers where it can be used by retailers;●NonInvasive. In taking measurements using our solution, the smartphone camera is not utilized; instead, the measurements are captured by scanningthe smartphone over the consumer’s body or package, thus ensuring greater privacy.Our Growth StrategyWe aim to drive revenue primarily through penetration of the U.S. and Europe markets through a business to business to consumer (B2B2C) model in theverticals we are targeting. We are pursuing the following growth strategies:●Sign Additional Commercial Agreements with U.S. Retailers. During 2022, we expanded our commercial agreements with Levi’s, introducing NorthAmerica (U.S. and Canada) and Latin America regions, and by extension Levis’ native apps in EU and U.S. regions. We also entered into commercialagreements with Baby Fresh, Galax, Punto Blanco, GEF France, Diesel, Gaala, Superdry, Uniontex Industries, and Temperlay London among others. Weare in various stages of discussions with U.S. and foreign retailers for the deployment of our size recommendation and measurement technology with aview to entering into additional commercial agreements.6●Pursue a TwoPronged Commercialization Strategy. We are seeking to accelerate adoption of our solutions both through direct partnerships with ecommerce websites as well as through thirdparty platform websites. While we seek to directly enter into partnerships with companies maintaining ecommerce websites in the apparel, courier and DIY markets, we are also seeking to deploy our solutions on thirdparty platforms. Furthermore, with theexpansion of MySizeID through the release of our FirstLook Smart Mirror, which we are offering to brick and mortar stores to digitize the physicalstores, MySizeID is now available for online retailers utilizing the WooCoomerce, Shopify, Lightspeed, PrestaShop, Bitrix and Wix platforms and tobrick and mortar stores through GK Software POS solution while BoxSize is available on the Honeywell, Zebra Technologies and Datalogic.●Ongoing Investment in our Technology Platform. We continue to invest in building new software capabilities and extending our platform to bring thepower of accurate measurement to a broader range of applications. In particular, we seek not only to deliver size recommendations but to provide arobust, endtoend,artificial intelligence, or AIdriven platform that inspires consumer confidence and drives revenue growth by providing a superiorconsumer journey to both online and the brick and mortar stores.●Grow our database. As the usage of our measurement apps increases, our database of information including user behaviour and body measurementsgenerates valuable statistics. Such data can be used in the big data market for targeted advertising and for blind consumer data mining.●Identify and acquire synergistic businesses. In order to reduce our time to market and obtain complementary technologies, we are seeking to acquiretechnologies and businesses that are synergistic to our product offering. We recently completed an acquisition of Orgad which operates anomnichannel ecommerce platform and Naiz which provides SaaS technology solutions that solve size and fit issues for fashion ecommerce companies.●Partnerships and cooperation. In order to bring a wider solution for the retail market we are working to partner and integrate our technology withpartners that can increase our penetration and offering to the market.Market OpportunityThe global ecommerce market was $5.7 trillion in 2022, and the industry is expected to grow significantly in the coming years with no signs of slowingdown. Market specialists expect a compound annual growth rate of 27.43% from 2023 to 2028: according to data from Statista, the market is expected to reach $6.5trillion in 2023. While many sectors have found ways to increase revenue through ecommerce, ecommerce is still plagued by issues that cut into profits andnegatively impact the bottom line, such as customer returns, low consumer conversion, and associated restocking and shipping costs.Fashion/ApparelSince the onset of the COVID19 pandemic, an immense shift to digital was recorded, with 85.9% growth vs. prepandemic, according to Mastercard, andover 2 billion people worldwide who shop online, according to data from Oberlo. In November 2022, online shoppers broke records with $11.3 billion in spending onCyber Monday, driving 5.8% yearoveryear growth and making the day the biggest online shopping day of all time, according to Adobe Analytics.In 2021, fashion companies invested between 1.6% and 1.8% of their revenues in technology, according to Mckinsey, and are expected to double theinvestment by 2030 in order to keep up with digital natives and keep a competitive edge. Personalization in ecommerce and hybrid connectivity in brickandmortarretail are two key themes in the future of fashtech, according to Mckinsey’s 2022 State of Fashion Technology.7In the upcoming years, inflation is expected to impact the fashion world. As prices for goods increase, the challenge will be to inspire confidence inconsumers, via different smart digital tools. Brands will need to embrace creative digital tools and new channels to deepen customer relationships, and as Mckinseyforecasts in their State of Fashion report for 2023, they will need to execute on priorities such as sustainability and digital acceleration.The global fashion ecommerce market size is expected to grow from $744.4 billion in 2022 to $821.19 billion in 2023 at a compound annual growth rate of10.3%. In 2027, the market size is expected to grow to $1,222.32 billion, at a compound annual growth rate of 10.5%, according to BRC.Based on the importance which shoppers attribute to free shipping 50% of cart abandonment rate is due to extra shipping costs (Baymard Institute) theneed for fashion retailers to substantiate the optimal size for a customer, thus minimizing returns, has never been more crucial.As brands move online or significantly expand their online presence, we believe that developing innovative ways to connect with shoppers, both onlineand offline, has become a top priority.Shipping/ParcelAccording to Pitney Bowes, parcel revenue in 13 major countries around the world increased by 17% year over year from $420 billion in 2020 (reflecting 131billion parcels) to $491 billion in 2021 (reflecting 159 billion parcels). In the shipping/parcel industry, the dimensions of a package are critical. It is not merely themeasurement of a package or box – but rather the amount of space that the package or box will take up on a truck, airplane, or ship that will be transporting thepackage or box. Far too often, retailers use unfit packaging for their items, adding additional costs in materials and shipping fees.DIYSimilar to issues in the apparel and fashion market, big box, hardware, furniture, and DIY stores are plagued by returns due to incorrect fit andmeasurements. In an industry where precise measurement for projects is an absolute necessity, ecommerce has not grown as quickly as in other industries which webelieve is due to lack of consumer confidence in measurements at home and buying the correct item online.MySizeIDWe have released the MySizeID app for both iOS and Android which assists consumers to take highly accurate measurement of their own body in order tosize clothing in the best way possible without the need to try the clothes on before purchasing. MySizeID is designed to simplify the process of purchasing clothesonline and significantly reduce the rate of returns of poorfitting clothing. During 2022, MySizeID delivered over 23.5 million size recommendations.The application is the result of a research and development effort that combines:●anthropometric research – analyses of information pertaining to body measurements derived from a survey and the subsequent determination ofcorrelations between body parts;●body measurement algorithm research – an algorithm created by us to measure body parts; and●retailers size chart analyses – adopting a deep understanding of the size charts of retailers and the corresponding “body to garment size.”MySizeID allows consumers to create a secure, online profile of their personal measurements, which can then be utilized, with partnered online retailers, toensure that no matter the manufacturer or size chart, they will get the right fit. MySizeID operates based on the use of existing sensors in smart phones which enable,through a specific purpose application, the measurement of the body of any consumer by moving the smartphone along his or her body. The MySizeID applicationdoes not rely on user photographs or any additional hardware; all a user needs to do is scan their body with their smartphone and the application records theirmeasurements. The measurements can then be saved in our database in the cloud, enabling the user to search for clothes in various retailer websites withoutworrying about size. When a search is made, the retailer will connect to our cloud database, and then provide results based on the user’s measurements and otherparameters as he or she may have defined. This data is also saved for use when a customer enters a brickandmortar store to help serve the customer moreefficiently and to provide a better shopping experience.8Figure 1: Screenshot of MySizeID on smartphone and ecommerce websiteAs part of the integration process, we offer to the retailer five main components:●Mobile App. MySizeID comes in the form of a native app or website. Our native app can be used “as is” integrated into the retailer’s ecommercewebsite. The website users can build a body profile on the app and receive size recommendations for their profile both in the app and on a widgetintegrated with their website.9●Widget. When a consumer enters into the retailer’s website and looks for a specific item, he or she can click on the MySizeID widget which will informthe consumer of his or her recommended size, based on his or her actual measurements, as measured using the app and the item he or she is looking at.The widget has two features:AI Wizard mode allows the user to obtain size from the following parameters: gender, height, weight, belly shape, hip shape and bra size only. Thegender, height and weight questions are mandatory, while the body shape questions are optional and can be added to increase accuracy for specificapparel categories.Guest mode allows a user that does not wish to sign up to MySizeID as a user to obtain size recommendations as well.●Analytic Pixel. MySizeID analytic pixel allows retailer to track and analyze the widget usage. By adding the pixel to the retailer’s website, MySizeID BIteam can track engagement, order, and return data and provide retailers with tools to understand the advantages and benefits of MySizeID.Use your own device using MySizeID instore solution, shoppers can receive size recommendations for all store items, when shopping in the offlinestores. The shoppers can build their body profile using an easy to use 3 to 6 questions form, scan an item barcode and receive a size recommendationfor the scanned item based on their body profile and the item’s size chart.Another feature we added is the “inbetween sizing” feature. Our system can detect a user that has body dimensions that place the user inbetweenthe clothes sizes being offered and lets the user know that. A user can then choose between the two sizes according to the user’s fit preference(tight/loose/average).In addition, we have recently released our InstantApp feature which allows shoppers to generate their body measurements directly from our widget,without the need to download our mobile app. Using this technology, the shoppers can create their online profile of their personal measurements andcomplete a purchase faster and easier with minimum distractions.The body profile can be created while shoppers are viewing the page from their mobile phone, or by scanning a QR code on desktop that will open thesame page on the mobile phone.Screenshot of InstantApp widget on desktop on yumyumfashion website10●MyDash Platform. The MyDash platform is a smart backoffice system where the retailer enters all the information regarding its size charts thatcorrelates to every product in its ecommerce site, and where the retailer can access the information on its users. This system is customizable based onthe retailer’s needs. In 2021, we changed the MyDash system to increase the system’s accessibility, added walkthroughs, user guides and changed theuser interface and much more for the ease of use. We added the option to use our generic size charts, added the option upload size chart files insteadof typing the size charts values manually, added more widget styling options and changed the pairing mechanism between the size chart and theproducts to be more userfriendly.Figure 3: Screenshot of BackOffice System●FirstLook Smart Mirror. The Smart Mirror provides an interactive, mirrorlike touch display that allows brands to provide instore customers with anenhanced, online shopping experience, contactless checkout and obtains the recommended size. The MySizeIDFirstLook Smart Mirror can be placedin numerous locations throughout a retail store, including the fitting rooms (without cameras) or other hightraffic locations of the store. Highlightcapabilities of the FirstLook Smart Mirror include a 3D “Tryiton” interactive avatar experience, personalized and highly accurate sizerecommendations by MySizeID, thirdparty point of sale systems integration, styling recommendations and contactless “select and collect” at theregister feature.Illustration of MySizeID “first look” smart mirror in a fashion store11We are currently offering MySizeID technology to retailers through either a payperuse model or a monthly subscription model. In our payperusebusiness model, every time the consumer obtains a recommended size, the retailer is charged for the usage.BoxSizeBoxSize is a parcel measurement application that can provide realtime logistic data on package volumes and transportation, resulting in improvedoperational efficiency and reduced operating expenses. In addition, BoxSize allows customers to easily measure the size of their parcel with their smartphone,calculate shipping costs and arrange for a convenient pickup time for the package. BoxSize is available both on iOS and Android.In 2020 we released the “One Click” feature on BoxSize that enables the user to measure a package with just one swipe of the handheld device. Previously,measurements through BoxSize would require three separate swipes.Figure 4: Screenshot of BoxSizeOur BoxSize mobile measurement solution is available on the Honeywell Marketplace. In addition, BoxSize was approved for Honeywell’s Global VendorProgram, and is available to provide highly accurate mobile measurement solutions for thousands of Honeywell clients. We also developed a new dashboard for thecourier companies to have all the required data about each package in one place. It includes package dimensions, pictures, scan geo location and more. Thedashboard also let the courier use Webhooks, which allows him to get the information from his own system.12In 2020, we announced our partnership with Datalogic, a company focused on the automatic data capture and process automation markets. The partnershipmakes our BoxSize measurement solution available to thousands of Datalogic customers in the Transportation and Logistics vertical.Agreement with Delhivery Private Limited, IndiaWe entered into an agreement with Delhivery Private Limited, one of the largest courier pickup, delivery, and online shipping services in India. Delhivery’sreputation as a frontrunner in delivery and logistics tech makes its decision to select Boxsize a particularly strong testament to the value the solution provides.BoxSize provides Delhivery’s employees on the B2B side with critical information that will allow them to effortlessly optimize loading efficiency and add even morerealtime visibility to operations.SizeUpWe are working on additional consumer applications, including a DIY application. Our SizeUp application is a smart tape measure for the business toconsumer market which allows users to utilize their smartphone as a tape measure. The application provides measurements with an accuracy of within twocentimeters. Through the use of SizeUp, users will be able to visualize how an object or a piece of furniture will fit in an existing room in their home or office. It alsoadded Google Vision for image content analysis, object detection, and title suggestions.Currently the SizeUp app for Android and iOS is available for free for the first 30 days, after which a user will be required to register via email and pay aonetime fee of $1.99 to continue using the application. To date, revenues from downloads have been minimal.Research and DevelopmentOur research and development team are responsible for the research, algorithm, design, development, and testing of all aspects of our measurementplatform technology. We invest in these efforts to continuously improve, innovate, and add new features to our solutions.We incurred research and development expenses of approximately $1.7 million in 2022 and $4.25 million in 2021, relating to the development of itsapplications and technologies. The decrease from the corresponding period primarily resulted from share based payment in amount of $2,618,000 attributed to theshare issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021. We intend to continue to invest in our research anddevelopment capabilities to extend our platform and bring our measurement technology to a broader range of applications.13In 2022, the R&D department experienced significant success in their efforts to improve the performance of their size recommendation system. Through acombination of optimized algorithms and the incorporation of cuttingedge technologies, the team was able to achieve a threefold increase in the system’s speed.This breakthrough not only makes the system one of the fastest and most accurate on the market, but also reduced the operation costs, making it more costeffective for businesses to use. Additionally, the solution is now highly scalable, allowing it to easily adapt to the needs of businesses of any size. The R&D team isnow focused on further improving the system and exploring new applications for the technology.Sales and MarketingIn 2019, we launched a commercialization strategy that directs our sales efforts toward both sales to ecommerce players in specific vertical markets such asfashion/apparel and shipping/delivery as well as to ecommerce thirdparty platform providers. As of March 15, 2023, our products are being sold in the followingcountries: US, UK, France, Netherlands, Spain, Portugal Turkey, Germany, Israel and Italy, generating customer leads, building out a sales pipeline, and developingcustomer relationships.We believe an effective method to market our suite of products is for users to actively use and explore its capabilities. We encourage free trials of one ormore of our products in order to successfully convert those accounts to paid subscriptions.Proprietary RightsWe rely on a combination of patent, copyright, trademark and trade secret laws in the United States and other jurisdictions, as well as contractualprotections, to protect our proprietary technology.As of December 31, 2022, we owned 18 issued patents: six in Europe, four in the U.S., three in each of Russia and Japan and one in each of Canada andIsrael which expire between January 20, 2033 and August 18, 2036, and we have two additional patent applications in process. As of such date, we do not have anyregistered trademarks.We cannot provide any assurance that our proprietary rights with respect to our products will be viable or have value in the future since the validity,enforceability and type of protection of proprietary rights in softwarerelated industries are uncertain and still evolving.Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products or to obtain and use informationthat we regard as proprietary. Policing unauthorized use of our products is difficult, and while we are unable to determine the extent to which piracy of our softwareproducts exists, software piracy can be expected to be a persistent problem. In addition, the laws of some foreign countries do not protect proprietary rights to asgreat an extent as do the laws of the United States, and effective copyright, trademark, trade secret and patent protection may not be available in those jurisdictions.Our means of protecting our proprietary rights may not be adequate to protect us from the infringement or misappropriation of such rights by others.Further, in recent years, there has been significant litigation in the United States involving patents and other intellectual property rights, particularly in thesoftware and Internetrelated industries. We can become subject to intellectual property infringement claims as the number of our competitors grows and ourproducts and services overlap with competitive offerings. These claims, even if not meritorious, could be expensive to defend and could divert management’sattention from operating our business. If we become liable to third parties for infringing their intellectual property rights, we could be required to pay a substantialaward of damages and to develop noninfringing technology, obtain a license or cease selling the products that contain the infringing intellectual property. We maybe unable to develop noninfringing technology or obtain a license on commercially reasonable terms, if at all.14Government RegulationWe are subject to a number foreign and domestic laws and regulations that involve matters central to our business. These laws and regulations mayinvolve privacy, data protection, intellectual property, or other subjects. Many of the laws and regulations to which we are subject are still evolving and being testedin courts and could be interpreted in ways that could harm our business. In addition, the application and interpretation of these laws and regulations often areuncertain, particularly in the new and rapidly evolving industry in which we operate. Because global laws and regulations have continued to develop and evolverapidly, it is possible that we, our products, or our platform may not be, or may not have been, compliant with each such applicable law or regulation.In particular, we are subject to a variety of federal, state and international laws and regulations governing the processing of personal data. Many U.S. stateshave passed laws requiring notification to data subjects when there is a security breach of personally identifiable data. There are also a number of legislativeproposals pending before the U.S. Congress, various state legislative bodies and foreign governments concerning data protection. In addition, data protection lawsin Europe and other jurisdictions outside the United States can be more restrictive than those within the United States, and the interpretation and application ofthese laws are still uncertain and in flux.For example, the General Data Protection Regulation, or GDPR, which took effect on May 25, 2018, enhances data protection obligations for entities thatprocess personal data about individuals, including obligations to cooperate with European data protection authorities, implement security measures and keeprecords of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to the greater of €20 million or 4% of global annual revenue. Inaddition, the California Consumer Privacy Act of 2018, or CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and requiredeletion of their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used.The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further,failure to comply with the Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may exposeus to administrative fines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the currentenforcement measures and sanctions. Given the breadth and depth of changes in data protection obligations, meeting the requirements of GDPR and otherapplicable laws and regulations has required significant time and resources, including a review of our technology and systems currently in use against therequirements of GDPR and other applicable laws and regulations. We have taken various steps to prepare for complying with GDPR and other applicable laws andregulations however there can be no assurance that these steps are sufficient to assure compliance. Further, additional EU laws and regulations (and member states’implementations thereof) further govern the protection of individuals and of electronic communications. If our efforts to comply with GDPR or other applicable lawsand regulations are not successful, we may be subject to penalties and fines that would adversely impact our business and results of operations, and our ability touse personal data of individuals could be significantly impaired.CompetitionWe operate in a highly competitive industry that is characterized by constant change and innovation. Changes in the applications and the programinglanguages used to develop applications, devices, operating systems, and technology landscape result in evolving customer requirements. Our competitors includeTrue Fit, Fit analytics and 3DLook.The principal competitive factors in our market include the following:●High Accuracy Size Recommendations: the highest accuracy and the lowest margin of error by combining patented technology including AI and ML,size chart or spec data, and MySizeID property body data measurement;●Integration○Fast 1 week integration including size chart size chart review and product mapping○Easy 1 line of “all included” script implementation●Technical Advantages○Very small library that weighs ±50kb (minimum widget loading time on product page)○UltraFast loading and size recommendation presenting○Restful API option (API integration with any website or app)15●Optimizations○Adjustments of size charts based on performance○Widget usage analysis by FashTech and BI teams○Automatic pairing of size charts with products/collections●User Experience○Easy to use interface (1015 seconds to receive size recommendations)○Option to add/deduct questions to/from widget wizards○Users automatically receive size recommendations on all products after initial sign up●Product and platform features, architecture, reliability, privacy and security, performance, effectiveness, and supported environments;●Product extensibility and ability to integrate with other technology infrastructures;●Digital operations expertise;●Ease of use of products and platform capabilities;●Total cost of ownership;●Adherence to industry standards and certifications;●Strength of sales and marketing efforts;●Brand awareness and reputation; and●Focus on customer successWe believe we generally compete favorably with our competitors on the basis of these factors. We expect competition to increase as other established andemerging companies enter our markets, as customer requirements evolve, and as new products and technologies are introduced. We expect this to be particularlytrue as we offer a smartphonebased offering that does not need to utilize the smartphone’s camera, and our competitors may also seek to repurpose their existingofferings to provide similar solutions. Many of our competitors have substantially greater financial, technical, and other resources, greater name recognition, largersales and marketing budgets, broader distribution, and larger and more mature intellectual property portfolios.Human Capital ManagementAs of March 31, 2023, we had a total of 35 employees, of which 30 were fulltime employees, including 9 in sales and marketing, 12 in technology anddevelopment and 9 in administration and finance.None of our employees are represented by a collective bargaining agreement, nor have we experienced any work stoppage. We consider our relationshipwith our employees to be good. Our future success depends on our continuing ability to attract and retain highly qualified engineers, sales and marketing, accountmanagement, and senior management personnel.We also believe we have built a strong sales team focused on expanding into new markets through the acquisition of Naiz and our current team.We believe that our future success will depend, in part, on our continued ability to attract, hire and retain qualified personnel. In particular, we depend onthe skills, experience and performance of our senior management and research personnel. We compete for qualified personnel with other hitech companies, as wellas universities and nonprofit research institutions.16We provide competitive compensation and benefits programs to help meet the needs of our employees. In addition to salaries, these programs (which varyby country/region and employment classification) include incentive compensation plan, pension, and insurance benefits, paid time off, , among others. We also usetargeted equitybased grants with vesting conditions to facilitate retention of personnel, particularly for our key employees.The success of our business is fundamentally connected to the wellbeing of our people. Accordingly, we implemented an hybrid work policy in which theemployees can work from home twice a week.We consider our employees to be a key factor to our success and we are focused on attracting and retaining the best employees at all levels of ourbusiness. Inclusion and diversity is a strategic, business priority. We employ people based on relevant qualifications, demonstrated skills, performance and otherjobrelated factors. We do not tolerate unlawful discrimination related to employment, and strive to ensure that employment decisions related to recruitment,selection, evaluation, compensation, and development, among others, are not influenced by race, color, religion, gender, age, ethnic origin, nationality, sexualorientation, marital status, or disability. Continuous monitoring to ensure pay equity has been a focus in 2022. We have continued to improve gender balance in 2022with a focus on increasing the representation of women hired as new college graduates. We are committed to creating a trusting environment where all ideas arewelcomed and employees feel comfortable and empowered to draw on their unique experiences and backgrounds.We consider our relations with our employees to be good.Company InformationOur principal executive offices are located at HaYarden 4 St., POB 1026, Airport City, Israel 7010000, and our telephone number is +97236009030. Ourwebsite address is www.mysizeid.com. Any information contained on, or that can be accessed through, our website is not incorporated by reference into, nor is it inany way a part of, this Annual Report on Form 10K.We use our website (www.mysizeid.com) as a channel of distribution of Company information. The information we post through this channel may bedeemed material. Accordingly, investors should monitor our website, in addition to following our press releases, SEC filings and public conference calls andwebcasts. The contents of our website are not, however, a part of this Annual Report on Form 10K.Corporate HistoryWe were incorporated in the State of Delaware on September 20, 1999 under the name Topspin Medical, Inc. In December 2013, we changed our name toKnowledgetree Ventures Inc. Subsequently, in February 2014, we changed our name to MySize, Inc. In 2020, we created a subsidiary in the Russian Federation, MySize LLC.From inception through 2012, we were engaged in research and development of a medical magnetic resonance imaging, or MRI, technology forinterventional cardiology and in the development of MRI technology for use in the diagnosis and treatment of prostate cancer. In January 2012, we acquiredMetamorefix Ltd., or Metamorefix. Metamorefix was incorporated in 2007, and was engaged in the development of innovative solutions for the rehabilitation oftissues, particularly skin tissues. By the end of 2012, we ceased operations and in January 2013, we sold our entire ownership interest in Metamorefix.In September 2013, Ronen Luzon, our Chief Executive Officer, acquired control of the Company from Asher Shmuelevitch, according to which Mr. Luzonpurchased 70,238 shares of common stock from Mr. Shmuelevitch, which shares represented approximately 40% of the issued and outstanding capital stock of theCompany at such time, thus becoming a controlling shareholder of the Company. In connection with the acquisition, Mr. Luzon reached a settlement with our thencreditors pursuant to which the main creditor, Mr. Shmuelevitch, was paid a total sum of approximately $140,000 in consideration for a full and final waiver of any andall his claims that he may have relating to any monetary indebtedness of the Company to the creditors.17In February 2014, My Size Israel, our wholly owned subsidiary, entered into a Purchase Agreement, or the Purchase Agreement, with Shoshana Zigdon,who at the time was a beneficial owner of more than 20% of our outstanding shares, with respect to the acquisition by us of certain rights related to the collection ofdata for measurement purposes including rights in the venture, the method and a patent application that had been filed by the Seller (PCT/IL2013/050056), or theAssets. In consideration for the sale of the Assets, we agreed to pay to Ms. Zigdon, 18% of our operating profit, directly or indirectly connected with the Assetstogether with valueadded tax in accordance with the law for a period of seven years from the end of the development period of the aforementioned venture. Inaddition to the foregoing, the Purchase Agreement provided that all developments, improvements, knowledge and knowhow developed and/or accumulated by usafter the execution of the Purchase Agreement will be owned by us. Further, Ms. Zigdon agreed not to compete, directly or indirectly, with us in any matter relatingto the Assets for a period of seven years from the end of the development period of the venture.On May 26, 2021, we, My Size Israel, and Ms. Zigdon entered into an Amendment to Purchase Agreement, or the Amendment, which made certainamendments to the Purchase Agreement. Pursuant to the Amendment, Ms. Zigdon agreed to irrevocably waive (i) the right to repurchase certain assets related tothe collection of data for measurement purposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which our business issubstantially dependent, or the Assets, and (ii) all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My SizeIsrael under the Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation, reward orany rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights, or the Waiver. Inconsideration of the Waiver, we issued 100,000 shares of common stock to Ms. Zigdon.In September 2005, we commenced trading on the Tel Aviv Stock Exchange, or TASE. Between 2007 and 2012 we reported as a public company with theSEC. In August 2012, we suspended our reporting obligations. In mid2015 we resumed reporting as a public company. On July 25, 2016, our common stock beganpublicly trading on the Nasdaq Capital Market under the symbol “MYSZ”.ITEM 1A. RISK FACTORSAn investment in our common stock involves a high degree of risk. You should carefully consider the following risk factors and the other information inthis Annual Report on Form 10K before investing in our common stock. Our business and results of operations could be seriously harmed by any of the followingrisks. The risks set out below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterialalso may materially adversely affect our business, financial condition and/or operating results. If any of the following events occur, our business, financial conditionand results of operations could be materially adversely affected. In such case, the value and trading price of our common stock could decline, and you may lose allor part of your investment.Summary Risk FactorsThe principal factors and uncertainties that make investing in our ordinary shares risky, include, among others:Risks Related to Our Financial Position and Capital Requirements●We have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.●Our limited operating history makes it difficult to evaluate our business and prospects.●We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive and maycause the market price of our common stock to decline.●The report of our independent registered public accounting firm contains an explanatory paragraph regarding substantial doubt about our ability tocontinue as a going concern.Risks Related to Our Company and Our Business●The market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and online thirdparty resellers adopting our flagship product, MySizeID.18●Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broader marketacceptance of our products.●We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which may makeit difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.●We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increase ourcapital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.●If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations and financialcondition may be adversely affected.●If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operations andfinancial condition could be adversely affected.●The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile device applications andcustom development services.●Our growth depends, in part, on the success of our strategic relationships with third parties.●Changes in economic conditions could materially affect our business, financial condition and results of operations.●We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.●We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significant interruptionin our network or hosting and cloud services could adversely impact our operations and harm our business.●Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.●We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.●A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.●Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, data protectionand information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive and confidentialinformation. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm our business,results of operations and financial condition.●We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect our business.●We may face intense competition and expect competition to increase in the future, which could limit us in developing a customer base and generatingrevenue.●Our business operations and future development could be significantly disrupted if we lose key members of our management team.19●If we are able to expand our operations, we may be unable to successfully manage our future growth.Risks Related to Our Operations in Israel and Russia●Our headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.●Russia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.Risks Related to Our Common Stock●A more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.●Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions and adversedevelopments with respect to financial institutions and associated liquidity risk;●Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.●Our securities are traded on more than one market which may result in price variations.●We are a former “shell company” and as such are subject to certain limitations not generally applicable to other public companies.Risks Related to Our Financial Position and Capital RequirementsWe have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.We realized a net loss of approximately $8.3 million and $10.5 million for the years ended December 31, 2022 and 2021 and had an accumulated deficit of$53.5 million as at December 31, 2022. Because of the numerous risks and uncertainties associated with the development and commercialization of our products andbusiness, we are unable to predict the extent of any future losses or when we will become profitable, if at all. Expected future operating losses will have an adverseeffect on our cash resources, shareholders’ equity and working capital. Our failure to become and remain profitable could depress the value of our stock and impairour ability to raise capital, expand our business, maintain our development efforts, or continue our operations. A decline in our value could also cause you to lose allor part of your investment in us.Our limited operating history makes it difficult to evaluate our business and prospects.We have only been developing our measurement technology since 2014. Since then, our operating history has been primarily limited to research anddevelopment, pilot studies, raising capital, and more recently acquisitions and sales and marketing efforts. Therefore, it may be difficult to evaluate our business andprospects. We have not yet demonstrated an ability to commercialize our products. Consequently, any predictions about our future performance may not beaccurate, and you may not be able to fully assess our ability to complete development and/or commercialize our products, and any future products.We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive andmay cause the market price of our common stock to decline.Based on our projected cash flows and the cash balances as of the date of this Annual Report on Form 10K, our existing cash is insufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. In order to meet ourbusiness objectives in the future, we will need to raise additional capital, which may not be available on reasonable terms or at all. Additional capital would be usedto accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;20●respond to competitive pressure;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, and a number of otherfactors, many of which are outside our control, and on our financial performance. Accordingly, we cannot assure you that we will be able to successfully raiseadditional capital at all or on terms that are acceptable to us. If we cannot raise additional capital when needed, it may have a material adverse effect on our business,results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.Management has concluded that there is substantial doubt about our ability to continue as a going concern which could prevent us from obtainingnew financing on reasonable terms or at all.We have incurred significant losses and negative cash flows from operations and have an accumulated deficit that raises substantial doubt about its abilityto continue as a going concern. Our audited consolidated financial statements for the year ended December 31, 2022 were prepared under the assumption that wewould continue our operations as a going concern. Our independent registered public accounting firm has included a “going concern” explanatory paragraph in itsreport on our financial statements for the year ended December 31, 2022. If we are unable to improve our liquidity position, by, among other things, raising capitalthrough public or private offerings or reducing our expenses, we may exhaust our cash resources and will be unable to continue our operations. If we cannotcontinue as a viable entity, our shareholders would likely lose most or all of their investment in us.Risks Related to Our Company and Our BusinessThe market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and onlinethirdparty resellers adopting our flagship product, MySizeID.The market for our measurement technology is relatively new and unproven and is subject to a number of risks and uncertainties. We believe that ourfuture success will depend in large part on market adoption of our flagship product, MySizeID, by U.S. retailers and online thirdparty resellers. In order to grow ourbusiness, we intend to focus on educating retailers and resellers and other potential customers about the benefits of our measurement technology, expanding thefunctionality of our products and bringing new products to market to increase market acceptance and use of our technology. Our ability to develop and expand themarket that our products address depends upon a number of factors, including the cost savings, performance and perceived value associated with such products.The market for our products could fail to develop or there could be a reduction in interest or demand for our products as a result of a lack of consumer acceptance,technological challenges, competing products and services, weakening economic conditions and other causes. We may never successfully commercialize ourproducts and if our products fail to achieve market acceptance, this would have a material adverse effect on our business, results of operations and financialcondition.21Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broadermarket acceptance of our products.Our ability to achieve customer adoption, especially among U.S. retailers will depend, in part, on our ability to effectively organize, focus and train our salesand marketing personnel. We have limited experience selling to U.S. retailers and only recently established a U.S. sales force. We believe that there is significantcompetition for experienced sales professionals with the skills and industry knowledge that we require. Our ability to achieve significant revenue growth in thefuture will depend, in part, on our ability to recruit, train and retain a sufficient number of experienced sales professionals, particularly those with experience sellingto U.S. retailers. In addition, even if we are successful in hiring qualified sales personnel, new hires require significant training and experience before they achievefull productivity, particularly for sales efforts targeted at U.S. retailers and new markets. Because we only recently started sales efforts, we cannot predict whether, orto what extent, our sales efforts will be successful.We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which maymake it difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.In this market segment, the decision to adopt our products may require the approval of multiple technical and business decision makers, including security,compliance, procurement, operations and IT. In addition, while U.S. retailers may be willing to deploy our products on a limited basis, before they will commit todeploying our products at scale, they often require extensive education about our products and significant customer support time, engage in protracted pricingnegotiations and seek to secure readily available development resources. As a result, it is difficult to predict when we will obtain new customers and begingenerating revenue from these customers. As part of our sales cycle, we may incur significant expenses before executing a definitive agreement with a prospectivecustomer and before we are able to generate any revenue from such agreement. We have no assurance that the substantial time and money spent on our salesefforts will generate significant revenue. If conditions in the marketplace generally or with a specific prospective customer change negatively, it is possible that nodefinitive agreement will be executed, and we will be unable to recover any of these expenses. If we are not successful in targeting, supporting and streamlining oursales processes and if revenue expected to be generated from a prospective customer is not realized in the time period expected or not realized at all, our ability togrow our business, and our operating results and financial condition may be adversely affected. If our sales cycles lengthen, our future revenue could be lower thanexpected, which would have an adverse impact on our operating results and could cause our stock price to decline.22We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increaseour capital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.In order to reduce time to market and obtain complementary technologies, we are seeking to acquire technologies and businesses that are synergistic to ourproduct offering. For example, we recently acquired Orgad which operates an omnichannel ecommerce platform and Naiz which provides SaaS technology solutionsthat solve size and fit issues for fashion ecommerce companies. We evaluate from time to time various acquisitions and collaborations, including licensing oracquiring complementary technologies, intellectual property rights, or businesses. The process for acquiring a company may take from several months up to a yearand costs can vary greatly. We may also compete with others to acquire companies, and such competition may result in decreased availability of, or an increase inprice for, suitable acquisition candidates. In addition, we may not be able to consummate acquisitions or investments that we have identified as crucial to theimplementation of our strategy for other commercial or economic reasons. As a result, it may be more difficult for us to identify suitable acquisition or investmenttargets or to consummate acquisitions or investments on acceptable terms or at all. If we are not able to execute on any acquisition, we may not be able to achieve afuture growth strategy and may lose market share.In addition, the acquisition of Orgad, Naiz and any potential future acquisition, joint venture or collaboration may entail numerous potential risks, including:●increased operating expenses and cash requirements;●the assumption of additional indebtedness or contingent liabilities;●assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel;●the diversion of our management’s attention from our existing programs and initiatives in pursuing such a strategic merger or acquisition;●retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships;●risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing technologies; and●our inability to generate revenue from acquired technologies or products sufficient to meet our objectives in undertaking the acquisition or even to offsetthe associated acquisition and maintenance costs.All of the foregoing risks may be magnified as the cost, size or complexity of an acquisition or acquired company increases, or where the acquiredcompany’s products, market or business are materially different from ours, or where more than one integration is occurring simultaneously or within a concentratedperiod of time. We may not be able to obtain the necessary regulatory approvals, including those of antitrust authorities and foreign investment authorities, incountries where we seek to consummate acquisitions or make investments. For those and other reasons, we may ultimately fail to consummate an acquisition, even ifwe announce the intended acquisition.In addition, we may require significant financing to complete an acquisition or investment, whether through bank loans, raising of equity or debt orotherwise. We cannot assure you that such financing options will be available to us on reasonable terms, or at all. If we are not able to obtain such necessaryfinancing, it could have an impact on our ability to consummate a substantial acquisition or investment and execute a future growth strategy. Alternatively, we mayissue a significant number of shares as consideration for an acquisition, which would have a dilutive effect on our existing shareholders. For example, in partialconsideration for the acquisition of Orgad, we agreed to issue up to 111,602 shares of our common stock and in the Naiz acquisition we issued 240,000 shares of ourcommon stock. Furthermore, if we undertake acquisitions, we may incur large onetime expenses and acquire intangible assets that could result in significant futureamortization expense.23If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations andfinancial condition may be adversely affected.We believe that enhancing the “MySize” brand identity and increasing market awareness of our company and products, particularly among U.S. retailers, iscritical to achieving widespread acceptance of our products. Our ability to successfully develop new retailers may be adversely affected by a lack of awareness oracceptance of our brand. To the extent that we are unable to foster name recognition and affinity for our brand, our growth may be significantly delayed or impaired.The successful promotion of our brand will depend largely on our continued marketing efforts, market adoption of our products, and our ability to successfullydifferentiate our products from competing products and services. Our brand promotion may not be successful or result in revenue generation. Any incident thaterodes consumer affinity for our brand could significantly reduce our brand value and damage our business. If consumers perceive or experience a reduction inquality, or in any way believe we fail to deliver a consistently positive experience, our brand value could suffer and our business may be adversely affected.In particular, adverse weather conditions can impact guest traffic at our retailers, and, in more severe cases, cause temporary retail closures, sometimes forprolonged periods. Our business is subject to seasonal fluctuations, with retail sales typically higher during certain months, such as December. Adverse weatherconditions during our most favorable months or periods may exacerbate the effect of adverse weather on consumer traffic and may cause fluctuations in ouroperating results from quartertoquarter within a fiscal year.If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operationsand financial condition could be adversely affected.Our ability to attract new customers depends in part on our ability to enhance and improve our existing products, increase adoption and usage of ourproducts and introduce new products. The success of any enhancements or new products depends on several factors, including timely completion, adequatequality testing, actual performance quality, and overall market acceptance. Enhancements and new products that we develop may not be introduced in a timely orcosteffective manner, may contain errors or defects, may have interoperability difficulties with our platform or other products or may not achieve the broad marketacceptance necessary to generate significant revenue. Furthermore, our ability to increase the usage of our products depends, in part, on the development of newuse cases for our products and may be outside of our control. If we are unable to successfully enhance our existing products to meet evolving customerrequirements, increase adoption and usage of our products, develop new products, then our business, results of operations and financial condition would beadversely affected.The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile Apps and customdevelopment services.We must continue to enhance and improve the performance, functionality and reliability of our products. The mobile technology industry is characterizedby rapid technological change, changes in user requirements and preferences, frequent new product and services introductions embodying new technologies andthe emergence of new industry standards and practices that could render our products obsolete. Our success will depend, in part, on our ability to both internallydevelop and enhance our existing products, develop new products that address the increasingly sophisticated and varied needs of our customers, and respond totechnological advances and emerging industry standards and practices on a costeffective and timely basis. The development of our technology involvessignificant technical and business risks. We may fail to use new technologies effectively or to adapt our proprietary technology and systems to customerrequirements or emerging industry standards. If we are unable to adapt to changing market conditions, customer requirements or emerging industry standards, wemay not be able to increase our revenue and expand our business.Changes in economic conditions could materially affect our business, financial condition and results of operations.Because our primary target customers include U.S. retailers , we, together with the rest of the fashion/apparel industry, will depend upon consumerdiscretionary spending. Increases in unemployment rates, reductions in home values, increases in home foreclosures, investment losses, personal bankruptcies andreductions in access to credit and reduced consumer confidence, may impact consumers’ ability and willingness to spend discretionary dollars. In addition, volatileeconomic conditions may repress consumer confidence and discretionary spending. Any of the foregoing may have a material adverse effect on our business,financial condition and results of operations.24Our growth depends, in part, on the success of our strategic relationships with third parties.To grow our business, we anticipate that we will continue to depend on relationships with third parties, such as our customers and thirdparty platforms.Identifying partners, and negotiating and documenting relationships with them, requires significant time and resources. If we are unsuccessful in establishing ormaintaining our relationships with third parties, our ability to compete in the marketplace or to grow our revenue could be impaired, and our results of operationsmay suffer. Even if we are successful, we cannot assure you that these relationships will result in increased customer usage of our products or increased revenue.We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.We currently utilize, and plan on continuing to utilize over the current fiscal year, thirdparty networking providers and distribution through companiesincluding, but not limited to, Apple and Google as well as Shopify, WooCommerce and, Datalogic, Honeywell and Zebra to distribute our technologies. If disruptionsor capacity constraints occur, we may have no means of replacing these services, on a timely basis or at all. This could cause a material adverse condition for ouroperations and financial earnings.We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significantinterruption in our network or hosting and cloud services could adversely impact our operations and harm our business.Our technology infrastructure is critical to the performance of our products and customer satisfaction. Our products run on a complex distributed system,or what is commonly known as cloud computing. We own, operate and maintain elements of this system, but significant elements of this system are operated bythirdparties that we do not control and which would require significant time to replace. We expect this dependence on thirdparties to continue. In particular, asignificant portion, if not almost all data storage, data processing and other computing services and systems is hosted by cloud computing providers. Anydisruptions, outages and other performance problems relating to such services, including infrastructure changes, human or software errors and capacity constraints,could adversely impact our business, financial condition or results of operations.Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.We update our products on a frequent basis. Despite efforts to test our updates, errors, failures or bugs may not be found in our products until after theyare deployed to a customer. We have discovered and expect we will continue to discover errors, failures and bugs in our products and anticipate that certain of theseerrors, failures and bugs will only be discovered and remediated after deployment. Real or perceived errors, failures or bugs in our platform could result in negativepublicity, government inquiries, loss of or delay in market acceptance of our products, loss of competitive position, or claims by customers for losses sustained bythem. In such an event, we may be required, or may choose, for customer relations or other reasons, to expend additional resources in order to help correct theproblem.We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.In connection with the operation of our business, we store, process and transmit data, including personal and payment information, about our employeesand customers, a portion of which is confidential and/or personally sensitive. Unauthorized disclosure or loss of sensitive or confidential data may occur through avariety of methods. These include, but are not limited to, systems failure, employee negligence, fraud or misappropriation, or unauthorized access to or through ourinformation systems, whether by our employees or third parties, including a cyberattack by computer programmers, hackers, members of organized crime and/orstatesponsored organizations, who may develop and deploy viruses, worms or other malicious software programs. Such disclosure, loss or breach could harm ourreputation and subject us to government sanctions and liability under our contracts and laws that protect sensitive or personal data and confidential information,resulting in increased costs or loss of revenues. It is possible that security controls over sensitive or confidential data and other practices we and our thirdpartyvendors follow may not prevent the improper access to, disclosure of, or loss of such information. The potential risk of security breaches and cyberattacks mayincrease as we introduce new products and offerings. Further, data privacy is subject to frequently changing rules and regulations, which sometimes conflict amongthe various jurisdictions in which we provide services. Any failure or perceived failure to successfully manage the collection, use, disclosure, or security of personalinformation or other privacy related matters, or any failure to comply with changing regulatory requirements in this area, could result in legal liability or impairment toour reputation in the marketplace.25A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.Information security risks have generally increased in recent years, in part because of the proliferation of new technologies and the use of the Internet, andthe increased sophistication and activity of organized crime, hackers, terrorists, activists, cybercriminals and other external parties, some of which may be linked toterrorist organizations or hostile foreign governments. For example, a cybercriminal could use cybersecurity threats to gain access to sensitive information aboutanother company or to alter or disrupt news or information to be distributed by PR Newswire. Cybersecurity attacks are becoming more sophisticated and includemalicious software, ransomware, attempts to gain unauthorized access to data and other electronic security breaches that could lead to disruptions in criticalsystems, unauthorized release of confidential or otherwise protected information and corruption of data, substantially damaging our reputation. Any person whocircumvents our security measures could steal proprietary or confidential customer information or cause interruptions in our operations. We incur significant coststo protect against security breaches, and may incur significant additional costs to alleviate problems caused by any breaches. Our failure to prevent securitybreaches, or wellpublicized security breaches affecting the Internet in general, could significantly harm our reputation and business and financial results.Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, dataprotection and information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive andconfidential information. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm ourbusiness, results of operations and financial condition.We and our customers that use our products may be subject to privacy and data protectionrelated laws and regulations that impose obligations inconnection with the collection, processing and use of personal data, financial data, health or other similar data. The U.S. federal and various state and foreigngovernments have adopted or proposed limitations on, or requirements regarding, the collection, distribution, use, security and storage of personally identifiableinformation of individuals. The U.S. Federal Trade Commission and numerous state attorneys general are applying federal and state consumer protection laws toimpose standards on the online collection, use and dissemination of data, and to the security measures applied to such data.Similarly, many foreign countries and governmental bodies, including the EU member states, have laws and regulations concerning the collection and useof personally identifiable information obtained from individuals located in the EU or by businesses operating within their jurisdiction, which are often morerestrictive than those in the United States. Laws and regulations in these jurisdictions apply broadly to the collection, use, storage, disclosure and security ofpersonally identifiable information that identifies or may be used to identify an individual, such as names, telephone numbers, email addresses and, in somejurisdictions, IP addresses and other online identifiers.For example, the GDPR, which took full effect on May 25, 2018. The GDPR enhances data protection obligations for businesses and requires serviceproviders (data processors) processing personal data on behalf of customers to cooperate with European data protection authorities, implement security measuresand keep records of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to or greater of €20 million or 4% of global annualrevenues. In addition, the CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and require deletion of their personalinformation, opt out of certain personal information sharing, and receive detailed information about how their personal information is used. The CCPA provides forcivil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further, failure to comply withthe Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may expose us to administrativefines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the current enforcementmeasures and sanctions. There are also additional laws and regulations in additional jurisdictions around the world which govern the protection of consumers andof electronic communications. If our efforts to comply with GDPR, CCPA or other applicable laws and regulations are not successful, we may be subject to penaltiesand fines that would adversely impact our business and results of operations, and our ability to conduct business could be significantly impaired.26Additionally, although we endeavor to have our products comply with applicable laws and regulations, these and other obligations may be modified, theymay be interpreted and applied in an inconsistent manner from one jurisdiction to another, and they may conflict with one another, other regulatory requirements,contractual commitments or our internal practices. We also may be bound by contractual obligations relating to our collection, use and disclosure of personal,financial and other data or may find it necessary or desirable to join industry or other selfregulatory bodies or other privacy or data protectionrelatedorganizations that require compliance with their rules pertaining to privacy and data protection.We expect that there will continue to be new proposed laws, rules of selfregulatory bodies, regulations and industry standards concerning privacy, dataprotection and information security in the United States, the European Union and other jurisdictions, and we cannot yet determine the impact such future laws,rules, regulations and standards may have on our business. Moreover, existing U.S. federal and various state and foreign privacy and data protectionrelated lawsand regulations are evolving and subject to potentially differing interpretations, and various legislative and regulatory bodies may expand current or enact new lawsand regulations regarding privacy and data protectionrelated matters. Because global laws, regulations and industry standards concerning privacy and datasecurity have continued to develop and evolve rapidly, it is possible that we or our products or platform may not be, or may not have been, compliant with eachsuch applicable law, regulation and industry standard and compliance with such new laws or to changes to existing laws may impact our business and practices,require us to expend significant resources to adapt to these changes, or to stop offering our products in certain countries. These developments could adverselyaffect our business, results of operations and financial condition.We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect ourbusiness.Our ability to implement our business plan successfully depends in part on our ability to build brand recognition using our trademarks, service marks andother proprietary intellectual property, including our names and logos. We currently have no registered trademarks. While we plan to register a number of ourtrademarks; however, no assurance can be given that our trademark applications will be approved. As of December 31, 2022, we own 18 issued patents: six in Europe,four in the U.S., three in each of Russia and Japan and one in each of Canada and Israel which expire between January 20, 2033 and August 18, 2036, and we havetwo additional patent applications in process. As of such date, we do not have any registered trademarks., No assurance can be given that our patent applicationswhich are in process will be approved. If our patent applications are not approved, our ability to expand or develop our business may be negatively affected.Third parties may also oppose our trademark or patent applications, or otherwise challenge our use of the trademarks or patents. In the event that ourtrademarks or patents are successfully challenged, we could be forced to rebrand our goods and services or redesign our technology, which could result in loss ofbrand recognition, and could require us to devote resources to advertising and marketing new brands and products.If our efforts to register, maintain and protect our intellectual property are inadequate, or if any thirdparty misappropriates, dilutes or infringes on ourintellectual property, the value of our brands may be harmed, which could have a material adverse effect on our business and might prevent our brands fromachieving or maintaining market acceptance. We may also face the risk of claims that we have infringed third parties’ intellectual property rights. If third parties claimthat we infringe upon their intellectual property rights, our operating profits could be adversely affected. Any claims of intellectual property infringement, eventhose without merit, could be expensive and time consuming to defend, require us to rebrand our services, if feasible, divert management’s attention and resourcesor require us to enter into royalty or licensing agreements in order to obtain the right to use a thirdparty’s intellectual property.Any royalty or licensing agreements, if required, may not be available to us on acceptable terms or at all. A successful claim of infringement against uscould result in our being required to pay significant damages, enter into costly license or royalty agreements, or stop the sale of certain products or services, any ofwhich could have a negative impact on our operating profits and harm our future prospects.We may face intense competition and expect competition to increase in the future, which could prohibit us from developing a customer base andgenerating revenue.We face significant competition in every aspect of our business. Our competitors include True Fit, Virtusize, EasyMeasure, AR MeasureKit, Smart Measureand 3DLook. These companies may already have an established market in our industry. Most of these companies have significantly greater financial and otherresources than us and have been developing their products and services longer than we have been developing ours.27In addition, some of our larger competitors have substantially broader product offerings and leverage their relationships based on other products orincorporate functionality into existing products to gain business in a manner that discourages potential customers from purchasing our products. Potentialcustomers may also prefer to purchase from their existing solution providers rather than a new solution provider regardless of product performance or features.These larger competitors often have broader product lines and market focus and will therefore not be as susceptible to downturns in a particular market. Conditionsin our market could change rapidly and significantly as a result of technological advancements, partnering by our competitors or continuing market consolidation.New startup companies that innovate and large competitors that are making significant investments in research and development may invent similar or superiorproducts and technologies that compete with our products. In addition, some of our competitors may enter into new alliances with each other or may establish orstrengthen cooperative relationships. Any such consolidation, acquisition, alliance or cooperative relationship could lead to pricing pressure and our loss of anyfuture market share and could result in a competitor with greater financial, technical, marketing, service and other resources, all of which could harm our ability tocompete. Furthermore, organizations may be more willing to incrementally add solutions to their existing infrastructure from competitors than to replace their existinginfrastructure with our products. Any failure to meet and address these factors could harm our business, results of operations and financial condition.Our business operations and future development could be significantly disrupted if we lose key members of our management team.The success of our business continues to depend to a significant degree upon the continued contributions of our senior officers and key employees, bothindividually and as a group. Our future performance will be substantially dependent in particular on our ability to retain and motivate Ronen Luzon, our ChiefExecutive Officer, and certain of our other senior executive officers. The loss of the services of our Chief Executive Officer, senior officers or other key employeescould have a material adverse effect on our business and plans for future development. We have no reason to believe that we will lose the services of any of theseindividuals in the foreseeable future; however, we currently have no effective replacement for any of these individuals due to their experience, reputation in theindustry and special role in our operations. We also do not maintain any key man life insurance policies for any of our employees.If we are able to expand our operations, we may be unable to successfully manage our future growth.Our growth may strain our infrastructure and resources. Any such growth could place increased strain on our management, operational, financial and otherresources, and we will need to train, motivate, and manage employees, as well as attract management, sales, finance and accounting, international, technical, andother professionals. Any failure to expand these areas and implement appropriate procedures and controls in an efficient manner and at a pace consistent with ourbusiness objectives could have a material adverse effect on our business, results of operations and financial condition.Our business operations are conducted in multiple languages and could be disrupted due to miscommunications or translation errors.The success of our business continues to depend on our marketing efforts in the United States, Europe and Israel, each of which is conducted in the locallanguage. Miscommunications or inaccurate foreign language translations could have a material adverse effect on our business operations and financial conditions.Additionally, contracts, communications and complex technical information must be accurately translated into foreign languages.We will continue to incur costs and be subject to various obligations as a result of being a public company, listed in the United States and in Israel.We will continue to incur significant legal, accounting and other expenses as a result of being a public company, listed in the United States and in Israel.Although we will incur costs each year associated with being a publiclytraded company, it is possible that our actual costs of being a publiclytraded company willvary from year to year and may be different than our estimates. In estimating these costs, we take into account expenses related to insurance, legal, accounting andcompliance activities.28Furthermore, the need to maintain the corporate infrastructure demanded of a public company may divert management’s attention from implementing ourgrowth strategy, which could prevent us from improving our business, results of operations and financial condition. We have made, and will continue to make,changes to our internal controls and procedures for financial reporting and accounting systems to meet our reporting obligations as a U.S. publicly traded company.However, the measures we take may not be sufficient to satisfy our obligations as a publicly traded company.Any future or current litigation could have a material adverse impact on our results of operations, financial condition and liquidity.From time to time, we may be subject to litigation, including, among others, potential stockholder derivative actions and class actions. Risks associatedwith legal liability are difficult to assess and quantify, and their existence and magnitude can remain unknown for significant periods of time. Subject to certainexceptions, our Amended and Restated Certificate of Incorporation, or Certificate of Incorporation, and Amended and Restated Bylaws, or Bylaws, require us toindemnify and advance expenses to our officers and directors involved in legal proceedings. To date we have obtained directors and officers’ liability, or D&O,insurance to cover some of the risk exposure for our directors and officers. Such insurance generally pays the expenses (including amounts paid to plaintiffs, fines,and expenses including attorneys’ fees) of officers and directors who are the subject of a lawsuit as a result of their service to us. There can be no assurance that wewill be able to continue to maintain this insurance at reasonable rates or at all, or in amounts adequate to cover such expenses should such a lawsuit occur. WithoutD&O insurance, the amounts we would pay to indemnify our officers and directors should they be subject to legal action based on their service to us could have amaterial adverse effect on our financial condition, results of operations and liquidity. Such lawsuits, and any related publicity, may result in substantial costs and,among other things, divert the attention of management and our employees. An unfavorable outcome in any claim or proceeding against us could have a materialadverse impact on our financial position and results of operations for the period in which the unfavorable outcome occurs, and potentially in future periods. Further,any settlement announced by us may expose us to further claims against us by third parties seeking monetary or other damages which, even if unsuccessful, woulddivert management attention from the business and cause us to incur costs, possibly material, to defend such matters, which could have a material adverse impacton our financial position. See “Legal Proceedings” for more information regarding our involvement in ongoing litigation matters.Federal, state and local or Israeli tax rules may adversely impact our results of operations and financial position.We are subject to federal, state and local taxes in the U.S., as well as local taxes in Israel in respect to our operations in Israel. Although we believe our taxestimates are reasonable, if the Internal Revenue Service or other taxing authority disagrees with the positions we have taken on our tax returns, we could faceadditional tax liability, including interest and penalties. If material, payment of such additional amounts upon final adjudication of any disputes could have a materialimpact on our results of operations and financial position. In addition, complying with new tax rules, laws or regulations could impact our financial condition, andincreases to federal or state statutory tax rates and other changes in tax laws, rules or regulations may increase our effective tax rate. Any increase in our effectivetax rate could have a material impact on our financial results.A significant majority of Orgad’s revenue is from sales of products on Amazon’s U.S. Marketplace and any change, limitation or restriction on ourability to operate on Amazon’s platform or any other marketplace could have a material adverse impact to our business, results of operations, financialcondition and prospects.Orgad, our wholly owned subsidiary, operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com, eBay and others. A substantial percentage of Orgad’s revenue is driven by sales on Amazon’s U.S. marketplace and Orgad is subject toterms of service of Amazon and other maketplaces and various other seller policies and services that apply to third parties selling products on Amazon and othermarketplaces. Generally, a marketplace has the right to terminate or suspend its agreement with Orgad at any time and for any reason. Such marketplace may takeother actions against Orgad such as suspending or terminating a seller account or product listing and withholding payments owed to Orgad indefinitely. Forexample, in July 2022, Amazon deactivated Orgad’s Amazon U.S. store as a result of complaints submitted due to an error in the listed manufacturer of certainproducts on Orgad’s store. Although its account was subsequently reinstated in September 2022, if the deactivation were to occur in the future for a prolongedperiod of time, or if Amazon were to terminate Orgad’s account, this would have a material adverse effect on our business, results of operations, financial conditionand prospects. While Orgad endeavors to materially comply with the terms of services of the marketplaces on which it operates, we can provide no assurance thatthese marketplaces will have the same determination with respect to our compliance.29In addition, Amazon and other marketplaces can make changes to its platform that could require Orgad to change the manner in which it operates, limit itsability to successfully launch new products or increase its costs to operate and such changes could have an adverse effect on our business, results of operations,financial condition and prospects. Examples of changes that could impact us relate to platform fee charges (i.e., selling commissions), exclusivity, inventorywarehouse availability, excluded products and limitations on sales and marketing. Any change, limitation or restriction on our ability to sell on Amazon’s platform orany other marketplace, even if temporary, could have a material impact on our business, results of operations, financial condition and prospects.Orgad also relies on services provided by Amazon’s fulfillment platform, including Prime Certification, which provides for expedited shipping to theconsumer, an important aspect in the buying decision for consumers. For products that Orgad fulfills itself, Orgad is qualified to offer our products for sale withPrime Certification delivery. Any inability to market our products for sale with expedited delivery provided under Prime Certification could have a material impact onour business, results of operations, financial condition and prospects. Failure to remain compliant with the best fulfillment practices on Amazon’s platform couldhave a material impact on our business, results of operations, financial condition and prospects. In addition, due to the COVID19 pandemic, Amazon has changedthe amount of inventory it accepts per product for a period of time. If this were to continue it could cause us to miss sales and/or pay additional shipping costswhich would harm our business operations and financial conditions.Orgad’s business depends on its ability to build and maintain strong product listings on ecommerce platforms. Orgad may not be able to maintain andenhance our product listings if it receives unfavorable customer complaints, negative publicity or otherwise fails to live up to consumers’ expectations, whichcould materially adversely affect our business, results of operations and growth prospects.Maintaining and enhancing Orgad’s product listings is critical in expanding and growing its business. However, a significant portion of Orgad’s perceivedperformance to the customer depends on third parties outside of its control, including suppliers and thirdparty delivery agents as well as online retailers such asAmazon and eBay. Because Orgad’s agreements with its online retail partners are generally terminable at will, it may be unable to maintain these relationships, andour results of operations could fluctuate significantly from period to period. Because Orgad relies on third parties to deliver its products, it is subject to shippingdelays or disruptions caused by inclement weather, natural disasters, labor activism, health epidemics or bioterrorism. It may also experience shipping delays ordisruptions due to other carrierrelated issues relating to their own internal operational capabilities. Further, Orgad relies on the business continuity plans of thesethird parties to operate during pandemics, like the COVID19 pandemic, and it has limited ability to influence their plans, prevent delays, and/or cost increases due toreduced availability and capacity and increased required safety measures.Customer complaints or negative publicity about its products, delivery times, or marketing strategies, even if not accurate, especially on blogs, social mediawebsites and thirdparty market sites, could rapidly and severely diminish consumer view of Orgad’s product listings and result in harm to its brand. Customers mayalso make safetyrelated or other types of claims regarding products sold through our online retail partners, such as Amazon, which may result in an online retailpartner removing the product from its marketplace. We also use and rely on other services from third parties, such as our telecommunications services, and thoseservices may be subject to outages and interruptions that are not within our control.Orgad faces risks related to successfully optimizing and operating its fulfillment and customer service operations.Failures to adequately predict customer demand or otherwise optimize and operate its fulfillment and customer service operations successfully from time totime result in excess or insufficient fulfillment or customer service capacity, increased costs, and impairment charges, any of which could materially harm ourbusiness. As Orgad continues to add fulfillment and customer service capability or add new businesses with different requirements, its fulfillment and customerservice operations become increasingly complex and operating them becomes more challenging. There can be no assurance that Orgad will be able to operate ouroperations effectively.30In addition, failure to optimize inventory in our fulfillment operations increases net shipping cost by requiring longzone or partial shipments. Orgad may beunable to adequately staff its fulfillment and customer service operations. Orgad’s failure to properly handle such inventory or to accurately forecast productdemand may result in it being unable to secure sufficient storage space or to optimize its fulfillment operations or cause other unexpected costs and other harm toour business and reputation.Orgad relies on a limited number of shipping companies to deliver inventory to it and completed orders to our customers. The inability to negotiateacceptable terms with these companies or performance problems or other difficulties experienced by these companies could negatively impact our operating resultsand customer experience. In addition, Orgad’s ability to receive inbound inventory efficiently and ship completed orders to customers also may be negativelyaffected by natural or manmade disasters, extreme weather, geopolitical events and security issues, labor or trade disputes, and similar events.The variability in Orgad’s retail business places increased strain on its operations.Demand for Orgad’s product listings can fluctuate significantly for many reasons, including as a result of seasonality, promotions, product launches, orunforeseeable events, such as in response to natural or manmade disasters, extreme weather, or geopolitical events. For example, Orgad expects a disproportionateamount of our retail sales to occur during our fourth quarter. Failure to stock or restock popular products in sufficient amounts such that Orgad fails to meetcustomer demand could significantly affect our revenue and our future growth. If too many customers access the websites on which Orgad engages in onlineretailing within a short period of time due to increased demand, Orgad may experience system interruptions that make the websites unavailable or prevent us fromefficiently fulfilling orders, which may reduce the volume of goods its offers or sell and the attractiveness of its products. In addition, Orgad may be unable toadequately staff for fulfillment of orders and customer service during these peak periods and delivery and other fulfillment companies and customer service cosourcers may be unable to meet the seasonal demand.Our business is subject to the risks of earthquakes, fire, power outages, floods, health risks and other catastrophic events, and to interruption by manmade problems such as terrorism.Natural disasters, such as fire or floods, a significant power outage, telecommunications failure, terrorism, an armed conflict, cyberattacks, epidemics andpandemics such as COVID19, or other geopolitical unrest could affect our supply chain, manufacturers, logistics providers, channel partners, or endcustomers orthe economy as a whole and such disruption could impact us and the shipments and sales. These risks may be further increased if the disaster recovery plans for usand our suppliers prove to be inadequate. To the extent that any of the above should result in delays or cancellations of customer orders, the loss of customers, orthe delay in the deployment or shipment of products, our business, financial condition, and operating results would be adversely affected.For example, on January 2, 2023, Orgad experienced a fire at its warehouse in Israel. We are not aware of any casualties or injuries associated with the fire.We shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incidentdid not affect the future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of thisincident on the other parties that were involved in the incident (lessor and others that leased properties near the warehouse).Our business could be negatively impacted by unsolicited takeover proposals, by shareholder activism or by proxy contests relating to the election ofdirectors or other matters.Our business could be negatively affected as a result of an unsolicited takeover proposal, by shareholder activism or a proxy contest. During 2021, anactivist shareholder sought to make changes to our board of directors, among other matters, which ultimately resulted in us entering into a settlement agreementwith the activist shareholder and another shareholder, and for which considerable costs were incurred and absorbed significant time and attention by managementand the board of directors. A future proxy contest, unsolicited takeover proposal, or other shareholder activism relating to the election of directors or other matterswould most likely require us to incur significant legal fees and proxy solicitation expenses and require significant time and attention by management and our Boardof Directors. The potential of a proxy contest, unsolicited takeover proposal, or other shareholder activism could interfere with our ability to execute our strategicplan, give rise to perceived uncertainties as to our future direction, result in the loss of potential business opportunities or make it more difficult to attract and retainqualified personnel, any of which could materially and adversely affect our business and operating results.31Environmental, social and corporate governance (ESG) issues, including those related to climate change and sustainability, may have an adverseeffect on our business, financial condition and results of operations and damage our reputation.There is an increasing focus from certain investors, customers, consumers, employees and other stakeholders concerning ESG matters. Additionally, publicinterest and legislative pressure related to public companies’ ESG practices continue to grow. If our ESG practices fail to meet regulatory requirements or investor,customer, consumer, employee or other shareholders’ evolving expectations and standards for responsible corporate citizenship in areas including environmentalstewardship, support for local communities, Board of Director and employee diversity, human capital management, employee health and safety practices, productquality, supply chain management, corporate governance and transparency, our reputation, brand and employee retention may be negatively impacted, and ourcustomers and suppliers may be unwilling to continue to do business with us.Customers, consumers, investors and other shareholders are increasingly focusing on environmental issues, including climate change, energy and wateruse, plastic waste and other sustainability concerns. Concern over climate change may result in new or increased legal and regulatory requirements to reduce ormitigate impacts to the environment. Changing customer and consumer preferences or increased regulatory requirements may result in increased demands orrequirements. Complying with these demands or requirements could cause us to incur additional manufacturing, operating or product development costs.If we do not adapt to or comply with new regulations, including the SEC’s published proposed rules that would require companies to provide significantlyexpanded climaterelated disclosures in their periodic reporting, which may require us to incur significant additional costs to comply and impose increased oversightobligations on our management and board of directors, or fail to meet evolving investor, industry or stakeholder expectations and concerns regarding ESG issues,investors may reconsider their capital investment in our company, we may become subject to penalties, and customers and consumers may choose to stoppurchasing our products, if approved for commercialization, which could have a material adverse effect on our reputation, business or financial condition.Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions andadverse developments with respect to financial institutions and associated liquidity risk.Our business depends on the economic health of the global economies. If the conditions in the global economies remain uncertain or continue to bevolatile, or if they deteriorate, including as a result of the impact of military conflict, such as the war between Russia and Ukraine, terrorism or other geopoliticalevents, our business, operating results and financial condition may be materially adversely affected. Economic weakness, inflation and increases in interest rates,limited availability of credit, liquidity shortages and constrained capital spending have at times in the past resulted, and may in the future result, in challenging anddelayed sales cycles, slower adoption of new technologies and increased price competition, and could negatively affect our ability to forecast future periods, whichcould result in an inability to satisfy demand for our products and a loss of market share.In addition, increases in inflation raise our costs for commodities, labor, materials and services and other costs required to grow and operate our business,and failure to secure these on reasonable terms may adversely impact our financial condition. Additionally, increases in inflation, along with the uncertaintiessurrounding COVID19, geopolitical developments and global supply chain disruptions, have caused, and may in the future cause, global economic uncertainty anduncertainty about the interest rate environment, which may make it more difficult, costly or dilutive for us to secure additional financing. A failure to adequatelyrespond to these risks could have a material adverse impact on our financial condition, results of operations or cash flows.More recently, the closures of SVB and Signature Bank and their placement into receivership with the FDIC created bankspecific and broader financialinstitution liquidity risk and concerns. Although the Department of the Treasury, the Federal Reserve and the FDIC jointly released a statement that depositors atSVB and Signature Bank would have access to their funds, even those in excess of the standard FDIC insurance limits, under a systemic risk exception, futureadverse developments with respect to specific financial institutions or the broader financial services industry may lead to marketwide liquidity shortages, impair theability of companies to access nearterm working capital needs, and create additional market and economic uncertainty. There can be no assurance that future creditand financial market instability and a deterioration in confidence in economic conditions will not occur. Our general business strategy may be adversely affected byany such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions. If the current equityand credit markets deteriorate, or if adverse developments are experienced by financial institutions, it may cause shortterm liquidity risk and also make anynecessary debt or equity financing more difficult, more costly, more onerous with respect to financial and operating covenants and more dilutive. Failure to secureany necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stockprice and could require us to alter our operating plans. In addition, there is a risk that one or more of our service providers, financial institutions, manufacturers,suppliers and other partners may be adversely affected by the foregoing risks, which could directly affect our ability to attain our operating goals on schedule andon budget.Our business may be adversely affected by the impact of any renewed outbreak of the COVID19 pandemic.Public health epidemics or outbreaks could adversely impact our business. In late 2019, a novel strain of COVID19, also known as coronavirus, wasreported in Wuhan, China. While initially the outbreak was largely concentrated in China, it spread worldwide. Many countries around the world, including in Israel,implemented significant governmental measures to control the spread of the virus, including temporary closure of businesses, severe restrictions on travel and themovement of people, and other material limitations on the conduct of business. These measures haven historically resulted in work stoppages and other disruptions.If there is a resurgence of the COVID19 pandemic, this could adversely impact our operations, including among others, our sales and marketing efforts and ourability to raise additional funds, and accordingly, the impact of COVID19 could have an adverse impact on our business and our financial results.32Risks Related to Our Operations in RussiaRussia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.In addition to our Israel operations, we have operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia and we engage two software developers through a third party who are based in Ukraine. On February 24,2022, Russia invaded Ukraine. The outbreak of hostilities between the two countries could result in more widespread conflict and could have a severe adverse effecton the region.Following Russia’s actions, various countries, including the U.S., Canada, the United Kingdom, Germany and France, as well as the European Union,issued broadranging economic sanctions against Russia. Such sanctions included, among other things, a prohibition on doing business with certain Russiancompanies, officials and oligarchs; a commitment by certain countries and the European Union to remove selected Russian banks from the Society for WorldwideInterbank Financial Telecommunications (SWIFT) electronic banking network that connects banks globally; and restrictive measures to prevent the Russian CentralBank from undermining the impact of the sanctions. In response to sanctions, the Russian Central Bank raised its interest rates and banned sales of local securitiesby foreigners. Russia may take additional counter measures or retaliatory actions in the future. While diplomatic efforts have been ongoing, the conflict betweenRussia and Ukraine is currently unpredictable and has the potential to result in broadened military actions. The duration of ongoing hostilities and such sanctionsand related events cannot be predicted. Uncertainty as to future relations between Russia and the U.S. and other countries in the west, or between Russia and othereastern European countries, may have a negative impact on our operations.Such international sanctions and potential responses to such sanctions, including those that may limit or restrict transfer funds into Russia, may in thefuture significantly affect our ability to conduct our activities in Russia including paying our personnel. To date, the conflict has had minimal impact on operations .Nevertheless, we have no way to predict the progress or outcome of the situation in Ukraine, as the conflict and governmental reactions are rapidly developing andbeyond our control. Prolonged unrest, intensified military activities or more extensive sanctions impacting the region could have a material adverse effect on ouroperations, results of operations, financial condition, liquidity and business outlook.Political, military conditions or other risks in Russia could adversely affect our business.Russia is a federative state consisting of 85 constituent entities, or “subjects.” The Russian Constitution reserves some governmental powers for theRussian Government, some for the subjects and some for areas of joint competence. In addition, eight “federal districts” (“federal’nye okruga”), which are overseenby a plenipotentiary representative of the President, supplement the country’s federal system. The delineation of authority among and within the subjects is, inmany instances, unclear and contested, particularly with respect to the division of tax revenues and authority over regulatory matters. For these reasons, theRussian political system is vulnerable to tension and conflict between federal, subject and local authorities. This tension creates uncertainties in the operatingenvironment in Russia, which may prevent us from carrying out our strategy effectively. The risks associated with these events or potential events could materiallyand adversely affect the investment environment and overall consumer and entrepreneurial confidence in Russia, and our business, prospects, financial condition,hiring ability, and results of operations could be materially and adversely affected.Furthermore, high levels of corruption reportedly exist in Russia, including the bribing of officials for the purpose of initiating investigations bygovernment agencies. Corruption and other illegal activities could disrupt our ability to conduct our business effectively, and claims that the we are involved in suchcorruption or illegal activities could generate negative publicity, of which could harm our development, financial condition, results of operations or prospects.Economic and other risks in Russia could adversely affect our business.Operating a business in an emerging market such as Russia can involve a greater degree of risk than operating a business in more developed markets.Over the last two decades, the Russian economy has experienced or continues to experience at various times:●significant volatility in its GDP;33●the impact of international sanctions;●high levels of inflation;●increases in, or high, interest rates;●sudden price declines in oil and other natural resources;●instability in the local currency market;●budget deficits;●the continued operation of lossmaking enterprises due to the lack of effective bankruptcy proceedings;●capital flight; and●significant increases in poverty rates, unemployment and underemployment.The Russian economy has been subject to abrupt downturns in the past, including as a result of the invasion of Ukraine, global financial crisis, and, as anemerging market, remains particularly vulnerable to further external shocks and any future fluctuations in the global markets. Any further deterioration in the generaleconomic conditions in Russia (whether or not as a result of the events mentioned above) could have a material adverse effect on the Russian economy and mayresult in hiring and operational difficulties, as well as potential flight of human capital, which could have a material adverse effect on our business, productdevelopment and results of operations.Legal risks in Russia could materially adversely affect our operations and Russian tax legislation is subject to frequent change.Among the risks of the Russian legal system are: inconsistencies among laws, presidential decrees, and government and ministerial orders and resolutions;conflicting local, regional and federal laws and regulations; the untested nature of the independence of the judiciary and its sensitivity to economic or politicalinfluences; substantial gaps in the regulatory structure due to the delay or absence of implementing legislation; a high degree of discretion on the part ofgovernmental authorities; reported corruption within governmental entities and other governmental authorities; the relative inexperience of judges and courts ininterpreting laws applicable to complex transactions; and the unpredictability of enforcement of foreign judgments and foreign arbitral awards. Many Russian lawsand regulations are construed in a way that provides for significant administrative discretion in application and enforcement. Unlawful, selective or arbitrary actionsof the Russian Government have reportedly included the denial or withdrawal of licenses, sudden and unexpected tax audits, criminal prosecutions, and civil claims.Any of the above events may have a material adverse effect on our product development and results of operations.Despite certain improvements in the taxation system made by the Russian Government over the past decade, Russian tax legislation is still subject tofrequent change, varying interpretations, and inconsistent and selective enforcement. There are currently no clear rules for distinguishing between lawful taxoptimization and tax evasion. In addition, Russian tax laws do not contain detailed rules on the taxation in Russia of foreign companies. As such, taxpayers oftenhave to resort to court proceedings to defend their position against the Russian tax authorities. However, in the absence of consistent court practice or bindingprecedents, there is inconsistency amongst court decisions. Further, the possibility exists that the Russian Federation would impose arbitrary or onerous taxes andpenalties in the future, which could have a material adverse effect on our product development and results of operations.34Risks Related to Our Operations In IsraelOur headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.Our headquarters and most of our operations are located in central Israel and our key employees, officers and directors are residents of Israel. Accordingly,political, economic and military conditions in Israel and the surrounding region may directly affect our business. Since the establishment of the State of Israel in1948, a number of armed conflicts have taken place between Israel and its Arab neighbors. Any hostilities involving Israel or the interruption or curtailment of tradewithin Israel or between Israel and its trading partners could adversely affect our operations and results of operations and could make it more difficult for us to raisecapital. During the winter of 2008, winter of 2012 and the summer of 2014, Israel was engaged in an armed conflict with Hamas, a militia group and political partyoperating in the Gaza Strip, and during the summer of 2006, Israel was engaged in an armed conflict with Hezbollah, a Lebanese Islamist Shiite militia group andpolitical party. Israel faces political tension with respect to its relationships with Turkey, Iran and certain Arab neighbor countries. In addition, recent conflictsinvolved missile strikes against civilian targets in various parts of Israel, and negatively affected business conditions in Israel. Recent political uprisings and socialunrest in various countries in the Middle East and North Africa are affecting the political stability of those countries. This instability may lead to deterioration of thepolitical relationships that exist between Israel and these countries, and have raised concerns regarding security in the region and the potential for armed conflict.Any armed conflicts, terrorist activities or political instability in the region could adversely affect business conditions and could harm our results of operations. Forexample, any major escalation in hostilities in the region could result in a portion of our employees and service providers being called up to perform military duty foran extended period of time. Parties with whom we do business have sometimes declined to travel to Israel during periods of heightened unrest or tension, forcing usto make alternative arrangements when necessary. In addition, the political and security situation in Israel may result in parties with whom we have agreementsinvolving performance in Israel claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions insuch agreements. Any future deterioration in the political and security situation in Israel will negatively impact our business.Our commercial insurance does not cover losses that may occur as a result of events associated with the security situation in the Middle East. Althoughthe Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that thisgovernment coverage will be maintained. Any losses or damages incurred by us could have a material adverse effect on our business. Any armed conflicts orpolitical instability in the region would likely negatively affect business conditions and could harm our results of operations.Further, in the past, the State of Israel and Israeli companies have been subjected to an economic boycott. Several countries still restrict business with theState of Israel and with Israeli companies. These restrictive laws and policies may have an adverse impact on our operating results, financial condition or theexpansion of our business.The legislative power of the State resides in the Knesset, a unicameral parliament that consists of 120 members elected by nationwide voting under asystem of proportional representation. Israel’s most recent general elections were held on April 9, 2019, September 17, 2019, March 2, 2020 and November 1, 2022.The uncertainty surrounding the results of the recent elections may continue. Actual or perceived political instability in Israel or any negative changes in thepolitical environment, may individually or in the aggregate adversely affect the Israeli economy and, in turn, our business, financial condition, results of operationsand prospects.Some of our employees are obligated to perform military reserve duty in Israel.Many Israeli citizens, including our employees are obligated to perform one month, and in some cases more, of annual military reserve duty until they reachthe age of 40 (or older, for reservists with certain occupations) and, in the event of a military conflict, may be called to active duty. In response to increases interrorist activity, there have been periods of significant callups of military reservists. It is possible that there will be military reserve duty callups in the future. Ouroperations could be disrupted by such callups. Such disruption could materially adversely affect our business, results of operations and financial condition.35It may be difficult to enforce a nonIsraeli judgment against the Company or its officers and directors.The operating subsidiary of ours is incorporated in Israel. All of our executive officers and directors are not residents of the United States, and asubstantial portion of our assets and the assets of our executive officers and directors are located outside the United States. Therefore, a judgment obtained againstus, or any of these persons, including a judgment based on the civil liability provisions of the U.S. federal securities laws, may not be collectible in the United Statesand may not necessarily be enforced by an Israeli court. It also may be difficult to affect service of process on these persons in the United States or to assert U.S.securities law claims in original actions instituted in Israel. Additionally, it may be difficult for an investor, or any other person or entity, to initiate an action withrespect to U.S. securities laws in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of U.S. securities laws reasoning that Israel is not themost appropriate forum in which to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law isapplicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law often involves the testimony of expert witnesses, which can be a timeconsuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel that addresses the mattersdescribed above. As a result of the difficulty associated with enforcing a judgment against us in Israel, it may be impossible to collect any damages awarded byeither a U.S. or foreign court.Our international operations could expose us to additional risks, including exchange rate fluctuations, legal regulations and political or economicinstability that could harm our business and operating results.Our international operations expose us to the following risks which may have a material adverse effect on our business and operating results:●devaluations and fluctuations in currency exchange rates including fluctuations between the U.S. dollar and the NIS and the Russian Ruble;●costs of compliance with local laws, including labor laws and intellectual property laws;●compliance with domestic and foreign government policies, including compliance with Israeli securities laws and TASE;●changes in trade regulations and procedures affecting approval, production, pricing, marketing, reimbursement for and access to, our products;●compliance with applicable foreign anticorruption laws, antitrust/competition laws, antiBoycott Israel law and antimoney laundering laws; and●economic and geopolitical developments and conditions, including ongoing instability in global economies and financial markets, international hostilities,acts of terrorism and governmental reactions, inflation, outbreaks of contagious disease (e.g., the COVID19 pandemic) and military and political alliances.Risks Related to Our Common StockA more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.Although our common stock is listed on the Nasdaq Capital Market, it has only been traded on the Nasdaq Capital Market since July 25, 2016. There hasbeen relatively limited trading volume in the market for our common stock, and a more active, liquid public trading market may not develop or may not be sustained.Limited liquidity in the trading market for our common stock may adversely affect a stockholder’s ability to sell its shares of common stock at the time it wishes tosell them or at a price that it considers acceptable. If a more active, liquid public trading market does not develop, we may be limited in our ability to raise capital byselling shares of common stock and our ability to acquire other companies or assets by using shares of our common stock as consideration. In addition, if there is athin trading market or “float” for our stock, the market price for our common stock may fluctuate significantly more than the stock market as a whole. Without a largefloat, our common stock would be less liquid than the stock of companies with broader public ownership and, as a result, the trading prices of our common stockmay be more volatile and it would be harder for you to liquidate any investment in our common stock. Furthermore, the stock market is subject to significant priceand volume fluctuations, and the price of our common stock could fluctuate widely in response to several factors, including:●our quarterly or annual operating results;●changes in our earnings estimates;●investment recommendations by securities analysts following our business or our industry;●additions or departures of key personnel;●changes in the business, earnings estimates or market perceptions of our competitors;36●our failure to achieve operating results consistent with securities analysts’ projections;●changes in industry, general market or economic conditions;●announcements of legislative or regulatory changes; and●natural disasters (including for example, the recent fire in the Orgad warehouse) and political and economic instability, including wars, terrorism, politicalunrest, results of certain elections and votes, emergence of a pandemic, or other widespread health emergencies (or concerns over the possibility of suchan emergency, including for example, the recent the COVID19 pandemic), boycotts, adoption or expansion of government trade restrictions, and otherbusiness restrictions.The stock market has experienced extreme price and volume fluctuations in recent years that have significantly affected the quoted prices of the securitiesof many companies. The changes often appear to occur without regard to specific operating performance. The price of our common stock could fluctuate basedupon factors that have little or nothing to do with us and these fluctuations could materially reduce our stock price.Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.If any of our shareholders were to decide to sell large amounts of stock over a short period of time (presuming such sales were permitted) such sales couldcause the market price of our common stock to drop significantly, even if our business is doing well. Further, the market price of our common stock could decline as aresult of the perception that such sales could occur. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equitysecurities in the future at a time and price that we deem appropriate.Our securities are traded on more than one market which may result in price variations.Our securities have been trading on the Nasdaq Capital Market since July 2016 and on TASE since September 2005. Trading in our securities on suchexchanges occurs in different currencies (U.S. dollars on the Nasdaq Capital Market and NIS on the TASE), and at different times (due to different time zones,trading days and public holidays in the United States and Israel). The trading prices of our securities on the two exchanges may differ due to the foregoing andother factors. Any decrease in the price of our shares on the TASE could cause a decrease in the trading price of our shares on the Nasdaq Capital Market and viceversa.We are a smaller reporting company and, as a result of the reduced disclosure and governance requirements applicable to such companies, ourcommon stock may be less attractive to investors.We are a smaller reporting company, (i.e. a company with “public float” held by nonaffiliates with a market value of less than $250 million) and we areeligible to take advantage of certain exemptions from various reporting requirements applicable to other public companies. We have elected to adopt these reduceddisclosure requirements. We cannot predict if investors will find our common stock less attractive as a result of our taking advantage of these exemptions. If someinvestors find our common stock less attractive as a result of our choices, there may be a less active trading market for our common stock and our stock price may bemore volatile.We do not expect to pay any cash dividends in the foreseeable future.We have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our board of directors deems relevant. Investors should not purchase our common stock expecting to receive cash dividends. Because we do notpay dividends, and there may be limited trading, investors may not have any manner to liquidate or receive any payment on their investment. Therefore, our failureto pay dividends may cause investors to not see any return on investment even if we are successful in our business operations. In addition, because we do not paydividends we may have trouble raising additional funds, which could affect our ability to expand our business operations.37UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2022☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ________ to _________Commission file number 00137370MY SIZE, INC.(Exact name of registrant as specified in charter)Delaware510394637(State or jurisdiction ofIncorporation or organization)I.R.S EmployerIdentification No.4 Hayarden, POB 1026, Airport City, Israel7010000(Address of principal executive offices)(Zip code)+9723 6009030(Registrant’s telephone number, including area code)Securities registered pursuant to Section 12(b) of the Act:Title of each classTrading Symbol(s)Name of Each Exchange on Which RegisteredCommon Stock, par value $0.001 per shareMYSZThe Nasdaq Capital MarketSecurities registered pursuant to Section 12(g) of the Act: None.Indicate by check mark whether the registrant is a wellknown seasoned issuer as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes☒ No ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer, a smaller reporting company, or an emerginggrowth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 of theExchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☒Smaller Reporting Company☒Emerging Growth Company☐If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revisedfinancial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b2 of the Exchange Act) Yes ☐No☒Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control overfinancial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflectthe correction of an error to previously issued financial statements. ☐Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by anyof the registrant’s executive officers during the relevant recovery period pursuant to §240.10D1(b). ☐The aggregate market value of voting and nonvoting common equity held by nonaffiliates of the registrant as of June 30, 2022, the last business day of theregistrant’s most recently completed second fiscal quarter, was approximately $25,551,906.Number of shares of common stock outstanding as of March 31, 2023 was 2,446,780.Documents Incorporated by Reference: None.Table of ContentsPart IItem 1.Business2Item 1A.Risk Factors18Item 1B.Unresolved Staff Comments41Item 2.Properties41Item 3.Legal Proceedings41Item 4.Mine Safety Disclosures42Part IIItem 5.Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities43Item 6.Selected Financial Data43Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations43Item 7A.Quantitative and Qualitative Disclosures about Market Risk50Item 8.Financial Statements and Supplementary DataF1Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure51Item 9A.Controls and Procedures51Item 9B.Other Information51Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.51Part IIIItem 10.Directors, Executive Officers and Corporate Governance52Item 11.Executive Compensation57Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters60Item 13.Certain Relationships and Related Transactions, and Director Independence62Item 14.Principal Accounting Fees and Services65Part IVItem 15.Exhibits, Financial Statement Schedules66Signatures69iPART IIn this Annual Report on Form 10K, unless the context requires otherwise, the terms “we,” “our,” “us,” or “the Company” refer to MySize, Inc., a Delawarecorporation, and its subsidiaries, including MySize Israel 2014 Ltd. My Size LLC, Orgad International Marketing Ltd., or Orgad, and Naiz Bespoke Technologies, S.L,or Naiz, taken as a whole.References to “U.S. dollars” and “$” are to currency of the United States of America, and references to “NIS” are to New Israeli Shekels. Unless otherwiseindicated, U.S. dollar translations of NIS amounts presented in this Annual Report on Form 10K for the year ended on December 31, 2022 are translated using therate of NIS 3.358 to $1.00.All information in this Annual Report on Form 10K relating to shares or price per share reflects the 1for25 reverse stock split effected by us on December8, 2022.CAUTIONARY NOTE ON FORWARDLOOKING STATEMENTSThis Annual Report on Form 10K contains certain forwardlooking statements within the meaning of Section 27A of the Securities Act and Section 21E ofthe Exchange Act. Any statements in Annual Report on Form 10K about our expectations, beliefs, plans, objectives, assumptions or future events or performanceare not historical facts and are forwardlooking statements. These statements are often, but not always, made through the use of words or phrases such as“believe,” “will,” “expect,” “anticipate,” “estimate,” “intend,” “plan” and “would.” For example, statements concerning financial condition, possible or assumedfuture results of operations, growth opportunities, industry ranking, plans and objectives of management, markets for our common stock and future managementand organizational structure are all forwardlooking statements. Forwardlooking statements are not guarantees of performance. They involve known and unknownrisks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to differ materially from any results, levels ofactivity, performance or achievements expressed or implied by any forwardlooking statement.Any forwardlooking statements are qualified in their entirety by reference to the risk factors discussed throughout this Annual Report on Form 10K. Someof the risks, uncertainties and assumptions that could cause actual results to differ materially from estimates or projections contained in the forwardlookingstatements include but are not limited to:●our history of losses and needs for additional capital to fund our operations and our inability to obtain additional capital on acceptable terms, or at all;●risks related to our ability to continue as a going concern;●the new and unproven nature of the measurement technology markets;●our ability to achieve customer adoption of our products;●our ability to realize the benefits of our acquisitions of Orgad and Naiz;●our dependence on assets we purchased from a related party;●our ability to enhance our brand and increase market awareness;●our ability to introduce new products and continually enhance our product offerings;●the success of our strategic relationships with third parties;●information technology system failures or breaches of our network security;●competition from competitors;●our reliance on key members of our management team;●current or future litigation;●current or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated liquidityrisk; and●the impact of the political and security situation in Israel on our business.1The foregoing list sets forth some, but not all, of the factors that could affect our ability to achieve results described in any forwardlooking statements.You should read this Annual Report on Form 10K and the documents that we reference herein and have filed as exhibits to the Annual Report on Form 10K,completely and with the understanding that our actual future results may be materially different from what we expect. You should assume that the informationappearing in this Annual Report on Form 10K is accurate as of the date hereof. Because the risk factors referred to in this Annual Report on Form 10K, could causeactual results or outcomes to differ materially from those expressed in any forwardlooking statements made by us or on our behalf, you should not place unduereliance on any forwardlooking statements.Further, any forwardlooking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forwardlookingstatement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. New factors emergefrom time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extentto which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements. We qualify all ofthe information presented in this Annual Report on Form 10K, and particularly our forwardlooking statements, by these cautionary statements.ITEM 1. BUSINESSOverviewWe are an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile phone or through MySizeID Widget: a simple questionnaire which uses a database collected over the years.MySizeID syncs the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and only presents itemsfor purchase that match their measurements to ensure a correct fit.We are positioning ourselves as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empower brand design teams, which are designed to increase endconsumer satisfaction, contributing to a sustainable world and reduce operation costs.Recent DevelopmentsOrgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,602 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.2The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz, a limitedliability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.3The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Warehouse FireOn January 2, 2023, Orgad experienced a fire at its warehouse in Israel. we are not aware of any casualties or injuries associated with the fire. We shiftedOrgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incident did not affectthe future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of this incident on the otherparties that were involved in the incident (lessor and others that leased properties near the warehouse).January 2023 FinancingOn January 10, 2023, we entered into a securities purchase agreement, or the RD Purchase Agreement, pursuant to which we agreed to sell and issue in theRD Offering an aggregate of 162,000 of our shares of common stock, or the RD Shares, and prefunded warrants, or the Prefunded Warrants, to purchase up to279,899 shares of common stock and, in a concurrent private placement, unregistered warrants to purchase up to 883,798 shares of common stock, or the RDWarrants, consisting of Series A warrants, or Series A Warrants, to purchase up to 441,899 shares of common stock and Series B warrants, or Series B Warrants, topurchase up to 441,899 shares of common stock, at an offering price of $3.055 per RD Share and associated Series A and Series B Warrants and an offering price of$3.054 per Prefunded Warrant and associated Series A and Series B Warrants.4In addition, we entered into a securities purchase agreement, or the PIPE Purchase Agreement, and together with the RD Purchase Agreement, thePurchase Agreements, pursuant to which we agreed to sell and issue in the PIPE Offering an aggregate of up to 540,098 unregistered Prefunded Warrants andunregistered warrants to purchase up to an aggregate of 1,080,196 shares of common stock, or the PIPE Warrants and together with the RD Warrants, the Warrants,consisting of Series A Warrants to purchase up to 540,098 shares of common stock and Series B Warrants to purchase up to 540,098 shares of common stock at anoffering price of $3.054 per Prefunded Warrant and associated Series A and Series B Warrants.The Prefunded Warrants are immediately exercisable at an exercise price of $0.001 per share and will not expire until exercised in full. The Warrants areimmediately exercisable upon issuance at an exercise price of $2.805 per share, subject to adjustment as set forth therein. The Series A Warrants have a term of fiveand onehalf years from the date of issuance and the Series B Warrants have a term of 28 months from the date of issuance. The Warrants may be exercised on acashless basis if there is no effective registration statement registering the shares underlying the warrants.In connection with the PIPE Purchase Agreement, we entered into a registration rights agreement, or the Registration Rights Agreement. Pursuant to theRegistration Rights Agreement, we are required to file a resale registration statement, or the Registration Statement, with the Securities and Exchange Commission, orthe SEC, to register for resale the shares issuable upon exercise of the unregistered Prefunded Warrants and the Series A and Series B Warrants, within 20 days ofthe signing date of the PIPE Purchase Agreement, or the Signing Date, and to have such Registration Statement declared effective within 60 days after the SigningDate in the event the Registration Statement is not reviewed by the SEC, or 90 days of the Signing Date in the event the Registration Statement is reviewed by theSEC. we will be obligated to pay certain liquidated damages if we fail to maintain the effectiveness of the Registration Statement.The Purchase Agreements and the Registration Rights Agreements also contain representations, warranties, indemnification and other provisionscustomary for transactions of this nature. In addition, subject to limited exceptions, the Purchase Agreements provide that for a period of one year following theclosing of the Offerings, we will not effect or enter into an agreement to effect a “variable rate transaction” as defined in the Purchase Agreements.Aggregate gross proceeds to the Company in respect of the Offerings was approximately $3.0 million, before deducting fees payable to the placement agentand other offering expenses payable by the Company.We also entered into a letter agreement, or the Engagement Agreement, with H.C. Wainwright & Co., LLC, or Wainwright, pursuant to which Wainwrightagreed to serve as the exclusive placement agent for the Company in connection with the Offerings. We paid Wainwright a cash placement fee equal to 7% of theaggregate gross proceeds raised in the Offerings, a management fee of 1% of the aggregate gross proceeds raised in the Offerings, a nonaccountable expenseallowance of $85,000 and clearing fees of $15,950. Wainwright also received placement agent warrants, or the Placement Agent Warrants, with substantially the sameterms as the Series A Warrants issued in the Offering in an amount equal to 7% of the aggregate number of Shares and Prefunded Warrants sold in the Offerings, or68,740 shares, at an exercise price of $3.8188 per share and a term expiring on January 10, 2028.Our SolutionOur cloudbased software platform provides highly accurate sizing and measurement with broad applications including the online fashion/apparel industry,logistics and courier services and home DIY. Currently, we are mainly focusing on the ecommerce fashion/apparel industry. This proprietary technology is driven byseveral patented algorithms which are able to calculate and record measurements in a variety of novel ways. Although specific functionality varies by product, webelieve that our core solutions address the need for highly accurate measurements in a variety of consumer friendly, every day uses.5We have developed three products, MySizeID for the fashion/apparel industry, BoxSize for the logistics and courier services market and SizeUp for thehome DIY market.●MySizeID enables shoppers to generate highly accurate measurements of their body to find proper fitting clothes and accessories, through the use ofour application on their mobile phone or through a simple questionnaire if the user decides not to download the application. MySizeID syncs the user’smeasurement data to a sizing chart and presents items for purchase that match their measurements to ensure a correct fit. MySizeID is available forlicense by retailers and accessable by consumers through a web page.●BoxSize enables customers to quickly and easily measure the size and volume of a parcel to accurately calculate shipping fees. It also offers shippingcompanies a variety of precise logistical data for more efficiently managing their supply chain, providing them with an accurate way to compare thephysical package with what is in the shipping manifest. BoxSize solution is available for license on both iOS and Android operating systems. BoxSizeis available on the Honeywell Marketplace and in August 2019 was approved for Honeywell’s Independent Software Vendor Program, and MySize wasgranted an independent software vendor (ISV) status on the Zebra Technologies and on DataLogic platforms.●SizeUp is a digital tape measure that allows users to measure length, width and height of a surface by moving their smartphone from point to point ofan object or space. SizeUp is a valueadd for DIY and home improvement retailers whose customers struggle to find the appropriately sized items (likeblinds or curtains) for their homes or projects due to inaccurate measurements. SizeUp also is designed to replace rulers, tape measures and othermeasuring tools used for DIY projects. SizeUp is available for consumer download on both iOS and Android operating systems.The following are some select key features of our solutions:●Integration Capability. We design our solutions to be flexible and configurable, allowing our clients to match their use of our algorithms and softwarewith their specific business processes and workflows. Our platform has been organically developed from a common code base, data structure and userinterface, providing a consistent user experience with powerful features that are easily adaptable to our clients’ needs. The MySizeID widget can beintegrated via oneline JavaScript code, or through RESTful API;●Intuitive user experience. Our intuitive, easytouse interface is based on current technology, multiple focus groups and automatically adapts to users’devices, including mobile platforms, thereby significantly increasing accessibility of our solutions;●Big Data Generation. While we supply to the user the information he/she requires, we gather certain vital information such as body measurement andpackage volume which can be used anonymously to help the retailer acquire predictive size information on stocking, operations and consumers thatmay be in between sizes. All the information is being gathered and stored on our servers where it can be used by retailers;●NonInvasive. In taking measurements using our solution, the smartphone camera is not utilized; instead, the measurements are captured by scanningthe smartphone over the consumer’s body or package, thus ensuring greater privacy.Our Growth StrategyWe aim to drive revenue primarily through penetration of the U.S. and Europe markets through a business to business to consumer (B2B2C) model in theverticals we are targeting. We are pursuing the following growth strategies:●Sign Additional Commercial Agreements with U.S. Retailers. During 2022, we expanded our commercial agreements with Levi’s, introducing NorthAmerica (U.S. and Canada) and Latin America regions, and by extension Levis’ native apps in EU and U.S. regions. We also entered into commercialagreements with Baby Fresh, Galax, Punto Blanco, GEF France, Diesel, Gaala, Superdry, Uniontex Industries, and Temperlay London among others. Weare in various stages of discussions with U.S. and foreign retailers for the deployment of our size recommendation and measurement technology with aview to entering into additional commercial agreements.6●Pursue a TwoPronged Commercialization Strategy. We are seeking to accelerate adoption of our solutions both through direct partnerships with ecommerce websites as well as through thirdparty platform websites. While we seek to directly enter into partnerships with companies maintaining ecommerce websites in the apparel, courier and DIY markets, we are also seeking to deploy our solutions on thirdparty platforms. Furthermore, with theexpansion of MySizeID through the release of our FirstLook Smart Mirror, which we are offering to brick and mortar stores to digitize the physicalstores, MySizeID is now available for online retailers utilizing the WooCoomerce, Shopify, Lightspeed, PrestaShop, Bitrix and Wix platforms and tobrick and mortar stores through GK Software POS solution while BoxSize is available on the Honeywell, Zebra Technologies and Datalogic.●Ongoing Investment in our Technology Platform. We continue to invest in building new software capabilities and extending our platform to bring thepower of accurate measurement to a broader range of applications. In particular, we seek not only to deliver size recommendations but to provide arobust, endtoend,artificial intelligence, or AIdriven platform that inspires consumer confidence and drives revenue growth by providing a superiorconsumer journey to both online and the brick and mortar stores.●Grow our database. As the usage of our measurement apps increases, our database of information including user behaviour and body measurementsgenerates valuable statistics. Such data can be used in the big data market for targeted advertising and for blind consumer data mining.●Identify and acquire synergistic businesses. In order to reduce our time to market and obtain complementary technologies, we are seeking to acquiretechnologies and businesses that are synergistic to our product offering. We recently completed an acquisition of Orgad which operates anomnichannel ecommerce platform and Naiz which provides SaaS technology solutions that solve size and fit issues for fashion ecommerce companies.●Partnerships and cooperation. In order to bring a wider solution for the retail market we are working to partner and integrate our technology withpartners that can increase our penetration and offering to the market.Market OpportunityThe global ecommerce market was $5.7 trillion in 2022, and the industry is expected to grow significantly in the coming years with no signs of slowingdown. Market specialists expect a compound annual growth rate of 27.43% from 2023 to 2028: according to data from Statista, the market is expected to reach $6.5trillion in 2023. While many sectors have found ways to increase revenue through ecommerce, ecommerce is still plagued by issues that cut into profits andnegatively impact the bottom line, such as customer returns, low consumer conversion, and associated restocking and shipping costs.Fashion/ApparelSince the onset of the COVID19 pandemic, an immense shift to digital was recorded, with 85.9% growth vs. prepandemic, according to Mastercard, andover 2 billion people worldwide who shop online, according to data from Oberlo. In November 2022, online shoppers broke records with $11.3 billion in spending onCyber Monday, driving 5.8% yearoveryear growth and making the day the biggest online shopping day of all time, according to Adobe Analytics.In 2021, fashion companies invested between 1.6% and 1.8% of their revenues in technology, according to Mckinsey, and are expected to double theinvestment by 2030 in order to keep up with digital natives and keep a competitive edge. Personalization in ecommerce and hybrid connectivity in brickandmortarretail are two key themes in the future of fashtech, according to Mckinsey’s 2022 State of Fashion Technology.7In the upcoming years, inflation is expected to impact the fashion world. As prices for goods increase, the challenge will be to inspire confidence inconsumers, via different smart digital tools. Brands will need to embrace creative digital tools and new channels to deepen customer relationships, and as Mckinseyforecasts in their State of Fashion report for 2023, they will need to execute on priorities such as sustainability and digital acceleration.The global fashion ecommerce market size is expected to grow from $744.4 billion in 2022 to $821.19 billion in 2023 at a compound annual growth rate of10.3%. In 2027, the market size is expected to grow to $1,222.32 billion, at a compound annual growth rate of 10.5%, according to BRC.Based on the importance which shoppers attribute to free shipping 50% of cart abandonment rate is due to extra shipping costs (Baymard Institute) theneed for fashion retailers to substantiate the optimal size for a customer, thus minimizing returns, has never been more crucial.As brands move online or significantly expand their online presence, we believe that developing innovative ways to connect with shoppers, both onlineand offline, has become a top priority.Shipping/ParcelAccording to Pitney Bowes, parcel revenue in 13 major countries around the world increased by 17% year over year from $420 billion in 2020 (reflecting 131billion parcels) to $491 billion in 2021 (reflecting 159 billion parcels). In the shipping/parcel industry, the dimensions of a package are critical. It is not merely themeasurement of a package or box – but rather the amount of space that the package or box will take up on a truck, airplane, or ship that will be transporting thepackage or box. Far too often, retailers use unfit packaging for their items, adding additional costs in materials and shipping fees.DIYSimilar to issues in the apparel and fashion market, big box, hardware, furniture, and DIY stores are plagued by returns due to incorrect fit andmeasurements. In an industry where precise measurement for projects is an absolute necessity, ecommerce has not grown as quickly as in other industries which webelieve is due to lack of consumer confidence in measurements at home and buying the correct item online.MySizeIDWe have released the MySizeID app for both iOS and Android which assists consumers to take highly accurate measurement of their own body in order tosize clothing in the best way possible without the need to try the clothes on before purchasing. MySizeID is designed to simplify the process of purchasing clothesonline and significantly reduce the rate of returns of poorfitting clothing. During 2022, MySizeID delivered over 23.5 million size recommendations.The application is the result of a research and development effort that combines:●anthropometric research – analyses of information pertaining to body measurements derived from a survey and the subsequent determination ofcorrelations between body parts;●body measurement algorithm research – an algorithm created by us to measure body parts; and●retailers size chart analyses – adopting a deep understanding of the size charts of retailers and the corresponding “body to garment size.”MySizeID allows consumers to create a secure, online profile of their personal measurements, which can then be utilized, with partnered online retailers, toensure that no matter the manufacturer or size chart, they will get the right fit. MySizeID operates based on the use of existing sensors in smart phones which enable,through a specific purpose application, the measurement of the body of any consumer by moving the smartphone along his or her body. The MySizeID applicationdoes not rely on user photographs or any additional hardware; all a user needs to do is scan their body with their smartphone and the application records theirmeasurements. The measurements can then be saved in our database in the cloud, enabling the user to search for clothes in various retailer websites withoutworrying about size. When a search is made, the retailer will connect to our cloud database, and then provide results based on the user’s measurements and otherparameters as he or she may have defined. This data is also saved for use when a customer enters a brickandmortar store to help serve the customer moreefficiently and to provide a better shopping experience.8Figure 1: Screenshot of MySizeID on smartphone and ecommerce websiteAs part of the integration process, we offer to the retailer five main components:●Mobile App. MySizeID comes in the form of a native app or website. Our native app can be used “as is” integrated into the retailer’s ecommercewebsite. The website users can build a body profile on the app and receive size recommendations for their profile both in the app and on a widgetintegrated with their website.9●Widget. When a consumer enters into the retailer’s website and looks for a specific item, he or she can click on the MySizeID widget which will informthe consumer of his or her recommended size, based on his or her actual measurements, as measured using the app and the item he or she is looking at.The widget has two features:AI Wizard mode allows the user to obtain size from the following parameters: gender, height, weight, belly shape, hip shape and bra size only. Thegender, height and weight questions are mandatory, while the body shape questions are optional and can be added to increase accuracy for specificapparel categories.Guest mode allows a user that does not wish to sign up to MySizeID as a user to obtain size recommendations as well.●Analytic Pixel. MySizeID analytic pixel allows retailer to track and analyze the widget usage. By adding the pixel to the retailer’s website, MySizeID BIteam can track engagement, order, and return data and provide retailers with tools to understand the advantages and benefits of MySizeID.Use your own device using MySizeID instore solution, shoppers can receive size recommendations for all store items, when shopping in the offlinestores. The shoppers can build their body profile using an easy to use 3 to 6 questions form, scan an item barcode and receive a size recommendationfor the scanned item based on their body profile and the item’s size chart.Another feature we added is the “inbetween sizing” feature. Our system can detect a user that has body dimensions that place the user inbetweenthe clothes sizes being offered and lets the user know that. A user can then choose between the two sizes according to the user’s fit preference(tight/loose/average).In addition, we have recently released our InstantApp feature which allows shoppers to generate their body measurements directly from our widget,without the need to download our mobile app. Using this technology, the shoppers can create their online profile of their personal measurements andcomplete a purchase faster and easier with minimum distractions.The body profile can be created while shoppers are viewing the page from their mobile phone, or by scanning a QR code on desktop that will open thesame page on the mobile phone.Screenshot of InstantApp widget on desktop on yumyumfashion website10●MyDash Platform. The MyDash platform is a smart backoffice system where the retailer enters all the information regarding its size charts thatcorrelates to every product in its ecommerce site, and where the retailer can access the information on its users. This system is customizable based onthe retailer’s needs. In 2021, we changed the MyDash system to increase the system’s accessibility, added walkthroughs, user guides and changed theuser interface and much more for the ease of use. We added the option to use our generic size charts, added the option upload size chart files insteadof typing the size charts values manually, added more widget styling options and changed the pairing mechanism between the size chart and theproducts to be more userfriendly.Figure 3: Screenshot of BackOffice System●FirstLook Smart Mirror. The Smart Mirror provides an interactive, mirrorlike touch display that allows brands to provide instore customers with anenhanced, online shopping experience, contactless checkout and obtains the recommended size. The MySizeIDFirstLook Smart Mirror can be placedin numerous locations throughout a retail store, including the fitting rooms (without cameras) or other hightraffic locations of the store. Highlightcapabilities of the FirstLook Smart Mirror include a 3D “Tryiton” interactive avatar experience, personalized and highly accurate sizerecommendations by MySizeID, thirdparty point of sale systems integration, styling recommendations and contactless “select and collect” at theregister feature.Illustration of MySizeID “first look” smart mirror in a fashion store11We are currently offering MySizeID technology to retailers through either a payperuse model or a monthly subscription model. In our payperusebusiness model, every time the consumer obtains a recommended size, the retailer is charged for the usage.BoxSizeBoxSize is a parcel measurement application that can provide realtime logistic data on package volumes and transportation, resulting in improvedoperational efficiency and reduced operating expenses. In addition, BoxSize allows customers to easily measure the size of their parcel with their smartphone,calculate shipping costs and arrange for a convenient pickup time for the package. BoxSize is available both on iOS and Android.In 2020 we released the “One Click” feature on BoxSize that enables the user to measure a package with just one swipe of the handheld device. Previously,measurements through BoxSize would require three separate swipes.Figure 4: Screenshot of BoxSizeOur BoxSize mobile measurement solution is available on the Honeywell Marketplace. In addition, BoxSize was approved for Honeywell’s Global VendorProgram, and is available to provide highly accurate mobile measurement solutions for thousands of Honeywell clients. We also developed a new dashboard for thecourier companies to have all the required data about each package in one place. It includes package dimensions, pictures, scan geo location and more. Thedashboard also let the courier use Webhooks, which allows him to get the information from his own system.12In 2020, we announced our partnership with Datalogic, a company focused on the automatic data capture and process automation markets. The partnershipmakes our BoxSize measurement solution available to thousands of Datalogic customers in the Transportation and Logistics vertical.Agreement with Delhivery Private Limited, IndiaWe entered into an agreement with Delhivery Private Limited, one of the largest courier pickup, delivery, and online shipping services in India. Delhivery’sreputation as a frontrunner in delivery and logistics tech makes its decision to select Boxsize a particularly strong testament to the value the solution provides.BoxSize provides Delhivery’s employees on the B2B side with critical information that will allow them to effortlessly optimize loading efficiency and add even morerealtime visibility to operations.SizeUpWe are working on additional consumer applications, including a DIY application. Our SizeUp application is a smart tape measure for the business toconsumer market which allows users to utilize their smartphone as a tape measure. The application provides measurements with an accuracy of within twocentimeters. Through the use of SizeUp, users will be able to visualize how an object or a piece of furniture will fit in an existing room in their home or office. It alsoadded Google Vision for image content analysis, object detection, and title suggestions.Currently the SizeUp app for Android and iOS is available for free for the first 30 days, after which a user will be required to register via email and pay aonetime fee of $1.99 to continue using the application. To date, revenues from downloads have been minimal.Research and DevelopmentOur research and development team are responsible for the research, algorithm, design, development, and testing of all aspects of our measurementplatform technology. We invest in these efforts to continuously improve, innovate, and add new features to our solutions.We incurred research and development expenses of approximately $1.7 million in 2022 and $4.25 million in 2021, relating to the development of itsapplications and technologies. The decrease from the corresponding period primarily resulted from share based payment in amount of $2,618,000 attributed to theshare issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021. We intend to continue to invest in our research anddevelopment capabilities to extend our platform and bring our measurement technology to a broader range of applications.13In 2022, the R&D department experienced significant success in their efforts to improve the performance of their size recommendation system. Through acombination of optimized algorithms and the incorporation of cuttingedge technologies, the team was able to achieve a threefold increase in the system’s speed.This breakthrough not only makes the system one of the fastest and most accurate on the market, but also reduced the operation costs, making it more costeffective for businesses to use. Additionally, the solution is now highly scalable, allowing it to easily adapt to the needs of businesses of any size. The R&D team isnow focused on further improving the system and exploring new applications for the technology.Sales and MarketingIn 2019, we launched a commercialization strategy that directs our sales efforts toward both sales to ecommerce players in specific vertical markets such asfashion/apparel and shipping/delivery as well as to ecommerce thirdparty platform providers. As of March 15, 2023, our products are being sold in the followingcountries: US, UK, France, Netherlands, Spain, Portugal Turkey, Germany, Israel and Italy, generating customer leads, building out a sales pipeline, and developingcustomer relationships.We believe an effective method to market our suite of products is for users to actively use and explore its capabilities. We encourage free trials of one ormore of our products in order to successfully convert those accounts to paid subscriptions.Proprietary RightsWe rely on a combination of patent, copyright, trademark and trade secret laws in the United States and other jurisdictions, as well as contractualprotections, to protect our proprietary technology.As of December 31, 2022, we owned 18 issued patents: six in Europe, four in the U.S., three in each of Russia and Japan and one in each of Canada andIsrael which expire between January 20, 2033 and August 18, 2036, and we have two additional patent applications in process. As of such date, we do not have anyregistered trademarks.We cannot provide any assurance that our proprietary rights with respect to our products will be viable or have value in the future since the validity,enforceability and type of protection of proprietary rights in softwarerelated industries are uncertain and still evolving.Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products or to obtain and use informationthat we regard as proprietary. Policing unauthorized use of our products is difficult, and while we are unable to determine the extent to which piracy of our softwareproducts exists, software piracy can be expected to be a persistent problem. In addition, the laws of some foreign countries do not protect proprietary rights to asgreat an extent as do the laws of the United States, and effective copyright, trademark, trade secret and patent protection may not be available in those jurisdictions.Our means of protecting our proprietary rights may not be adequate to protect us from the infringement or misappropriation of such rights by others.Further, in recent years, there has been significant litigation in the United States involving patents and other intellectual property rights, particularly in thesoftware and Internetrelated industries. We can become subject to intellectual property infringement claims as the number of our competitors grows and ourproducts and services overlap with competitive offerings. These claims, even if not meritorious, could be expensive to defend and could divert management’sattention from operating our business. If we become liable to third parties for infringing their intellectual property rights, we could be required to pay a substantialaward of damages and to develop noninfringing technology, obtain a license or cease selling the products that contain the infringing intellectual property. We maybe unable to develop noninfringing technology or obtain a license on commercially reasonable terms, if at all.14Government RegulationWe are subject to a number foreign and domestic laws and regulations that involve matters central to our business. These laws and regulations mayinvolve privacy, data protection, intellectual property, or other subjects. Many of the laws and regulations to which we are subject are still evolving and being testedin courts and could be interpreted in ways that could harm our business. In addition, the application and interpretation of these laws and regulations often areuncertain, particularly in the new and rapidly evolving industry in which we operate. Because global laws and regulations have continued to develop and evolverapidly, it is possible that we, our products, or our platform may not be, or may not have been, compliant with each such applicable law or regulation.In particular, we are subject to a variety of federal, state and international laws and regulations governing the processing of personal data. Many U.S. stateshave passed laws requiring notification to data subjects when there is a security breach of personally identifiable data. There are also a number of legislativeproposals pending before the U.S. Congress, various state legislative bodies and foreign governments concerning data protection. In addition, data protection lawsin Europe and other jurisdictions outside the United States can be more restrictive than those within the United States, and the interpretation and application ofthese laws are still uncertain and in flux.For example, the General Data Protection Regulation, or GDPR, which took effect on May 25, 2018, enhances data protection obligations for entities thatprocess personal data about individuals, including obligations to cooperate with European data protection authorities, implement security measures and keeprecords of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to the greater of €20 million or 4% of global annual revenue. Inaddition, the California Consumer Privacy Act of 2018, or CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and requiredeletion of their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used.The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further,failure to comply with the Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may exposeus to administrative fines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the currentenforcement measures and sanctions. Given the breadth and depth of changes in data protection obligations, meeting the requirements of GDPR and otherapplicable laws and regulations has required significant time and resources, including a review of our technology and systems currently in use against therequirements of GDPR and other applicable laws and regulations. We have taken various steps to prepare for complying with GDPR and other applicable laws andregulations however there can be no assurance that these steps are sufficient to assure compliance. Further, additional EU laws and regulations (and member states’implementations thereof) further govern the protection of individuals and of electronic communications. If our efforts to comply with GDPR or other applicable lawsand regulations are not successful, we may be subject to penalties and fines that would adversely impact our business and results of operations, and our ability touse personal data of individuals could be significantly impaired.CompetitionWe operate in a highly competitive industry that is characterized by constant change and innovation. Changes in the applications and the programinglanguages used to develop applications, devices, operating systems, and technology landscape result in evolving customer requirements. Our competitors includeTrue Fit, Fit analytics and 3DLook.The principal competitive factors in our market include the following:●High Accuracy Size Recommendations: the highest accuracy and the lowest margin of error by combining patented technology including AI and ML,size chart or spec data, and MySizeID property body data measurement;●Integration○Fast 1 week integration including size chart size chart review and product mapping○Easy 1 line of “all included” script implementation●Technical Advantages○Very small library that weighs ±50kb (minimum widget loading time on product page)○UltraFast loading and size recommendation presenting○Restful API option (API integration with any website or app)15●Optimizations○Adjustments of size charts based on performance○Widget usage analysis by FashTech and BI teams○Automatic pairing of size charts with products/collections●User Experience○Easy to use interface (1015 seconds to receive size recommendations)○Option to add/deduct questions to/from widget wizards○Users automatically receive size recommendations on all products after initial sign up●Product and platform features, architecture, reliability, privacy and security, performance, effectiveness, and supported environments;●Product extensibility and ability to integrate with other technology infrastructures;●Digital operations expertise;●Ease of use of products and platform capabilities;●Total cost of ownership;●Adherence to industry standards and certifications;●Strength of sales and marketing efforts;●Brand awareness and reputation; and●Focus on customer successWe believe we generally compete favorably with our competitors on the basis of these factors. We expect competition to increase as other established andemerging companies enter our markets, as customer requirements evolve, and as new products and technologies are introduced. We expect this to be particularlytrue as we offer a smartphonebased offering that does not need to utilize the smartphone’s camera, and our competitors may also seek to repurpose their existingofferings to provide similar solutions. Many of our competitors have substantially greater financial, technical, and other resources, greater name recognition, largersales and marketing budgets, broader distribution, and larger and more mature intellectual property portfolios.Human Capital ManagementAs of March 31, 2023, we had a total of 35 employees, of which 30 were fulltime employees, including 9 in sales and marketing, 12 in technology anddevelopment and 9 in administration and finance.None of our employees are represented by a collective bargaining agreement, nor have we experienced any work stoppage. We consider our relationshipwith our employees to be good. Our future success depends on our continuing ability to attract and retain highly qualified engineers, sales and marketing, accountmanagement, and senior management personnel.We also believe we have built a strong sales team focused on expanding into new markets through the acquisition of Naiz and our current team.We believe that our future success will depend, in part, on our continued ability to attract, hire and retain qualified personnel. In particular, we depend onthe skills, experience and performance of our senior management and research personnel. We compete for qualified personnel with other hitech companies, as wellas universities and nonprofit research institutions.16We provide competitive compensation and benefits programs to help meet the needs of our employees. In addition to salaries, these programs (which varyby country/region and employment classification) include incentive compensation plan, pension, and insurance benefits, paid time off, , among others. We also usetargeted equitybased grants with vesting conditions to facilitate retention of personnel, particularly for our key employees.The success of our business is fundamentally connected to the wellbeing of our people. Accordingly, we implemented an hybrid work policy in which theemployees can work from home twice a week.We consider our employees to be a key factor to our success and we are focused on attracting and retaining the best employees at all levels of ourbusiness. Inclusion and diversity is a strategic, business priority. We employ people based on relevant qualifications, demonstrated skills, performance and otherjobrelated factors. We do not tolerate unlawful discrimination related to employment, and strive to ensure that employment decisions related to recruitment,selection, evaluation, compensation, and development, among others, are not influenced by race, color, religion, gender, age, ethnic origin, nationality, sexualorientation, marital status, or disability. Continuous monitoring to ensure pay equity has been a focus in 2022. We have continued to improve gender balance in 2022with a focus on increasing the representation of women hired as new college graduates. We are committed to creating a trusting environment where all ideas arewelcomed and employees feel comfortable and empowered to draw on their unique experiences and backgrounds.We consider our relations with our employees to be good.Company InformationOur principal executive offices are located at HaYarden 4 St., POB 1026, Airport City, Israel 7010000, and our telephone number is +97236009030. Ourwebsite address is www.mysizeid.com. Any information contained on, or that can be accessed through, our website is not incorporated by reference into, nor is it inany way a part of, this Annual Report on Form 10K.We use our website (www.mysizeid.com) as a channel of distribution of Company information. The information we post through this channel may bedeemed material. Accordingly, investors should monitor our website, in addition to following our press releases, SEC filings and public conference calls andwebcasts. The contents of our website are not, however, a part of this Annual Report on Form 10K.Corporate HistoryWe were incorporated in the State of Delaware on September 20, 1999 under the name Topspin Medical, Inc. In December 2013, we changed our name toKnowledgetree Ventures Inc. Subsequently, in February 2014, we changed our name to MySize, Inc. In 2020, we created a subsidiary in the Russian Federation, MySize LLC.From inception through 2012, we were engaged in research and development of a medical magnetic resonance imaging, or MRI, technology forinterventional cardiology and in the development of MRI technology for use in the diagnosis and treatment of prostate cancer. In January 2012, we acquiredMetamorefix Ltd., or Metamorefix. Metamorefix was incorporated in 2007, and was engaged in the development of innovative solutions for the rehabilitation oftissues, particularly skin tissues. By the end of 2012, we ceased operations and in January 2013, we sold our entire ownership interest in Metamorefix.In September 2013, Ronen Luzon, our Chief Executive Officer, acquired control of the Company from Asher Shmuelevitch, according to which Mr. Luzonpurchased 70,238 shares of common stock from Mr. Shmuelevitch, which shares represented approximately 40% of the issued and outstanding capital stock of theCompany at such time, thus becoming a controlling shareholder of the Company. In connection with the acquisition, Mr. Luzon reached a settlement with our thencreditors pursuant to which the main creditor, Mr. Shmuelevitch, was paid a total sum of approximately $140,000 in consideration for a full and final waiver of any andall his claims that he may have relating to any monetary indebtedness of the Company to the creditors.17In February 2014, My Size Israel, our wholly owned subsidiary, entered into a Purchase Agreement, or the Purchase Agreement, with Shoshana Zigdon,who at the time was a beneficial owner of more than 20% of our outstanding shares, with respect to the acquisition by us of certain rights related to the collection ofdata for measurement purposes including rights in the venture, the method and a patent application that had been filed by the Seller (PCT/IL2013/050056), or theAssets. In consideration for the sale of the Assets, we agreed to pay to Ms. Zigdon, 18% of our operating profit, directly or indirectly connected with the Assetstogether with valueadded tax in accordance with the law for a period of seven years from the end of the development period of the aforementioned venture. Inaddition to the foregoing, the Purchase Agreement provided that all developments, improvements, knowledge and knowhow developed and/or accumulated by usafter the execution of the Purchase Agreement will be owned by us. Further, Ms. Zigdon agreed not to compete, directly or indirectly, with us in any matter relatingto the Assets for a period of seven years from the end of the development period of the venture.On May 26, 2021, we, My Size Israel, and Ms. Zigdon entered into an Amendment to Purchase Agreement, or the Amendment, which made certainamendments to the Purchase Agreement. Pursuant to the Amendment, Ms. Zigdon agreed to irrevocably waive (i) the right to repurchase certain assets related tothe collection of data for measurement purposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which our business issubstantially dependent, or the Assets, and (ii) all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My SizeIsrael under the Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation, reward orany rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights, or the Waiver. Inconsideration of the Waiver, we issued 100,000 shares of common stock to Ms. Zigdon.In September 2005, we commenced trading on the Tel Aviv Stock Exchange, or TASE. Between 2007 and 2012 we reported as a public company with theSEC. In August 2012, we suspended our reporting obligations. In mid2015 we resumed reporting as a public company. On July 25, 2016, our common stock beganpublicly trading on the Nasdaq Capital Market under the symbol “MYSZ”.ITEM 1A. RISK FACTORSAn investment in our common stock involves a high degree of risk. You should carefully consider the following risk factors and the other information inthis Annual Report on Form 10K before investing in our common stock. Our business and results of operations could be seriously harmed by any of the followingrisks. The risks set out below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterialalso may materially adversely affect our business, financial condition and/or operating results. If any of the following events occur, our business, financial conditionand results of operations could be materially adversely affected. In such case, the value and trading price of our common stock could decline, and you may lose allor part of your investment.Summary Risk FactorsThe principal factors and uncertainties that make investing in our ordinary shares risky, include, among others:Risks Related to Our Financial Position and Capital Requirements●We have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.●Our limited operating history makes it difficult to evaluate our business and prospects.●We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive and maycause the market price of our common stock to decline.●The report of our independent registered public accounting firm contains an explanatory paragraph regarding substantial doubt about our ability tocontinue as a going concern.Risks Related to Our Company and Our Business●The market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and online thirdparty resellers adopting our flagship product, MySizeID.18●Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broader marketacceptance of our products.●We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which may makeit difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.●We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increase ourcapital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.●If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations and financialcondition may be adversely affected.●If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operations andfinancial condition could be adversely affected.●The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile device applications andcustom development services.●Our growth depends, in part, on the success of our strategic relationships with third parties.●Changes in economic conditions could materially affect our business, financial condition and results of operations.●We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.●We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significant interruptionin our network or hosting and cloud services could adversely impact our operations and harm our business.●Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.●We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.●A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.●Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, data protectionand information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive and confidentialinformation. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm our business,results of operations and financial condition.●We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect our business.●We may face intense competition and expect competition to increase in the future, which could limit us in developing a customer base and generatingrevenue.●Our business operations and future development could be significantly disrupted if we lose key members of our management team.19●If we are able to expand our operations, we may be unable to successfully manage our future growth.Risks Related to Our Operations in Israel and Russia●Our headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.●Russia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.Risks Related to Our Common Stock●A more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.●Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions and adversedevelopments with respect to financial institutions and associated liquidity risk;●Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.●Our securities are traded on more than one market which may result in price variations.●We are a former “shell company” and as such are subject to certain limitations not generally applicable to other public companies.Risks Related to Our Financial Position and Capital RequirementsWe have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.We realized a net loss of approximately $8.3 million and $10.5 million for the years ended December 31, 2022 and 2021 and had an accumulated deficit of$53.5 million as at December 31, 2022. Because of the numerous risks and uncertainties associated with the development and commercialization of our products andbusiness, we are unable to predict the extent of any future losses or when we will become profitable, if at all. Expected future operating losses will have an adverseeffect on our cash resources, shareholders’ equity and working capital. Our failure to become and remain profitable could depress the value of our stock and impairour ability to raise capital, expand our business, maintain our development efforts, or continue our operations. A decline in our value could also cause you to lose allor part of your investment in us.Our limited operating history makes it difficult to evaluate our business and prospects.We have only been developing our measurement technology since 2014. Since then, our operating history has been primarily limited to research anddevelopment, pilot studies, raising capital, and more recently acquisitions and sales and marketing efforts. Therefore, it may be difficult to evaluate our business andprospects. We have not yet demonstrated an ability to commercialize our products. Consequently, any predictions about our future performance may not beaccurate, and you may not be able to fully assess our ability to complete development and/or commercialize our products, and any future products.We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive andmay cause the market price of our common stock to decline.Based on our projected cash flows and the cash balances as of the date of this Annual Report on Form 10K, our existing cash is insufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. In order to meet ourbusiness objectives in the future, we will need to raise additional capital, which may not be available on reasonable terms or at all. Additional capital would be usedto accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;20●respond to competitive pressure;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, and a number of otherfactors, many of which are outside our control, and on our financial performance. Accordingly, we cannot assure you that we will be able to successfully raiseadditional capital at all or on terms that are acceptable to us. If we cannot raise additional capital when needed, it may have a material adverse effect on our business,results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.Management has concluded that there is substantial doubt about our ability to continue as a going concern which could prevent us from obtainingnew financing on reasonable terms or at all.We have incurred significant losses and negative cash flows from operations and have an accumulated deficit that raises substantial doubt about its abilityto continue as a going concern. Our audited consolidated financial statements for the year ended December 31, 2022 were prepared under the assumption that wewould continue our operations as a going concern. Our independent registered public accounting firm has included a “going concern” explanatory paragraph in itsreport on our financial statements for the year ended December 31, 2022. If we are unable to improve our liquidity position, by, among other things, raising capitalthrough public or private offerings or reducing our expenses, we may exhaust our cash resources and will be unable to continue our operations. If we cannotcontinue as a viable entity, our shareholders would likely lose most or all of their investment in us.Risks Related to Our Company and Our BusinessThe market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and onlinethirdparty resellers adopting our flagship product, MySizeID.The market for our measurement technology is relatively new and unproven and is subject to a number of risks and uncertainties. We believe that ourfuture success will depend in large part on market adoption of our flagship product, MySizeID, by U.S. retailers and online thirdparty resellers. In order to grow ourbusiness, we intend to focus on educating retailers and resellers and other potential customers about the benefits of our measurement technology, expanding thefunctionality of our products and bringing new products to market to increase market acceptance and use of our technology. Our ability to develop and expand themarket that our products address depends upon a number of factors, including the cost savings, performance and perceived value associated with such products.The market for our products could fail to develop or there could be a reduction in interest or demand for our products as a result of a lack of consumer acceptance,technological challenges, competing products and services, weakening economic conditions and other causes. We may never successfully commercialize ourproducts and if our products fail to achieve market acceptance, this would have a material adverse effect on our business, results of operations and financialcondition.21Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broadermarket acceptance of our products.Our ability to achieve customer adoption, especially among U.S. retailers will depend, in part, on our ability to effectively organize, focus and train our salesand marketing personnel. We have limited experience selling to U.S. retailers and only recently established a U.S. sales force. We believe that there is significantcompetition for experienced sales professionals with the skills and industry knowledge that we require. Our ability to achieve significant revenue growth in thefuture will depend, in part, on our ability to recruit, train and retain a sufficient number of experienced sales professionals, particularly those with experience sellingto U.S. retailers. In addition, even if we are successful in hiring qualified sales personnel, new hires require significant training and experience before they achievefull productivity, particularly for sales efforts targeted at U.S. retailers and new markets. Because we only recently started sales efforts, we cannot predict whether, orto what extent, our sales efforts will be successful.We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which maymake it difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.In this market segment, the decision to adopt our products may require the approval of multiple technical and business decision makers, including security,compliance, procurement, operations and IT. In addition, while U.S. retailers may be willing to deploy our products on a limited basis, before they will commit todeploying our products at scale, they often require extensive education about our products and significant customer support time, engage in protracted pricingnegotiations and seek to secure readily available development resources. As a result, it is difficult to predict when we will obtain new customers and begingenerating revenue from these customers. As part of our sales cycle, we may incur significant expenses before executing a definitive agreement with a prospectivecustomer and before we are able to generate any revenue from such agreement. We have no assurance that the substantial time and money spent on our salesefforts will generate significant revenue. If conditions in the marketplace generally or with a specific prospective customer change negatively, it is possible that nodefinitive agreement will be executed, and we will be unable to recover any of these expenses. If we are not successful in targeting, supporting and streamlining oursales processes and if revenue expected to be generated from a prospective customer is not realized in the time period expected or not realized at all, our ability togrow our business, and our operating results and financial condition may be adversely affected. If our sales cycles lengthen, our future revenue could be lower thanexpected, which would have an adverse impact on our operating results and could cause our stock price to decline.22We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increaseour capital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.In order to reduce time to market and obtain complementary technologies, we are seeking to acquire technologies and businesses that are synergistic to ourproduct offering. For example, we recently acquired Orgad which operates an omnichannel ecommerce platform and Naiz which provides SaaS technology solutionsthat solve size and fit issues for fashion ecommerce companies. We evaluate from time to time various acquisitions and collaborations, including licensing oracquiring complementary technologies, intellectual property rights, or businesses. The process for acquiring a company may take from several months up to a yearand costs can vary greatly. We may also compete with others to acquire companies, and such competition may result in decreased availability of, or an increase inprice for, suitable acquisition candidates. In addition, we may not be able to consummate acquisitions or investments that we have identified as crucial to theimplementation of our strategy for other commercial or economic reasons. As a result, it may be more difficult for us to identify suitable acquisition or investmenttargets or to consummate acquisitions or investments on acceptable terms or at all. If we are not able to execute on any acquisition, we may not be able to achieve afuture growth strategy and may lose market share.In addition, the acquisition of Orgad, Naiz and any potential future acquisition, joint venture or collaboration may entail numerous potential risks, including:●increased operating expenses and cash requirements;●the assumption of additional indebtedness or contingent liabilities;●assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel;●the diversion of our management’s attention from our existing programs and initiatives in pursuing such a strategic merger or acquisition;●retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships;●risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing technologies; and●our inability to generate revenue from acquired technologies or products sufficient to meet our objectives in undertaking the acquisition or even to offsetthe associated acquisition and maintenance costs.All of the foregoing risks may be magnified as the cost, size or complexity of an acquisition or acquired company increases, or where the acquiredcompany’s products, market or business are materially different from ours, or where more than one integration is occurring simultaneously or within a concentratedperiod of time. We may not be able to obtain the necessary regulatory approvals, including those of antitrust authorities and foreign investment authorities, incountries where we seek to consummate acquisitions or make investments. For those and other reasons, we may ultimately fail to consummate an acquisition, even ifwe announce the intended acquisition.In addition, we may require significant financing to complete an acquisition or investment, whether through bank loans, raising of equity or debt orotherwise. We cannot assure you that such financing options will be available to us on reasonable terms, or at all. If we are not able to obtain such necessaryfinancing, it could have an impact on our ability to consummate a substantial acquisition or investment and execute a future growth strategy. Alternatively, we mayissue a significant number of shares as consideration for an acquisition, which would have a dilutive effect on our existing shareholders. For example, in partialconsideration for the acquisition of Orgad, we agreed to issue up to 111,602 shares of our common stock and in the Naiz acquisition we issued 240,000 shares of ourcommon stock. Furthermore, if we undertake acquisitions, we may incur large onetime expenses and acquire intangible assets that could result in significant futureamortization expense.23If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations andfinancial condition may be adversely affected.We believe that enhancing the “MySize” brand identity and increasing market awareness of our company and products, particularly among U.S. retailers, iscritical to achieving widespread acceptance of our products. Our ability to successfully develop new retailers may be adversely affected by a lack of awareness oracceptance of our brand. To the extent that we are unable to foster name recognition and affinity for our brand, our growth may be significantly delayed or impaired.The successful promotion of our brand will depend largely on our continued marketing efforts, market adoption of our products, and our ability to successfullydifferentiate our products from competing products and services. Our brand promotion may not be successful or result in revenue generation. Any incident thaterodes consumer affinity for our brand could significantly reduce our brand value and damage our business. If consumers perceive or experience a reduction inquality, or in any way believe we fail to deliver a consistently positive experience, our brand value could suffer and our business may be adversely affected.In particular, adverse weather conditions can impact guest traffic at our retailers, and, in more severe cases, cause temporary retail closures, sometimes forprolonged periods. Our business is subject to seasonal fluctuations, with retail sales typically higher during certain months, such as December. Adverse weatherconditions during our most favorable months or periods may exacerbate the effect of adverse weather on consumer traffic and may cause fluctuations in ouroperating results from quartertoquarter within a fiscal year.If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operationsand financial condition could be adversely affected.Our ability to attract new customers depends in part on our ability to enhance and improve our existing products, increase adoption and usage of ourproducts and introduce new products. The success of any enhancements or new products depends on several factors, including timely completion, adequatequality testing, actual performance quality, and overall market acceptance. Enhancements and new products that we develop may not be introduced in a timely orcosteffective manner, may contain errors or defects, may have interoperability difficulties with our platform or other products or may not achieve the broad marketacceptance necessary to generate significant revenue. Furthermore, our ability to increase the usage of our products depends, in part, on the development of newuse cases for our products and may be outside of our control. If we are unable to successfully enhance our existing products to meet evolving customerrequirements, increase adoption and usage of our products, develop new products, then our business, results of operations and financial condition would beadversely affected.The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile Apps and customdevelopment services.We must continue to enhance and improve the performance, functionality and reliability of our products. The mobile technology industry is characterizedby rapid technological change, changes in user requirements and preferences, frequent new product and services introductions embodying new technologies andthe emergence of new industry standards and practices that could render our products obsolete. Our success will depend, in part, on our ability to both internallydevelop and enhance our existing products, develop new products that address the increasingly sophisticated and varied needs of our customers, and respond totechnological advances and emerging industry standards and practices on a costeffective and timely basis. The development of our technology involvessignificant technical and business risks. We may fail to use new technologies effectively or to adapt our proprietary technology and systems to customerrequirements or emerging industry standards. If we are unable to adapt to changing market conditions, customer requirements or emerging industry standards, wemay not be able to increase our revenue and expand our business.Changes in economic conditions could materially affect our business, financial condition and results of operations.Because our primary target customers include U.S. retailers , we, together with the rest of the fashion/apparel industry, will depend upon consumerdiscretionary spending. Increases in unemployment rates, reductions in home values, increases in home foreclosures, investment losses, personal bankruptcies andreductions in access to credit and reduced consumer confidence, may impact consumers’ ability and willingness to spend discretionary dollars. In addition, volatileeconomic conditions may repress consumer confidence and discretionary spending. Any of the foregoing may have a material adverse effect on our business,financial condition and results of operations.24Our growth depends, in part, on the success of our strategic relationships with third parties.To grow our business, we anticipate that we will continue to depend on relationships with third parties, such as our customers and thirdparty platforms.Identifying partners, and negotiating and documenting relationships with them, requires significant time and resources. If we are unsuccessful in establishing ormaintaining our relationships with third parties, our ability to compete in the marketplace or to grow our revenue could be impaired, and our results of operationsmay suffer. Even if we are successful, we cannot assure you that these relationships will result in increased customer usage of our products or increased revenue.We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.We currently utilize, and plan on continuing to utilize over the current fiscal year, thirdparty networking providers and distribution through companiesincluding, but not limited to, Apple and Google as well as Shopify, WooCommerce and, Datalogic, Honeywell and Zebra to distribute our technologies. If disruptionsor capacity constraints occur, we may have no means of replacing these services, on a timely basis or at all. This could cause a material adverse condition for ouroperations and financial earnings.We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significantinterruption in our network or hosting and cloud services could adversely impact our operations and harm our business.Our technology infrastructure is critical to the performance of our products and customer satisfaction. Our products run on a complex distributed system,or what is commonly known as cloud computing. We own, operate and maintain elements of this system, but significant elements of this system are operated bythirdparties that we do not control and which would require significant time to replace. We expect this dependence on thirdparties to continue. In particular, asignificant portion, if not almost all data storage, data processing and other computing services and systems is hosted by cloud computing providers. Anydisruptions, outages and other performance problems relating to such services, including infrastructure changes, human or software errors and capacity constraints,could adversely impact our business, financial condition or results of operations.Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.We update our products on a frequent basis. Despite efforts to test our updates, errors, failures or bugs may not be found in our products until after theyare deployed to a customer. We have discovered and expect we will continue to discover errors, failures and bugs in our products and anticipate that certain of theseerrors, failures and bugs will only be discovered and remediated after deployment. Real or perceived errors, failures or bugs in our platform could result in negativepublicity, government inquiries, loss of or delay in market acceptance of our products, loss of competitive position, or claims by customers for losses sustained bythem. In such an event, we may be required, or may choose, for customer relations or other reasons, to expend additional resources in order to help correct theproblem.We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.In connection with the operation of our business, we store, process and transmit data, including personal and payment information, about our employeesand customers, a portion of which is confidential and/or personally sensitive. Unauthorized disclosure or loss of sensitive or confidential data may occur through avariety of methods. These include, but are not limited to, systems failure, employee negligence, fraud or misappropriation, or unauthorized access to or through ourinformation systems, whether by our employees or third parties, including a cyberattack by computer programmers, hackers, members of organized crime and/orstatesponsored organizations, who may develop and deploy viruses, worms or other malicious software programs. Such disclosure, loss or breach could harm ourreputation and subject us to government sanctions and liability under our contracts and laws that protect sensitive or personal data and confidential information,resulting in increased costs or loss of revenues. It is possible that security controls over sensitive or confidential data and other practices we and our thirdpartyvendors follow may not prevent the improper access to, disclosure of, or loss of such information. The potential risk of security breaches and cyberattacks mayincrease as we introduce new products and offerings. Further, data privacy is subject to frequently changing rules and regulations, which sometimes conflict amongthe various jurisdictions in which we provide services. Any failure or perceived failure to successfully manage the collection, use, disclosure, or security of personalinformation or other privacy related matters, or any failure to comply with changing regulatory requirements in this area, could result in legal liability or impairment toour reputation in the marketplace.25A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.Information security risks have generally increased in recent years, in part because of the proliferation of new technologies and the use of the Internet, andthe increased sophistication and activity of organized crime, hackers, terrorists, activists, cybercriminals and other external parties, some of which may be linked toterrorist organizations or hostile foreign governments. For example, a cybercriminal could use cybersecurity threats to gain access to sensitive information aboutanother company or to alter or disrupt news or information to be distributed by PR Newswire. Cybersecurity attacks are becoming more sophisticated and includemalicious software, ransomware, attempts to gain unauthorized access to data and other electronic security breaches that could lead to disruptions in criticalsystems, unauthorized release of confidential or otherwise protected information and corruption of data, substantially damaging our reputation. Any person whocircumvents our security measures could steal proprietary or confidential customer information or cause interruptions in our operations. We incur significant coststo protect against security breaches, and may incur significant additional costs to alleviate problems caused by any breaches. Our failure to prevent securitybreaches, or wellpublicized security breaches affecting the Internet in general, could significantly harm our reputation and business and financial results.Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, dataprotection and information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive andconfidential information. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm ourbusiness, results of operations and financial condition.We and our customers that use our products may be subject to privacy and data protectionrelated laws and regulations that impose obligations inconnection with the collection, processing and use of personal data, financial data, health or other similar data. The U.S. federal and various state and foreigngovernments have adopted or proposed limitations on, or requirements regarding, the collection, distribution, use, security and storage of personally identifiableinformation of individuals. The U.S. Federal Trade Commission and numerous state attorneys general are applying federal and state consumer protection laws toimpose standards on the online collection, use and dissemination of data, and to the security measures applied to such data.Similarly, many foreign countries and governmental bodies, including the EU member states, have laws and regulations concerning the collection and useof personally identifiable information obtained from individuals located in the EU or by businesses operating within their jurisdiction, which are often morerestrictive than those in the United States. Laws and regulations in these jurisdictions apply broadly to the collection, use, storage, disclosure and security ofpersonally identifiable information that identifies or may be used to identify an individual, such as names, telephone numbers, email addresses and, in somejurisdictions, IP addresses and other online identifiers.For example, the GDPR, which took full effect on May 25, 2018. The GDPR enhances data protection obligations for businesses and requires serviceproviders (data processors) processing personal data on behalf of customers to cooperate with European data protection authorities, implement security measuresand keep records of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to or greater of €20 million or 4% of global annualrevenues. In addition, the CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and require deletion of their personalinformation, opt out of certain personal information sharing, and receive detailed information about how their personal information is used. The CCPA provides forcivil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further, failure to comply withthe Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may expose us to administrativefines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the current enforcementmeasures and sanctions. There are also additional laws and regulations in additional jurisdictions around the world which govern the protection of consumers andof electronic communications. If our efforts to comply with GDPR, CCPA or other applicable laws and regulations are not successful, we may be subject to penaltiesand fines that would adversely impact our business and results of operations, and our ability to conduct business could be significantly impaired.26Additionally, although we endeavor to have our products comply with applicable laws and regulations, these and other obligations may be modified, theymay be interpreted and applied in an inconsistent manner from one jurisdiction to another, and they may conflict with one another, other regulatory requirements,contractual commitments or our internal practices. We also may be bound by contractual obligations relating to our collection, use and disclosure of personal,financial and other data or may find it necessary or desirable to join industry or other selfregulatory bodies or other privacy or data protectionrelatedorganizations that require compliance with their rules pertaining to privacy and data protection.We expect that there will continue to be new proposed laws, rules of selfregulatory bodies, regulations and industry standards concerning privacy, dataprotection and information security in the United States, the European Union and other jurisdictions, and we cannot yet determine the impact such future laws,rules, regulations and standards may have on our business. Moreover, existing U.S. federal and various state and foreign privacy and data protectionrelated lawsand regulations are evolving and subject to potentially differing interpretations, and various legislative and regulatory bodies may expand current or enact new lawsand regulations regarding privacy and data protectionrelated matters. Because global laws, regulations and industry standards concerning privacy and datasecurity have continued to develop and evolve rapidly, it is possible that we or our products or platform may not be, or may not have been, compliant with eachsuch applicable law, regulation and industry standard and compliance with such new laws or to changes to existing laws may impact our business and practices,require us to expend significant resources to adapt to these changes, or to stop offering our products in certain countries. These developments could adverselyaffect our business, results of operations and financial condition.We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect ourbusiness.Our ability to implement our business plan successfully depends in part on our ability to build brand recognition using our trademarks, service marks andother proprietary intellectual property, including our names and logos. We currently have no registered trademarks. While we plan to register a number of ourtrademarks; however, no assurance can be given that our trademark applications will be approved. As of December 31, 2022, we own 18 issued patents: six in Europe,four in the U.S., three in each of Russia and Japan and one in each of Canada and Israel which expire between January 20, 2033 and August 18, 2036, and we havetwo additional patent applications in process. As of such date, we do not have any registered trademarks., No assurance can be given that our patent applicationswhich are in process will be approved. If our patent applications are not approved, our ability to expand or develop our business may be negatively affected.Third parties may also oppose our trademark or patent applications, or otherwise challenge our use of the trademarks or patents. In the event that ourtrademarks or patents are successfully challenged, we could be forced to rebrand our goods and services or redesign our technology, which could result in loss ofbrand recognition, and could require us to devote resources to advertising and marketing new brands and products.If our efforts to register, maintain and protect our intellectual property are inadequate, or if any thirdparty misappropriates, dilutes or infringes on ourintellectual property, the value of our brands may be harmed, which could have a material adverse effect on our business and might prevent our brands fromachieving or maintaining market acceptance. We may also face the risk of claims that we have infringed third parties’ intellectual property rights. If third parties claimthat we infringe upon their intellectual property rights, our operating profits could be adversely affected. Any claims of intellectual property infringement, eventhose without merit, could be expensive and time consuming to defend, require us to rebrand our services, if feasible, divert management’s attention and resourcesor require us to enter into royalty or licensing agreements in order to obtain the right to use a thirdparty’s intellectual property.Any royalty or licensing agreements, if required, may not be available to us on acceptable terms or at all. A successful claim of infringement against uscould result in our being required to pay significant damages, enter into costly license or royalty agreements, or stop the sale of certain products or services, any ofwhich could have a negative impact on our operating profits and harm our future prospects.We may face intense competition and expect competition to increase in the future, which could prohibit us from developing a customer base andgenerating revenue.We face significant competition in every aspect of our business. Our competitors include True Fit, Virtusize, EasyMeasure, AR MeasureKit, Smart Measureand 3DLook. These companies may already have an established market in our industry. Most of these companies have significantly greater financial and otherresources than us and have been developing their products and services longer than we have been developing ours.27In addition, some of our larger competitors have substantially broader product offerings and leverage their relationships based on other products orincorporate functionality into existing products to gain business in a manner that discourages potential customers from purchasing our products. Potentialcustomers may also prefer to purchase from their existing solution providers rather than a new solution provider regardless of product performance or features.These larger competitors often have broader product lines and market focus and will therefore not be as susceptible to downturns in a particular market. Conditionsin our market could change rapidly and significantly as a result of technological advancements, partnering by our competitors or continuing market consolidation.New startup companies that innovate and large competitors that are making significant investments in research and development may invent similar or superiorproducts and technologies that compete with our products. In addition, some of our competitors may enter into new alliances with each other or may establish orstrengthen cooperative relationships. Any such consolidation, acquisition, alliance or cooperative relationship could lead to pricing pressure and our loss of anyfuture market share and could result in a competitor with greater financial, technical, marketing, service and other resources, all of which could harm our ability tocompete. Furthermore, organizations may be more willing to incrementally add solutions to their existing infrastructure from competitors than to replace their existinginfrastructure with our products. Any failure to meet and address these factors could harm our business, results of operations and financial condition.Our business operations and future development could be significantly disrupted if we lose key members of our management team.The success of our business continues to depend to a significant degree upon the continued contributions of our senior officers and key employees, bothindividually and as a group. Our future performance will be substantially dependent in particular on our ability to retain and motivate Ronen Luzon, our ChiefExecutive Officer, and certain of our other senior executive officers. The loss of the services of our Chief Executive Officer, senior officers or other key employeescould have a material adverse effect on our business and plans for future development. We have no reason to believe that we will lose the services of any of theseindividuals in the foreseeable future; however, we currently have no effective replacement for any of these individuals due to their experience, reputation in theindustry and special role in our operations. We also do not maintain any key man life insurance policies for any of our employees.If we are able to expand our operations, we may be unable to successfully manage our future growth.Our growth may strain our infrastructure and resources. Any such growth could place increased strain on our management, operational, financial and otherresources, and we will need to train, motivate, and manage employees, as well as attract management, sales, finance and accounting, international, technical, andother professionals. Any failure to expand these areas and implement appropriate procedures and controls in an efficient manner and at a pace consistent with ourbusiness objectives could have a material adverse effect on our business, results of operations and financial condition.Our business operations are conducted in multiple languages and could be disrupted due to miscommunications or translation errors.The success of our business continues to depend on our marketing efforts in the United States, Europe and Israel, each of which is conducted in the locallanguage. Miscommunications or inaccurate foreign language translations could have a material adverse effect on our business operations and financial conditions.Additionally, contracts, communications and complex technical information must be accurately translated into foreign languages.We will continue to incur costs and be subject to various obligations as a result of being a public company, listed in the United States and in Israel.We will continue to incur significant legal, accounting and other expenses as a result of being a public company, listed in the United States and in Israel.Although we will incur costs each year associated with being a publiclytraded company, it is possible that our actual costs of being a publiclytraded company willvary from year to year and may be different than our estimates. In estimating these costs, we take into account expenses related to insurance, legal, accounting andcompliance activities.28Furthermore, the need to maintain the corporate infrastructure demanded of a public company may divert management’s attention from implementing ourgrowth strategy, which could prevent us from improving our business, results of operations and financial condition. We have made, and will continue to make,changes to our internal controls and procedures for financial reporting and accounting systems to meet our reporting obligations as a U.S. publicly traded company.However, the measures we take may not be sufficient to satisfy our obligations as a publicly traded company.Any future or current litigation could have a material adverse impact on our results of operations, financial condition and liquidity.From time to time, we may be subject to litigation, including, among others, potential stockholder derivative actions and class actions. Risks associatedwith legal liability are difficult to assess and quantify, and their existence and magnitude can remain unknown for significant periods of time. Subject to certainexceptions, our Amended and Restated Certificate of Incorporation, or Certificate of Incorporation, and Amended and Restated Bylaws, or Bylaws, require us toindemnify and advance expenses to our officers and directors involved in legal proceedings. To date we have obtained directors and officers’ liability, or D&O,insurance to cover some of the risk exposure for our directors and officers. Such insurance generally pays the expenses (including amounts paid to plaintiffs, fines,and expenses including attorneys’ fees) of officers and directors who are the subject of a lawsuit as a result of their service to us. There can be no assurance that wewill be able to continue to maintain this insurance at reasonable rates or at all, or in amounts adequate to cover such expenses should such a lawsuit occur. WithoutD&O insurance, the amounts we would pay to indemnify our officers and directors should they be subject to legal action based on their service to us could have amaterial adverse effect on our financial condition, results of operations and liquidity. Such lawsuits, and any related publicity, may result in substantial costs and,among other things, divert the attention of management and our employees. An unfavorable outcome in any claim or proceeding against us could have a materialadverse impact on our financial position and results of operations for the period in which the unfavorable outcome occurs, and potentially in future periods. Further,any settlement announced by us may expose us to further claims against us by third parties seeking monetary or other damages which, even if unsuccessful, woulddivert management attention from the business and cause us to incur costs, possibly material, to defend such matters, which could have a material adverse impacton our financial position. See “Legal Proceedings” for more information regarding our involvement in ongoing litigation matters.Federal, state and local or Israeli tax rules may adversely impact our results of operations and financial position.We are subject to federal, state and local taxes in the U.S., as well as local taxes in Israel in respect to our operations in Israel. Although we believe our taxestimates are reasonable, if the Internal Revenue Service or other taxing authority disagrees with the positions we have taken on our tax returns, we could faceadditional tax liability, including interest and penalties. If material, payment of such additional amounts upon final adjudication of any disputes could have a materialimpact on our results of operations and financial position. In addition, complying with new tax rules, laws or regulations could impact our financial condition, andincreases to federal or state statutory tax rates and other changes in tax laws, rules or regulations may increase our effective tax rate. Any increase in our effectivetax rate could have a material impact on our financial results.A significant majority of Orgad’s revenue is from sales of products on Amazon’s U.S. Marketplace and any change, limitation or restriction on ourability to operate on Amazon’s platform or any other marketplace could have a material adverse impact to our business, results of operations, financialcondition and prospects.Orgad, our wholly owned subsidiary, operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com, eBay and others. A substantial percentage of Orgad’s revenue is driven by sales on Amazon’s U.S. marketplace and Orgad is subject toterms of service of Amazon and other maketplaces and various other seller policies and services that apply to third parties selling products on Amazon and othermarketplaces. Generally, a marketplace has the right to terminate or suspend its agreement with Orgad at any time and for any reason. Such marketplace may takeother actions against Orgad such as suspending or terminating a seller account or product listing and withholding payments owed to Orgad indefinitely. Forexample, in July 2022, Amazon deactivated Orgad’s Amazon U.S. store as a result of complaints submitted due to an error in the listed manufacturer of certainproducts on Orgad’s store. Although its account was subsequently reinstated in September 2022, if the deactivation were to occur in the future for a prolongedperiod of time, or if Amazon were to terminate Orgad’s account, this would have a material adverse effect on our business, results of operations, financial conditionand prospects. While Orgad endeavors to materially comply with the terms of services of the marketplaces on which it operates, we can provide no assurance thatthese marketplaces will have the same determination with respect to our compliance.29In addition, Amazon and other marketplaces can make changes to its platform that could require Orgad to change the manner in which it operates, limit itsability to successfully launch new products or increase its costs to operate and such changes could have an adverse effect on our business, results of operations,financial condition and prospects. Examples of changes that could impact us relate to platform fee charges (i.e., selling commissions), exclusivity, inventorywarehouse availability, excluded products and limitations on sales and marketing. Any change, limitation or restriction on our ability to sell on Amazon’s platform orany other marketplace, even if temporary, could have a material impact on our business, results of operations, financial condition and prospects.Orgad also relies on services provided by Amazon’s fulfillment platform, including Prime Certification, which provides for expedited shipping to theconsumer, an important aspect in the buying decision for consumers. For products that Orgad fulfills itself, Orgad is qualified to offer our products for sale withPrime Certification delivery. Any inability to market our products for sale with expedited delivery provided under Prime Certification could have a material impact onour business, results of operations, financial condition and prospects. Failure to remain compliant with the best fulfillment practices on Amazon’s platform couldhave a material impact on our business, results of operations, financial condition and prospects. In addition, due to the COVID19 pandemic, Amazon has changedthe amount of inventory it accepts per product for a period of time. If this were to continue it could cause us to miss sales and/or pay additional shipping costswhich would harm our business operations and financial conditions.Orgad’s business depends on its ability to build and maintain strong product listings on ecommerce platforms. Orgad may not be able to maintain andenhance our product listings if it receives unfavorable customer complaints, negative publicity or otherwise fails to live up to consumers’ expectations, whichcould materially adversely affect our business, results of operations and growth prospects.Maintaining and enhancing Orgad’s product listings is critical in expanding and growing its business. However, a significant portion of Orgad’s perceivedperformance to the customer depends on third parties outside of its control, including suppliers and thirdparty delivery agents as well as online retailers such asAmazon and eBay. Because Orgad’s agreements with its online retail partners are generally terminable at will, it may be unable to maintain these relationships, andour results of operations could fluctuate significantly from period to period. Because Orgad relies on third parties to deliver its products, it is subject to shippingdelays or disruptions caused by inclement weather, natural disasters, labor activism, health epidemics or bioterrorism. It may also experience shipping delays ordisruptions due to other carrierrelated issues relating to their own internal operational capabilities. Further, Orgad relies on the business continuity plans of thesethird parties to operate during pandemics, like the COVID19 pandemic, and it has limited ability to influence their plans, prevent delays, and/or cost increases due toreduced availability and capacity and increased required safety measures.Customer complaints or negative publicity about its products, delivery times, or marketing strategies, even if not accurate, especially on blogs, social mediawebsites and thirdparty market sites, could rapidly and severely diminish consumer view of Orgad’s product listings and result in harm to its brand. Customers mayalso make safetyrelated or other types of claims regarding products sold through our online retail partners, such as Amazon, which may result in an online retailpartner removing the product from its marketplace. We also use and rely on other services from third parties, such as our telecommunications services, and thoseservices may be subject to outages and interruptions that are not within our control.Orgad faces risks related to successfully optimizing and operating its fulfillment and customer service operations.Failures to adequately predict customer demand or otherwise optimize and operate its fulfillment and customer service operations successfully from time totime result in excess or insufficient fulfillment or customer service capacity, increased costs, and impairment charges, any of which could materially harm ourbusiness. As Orgad continues to add fulfillment and customer service capability or add new businesses with different requirements, its fulfillment and customerservice operations become increasingly complex and operating them becomes more challenging. There can be no assurance that Orgad will be able to operate ouroperations effectively.30In addition, failure to optimize inventory in our fulfillment operations increases net shipping cost by requiring longzone or partial shipments. Orgad may beunable to adequately staff its fulfillment and customer service operations. Orgad’s failure to properly handle such inventory or to accurately forecast productdemand may result in it being unable to secure sufficient storage space or to optimize its fulfillment operations or cause other unexpected costs and other harm toour business and reputation.Orgad relies on a limited number of shipping companies to deliver inventory to it and completed orders to our customers. The inability to negotiateacceptable terms with these companies or performance problems or other difficulties experienced by these companies could negatively impact our operating resultsand customer experience. In addition, Orgad’s ability to receive inbound inventory efficiently and ship completed orders to customers also may be negativelyaffected by natural or manmade disasters, extreme weather, geopolitical events and security issues, labor or trade disputes, and similar events.The variability in Orgad’s retail business places increased strain on its operations.Demand for Orgad’s product listings can fluctuate significantly for many reasons, including as a result of seasonality, promotions, product launches, orunforeseeable events, such as in response to natural or manmade disasters, extreme weather, or geopolitical events. For example, Orgad expects a disproportionateamount of our retail sales to occur during our fourth quarter. Failure to stock or restock popular products in sufficient amounts such that Orgad fails to meetcustomer demand could significantly affect our revenue and our future growth. If too many customers access the websites on which Orgad engages in onlineretailing within a short period of time due to increased demand, Orgad may experience system interruptions that make the websites unavailable or prevent us fromefficiently fulfilling orders, which may reduce the volume of goods its offers or sell and the attractiveness of its products. In addition, Orgad may be unable toadequately staff for fulfillment of orders and customer service during these peak periods and delivery and other fulfillment companies and customer service cosourcers may be unable to meet the seasonal demand.Our business is subject to the risks of earthquakes, fire, power outages, floods, health risks and other catastrophic events, and to interruption by manmade problems such as terrorism.Natural disasters, such as fire or floods, a significant power outage, telecommunications failure, terrorism, an armed conflict, cyberattacks, epidemics andpandemics such as COVID19, or other geopolitical unrest could affect our supply chain, manufacturers, logistics providers, channel partners, or endcustomers orthe economy as a whole and such disruption could impact us and the shipments and sales. These risks may be further increased if the disaster recovery plans for usand our suppliers prove to be inadequate. To the extent that any of the above should result in delays or cancellations of customer orders, the loss of customers, orthe delay in the deployment or shipment of products, our business, financial condition, and operating results would be adversely affected.For example, on January 2, 2023, Orgad experienced a fire at its warehouse in Israel. We are not aware of any casualties or injuries associated with the fire.We shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incidentdid not affect the future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of thisincident on the other parties that were involved in the incident (lessor and others that leased properties near the warehouse).Our business could be negatively impacted by unsolicited takeover proposals, by shareholder activism or by proxy contests relating to the election ofdirectors or other matters.Our business could be negatively affected as a result of an unsolicited takeover proposal, by shareholder activism or a proxy contest. During 2021, anactivist shareholder sought to make changes to our board of directors, among other matters, which ultimately resulted in us entering into a settlement agreementwith the activist shareholder and another shareholder, and for which considerable costs were incurred and absorbed significant time and attention by managementand the board of directors. A future proxy contest, unsolicited takeover proposal, or other shareholder activism relating to the election of directors or other matterswould most likely require us to incur significant legal fees and proxy solicitation expenses and require significant time and attention by management and our Boardof Directors. The potential of a proxy contest, unsolicited takeover proposal, or other shareholder activism could interfere with our ability to execute our strategicplan, give rise to perceived uncertainties as to our future direction, result in the loss of potential business opportunities or make it more difficult to attract and retainqualified personnel, any of which could materially and adversely affect our business and operating results.31Environmental, social and corporate governance (ESG) issues, including those related to climate change and sustainability, may have an adverseeffect on our business, financial condition and results of operations and damage our reputation.There is an increasing focus from certain investors, customers, consumers, employees and other stakeholders concerning ESG matters. Additionally, publicinterest and legislative pressure related to public companies’ ESG practices continue to grow. If our ESG practices fail to meet regulatory requirements or investor,customer, consumer, employee or other shareholders’ evolving expectations and standards for responsible corporate citizenship in areas including environmentalstewardship, support for local communities, Board of Director and employee diversity, human capital management, employee health and safety practices, productquality, supply chain management, corporate governance and transparency, our reputation, brand and employee retention may be negatively impacted, and ourcustomers and suppliers may be unwilling to continue to do business with us.Customers, consumers, investors and other shareholders are increasingly focusing on environmental issues, including climate change, energy and wateruse, plastic waste and other sustainability concerns. Concern over climate change may result in new or increased legal and regulatory requirements to reduce ormitigate impacts to the environment. Changing customer and consumer preferences or increased regulatory requirements may result in increased demands orrequirements. Complying with these demands or requirements could cause us to incur additional manufacturing, operating or product development costs.If we do not adapt to or comply with new regulations, including the SEC’s published proposed rules that would require companies to provide significantlyexpanded climaterelated disclosures in their periodic reporting, which may require us to incur significant additional costs to comply and impose increased oversightobligations on our management and board of directors, or fail to meet evolving investor, industry or stakeholder expectations and concerns regarding ESG issues,investors may reconsider their capital investment in our company, we may become subject to penalties, and customers and consumers may choose to stoppurchasing our products, if approved for commercialization, which could have a material adverse effect on our reputation, business or financial condition.Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions andadverse developments with respect to financial institutions and associated liquidity risk.Our business depends on the economic health of the global economies. If the conditions in the global economies remain uncertain or continue to bevolatile, or if they deteriorate, including as a result of the impact of military conflict, such as the war between Russia and Ukraine, terrorism or other geopoliticalevents, our business, operating results and financial condition may be materially adversely affected. Economic weakness, inflation and increases in interest rates,limited availability of credit, liquidity shortages and constrained capital spending have at times in the past resulted, and may in the future result, in challenging anddelayed sales cycles, slower adoption of new technologies and increased price competition, and could negatively affect our ability to forecast future periods, whichcould result in an inability to satisfy demand for our products and a loss of market share.In addition, increases in inflation raise our costs for commodities, labor, materials and services and other costs required to grow and operate our business,and failure to secure these on reasonable terms may adversely impact our financial condition. Additionally, increases in inflation, along with the uncertaintiessurrounding COVID19, geopolitical developments and global supply chain disruptions, have caused, and may in the future cause, global economic uncertainty anduncertainty about the interest rate environment, which may make it more difficult, costly or dilutive for us to secure additional financing. A failure to adequatelyrespond to these risks could have a material adverse impact on our financial condition, results of operations or cash flows.More recently, the closures of SVB and Signature Bank and their placement into receivership with the FDIC created bankspecific and broader financialinstitution liquidity risk and concerns. Although the Department of the Treasury, the Federal Reserve and the FDIC jointly released a statement that depositors atSVB and Signature Bank would have access to their funds, even those in excess of the standard FDIC insurance limits, under a systemic risk exception, futureadverse developments with respect to specific financial institutions or the broader financial services industry may lead to marketwide liquidity shortages, impair theability of companies to access nearterm working capital needs, and create additional market and economic uncertainty. There can be no assurance that future creditand financial market instability and a deterioration in confidence in economic conditions will not occur. Our general business strategy may be adversely affected byany such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions. If the current equityand credit markets deteriorate, or if adverse developments are experienced by financial institutions, it may cause shortterm liquidity risk and also make anynecessary debt or equity financing more difficult, more costly, more onerous with respect to financial and operating covenants and more dilutive. Failure to secureany necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stockprice and could require us to alter our operating plans. In addition, there is a risk that one or more of our service providers, financial institutions, manufacturers,suppliers and other partners may be adversely affected by the foregoing risks, which could directly affect our ability to attain our operating goals on schedule andon budget.Our business may be adversely affected by the impact of any renewed outbreak of the COVID19 pandemic.Public health epidemics or outbreaks could adversely impact our business. In late 2019, a novel strain of COVID19, also known as coronavirus, wasreported in Wuhan, China. While initially the outbreak was largely concentrated in China, it spread worldwide. Many countries around the world, including in Israel,implemented significant governmental measures to control the spread of the virus, including temporary closure of businesses, severe restrictions on travel and themovement of people, and other material limitations on the conduct of business. These measures haven historically resulted in work stoppages and other disruptions.If there is a resurgence of the COVID19 pandemic, this could adversely impact our operations, including among others, our sales and marketing efforts and ourability to raise additional funds, and accordingly, the impact of COVID19 could have an adverse impact on our business and our financial results.32Risks Related to Our Operations in RussiaRussia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.In addition to our Israel operations, we have operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia and we engage two software developers through a third party who are based in Ukraine. On February 24,2022, Russia invaded Ukraine. The outbreak of hostilities between the two countries could result in more widespread conflict and could have a severe adverse effecton the region.Following Russia’s actions, various countries, including the U.S., Canada, the United Kingdom, Germany and France, as well as the European Union,issued broadranging economic sanctions against Russia. Such sanctions included, among other things, a prohibition on doing business with certain Russiancompanies, officials and oligarchs; a commitment by certain countries and the European Union to remove selected Russian banks from the Society for WorldwideInterbank Financial Telecommunications (SWIFT) electronic banking network that connects banks globally; and restrictive measures to prevent the Russian CentralBank from undermining the impact of the sanctions. In response to sanctions, the Russian Central Bank raised its interest rates and banned sales of local securitiesby foreigners. Russia may take additional counter measures or retaliatory actions in the future. While diplomatic efforts have been ongoing, the conflict betweenRussia and Ukraine is currently unpredictable and has the potential to result in broadened military actions. The duration of ongoing hostilities and such sanctionsand related events cannot be predicted. Uncertainty as to future relations between Russia and the U.S. and other countries in the west, or between Russia and othereastern European countries, may have a negative impact on our operations.Such international sanctions and potential responses to such sanctions, including those that may limit or restrict transfer funds into Russia, may in thefuture significantly affect our ability to conduct our activities in Russia including paying our personnel. To date, the conflict has had minimal impact on operations .Nevertheless, we have no way to predict the progress or outcome of the situation in Ukraine, as the conflict and governmental reactions are rapidly developing andbeyond our control. Prolonged unrest, intensified military activities or more extensive sanctions impacting the region could have a material adverse effect on ouroperations, results of operations, financial condition, liquidity and business outlook.Political, military conditions or other risks in Russia could adversely affect our business.Russia is a federative state consisting of 85 constituent entities, or “subjects.” The Russian Constitution reserves some governmental powers for theRussian Government, some for the subjects and some for areas of joint competence. In addition, eight “federal districts” (“federal’nye okruga”), which are overseenby a plenipotentiary representative of the President, supplement the country’s federal system. The delineation of authority among and within the subjects is, inmany instances, unclear and contested, particularly with respect to the division of tax revenues and authority over regulatory matters. For these reasons, theRussian political system is vulnerable to tension and conflict between federal, subject and local authorities. This tension creates uncertainties in the operatingenvironment in Russia, which may prevent us from carrying out our strategy effectively. The risks associated with these events or potential events could materiallyand adversely affect the investment environment and overall consumer and entrepreneurial confidence in Russia, and our business, prospects, financial condition,hiring ability, and results of operations could be materially and adversely affected.Furthermore, high levels of corruption reportedly exist in Russia, including the bribing of officials for the purpose of initiating investigations bygovernment agencies. Corruption and other illegal activities could disrupt our ability to conduct our business effectively, and claims that the we are involved in suchcorruption or illegal activities could generate negative publicity, of which could harm our development, financial condition, results of operations or prospects.Economic and other risks in Russia could adversely affect our business.Operating a business in an emerging market such as Russia can involve a greater degree of risk than operating a business in more developed markets.Over the last two decades, the Russian economy has experienced or continues to experience at various times:●significant volatility in its GDP;33●the impact of international sanctions;●high levels of inflation;●increases in, or high, interest rates;●sudden price declines in oil and other natural resources;●instability in the local currency market;●budget deficits;●the continued operation of lossmaking enterprises due to the lack of effective bankruptcy proceedings;●capital flight; and●significant increases in poverty rates, unemployment and underemployment.The Russian economy has been subject to abrupt downturns in the past, including as a result of the invasion of Ukraine, global financial crisis, and, as anemerging market, remains particularly vulnerable to further external shocks and any future fluctuations in the global markets. Any further deterioration in the generaleconomic conditions in Russia (whether or not as a result of the events mentioned above) could have a material adverse effect on the Russian economy and mayresult in hiring and operational difficulties, as well as potential flight of human capital, which could have a material adverse effect on our business, productdevelopment and results of operations.Legal risks in Russia could materially adversely affect our operations and Russian tax legislation is subject to frequent change.Among the risks of the Russian legal system are: inconsistencies among laws, presidential decrees, and government and ministerial orders and resolutions;conflicting local, regional and federal laws and regulations; the untested nature of the independence of the judiciary and its sensitivity to economic or politicalinfluences; substantial gaps in the regulatory structure due to the delay or absence of implementing legislation; a high degree of discretion on the part ofgovernmental authorities; reported corruption within governmental entities and other governmental authorities; the relative inexperience of judges and courts ininterpreting laws applicable to complex transactions; and the unpredictability of enforcement of foreign judgments and foreign arbitral awards. Many Russian lawsand regulations are construed in a way that provides for significant administrative discretion in application and enforcement. Unlawful, selective or arbitrary actionsof the Russian Government have reportedly included the denial or withdrawal of licenses, sudden and unexpected tax audits, criminal prosecutions, and civil claims.Any of the above events may have a material adverse effect on our product development and results of operations.Despite certain improvements in the taxation system made by the Russian Government over the past decade, Russian tax legislation is still subject tofrequent change, varying interpretations, and inconsistent and selective enforcement. There are currently no clear rules for distinguishing between lawful taxoptimization and tax evasion. In addition, Russian tax laws do not contain detailed rules on the taxation in Russia of foreign companies. As such, taxpayers oftenhave to resort to court proceedings to defend their position against the Russian tax authorities. However, in the absence of consistent court practice or bindingprecedents, there is inconsistency amongst court decisions. Further, the possibility exists that the Russian Federation would impose arbitrary or onerous taxes andpenalties in the future, which could have a material adverse effect on our product development and results of operations.34Risks Related to Our Operations In IsraelOur headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.Our headquarters and most of our operations are located in central Israel and our key employees, officers and directors are residents of Israel. Accordingly,political, economic and military conditions in Israel and the surrounding region may directly affect our business. Since the establishment of the State of Israel in1948, a number of armed conflicts have taken place between Israel and its Arab neighbors. Any hostilities involving Israel or the interruption or curtailment of tradewithin Israel or between Israel and its trading partners could adversely affect our operations and results of operations and could make it more difficult for us to raisecapital. During the winter of 2008, winter of 2012 and the summer of 2014, Israel was engaged in an armed conflict with Hamas, a militia group and political partyoperating in the Gaza Strip, and during the summer of 2006, Israel was engaged in an armed conflict with Hezbollah, a Lebanese Islamist Shiite militia group andpolitical party. Israel faces political tension with respect to its relationships with Turkey, Iran and certain Arab neighbor countries. In addition, recent conflictsinvolved missile strikes against civilian targets in various parts of Israel, and negatively affected business conditions in Israel. Recent political uprisings and socialunrest in various countries in the Middle East and North Africa are affecting the political stability of those countries. This instability may lead to deterioration of thepolitical relationships that exist between Israel and these countries, and have raised concerns regarding security in the region and the potential for armed conflict.Any armed conflicts, terrorist activities or political instability in the region could adversely affect business conditions and could harm our results of operations. Forexample, any major escalation in hostilities in the region could result in a portion of our employees and service providers being called up to perform military duty foran extended period of time. Parties with whom we do business have sometimes declined to travel to Israel during periods of heightened unrest or tension, forcing usto make alternative arrangements when necessary. In addition, the political and security situation in Israel may result in parties with whom we have agreementsinvolving performance in Israel claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions insuch agreements. Any future deterioration in the political and security situation in Israel will negatively impact our business.Our commercial insurance does not cover losses that may occur as a result of events associated with the security situation in the Middle East. Althoughthe Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that thisgovernment coverage will be maintained. Any losses or damages incurred by us could have a material adverse effect on our business. Any armed conflicts orpolitical instability in the region would likely negatively affect business conditions and could harm our results of operations.Further, in the past, the State of Israel and Israeli companies have been subjected to an economic boycott. Several countries still restrict business with theState of Israel and with Israeli companies. These restrictive laws and policies may have an adverse impact on our operating results, financial condition or theexpansion of our business.The legislative power of the State resides in the Knesset, a unicameral parliament that consists of 120 members elected by nationwide voting under asystem of proportional representation. Israel’s most recent general elections were held on April 9, 2019, September 17, 2019, March 2, 2020 and November 1, 2022.The uncertainty surrounding the results of the recent elections may continue. Actual or perceived political instability in Israel or any negative changes in thepolitical environment, may individually or in the aggregate adversely affect the Israeli economy and, in turn, our business, financial condition, results of operationsand prospects.Some of our employees are obligated to perform military reserve duty in Israel.Many Israeli citizens, including our employees are obligated to perform one month, and in some cases more, of annual military reserve duty until they reachthe age of 40 (or older, for reservists with certain occupations) and, in the event of a military conflict, may be called to active duty. In response to increases interrorist activity, there have been periods of significant callups of military reservists. It is possible that there will be military reserve duty callups in the future. Ouroperations could be disrupted by such callups. Such disruption could materially adversely affect our business, results of operations and financial condition.35It may be difficult to enforce a nonIsraeli judgment against the Company or its officers and directors.The operating subsidiary of ours is incorporated in Israel. All of our executive officers and directors are not residents of the United States, and asubstantial portion of our assets and the assets of our executive officers and directors are located outside the United States. Therefore, a judgment obtained againstus, or any of these persons, including a judgment based on the civil liability provisions of the U.S. federal securities laws, may not be collectible in the United Statesand may not necessarily be enforced by an Israeli court. It also may be difficult to affect service of process on these persons in the United States or to assert U.S.securities law claims in original actions instituted in Israel. Additionally, it may be difficult for an investor, or any other person or entity, to initiate an action withrespect to U.S. securities laws in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of U.S. securities laws reasoning that Israel is not themost appropriate forum in which to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law isapplicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law often involves the testimony of expert witnesses, which can be a timeconsuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel that addresses the mattersdescribed above. As a result of the difficulty associated with enforcing a judgment against us in Israel, it may be impossible to collect any damages awarded byeither a U.S. or foreign court.Our international operations could expose us to additional risks, including exchange rate fluctuations, legal regulations and political or economicinstability that could harm our business and operating results.Our international operations expose us to the following risks which may have a material adverse effect on our business and operating results:●devaluations and fluctuations in currency exchange rates including fluctuations between the U.S. dollar and the NIS and the Russian Ruble;●costs of compliance with local laws, including labor laws and intellectual property laws;●compliance with domestic and foreign government policies, including compliance with Israeli securities laws and TASE;●changes in trade regulations and procedures affecting approval, production, pricing, marketing, reimbursement for and access to, our products;●compliance with applicable foreign anticorruption laws, antitrust/competition laws, antiBoycott Israel law and antimoney laundering laws; and●economic and geopolitical developments and conditions, including ongoing instability in global economies and financial markets, international hostilities,acts of terrorism and governmental reactions, inflation, outbreaks of contagious disease (e.g., the COVID19 pandemic) and military and political alliances.Risks Related to Our Common StockA more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.Although our common stock is listed on the Nasdaq Capital Market, it has only been traded on the Nasdaq Capital Market since July 25, 2016. There hasbeen relatively limited trading volume in the market for our common stock, and a more active, liquid public trading market may not develop or may not be sustained.Limited liquidity in the trading market for our common stock may adversely affect a stockholder’s ability to sell its shares of common stock at the time it wishes tosell them or at a price that it considers acceptable. If a more active, liquid public trading market does not develop, we may be limited in our ability to raise capital byselling shares of common stock and our ability to acquire other companies or assets by using shares of our common stock as consideration. In addition, if there is athin trading market or “float” for our stock, the market price for our common stock may fluctuate significantly more than the stock market as a whole. Without a largefloat, our common stock would be less liquid than the stock of companies with broader public ownership and, as a result, the trading prices of our common stockmay be more volatile and it would be harder for you to liquidate any investment in our common stock. Furthermore, the stock market is subject to significant priceand volume fluctuations, and the price of our common stock could fluctuate widely in response to several factors, including:●our quarterly or annual operating results;●changes in our earnings estimates;●investment recommendations by securities analysts following our business or our industry;●additions or departures of key personnel;●changes in the business, earnings estimates or market perceptions of our competitors;36●our failure to achieve operating results consistent with securities analysts’ projections;●changes in industry, general market or economic conditions;●announcements of legislative or regulatory changes; and●natural disasters (including for example, the recent fire in the Orgad warehouse) and political and economic instability, including wars, terrorism, politicalunrest, results of certain elections and votes, emergence of a pandemic, or other widespread health emergencies (or concerns over the possibility of suchan emergency, including for example, the recent the COVID19 pandemic), boycotts, adoption or expansion of government trade restrictions, and otherbusiness restrictions.The stock market has experienced extreme price and volume fluctuations in recent years that have significantly affected the quoted prices of the securitiesof many companies. The changes often appear to occur without regard to specific operating performance. The price of our common stock could fluctuate basedupon factors that have little or nothing to do with us and these fluctuations could materially reduce our stock price.Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.If any of our shareholders were to decide to sell large amounts of stock over a short period of time (presuming such sales were permitted) such sales couldcause the market price of our common stock to drop significantly, even if our business is doing well. Further, the market price of our common stock could decline as aresult of the perception that such sales could occur. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equitysecurities in the future at a time and price that we deem appropriate.Our securities are traded on more than one market which may result in price variations.Our securities have been trading on the Nasdaq Capital Market since July 2016 and on TASE since September 2005. Trading in our securities on suchexchanges occurs in different currencies (U.S. dollars on the Nasdaq Capital Market and NIS on the TASE), and at different times (due to different time zones,trading days and public holidays in the United States and Israel). The trading prices of our securities on the two exchanges may differ due to the foregoing andother factors. Any decrease in the price of our shares on the TASE could cause a decrease in the trading price of our shares on the Nasdaq Capital Market and viceversa.We are a smaller reporting company and, as a result of the reduced disclosure and governance requirements applicable to such companies, ourcommon stock may be less attractive to investors.We are a smaller reporting company, (i.e. a company with “public float” held by nonaffiliates with a market value of less than $250 million) and we areeligible to take advantage of certain exemptions from various reporting requirements applicable to other public companies. We have elected to adopt these reduceddisclosure requirements. We cannot predict if investors will find our common stock less attractive as a result of our taking advantage of these exemptions. If someinvestors find our common stock less attractive as a result of our choices, there may be a less active trading market for our common stock and our stock price may bemore volatile.We do not expect to pay any cash dividends in the foreseeable future.We have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our board of directors deems relevant. Investors should not purchase our common stock expecting to receive cash dividends. Because we do notpay dividends, and there may be limited trading, investors may not have any manner to liquidate or receive any payment on their investment. Therefore, our failureto pay dividends may cause investors to not see any return on investment even if we are successful in our business operations. In addition, because we do not paydividends we may have trouble raising additional funds, which could affect our ability to expand our business operations.37UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2022☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ________ to _________Commission file number 00137370MY SIZE, INC.(Exact name of registrant as specified in charter)Delaware510394637(State or jurisdiction ofIncorporation or organization)I.R.S EmployerIdentification No.4 Hayarden, POB 1026, Airport City, Israel7010000(Address of principal executive offices)(Zip code)+9723 6009030(Registrant’s telephone number, including area code)Securities registered pursuant to Section 12(b) of the Act:Title of each classTrading Symbol(s)Name of Each Exchange on Which RegisteredCommon Stock, par value $0.001 per shareMYSZThe Nasdaq Capital MarketSecurities registered pursuant to Section 12(g) of the Act: None.Indicate by check mark whether the registrant is a wellknown seasoned issuer as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes☒ No ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer, a smaller reporting company, or an emerginggrowth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 of theExchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☒Smaller Reporting Company☒Emerging Growth Company☐If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revisedfinancial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b2 of the Exchange Act) Yes ☐No☒Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control overfinancial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflectthe correction of an error to previously issued financial statements. ☐Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by anyof the registrant’s executive officers during the relevant recovery period pursuant to §240.10D1(b). ☐The aggregate market value of voting and nonvoting common equity held by nonaffiliates of the registrant as of June 30, 2022, the last business day of theregistrant’s most recently completed second fiscal quarter, was approximately $25,551,906.Number of shares of common stock outstanding as of March 31, 2023 was 2,446,780.Documents Incorporated by Reference: None.Table of ContentsPart IItem 1.Business2Item 1A.Risk Factors18Item 1B.Unresolved Staff Comments41Item 2.Properties41Item 3.Legal Proceedings41Item 4.Mine Safety Disclosures42Part IIItem 5.Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities43Item 6.Selected Financial Data43Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations43Item 7A.Quantitative and Qualitative Disclosures about Market Risk50Item 8.Financial Statements and Supplementary DataF1Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure51Item 9A.Controls and Procedures51Item 9B.Other Information51Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.51Part IIIItem 10.Directors, Executive Officers and Corporate Governance52Item 11.Executive Compensation57Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters60Item 13.Certain Relationships and Related Transactions, and Director Independence62Item 14.Principal Accounting Fees and Services65Part IVItem 15.Exhibits, Financial Statement Schedules66Signatures69iPART IIn this Annual Report on Form 10K, unless the context requires otherwise, the terms “we,” “our,” “us,” or “the Company” refer to MySize, Inc., a Delawarecorporation, and its subsidiaries, including MySize Israel 2014 Ltd. My Size LLC, Orgad International Marketing Ltd., or Orgad, and Naiz Bespoke Technologies, S.L,or Naiz, taken as a whole.References to “U.S. dollars” and “$” are to currency of the United States of America, and references to “NIS” are to New Israeli Shekels. Unless otherwiseindicated, U.S. dollar translations of NIS amounts presented in this Annual Report on Form 10K for the year ended on December 31, 2022 are translated using therate of NIS 3.358 to $1.00.All information in this Annual Report on Form 10K relating to shares or price per share reflects the 1for25 reverse stock split effected by us on December8, 2022.CAUTIONARY NOTE ON FORWARDLOOKING STATEMENTSThis Annual Report on Form 10K contains certain forwardlooking statements within the meaning of Section 27A of the Securities Act and Section 21E ofthe Exchange Act. Any statements in Annual Report on Form 10K about our expectations, beliefs, plans, objectives, assumptions or future events or performanceare not historical facts and are forwardlooking statements. These statements are often, but not always, made through the use of words or phrases such as“believe,” “will,” “expect,” “anticipate,” “estimate,” “intend,” “plan” and “would.” For example, statements concerning financial condition, possible or assumedfuture results of operations, growth opportunities, industry ranking, plans and objectives of management, markets for our common stock and future managementand organizational structure are all forwardlooking statements. Forwardlooking statements are not guarantees of performance. They involve known and unknownrisks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to differ materially from any results, levels ofactivity, performance or achievements expressed or implied by any forwardlooking statement.Any forwardlooking statements are qualified in their entirety by reference to the risk factors discussed throughout this Annual Report on Form 10K. Someof the risks, uncertainties and assumptions that could cause actual results to differ materially from estimates or projections contained in the forwardlookingstatements include but are not limited to:●our history of losses and needs for additional capital to fund our operations and our inability to obtain additional capital on acceptable terms, or at all;●risks related to our ability to continue as a going concern;●the new and unproven nature of the measurement technology markets;●our ability to achieve customer adoption of our products;●our ability to realize the benefits of our acquisitions of Orgad and Naiz;●our dependence on assets we purchased from a related party;●our ability to enhance our brand and increase market awareness;●our ability to introduce new products and continually enhance our product offerings;●the success of our strategic relationships with third parties;●information technology system failures or breaches of our network security;●competition from competitors;●our reliance on key members of our management team;●current or future litigation;●current or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated liquidityrisk; and●the impact of the political and security situation in Israel on our business.1The foregoing list sets forth some, but not all, of the factors that could affect our ability to achieve results described in any forwardlooking statements.You should read this Annual Report on Form 10K and the documents that we reference herein and have filed as exhibits to the Annual Report on Form 10K,completely and with the understanding that our actual future results may be materially different from what we expect. You should assume that the informationappearing in this Annual Report on Form 10K is accurate as of the date hereof. Because the risk factors referred to in this Annual Report on Form 10K, could causeactual results or outcomes to differ materially from those expressed in any forwardlooking statements made by us or on our behalf, you should not place unduereliance on any forwardlooking statements.Further, any forwardlooking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forwardlookingstatement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. New factors emergefrom time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extentto which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements. We qualify all ofthe information presented in this Annual Report on Form 10K, and particularly our forwardlooking statements, by these cautionary statements.ITEM 1. BUSINESSOverviewWe are an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile phone or through MySizeID Widget: a simple questionnaire which uses a database collected over the years.MySizeID syncs the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and only presents itemsfor purchase that match their measurements to ensure a correct fit.We are positioning ourselves as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empower brand design teams, which are designed to increase endconsumer satisfaction, contributing to a sustainable world and reduce operation costs.Recent DevelopmentsOrgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,602 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.2The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz, a limitedliability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.3The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Warehouse FireOn January 2, 2023, Orgad experienced a fire at its warehouse in Israel. we are not aware of any casualties or injuries associated with the fire. We shiftedOrgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incident did not affectthe future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of this incident on the otherparties that were involved in the incident (lessor and others that leased properties near the warehouse).January 2023 FinancingOn January 10, 2023, we entered into a securities purchase agreement, or the RD Purchase Agreement, pursuant to which we agreed to sell and issue in theRD Offering an aggregate of 162,000 of our shares of common stock, or the RD Shares, and prefunded warrants, or the Prefunded Warrants, to purchase up to279,899 shares of common stock and, in a concurrent private placement, unregistered warrants to purchase up to 883,798 shares of common stock, or the RDWarrants, consisting of Series A warrants, or Series A Warrants, to purchase up to 441,899 shares of common stock and Series B warrants, or Series B Warrants, topurchase up to 441,899 shares of common stock, at an offering price of $3.055 per RD Share and associated Series A and Series B Warrants and an offering price of$3.054 per Prefunded Warrant and associated Series A and Series B Warrants.4In addition, we entered into a securities purchase agreement, or the PIPE Purchase Agreement, and together with the RD Purchase Agreement, thePurchase Agreements, pursuant to which we agreed to sell and issue in the PIPE Offering an aggregate of up to 540,098 unregistered Prefunded Warrants andunregistered warrants to purchase up to an aggregate of 1,080,196 shares of common stock, or the PIPE Warrants and together with the RD Warrants, the Warrants,consisting of Series A Warrants to purchase up to 540,098 shares of common stock and Series B Warrants to purchase up to 540,098 shares of common stock at anoffering price of $3.054 per Prefunded Warrant and associated Series A and Series B Warrants.The Prefunded Warrants are immediately exercisable at an exercise price of $0.001 per share and will not expire until exercised in full. The Warrants areimmediately exercisable upon issuance at an exercise price of $2.805 per share, subject to adjustment as set forth therein. The Series A Warrants have a term of fiveand onehalf years from the date of issuance and the Series B Warrants have a term of 28 months from the date of issuance. The Warrants may be exercised on acashless basis if there is no effective registration statement registering the shares underlying the warrants.In connection with the PIPE Purchase Agreement, we entered into a registration rights agreement, or the Registration Rights Agreement. Pursuant to theRegistration Rights Agreement, we are required to file a resale registration statement, or the Registration Statement, with the Securities and Exchange Commission, orthe SEC, to register for resale the shares issuable upon exercise of the unregistered Prefunded Warrants and the Series A and Series B Warrants, within 20 days ofthe signing date of the PIPE Purchase Agreement, or the Signing Date, and to have such Registration Statement declared effective within 60 days after the SigningDate in the event the Registration Statement is not reviewed by the SEC, or 90 days of the Signing Date in the event the Registration Statement is reviewed by theSEC. we will be obligated to pay certain liquidated damages if we fail to maintain the effectiveness of the Registration Statement.The Purchase Agreements and the Registration Rights Agreements also contain representations, warranties, indemnification and other provisionscustomary for transactions of this nature. In addition, subject to limited exceptions, the Purchase Agreements provide that for a period of one year following theclosing of the Offerings, we will not effect or enter into an agreement to effect a “variable rate transaction” as defined in the Purchase Agreements.Aggregate gross proceeds to the Company in respect of the Offerings was approximately $3.0 million, before deducting fees payable to the placement agentand other offering expenses payable by the Company.We also entered into a letter agreement, or the Engagement Agreement, with H.C. Wainwright & Co., LLC, or Wainwright, pursuant to which Wainwrightagreed to serve as the exclusive placement agent for the Company in connection with the Offerings. We paid Wainwright a cash placement fee equal to 7% of theaggregate gross proceeds raised in the Offerings, a management fee of 1% of the aggregate gross proceeds raised in the Offerings, a nonaccountable expenseallowance of $85,000 and clearing fees of $15,950. Wainwright also received placement agent warrants, or the Placement Agent Warrants, with substantially the sameterms as the Series A Warrants issued in the Offering in an amount equal to 7% of the aggregate number of Shares and Prefunded Warrants sold in the Offerings, or68,740 shares, at an exercise price of $3.8188 per share and a term expiring on January 10, 2028.Our SolutionOur cloudbased software platform provides highly accurate sizing and measurement with broad applications including the online fashion/apparel industry,logistics and courier services and home DIY. Currently, we are mainly focusing on the ecommerce fashion/apparel industry. This proprietary technology is driven byseveral patented algorithms which are able to calculate and record measurements in a variety of novel ways. Although specific functionality varies by product, webelieve that our core solutions address the need for highly accurate measurements in a variety of consumer friendly, every day uses.5We have developed three products, MySizeID for the fashion/apparel industry, BoxSize for the logistics and courier services market and SizeUp for thehome DIY market.●MySizeID enables shoppers to generate highly accurate measurements of their body to find proper fitting clothes and accessories, through the use ofour application on their mobile phone or through a simple questionnaire if the user decides not to download the application. MySizeID syncs the user’smeasurement data to a sizing chart and presents items for purchase that match their measurements to ensure a correct fit. MySizeID is available forlicense by retailers and accessable by consumers through a web page.●BoxSize enables customers to quickly and easily measure the size and volume of a parcel to accurately calculate shipping fees. It also offers shippingcompanies a variety of precise logistical data for more efficiently managing their supply chain, providing them with an accurate way to compare thephysical package with what is in the shipping manifest. BoxSize solution is available for license on both iOS and Android operating systems. BoxSizeis available on the Honeywell Marketplace and in August 2019 was approved for Honeywell’s Independent Software Vendor Program, and MySize wasgranted an independent software vendor (ISV) status on the Zebra Technologies and on DataLogic platforms.●SizeUp is a digital tape measure that allows users to measure length, width and height of a surface by moving their smartphone from point to point ofan object or space. SizeUp is a valueadd for DIY and home improvement retailers whose customers struggle to find the appropriately sized items (likeblinds or curtains) for their homes or projects due to inaccurate measurements. SizeUp also is designed to replace rulers, tape measures and othermeasuring tools used for DIY projects. SizeUp is available for consumer download on both iOS and Android operating systems.The following are some select key features of our solutions:●Integration Capability. We design our solutions to be flexible and configurable, allowing our clients to match their use of our algorithms and softwarewith their specific business processes and workflows. Our platform has been organically developed from a common code base, data structure and userinterface, providing a consistent user experience with powerful features that are easily adaptable to our clients’ needs. The MySizeID widget can beintegrated via oneline JavaScript code, or through RESTful API;●Intuitive user experience. Our intuitive, easytouse interface is based on current technology, multiple focus groups and automatically adapts to users’devices, including mobile platforms, thereby significantly increasing accessibility of our solutions;●Big Data Generation. While we supply to the user the information he/she requires, we gather certain vital information such as body measurement andpackage volume which can be used anonymously to help the retailer acquire predictive size information on stocking, operations and consumers thatmay be in between sizes. All the information is being gathered and stored on our servers where it can be used by retailers;●NonInvasive. In taking measurements using our solution, the smartphone camera is not utilized; instead, the measurements are captured by scanningthe smartphone over the consumer’s body or package, thus ensuring greater privacy.Our Growth StrategyWe aim to drive revenue primarily through penetration of the U.S. and Europe markets through a business to business to consumer (B2B2C) model in theverticals we are targeting. We are pursuing the following growth strategies:●Sign Additional Commercial Agreements with U.S. Retailers. During 2022, we expanded our commercial agreements with Levi’s, introducing NorthAmerica (U.S. and Canada) and Latin America regions, and by extension Levis’ native apps in EU and U.S. regions. We also entered into commercialagreements with Baby Fresh, Galax, Punto Blanco, GEF France, Diesel, Gaala, Superdry, Uniontex Industries, and Temperlay London among others. Weare in various stages of discussions with U.S. and foreign retailers for the deployment of our size recommendation and measurement technology with aview to entering into additional commercial agreements.6●Pursue a TwoPronged Commercialization Strategy. We are seeking to accelerate adoption of our solutions both through direct partnerships with ecommerce websites as well as through thirdparty platform websites. While we seek to directly enter into partnerships with companies maintaining ecommerce websites in the apparel, courier and DIY markets, we are also seeking to deploy our solutions on thirdparty platforms. Furthermore, with theexpansion of MySizeID through the release of our FirstLook Smart Mirror, which we are offering to brick and mortar stores to digitize the physicalstores, MySizeID is now available for online retailers utilizing the WooCoomerce, Shopify, Lightspeed, PrestaShop, Bitrix and Wix platforms and tobrick and mortar stores through GK Software POS solution while BoxSize is available on the Honeywell, Zebra Technologies and Datalogic.●Ongoing Investment in our Technology Platform. We continue to invest in building new software capabilities and extending our platform to bring thepower of accurate measurement to a broader range of applications. In particular, we seek not only to deliver size recommendations but to provide arobust, endtoend,artificial intelligence, or AIdriven platform that inspires consumer confidence and drives revenue growth by providing a superiorconsumer journey to both online and the brick and mortar stores.●Grow our database. As the usage of our measurement apps increases, our database of information including user behaviour and body measurementsgenerates valuable statistics. Such data can be used in the big data market for targeted advertising and for blind consumer data mining.●Identify and acquire synergistic businesses. In order to reduce our time to market and obtain complementary technologies, we are seeking to acquiretechnologies and businesses that are synergistic to our product offering. We recently completed an acquisition of Orgad which operates anomnichannel ecommerce platform and Naiz which provides SaaS technology solutions that solve size and fit issues for fashion ecommerce companies.●Partnerships and cooperation. In order to bring a wider solution for the retail market we are working to partner and integrate our technology withpartners that can increase our penetration and offering to the market.Market OpportunityThe global ecommerce market was $5.7 trillion in 2022, and the industry is expected to grow significantly in the coming years with no signs of slowingdown. Market specialists expect a compound annual growth rate of 27.43% from 2023 to 2028: according to data from Statista, the market is expected to reach $6.5trillion in 2023. While many sectors have found ways to increase revenue through ecommerce, ecommerce is still plagued by issues that cut into profits andnegatively impact the bottom line, such as customer returns, low consumer conversion, and associated restocking and shipping costs.Fashion/ApparelSince the onset of the COVID19 pandemic, an immense shift to digital was recorded, with 85.9% growth vs. prepandemic, according to Mastercard, andover 2 billion people worldwide who shop online, according to data from Oberlo. In November 2022, online shoppers broke records with $11.3 billion in spending onCyber Monday, driving 5.8% yearoveryear growth and making the day the biggest online shopping day of all time, according to Adobe Analytics.In 2021, fashion companies invested between 1.6% and 1.8% of their revenues in technology, according to Mckinsey, and are expected to double theinvestment by 2030 in order to keep up with digital natives and keep a competitive edge. Personalization in ecommerce and hybrid connectivity in brickandmortarretail are two key themes in the future of fashtech, according to Mckinsey’s 2022 State of Fashion Technology.7In the upcoming years, inflation is expected to impact the fashion world. As prices for goods increase, the challenge will be to inspire confidence inconsumers, via different smart digital tools. Brands will need to embrace creative digital tools and new channels to deepen customer relationships, and as Mckinseyforecasts in their State of Fashion report for 2023, they will need to execute on priorities such as sustainability and digital acceleration.The global fashion ecommerce market size is expected to grow from $744.4 billion in 2022 to $821.19 billion in 2023 at a compound annual growth rate of10.3%. In 2027, the market size is expected to grow to $1,222.32 billion, at a compound annual growth rate of 10.5%, according to BRC.Based on the importance which shoppers attribute to free shipping 50% of cart abandonment rate is due to extra shipping costs (Baymard Institute) theneed for fashion retailers to substantiate the optimal size for a customer, thus minimizing returns, has never been more crucial.As brands move online or significantly expand their online presence, we believe that developing innovative ways to connect with shoppers, both onlineand offline, has become a top priority.Shipping/ParcelAccording to Pitney Bowes, parcel revenue in 13 major countries around the world increased by 17% year over year from $420 billion in 2020 (reflecting 131billion parcels) to $491 billion in 2021 (reflecting 159 billion parcels). In the shipping/parcel industry, the dimensions of a package are critical. It is not merely themeasurement of a package or box – but rather the amount of space that the package or box will take up on a truck, airplane, or ship that will be transporting thepackage or box. Far too often, retailers use unfit packaging for their items, adding additional costs in materials and shipping fees.DIYSimilar to issues in the apparel and fashion market, big box, hardware, furniture, and DIY stores are plagued by returns due to incorrect fit andmeasurements. In an industry where precise measurement for projects is an absolute necessity, ecommerce has not grown as quickly as in other industries which webelieve is due to lack of consumer confidence in measurements at home and buying the correct item online.MySizeIDWe have released the MySizeID app for both iOS and Android which assists consumers to take highly accurate measurement of their own body in order tosize clothing in the best way possible without the need to try the clothes on before purchasing. MySizeID is designed to simplify the process of purchasing clothesonline and significantly reduce the rate of returns of poorfitting clothing. During 2022, MySizeID delivered over 23.5 million size recommendations.The application is the result of a research and development effort that combines:●anthropometric research – analyses of information pertaining to body measurements derived from a survey and the subsequent determination ofcorrelations between body parts;●body measurement algorithm research – an algorithm created by us to measure body parts; and●retailers size chart analyses – adopting a deep understanding of the size charts of retailers and the corresponding “body to garment size.”MySizeID allows consumers to create a secure, online profile of their personal measurements, which can then be utilized, with partnered online retailers, toensure that no matter the manufacturer or size chart, they will get the right fit. MySizeID operates based on the use of existing sensors in smart phones which enable,through a specific purpose application, the measurement of the body of any consumer by moving the smartphone along his or her body. The MySizeID applicationdoes not rely on user photographs or any additional hardware; all a user needs to do is scan their body with their smartphone and the application records theirmeasurements. The measurements can then be saved in our database in the cloud, enabling the user to search for clothes in various retailer websites withoutworrying about size. When a search is made, the retailer will connect to our cloud database, and then provide results based on the user’s measurements and otherparameters as he or she may have defined. This data is also saved for use when a customer enters a brickandmortar store to help serve the customer moreefficiently and to provide a better shopping experience.8Figure 1: Screenshot of MySizeID on smartphone and ecommerce websiteAs part of the integration process, we offer to the retailer five main components:●Mobile App. MySizeID comes in the form of a native app or website. Our native app can be used “as is” integrated into the retailer’s ecommercewebsite. The website users can build a body profile on the app and receive size recommendations for their profile both in the app and on a widgetintegrated with their website.9●Widget. When a consumer enters into the retailer’s website and looks for a specific item, he or she can click on the MySizeID widget which will informthe consumer of his or her recommended size, based on his or her actual measurements, as measured using the app and the item he or she is looking at.The widget has two features:AI Wizard mode allows the user to obtain size from the following parameters: gender, height, weight, belly shape, hip shape and bra size only. Thegender, height and weight questions are mandatory, while the body shape questions are optional and can be added to increase accuracy for specificapparel categories.Guest mode allows a user that does not wish to sign up to MySizeID as a user to obtain size recommendations as well.●Analytic Pixel. MySizeID analytic pixel allows retailer to track and analyze the widget usage. By adding the pixel to the retailer’s website, MySizeID BIteam can track engagement, order, and return data and provide retailers with tools to understand the advantages and benefits of MySizeID.Use your own device using MySizeID instore solution, shoppers can receive size recommendations for all store items, when shopping in the offlinestores. The shoppers can build their body profile using an easy to use 3 to 6 questions form, scan an item barcode and receive a size recommendationfor the scanned item based on their body profile and the item’s size chart.Another feature we added is the “inbetween sizing” feature. Our system can detect a user that has body dimensions that place the user inbetweenthe clothes sizes being offered and lets the user know that. A user can then choose between the two sizes according to the user’s fit preference(tight/loose/average).In addition, we have recently released our InstantApp feature which allows shoppers to generate their body measurements directly from our widget,without the need to download our mobile app. Using this technology, the shoppers can create their online profile of their personal measurements andcomplete a purchase faster and easier with minimum distractions.The body profile can be created while shoppers are viewing the page from their mobile phone, or by scanning a QR code on desktop that will open thesame page on the mobile phone.Screenshot of InstantApp widget on desktop on yumyumfashion website10●MyDash Platform. The MyDash platform is a smart backoffice system where the retailer enters all the information regarding its size charts thatcorrelates to every product in its ecommerce site, and where the retailer can access the information on its users. This system is customizable based onthe retailer’s needs. In 2021, we changed the MyDash system to increase the system’s accessibility, added walkthroughs, user guides and changed theuser interface and much more for the ease of use. We added the option to use our generic size charts, added the option upload size chart files insteadof typing the size charts values manually, added more widget styling options and changed the pairing mechanism between the size chart and theproducts to be more userfriendly.Figure 3: Screenshot of BackOffice System●FirstLook Smart Mirror. The Smart Mirror provides an interactive, mirrorlike touch display that allows brands to provide instore customers with anenhanced, online shopping experience, contactless checkout and obtains the recommended size. The MySizeIDFirstLook Smart Mirror can be placedin numerous locations throughout a retail store, including the fitting rooms (without cameras) or other hightraffic locations of the store. Highlightcapabilities of the FirstLook Smart Mirror include a 3D “Tryiton” interactive avatar experience, personalized and highly accurate sizerecommendations by MySizeID, thirdparty point of sale systems integration, styling recommendations and contactless “select and collect” at theregister feature.Illustration of MySizeID “first look” smart mirror in a fashion store11We are currently offering MySizeID technology to retailers through either a payperuse model or a monthly subscription model. In our payperusebusiness model, every time the consumer obtains a recommended size, the retailer is charged for the usage.BoxSizeBoxSize is a parcel measurement application that can provide realtime logistic data on package volumes and transportation, resulting in improvedoperational efficiency and reduced operating expenses. In addition, BoxSize allows customers to easily measure the size of their parcel with their smartphone,calculate shipping costs and arrange for a convenient pickup time for the package. BoxSize is available both on iOS and Android.In 2020 we released the “One Click” feature on BoxSize that enables the user to measure a package with just one swipe of the handheld device. Previously,measurements through BoxSize would require three separate swipes.Figure 4: Screenshot of BoxSizeOur BoxSize mobile measurement solution is available on the Honeywell Marketplace. In addition, BoxSize was approved for Honeywell’s Global VendorProgram, and is available to provide highly accurate mobile measurement solutions for thousands of Honeywell clients. We also developed a new dashboard for thecourier companies to have all the required data about each package in one place. It includes package dimensions, pictures, scan geo location and more. Thedashboard also let the courier use Webhooks, which allows him to get the information from his own system.12In 2020, we announced our partnership with Datalogic, a company focused on the automatic data capture and process automation markets. The partnershipmakes our BoxSize measurement solution available to thousands of Datalogic customers in the Transportation and Logistics vertical.Agreement with Delhivery Private Limited, IndiaWe entered into an agreement with Delhivery Private Limited, one of the largest courier pickup, delivery, and online shipping services in India. Delhivery’sreputation as a frontrunner in delivery and logistics tech makes its decision to select Boxsize a particularly strong testament to the value the solution provides.BoxSize provides Delhivery’s employees on the B2B side with critical information that will allow them to effortlessly optimize loading efficiency and add even morerealtime visibility to operations.SizeUpWe are working on additional consumer applications, including a DIY application. Our SizeUp application is a smart tape measure for the business toconsumer market which allows users to utilize their smartphone as a tape measure. The application provides measurements with an accuracy of within twocentimeters. Through the use of SizeUp, users will be able to visualize how an object or a piece of furniture will fit in an existing room in their home or office. It alsoadded Google Vision for image content analysis, object detection, and title suggestions.Currently the SizeUp app for Android and iOS is available for free for the first 30 days, after which a user will be required to register via email and pay aonetime fee of $1.99 to continue using the application. To date, revenues from downloads have been minimal.Research and DevelopmentOur research and development team are responsible for the research, algorithm, design, development, and testing of all aspects of our measurementplatform technology. We invest in these efforts to continuously improve, innovate, and add new features to our solutions.We incurred research and development expenses of approximately $1.7 million in 2022 and $4.25 million in 2021, relating to the development of itsapplications and technologies. The decrease from the corresponding period primarily resulted from share based payment in amount of $2,618,000 attributed to theshare issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021. We intend to continue to invest in our research anddevelopment capabilities to extend our platform and bring our measurement technology to a broader range of applications.13In 2022, the R&D department experienced significant success in their efforts to improve the performance of their size recommendation system. Through acombination of optimized algorithms and the incorporation of cuttingedge technologies, the team was able to achieve a threefold increase in the system’s speed.This breakthrough not only makes the system one of the fastest and most accurate on the market, but also reduced the operation costs, making it more costeffective for businesses to use. Additionally, the solution is now highly scalable, allowing it to easily adapt to the needs of businesses of any size. The R&D team isnow focused on further improving the system and exploring new applications for the technology.Sales and MarketingIn 2019, we launched a commercialization strategy that directs our sales efforts toward both sales to ecommerce players in specific vertical markets such asfashion/apparel and shipping/delivery as well as to ecommerce thirdparty platform providers. As of March 15, 2023, our products are being sold in the followingcountries: US, UK, France, Netherlands, Spain, Portugal Turkey, Germany, Israel and Italy, generating customer leads, building out a sales pipeline, and developingcustomer relationships.We believe an effective method to market our suite of products is for users to actively use and explore its capabilities. We encourage free trials of one ormore of our products in order to successfully convert those accounts to paid subscriptions.Proprietary RightsWe rely on a combination of patent, copyright, trademark and trade secret laws in the United States and other jurisdictions, as well as contractualprotections, to protect our proprietary technology.As of December 31, 2022, we owned 18 issued patents: six in Europe, four in the U.S., three in each of Russia and Japan and one in each of Canada andIsrael which expire between January 20, 2033 and August 18, 2036, and we have two additional patent applications in process. As of such date, we do not have anyregistered trademarks.We cannot provide any assurance that our proprietary rights with respect to our products will be viable or have value in the future since the validity,enforceability and type of protection of proprietary rights in softwarerelated industries are uncertain and still evolving.Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products or to obtain and use informationthat we regard as proprietary. Policing unauthorized use of our products is difficult, and while we are unable to determine the extent to which piracy of our softwareproducts exists, software piracy can be expected to be a persistent problem. In addition, the laws of some foreign countries do not protect proprietary rights to asgreat an extent as do the laws of the United States, and effective copyright, trademark, trade secret and patent protection may not be available in those jurisdictions.Our means of protecting our proprietary rights may not be adequate to protect us from the infringement or misappropriation of such rights by others.Further, in recent years, there has been significant litigation in the United States involving patents and other intellectual property rights, particularly in thesoftware and Internetrelated industries. We can become subject to intellectual property infringement claims as the number of our competitors grows and ourproducts and services overlap with competitive offerings. These claims, even if not meritorious, could be expensive to defend and could divert management’sattention from operating our business. If we become liable to third parties for infringing their intellectual property rights, we could be required to pay a substantialaward of damages and to develop noninfringing technology, obtain a license or cease selling the products that contain the infringing intellectual property. We maybe unable to develop noninfringing technology or obtain a license on commercially reasonable terms, if at all.14Government RegulationWe are subject to a number foreign and domestic laws and regulations that involve matters central to our business. These laws and regulations mayinvolve privacy, data protection, intellectual property, or other subjects. Many of the laws and regulations to which we are subject are still evolving and being testedin courts and could be interpreted in ways that could harm our business. In addition, the application and interpretation of these laws and regulations often areuncertain, particularly in the new and rapidly evolving industry in which we operate. Because global laws and regulations have continued to develop and evolverapidly, it is possible that we, our products, or our platform may not be, or may not have been, compliant with each such applicable law or regulation.In particular, we are subject to a variety of federal, state and international laws and regulations governing the processing of personal data. Many U.S. stateshave passed laws requiring notification to data subjects when there is a security breach of personally identifiable data. There are also a number of legislativeproposals pending before the U.S. Congress, various state legislative bodies and foreign governments concerning data protection. In addition, data protection lawsin Europe and other jurisdictions outside the United States can be more restrictive than those within the United States, and the interpretation and application ofthese laws are still uncertain and in flux.For example, the General Data Protection Regulation, or GDPR, which took effect on May 25, 2018, enhances data protection obligations for entities thatprocess personal data about individuals, including obligations to cooperate with European data protection authorities, implement security measures and keeprecords of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to the greater of €20 million or 4% of global annual revenue. Inaddition, the California Consumer Privacy Act of 2018, or CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and requiredeletion of their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used.The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further,failure to comply with the Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may exposeus to administrative fines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the currentenforcement measures and sanctions. Given the breadth and depth of changes in data protection obligations, meeting the requirements of GDPR and otherapplicable laws and regulations has required significant time and resources, including a review of our technology and systems currently in use against therequirements of GDPR and other applicable laws and regulations. We have taken various steps to prepare for complying with GDPR and other applicable laws andregulations however there can be no assurance that these steps are sufficient to assure compliance. Further, additional EU laws and regulations (and member states’implementations thereof) further govern the protection of individuals and of electronic communications. If our efforts to comply with GDPR or other applicable lawsand regulations are not successful, we may be subject to penalties and fines that would adversely impact our business and results of operations, and our ability touse personal data of individuals could be significantly impaired.CompetitionWe operate in a highly competitive industry that is characterized by constant change and innovation. Changes in the applications and the programinglanguages used to develop applications, devices, operating systems, and technology landscape result in evolving customer requirements. Our competitors includeTrue Fit, Fit analytics and 3DLook.The principal competitive factors in our market include the following:●High Accuracy Size Recommendations: the highest accuracy and the lowest margin of error by combining patented technology including AI and ML,size chart or spec data, and MySizeID property body data measurement;●Integration○Fast 1 week integration including size chart size chart review and product mapping○Easy 1 line of “all included” script implementation●Technical Advantages○Very small library that weighs ±50kb (minimum widget loading time on product page)○UltraFast loading and size recommendation presenting○Restful API option (API integration with any website or app)15●Optimizations○Adjustments of size charts based on performance○Widget usage analysis by FashTech and BI teams○Automatic pairing of size charts with products/collections●User Experience○Easy to use interface (1015 seconds to receive size recommendations)○Option to add/deduct questions to/from widget wizards○Users automatically receive size recommendations on all products after initial sign up●Product and platform features, architecture, reliability, privacy and security, performance, effectiveness, and supported environments;●Product extensibility and ability to integrate with other technology infrastructures;●Digital operations expertise;●Ease of use of products and platform capabilities;●Total cost of ownership;●Adherence to industry standards and certifications;●Strength of sales and marketing efforts;●Brand awareness and reputation; and●Focus on customer successWe believe we generally compete favorably with our competitors on the basis of these factors. We expect competition to increase as other established andemerging companies enter our markets, as customer requirements evolve, and as new products and technologies are introduced. We expect this to be particularlytrue as we offer a smartphonebased offering that does not need to utilize the smartphone’s camera, and our competitors may also seek to repurpose their existingofferings to provide similar solutions. Many of our competitors have substantially greater financial, technical, and other resources, greater name recognition, largersales and marketing budgets, broader distribution, and larger and more mature intellectual property portfolios.Human Capital ManagementAs of March 31, 2023, we had a total of 35 employees, of which 30 were fulltime employees, including 9 in sales and marketing, 12 in technology anddevelopment and 9 in administration and finance.None of our employees are represented by a collective bargaining agreement, nor have we experienced any work stoppage. We consider our relationshipwith our employees to be good. Our future success depends on our continuing ability to attract and retain highly qualified engineers, sales and marketing, accountmanagement, and senior management personnel.We also believe we have built a strong sales team focused on expanding into new markets through the acquisition of Naiz and our current team.We believe that our future success will depend, in part, on our continued ability to attract, hire and retain qualified personnel. In particular, we depend onthe skills, experience and performance of our senior management and research personnel. We compete for qualified personnel with other hitech companies, as wellas universities and nonprofit research institutions.16We provide competitive compensation and benefits programs to help meet the needs of our employees. In addition to salaries, these programs (which varyby country/region and employment classification) include incentive compensation plan, pension, and insurance benefits, paid time off, , among others. We also usetargeted equitybased grants with vesting conditions to facilitate retention of personnel, particularly for our key employees.The success of our business is fundamentally connected to the wellbeing of our people. Accordingly, we implemented an hybrid work policy in which theemployees can work from home twice a week.We consider our employees to be a key factor to our success and we are focused on attracting and retaining the best employees at all levels of ourbusiness. Inclusion and diversity is a strategic, business priority. We employ people based on relevant qualifications, demonstrated skills, performance and otherjobrelated factors. We do not tolerate unlawful discrimination related to employment, and strive to ensure that employment decisions related to recruitment,selection, evaluation, compensation, and development, among others, are not influenced by race, color, religion, gender, age, ethnic origin, nationality, sexualorientation, marital status, or disability. Continuous monitoring to ensure pay equity has been a focus in 2022. We have continued to improve gender balance in 2022with a focus on increasing the representation of women hired as new college graduates. We are committed to creating a trusting environment where all ideas arewelcomed and employees feel comfortable and empowered to draw on their unique experiences and backgrounds.We consider our relations with our employees to be good.Company InformationOur principal executive offices are located at HaYarden 4 St., POB 1026, Airport City, Israel 7010000, and our telephone number is +97236009030. Ourwebsite address is www.mysizeid.com. Any information contained on, or that can be accessed through, our website is not incorporated by reference into, nor is it inany way a part of, this Annual Report on Form 10K.We use our website (www.mysizeid.com) as a channel of distribution of Company information. The information we post through this channel may bedeemed material. Accordingly, investors should monitor our website, in addition to following our press releases, SEC filings and public conference calls andwebcasts. The contents of our website are not, however, a part of this Annual Report on Form 10K.Corporate HistoryWe were incorporated in the State of Delaware on September 20, 1999 under the name Topspin Medical, Inc. In December 2013, we changed our name toKnowledgetree Ventures Inc. Subsequently, in February 2014, we changed our name to MySize, Inc. In 2020, we created a subsidiary in the Russian Federation, MySize LLC.From inception through 2012, we were engaged in research and development of a medical magnetic resonance imaging, or MRI, technology forinterventional cardiology and in the development of MRI technology for use in the diagnosis and treatment of prostate cancer. In January 2012, we acquiredMetamorefix Ltd., or Metamorefix. Metamorefix was incorporated in 2007, and was engaged in the development of innovative solutions for the rehabilitation oftissues, particularly skin tissues. By the end of 2012, we ceased operations and in January 2013, we sold our entire ownership interest in Metamorefix.In September 2013, Ronen Luzon, our Chief Executive Officer, acquired control of the Company from Asher Shmuelevitch, according to which Mr. Luzonpurchased 70,238 shares of common stock from Mr. Shmuelevitch, which shares represented approximately 40% of the issued and outstanding capital stock of theCompany at such time, thus becoming a controlling shareholder of the Company. In connection with the acquisition, Mr. Luzon reached a settlement with our thencreditors pursuant to which the main creditor, Mr. Shmuelevitch, was paid a total sum of approximately $140,000 in consideration for a full and final waiver of any andall his claims that he may have relating to any monetary indebtedness of the Company to the creditors.17In February 2014, My Size Israel, our wholly owned subsidiary, entered into a Purchase Agreement, or the Purchase Agreement, with Shoshana Zigdon,who at the time was a beneficial owner of more than 20% of our outstanding shares, with respect to the acquisition by us of certain rights related to the collection ofdata for measurement purposes including rights in the venture, the method and a patent application that had been filed by the Seller (PCT/IL2013/050056), or theAssets. In consideration for the sale of the Assets, we agreed to pay to Ms. Zigdon, 18% of our operating profit, directly or indirectly connected with the Assetstogether with valueadded tax in accordance with the law for a period of seven years from the end of the development period of the aforementioned venture. Inaddition to the foregoing, the Purchase Agreement provided that all developments, improvements, knowledge and knowhow developed and/or accumulated by usafter the execution of the Purchase Agreement will be owned by us. Further, Ms. Zigdon agreed not to compete, directly or indirectly, with us in any matter relatingto the Assets for a period of seven years from the end of the development period of the venture.On May 26, 2021, we, My Size Israel, and Ms. Zigdon entered into an Amendment to Purchase Agreement, or the Amendment, which made certainamendments to the Purchase Agreement. Pursuant to the Amendment, Ms. Zigdon agreed to irrevocably waive (i) the right to repurchase certain assets related tothe collection of data for measurement purposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which our business issubstantially dependent, or the Assets, and (ii) all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My SizeIsrael under the Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation, reward orany rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights, or the Waiver. Inconsideration of the Waiver, we issued 100,000 shares of common stock to Ms. Zigdon.In September 2005, we commenced trading on the Tel Aviv Stock Exchange, or TASE. Between 2007 and 2012 we reported as a public company with theSEC. In August 2012, we suspended our reporting obligations. In mid2015 we resumed reporting as a public company. On July 25, 2016, our common stock beganpublicly trading on the Nasdaq Capital Market under the symbol “MYSZ”.ITEM 1A. RISK FACTORSAn investment in our common stock involves a high degree of risk. You should carefully consider the following risk factors and the other information inthis Annual Report on Form 10K before investing in our common stock. Our business and results of operations could be seriously harmed by any of the followingrisks. The risks set out below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterialalso may materially adversely affect our business, financial condition and/or operating results. If any of the following events occur, our business, financial conditionand results of operations could be materially adversely affected. In such case, the value and trading price of our common stock could decline, and you may lose allor part of your investment.Summary Risk FactorsThe principal factors and uncertainties that make investing in our ordinary shares risky, include, among others:Risks Related to Our Financial Position and Capital Requirements●We have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.●Our limited operating history makes it difficult to evaluate our business and prospects.●We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive and maycause the market price of our common stock to decline.●The report of our independent registered public accounting firm contains an explanatory paragraph regarding substantial doubt about our ability tocontinue as a going concern.Risks Related to Our Company and Our Business●The market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and online thirdparty resellers adopting our flagship product, MySizeID.18●Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broader marketacceptance of our products.●We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which may makeit difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.●We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increase ourcapital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.●If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations and financialcondition may be adversely affected.●If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operations andfinancial condition could be adversely affected.●The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile device applications andcustom development services.●Our growth depends, in part, on the success of our strategic relationships with third parties.●Changes in economic conditions could materially affect our business, financial condition and results of operations.●We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.●We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significant interruptionin our network or hosting and cloud services could adversely impact our operations and harm our business.●Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.●We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.●A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.●Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, data protectionand information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive and confidentialinformation. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm our business,results of operations and financial condition.●We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect our business.●We may face intense competition and expect competition to increase in the future, which could limit us in developing a customer base and generatingrevenue.●Our business operations and future development could be significantly disrupted if we lose key members of our management team.19●If we are able to expand our operations, we may be unable to successfully manage our future growth.Risks Related to Our Operations in Israel and Russia●Our headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.●Russia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.Risks Related to Our Common Stock●A more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.●Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions and adversedevelopments with respect to financial institutions and associated liquidity risk;●Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.●Our securities are traded on more than one market which may result in price variations.●We are a former “shell company” and as such are subject to certain limitations not generally applicable to other public companies.Risks Related to Our Financial Position and Capital RequirementsWe have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.We realized a net loss of approximately $8.3 million and $10.5 million for the years ended December 31, 2022 and 2021 and had an accumulated deficit of$53.5 million as at December 31, 2022. Because of the numerous risks and uncertainties associated with the development and commercialization of our products andbusiness, we are unable to predict the extent of any future losses or when we will become profitable, if at all. Expected future operating losses will have an adverseeffect on our cash resources, shareholders’ equity and working capital. Our failure to become and remain profitable could depress the value of our stock and impairour ability to raise capital, expand our business, maintain our development efforts, or continue our operations. A decline in our value could also cause you to lose allor part of your investment in us.Our limited operating history makes it difficult to evaluate our business and prospects.We have only been developing our measurement technology since 2014. Since then, our operating history has been primarily limited to research anddevelopment, pilot studies, raising capital, and more recently acquisitions and sales and marketing efforts. Therefore, it may be difficult to evaluate our business andprospects. We have not yet demonstrated an ability to commercialize our products. Consequently, any predictions about our future performance may not beaccurate, and you may not be able to fully assess our ability to complete development and/or commercialize our products, and any future products.We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive andmay cause the market price of our common stock to decline.Based on our projected cash flows and the cash balances as of the date of this Annual Report on Form 10K, our existing cash is insufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. In order to meet ourbusiness objectives in the future, we will need to raise additional capital, which may not be available on reasonable terms or at all. Additional capital would be usedto accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;20●respond to competitive pressure;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, and a number of otherfactors, many of which are outside our control, and on our financial performance. Accordingly, we cannot assure you that we will be able to successfully raiseadditional capital at all or on terms that are acceptable to us. If we cannot raise additional capital when needed, it may have a material adverse effect on our business,results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.Management has concluded that there is substantial doubt about our ability to continue as a going concern which could prevent us from obtainingnew financing on reasonable terms or at all.We have incurred significant losses and negative cash flows from operations and have an accumulated deficit that raises substantial doubt about its abilityto continue as a going concern. Our audited consolidated financial statements for the year ended December 31, 2022 were prepared under the assumption that wewould continue our operations as a going concern. Our independent registered public accounting firm has included a “going concern” explanatory paragraph in itsreport on our financial statements for the year ended December 31, 2022. If we are unable to improve our liquidity position, by, among other things, raising capitalthrough public or private offerings or reducing our expenses, we may exhaust our cash resources and will be unable to continue our operations. If we cannotcontinue as a viable entity, our shareholders would likely lose most or all of their investment in us.Risks Related to Our Company and Our BusinessThe market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and onlinethirdparty resellers adopting our flagship product, MySizeID.The market for our measurement technology is relatively new and unproven and is subject to a number of risks and uncertainties. We believe that ourfuture success will depend in large part on market adoption of our flagship product, MySizeID, by U.S. retailers and online thirdparty resellers. In order to grow ourbusiness, we intend to focus on educating retailers and resellers and other potential customers about the benefits of our measurement technology, expanding thefunctionality of our products and bringing new products to market to increase market acceptance and use of our technology. Our ability to develop and expand themarket that our products address depends upon a number of factors, including the cost savings, performance and perceived value associated with such products.The market for our products could fail to develop or there could be a reduction in interest or demand for our products as a result of a lack of consumer acceptance,technological challenges, competing products and services, weakening economic conditions and other causes. We may never successfully commercialize ourproducts and if our products fail to achieve market acceptance, this would have a material adverse effect on our business, results of operations and financialcondition.21Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broadermarket acceptance of our products.Our ability to achieve customer adoption, especially among U.S. retailers will depend, in part, on our ability to effectively organize, focus and train our salesand marketing personnel. We have limited experience selling to U.S. retailers and only recently established a U.S. sales force. We believe that there is significantcompetition for experienced sales professionals with the skills and industry knowledge that we require. Our ability to achieve significant revenue growth in thefuture will depend, in part, on our ability to recruit, train and retain a sufficient number of experienced sales professionals, particularly those with experience sellingto U.S. retailers. In addition, even if we are successful in hiring qualified sales personnel, new hires require significant training and experience before they achievefull productivity, particularly for sales efforts targeted at U.S. retailers and new markets. Because we only recently started sales efforts, we cannot predict whether, orto what extent, our sales efforts will be successful.We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which maymake it difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.In this market segment, the decision to adopt our products may require the approval of multiple technical and business decision makers, including security,compliance, procurement, operations and IT. In addition, while U.S. retailers may be willing to deploy our products on a limited basis, before they will commit todeploying our products at scale, they often require extensive education about our products and significant customer support time, engage in protracted pricingnegotiations and seek to secure readily available development resources. As a result, it is difficult to predict when we will obtain new customers and begingenerating revenue from these customers. As part of our sales cycle, we may incur significant expenses before executing a definitive agreement with a prospectivecustomer and before we are able to generate any revenue from such agreement. We have no assurance that the substantial time and money spent on our salesefforts will generate significant revenue. If conditions in the marketplace generally or with a specific prospective customer change negatively, it is possible that nodefinitive agreement will be executed, and we will be unable to recover any of these expenses. If we are not successful in targeting, supporting and streamlining oursales processes and if revenue expected to be generated from a prospective customer is not realized in the time period expected or not realized at all, our ability togrow our business, and our operating results and financial condition may be adversely affected. If our sales cycles lengthen, our future revenue could be lower thanexpected, which would have an adverse impact on our operating results and could cause our stock price to decline.22We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increaseour capital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.In order to reduce time to market and obtain complementary technologies, we are seeking to acquire technologies and businesses that are synergistic to ourproduct offering. For example, we recently acquired Orgad which operates an omnichannel ecommerce platform and Naiz which provides SaaS technology solutionsthat solve size and fit issues for fashion ecommerce companies. We evaluate from time to time various acquisitions and collaborations, including licensing oracquiring complementary technologies, intellectual property rights, or businesses. The process for acquiring a company may take from several months up to a yearand costs can vary greatly. We may also compete with others to acquire companies, and such competition may result in decreased availability of, or an increase inprice for, suitable acquisition candidates. In addition, we may not be able to consummate acquisitions or investments that we have identified as crucial to theimplementation of our strategy for other commercial or economic reasons. As a result, it may be more difficult for us to identify suitable acquisition or investmenttargets or to consummate acquisitions or investments on acceptable terms or at all. If we are not able to execute on any acquisition, we may not be able to achieve afuture growth strategy and may lose market share.In addition, the acquisition of Orgad, Naiz and any potential future acquisition, joint venture or collaboration may entail numerous potential risks, including:●increased operating expenses and cash requirements;●the assumption of additional indebtedness or contingent liabilities;●assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel;●the diversion of our management’s attention from our existing programs and initiatives in pursuing such a strategic merger or acquisition;●retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships;●risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing technologies; and●our inability to generate revenue from acquired technologies or products sufficient to meet our objectives in undertaking the acquisition or even to offsetthe associated acquisition and maintenance costs.All of the foregoing risks may be magnified as the cost, size or complexity of an acquisition or acquired company increases, or where the acquiredcompany’s products, market or business are materially different from ours, or where more than one integration is occurring simultaneously or within a concentratedperiod of time. We may not be able to obtain the necessary regulatory approvals, including those of antitrust authorities and foreign investment authorities, incountries where we seek to consummate acquisitions or make investments. For those and other reasons, we may ultimately fail to consummate an acquisition, even ifwe announce the intended acquisition.In addition, we may require significant financing to complete an acquisition or investment, whether through bank loans, raising of equity or debt orotherwise. We cannot assure you that such financing options will be available to us on reasonable terms, or at all. If we are not able to obtain such necessaryfinancing, it could have an impact on our ability to consummate a substantial acquisition or investment and execute a future growth strategy. Alternatively, we mayissue a significant number of shares as consideration for an acquisition, which would have a dilutive effect on our existing shareholders. For example, in partialconsideration for the acquisition of Orgad, we agreed to issue up to 111,602 shares of our common stock and in the Naiz acquisition we issued 240,000 shares of ourcommon stock. Furthermore, if we undertake acquisitions, we may incur large onetime expenses and acquire intangible assets that could result in significant futureamortization expense.23If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations andfinancial condition may be adversely affected.We believe that enhancing the “MySize” brand identity and increasing market awareness of our company and products, particularly among U.S. retailers, iscritical to achieving widespread acceptance of our products. Our ability to successfully develop new retailers may be adversely affected by a lack of awareness oracceptance of our brand. To the extent that we are unable to foster name recognition and affinity for our brand, our growth may be significantly delayed or impaired.The successful promotion of our brand will depend largely on our continued marketing efforts, market adoption of our products, and our ability to successfullydifferentiate our products from competing products and services. Our brand promotion may not be successful or result in revenue generation. Any incident thaterodes consumer affinity for our brand could significantly reduce our brand value and damage our business. If consumers perceive or experience a reduction inquality, or in any way believe we fail to deliver a consistently positive experience, our brand value could suffer and our business may be adversely affected.In particular, adverse weather conditions can impact guest traffic at our retailers, and, in more severe cases, cause temporary retail closures, sometimes forprolonged periods. Our business is subject to seasonal fluctuations, with retail sales typically higher during certain months, such as December. Adverse weatherconditions during our most favorable months or periods may exacerbate the effect of adverse weather on consumer traffic and may cause fluctuations in ouroperating results from quartertoquarter within a fiscal year.If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operationsand financial condition could be adversely affected.Our ability to attract new customers depends in part on our ability to enhance and improve our existing products, increase adoption and usage of ourproducts and introduce new products. The success of any enhancements or new products depends on several factors, including timely completion, adequatequality testing, actual performance quality, and overall market acceptance. Enhancements and new products that we develop may not be introduced in a timely orcosteffective manner, may contain errors or defects, may have interoperability difficulties with our platform or other products or may not achieve the broad marketacceptance necessary to generate significant revenue. Furthermore, our ability to increase the usage of our products depends, in part, on the development of newuse cases for our products and may be outside of our control. If we are unable to successfully enhance our existing products to meet evolving customerrequirements, increase adoption and usage of our products, develop new products, then our business, results of operations and financial condition would beadversely affected.The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile Apps and customdevelopment services.We must continue to enhance and improve the performance, functionality and reliability of our products. The mobile technology industry is characterizedby rapid technological change, changes in user requirements and preferences, frequent new product and services introductions embodying new technologies andthe emergence of new industry standards and practices that could render our products obsolete. Our success will depend, in part, on our ability to both internallydevelop and enhance our existing products, develop new products that address the increasingly sophisticated and varied needs of our customers, and respond totechnological advances and emerging industry standards and practices on a costeffective and timely basis. The development of our technology involvessignificant technical and business risks. We may fail to use new technologies effectively or to adapt our proprietary technology and systems to customerrequirements or emerging industry standards. If we are unable to adapt to changing market conditions, customer requirements or emerging industry standards, wemay not be able to increase our revenue and expand our business.Changes in economic conditions could materially affect our business, financial condition and results of operations.Because our primary target customers include U.S. retailers , we, together with the rest of the fashion/apparel industry, will depend upon consumerdiscretionary spending. Increases in unemployment rates, reductions in home values, increases in home foreclosures, investment losses, personal bankruptcies andreductions in access to credit and reduced consumer confidence, may impact consumers’ ability and willingness to spend discretionary dollars. In addition, volatileeconomic conditions may repress consumer confidence and discretionary spending. Any of the foregoing may have a material adverse effect on our business,financial condition and results of operations.24Our growth depends, in part, on the success of our strategic relationships with third parties.To grow our business, we anticipate that we will continue to depend on relationships with third parties, such as our customers and thirdparty platforms.Identifying partners, and negotiating and documenting relationships with them, requires significant time and resources. If we are unsuccessful in establishing ormaintaining our relationships with third parties, our ability to compete in the marketplace or to grow our revenue could be impaired, and our results of operationsmay suffer. Even if we are successful, we cannot assure you that these relationships will result in increased customer usage of our products or increased revenue.We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.We currently utilize, and plan on continuing to utilize over the current fiscal year, thirdparty networking providers and distribution through companiesincluding, but not limited to, Apple and Google as well as Shopify, WooCommerce and, Datalogic, Honeywell and Zebra to distribute our technologies. If disruptionsor capacity constraints occur, we may have no means of replacing these services, on a timely basis or at all. This could cause a material adverse condition for ouroperations and financial earnings.We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significantinterruption in our network or hosting and cloud services could adversely impact our operations and harm our business.Our technology infrastructure is critical to the performance of our products and customer satisfaction. Our products run on a complex distributed system,or what is commonly known as cloud computing. We own, operate and maintain elements of this system, but significant elements of this system are operated bythirdparties that we do not control and which would require significant time to replace. We expect this dependence on thirdparties to continue. In particular, asignificant portion, if not almost all data storage, data processing and other computing services and systems is hosted by cloud computing providers. Anydisruptions, outages and other performance problems relating to such services, including infrastructure changes, human or software errors and capacity constraints,could adversely impact our business, financial condition or results of operations.Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.We update our products on a frequent basis. Despite efforts to test our updates, errors, failures or bugs may not be found in our products until after theyare deployed to a customer. We have discovered and expect we will continue to discover errors, failures and bugs in our products and anticipate that certain of theseerrors, failures and bugs will only be discovered and remediated after deployment. Real or perceived errors, failures or bugs in our platform could result in negativepublicity, government inquiries, loss of or delay in market acceptance of our products, loss of competitive position, or claims by customers for losses sustained bythem. In such an event, we may be required, or may choose, for customer relations or other reasons, to expend additional resources in order to help correct theproblem.We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.In connection with the operation of our business, we store, process and transmit data, including personal and payment information, about our employeesand customers, a portion of which is confidential and/or personally sensitive. Unauthorized disclosure or loss of sensitive or confidential data may occur through avariety of methods. These include, but are not limited to, systems failure, employee negligence, fraud or misappropriation, or unauthorized access to or through ourinformation systems, whether by our employees or third parties, including a cyberattack by computer programmers, hackers, members of organized crime and/orstatesponsored organizations, who may develop and deploy viruses, worms or other malicious software programs. Such disclosure, loss or breach could harm ourreputation and subject us to government sanctions and liability under our contracts and laws that protect sensitive or personal data and confidential information,resulting in increased costs or loss of revenues. It is possible that security controls over sensitive or confidential data and other practices we and our thirdpartyvendors follow may not prevent the improper access to, disclosure of, or loss of such information. The potential risk of security breaches and cyberattacks mayincrease as we introduce new products and offerings. Further, data privacy is subject to frequently changing rules and regulations, which sometimes conflict amongthe various jurisdictions in which we provide services. Any failure or perceived failure to successfully manage the collection, use, disclosure, or security of personalinformation or other privacy related matters, or any failure to comply with changing regulatory requirements in this area, could result in legal liability or impairment toour reputation in the marketplace.25A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.Information security risks have generally increased in recent years, in part because of the proliferation of new technologies and the use of the Internet, andthe increased sophistication and activity of organized crime, hackers, terrorists, activists, cybercriminals and other external parties, some of which may be linked toterrorist organizations or hostile foreign governments. For example, a cybercriminal could use cybersecurity threats to gain access to sensitive information aboutanother company or to alter or disrupt news or information to be distributed by PR Newswire. Cybersecurity attacks are becoming more sophisticated and includemalicious software, ransomware, attempts to gain unauthorized access to data and other electronic security breaches that could lead to disruptions in criticalsystems, unauthorized release of confidential or otherwise protected information and corruption of data, substantially damaging our reputation. Any person whocircumvents our security measures could steal proprietary or confidential customer information or cause interruptions in our operations. We incur significant coststo protect against security breaches, and may incur significant additional costs to alleviate problems caused by any breaches. Our failure to prevent securitybreaches, or wellpublicized security breaches affecting the Internet in general, could significantly harm our reputation and business and financial results.Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, dataprotection and information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive andconfidential information. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm ourbusiness, results of operations and financial condition.We and our customers that use our products may be subject to privacy and data protectionrelated laws and regulations that impose obligations inconnection with the collection, processing and use of personal data, financial data, health or other similar data. The U.S. federal and various state and foreigngovernments have adopted or proposed limitations on, or requirements regarding, the collection, distribution, use, security and storage of personally identifiableinformation of individuals. The U.S. Federal Trade Commission and numerous state attorneys general are applying federal and state consumer protection laws toimpose standards on the online collection, use and dissemination of data, and to the security measures applied to such data.Similarly, many foreign countries and governmental bodies, including the EU member states, have laws and regulations concerning the collection and useof personally identifiable information obtained from individuals located in the EU or by businesses operating within their jurisdiction, which are often morerestrictive than those in the United States. Laws and regulations in these jurisdictions apply broadly to the collection, use, storage, disclosure and security ofpersonally identifiable information that identifies or may be used to identify an individual, such as names, telephone numbers, email addresses and, in somejurisdictions, IP addresses and other online identifiers.For example, the GDPR, which took full effect on May 25, 2018. The GDPR enhances data protection obligations for businesses and requires serviceproviders (data processors) processing personal data on behalf of customers to cooperate with European data protection authorities, implement security measuresand keep records of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to or greater of €20 million or 4% of global annualrevenues. In addition, the CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and require deletion of their personalinformation, opt out of certain personal information sharing, and receive detailed information about how their personal information is used. The CCPA provides forcivil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further, failure to comply withthe Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may expose us to administrativefines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the current enforcementmeasures and sanctions. There are also additional laws and regulations in additional jurisdictions around the world which govern the protection of consumers andof electronic communications. If our efforts to comply with GDPR, CCPA or other applicable laws and regulations are not successful, we may be subject to penaltiesand fines that would adversely impact our business and results of operations, and our ability to conduct business could be significantly impaired.26Additionally, although we endeavor to have our products comply with applicable laws and regulations, these and other obligations may be modified, theymay be interpreted and applied in an inconsistent manner from one jurisdiction to another, and they may conflict with one another, other regulatory requirements,contractual commitments or our internal practices. We also may be bound by contractual obligations relating to our collection, use and disclosure of personal,financial and other data or may find it necessary or desirable to join industry or other selfregulatory bodies or other privacy or data protectionrelatedorganizations that require compliance with their rules pertaining to privacy and data protection.We expect that there will continue to be new proposed laws, rules of selfregulatory bodies, regulations and industry standards concerning privacy, dataprotection and information security in the United States, the European Union and other jurisdictions, and we cannot yet determine the impact such future laws,rules, regulations and standards may have on our business. Moreover, existing U.S. federal and various state and foreign privacy and data protectionrelated lawsand regulations are evolving and subject to potentially differing interpretations, and various legislative and regulatory bodies may expand current or enact new lawsand regulations regarding privacy and data protectionrelated matters. Because global laws, regulations and industry standards concerning privacy and datasecurity have continued to develop and evolve rapidly, it is possible that we or our products or platform may not be, or may not have been, compliant with eachsuch applicable law, regulation and industry standard and compliance with such new laws or to changes to existing laws may impact our business and practices,require us to expend significant resources to adapt to these changes, or to stop offering our products in certain countries. These developments could adverselyaffect our business, results of operations and financial condition.We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect ourbusiness.Our ability to implement our business plan successfully depends in part on our ability to build brand recognition using our trademarks, service marks andother proprietary intellectual property, including our names and logos. We currently have no registered trademarks. While we plan to register a number of ourtrademarks; however, no assurance can be given that our trademark applications will be approved. As of December 31, 2022, we own 18 issued patents: six in Europe,four in the U.S., three in each of Russia and Japan and one in each of Canada and Israel which expire between January 20, 2033 and August 18, 2036, and we havetwo additional patent applications in process. As of such date, we do not have any registered trademarks., No assurance can be given that our patent applicationswhich are in process will be approved. If our patent applications are not approved, our ability to expand or develop our business may be negatively affected.Third parties may also oppose our trademark or patent applications, or otherwise challenge our use of the trademarks or patents. In the event that ourtrademarks or patents are successfully challenged, we could be forced to rebrand our goods and services or redesign our technology, which could result in loss ofbrand recognition, and could require us to devote resources to advertising and marketing new brands and products.If our efforts to register, maintain and protect our intellectual property are inadequate, or if any thirdparty misappropriates, dilutes or infringes on ourintellectual property, the value of our brands may be harmed, which could have a material adverse effect on our business and might prevent our brands fromachieving or maintaining market acceptance. We may also face the risk of claims that we have infringed third parties’ intellectual property rights. If third parties claimthat we infringe upon their intellectual property rights, our operating profits could be adversely affected. Any claims of intellectual property infringement, eventhose without merit, could be expensive and time consuming to defend, require us to rebrand our services, if feasible, divert management’s attention and resourcesor require us to enter into royalty or licensing agreements in order to obtain the right to use a thirdparty’s intellectual property.Any royalty or licensing agreements, if required, may not be available to us on acceptable terms or at all. A successful claim of infringement against uscould result in our being required to pay significant damages, enter into costly license or royalty agreements, or stop the sale of certain products or services, any ofwhich could have a negative impact on our operating profits and harm our future prospects.We may face intense competition and expect competition to increase in the future, which could prohibit us from developing a customer base andgenerating revenue.We face significant competition in every aspect of our business. Our competitors include True Fit, Virtusize, EasyMeasure, AR MeasureKit, Smart Measureand 3DLook. These companies may already have an established market in our industry. Most of these companies have significantly greater financial and otherresources than us and have been developing their products and services longer than we have been developing ours.27In addition, some of our larger competitors have substantially broader product offerings and leverage their relationships based on other products orincorporate functionality into existing products to gain business in a manner that discourages potential customers from purchasing our products. Potentialcustomers may also prefer to purchase from their existing solution providers rather than a new solution provider regardless of product performance or features.These larger competitors often have broader product lines and market focus and will therefore not be as susceptible to downturns in a particular market. Conditionsin our market could change rapidly and significantly as a result of technological advancements, partnering by our competitors or continuing market consolidation.New startup companies that innovate and large competitors that are making significant investments in research and development may invent similar or superiorproducts and technologies that compete with our products. In addition, some of our competitors may enter into new alliances with each other or may establish orstrengthen cooperative relationships. Any such consolidation, acquisition, alliance or cooperative relationship could lead to pricing pressure and our loss of anyfuture market share and could result in a competitor with greater financial, technical, marketing, service and other resources, all of which could harm our ability tocompete. Furthermore, organizations may be more willing to incrementally add solutions to their existing infrastructure from competitors than to replace their existinginfrastructure with our products. Any failure to meet and address these factors could harm our business, results of operations and financial condition.Our business operations and future development could be significantly disrupted if we lose key members of our management team.The success of our business continues to depend to a significant degree upon the continued contributions of our senior officers and key employees, bothindividually and as a group. Our future performance will be substantially dependent in particular on our ability to retain and motivate Ronen Luzon, our ChiefExecutive Officer, and certain of our other senior executive officers. The loss of the services of our Chief Executive Officer, senior officers or other key employeescould have a material adverse effect on our business and plans for future development. We have no reason to believe that we will lose the services of any of theseindividuals in the foreseeable future; however, we currently have no effective replacement for any of these individuals due to their experience, reputation in theindustry and special role in our operations. We also do not maintain any key man life insurance policies for any of our employees.If we are able to expand our operations, we may be unable to successfully manage our future growth.Our growth may strain our infrastructure and resources. Any such growth could place increased strain on our management, operational, financial and otherresources, and we will need to train, motivate, and manage employees, as well as attract management, sales, finance and accounting, international, technical, andother professionals. Any failure to expand these areas and implement appropriate procedures and controls in an efficient manner and at a pace consistent with ourbusiness objectives could have a material adverse effect on our business, results of operations and financial condition.Our business operations are conducted in multiple languages and could be disrupted due to miscommunications or translation errors.The success of our business continues to depend on our marketing efforts in the United States, Europe and Israel, each of which is conducted in the locallanguage. Miscommunications or inaccurate foreign language translations could have a material adverse effect on our business operations and financial conditions.Additionally, contracts, communications and complex technical information must be accurately translated into foreign languages.We will continue to incur costs and be subject to various obligations as a result of being a public company, listed in the United States and in Israel.We will continue to incur significant legal, accounting and other expenses as a result of being a public company, listed in the United States and in Israel.Although we will incur costs each year associated with being a publiclytraded company, it is possible that our actual costs of being a publiclytraded company willvary from year to year and may be different than our estimates. In estimating these costs, we take into account expenses related to insurance, legal, accounting andcompliance activities.28Furthermore, the need to maintain the corporate infrastructure demanded of a public company may divert management’s attention from implementing ourgrowth strategy, which could prevent us from improving our business, results of operations and financial condition. We have made, and will continue to make,changes to our internal controls and procedures for financial reporting and accounting systems to meet our reporting obligations as a U.S. publicly traded company.However, the measures we take may not be sufficient to satisfy our obligations as a publicly traded company.Any future or current litigation could have a material adverse impact on our results of operations, financial condition and liquidity.From time to time, we may be subject to litigation, including, among others, potential stockholder derivative actions and class actions. Risks associatedwith legal liability are difficult to assess and quantify, and their existence and magnitude can remain unknown for significant periods of time. Subject to certainexceptions, our Amended and Restated Certificate of Incorporation, or Certificate of Incorporation, and Amended and Restated Bylaws, or Bylaws, require us toindemnify and advance expenses to our officers and directors involved in legal proceedings. To date we have obtained directors and officers’ liability, or D&O,insurance to cover some of the risk exposure for our directors and officers. Such insurance generally pays the expenses (including amounts paid to plaintiffs, fines,and expenses including attorneys’ fees) of officers and directors who are the subject of a lawsuit as a result of their service to us. There can be no assurance that wewill be able to continue to maintain this insurance at reasonable rates or at all, or in amounts adequate to cover such expenses should such a lawsuit occur. WithoutD&O insurance, the amounts we would pay to indemnify our officers and directors should they be subject to legal action based on their service to us could have amaterial adverse effect on our financial condition, results of operations and liquidity. Such lawsuits, and any related publicity, may result in substantial costs and,among other things, divert the attention of management and our employees. An unfavorable outcome in any claim or proceeding against us could have a materialadverse impact on our financial position and results of operations for the period in which the unfavorable outcome occurs, and potentially in future periods. Further,any settlement announced by us may expose us to further claims against us by third parties seeking monetary or other damages which, even if unsuccessful, woulddivert management attention from the business and cause us to incur costs, possibly material, to defend such matters, which could have a material adverse impacton our financial position. See “Legal Proceedings” for more information regarding our involvement in ongoing litigation matters.Federal, state and local or Israeli tax rules may adversely impact our results of operations and financial position.We are subject to federal, state and local taxes in the U.S., as well as local taxes in Israel in respect to our operations in Israel. Although we believe our taxestimates are reasonable, if the Internal Revenue Service or other taxing authority disagrees with the positions we have taken on our tax returns, we could faceadditional tax liability, including interest and penalties. If material, payment of such additional amounts upon final adjudication of any disputes could have a materialimpact on our results of operations and financial position. In addition, complying with new tax rules, laws or regulations could impact our financial condition, andincreases to federal or state statutory tax rates and other changes in tax laws, rules or regulations may increase our effective tax rate. Any increase in our effectivetax rate could have a material impact on our financial results.A significant majority of Orgad’s revenue is from sales of products on Amazon’s U.S. Marketplace and any change, limitation or restriction on ourability to operate on Amazon’s platform or any other marketplace could have a material adverse impact to our business, results of operations, financialcondition and prospects.Orgad, our wholly owned subsidiary, operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com, eBay and others. A substantial percentage of Orgad’s revenue is driven by sales on Amazon’s U.S. marketplace and Orgad is subject toterms of service of Amazon and other maketplaces and various other seller policies and services that apply to third parties selling products on Amazon and othermarketplaces. Generally, a marketplace has the right to terminate or suspend its agreement with Orgad at any time and for any reason. Such marketplace may takeother actions against Orgad such as suspending or terminating a seller account or product listing and withholding payments owed to Orgad indefinitely. Forexample, in July 2022, Amazon deactivated Orgad’s Amazon U.S. store as a result of complaints submitted due to an error in the listed manufacturer of certainproducts on Orgad’s store. Although its account was subsequently reinstated in September 2022, if the deactivation were to occur in the future for a prolongedperiod of time, or if Amazon were to terminate Orgad’s account, this would have a material adverse effect on our business, results of operations, financial conditionand prospects. While Orgad endeavors to materially comply with the terms of services of the marketplaces on which it operates, we can provide no assurance thatthese marketplaces will have the same determination with respect to our compliance.29In addition, Amazon and other marketplaces can make changes to its platform that could require Orgad to change the manner in which it operates, limit itsability to successfully launch new products or increase its costs to operate and such changes could have an adverse effect on our business, results of operations,financial condition and prospects. Examples of changes that could impact us relate to platform fee charges (i.e., selling commissions), exclusivity, inventorywarehouse availability, excluded products and limitations on sales and marketing. Any change, limitation or restriction on our ability to sell on Amazon’s platform orany other marketplace, even if temporary, could have a material impact on our business, results of operations, financial condition and prospects.Orgad also relies on services provided by Amazon’s fulfillment platform, including Prime Certification, which provides for expedited shipping to theconsumer, an important aspect in the buying decision for consumers. For products that Orgad fulfills itself, Orgad is qualified to offer our products for sale withPrime Certification delivery. Any inability to market our products for sale with expedited delivery provided under Prime Certification could have a material impact onour business, results of operations, financial condition and prospects. Failure to remain compliant with the best fulfillment practices on Amazon’s platform couldhave a material impact on our business, results of operations, financial condition and prospects. In addition, due to the COVID19 pandemic, Amazon has changedthe amount of inventory it accepts per product for a period of time. If this were to continue it could cause us to miss sales and/or pay additional shipping costswhich would harm our business operations and financial conditions.Orgad’s business depends on its ability to build and maintain strong product listings on ecommerce platforms. Orgad may not be able to maintain andenhance our product listings if it receives unfavorable customer complaints, negative publicity or otherwise fails to live up to consumers’ expectations, whichcould materially adversely affect our business, results of operations and growth prospects.Maintaining and enhancing Orgad’s product listings is critical in expanding and growing its business. However, a significant portion of Orgad’s perceivedperformance to the customer depends on third parties outside of its control, including suppliers and thirdparty delivery agents as well as online retailers such asAmazon and eBay. Because Orgad’s agreements with its online retail partners are generally terminable at will, it may be unable to maintain these relationships, andour results of operations could fluctuate significantly from period to period. Because Orgad relies on third parties to deliver its products, it is subject to shippingdelays or disruptions caused by inclement weather, natural disasters, labor activism, health epidemics or bioterrorism. It may also experience shipping delays ordisruptions due to other carrierrelated issues relating to their own internal operational capabilities. Further, Orgad relies on the business continuity plans of thesethird parties to operate during pandemics, like the COVID19 pandemic, and it has limited ability to influence their plans, prevent delays, and/or cost increases due toreduced availability and capacity and increased required safety measures.Customer complaints or negative publicity about its products, delivery times, or marketing strategies, even if not accurate, especially on blogs, social mediawebsites and thirdparty market sites, could rapidly and severely diminish consumer view of Orgad’s product listings and result in harm to its brand. Customers mayalso make safetyrelated or other types of claims regarding products sold through our online retail partners, such as Amazon, which may result in an online retailpartner removing the product from its marketplace. We also use and rely on other services from third parties, such as our telecommunications services, and thoseservices may be subject to outages and interruptions that are not within our control.Orgad faces risks related to successfully optimizing and operating its fulfillment and customer service operations.Failures to adequately predict customer demand or otherwise optimize and operate its fulfillment and customer service operations successfully from time totime result in excess or insufficient fulfillment or customer service capacity, increased costs, and impairment charges, any of which could materially harm ourbusiness. As Orgad continues to add fulfillment and customer service capability or add new businesses with different requirements, its fulfillment and customerservice operations become increasingly complex and operating them becomes more challenging. There can be no assurance that Orgad will be able to operate ouroperations effectively.30In addition, failure to optimize inventory in our fulfillment operations increases net shipping cost by requiring longzone or partial shipments. Orgad may beunable to adequately staff its fulfillment and customer service operations. Orgad’s failure to properly handle such inventory or to accurately forecast productdemand may result in it being unable to secure sufficient storage space or to optimize its fulfillment operations or cause other unexpected costs and other harm toour business and reputation.Orgad relies on a limited number of shipping companies to deliver inventory to it and completed orders to our customers. The inability to negotiateacceptable terms with these companies or performance problems or other difficulties experienced by these companies could negatively impact our operating resultsand customer experience. In addition, Orgad’s ability to receive inbound inventory efficiently and ship completed orders to customers also may be negativelyaffected by natural or manmade disasters, extreme weather, geopolitical events and security issues, labor or trade disputes, and similar events.The variability in Orgad’s retail business places increased strain on its operations.Demand for Orgad’s product listings can fluctuate significantly for many reasons, including as a result of seasonality, promotions, product launches, orunforeseeable events, such as in response to natural or manmade disasters, extreme weather, or geopolitical events. For example, Orgad expects a disproportionateamount of our retail sales to occur during our fourth quarter. Failure to stock or restock popular products in sufficient amounts such that Orgad fails to meetcustomer demand could significantly affect our revenue and our future growth. If too many customers access the websites on which Orgad engages in onlineretailing within a short period of time due to increased demand, Orgad may experience system interruptions that make the websites unavailable or prevent us fromefficiently fulfilling orders, which may reduce the volume of goods its offers or sell and the attractiveness of its products. In addition, Orgad may be unable toadequately staff for fulfillment of orders and customer service during these peak periods and delivery and other fulfillment companies and customer service cosourcers may be unable to meet the seasonal demand.Our business is subject to the risks of earthquakes, fire, power outages, floods, health risks and other catastrophic events, and to interruption by manmade problems such as terrorism.Natural disasters, such as fire or floods, a significant power outage, telecommunications failure, terrorism, an armed conflict, cyberattacks, epidemics andpandemics such as COVID19, or other geopolitical unrest could affect our supply chain, manufacturers, logistics providers, channel partners, or endcustomers orthe economy as a whole and such disruption could impact us and the shipments and sales. These risks may be further increased if the disaster recovery plans for usand our suppliers prove to be inadequate. To the extent that any of the above should result in delays or cancellations of customer orders, the loss of customers, orthe delay in the deployment or shipment of products, our business, financial condition, and operating results would be adversely affected.For example, on January 2, 2023, Orgad experienced a fire at its warehouse in Israel. We are not aware of any casualties or injuries associated with the fire.We shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incidentdid not affect the future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of thisincident on the other parties that were involved in the incident (lessor and others that leased properties near the warehouse).Our business could be negatively impacted by unsolicited takeover proposals, by shareholder activism or by proxy contests relating to the election ofdirectors or other matters.Our business could be negatively affected as a result of an unsolicited takeover proposal, by shareholder activism or a proxy contest. During 2021, anactivist shareholder sought to make changes to our board of directors, among other matters, which ultimately resulted in us entering into a settlement agreementwith the activist shareholder and another shareholder, and for which considerable costs were incurred and absorbed significant time and attention by managementand the board of directors. A future proxy contest, unsolicited takeover proposal, or other shareholder activism relating to the election of directors or other matterswould most likely require us to incur significant legal fees and proxy solicitation expenses and require significant time and attention by management and our Boardof Directors. The potential of a proxy contest, unsolicited takeover proposal, or other shareholder activism could interfere with our ability to execute our strategicplan, give rise to perceived uncertainties as to our future direction, result in the loss of potential business opportunities or make it more difficult to attract and retainqualified personnel, any of which could materially and adversely affect our business and operating results.31Environmental, social and corporate governance (ESG) issues, including those related to climate change and sustainability, may have an adverseeffect on our business, financial condition and results of operations and damage our reputation.There is an increasing focus from certain investors, customers, consumers, employees and other stakeholders concerning ESG matters. Additionally, publicinterest and legislative pressure related to public companies’ ESG practices continue to grow. If our ESG practices fail to meet regulatory requirements or investor,customer, consumer, employee or other shareholders’ evolving expectations and standards for responsible corporate citizenship in areas including environmentalstewardship, support for local communities, Board of Director and employee diversity, human capital management, employee health and safety practices, productquality, supply chain management, corporate governance and transparency, our reputation, brand and employee retention may be negatively impacted, and ourcustomers and suppliers may be unwilling to continue to do business with us.Customers, consumers, investors and other shareholders are increasingly focusing on environmental issues, including climate change, energy and wateruse, plastic waste and other sustainability concerns. Concern over climate change may result in new or increased legal and regulatory requirements to reduce ormitigate impacts to the environment. Changing customer and consumer preferences or increased regulatory requirements may result in increased demands orrequirements. Complying with these demands or requirements could cause us to incur additional manufacturing, operating or product development costs.If we do not adapt to or comply with new regulations, including the SEC’s published proposed rules that would require companies to provide significantlyexpanded climaterelated disclosures in their periodic reporting, which may require us to incur significant additional costs to comply and impose increased oversightobligations on our management and board of directors, or fail to meet evolving investor, industry or stakeholder expectations and concerns regarding ESG issues,investors may reconsider their capital investment in our company, we may become subject to penalties, and customers and consumers may choose to stoppurchasing our products, if approved for commercialization, which could have a material adverse effect on our reputation, business or financial condition.Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions andadverse developments with respect to financial institutions and associated liquidity risk.Our business depends on the economic health of the global economies. If the conditions in the global economies remain uncertain or continue to bevolatile, or if they deteriorate, including as a result of the impact of military conflict, such as the war between Russia and Ukraine, terrorism or other geopoliticalevents, our business, operating results and financial condition may be materially adversely affected. Economic weakness, inflation and increases in interest rates,limited availability of credit, liquidity shortages and constrained capital spending have at times in the past resulted, and may in the future result, in challenging anddelayed sales cycles, slower adoption of new technologies and increased price competition, and could negatively affect our ability to forecast future periods, whichcould result in an inability to satisfy demand for our products and a loss of market share.In addition, increases in inflation raise our costs for commodities, labor, materials and services and other costs required to grow and operate our business,and failure to secure these on reasonable terms may adversely impact our financial condition. Additionally, increases in inflation, along with the uncertaintiessurrounding COVID19, geopolitical developments and global supply chain disruptions, have caused, and may in the future cause, global economic uncertainty anduncertainty about the interest rate environment, which may make it more difficult, costly or dilutive for us to secure additional financing. A failure to adequatelyrespond to these risks could have a material adverse impact on our financial condition, results of operations or cash flows.More recently, the closures of SVB and Signature Bank and their placement into receivership with the FDIC created bankspecific and broader financialinstitution liquidity risk and concerns. Although the Department of the Treasury, the Federal Reserve and the FDIC jointly released a statement that depositors atSVB and Signature Bank would have access to their funds, even those in excess of the standard FDIC insurance limits, under a systemic risk exception, futureadverse developments with respect to specific financial institutions or the broader financial services industry may lead to marketwide liquidity shortages, impair theability of companies to access nearterm working capital needs, and create additional market and economic uncertainty. There can be no assurance that future creditand financial market instability and a deterioration in confidence in economic conditions will not occur. Our general business strategy may be adversely affected byany such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions. If the current equityand credit markets deteriorate, or if adverse developments are experienced by financial institutions, it may cause shortterm liquidity risk and also make anynecessary debt or equity financing more difficult, more costly, more onerous with respect to financial and operating covenants and more dilutive. Failure to secureany necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stockprice and could require us to alter our operating plans. In addition, there is a risk that one or more of our service providers, financial institutions, manufacturers,suppliers and other partners may be adversely affected by the foregoing risks, which could directly affect our ability to attain our operating goals on schedule andon budget.Our business may be adversely affected by the impact of any renewed outbreak of the COVID19 pandemic.Public health epidemics or outbreaks could adversely impact our business. In late 2019, a novel strain of COVID19, also known as coronavirus, wasreported in Wuhan, China. While initially the outbreak was largely concentrated in China, it spread worldwide. Many countries around the world, including in Israel,implemented significant governmental measures to control the spread of the virus, including temporary closure of businesses, severe restrictions on travel and themovement of people, and other material limitations on the conduct of business. These measures haven historically resulted in work stoppages and other disruptions.If there is a resurgence of the COVID19 pandemic, this could adversely impact our operations, including among others, our sales and marketing efforts and ourability to raise additional funds, and accordingly, the impact of COVID19 could have an adverse impact on our business and our financial results.32Risks Related to Our Operations in RussiaRussia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.In addition to our Israel operations, we have operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia and we engage two software developers through a third party who are based in Ukraine. On February 24,2022, Russia invaded Ukraine. The outbreak of hostilities between the two countries could result in more widespread conflict and could have a severe adverse effecton the region.Following Russia’s actions, various countries, including the U.S., Canada, the United Kingdom, Germany and France, as well as the European Union,issued broadranging economic sanctions against Russia. Such sanctions included, among other things, a prohibition on doing business with certain Russiancompanies, officials and oligarchs; a commitment by certain countries and the European Union to remove selected Russian banks from the Society for WorldwideInterbank Financial Telecommunications (SWIFT) electronic banking network that connects banks globally; and restrictive measures to prevent the Russian CentralBank from undermining the impact of the sanctions. In response to sanctions, the Russian Central Bank raised its interest rates and banned sales of local securitiesby foreigners. Russia may take additional counter measures or retaliatory actions in the future. While diplomatic efforts have been ongoing, the conflict betweenRussia and Ukraine is currently unpredictable and has the potential to result in broadened military actions. The duration of ongoing hostilities and such sanctionsand related events cannot be predicted. Uncertainty as to future relations between Russia and the U.S. and other countries in the west, or between Russia and othereastern European countries, may have a negative impact on our operations.Such international sanctions and potential responses to such sanctions, including those that may limit or restrict transfer funds into Russia, may in thefuture significantly affect our ability to conduct our activities in Russia including paying our personnel. To date, the conflict has had minimal impact on operations .Nevertheless, we have no way to predict the progress or outcome of the situation in Ukraine, as the conflict and governmental reactions are rapidly developing andbeyond our control. Prolonged unrest, intensified military activities or more extensive sanctions impacting the region could have a material adverse effect on ouroperations, results of operations, financial condition, liquidity and business outlook.Political, military conditions or other risks in Russia could adversely affect our business.Russia is a federative state consisting of 85 constituent entities, or “subjects.” The Russian Constitution reserves some governmental powers for theRussian Government, some for the subjects and some for areas of joint competence. In addition, eight “federal districts” (“federal’nye okruga”), which are overseenby a plenipotentiary representative of the President, supplement the country’s federal system. The delineation of authority among and within the subjects is, inmany instances, unclear and contested, particularly with respect to the division of tax revenues and authority over regulatory matters. For these reasons, theRussian political system is vulnerable to tension and conflict between federal, subject and local authorities. This tension creates uncertainties in the operatingenvironment in Russia, which may prevent us from carrying out our strategy effectively. The risks associated with these events or potential events could materiallyand adversely affect the investment environment and overall consumer and entrepreneurial confidence in Russia, and our business, prospects, financial condition,hiring ability, and results of operations could be materially and adversely affected.Furthermore, high levels of corruption reportedly exist in Russia, including the bribing of officials for the purpose of initiating investigations bygovernment agencies. Corruption and other illegal activities could disrupt our ability to conduct our business effectively, and claims that the we are involved in suchcorruption or illegal activities could generate negative publicity, of which could harm our development, financial condition, results of operations or prospects.Economic and other risks in Russia could adversely affect our business.Operating a business in an emerging market such as Russia can involve a greater degree of risk than operating a business in more developed markets.Over the last two decades, the Russian economy has experienced or continues to experience at various times:●significant volatility in its GDP;33●the impact of international sanctions;●high levels of inflation;●increases in, or high, interest rates;●sudden price declines in oil and other natural resources;●instability in the local currency market;●budget deficits;●the continued operation of lossmaking enterprises due to the lack of effective bankruptcy proceedings;●capital flight; and●significant increases in poverty rates, unemployment and underemployment.The Russian economy has been subject to abrupt downturns in the past, including as a result of the invasion of Ukraine, global financial crisis, and, as anemerging market, remains particularly vulnerable to further external shocks and any future fluctuations in the global markets. Any further deterioration in the generaleconomic conditions in Russia (whether or not as a result of the events mentioned above) could have a material adverse effect on the Russian economy and mayresult in hiring and operational difficulties, as well as potential flight of human capital, which could have a material adverse effect on our business, productdevelopment and results of operations.Legal risks in Russia could materially adversely affect our operations and Russian tax legislation is subject to frequent change.Among the risks of the Russian legal system are: inconsistencies among laws, presidential decrees, and government and ministerial orders and resolutions;conflicting local, regional and federal laws and regulations; the untested nature of the independence of the judiciary and its sensitivity to economic or politicalinfluences; substantial gaps in the regulatory structure due to the delay or absence of implementing legislation; a high degree of discretion on the part ofgovernmental authorities; reported corruption within governmental entities and other governmental authorities; the relative inexperience of judges and courts ininterpreting laws applicable to complex transactions; and the unpredictability of enforcement of foreign judgments and foreign arbitral awards. Many Russian lawsand regulations are construed in a way that provides for significant administrative discretion in application and enforcement. Unlawful, selective or arbitrary actionsof the Russian Government have reportedly included the denial or withdrawal of licenses, sudden and unexpected tax audits, criminal prosecutions, and civil claims.Any of the above events may have a material adverse effect on our product development and results of operations.Despite certain improvements in the taxation system made by the Russian Government over the past decade, Russian tax legislation is still subject tofrequent change, varying interpretations, and inconsistent and selective enforcement. There are currently no clear rules for distinguishing between lawful taxoptimization and tax evasion. In addition, Russian tax laws do not contain detailed rules on the taxation in Russia of foreign companies. As such, taxpayers oftenhave to resort to court proceedings to defend their position against the Russian tax authorities. However, in the absence of consistent court practice or bindingprecedents, there is inconsistency amongst court decisions. Further, the possibility exists that the Russian Federation would impose arbitrary or onerous taxes andpenalties in the future, which could have a material adverse effect on our product development and results of operations.34Risks Related to Our Operations In IsraelOur headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.Our headquarters and most of our operations are located in central Israel and our key employees, officers and directors are residents of Israel. Accordingly,political, economic and military conditions in Israel and the surrounding region may directly affect our business. Since the establishment of the State of Israel in1948, a number of armed conflicts have taken place between Israel and its Arab neighbors. Any hostilities involving Israel or the interruption or curtailment of tradewithin Israel or between Israel and its trading partners could adversely affect our operations and results of operations and could make it more difficult for us to raisecapital. During the winter of 2008, winter of 2012 and the summer of 2014, Israel was engaged in an armed conflict with Hamas, a militia group and political partyoperating in the Gaza Strip, and during the summer of 2006, Israel was engaged in an armed conflict with Hezbollah, a Lebanese Islamist Shiite militia group andpolitical party. Israel faces political tension with respect to its relationships with Turkey, Iran and certain Arab neighbor countries. In addition, recent conflictsinvolved missile strikes against civilian targets in various parts of Israel, and negatively affected business conditions in Israel. Recent political uprisings and socialunrest in various countries in the Middle East and North Africa are affecting the political stability of those countries. This instability may lead to deterioration of thepolitical relationships that exist between Israel and these countries, and have raised concerns regarding security in the region and the potential for armed conflict.Any armed conflicts, terrorist activities or political instability in the region could adversely affect business conditions and could harm our results of operations. Forexample, any major escalation in hostilities in the region could result in a portion of our employees and service providers being called up to perform military duty foran extended period of time. Parties with whom we do business have sometimes declined to travel to Israel during periods of heightened unrest or tension, forcing usto make alternative arrangements when necessary. In addition, the political and security situation in Israel may result in parties with whom we have agreementsinvolving performance in Israel claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions insuch agreements. Any future deterioration in the political and security situation in Israel will negatively impact our business.Our commercial insurance does not cover losses that may occur as a result of events associated with the security situation in the Middle East. Althoughthe Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that thisgovernment coverage will be maintained. Any losses or damages incurred by us could have a material adverse effect on our business. Any armed conflicts orpolitical instability in the region would likely negatively affect business conditions and could harm our results of operations.Further, in the past, the State of Israel and Israeli companies have been subjected to an economic boycott. Several countries still restrict business with theState of Israel and with Israeli companies. These restrictive laws and policies may have an adverse impact on our operating results, financial condition or theexpansion of our business.The legislative power of the State resides in the Knesset, a unicameral parliament that consists of 120 members elected by nationwide voting under asystem of proportional representation. Israel’s most recent general elections were held on April 9, 2019, September 17, 2019, March 2, 2020 and November 1, 2022.The uncertainty surrounding the results of the recent elections may continue. Actual or perceived political instability in Israel or any negative changes in thepolitical environment, may individually or in the aggregate adversely affect the Israeli economy and, in turn, our business, financial condition, results of operationsand prospects.Some of our employees are obligated to perform military reserve duty in Israel.Many Israeli citizens, including our employees are obligated to perform one month, and in some cases more, of annual military reserve duty until they reachthe age of 40 (or older, for reservists with certain occupations) and, in the event of a military conflict, may be called to active duty. In response to increases interrorist activity, there have been periods of significant callups of military reservists. It is possible that there will be military reserve duty callups in the future. Ouroperations could be disrupted by such callups. Such disruption could materially adversely affect our business, results of operations and financial condition.35It may be difficult to enforce a nonIsraeli judgment against the Company or its officers and directors.The operating subsidiary of ours is incorporated in Israel. All of our executive officers and directors are not residents of the United States, and asubstantial portion of our assets and the assets of our executive officers and directors are located outside the United States. Therefore, a judgment obtained againstus, or any of these persons, including a judgment based on the civil liability provisions of the U.S. federal securities laws, may not be collectible in the United Statesand may not necessarily be enforced by an Israeli court. It also may be difficult to affect service of process on these persons in the United States or to assert U.S.securities law claims in original actions instituted in Israel. Additionally, it may be difficult for an investor, or any other person or entity, to initiate an action withrespect to U.S. securities laws in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of U.S. securities laws reasoning that Israel is not themost appropriate forum in which to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law isapplicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law often involves the testimony of expert witnesses, which can be a timeconsuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel that addresses the mattersdescribed above. As a result of the difficulty associated with enforcing a judgment against us in Israel, it may be impossible to collect any damages awarded byeither a U.S. or foreign court.Our international operations could expose us to additional risks, including exchange rate fluctuations, legal regulations and political or economicinstability that could harm our business and operating results.Our international operations expose us to the following risks which may have a material adverse effect on our business and operating results:●devaluations and fluctuations in currency exchange rates including fluctuations between the U.S. dollar and the NIS and the Russian Ruble;●costs of compliance with local laws, including labor laws and intellectual property laws;●compliance with domestic and foreign government policies, including compliance with Israeli securities laws and TASE;●changes in trade regulations and procedures affecting approval, production, pricing, marketing, reimbursement for and access to, our products;●compliance with applicable foreign anticorruption laws, antitrust/competition laws, antiBoycott Israel law and antimoney laundering laws; and●economic and geopolitical developments and conditions, including ongoing instability in global economies and financial markets, international hostilities,acts of terrorism and governmental reactions, inflation, outbreaks of contagious disease (e.g., the COVID19 pandemic) and military and political alliances.Risks Related to Our Common StockA more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.Although our common stock is listed on the Nasdaq Capital Market, it has only been traded on the Nasdaq Capital Market since July 25, 2016. There hasbeen relatively limited trading volume in the market for our common stock, and a more active, liquid public trading market may not develop or may not be sustained.Limited liquidity in the trading market for our common stock may adversely affect a stockholder’s ability to sell its shares of common stock at the time it wishes tosell them or at a price that it considers acceptable. If a more active, liquid public trading market does not develop, we may be limited in our ability to raise capital byselling shares of common stock and our ability to acquire other companies or assets by using shares of our common stock as consideration. In addition, if there is athin trading market or “float” for our stock, the market price for our common stock may fluctuate significantly more than the stock market as a whole. Without a largefloat, our common stock would be less liquid than the stock of companies with broader public ownership and, as a result, the trading prices of our common stockmay be more volatile and it would be harder for you to liquidate any investment in our common stock. Furthermore, the stock market is subject to significant priceand volume fluctuations, and the price of our common stock could fluctuate widely in response to several factors, including:●our quarterly or annual operating results;●changes in our earnings estimates;●investment recommendations by securities analysts following our business or our industry;●additions or departures of key personnel;●changes in the business, earnings estimates or market perceptions of our competitors;36●our failure to achieve operating results consistent with securities analysts’ projections;●changes in industry, general market or economic conditions;●announcements of legislative or regulatory changes; and●natural disasters (including for example, the recent fire in the Orgad warehouse) and political and economic instability, including wars, terrorism, politicalunrest, results of certain elections and votes, emergence of a pandemic, or other widespread health emergencies (or concerns over the possibility of suchan emergency, including for example, the recent the COVID19 pandemic), boycotts, adoption or expansion of government trade restrictions, and otherbusiness restrictions.The stock market has experienced extreme price and volume fluctuations in recent years that have significantly affected the quoted prices of the securitiesof many companies. The changes often appear to occur without regard to specific operating performance. The price of our common stock could fluctuate basedupon factors that have little or nothing to do with us and these fluctuations could materially reduce our stock price.Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.If any of our shareholders were to decide to sell large amounts of stock over a short period of time (presuming such sales were permitted) such sales couldcause the market price of our common stock to drop significantly, even if our business is doing well. Further, the market price of our common stock could decline as aresult of the perception that such sales could occur. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equitysecurities in the future at a time and price that we deem appropriate.Our securities are traded on more than one market which may result in price variations.Our securities have been trading on the Nasdaq Capital Market since July 2016 and on TASE since September 2005. Trading in our securities on suchexchanges occurs in different currencies (U.S. dollars on the Nasdaq Capital Market and NIS on the TASE), and at different times (due to different time zones,trading days and public holidays in the United States and Israel). The trading prices of our securities on the two exchanges may differ due to the foregoing andother factors. Any decrease in the price of our shares on the TASE could cause a decrease in the trading price of our shares on the Nasdaq Capital Market and viceversa.We are a smaller reporting company and, as a result of the reduced disclosure and governance requirements applicable to such companies, ourcommon stock may be less attractive to investors.We are a smaller reporting company, (i.e. a company with “public float” held by nonaffiliates with a market value of less than $250 million) and we areeligible to take advantage of certain exemptions from various reporting requirements applicable to other public companies. We have elected to adopt these reduceddisclosure requirements. We cannot predict if investors will find our common stock less attractive as a result of our taking advantage of these exemptions. If someinvestors find our common stock less attractive as a result of our choices, there may be a less active trading market for our common stock and our stock price may bemore volatile.We do not expect to pay any cash dividends in the foreseeable future.We have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our board of directors deems relevant. Investors should not purchase our common stock expecting to receive cash dividends. Because we do notpay dividends, and there may be limited trading, investors may not have any manner to liquidate or receive any payment on their investment. Therefore, our failureto pay dividends may cause investors to not see any return on investment even if we are successful in our business operations. In addition, because we do not paydividends we may have trouble raising additional funds, which could affect our ability to expand our business operations.37UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2022☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ________ to _________Commission file number 00137370MY SIZE, INC.(Exact name of registrant as specified in charter)Delaware510394637(State or jurisdiction ofIncorporation or organization)I.R.S EmployerIdentification No.4 Hayarden, POB 1026, Airport City, Israel7010000(Address of principal executive offices)(Zip code)+9723 6009030(Registrant’s telephone number, including area code)Securities registered pursuant to Section 12(b) of the Act:Title of each classTrading Symbol(s)Name of Each Exchange on Which RegisteredCommon Stock, par value $0.001 per shareMYSZThe Nasdaq Capital MarketSecurities registered pursuant to Section 12(g) of the Act: None.Indicate by check mark whether the registrant is a wellknown seasoned issuer as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes☒ No ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer, a smaller reporting company, or an emerginggrowth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 of theExchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☒Smaller Reporting Company☒Emerging Growth Company☐If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revisedfinancial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b2 of the Exchange Act) Yes ☐No☒Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control overfinancial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflectthe correction of an error to previously issued financial statements. ☐Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by anyof the registrant’s executive officers during the relevant recovery period pursuant to §240.10D1(b). ☐The aggregate market value of voting and nonvoting common equity held by nonaffiliates of the registrant as of June 30, 2022, the last business day of theregistrant’s most recently completed second fiscal quarter, was approximately $25,551,906.Number of shares of common stock outstanding as of March 31, 2023 was 2,446,780.Documents Incorporated by Reference: None.Table of ContentsPart IItem 1.Business2Item 1A.Risk Factors18Item 1B.Unresolved Staff Comments41Item 2.Properties41Item 3.Legal Proceedings41Item 4.Mine Safety Disclosures42Part IIItem 5.Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities43Item 6.Selected Financial Data43Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations43Item 7A.Quantitative and Qualitative Disclosures about Market Risk50Item 8.Financial Statements and Supplementary DataF1Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure51Item 9A.Controls and Procedures51Item 9B.Other Information51Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.51Part IIIItem 10.Directors, Executive Officers and Corporate Governance52Item 11.Executive Compensation57Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters60Item 13.Certain Relationships and Related Transactions, and Director Independence62Item 14.Principal Accounting Fees and Services65Part IVItem 15.Exhibits, Financial Statement Schedules66Signatures69iPART IIn this Annual Report on Form 10K, unless the context requires otherwise, the terms “we,” “our,” “us,” or “the Company” refer to MySize, Inc., a Delawarecorporation, and its subsidiaries, including MySize Israel 2014 Ltd. My Size LLC, Orgad International Marketing Ltd., or Orgad, and Naiz Bespoke Technologies, S.L,or Naiz, taken as a whole.References to “U.S. dollars” and “$” are to currency of the United States of America, and references to “NIS” are to New Israeli Shekels. Unless otherwiseindicated, U.S. dollar translations of NIS amounts presented in this Annual Report on Form 10K for the year ended on December 31, 2022 are translated using therate of NIS 3.358 to $1.00.All information in this Annual Report on Form 10K relating to shares or price per share reflects the 1for25 reverse stock split effected by us on December8, 2022.CAUTIONARY NOTE ON FORWARDLOOKING STATEMENTSThis Annual Report on Form 10K contains certain forwardlooking statements within the meaning of Section 27A of the Securities Act and Section 21E ofthe Exchange Act. Any statements in Annual Report on Form 10K about our expectations, beliefs, plans, objectives, assumptions or future events or performanceare not historical facts and are forwardlooking statements. These statements are often, but not always, made through the use of words or phrases such as“believe,” “will,” “expect,” “anticipate,” “estimate,” “intend,” “plan” and “would.” For example, statements concerning financial condition, possible or assumedfuture results of operations, growth opportunities, industry ranking, plans and objectives of management, markets for our common stock and future managementand organizational structure are all forwardlooking statements. Forwardlooking statements are not guarantees of performance. They involve known and unknownrisks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to differ materially from any results, levels ofactivity, performance or achievements expressed or implied by any forwardlooking statement.Any forwardlooking statements are qualified in their entirety by reference to the risk factors discussed throughout this Annual Report on Form 10K. Someof the risks, uncertainties and assumptions that could cause actual results to differ materially from estimates or projections contained in the forwardlookingstatements include but are not limited to:●our history of losses and needs for additional capital to fund our operations and our inability to obtain additional capital on acceptable terms, or at all;●risks related to our ability to continue as a going concern;●the new and unproven nature of the measurement technology markets;●our ability to achieve customer adoption of our products;●our ability to realize the benefits of our acquisitions of Orgad and Naiz;●our dependence on assets we purchased from a related party;●our ability to enhance our brand and increase market awareness;●our ability to introduce new products and continually enhance our product offerings;●the success of our strategic relationships with third parties;●information technology system failures or breaches of our network security;●competition from competitors;●our reliance on key members of our management team;●current or future litigation;●current or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated liquidityrisk; and●the impact of the political and security situation in Israel on our business.1The foregoing list sets forth some, but not all, of the factors that could affect our ability to achieve results described in any forwardlooking statements.You should read this Annual Report on Form 10K and the documents that we reference herein and have filed as exhibits to the Annual Report on Form 10K,completely and with the understanding that our actual future results may be materially different from what we expect. You should assume that the informationappearing in this Annual Report on Form 10K is accurate as of the date hereof. Because the risk factors referred to in this Annual Report on Form 10K, could causeactual results or outcomes to differ materially from those expressed in any forwardlooking statements made by us or on our behalf, you should not place unduereliance on any forwardlooking statements.Further, any forwardlooking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forwardlookingstatement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. New factors emergefrom time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extentto which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements. We qualify all ofthe information presented in this Annual Report on Form 10K, and particularly our forwardlooking statements, by these cautionary statements.ITEM 1. BUSINESSOverviewWe are an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile phone or through MySizeID Widget: a simple questionnaire which uses a database collected over the years.MySizeID syncs the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and only presents itemsfor purchase that match their measurements to ensure a correct fit.We are positioning ourselves as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empower brand design teams, which are designed to increase endconsumer satisfaction, contributing to a sustainable world and reduce operation costs.Recent DevelopmentsOrgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,602 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.2The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz, a limitedliability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.3The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Warehouse FireOn January 2, 2023, Orgad experienced a fire at its warehouse in Israel. we are not aware of any casualties or injuries associated with the fire. We shiftedOrgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incident did not affectthe future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of this incident on the otherparties that were involved in the incident (lessor and others that leased properties near the warehouse).January 2023 FinancingOn January 10, 2023, we entered into a securities purchase agreement, or the RD Purchase Agreement, pursuant to which we agreed to sell and issue in theRD Offering an aggregate of 162,000 of our shares of common stock, or the RD Shares, and prefunded warrants, or the Prefunded Warrants, to purchase up to279,899 shares of common stock and, in a concurrent private placement, unregistered warrants to purchase up to 883,798 shares of common stock, or the RDWarrants, consisting of Series A warrants, or Series A Warrants, to purchase up to 441,899 shares of common stock and Series B warrants, or Series B Warrants, topurchase up to 441,899 shares of common stock, at an offering price of $3.055 per RD Share and associated Series A and Series B Warrants and an offering price of$3.054 per Prefunded Warrant and associated Series A and Series B Warrants.4In addition, we entered into a securities purchase agreement, or the PIPE Purchase Agreement, and together with the RD Purchase Agreement, thePurchase Agreements, pursuant to which we agreed to sell and issue in the PIPE Offering an aggregate of up to 540,098 unregistered Prefunded Warrants andunregistered warrants to purchase up to an aggregate of 1,080,196 shares of common stock, or the PIPE Warrants and together with the RD Warrants, the Warrants,consisting of Series A Warrants to purchase up to 540,098 shares of common stock and Series B Warrants to purchase up to 540,098 shares of common stock at anoffering price of $3.054 per Prefunded Warrant and associated Series A and Series B Warrants.The Prefunded Warrants are immediately exercisable at an exercise price of $0.001 per share and will not expire until exercised in full. The Warrants areimmediately exercisable upon issuance at an exercise price of $2.805 per share, subject to adjustment as set forth therein. The Series A Warrants have a term of fiveand onehalf years from the date of issuance and the Series B Warrants have a term of 28 months from the date of issuance. The Warrants may be exercised on acashless basis if there is no effective registration statement registering the shares underlying the warrants.In connection with the PIPE Purchase Agreement, we entered into a registration rights agreement, or the Registration Rights Agreement. Pursuant to theRegistration Rights Agreement, we are required to file a resale registration statement, or the Registration Statement, with the Securities and Exchange Commission, orthe SEC, to register for resale the shares issuable upon exercise of the unregistered Prefunded Warrants and the Series A and Series B Warrants, within 20 days ofthe signing date of the PIPE Purchase Agreement, or the Signing Date, and to have such Registration Statement declared effective within 60 days after the SigningDate in the event the Registration Statement is not reviewed by the SEC, or 90 days of the Signing Date in the event the Registration Statement is reviewed by theSEC. we will be obligated to pay certain liquidated damages if we fail to maintain the effectiveness of the Registration Statement.The Purchase Agreements and the Registration Rights Agreements also contain representations, warranties, indemnification and other provisionscustomary for transactions of this nature. In addition, subject to limited exceptions, the Purchase Agreements provide that for a period of one year following theclosing of the Offerings, we will not effect or enter into an agreement to effect a “variable rate transaction” as defined in the Purchase Agreements.Aggregate gross proceeds to the Company in respect of the Offerings was approximately $3.0 million, before deducting fees payable to the placement agentand other offering expenses payable by the Company.We also entered into a letter agreement, or the Engagement Agreement, with H.C. Wainwright & Co., LLC, or Wainwright, pursuant to which Wainwrightagreed to serve as the exclusive placement agent for the Company in connection with the Offerings. We paid Wainwright a cash placement fee equal to 7% of theaggregate gross proceeds raised in the Offerings, a management fee of 1% of the aggregate gross proceeds raised in the Offerings, a nonaccountable expenseallowance of $85,000 and clearing fees of $15,950. Wainwright also received placement agent warrants, or the Placement Agent Warrants, with substantially the sameterms as the Series A Warrants issued in the Offering in an amount equal to 7% of the aggregate number of Shares and Prefunded Warrants sold in the Offerings, or68,740 shares, at an exercise price of $3.8188 per share and a term expiring on January 10, 2028.Our SolutionOur cloudbased software platform provides highly accurate sizing and measurement with broad applications including the online fashion/apparel industry,logistics and courier services and home DIY. Currently, we are mainly focusing on the ecommerce fashion/apparel industry. This proprietary technology is driven byseveral patented algorithms which are able to calculate and record measurements in a variety of novel ways. Although specific functionality varies by product, webelieve that our core solutions address the need for highly accurate measurements in a variety of consumer friendly, every day uses.5We have developed three products, MySizeID for the fashion/apparel industry, BoxSize for the logistics and courier services market and SizeUp for thehome DIY market.●MySizeID enables shoppers to generate highly accurate measurements of their body to find proper fitting clothes and accessories, through the use ofour application on their mobile phone or through a simple questionnaire if the user decides not to download the application. MySizeID syncs the user’smeasurement data to a sizing chart and presents items for purchase that match their measurements to ensure a correct fit. MySizeID is available forlicense by retailers and accessable by consumers through a web page.●BoxSize enables customers to quickly and easily measure the size and volume of a parcel to accurately calculate shipping fees. It also offers shippingcompanies a variety of precise logistical data for more efficiently managing their supply chain, providing them with an accurate way to compare thephysical package with what is in the shipping manifest. BoxSize solution is available for license on both iOS and Android operating systems. BoxSizeis available on the Honeywell Marketplace and in August 2019 was approved for Honeywell’s Independent Software Vendor Program, and MySize wasgranted an independent software vendor (ISV) status on the Zebra Technologies and on DataLogic platforms.●SizeUp is a digital tape measure that allows users to measure length, width and height of a surface by moving their smartphone from point to point ofan object or space. SizeUp is a valueadd for DIY and home improvement retailers whose customers struggle to find the appropriately sized items (likeblinds or curtains) for their homes or projects due to inaccurate measurements. SizeUp also is designed to replace rulers, tape measures and othermeasuring tools used for DIY projects. SizeUp is available for consumer download on both iOS and Android operating systems.The following are some select key features of our solutions:●Integration Capability. We design our solutions to be flexible and configurable, allowing our clients to match their use of our algorithms and softwarewith their specific business processes and workflows. Our platform has been organically developed from a common code base, data structure and userinterface, providing a consistent user experience with powerful features that are easily adaptable to our clients’ needs. The MySizeID widget can beintegrated via oneline JavaScript code, or through RESTful API;●Intuitive user experience. Our intuitive, easytouse interface is based on current technology, multiple focus groups and automatically adapts to users’devices, including mobile platforms, thereby significantly increasing accessibility of our solutions;●Big Data Generation. While we supply to the user the information he/she requires, we gather certain vital information such as body measurement andpackage volume which can be used anonymously to help the retailer acquire predictive size information on stocking, operations and consumers thatmay be in between sizes. All the information is being gathered and stored on our servers where it can be used by retailers;●NonInvasive. In taking measurements using our solution, the smartphone camera is not utilized; instead, the measurements are captured by scanningthe smartphone over the consumer’s body or package, thus ensuring greater privacy.Our Growth StrategyWe aim to drive revenue primarily through penetration of the U.S. and Europe markets through a business to business to consumer (B2B2C) model in theverticals we are targeting. We are pursuing the following growth strategies:●Sign Additional Commercial Agreements with U.S. Retailers. During 2022, we expanded our commercial agreements with Levi’s, introducing NorthAmerica (U.S. and Canada) and Latin America regions, and by extension Levis’ native apps in EU and U.S. regions. We also entered into commercialagreements with Baby Fresh, Galax, Punto Blanco, GEF France, Diesel, Gaala, Superdry, Uniontex Industries, and Temperlay London among others. Weare in various stages of discussions with U.S. and foreign retailers for the deployment of our size recommendation and measurement technology with aview to entering into additional commercial agreements.6●Pursue a TwoPronged Commercialization Strategy. We are seeking to accelerate adoption of our solutions both through direct partnerships with ecommerce websites as well as through thirdparty platform websites. While we seek to directly enter into partnerships with companies maintaining ecommerce websites in the apparel, courier and DIY markets, we are also seeking to deploy our solutions on thirdparty platforms. Furthermore, with theexpansion of MySizeID through the release of our FirstLook Smart Mirror, which we are offering to brick and mortar stores to digitize the physicalstores, MySizeID is now available for online retailers utilizing the WooCoomerce, Shopify, Lightspeed, PrestaShop, Bitrix and Wix platforms and tobrick and mortar stores through GK Software POS solution while BoxSize is available on the Honeywell, Zebra Technologies and Datalogic.●Ongoing Investment in our Technology Platform. We continue to invest in building new software capabilities and extending our platform to bring thepower of accurate measurement to a broader range of applications. In particular, we seek not only to deliver size recommendations but to provide arobust, endtoend,artificial intelligence, or AIdriven platform that inspires consumer confidence and drives revenue growth by providing a superiorconsumer journey to both online and the brick and mortar stores.●Grow our database. As the usage of our measurement apps increases, our database of information including user behaviour and body measurementsgenerates valuable statistics. Such data can be used in the big data market for targeted advertising and for blind consumer data mining.●Identify and acquire synergistic businesses. In order to reduce our time to market and obtain complementary technologies, we are seeking to acquiretechnologies and businesses that are synergistic to our product offering. We recently completed an acquisition of Orgad which operates anomnichannel ecommerce platform and Naiz which provides SaaS technology solutions that solve size and fit issues for fashion ecommerce companies.●Partnerships and cooperation. In order to bring a wider solution for the retail market we are working to partner and integrate our technology withpartners that can increase our penetration and offering to the market.Market OpportunityThe global ecommerce market was $5.7 trillion in 2022, and the industry is expected to grow significantly in the coming years with no signs of slowingdown. Market specialists expect a compound annual growth rate of 27.43% from 2023 to 2028: according to data from Statista, the market is expected to reach $6.5trillion in 2023. While many sectors have found ways to increase revenue through ecommerce, ecommerce is still plagued by issues that cut into profits andnegatively impact the bottom line, such as customer returns, low consumer conversion, and associated restocking and shipping costs.Fashion/ApparelSince the onset of the COVID19 pandemic, an immense shift to digital was recorded, with 85.9% growth vs. prepandemic, according to Mastercard, andover 2 billion people worldwide who shop online, according to data from Oberlo. In November 2022, online shoppers broke records with $11.3 billion in spending onCyber Monday, driving 5.8% yearoveryear growth and making the day the biggest online shopping day of all time, according to Adobe Analytics.In 2021, fashion companies invested between 1.6% and 1.8% of their revenues in technology, according to Mckinsey, and are expected to double theinvestment by 2030 in order to keep up with digital natives and keep a competitive edge. Personalization in ecommerce and hybrid connectivity in brickandmortarretail are two key themes in the future of fashtech, according to Mckinsey’s 2022 State of Fashion Technology.7In the upcoming years, inflation is expected to impact the fashion world. As prices for goods increase, the challenge will be to inspire confidence inconsumers, via different smart digital tools. Brands will need to embrace creative digital tools and new channels to deepen customer relationships, and as Mckinseyforecasts in their State of Fashion report for 2023, they will need to execute on priorities such as sustainability and digital acceleration.The global fashion ecommerce market size is expected to grow from $744.4 billion in 2022 to $821.19 billion in 2023 at a compound annual growth rate of10.3%. In 2027, the market size is expected to grow to $1,222.32 billion, at a compound annual growth rate of 10.5%, according to BRC.Based on the importance which shoppers attribute to free shipping 50% of cart abandonment rate is due to extra shipping costs (Baymard Institute) theneed for fashion retailers to substantiate the optimal size for a customer, thus minimizing returns, has never been more crucial.As brands move online or significantly expand their online presence, we believe that developing innovative ways to connect with shoppers, both onlineand offline, has become a top priority.Shipping/ParcelAccording to Pitney Bowes, parcel revenue in 13 major countries around the world increased by 17% year over year from $420 billion in 2020 (reflecting 131billion parcels) to $491 billion in 2021 (reflecting 159 billion parcels). In the shipping/parcel industry, the dimensions of a package are critical. It is not merely themeasurement of a package or box – but rather the amount of space that the package or box will take up on a truck, airplane, or ship that will be transporting thepackage or box. Far too often, retailers use unfit packaging for their items, adding additional costs in materials and shipping fees.DIYSimilar to issues in the apparel and fashion market, big box, hardware, furniture, and DIY stores are plagued by returns due to incorrect fit andmeasurements. In an industry where precise measurement for projects is an absolute necessity, ecommerce has not grown as quickly as in other industries which webelieve is due to lack of consumer confidence in measurements at home and buying the correct item online.MySizeIDWe have released the MySizeID app for both iOS and Android which assists consumers to take highly accurate measurement of their own body in order tosize clothing in the best way possible without the need to try the clothes on before purchasing. MySizeID is designed to simplify the process of purchasing clothesonline and significantly reduce the rate of returns of poorfitting clothing. During 2022, MySizeID delivered over 23.5 million size recommendations.The application is the result of a research and development effort that combines:●anthropometric research – analyses of information pertaining to body measurements derived from a survey and the subsequent determination ofcorrelations between body parts;●body measurement algorithm research – an algorithm created by us to measure body parts; and●retailers size chart analyses – adopting a deep understanding of the size charts of retailers and the corresponding “body to garment size.”MySizeID allows consumers to create a secure, online profile of their personal measurements, which can then be utilized, with partnered online retailers, toensure that no matter the manufacturer or size chart, they will get the right fit. MySizeID operates based on the use of existing sensors in smart phones which enable,through a specific purpose application, the measurement of the body of any consumer by moving the smartphone along his or her body. The MySizeID applicationdoes not rely on user photographs or any additional hardware; all a user needs to do is scan their body with their smartphone and the application records theirmeasurements. The measurements can then be saved in our database in the cloud, enabling the user to search for clothes in various retailer websites withoutworrying about size. When a search is made, the retailer will connect to our cloud database, and then provide results based on the user’s measurements and otherparameters as he or she may have defined. This data is also saved for use when a customer enters a brickandmortar store to help serve the customer moreefficiently and to provide a better shopping experience.8Figure 1: Screenshot of MySizeID on smartphone and ecommerce websiteAs part of the integration process, we offer to the retailer five main components:●Mobile App. MySizeID comes in the form of a native app or website. Our native app can be used “as is” integrated into the retailer’s ecommercewebsite. The website users can build a body profile on the app and receive size recommendations for their profile both in the app and on a widgetintegrated with their website.9●Widget. When a consumer enters into the retailer’s website and looks for a specific item, he or she can click on the MySizeID widget which will informthe consumer of his or her recommended size, based on his or her actual measurements, as measured using the app and the item he or she is looking at.The widget has two features:AI Wizard mode allows the user to obtain size from the following parameters: gender, height, weight, belly shape, hip shape and bra size only. Thegender, height and weight questions are mandatory, while the body shape questions are optional and can be added to increase accuracy for specificapparel categories.Guest mode allows a user that does not wish to sign up to MySizeID as a user to obtain size recommendations as well.●Analytic Pixel. MySizeID analytic pixel allows retailer to track and analyze the widget usage. By adding the pixel to the retailer’s website, MySizeID BIteam can track engagement, order, and return data and provide retailers with tools to understand the advantages and benefits of MySizeID.Use your own device using MySizeID instore solution, shoppers can receive size recommendations for all store items, when shopping in the offlinestores. The shoppers can build their body profile using an easy to use 3 to 6 questions form, scan an item barcode and receive a size recommendationfor the scanned item based on their body profile and the item’s size chart.Another feature we added is the “inbetween sizing” feature. Our system can detect a user that has body dimensions that place the user inbetweenthe clothes sizes being offered and lets the user know that. A user can then choose between the two sizes according to the user’s fit preference(tight/loose/average).In addition, we have recently released our InstantApp feature which allows shoppers to generate their body measurements directly from our widget,without the need to download our mobile app. Using this technology, the shoppers can create their online profile of their personal measurements andcomplete a purchase faster and easier with minimum distractions.The body profile can be created while shoppers are viewing the page from their mobile phone, or by scanning a QR code on desktop that will open thesame page on the mobile phone.Screenshot of InstantApp widget on desktop on yumyumfashion website10●MyDash Platform. The MyDash platform is a smart backoffice system where the retailer enters all the information regarding its size charts thatcorrelates to every product in its ecommerce site, and where the retailer can access the information on its users. This system is customizable based onthe retailer’s needs. In 2021, we changed the MyDash system to increase the system’s accessibility, added walkthroughs, user guides and changed theuser interface and much more for the ease of use. We added the option to use our generic size charts, added the option upload size chart files insteadof typing the size charts values manually, added more widget styling options and changed the pairing mechanism between the size chart and theproducts to be more userfriendly.Figure 3: Screenshot of BackOffice System●FirstLook Smart Mirror. The Smart Mirror provides an interactive, mirrorlike touch display that allows brands to provide instore customers with anenhanced, online shopping experience, contactless checkout and obtains the recommended size. The MySizeIDFirstLook Smart Mirror can be placedin numerous locations throughout a retail store, including the fitting rooms (without cameras) or other hightraffic locations of the store. Highlightcapabilities of the FirstLook Smart Mirror include a 3D “Tryiton” interactive avatar experience, personalized and highly accurate sizerecommendations by MySizeID, thirdparty point of sale systems integration, styling recommendations and contactless “select and collect” at theregister feature.Illustration of MySizeID “first look” smart mirror in a fashion store11We are currently offering MySizeID technology to retailers through either a payperuse model or a monthly subscription model. In our payperusebusiness model, every time the consumer obtains a recommended size, the retailer is charged for the usage.BoxSizeBoxSize is a parcel measurement application that can provide realtime logistic data on package volumes and transportation, resulting in improvedoperational efficiency and reduced operating expenses. In addition, BoxSize allows customers to easily measure the size of their parcel with their smartphone,calculate shipping costs and arrange for a convenient pickup time for the package. BoxSize is available both on iOS and Android.In 2020 we released the “One Click” feature on BoxSize that enables the user to measure a package with just one swipe of the handheld device. Previously,measurements through BoxSize would require three separate swipes.Figure 4: Screenshot of BoxSizeOur BoxSize mobile measurement solution is available on the Honeywell Marketplace. In addition, BoxSize was approved for Honeywell’s Global VendorProgram, and is available to provide highly accurate mobile measurement solutions for thousands of Honeywell clients. We also developed a new dashboard for thecourier companies to have all the required data about each package in one place. It includes package dimensions, pictures, scan geo location and more. Thedashboard also let the courier use Webhooks, which allows him to get the information from his own system.12In 2020, we announced our partnership with Datalogic, a company focused on the automatic data capture and process automation markets. The partnershipmakes our BoxSize measurement solution available to thousands of Datalogic customers in the Transportation and Logistics vertical.Agreement with Delhivery Private Limited, IndiaWe entered into an agreement with Delhivery Private Limited, one of the largest courier pickup, delivery, and online shipping services in India. Delhivery’sreputation as a frontrunner in delivery and logistics tech makes its decision to select Boxsize a particularly strong testament to the value the solution provides.BoxSize provides Delhivery’s employees on the B2B side with critical information that will allow them to effortlessly optimize loading efficiency and add even morerealtime visibility to operations.SizeUpWe are working on additional consumer applications, including a DIY application. Our SizeUp application is a smart tape measure for the business toconsumer market which allows users to utilize their smartphone as a tape measure. The application provides measurements with an accuracy of within twocentimeters. Through the use of SizeUp, users will be able to visualize how an object or a piece of furniture will fit in an existing room in their home or office. It alsoadded Google Vision for image content analysis, object detection, and title suggestions.Currently the SizeUp app for Android and iOS is available for free for the first 30 days, after which a user will be required to register via email and pay aonetime fee of $1.99 to continue using the application. To date, revenues from downloads have been minimal.Research and DevelopmentOur research and development team are responsible for the research, algorithm, design, development, and testing of all aspects of our measurementplatform technology. We invest in these efforts to continuously improve, innovate, and add new features to our solutions.We incurred research and development expenses of approximately $1.7 million in 2022 and $4.25 million in 2021, relating to the development of itsapplications and technologies. The decrease from the corresponding period primarily resulted from share based payment in amount of $2,618,000 attributed to theshare issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021. We intend to continue to invest in our research anddevelopment capabilities to extend our platform and bring our measurement technology to a broader range of applications.13In 2022, the R&D department experienced significant success in their efforts to improve the performance of their size recommendation system. Through acombination of optimized algorithms and the incorporation of cuttingedge technologies, the team was able to achieve a threefold increase in the system’s speed.This breakthrough not only makes the system one of the fastest and most accurate on the market, but also reduced the operation costs, making it more costeffective for businesses to use. Additionally, the solution is now highly scalable, allowing it to easily adapt to the needs of businesses of any size. The R&D team isnow focused on further improving the system and exploring new applications for the technology.Sales and MarketingIn 2019, we launched a commercialization strategy that directs our sales efforts toward both sales to ecommerce players in specific vertical markets such asfashion/apparel and shipping/delivery as well as to ecommerce thirdparty platform providers. As of March 15, 2023, our products are being sold in the followingcountries: US, UK, France, Netherlands, Spain, Portugal Turkey, Germany, Israel and Italy, generating customer leads, building out a sales pipeline, and developingcustomer relationships.We believe an effective method to market our suite of products is for users to actively use and explore its capabilities. We encourage free trials of one ormore of our products in order to successfully convert those accounts to paid subscriptions.Proprietary RightsWe rely on a combination of patent, copyright, trademark and trade secret laws in the United States and other jurisdictions, as well as contractualprotections, to protect our proprietary technology.As of December 31, 2022, we owned 18 issued patents: six in Europe, four in the U.S., three in each of Russia and Japan and one in each of Canada andIsrael which expire between January 20, 2033 and August 18, 2036, and we have two additional patent applications in process. As of such date, we do not have anyregistered trademarks.We cannot provide any assurance that our proprietary rights with respect to our products will be viable or have value in the future since the validity,enforceability and type of protection of proprietary rights in softwarerelated industries are uncertain and still evolving.Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products or to obtain and use informationthat we regard as proprietary. Policing unauthorized use of our products is difficult, and while we are unable to determine the extent to which piracy of our softwareproducts exists, software piracy can be expected to be a persistent problem. In addition, the laws of some foreign countries do not protect proprietary rights to asgreat an extent as do the laws of the United States, and effective copyright, trademark, trade secret and patent protection may not be available in those jurisdictions.Our means of protecting our proprietary rights may not be adequate to protect us from the infringement or misappropriation of such rights by others.Further, in recent years, there has been significant litigation in the United States involving patents and other intellectual property rights, particularly in thesoftware and Internetrelated industries. We can become subject to intellectual property infringement claims as the number of our competitors grows and ourproducts and services overlap with competitive offerings. These claims, even if not meritorious, could be expensive to defend and could divert management’sattention from operating our business. If we become liable to third parties for infringing their intellectual property rights, we could be required to pay a substantialaward of damages and to develop noninfringing technology, obtain a license or cease selling the products that contain the infringing intellectual property. We maybe unable to develop noninfringing technology or obtain a license on commercially reasonable terms, if at all.14Government RegulationWe are subject to a number foreign and domestic laws and regulations that involve matters central to our business. These laws and regulations mayinvolve privacy, data protection, intellectual property, or other subjects. Many of the laws and regulations to which we are subject are still evolving and being testedin courts and could be interpreted in ways that could harm our business. In addition, the application and interpretation of these laws and regulations often areuncertain, particularly in the new and rapidly evolving industry in which we operate. Because global laws and regulations have continued to develop and evolverapidly, it is possible that we, our products, or our platform may not be, or may not have been, compliant with each such applicable law or regulation.In particular, we are subject to a variety of federal, state and international laws and regulations governing the processing of personal data. Many U.S. stateshave passed laws requiring notification to data subjects when there is a security breach of personally identifiable data. There are also a number of legislativeproposals pending before the U.S. Congress, various state legislative bodies and foreign governments concerning data protection. In addition, data protection lawsin Europe and other jurisdictions outside the United States can be more restrictive than those within the United States, and the interpretation and application ofthese laws are still uncertain and in flux.For example, the General Data Protection Regulation, or GDPR, which took effect on May 25, 2018, enhances data protection obligations for entities thatprocess personal data about individuals, including obligations to cooperate with European data protection authorities, implement security measures and keeprecords of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to the greater of €20 million or 4% of global annual revenue. Inaddition, the California Consumer Privacy Act of 2018, or CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and requiredeletion of their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used.The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further,failure to comply with the Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may exposeus to administrative fines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the currentenforcement measures and sanctions. Given the breadth and depth of changes in data protection obligations, meeting the requirements of GDPR and otherapplicable laws and regulations has required significant time and resources, including a review of our technology and systems currently in use against therequirements of GDPR and other applicable laws and regulations. We have taken various steps to prepare for complying with GDPR and other applicable laws andregulations however there can be no assurance that these steps are sufficient to assure compliance. Further, additional EU laws and regulations (and member states’implementations thereof) further govern the protection of individuals and of electronic communications. If our efforts to comply with GDPR or other applicable lawsand regulations are not successful, we may be subject to penalties and fines that would adversely impact our business and results of operations, and our ability touse personal data of individuals could be significantly impaired.CompetitionWe operate in a highly competitive industry that is characterized by constant change and innovation. Changes in the applications and the programinglanguages used to develop applications, devices, operating systems, and technology landscape result in evolving customer requirements. Our competitors includeTrue Fit, Fit analytics and 3DLook.The principal competitive factors in our market include the following:●High Accuracy Size Recommendations: the highest accuracy and the lowest margin of error by combining patented technology including AI and ML,size chart or spec data, and MySizeID property body data measurement;●Integration○Fast 1 week integration including size chart size chart review and product mapping○Easy 1 line of “all included” script implementation●Technical Advantages○Very small library that weighs ±50kb (minimum widget loading time on product page)○UltraFast loading and size recommendation presenting○Restful API option (API integration with any website or app)15●Optimizations○Adjustments of size charts based on performance○Widget usage analysis by FashTech and BI teams○Automatic pairing of size charts with products/collections●User Experience○Easy to use interface (1015 seconds to receive size recommendations)○Option to add/deduct questions to/from widget wizards○Users automatically receive size recommendations on all products after initial sign up●Product and platform features, architecture, reliability, privacy and security, performance, effectiveness, and supported environments;●Product extensibility and ability to integrate with other technology infrastructures;●Digital operations expertise;●Ease of use of products and platform capabilities;●Total cost of ownership;●Adherence to industry standards and certifications;●Strength of sales and marketing efforts;●Brand awareness and reputation; and●Focus on customer successWe believe we generally compete favorably with our competitors on the basis of these factors. We expect competition to increase as other established andemerging companies enter our markets, as customer requirements evolve, and as new products and technologies are introduced. We expect this to be particularlytrue as we offer a smartphonebased offering that does not need to utilize the smartphone’s camera, and our competitors may also seek to repurpose their existingofferings to provide similar solutions. Many of our competitors have substantially greater financial, technical, and other resources, greater name recognition, largersales and marketing budgets, broader distribution, and larger and more mature intellectual property portfolios.Human Capital ManagementAs of March 31, 2023, we had a total of 35 employees, of which 30 were fulltime employees, including 9 in sales and marketing, 12 in technology anddevelopment and 9 in administration and finance.None of our employees are represented by a collective bargaining agreement, nor have we experienced any work stoppage. We consider our relationshipwith our employees to be good. Our future success depends on our continuing ability to attract and retain highly qualified engineers, sales and marketing, accountmanagement, and senior management personnel.We also believe we have built a strong sales team focused on expanding into new markets through the acquisition of Naiz and our current team.We believe that our future success will depend, in part, on our continued ability to attract, hire and retain qualified personnel. In particular, we depend onthe skills, experience and performance of our senior management and research personnel. We compete for qualified personnel with other hitech companies, as wellas universities and nonprofit research institutions.16We provide competitive compensation and benefits programs to help meet the needs of our employees. In addition to salaries, these programs (which varyby country/region and employment classification) include incentive compensation plan, pension, and insurance benefits, paid time off, , among others. We also usetargeted equitybased grants with vesting conditions to facilitate retention of personnel, particularly for our key employees.The success of our business is fundamentally connected to the wellbeing of our people. Accordingly, we implemented an hybrid work policy in which theemployees can work from home twice a week.We consider our employees to be a key factor to our success and we are focused on attracting and retaining the best employees at all levels of ourbusiness. Inclusion and diversity is a strategic, business priority. We employ people based on relevant qualifications, demonstrated skills, performance and otherjobrelated factors. We do not tolerate unlawful discrimination related to employment, and strive to ensure that employment decisions related to recruitment,selection, evaluation, compensation, and development, among others, are not influenced by race, color, religion, gender, age, ethnic origin, nationality, sexualorientation, marital status, or disability. Continuous monitoring to ensure pay equity has been a focus in 2022. We have continued to improve gender balance in 2022with a focus on increasing the representation of women hired as new college graduates. We are committed to creating a trusting environment where all ideas arewelcomed and employees feel comfortable and empowered to draw on their unique experiences and backgrounds.We consider our relations with our employees to be good.Company InformationOur principal executive offices are located at HaYarden 4 St., POB 1026, Airport City, Israel 7010000, and our telephone number is +97236009030. Ourwebsite address is www.mysizeid.com. Any information contained on, or that can be accessed through, our website is not incorporated by reference into, nor is it inany way a part of, this Annual Report on Form 10K.We use our website (www.mysizeid.com) as a channel of distribution of Company information. The information we post through this channel may bedeemed material. Accordingly, investors should monitor our website, in addition to following our press releases, SEC filings and public conference calls andwebcasts. The contents of our website are not, however, a part of this Annual Report on Form 10K.Corporate HistoryWe were incorporated in the State of Delaware on September 20, 1999 under the name Topspin Medical, Inc. In December 2013, we changed our name toKnowledgetree Ventures Inc. Subsequently, in February 2014, we changed our name to MySize, Inc. In 2020, we created a subsidiary in the Russian Federation, MySize LLC.From inception through 2012, we were engaged in research and development of a medical magnetic resonance imaging, or MRI, technology forinterventional cardiology and in the development of MRI technology for use in the diagnosis and treatment of prostate cancer. In January 2012, we acquiredMetamorefix Ltd., or Metamorefix. Metamorefix was incorporated in 2007, and was engaged in the development of innovative solutions for the rehabilitation oftissues, particularly skin tissues. By the end of 2012, we ceased operations and in January 2013, we sold our entire ownership interest in Metamorefix.In September 2013, Ronen Luzon, our Chief Executive Officer, acquired control of the Company from Asher Shmuelevitch, according to which Mr. Luzonpurchased 70,238 shares of common stock from Mr. Shmuelevitch, which shares represented approximately 40% of the issued and outstanding capital stock of theCompany at such time, thus becoming a controlling shareholder of the Company. In connection with the acquisition, Mr. Luzon reached a settlement with our thencreditors pursuant to which the main creditor, Mr. Shmuelevitch, was paid a total sum of approximately $140,000 in consideration for a full and final waiver of any andall his claims that he may have relating to any monetary indebtedness of the Company to the creditors.17In February 2014, My Size Israel, our wholly owned subsidiary, entered into a Purchase Agreement, or the Purchase Agreement, with Shoshana Zigdon,who at the time was a beneficial owner of more than 20% of our outstanding shares, with respect to the acquisition by us of certain rights related to the collection ofdata for measurement purposes including rights in the venture, the method and a patent application that had been filed by the Seller (PCT/IL2013/050056), or theAssets. In consideration for the sale of the Assets, we agreed to pay to Ms. Zigdon, 18% of our operating profit, directly or indirectly connected with the Assetstogether with valueadded tax in accordance with the law for a period of seven years from the end of the development period of the aforementioned venture. Inaddition to the foregoing, the Purchase Agreement provided that all developments, improvements, knowledge and knowhow developed and/or accumulated by usafter the execution of the Purchase Agreement will be owned by us. Further, Ms. Zigdon agreed not to compete, directly or indirectly, with us in any matter relatingto the Assets for a period of seven years from the end of the development period of the venture.On May 26, 2021, we, My Size Israel, and Ms. Zigdon entered into an Amendment to Purchase Agreement, or the Amendment, which made certainamendments to the Purchase Agreement. Pursuant to the Amendment, Ms. Zigdon agreed to irrevocably waive (i) the right to repurchase certain assets related tothe collection of data for measurement purposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which our business issubstantially dependent, or the Assets, and (ii) all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My SizeIsrael under the Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation, reward orany rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights, or the Waiver. Inconsideration of the Waiver, we issued 100,000 shares of common stock to Ms. Zigdon.In September 2005, we commenced trading on the Tel Aviv Stock Exchange, or TASE. Between 2007 and 2012 we reported as a public company with theSEC. In August 2012, we suspended our reporting obligations. In mid2015 we resumed reporting as a public company. On July 25, 2016, our common stock beganpublicly trading on the Nasdaq Capital Market under the symbol “MYSZ”.ITEM 1A. RISK FACTORSAn investment in our common stock involves a high degree of risk. You should carefully consider the following risk factors and the other information inthis Annual Report on Form 10K before investing in our common stock. Our business and results of operations could be seriously harmed by any of the followingrisks. The risks set out below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterialalso may materially adversely affect our business, financial condition and/or operating results. If any of the following events occur, our business, financial conditionand results of operations could be materially adversely affected. In such case, the value and trading price of our common stock could decline, and you may lose allor part of your investment.Summary Risk FactorsThe principal factors and uncertainties that make investing in our ordinary shares risky, include, among others:Risks Related to Our Financial Position and Capital Requirements●We have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.●Our limited operating history makes it difficult to evaluate our business and prospects.●We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive and maycause the market price of our common stock to decline.●The report of our independent registered public accounting firm contains an explanatory paragraph regarding substantial doubt about our ability tocontinue as a going concern.Risks Related to Our Company and Our Business●The market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and online thirdparty resellers adopting our flagship product, MySizeID.18●Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broader marketacceptance of our products.●We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which may makeit difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.●We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increase ourcapital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.●If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations and financialcondition may be adversely affected.●If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operations andfinancial condition could be adversely affected.●The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile device applications andcustom development services.●Our growth depends, in part, on the success of our strategic relationships with third parties.●Changes in economic conditions could materially affect our business, financial condition and results of operations.●We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.●We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significant interruptionin our network or hosting and cloud services could adversely impact our operations and harm our business.●Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.●We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.●A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.●Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, data protectionand information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive and confidentialinformation. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm our business,results of operations and financial condition.●We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect our business.●We may face intense competition and expect competition to increase in the future, which could limit us in developing a customer base and generatingrevenue.●Our business operations and future development could be significantly disrupted if we lose key members of our management team.19●If we are able to expand our operations, we may be unable to successfully manage our future growth.Risks Related to Our Operations in Israel and Russia●Our headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.●Russia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.Risks Related to Our Common Stock●A more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.●Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions and adversedevelopments with respect to financial institutions and associated liquidity risk;●Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.●Our securities are traded on more than one market which may result in price variations.●We are a former “shell company” and as such are subject to certain limitations not generally applicable to other public companies.Risks Related to Our Financial Position and Capital RequirementsWe have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.We realized a net loss of approximately $8.3 million and $10.5 million for the years ended December 31, 2022 and 2021 and had an accumulated deficit of$53.5 million as at December 31, 2022. Because of the numerous risks and uncertainties associated with the development and commercialization of our products andbusiness, we are unable to predict the extent of any future losses or when we will become profitable, if at all. Expected future operating losses will have an adverseeffect on our cash resources, shareholders’ equity and working capital. Our failure to become and remain profitable could depress the value of our stock and impairour ability to raise capital, expand our business, maintain our development efforts, or continue our operations. A decline in our value could also cause you to lose allor part of your investment in us.Our limited operating history makes it difficult to evaluate our business and prospects.We have only been developing our measurement technology since 2014. Since then, our operating history has been primarily limited to research anddevelopment, pilot studies, raising capital, and more recently acquisitions and sales and marketing efforts. Therefore, it may be difficult to evaluate our business andprospects. We have not yet demonstrated an ability to commercialize our products. Consequently, any predictions about our future performance may not beaccurate, and you may not be able to fully assess our ability to complete development and/or commercialize our products, and any future products.We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive andmay cause the market price of our common stock to decline.Based on our projected cash flows and the cash balances as of the date of this Annual Report on Form 10K, our existing cash is insufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. In order to meet ourbusiness objectives in the future, we will need to raise additional capital, which may not be available on reasonable terms or at all. Additional capital would be usedto accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;20●respond to competitive pressure;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, and a number of otherfactors, many of which are outside our control, and on our financial performance. Accordingly, we cannot assure you that we will be able to successfully raiseadditional capital at all or on terms that are acceptable to us. If we cannot raise additional capital when needed, it may have a material adverse effect on our business,results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.Management has concluded that there is substantial doubt about our ability to continue as a going concern which could prevent us from obtainingnew financing on reasonable terms or at all.We have incurred significant losses and negative cash flows from operations and have an accumulated deficit that raises substantial doubt about its abilityto continue as a going concern. Our audited consolidated financial statements for the year ended December 31, 2022 were prepared under the assumption that wewould continue our operations as a going concern. Our independent registered public accounting firm has included a “going concern” explanatory paragraph in itsreport on our financial statements for the year ended December 31, 2022. If we are unable to improve our liquidity position, by, among other things, raising capitalthrough public or private offerings or reducing our expenses, we may exhaust our cash resources and will be unable to continue our operations. If we cannotcontinue as a viable entity, our shareholders would likely lose most or all of their investment in us.Risks Related to Our Company and Our BusinessThe market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and onlinethirdparty resellers adopting our flagship product, MySizeID.The market for our measurement technology is relatively new and unproven and is subject to a number of risks and uncertainties. We believe that ourfuture success will depend in large part on market adoption of our flagship product, MySizeID, by U.S. retailers and online thirdparty resellers. In order to grow ourbusiness, we intend to focus on educating retailers and resellers and other potential customers about the benefits of our measurement technology, expanding thefunctionality of our products and bringing new products to market to increase market acceptance and use of our technology. Our ability to develop and expand themarket that our products address depends upon a number of factors, including the cost savings, performance and perceived value associated with such products.The market for our products could fail to develop or there could be a reduction in interest or demand for our products as a result of a lack of consumer acceptance,technological challenges, competing products and services, weakening economic conditions and other causes. We may never successfully commercialize ourproducts and if our products fail to achieve market acceptance, this would have a material adverse effect on our business, results of operations and financialcondition.21Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broadermarket acceptance of our products.Our ability to achieve customer adoption, especially among U.S. retailers will depend, in part, on our ability to effectively organize, focus and train our salesand marketing personnel. We have limited experience selling to U.S. retailers and only recently established a U.S. sales force. We believe that there is significantcompetition for experienced sales professionals with the skills and industry knowledge that we require. Our ability to achieve significant revenue growth in thefuture will depend, in part, on our ability to recruit, train and retain a sufficient number of experienced sales professionals, particularly those with experience sellingto U.S. retailers. In addition, even if we are successful in hiring qualified sales personnel, new hires require significant training and experience before they achievefull productivity, particularly for sales efforts targeted at U.S. retailers and new markets. Because we only recently started sales efforts, we cannot predict whether, orto what extent, our sales efforts will be successful.We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which maymake it difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.In this market segment, the decision to adopt our products may require the approval of multiple technical and business decision makers, including security,compliance, procurement, operations and IT. In addition, while U.S. retailers may be willing to deploy our products on a limited basis, before they will commit todeploying our products at scale, they often require extensive education about our products and significant customer support time, engage in protracted pricingnegotiations and seek to secure readily available development resources. As a result, it is difficult to predict when we will obtain new customers and begingenerating revenue from these customers. As part of our sales cycle, we may incur significant expenses before executing a definitive agreement with a prospectivecustomer and before we are able to generate any revenue from such agreement. We have no assurance that the substantial time and money spent on our salesefforts will generate significant revenue. If conditions in the marketplace generally or with a specific prospective customer change negatively, it is possible that nodefinitive agreement will be executed, and we will be unable to recover any of these expenses. If we are not successful in targeting, supporting and streamlining oursales processes and if revenue expected to be generated from a prospective customer is not realized in the time period expected or not realized at all, our ability togrow our business, and our operating results and financial condition may be adversely affected. If our sales cycles lengthen, our future revenue could be lower thanexpected, which would have an adverse impact on our operating results and could cause our stock price to decline.22We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increaseour capital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.In order to reduce time to market and obtain complementary technologies, we are seeking to acquire technologies and businesses that are synergistic to ourproduct offering. For example, we recently acquired Orgad which operates an omnichannel ecommerce platform and Naiz which provides SaaS technology solutionsthat solve size and fit issues for fashion ecommerce companies. We evaluate from time to time various acquisitions and collaborations, including licensing oracquiring complementary technologies, intellectual property rights, or businesses. The process for acquiring a company may take from several months up to a yearand costs can vary greatly. We may also compete with others to acquire companies, and such competition may result in decreased availability of, or an increase inprice for, suitable acquisition candidates. In addition, we may not be able to consummate acquisitions or investments that we have identified as crucial to theimplementation of our strategy for other commercial or economic reasons. As a result, it may be more difficult for us to identify suitable acquisition or investmenttargets or to consummate acquisitions or investments on acceptable terms or at all. If we are not able to execute on any acquisition, we may not be able to achieve afuture growth strategy and may lose market share.In addition, the acquisition of Orgad, Naiz and any potential future acquisition, joint venture or collaboration may entail numerous potential risks, including:●increased operating expenses and cash requirements;●the assumption of additional indebtedness or contingent liabilities;●assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel;●the diversion of our management’s attention from our existing programs and initiatives in pursuing such a strategic merger or acquisition;●retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships;●risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing technologies; and●our inability to generate revenue from acquired technologies or products sufficient to meet our objectives in undertaking the acquisition or even to offsetthe associated acquisition and maintenance costs.All of the foregoing risks may be magnified as the cost, size or complexity of an acquisition or acquired company increases, or where the acquiredcompany’s products, market or business are materially different from ours, or where more than one integration is occurring simultaneously or within a concentratedperiod of time. We may not be able to obtain the necessary regulatory approvals, including those of antitrust authorities and foreign investment authorities, incountries where we seek to consummate acquisitions or make investments. For those and other reasons, we may ultimately fail to consummate an acquisition, even ifwe announce the intended acquisition.In addition, we may require significant financing to complete an acquisition or investment, whether through bank loans, raising of equity or debt orotherwise. We cannot assure you that such financing options will be available to us on reasonable terms, or at all. If we are not able to obtain such necessaryfinancing, it could have an impact on our ability to consummate a substantial acquisition or investment and execute a future growth strategy. Alternatively, we mayissue a significant number of shares as consideration for an acquisition, which would have a dilutive effect on our existing shareholders. For example, in partialconsideration for the acquisition of Orgad, we agreed to issue up to 111,602 shares of our common stock and in the Naiz acquisition we issued 240,000 shares of ourcommon stock. Furthermore, if we undertake acquisitions, we may incur large onetime expenses and acquire intangible assets that could result in significant futureamortization expense.23If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations andfinancial condition may be adversely affected.We believe that enhancing the “MySize” brand identity and increasing market awareness of our company and products, particularly among U.S. retailers, iscritical to achieving widespread acceptance of our products. Our ability to successfully develop new retailers may be adversely affected by a lack of awareness oracceptance of our brand. To the extent that we are unable to foster name recognition and affinity for our brand, our growth may be significantly delayed or impaired.The successful promotion of our brand will depend largely on our continued marketing efforts, market adoption of our products, and our ability to successfullydifferentiate our products from competing products and services. Our brand promotion may not be successful or result in revenue generation. Any incident thaterodes consumer affinity for our brand could significantly reduce our brand value and damage our business. If consumers perceive or experience a reduction inquality, or in any way believe we fail to deliver a consistently positive experience, our brand value could suffer and our business may be adversely affected.In particular, adverse weather conditions can impact guest traffic at our retailers, and, in more severe cases, cause temporary retail closures, sometimes forprolonged periods. Our business is subject to seasonal fluctuations, with retail sales typically higher during certain months, such as December. Adverse weatherconditions during our most favorable months or periods may exacerbate the effect of adverse weather on consumer traffic and may cause fluctuations in ouroperating results from quartertoquarter within a fiscal year.If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operationsand financial condition could be adversely affected.Our ability to attract new customers depends in part on our ability to enhance and improve our existing products, increase adoption and usage of ourproducts and introduce new products. The success of any enhancements or new products depends on several factors, including timely completion, adequatequality testing, actual performance quality, and overall market acceptance. Enhancements and new products that we develop may not be introduced in a timely orcosteffective manner, may contain errors or defects, may have interoperability difficulties with our platform or other products or may not achieve the broad marketacceptance necessary to generate significant revenue. Furthermore, our ability to increase the usage of our products depends, in part, on the development of newuse cases for our products and may be outside of our control. If we are unable to successfully enhance our existing products to meet evolving customerrequirements, increase adoption and usage of our products, develop new products, then our business, results of operations and financial condition would beadversely affected.The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile Apps and customdevelopment services.We must continue to enhance and improve the performance, functionality and reliability of our products. The mobile technology industry is characterizedby rapid technological change, changes in user requirements and preferences, frequent new product and services introductions embodying new technologies andthe emergence of new industry standards and practices that could render our products obsolete. Our success will depend, in part, on our ability to both internallydevelop and enhance our existing products, develop new products that address the increasingly sophisticated and varied needs of our customers, and respond totechnological advances and emerging industry standards and practices on a costeffective and timely basis. The development of our technology involvessignificant technical and business risks. We may fail to use new technologies effectively or to adapt our proprietary technology and systems to customerrequirements or emerging industry standards. If we are unable to adapt to changing market conditions, customer requirements or emerging industry standards, wemay not be able to increase our revenue and expand our business.Changes in economic conditions could materially affect our business, financial condition and results of operations.Because our primary target customers include U.S. retailers , we, together with the rest of the fashion/apparel industry, will depend upon consumerdiscretionary spending. Increases in unemployment rates, reductions in home values, increases in home foreclosures, investment losses, personal bankruptcies andreductions in access to credit and reduced consumer confidence, may impact consumers’ ability and willingness to spend discretionary dollars. In addition, volatileeconomic conditions may repress consumer confidence and discretionary spending. Any of the foregoing may have a material adverse effect on our business,financial condition and results of operations.24Our growth depends, in part, on the success of our strategic relationships with third parties.To grow our business, we anticipate that we will continue to depend on relationships with third parties, such as our customers and thirdparty platforms.Identifying partners, and negotiating and documenting relationships with them, requires significant time and resources. If we are unsuccessful in establishing ormaintaining our relationships with third parties, our ability to compete in the marketplace or to grow our revenue could be impaired, and our results of operationsmay suffer. Even if we are successful, we cannot assure you that these relationships will result in increased customer usage of our products or increased revenue.We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.We currently utilize, and plan on continuing to utilize over the current fiscal year, thirdparty networking providers and distribution through companiesincluding, but not limited to, Apple and Google as well as Shopify, WooCommerce and, Datalogic, Honeywell and Zebra to distribute our technologies. If disruptionsor capacity constraints occur, we may have no means of replacing these services, on a timely basis or at all. This could cause a material adverse condition for ouroperations and financial earnings.We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significantinterruption in our network or hosting and cloud services could adversely impact our operations and harm our business.Our technology infrastructure is critical to the performance of our products and customer satisfaction. Our products run on a complex distributed system,or what is commonly known as cloud computing. We own, operate and maintain elements of this system, but significant elements of this system are operated bythirdparties that we do not control and which would require significant time to replace. We expect this dependence on thirdparties to continue. In particular, asignificant portion, if not almost all data storage, data processing and other computing services and systems is hosted by cloud computing providers. Anydisruptions, outages and other performance problems relating to such services, including infrastructure changes, human or software errors and capacity constraints,could adversely impact our business, financial condition or results of operations.Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.We update our products on a frequent basis. Despite efforts to test our updates, errors, failures or bugs may not be found in our products until after theyare deployed to a customer. We have discovered and expect we will continue to discover errors, failures and bugs in our products and anticipate that certain of theseerrors, failures and bugs will only be discovered and remediated after deployment. Real or perceived errors, failures or bugs in our platform could result in negativepublicity, government inquiries, loss of or delay in market acceptance of our products, loss of competitive position, or claims by customers for losses sustained bythem. In such an event, we may be required, or may choose, for customer relations or other reasons, to expend additional resources in order to help correct theproblem.We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.In connection with the operation of our business, we store, process and transmit data, including personal and payment information, about our employeesand customers, a portion of which is confidential and/or personally sensitive. Unauthorized disclosure or loss of sensitive or confidential data may occur through avariety of methods. These include, but are not limited to, systems failure, employee negligence, fraud or misappropriation, or unauthorized access to or through ourinformation systems, whether by our employees or third parties, including a cyberattack by computer programmers, hackers, members of organized crime and/orstatesponsored organizations, who may develop and deploy viruses, worms or other malicious software programs. Such disclosure, loss or breach could harm ourreputation and subject us to government sanctions and liability under our contracts and laws that protect sensitive or personal data and confidential information,resulting in increased costs or loss of revenues. It is possible that security controls over sensitive or confidential data and other practices we and our thirdpartyvendors follow may not prevent the improper access to, disclosure of, or loss of such information. The potential risk of security breaches and cyberattacks mayincrease as we introduce new products and offerings. Further, data privacy is subject to frequently changing rules and regulations, which sometimes conflict amongthe various jurisdictions in which we provide services. Any failure or perceived failure to successfully manage the collection, use, disclosure, or security of personalinformation or other privacy related matters, or any failure to comply with changing regulatory requirements in this area, could result in legal liability or impairment toour reputation in the marketplace.25A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.Information security risks have generally increased in recent years, in part because of the proliferation of new technologies and the use of the Internet, andthe increased sophistication and activity of organized crime, hackers, terrorists, activists, cybercriminals and other external parties, some of which may be linked toterrorist organizations or hostile foreign governments. For example, a cybercriminal could use cybersecurity threats to gain access to sensitive information aboutanother company or to alter or disrupt news or information to be distributed by PR Newswire. Cybersecurity attacks are becoming more sophisticated and includemalicious software, ransomware, attempts to gain unauthorized access to data and other electronic security breaches that could lead to disruptions in criticalsystems, unauthorized release of confidential or otherwise protected information and corruption of data, substantially damaging our reputation. Any person whocircumvents our security measures could steal proprietary or confidential customer information or cause interruptions in our operations. We incur significant coststo protect against security breaches, and may incur significant additional costs to alleviate problems caused by any breaches. Our failure to prevent securitybreaches, or wellpublicized security breaches affecting the Internet in general, could significantly harm our reputation and business and financial results.Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, dataprotection and information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive andconfidential information. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm ourbusiness, results of operations and financial condition.We and our customers that use our products may be subject to privacy and data protectionrelated laws and regulations that impose obligations inconnection with the collection, processing and use of personal data, financial data, health or other similar data. The U.S. federal and various state and foreigngovernments have adopted or proposed limitations on, or requirements regarding, the collection, distribution, use, security and storage of personally identifiableinformation of individuals. The U.S. Federal Trade Commission and numerous state attorneys general are applying federal and state consumer protection laws toimpose standards on the online collection, use and dissemination of data, and to the security measures applied to such data.Similarly, many foreign countries and governmental bodies, including the EU member states, have laws and regulations concerning the collection and useof personally identifiable information obtained from individuals located in the EU or by businesses operating within their jurisdiction, which are often morerestrictive than those in the United States. Laws and regulations in these jurisdictions apply broadly to the collection, use, storage, disclosure and security ofpersonally identifiable information that identifies or may be used to identify an individual, such as names, telephone numbers, email addresses and, in somejurisdictions, IP addresses and other online identifiers.For example, the GDPR, which took full effect on May 25, 2018. The GDPR enhances data protection obligations for businesses and requires serviceproviders (data processors) processing personal data on behalf of customers to cooperate with European data protection authorities, implement security measuresand keep records of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to or greater of €20 million or 4% of global annualrevenues. In addition, the CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and require deletion of their personalinformation, opt out of certain personal information sharing, and receive detailed information about how their personal information is used. The CCPA provides forcivil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further, failure to comply withthe Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may expose us to administrativefines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the current enforcementmeasures and sanctions. There are also additional laws and regulations in additional jurisdictions around the world which govern the protection of consumers andof electronic communications. If our efforts to comply with GDPR, CCPA or other applicable laws and regulations are not successful, we may be subject to penaltiesand fines that would adversely impact our business and results of operations, and our ability to conduct business could be significantly impaired.26Additionally, although we endeavor to have our products comply with applicable laws and regulations, these and other obligations may be modified, theymay be interpreted and applied in an inconsistent manner from one jurisdiction to another, and they may conflict with one another, other regulatory requirements,contractual commitments or our internal practices. We also may be bound by contractual obligations relating to our collection, use and disclosure of personal,financial and other data or may find it necessary or desirable to join industry or other selfregulatory bodies or other privacy or data protectionrelatedorganizations that require compliance with their rules pertaining to privacy and data protection.We expect that there will continue to be new proposed laws, rules of selfregulatory bodies, regulations and industry standards concerning privacy, dataprotection and information security in the United States, the European Union and other jurisdictions, and we cannot yet determine the impact such future laws,rules, regulations and standards may have on our business. Moreover, existing U.S. federal and various state and foreign privacy and data protectionrelated lawsand regulations are evolving and subject to potentially differing interpretations, and various legislative and regulatory bodies may expand current or enact new lawsand regulations regarding privacy and data protectionrelated matters. Because global laws, regulations and industry standards concerning privacy and datasecurity have continued to develop and evolve rapidly, it is possible that we or our products or platform may not be, or may not have been, compliant with eachsuch applicable law, regulation and industry standard and compliance with such new laws or to changes to existing laws may impact our business and practices,require us to expend significant resources to adapt to these changes, or to stop offering our products in certain countries. These developments could adverselyaffect our business, results of operations and financial condition.We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect ourbusiness.Our ability to implement our business plan successfully depends in part on our ability to build brand recognition using our trademarks, service marks andother proprietary intellectual property, including our names and logos. We currently have no registered trademarks. While we plan to register a number of ourtrademarks; however, no assurance can be given that our trademark applications will be approved. As of December 31, 2022, we own 18 issued patents: six in Europe,four in the U.S., three in each of Russia and Japan and one in each of Canada and Israel which expire between January 20, 2033 and August 18, 2036, and we havetwo additional patent applications in process. As of such date, we do not have any registered trademarks., No assurance can be given that our patent applicationswhich are in process will be approved. If our patent applications are not approved, our ability to expand or develop our business may be negatively affected.Third parties may also oppose our trademark or patent applications, or otherwise challenge our use of the trademarks or patents. In the event that ourtrademarks or patents are successfully challenged, we could be forced to rebrand our goods and services or redesign our technology, which could result in loss ofbrand recognition, and could require us to devote resources to advertising and marketing new brands and products.If our efforts to register, maintain and protect our intellectual property are inadequate, or if any thirdparty misappropriates, dilutes or infringes on ourintellectual property, the value of our brands may be harmed, which could have a material adverse effect on our business and might prevent our brands fromachieving or maintaining market acceptance. We may also face the risk of claims that we have infringed third parties’ intellectual property rights. If third parties claimthat we infringe upon their intellectual property rights, our operating profits could be adversely affected. Any claims of intellectual property infringement, eventhose without merit, could be expensive and time consuming to defend, require us to rebrand our services, if feasible, divert management’s attention and resourcesor require us to enter into royalty or licensing agreements in order to obtain the right to use a thirdparty’s intellectual property.Any royalty or licensing agreements, if required, may not be available to us on acceptable terms or at all. A successful claim of infringement against uscould result in our being required to pay significant damages, enter into costly license or royalty agreements, or stop the sale of certain products or services, any ofwhich could have a negative impact on our operating profits and harm our future prospects.We may face intense competition and expect competition to increase in the future, which could prohibit us from developing a customer base andgenerating revenue.We face significant competition in every aspect of our business. Our competitors include True Fit, Virtusize, EasyMeasure, AR MeasureKit, Smart Measureand 3DLook. These companies may already have an established market in our industry. Most of these companies have significantly greater financial and otherresources than us and have been developing their products and services longer than we have been developing ours.27In addition, some of our larger competitors have substantially broader product offerings and leverage their relationships based on other products orincorporate functionality into existing products to gain business in a manner that discourages potential customers from purchasing our products. Potentialcustomers may also prefer to purchase from their existing solution providers rather than a new solution provider regardless of product performance or features.These larger competitors often have broader product lines and market focus and will therefore not be as susceptible to downturns in a particular market. Conditionsin our market could change rapidly and significantly as a result of technological advancements, partnering by our competitors or continuing market consolidation.New startup companies that innovate and large competitors that are making significant investments in research and development may invent similar or superiorproducts and technologies that compete with our products. In addition, some of our competitors may enter into new alliances with each other or may establish orstrengthen cooperative relationships. Any such consolidation, acquisition, alliance or cooperative relationship could lead to pricing pressure and our loss of anyfuture market share and could result in a competitor with greater financial, technical, marketing, service and other resources, all of which could harm our ability tocompete. Furthermore, organizations may be more willing to incrementally add solutions to their existing infrastructure from competitors than to replace their existinginfrastructure with our products. Any failure to meet and address these factors could harm our business, results of operations and financial condition.Our business operations and future development could be significantly disrupted if we lose key members of our management team.The success of our business continues to depend to a significant degree upon the continued contributions of our senior officers and key employees, bothindividually and as a group. Our future performance will be substantially dependent in particular on our ability to retain and motivate Ronen Luzon, our ChiefExecutive Officer, and certain of our other senior executive officers. The loss of the services of our Chief Executive Officer, senior officers or other key employeescould have a material adverse effect on our business and plans for future development. We have no reason to believe that we will lose the services of any of theseindividuals in the foreseeable future; however, we currently have no effective replacement for any of these individuals due to their experience, reputation in theindustry and special role in our operations. We also do not maintain any key man life insurance policies for any of our employees.If we are able to expand our operations, we may be unable to successfully manage our future growth.Our growth may strain our infrastructure and resources. Any such growth could place increased strain on our management, operational, financial and otherresources, and we will need to train, motivate, and manage employees, as well as attract management, sales, finance and accounting, international, technical, andother professionals. Any failure to expand these areas and implement appropriate procedures and controls in an efficient manner and at a pace consistent with ourbusiness objectives could have a material adverse effect on our business, results of operations and financial condition.Our business operations are conducted in multiple languages and could be disrupted due to miscommunications or translation errors.The success of our business continues to depend on our marketing efforts in the United States, Europe and Israel, each of which is conducted in the locallanguage. Miscommunications or inaccurate foreign language translations could have a material adverse effect on our business operations and financial conditions.Additionally, contracts, communications and complex technical information must be accurately translated into foreign languages.We will continue to incur costs and be subject to various obligations as a result of being a public company, listed in the United States and in Israel.We will continue to incur significant legal, accounting and other expenses as a result of being a public company, listed in the United States and in Israel.Although we will incur costs each year associated with being a publiclytraded company, it is possible that our actual costs of being a publiclytraded company willvary from year to year and may be different than our estimates. In estimating these costs, we take into account expenses related to insurance, legal, accounting andcompliance activities.28Furthermore, the need to maintain the corporate infrastructure demanded of a public company may divert management’s attention from implementing ourgrowth strategy, which could prevent us from improving our business, results of operations and financial condition. We have made, and will continue to make,changes to our internal controls and procedures for financial reporting and accounting systems to meet our reporting obligations as a U.S. publicly traded company.However, the measures we take may not be sufficient to satisfy our obligations as a publicly traded company.Any future or current litigation could have a material adverse impact on our results of operations, financial condition and liquidity.From time to time, we may be subject to litigation, including, among others, potential stockholder derivative actions and class actions. Risks associatedwith legal liability are difficult to assess and quantify, and their existence and magnitude can remain unknown for significant periods of time. Subject to certainexceptions, our Amended and Restated Certificate of Incorporation, or Certificate of Incorporation, and Amended and Restated Bylaws, or Bylaws, require us toindemnify and advance expenses to our officers and directors involved in legal proceedings. To date we have obtained directors and officers’ liability, or D&O,insurance to cover some of the risk exposure for our directors and officers. Such insurance generally pays the expenses (including amounts paid to plaintiffs, fines,and expenses including attorneys’ fees) of officers and directors who are the subject of a lawsuit as a result of their service to us. There can be no assurance that wewill be able to continue to maintain this insurance at reasonable rates or at all, or in amounts adequate to cover such expenses should such a lawsuit occur. WithoutD&O insurance, the amounts we would pay to indemnify our officers and directors should they be subject to legal action based on their service to us could have amaterial adverse effect on our financial condition, results of operations and liquidity. Such lawsuits, and any related publicity, may result in substantial costs and,among other things, divert the attention of management and our employees. An unfavorable outcome in any claim or proceeding against us could have a materialadverse impact on our financial position and results of operations for the period in which the unfavorable outcome occurs, and potentially in future periods. Further,any settlement announced by us may expose us to further claims against us by third parties seeking monetary or other damages which, even if unsuccessful, woulddivert management attention from the business and cause us to incur costs, possibly material, to defend such matters, which could have a material adverse impacton our financial position. See “Legal Proceedings” for more information regarding our involvement in ongoing litigation matters.Federal, state and local or Israeli tax rules may adversely impact our results of operations and financial position.We are subject to federal, state and local taxes in the U.S., as well as local taxes in Israel in respect to our operations in Israel. Although we believe our taxestimates are reasonable, if the Internal Revenue Service or other taxing authority disagrees with the positions we have taken on our tax returns, we could faceadditional tax liability, including interest and penalties. If material, payment of such additional amounts upon final adjudication of any disputes could have a materialimpact on our results of operations and financial position. In addition, complying with new tax rules, laws or regulations could impact our financial condition, andincreases to federal or state statutory tax rates and other changes in tax laws, rules or regulations may increase our effective tax rate. Any increase in our effectivetax rate could have a material impact on our financial results.A significant majority of Orgad’s revenue is from sales of products on Amazon’s U.S. Marketplace and any change, limitation or restriction on ourability to operate on Amazon’s platform or any other marketplace could have a material adverse impact to our business, results of operations, financialcondition and prospects.Orgad, our wholly owned subsidiary, operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com, eBay and others. A substantial percentage of Orgad’s revenue is driven by sales on Amazon’s U.S. marketplace and Orgad is subject toterms of service of Amazon and other maketplaces and various other seller policies and services that apply to third parties selling products on Amazon and othermarketplaces. Generally, a marketplace has the right to terminate or suspend its agreement with Orgad at any time and for any reason. Such marketplace may takeother actions against Orgad such as suspending or terminating a seller account or product listing and withholding payments owed to Orgad indefinitely. Forexample, in July 2022, Amazon deactivated Orgad’s Amazon U.S. store as a result of complaints submitted due to an error in the listed manufacturer of certainproducts on Orgad’s store. Although its account was subsequently reinstated in September 2022, if the deactivation were to occur in the future for a prolongedperiod of time, or if Amazon were to terminate Orgad’s account, this would have a material adverse effect on our business, results of operations, financial conditionand prospects. While Orgad endeavors to materially comply with the terms of services of the marketplaces on which it operates, we can provide no assurance thatthese marketplaces will have the same determination with respect to our compliance.29In addition, Amazon and other marketplaces can make changes to its platform that could require Orgad to change the manner in which it operates, limit itsability to successfully launch new products or increase its costs to operate and such changes could have an adverse effect on our business, results of operations,financial condition and prospects. Examples of changes that could impact us relate to platform fee charges (i.e., selling commissions), exclusivity, inventorywarehouse availability, excluded products and limitations on sales and marketing. Any change, limitation or restriction on our ability to sell on Amazon’s platform orany other marketplace, even if temporary, could have a material impact on our business, results of operations, financial condition and prospects.Orgad also relies on services provided by Amazon’s fulfillment platform, including Prime Certification, which provides for expedited shipping to theconsumer, an important aspect in the buying decision for consumers. For products that Orgad fulfills itself, Orgad is qualified to offer our products for sale withPrime Certification delivery. Any inability to market our products for sale with expedited delivery provided under Prime Certification could have a material impact onour business, results of operations, financial condition and prospects. Failure to remain compliant with the best fulfillment practices on Amazon’s platform couldhave a material impact on our business, results of operations, financial condition and prospects. In addition, due to the COVID19 pandemic, Amazon has changedthe amount of inventory it accepts per product for a period of time. If this were to continue it could cause us to miss sales and/or pay additional shipping costswhich would harm our business operations and financial conditions.Orgad’s business depends on its ability to build and maintain strong product listings on ecommerce platforms. Orgad may not be able to maintain andenhance our product listings if it receives unfavorable customer complaints, negative publicity or otherwise fails to live up to consumers’ expectations, whichcould materially adversely affect our business, results of operations and growth prospects.Maintaining and enhancing Orgad’s product listings is critical in expanding and growing its business. However, a significant portion of Orgad’s perceivedperformance to the customer depends on third parties outside of its control, including suppliers and thirdparty delivery agents as well as online retailers such asAmazon and eBay. Because Orgad’s agreements with its online retail partners are generally terminable at will, it may be unable to maintain these relationships, andour results of operations could fluctuate significantly from period to period. Because Orgad relies on third parties to deliver its products, it is subject to shippingdelays or disruptions caused by inclement weather, natural disasters, labor activism, health epidemics or bioterrorism. It may also experience shipping delays ordisruptions due to other carrierrelated issues relating to their own internal operational capabilities. Further, Orgad relies on the business continuity plans of thesethird parties to operate during pandemics, like the COVID19 pandemic, and it has limited ability to influence their plans, prevent delays, and/or cost increases due toreduced availability and capacity and increased required safety measures.Customer complaints or negative publicity about its products, delivery times, or marketing strategies, even if not accurate, especially on blogs, social mediawebsites and thirdparty market sites, could rapidly and severely diminish consumer view of Orgad’s product listings and result in harm to its brand. Customers mayalso make safetyrelated or other types of claims regarding products sold through our online retail partners, such as Amazon, which may result in an online retailpartner removing the product from its marketplace. We also use and rely on other services from third parties, such as our telecommunications services, and thoseservices may be subject to outages and interruptions that are not within our control.Orgad faces risks related to successfully optimizing and operating its fulfillment and customer service operations.Failures to adequately predict customer demand or otherwise optimize and operate its fulfillment and customer service operations successfully from time totime result in excess or insufficient fulfillment or customer service capacity, increased costs, and impairment charges, any of which could materially harm ourbusiness. As Orgad continues to add fulfillment and customer service capability or add new businesses with different requirements, its fulfillment and customerservice operations become increasingly complex and operating them becomes more challenging. There can be no assurance that Orgad will be able to operate ouroperations effectively.30In addition, failure to optimize inventory in our fulfillment operations increases net shipping cost by requiring longzone or partial shipments. Orgad may beunable to adequately staff its fulfillment and customer service operations. Orgad’s failure to properly handle such inventory or to accurately forecast productdemand may result in it being unable to secure sufficient storage space or to optimize its fulfillment operations or cause other unexpected costs and other harm toour business and reputation.Orgad relies on a limited number of shipping companies to deliver inventory to it and completed orders to our customers. The inability to negotiateacceptable terms with these companies or performance problems or other difficulties experienced by these companies could negatively impact our operating resultsand customer experience. In addition, Orgad’s ability to receive inbound inventory efficiently and ship completed orders to customers also may be negativelyaffected by natural or manmade disasters, extreme weather, geopolitical events and security issues, labor or trade disputes, and similar events.The variability in Orgad’s retail business places increased strain on its operations.Demand for Orgad’s product listings can fluctuate significantly for many reasons, including as a result of seasonality, promotions, product launches, orunforeseeable events, such as in response to natural or manmade disasters, extreme weather, or geopolitical events. For example, Orgad expects a disproportionateamount of our retail sales to occur during our fourth quarter. Failure to stock or restock popular products in sufficient amounts such that Orgad fails to meetcustomer demand could significantly affect our revenue and our future growth. If too many customers access the websites on which Orgad engages in onlineretailing within a short period of time due to increased demand, Orgad may experience system interruptions that make the websites unavailable or prevent us fromefficiently fulfilling orders, which may reduce the volume of goods its offers or sell and the attractiveness of its products. In addition, Orgad may be unable toadequately staff for fulfillment of orders and customer service during these peak periods and delivery and other fulfillment companies and customer service cosourcers may be unable to meet the seasonal demand.Our business is subject to the risks of earthquakes, fire, power outages, floods, health risks and other catastrophic events, and to interruption by manmade problems such as terrorism.Natural disasters, such as fire or floods, a significant power outage, telecommunications failure, terrorism, an armed conflict, cyberattacks, epidemics andpandemics such as COVID19, or other geopolitical unrest could affect our supply chain, manufacturers, logistics providers, channel partners, or endcustomers orthe economy as a whole and such disruption could impact us and the shipments and sales. These risks may be further increased if the disaster recovery plans for usand our suppliers prove to be inadequate. To the extent that any of the above should result in delays or cancellations of customer orders, the loss of customers, orthe delay in the deployment or shipment of products, our business, financial condition, and operating results would be adversely affected.For example, on January 2, 2023, Orgad experienced a fire at its warehouse in Israel. We are not aware of any casualties or injuries associated with the fire.We shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incidentdid not affect the future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of thisincident on the other parties that were involved in the incident (lessor and others that leased properties near the warehouse).Our business could be negatively impacted by unsolicited takeover proposals, by shareholder activism or by proxy contests relating to the election ofdirectors or other matters.Our business could be negatively affected as a result of an unsolicited takeover proposal, by shareholder activism or a proxy contest. During 2021, anactivist shareholder sought to make changes to our board of directors, among other matters, which ultimately resulted in us entering into a settlement agreementwith the activist shareholder and another shareholder, and for which considerable costs were incurred and absorbed significant time and attention by managementand the board of directors. A future proxy contest, unsolicited takeover proposal, or other shareholder activism relating to the election of directors or other matterswould most likely require us to incur significant legal fees and proxy solicitation expenses and require significant time and attention by management and our Boardof Directors. The potential of a proxy contest, unsolicited takeover proposal, or other shareholder activism could interfere with our ability to execute our strategicplan, give rise to perceived uncertainties as to our future direction, result in the loss of potential business opportunities or make it more difficult to attract and retainqualified personnel, any of which could materially and adversely affect our business and operating results.31Environmental, social and corporate governance (ESG) issues, including those related to climate change and sustainability, may have an adverseeffect on our business, financial condition and results of operations and damage our reputation.There is an increasing focus from certain investors, customers, consumers, employees and other stakeholders concerning ESG matters. Additionally, publicinterest and legislative pressure related to public companies’ ESG practices continue to grow. If our ESG practices fail to meet regulatory requirements or investor,customer, consumer, employee or other shareholders’ evolving expectations and standards for responsible corporate citizenship in areas including environmentalstewardship, support for local communities, Board of Director and employee diversity, human capital management, employee health and safety practices, productquality, supply chain management, corporate governance and transparency, our reputation, brand and employee retention may be negatively impacted, and ourcustomers and suppliers may be unwilling to continue to do business with us.Customers, consumers, investors and other shareholders are increasingly focusing on environmental issues, including climate change, energy and wateruse, plastic waste and other sustainability concerns. Concern over climate change may result in new or increased legal and regulatory requirements to reduce ormitigate impacts to the environment. Changing customer and consumer preferences or increased regulatory requirements may result in increased demands orrequirements. Complying with these demands or requirements could cause us to incur additional manufacturing, operating or product development costs.If we do not adapt to or comply with new regulations, including the SEC’s published proposed rules that would require companies to provide significantlyexpanded climaterelated disclosures in their periodic reporting, which may require us to incur significant additional costs to comply and impose increased oversightobligations on our management and board of directors, or fail to meet evolving investor, industry or stakeholder expectations and concerns regarding ESG issues,investors may reconsider their capital investment in our company, we may become subject to penalties, and customers and consumers may choose to stoppurchasing our products, if approved for commercialization, which could have a material adverse effect on our reputation, business or financial condition.Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions andadverse developments with respect to financial institutions and associated liquidity risk.Our business depends on the economic health of the global economies. If the conditions in the global economies remain uncertain or continue to bevolatile, or if they deteriorate, including as a result of the impact of military conflict, such as the war between Russia and Ukraine, terrorism or other geopoliticalevents, our business, operating results and financial condition may be materially adversely affected. Economic weakness, inflation and increases in interest rates,limited availability of credit, liquidity shortages and constrained capital spending have at times in the past resulted, and may in the future result, in challenging anddelayed sales cycles, slower adoption of new technologies and increased price competition, and could negatively affect our ability to forecast future periods, whichcould result in an inability to satisfy demand for our products and a loss of market share.In addition, increases in inflation raise our costs for commodities, labor, materials and services and other costs required to grow and operate our business,and failure to secure these on reasonable terms may adversely impact our financial condition. Additionally, increases in inflation, along with the uncertaintiessurrounding COVID19, geopolitical developments and global supply chain disruptions, have caused, and may in the future cause, global economic uncertainty anduncertainty about the interest rate environment, which may make it more difficult, costly or dilutive for us to secure additional financing. A failure to adequatelyrespond to these risks could have a material adverse impact on our financial condition, results of operations or cash flows.More recently, the closures of SVB and Signature Bank and their placement into receivership with the FDIC created bankspecific and broader financialinstitution liquidity risk and concerns. Although the Department of the Treasury, the Federal Reserve and the FDIC jointly released a statement that depositors atSVB and Signature Bank would have access to their funds, even those in excess of the standard FDIC insurance limits, under a systemic risk exception, futureadverse developments with respect to specific financial institutions or the broader financial services industry may lead to marketwide liquidity shortages, impair theability of companies to access nearterm working capital needs, and create additional market and economic uncertainty. There can be no assurance that future creditand financial market instability and a deterioration in confidence in economic conditions will not occur. Our general business strategy may be adversely affected byany such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions. If the current equityand credit markets deteriorate, or if adverse developments are experienced by financial institutions, it may cause shortterm liquidity risk and also make anynecessary debt or equity financing more difficult, more costly, more onerous with respect to financial and operating covenants and more dilutive. Failure to secureany necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stockprice and could require us to alter our operating plans. In addition, there is a risk that one or more of our service providers, financial institutions, manufacturers,suppliers and other partners may be adversely affected by the foregoing risks, which could directly affect our ability to attain our operating goals on schedule andon budget.Our business may be adversely affected by the impact of any renewed outbreak of the COVID19 pandemic.Public health epidemics or outbreaks could adversely impact our business. In late 2019, a novel strain of COVID19, also known as coronavirus, wasreported in Wuhan, China. While initially the outbreak was largely concentrated in China, it spread worldwide. Many countries around the world, including in Israel,implemented significant governmental measures to control the spread of the virus, including temporary closure of businesses, severe restrictions on travel and themovement of people, and other material limitations on the conduct of business. These measures haven historically resulted in work stoppages and other disruptions.If there is a resurgence of the COVID19 pandemic, this could adversely impact our operations, including among others, our sales and marketing efforts and ourability to raise additional funds, and accordingly, the impact of COVID19 could have an adverse impact on our business and our financial results.32Risks Related to Our Operations in RussiaRussia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.In addition to our Israel operations, we have operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia and we engage two software developers through a third party who are based in Ukraine. On February 24,2022, Russia invaded Ukraine. The outbreak of hostilities between the two countries could result in more widespread conflict and could have a severe adverse effecton the region.Following Russia’s actions, various countries, including the U.S., Canada, the United Kingdom, Germany and France, as well as the European Union,issued broadranging economic sanctions against Russia. Such sanctions included, among other things, a prohibition on doing business with certain Russiancompanies, officials and oligarchs; a commitment by certain countries and the European Union to remove selected Russian banks from the Society for WorldwideInterbank Financial Telecommunications (SWIFT) electronic banking network that connects banks globally; and restrictive measures to prevent the Russian CentralBank from undermining the impact of the sanctions. In response to sanctions, the Russian Central Bank raised its interest rates and banned sales of local securitiesby foreigners. Russia may take additional counter measures or retaliatory actions in the future. While diplomatic efforts have been ongoing, the conflict betweenRussia and Ukraine is currently unpredictable and has the potential to result in broadened military actions. The duration of ongoing hostilities and such sanctionsand related events cannot be predicted. Uncertainty as to future relations between Russia and the U.S. and other countries in the west, or between Russia and othereastern European countries, may have a negative impact on our operations.Such international sanctions and potential responses to such sanctions, including those that may limit or restrict transfer funds into Russia, may in thefuture significantly affect our ability to conduct our activities in Russia including paying our personnel. To date, the conflict has had minimal impact on operations .Nevertheless, we have no way to predict the progress or outcome of the situation in Ukraine, as the conflict and governmental reactions are rapidly developing andbeyond our control. Prolonged unrest, intensified military activities or more extensive sanctions impacting the region could have a material adverse effect on ouroperations, results of operations, financial condition, liquidity and business outlook.Political, military conditions or other risks in Russia could adversely affect our business.Russia is a federative state consisting of 85 constituent entities, or “subjects.” The Russian Constitution reserves some governmental powers for theRussian Government, some for the subjects and some for areas of joint competence. In addition, eight “federal districts” (“federal’nye okruga”), which are overseenby a plenipotentiary representative of the President, supplement the country’s federal system. The delineation of authority among and within the subjects is, inmany instances, unclear and contested, particularly with respect to the division of tax revenues and authority over regulatory matters. For these reasons, theRussian political system is vulnerable to tension and conflict between federal, subject and local authorities. This tension creates uncertainties in the operatingenvironment in Russia, which may prevent us from carrying out our strategy effectively. The risks associated with these events or potential events could materiallyand adversely affect the investment environment and overall consumer and entrepreneurial confidence in Russia, and our business, prospects, financial condition,hiring ability, and results of operations could be materially and adversely affected.Furthermore, high levels of corruption reportedly exist in Russia, including the bribing of officials for the purpose of initiating investigations bygovernment agencies. Corruption and other illegal activities could disrupt our ability to conduct our business effectively, and claims that the we are involved in suchcorruption or illegal activities could generate negative publicity, of which could harm our development, financial condition, results of operations or prospects.Economic and other risks in Russia could adversely affect our business.Operating a business in an emerging market such as Russia can involve a greater degree of risk than operating a business in more developed markets.Over the last two decades, the Russian economy has experienced or continues to experience at various times:●significant volatility in its GDP;33●the impact of international sanctions;●high levels of inflation;●increases in, or high, interest rates;●sudden price declines in oil and other natural resources;●instability in the local currency market;●budget deficits;●the continued operation of lossmaking enterprises due to the lack of effective bankruptcy proceedings;●capital flight; and●significant increases in poverty rates, unemployment and underemployment.The Russian economy has been subject to abrupt downturns in the past, including as a result of the invasion of Ukraine, global financial crisis, and, as anemerging market, remains particularly vulnerable to further external shocks and any future fluctuations in the global markets. Any further deterioration in the generaleconomic conditions in Russia (whether or not as a result of the events mentioned above) could have a material adverse effect on the Russian economy and mayresult in hiring and operational difficulties, as well as potential flight of human capital, which could have a material adverse effect on our business, productdevelopment and results of operations.Legal risks in Russia could materially adversely affect our operations and Russian tax legislation is subject to frequent change.Among the risks of the Russian legal system are: inconsistencies among laws, presidential decrees, and government and ministerial orders and resolutions;conflicting local, regional and federal laws and regulations; the untested nature of the independence of the judiciary and its sensitivity to economic or politicalinfluences; substantial gaps in the regulatory structure due to the delay or absence of implementing legislation; a high degree of discretion on the part ofgovernmental authorities; reported corruption within governmental entities and other governmental authorities; the relative inexperience of judges and courts ininterpreting laws applicable to complex transactions; and the unpredictability of enforcement of foreign judgments and foreign arbitral awards. Many Russian lawsand regulations are construed in a way that provides for significant administrative discretion in application and enforcement. Unlawful, selective or arbitrary actionsof the Russian Government have reportedly included the denial or withdrawal of licenses, sudden and unexpected tax audits, criminal prosecutions, and civil claims.Any of the above events may have a material adverse effect on our product development and results of operations.Despite certain improvements in the taxation system made by the Russian Government over the past decade, Russian tax legislation is still subject tofrequent change, varying interpretations, and inconsistent and selective enforcement. There are currently no clear rules for distinguishing between lawful taxoptimization and tax evasion. In addition, Russian tax laws do not contain detailed rules on the taxation in Russia of foreign companies. As such, taxpayers oftenhave to resort to court proceedings to defend their position against the Russian tax authorities. However, in the absence of consistent court practice or bindingprecedents, there is inconsistency amongst court decisions. Further, the possibility exists that the Russian Federation would impose arbitrary or onerous taxes andpenalties in the future, which could have a material adverse effect on our product development and results of operations.34Risks Related to Our Operations In IsraelOur headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.Our headquarters and most of our operations are located in central Israel and our key employees, officers and directors are residents of Israel. Accordingly,political, economic and military conditions in Israel and the surrounding region may directly affect our business. Since the establishment of the State of Israel in1948, a number of armed conflicts have taken place between Israel and its Arab neighbors. Any hostilities involving Israel or the interruption or curtailment of tradewithin Israel or between Israel and its trading partners could adversely affect our operations and results of operations and could make it more difficult for us to raisecapital. During the winter of 2008, winter of 2012 and the summer of 2014, Israel was engaged in an armed conflict with Hamas, a militia group and political partyoperating in the Gaza Strip, and during the summer of 2006, Israel was engaged in an armed conflict with Hezbollah, a Lebanese Islamist Shiite militia group andpolitical party. Israel faces political tension with respect to its relationships with Turkey, Iran and certain Arab neighbor countries. In addition, recent conflictsinvolved missile strikes against civilian targets in various parts of Israel, and negatively affected business conditions in Israel. Recent political uprisings and socialunrest in various countries in the Middle East and North Africa are affecting the political stability of those countries. This instability may lead to deterioration of thepolitical relationships that exist between Israel and these countries, and have raised concerns regarding security in the region and the potential for armed conflict.Any armed conflicts, terrorist activities or political instability in the region could adversely affect business conditions and could harm our results of operations. Forexample, any major escalation in hostilities in the region could result in a portion of our employees and service providers being called up to perform military duty foran extended period of time. Parties with whom we do business have sometimes declined to travel to Israel during periods of heightened unrest or tension, forcing usto make alternative arrangements when necessary. In addition, the political and security situation in Israel may result in parties with whom we have agreementsinvolving performance in Israel claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions insuch agreements. Any future deterioration in the political and security situation in Israel will negatively impact our business.Our commercial insurance does not cover losses that may occur as a result of events associated with the security situation in the Middle East. Althoughthe Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that thisgovernment coverage will be maintained. Any losses or damages incurred by us could have a material adverse effect on our business. Any armed conflicts orpolitical instability in the region would likely negatively affect business conditions and could harm our results of operations.Further, in the past, the State of Israel and Israeli companies have been subjected to an economic boycott. Several countries still restrict business with theState of Israel and with Israeli companies. These restrictive laws and policies may have an adverse impact on our operating results, financial condition or theexpansion of our business.The legislative power of the State resides in the Knesset, a unicameral parliament that consists of 120 members elected by nationwide voting under asystem of proportional representation. Israel’s most recent general elections were held on April 9, 2019, September 17, 2019, March 2, 2020 and November 1, 2022.The uncertainty surrounding the results of the recent elections may continue. Actual or perceived political instability in Israel or any negative changes in thepolitical environment, may individually or in the aggregate adversely affect the Israeli economy and, in turn, our business, financial condition, results of operationsand prospects.Some of our employees are obligated to perform military reserve duty in Israel.Many Israeli citizens, including our employees are obligated to perform one month, and in some cases more, of annual military reserve duty until they reachthe age of 40 (or older, for reservists with certain occupations) and, in the event of a military conflict, may be called to active duty. In response to increases interrorist activity, there have been periods of significant callups of military reservists. It is possible that there will be military reserve duty callups in the future. Ouroperations could be disrupted by such callups. Such disruption could materially adversely affect our business, results of operations and financial condition.35It may be difficult to enforce a nonIsraeli judgment against the Company or its officers and directors.The operating subsidiary of ours is incorporated in Israel. All of our executive officers and directors are not residents of the United States, and asubstantial portion of our assets and the assets of our executive officers and directors are located outside the United States. Therefore, a judgment obtained againstus, or any of these persons, including a judgment based on the civil liability provisions of the U.S. federal securities laws, may not be collectible in the United Statesand may not necessarily be enforced by an Israeli court. It also may be difficult to affect service of process on these persons in the United States or to assert U.S.securities law claims in original actions instituted in Israel. Additionally, it may be difficult for an investor, or any other person or entity, to initiate an action withrespect to U.S. securities laws in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of U.S. securities laws reasoning that Israel is not themost appropriate forum in which to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law isapplicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law often involves the testimony of expert witnesses, which can be a timeconsuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel that addresses the mattersdescribed above. As a result of the difficulty associated with enforcing a judgment against us in Israel, it may be impossible to collect any damages awarded byeither a U.S. or foreign court.Our international operations could expose us to additional risks, including exchange rate fluctuations, legal regulations and political or economicinstability that could harm our business and operating results.Our international operations expose us to the following risks which may have a material adverse effect on our business and operating results:●devaluations and fluctuations in currency exchange rates including fluctuations between the U.S. dollar and the NIS and the Russian Ruble;●costs of compliance with local laws, including labor laws and intellectual property laws;●compliance with domestic and foreign government policies, including compliance with Israeli securities laws and TASE;●changes in trade regulations and procedures affecting approval, production, pricing, marketing, reimbursement for and access to, our products;●compliance with applicable foreign anticorruption laws, antitrust/competition laws, antiBoycott Israel law and antimoney laundering laws; and●economic and geopolitical developments and conditions, including ongoing instability in global economies and financial markets, international hostilities,acts of terrorism and governmental reactions, inflation, outbreaks of contagious disease (e.g., the COVID19 pandemic) and military and political alliances.Risks Related to Our Common StockA more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.Although our common stock is listed on the Nasdaq Capital Market, it has only been traded on the Nasdaq Capital Market since July 25, 2016. There hasbeen relatively limited trading volume in the market for our common stock, and a more active, liquid public trading market may not develop or may not be sustained.Limited liquidity in the trading market for our common stock may adversely affect a stockholder’s ability to sell its shares of common stock at the time it wishes tosell them or at a price that it considers acceptable. If a more active, liquid public trading market does not develop, we may be limited in our ability to raise capital byselling shares of common stock and our ability to acquire other companies or assets by using shares of our common stock as consideration. In addition, if there is athin trading market or “float” for our stock, the market price for our common stock may fluctuate significantly more than the stock market as a whole. Without a largefloat, our common stock would be less liquid than the stock of companies with broader public ownership and, as a result, the trading prices of our common stockmay be more volatile and it would be harder for you to liquidate any investment in our common stock. Furthermore, the stock market is subject to significant priceand volume fluctuations, and the price of our common stock could fluctuate widely in response to several factors, including:●our quarterly or annual operating results;●changes in our earnings estimates;●investment recommendations by securities analysts following our business or our industry;●additions or departures of key personnel;●changes in the business, earnings estimates or market perceptions of our competitors;36●our failure to achieve operating results consistent with securities analysts’ projections;●changes in industry, general market or economic conditions;●announcements of legislative or regulatory changes; and●natural disasters (including for example, the recent fire in the Orgad warehouse) and political and economic instability, including wars, terrorism, politicalunrest, results of certain elections and votes, emergence of a pandemic, or other widespread health emergencies (or concerns over the possibility of suchan emergency, including for example, the recent the COVID19 pandemic), boycotts, adoption or expansion of government trade restrictions, and otherbusiness restrictions.The stock market has experienced extreme price and volume fluctuations in recent years that have significantly affected the quoted prices of the securitiesof many companies. The changes often appear to occur without regard to specific operating performance. The price of our common stock could fluctuate basedupon factors that have little or nothing to do with us and these fluctuations could materially reduce our stock price.Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.If any of our shareholders were to decide to sell large amounts of stock over a short period of time (presuming such sales were permitted) such sales couldcause the market price of our common stock to drop significantly, even if our business is doing well. Further, the market price of our common stock could decline as aresult of the perception that such sales could occur. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equitysecurities in the future at a time and price that we deem appropriate.Our securities are traded on more than one market which may result in price variations.Our securities have been trading on the Nasdaq Capital Market since July 2016 and on TASE since September 2005. Trading in our securities on suchexchanges occurs in different currencies (U.S. dollars on the Nasdaq Capital Market and NIS on the TASE), and at different times (due to different time zones,trading days and public holidays in the United States and Israel). The trading prices of our securities on the two exchanges may differ due to the foregoing andother factors. Any decrease in the price of our shares on the TASE could cause a decrease in the trading price of our shares on the Nasdaq Capital Market and viceversa.We are a smaller reporting company and, as a result of the reduced disclosure and governance requirements applicable to such companies, ourcommon stock may be less attractive to investors.We are a smaller reporting company, (i.e. a company with “public float” held by nonaffiliates with a market value of less than $250 million) and we areeligible to take advantage of certain exemptions from various reporting requirements applicable to other public companies. We have elected to adopt these reduceddisclosure requirements. We cannot predict if investors will find our common stock less attractive as a result of our taking advantage of these exemptions. If someinvestors find our common stock less attractive as a result of our choices, there may be a less active trading market for our common stock and our stock price may bemore volatile.We do not expect to pay any cash dividends in the foreseeable future.We have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our board of directors deems relevant. Investors should not purchase our common stock expecting to receive cash dividends. Because we do notpay dividends, and there may be limited trading, investors may not have any manner to liquidate or receive any payment on their investment. Therefore, our failureto pay dividends may cause investors to not see any return on investment even if we are successful in our business operations. In addition, because we do not paydividends we may have trouble raising additional funds, which could affect our ability to expand our business operations.37UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2022☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ________ to _________Commission file number 00137370MY SIZE, INC.(Exact name of registrant as specified in charter)Delaware510394637(State or jurisdiction ofIncorporation or organization)I.R.S EmployerIdentification No.4 Hayarden, POB 1026, Airport City, Israel7010000(Address of principal executive offices)(Zip code)+9723 6009030(Registrant’s telephone number, including area code)Securities registered pursuant to Section 12(b) of the Act:Title of each classTrading Symbol(s)Name of Each Exchange on Which RegisteredCommon Stock, par value $0.001 per shareMYSZThe Nasdaq Capital MarketSecurities registered pursuant to Section 12(g) of the Act: None.Indicate by check mark whether the registrant is a wellknown seasoned issuer as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes☒ No ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer, a smaller reporting company, or an emerginggrowth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 of theExchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☒Smaller Reporting Company☒Emerging Growth Company☐If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revisedfinancial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b2 of the Exchange Act) Yes ☐No☒Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control overfinancial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflectthe correction of an error to previously issued financial statements. ☐Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by anyof the registrant’s executive officers during the relevant recovery period pursuant to §240.10D1(b). ☐The aggregate market value of voting and nonvoting common equity held by nonaffiliates of the registrant as of June 30, 2022, the last business day of theregistrant’s most recently completed second fiscal quarter, was approximately $25,551,906.Number of shares of common stock outstanding as of March 31, 2023 was 2,446,780.Documents Incorporated by Reference: None.Table of ContentsPart IItem 1.Business2Item 1A.Risk Factors18Item 1B.Unresolved Staff Comments41Item 2.Properties41Item 3.Legal Proceedings41Item 4.Mine Safety Disclosures42Part IIItem 5.Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities43Item 6.Selected Financial Data43Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations43Item 7A.Quantitative and Qualitative Disclosures about Market Risk50Item 8.Financial Statements and Supplementary DataF1Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure51Item 9A.Controls and Procedures51Item 9B.Other Information51Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.51Part IIIItem 10.Directors, Executive Officers and Corporate Governance52Item 11.Executive Compensation57Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters60Item 13.Certain Relationships and Related Transactions, and Director Independence62Item 14.Principal Accounting Fees and Services65Part IVItem 15.Exhibits, Financial Statement Schedules66Signatures69iPART IIn this Annual Report on Form 10K, unless the context requires otherwise, the terms “we,” “our,” “us,” or “the Company” refer to MySize, Inc., a Delawarecorporation, and its subsidiaries, including MySize Israel 2014 Ltd. My Size LLC, Orgad International Marketing Ltd., or Orgad, and Naiz Bespoke Technologies, S.L,or Naiz, taken as a whole.References to “U.S. dollars” and “$” are to currency of the United States of America, and references to “NIS” are to New Israeli Shekels. Unless otherwiseindicated, U.S. dollar translations of NIS amounts presented in this Annual Report on Form 10K for the year ended on December 31, 2022 are translated using therate of NIS 3.358 to $1.00.All information in this Annual Report on Form 10K relating to shares or price per share reflects the 1for25 reverse stock split effected by us on December8, 2022.CAUTIONARY NOTE ON FORWARDLOOKING STATEMENTSThis Annual Report on Form 10K contains certain forwardlooking statements within the meaning of Section 27A of the Securities Act and Section 21E ofthe Exchange Act. Any statements in Annual Report on Form 10K about our expectations, beliefs, plans, objectives, assumptions or future events or performanceare not historical facts and are forwardlooking statements. These statements are often, but not always, made through the use of words or phrases such as“believe,” “will,” “expect,” “anticipate,” “estimate,” “intend,” “plan” and “would.” For example, statements concerning financial condition, possible or assumedfuture results of operations, growth opportunities, industry ranking, plans and objectives of management, markets for our common stock and future managementand organizational structure are all forwardlooking statements. Forwardlooking statements are not guarantees of performance. They involve known and unknownrisks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to differ materially from any results, levels ofactivity, performance or achievements expressed or implied by any forwardlooking statement.Any forwardlooking statements are qualified in their entirety by reference to the risk factors discussed throughout this Annual Report on Form 10K. Someof the risks, uncertainties and assumptions that could cause actual results to differ materially from estimates or projections contained in the forwardlookingstatements include but are not limited to:●our history of losses and needs for additional capital to fund our operations and our inability to obtain additional capital on acceptable terms, or at all;●risks related to our ability to continue as a going concern;●the new and unproven nature of the measurement technology markets;●our ability to achieve customer adoption of our products;●our ability to realize the benefits of our acquisitions of Orgad and Naiz;●our dependence on assets we purchased from a related party;●our ability to enhance our brand and increase market awareness;●our ability to introduce new products and continually enhance our product offerings;●the success of our strategic relationships with third parties;●information technology system failures or breaches of our network security;●competition from competitors;●our reliance on key members of our management team;●current or future litigation;●current or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated liquidityrisk; and●the impact of the political and security situation in Israel on our business.1The foregoing list sets forth some, but not all, of the factors that could affect our ability to achieve results described in any forwardlooking statements.You should read this Annual Report on Form 10K and the documents that we reference herein and have filed as exhibits to the Annual Report on Form 10K,completely and with the understanding that our actual future results may be materially different from what we expect. You should assume that the informationappearing in this Annual Report on Form 10K is accurate as of the date hereof. Because the risk factors referred to in this Annual Report on Form 10K, could causeactual results or outcomes to differ materially from those expressed in any forwardlooking statements made by us or on our behalf, you should not place unduereliance on any forwardlooking statements.Further, any forwardlooking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forwardlookingstatement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. New factors emergefrom time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extentto which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements. We qualify all ofthe information presented in this Annual Report on Form 10K, and particularly our forwardlooking statements, by these cautionary statements.ITEM 1. BUSINESSOverviewWe are an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile phone or through MySizeID Widget: a simple questionnaire which uses a database collected over the years.MySizeID syncs the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and only presents itemsfor purchase that match their measurements to ensure a correct fit.We are positioning ourselves as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empower brand design teams, which are designed to increase endconsumer satisfaction, contributing to a sustainable world and reduce operation costs.Recent DevelopmentsOrgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,602 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.2The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz, a limitedliability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.3The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Warehouse FireOn January 2, 2023, Orgad experienced a fire at its warehouse in Israel. we are not aware of any casualties or injuries associated with the fire. We shiftedOrgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incident did not affectthe future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of this incident on the otherparties that were involved in the incident (lessor and others that leased properties near the warehouse).January 2023 FinancingOn January 10, 2023, we entered into a securities purchase agreement, or the RD Purchase Agreement, pursuant to which we agreed to sell and issue in theRD Offering an aggregate of 162,000 of our shares of common stock, or the RD Shares, and prefunded warrants, or the Prefunded Warrants, to purchase up to279,899 shares of common stock and, in a concurrent private placement, unregistered warrants to purchase up to 883,798 shares of common stock, or the RDWarrants, consisting of Series A warrants, or Series A Warrants, to purchase up to 441,899 shares of common stock and Series B warrants, or Series B Warrants, topurchase up to 441,899 shares of common stock, at an offering price of $3.055 per RD Share and associated Series A and Series B Warrants and an offering price of$3.054 per Prefunded Warrant and associated Series A and Series B Warrants.4In addition, we entered into a securities purchase agreement, or the PIPE Purchase Agreement, and together with the RD Purchase Agreement, thePurchase Agreements, pursuant to which we agreed to sell and issue in the PIPE Offering an aggregate of up to 540,098 unregistered Prefunded Warrants andunregistered warrants to purchase up to an aggregate of 1,080,196 shares of common stock, or the PIPE Warrants and together with the RD Warrants, the Warrants,consisting of Series A Warrants to purchase up to 540,098 shares of common stock and Series B Warrants to purchase up to 540,098 shares of common stock at anoffering price of $3.054 per Prefunded Warrant and associated Series A and Series B Warrants.The Prefunded Warrants are immediately exercisable at an exercise price of $0.001 per share and will not expire until exercised in full. The Warrants areimmediately exercisable upon issuance at an exercise price of $2.805 per share, subject to adjustment as set forth therein. The Series A Warrants have a term of fiveand onehalf years from the date of issuance and the Series B Warrants have a term of 28 months from the date of issuance. The Warrants may be exercised on acashless basis if there is no effective registration statement registering the shares underlying the warrants.In connection with the PIPE Purchase Agreement, we entered into a registration rights agreement, or the Registration Rights Agreement. Pursuant to theRegistration Rights Agreement, we are required to file a resale registration statement, or the Registration Statement, with the Securities and Exchange Commission, orthe SEC, to register for resale the shares issuable upon exercise of the unregistered Prefunded Warrants and the Series A and Series B Warrants, within 20 days ofthe signing date of the PIPE Purchase Agreement, or the Signing Date, and to have such Registration Statement declared effective within 60 days after the SigningDate in the event the Registration Statement is not reviewed by the SEC, or 90 days of the Signing Date in the event the Registration Statement is reviewed by theSEC. we will be obligated to pay certain liquidated damages if we fail to maintain the effectiveness of the Registration Statement.The Purchase Agreements and the Registration Rights Agreements also contain representations, warranties, indemnification and other provisionscustomary for transactions of this nature. In addition, subject to limited exceptions, the Purchase Agreements provide that for a period of one year following theclosing of the Offerings, we will not effect or enter into an agreement to effect a “variable rate transaction” as defined in the Purchase Agreements.Aggregate gross proceeds to the Company in respect of the Offerings was approximately $3.0 million, before deducting fees payable to the placement agentand other offering expenses payable by the Company.We also entered into a letter agreement, or the Engagement Agreement, with H.C. Wainwright & Co., LLC, or Wainwright, pursuant to which Wainwrightagreed to serve as the exclusive placement agent for the Company in connection with the Offerings. We paid Wainwright a cash placement fee equal to 7% of theaggregate gross proceeds raised in the Offerings, a management fee of 1% of the aggregate gross proceeds raised in the Offerings, a nonaccountable expenseallowance of $85,000 and clearing fees of $15,950. Wainwright also received placement agent warrants, or the Placement Agent Warrants, with substantially the sameterms as the Series A Warrants issued in the Offering in an amount equal to 7% of the aggregate number of Shares and Prefunded Warrants sold in the Offerings, or68,740 shares, at an exercise price of $3.8188 per share and a term expiring on January 10, 2028.Our SolutionOur cloudbased software platform provides highly accurate sizing and measurement with broad applications including the online fashion/apparel industry,logistics and courier services and home DIY. Currently, we are mainly focusing on the ecommerce fashion/apparel industry. This proprietary technology is driven byseveral patented algorithms which are able to calculate and record measurements in a variety of novel ways. Although specific functionality varies by product, webelieve that our core solutions address the need for highly accurate measurements in a variety of consumer friendly, every day uses.5We have developed three products, MySizeID for the fashion/apparel industry, BoxSize for the logistics and courier services market and SizeUp for thehome DIY market.●MySizeID enables shoppers to generate highly accurate measurements of their body to find proper fitting clothes and accessories, through the use ofour application on their mobile phone or through a simple questionnaire if the user decides not to download the application. MySizeID syncs the user’smeasurement data to a sizing chart and presents items for purchase that match their measurements to ensure a correct fit. MySizeID is available forlicense by retailers and accessable by consumers through a web page.●BoxSize enables customers to quickly and easily measure the size and volume of a parcel to accurately calculate shipping fees. It also offers shippingcompanies a variety of precise logistical data for more efficiently managing their supply chain, providing them with an accurate way to compare thephysical package with what is in the shipping manifest. BoxSize solution is available for license on both iOS and Android operating systems. BoxSizeis available on the Honeywell Marketplace and in August 2019 was approved for Honeywell’s Independent Software Vendor Program, and MySize wasgranted an independent software vendor (ISV) status on the Zebra Technologies and on DataLogic platforms.●SizeUp is a digital tape measure that allows users to measure length, width and height of a surface by moving their smartphone from point to point ofan object or space. SizeUp is a valueadd for DIY and home improvement retailers whose customers struggle to find the appropriately sized items (likeblinds or curtains) for their homes or projects due to inaccurate measurements. SizeUp also is designed to replace rulers, tape measures and othermeasuring tools used for DIY projects. SizeUp is available for consumer download on both iOS and Android operating systems.The following are some select key features of our solutions:●Integration Capability. We design our solutions to be flexible and configurable, allowing our clients to match their use of our algorithms and softwarewith their specific business processes and workflows. Our platform has been organically developed from a common code base, data structure and userinterface, providing a consistent user experience with powerful features that are easily adaptable to our clients’ needs. The MySizeID widget can beintegrated via oneline JavaScript code, or through RESTful API;●Intuitive user experience. Our intuitive, easytouse interface is based on current technology, multiple focus groups and automatically adapts to users’devices, including mobile platforms, thereby significantly increasing accessibility of our solutions;●Big Data Generation. While we supply to the user the information he/she requires, we gather certain vital information such as body measurement andpackage volume which can be used anonymously to help the retailer acquire predictive size information on stocking, operations and consumers thatmay be in between sizes. All the information is being gathered and stored on our servers where it can be used by retailers;●NonInvasive. In taking measurements using our solution, the smartphone camera is not utilized; instead, the measurements are captured by scanningthe smartphone over the consumer’s body or package, thus ensuring greater privacy.Our Growth StrategyWe aim to drive revenue primarily through penetration of the U.S. and Europe markets through a business to business to consumer (B2B2C) model in theverticals we are targeting. We are pursuing the following growth strategies:●Sign Additional Commercial Agreements with U.S. Retailers. During 2022, we expanded our commercial agreements with Levi’s, introducing NorthAmerica (U.S. and Canada) and Latin America regions, and by extension Levis’ native apps in EU and U.S. regions. We also entered into commercialagreements with Baby Fresh, Galax, Punto Blanco, GEF France, Diesel, Gaala, Superdry, Uniontex Industries, and Temperlay London among others. Weare in various stages of discussions with U.S. and foreign retailers for the deployment of our size recommendation and measurement technology with aview to entering into additional commercial agreements.6●Pursue a TwoPronged Commercialization Strategy. We are seeking to accelerate adoption of our solutions both through direct partnerships with ecommerce websites as well as through thirdparty platform websites. While we seek to directly enter into partnerships with companies maintaining ecommerce websites in the apparel, courier and DIY markets, we are also seeking to deploy our solutions on thirdparty platforms. Furthermore, with theexpansion of MySizeID through the release of our FirstLook Smart Mirror, which we are offering to brick and mortar stores to digitize the physicalstores, MySizeID is now available for online retailers utilizing the WooCoomerce, Shopify, Lightspeed, PrestaShop, Bitrix and Wix platforms and tobrick and mortar stores through GK Software POS solution while BoxSize is available on the Honeywell, Zebra Technologies and Datalogic.●Ongoing Investment in our Technology Platform. We continue to invest in building new software capabilities and extending our platform to bring thepower of accurate measurement to a broader range of applications. In particular, we seek not only to deliver size recommendations but to provide arobust, endtoend,artificial intelligence, or AIdriven platform that inspires consumer confidence and drives revenue growth by providing a superiorconsumer journey to both online and the brick and mortar stores.●Grow our database. As the usage of our measurement apps increases, our database of information including user behaviour and body measurementsgenerates valuable statistics. Such data can be used in the big data market for targeted advertising and for blind consumer data mining.●Identify and acquire synergistic businesses. In order to reduce our time to market and obtain complementary technologies, we are seeking to acquiretechnologies and businesses that are synergistic to our product offering. We recently completed an acquisition of Orgad which operates anomnichannel ecommerce platform and Naiz which provides SaaS technology solutions that solve size and fit issues for fashion ecommerce companies.●Partnerships and cooperation. In order to bring a wider solution for the retail market we are working to partner and integrate our technology withpartners that can increase our penetration and offering to the market.Market OpportunityThe global ecommerce market was $5.7 trillion in 2022, and the industry is expected to grow significantly in the coming years with no signs of slowingdown. Market specialists expect a compound annual growth rate of 27.43% from 2023 to 2028: according to data from Statista, the market is expected to reach $6.5trillion in 2023. While many sectors have found ways to increase revenue through ecommerce, ecommerce is still plagued by issues that cut into profits andnegatively impact the bottom line, such as customer returns, low consumer conversion, and associated restocking and shipping costs.Fashion/ApparelSince the onset of the COVID19 pandemic, an immense shift to digital was recorded, with 85.9% growth vs. prepandemic, according to Mastercard, andover 2 billion people worldwide who shop online, according to data from Oberlo. In November 2022, online shoppers broke records with $11.3 billion in spending onCyber Monday, driving 5.8% yearoveryear growth and making the day the biggest online shopping day of all time, according to Adobe Analytics.In 2021, fashion companies invested between 1.6% and 1.8% of their revenues in technology, according to Mckinsey, and are expected to double theinvestment by 2030 in order to keep up with digital natives and keep a competitive edge. Personalization in ecommerce and hybrid connectivity in brickandmortarretail are two key themes in the future of fashtech, according to Mckinsey’s 2022 State of Fashion Technology.7In the upcoming years, inflation is expected to impact the fashion world. As prices for goods increase, the challenge will be to inspire confidence inconsumers, via different smart digital tools. Brands will need to embrace creative digital tools and new channels to deepen customer relationships, and as Mckinseyforecasts in their State of Fashion report for 2023, they will need to execute on priorities such as sustainability and digital acceleration.The global fashion ecommerce market size is expected to grow from $744.4 billion in 2022 to $821.19 billion in 2023 at a compound annual growth rate of10.3%. In 2027, the market size is expected to grow to $1,222.32 billion, at a compound annual growth rate of 10.5%, according to BRC.Based on the importance which shoppers attribute to free shipping 50% of cart abandonment rate is due to extra shipping costs (Baymard Institute) theneed for fashion retailers to substantiate the optimal size for a customer, thus minimizing returns, has never been more crucial.As brands move online or significantly expand their online presence, we believe that developing innovative ways to connect with shoppers, both onlineand offline, has become a top priority.Shipping/ParcelAccording to Pitney Bowes, parcel revenue in 13 major countries around the world increased by 17% year over year from $420 billion in 2020 (reflecting 131billion parcels) to $491 billion in 2021 (reflecting 159 billion parcels). In the shipping/parcel industry, the dimensions of a package are critical. It is not merely themeasurement of a package or box – but rather the amount of space that the package or box will take up on a truck, airplane, or ship that will be transporting thepackage or box. Far too often, retailers use unfit packaging for their items, adding additional costs in materials and shipping fees.DIYSimilar to issues in the apparel and fashion market, big box, hardware, furniture, and DIY stores are plagued by returns due to incorrect fit andmeasurements. In an industry where precise measurement for projects is an absolute necessity, ecommerce has not grown as quickly as in other industries which webelieve is due to lack of consumer confidence in measurements at home and buying the correct item online.MySizeIDWe have released the MySizeID app for both iOS and Android which assists consumers to take highly accurate measurement of their own body in order tosize clothing in the best way possible without the need to try the clothes on before purchasing. MySizeID is designed to simplify the process of purchasing clothesonline and significantly reduce the rate of returns of poorfitting clothing. During 2022, MySizeID delivered over 23.5 million size recommendations.The application is the result of a research and development effort that combines:●anthropometric research – analyses of information pertaining to body measurements derived from a survey and the subsequent determination ofcorrelations between body parts;●body measurement algorithm research – an algorithm created by us to measure body parts; and●retailers size chart analyses – adopting a deep understanding of the size charts of retailers and the corresponding “body to garment size.”MySizeID allows consumers to create a secure, online profile of their personal measurements, which can then be utilized, with partnered online retailers, toensure that no matter the manufacturer or size chart, they will get the right fit. MySizeID operates based on the use of existing sensors in smart phones which enable,through a specific purpose application, the measurement of the body of any consumer by moving the smartphone along his or her body. The MySizeID applicationdoes not rely on user photographs or any additional hardware; all a user needs to do is scan their body with their smartphone and the application records theirmeasurements. The measurements can then be saved in our database in the cloud, enabling the user to search for clothes in various retailer websites withoutworrying about size. When a search is made, the retailer will connect to our cloud database, and then provide results based on the user’s measurements and otherparameters as he or she may have defined. This data is also saved for use when a customer enters a brickandmortar store to help serve the customer moreefficiently and to provide a better shopping experience.8Figure 1: Screenshot of MySizeID on smartphone and ecommerce websiteAs part of the integration process, we offer to the retailer five main components:●Mobile App. MySizeID comes in the form of a native app or website. Our native app can be used “as is” integrated into the retailer’s ecommercewebsite. The website users can build a body profile on the app and receive size recommendations for their profile both in the app and on a widgetintegrated with their website.9●Widget. When a consumer enters into the retailer’s website and looks for a specific item, he or she can click on the MySizeID widget which will informthe consumer of his or her recommended size, based on his or her actual measurements, as measured using the app and the item he or she is looking at.The widget has two features:AI Wizard mode allows the user to obtain size from the following parameters: gender, height, weight, belly shape, hip shape and bra size only. Thegender, height and weight questions are mandatory, while the body shape questions are optional and can be added to increase accuracy for specificapparel categories.Guest mode allows a user that does not wish to sign up to MySizeID as a user to obtain size recommendations as well.●Analytic Pixel. MySizeID analytic pixel allows retailer to track and analyze the widget usage. By adding the pixel to the retailer’s website, MySizeID BIteam can track engagement, order, and return data and provide retailers with tools to understand the advantages and benefits of MySizeID.Use your own device using MySizeID instore solution, shoppers can receive size recommendations for all store items, when shopping in the offlinestores. The shoppers can build their body profile using an easy to use 3 to 6 questions form, scan an item barcode and receive a size recommendationfor the scanned item based on their body profile and the item’s size chart.Another feature we added is the “inbetween sizing” feature. Our system can detect a user that has body dimensions that place the user inbetweenthe clothes sizes being offered and lets the user know that. A user can then choose between the two sizes according to the user’s fit preference(tight/loose/average).In addition, we have recently released our InstantApp feature which allows shoppers to generate their body measurements directly from our widget,without the need to download our mobile app. Using this technology, the shoppers can create their online profile of their personal measurements andcomplete a purchase faster and easier with minimum distractions.The body profile can be created while shoppers are viewing the page from their mobile phone, or by scanning a QR code on desktop that will open thesame page on the mobile phone.Screenshot of InstantApp widget on desktop on yumyumfashion website10●MyDash Platform. The MyDash platform is a smart backoffice system where the retailer enters all the information regarding its size charts thatcorrelates to every product in its ecommerce site, and where the retailer can access the information on its users. This system is customizable based onthe retailer’s needs. In 2021, we changed the MyDash system to increase the system’s accessibility, added walkthroughs, user guides and changed theuser interface and much more for the ease of use. We added the option to use our generic size charts, added the option upload size chart files insteadof typing the size charts values manually, added more widget styling options and changed the pairing mechanism between the size chart and theproducts to be more userfriendly.Figure 3: Screenshot of BackOffice System●FirstLook Smart Mirror. The Smart Mirror provides an interactive, mirrorlike touch display that allows brands to provide instore customers with anenhanced, online shopping experience, contactless checkout and obtains the recommended size. The MySizeIDFirstLook Smart Mirror can be placedin numerous locations throughout a retail store, including the fitting rooms (without cameras) or other hightraffic locations of the store. Highlightcapabilities of the FirstLook Smart Mirror include a 3D “Tryiton” interactive avatar experience, personalized and highly accurate sizerecommendations by MySizeID, thirdparty point of sale systems integration, styling recommendations and contactless “select and collect” at theregister feature.Illustration of MySizeID “first look” smart mirror in a fashion store11We are currently offering MySizeID technology to retailers through either a payperuse model or a monthly subscription model. In our payperusebusiness model, every time the consumer obtains a recommended size, the retailer is charged for the usage.BoxSizeBoxSize is a parcel measurement application that can provide realtime logistic data on package volumes and transportation, resulting in improvedoperational efficiency and reduced operating expenses. In addition, BoxSize allows customers to easily measure the size of their parcel with their smartphone,calculate shipping costs and arrange for a convenient pickup time for the package. BoxSize is available both on iOS and Android.In 2020 we released the “One Click” feature on BoxSize that enables the user to measure a package with just one swipe of the handheld device. Previously,measurements through BoxSize would require three separate swipes.Figure 4: Screenshot of BoxSizeOur BoxSize mobile measurement solution is available on the Honeywell Marketplace. In addition, BoxSize was approved for Honeywell’s Global VendorProgram, and is available to provide highly accurate mobile measurement solutions for thousands of Honeywell clients. We also developed a new dashboard for thecourier companies to have all the required data about each package in one place. It includes package dimensions, pictures, scan geo location and more. Thedashboard also let the courier use Webhooks, which allows him to get the information from his own system.12In 2020, we announced our partnership with Datalogic, a company focused on the automatic data capture and process automation markets. The partnershipmakes our BoxSize measurement solution available to thousands of Datalogic customers in the Transportation and Logistics vertical.Agreement with Delhivery Private Limited, IndiaWe entered into an agreement with Delhivery Private Limited, one of the largest courier pickup, delivery, and online shipping services in India. Delhivery’sreputation as a frontrunner in delivery and logistics tech makes its decision to select Boxsize a particularly strong testament to the value the solution provides.BoxSize provides Delhivery’s employees on the B2B side with critical information that will allow them to effortlessly optimize loading efficiency and add even morerealtime visibility to operations.SizeUpWe are working on additional consumer applications, including a DIY application. Our SizeUp application is a smart tape measure for the business toconsumer market which allows users to utilize their smartphone as a tape measure. The application provides measurements with an accuracy of within twocentimeters. Through the use of SizeUp, users will be able to visualize how an object or a piece of furniture will fit in an existing room in their home or office. It alsoadded Google Vision for image content analysis, object detection, and title suggestions.Currently the SizeUp app for Android and iOS is available for free for the first 30 days, after which a user will be required to register via email and pay aonetime fee of $1.99 to continue using the application. To date, revenues from downloads have been minimal.Research and DevelopmentOur research and development team are responsible for the research, algorithm, design, development, and testing of all aspects of our measurementplatform technology. We invest in these efforts to continuously improve, innovate, and add new features to our solutions.We incurred research and development expenses of approximately $1.7 million in 2022 and $4.25 million in 2021, relating to the development of itsapplications and technologies. The decrease from the corresponding period primarily resulted from share based payment in amount of $2,618,000 attributed to theshare issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021. We intend to continue to invest in our research anddevelopment capabilities to extend our platform and bring our measurement technology to a broader range of applications.13In 2022, the R&D department experienced significant success in their efforts to improve the performance of their size recommendation system. Through acombination of optimized algorithms and the incorporation of cuttingedge technologies, the team was able to achieve a threefold increase in the system’s speed.This breakthrough not only makes the system one of the fastest and most accurate on the market, but also reduced the operation costs, making it more costeffective for businesses to use. Additionally, the solution is now highly scalable, allowing it to easily adapt to the needs of businesses of any size. The R&D team isnow focused on further improving the system and exploring new applications for the technology.Sales and MarketingIn 2019, we launched a commercialization strategy that directs our sales efforts toward both sales to ecommerce players in specific vertical markets such asfashion/apparel and shipping/delivery as well as to ecommerce thirdparty platform providers. As of March 15, 2023, our products are being sold in the followingcountries: US, UK, France, Netherlands, Spain, Portugal Turkey, Germany, Israel and Italy, generating customer leads, building out a sales pipeline, and developingcustomer relationships.We believe an effective method to market our suite of products is for users to actively use and explore its capabilities. We encourage free trials of one ormore of our products in order to successfully convert those accounts to paid subscriptions.Proprietary RightsWe rely on a combination of patent, copyright, trademark and trade secret laws in the United States and other jurisdictions, as well as contractualprotections, to protect our proprietary technology.As of December 31, 2022, we owned 18 issued patents: six in Europe, four in the U.S., three in each of Russia and Japan and one in each of Canada andIsrael which expire between January 20, 2033 and August 18, 2036, and we have two additional patent applications in process. As of such date, we do not have anyregistered trademarks.We cannot provide any assurance that our proprietary rights with respect to our products will be viable or have value in the future since the validity,enforceability and type of protection of proprietary rights in softwarerelated industries are uncertain and still evolving.Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products or to obtain and use informationthat we regard as proprietary. Policing unauthorized use of our products is difficult, and while we are unable to determine the extent to which piracy of our softwareproducts exists, software piracy can be expected to be a persistent problem. In addition, the laws of some foreign countries do not protect proprietary rights to asgreat an extent as do the laws of the United States, and effective copyright, trademark, trade secret and patent protection may not be available in those jurisdictions.Our means of protecting our proprietary rights may not be adequate to protect us from the infringement or misappropriation of such rights by others.Further, in recent years, there has been significant litigation in the United States involving patents and other intellectual property rights, particularly in thesoftware and Internetrelated industries. We can become subject to intellectual property infringement claims as the number of our competitors grows and ourproducts and services overlap with competitive offerings. These claims, even if not meritorious, could be expensive to defend and could divert management’sattention from operating our business. If we become liable to third parties for infringing their intellectual property rights, we could be required to pay a substantialaward of damages and to develop noninfringing technology, obtain a license or cease selling the products that contain the infringing intellectual property. We maybe unable to develop noninfringing technology or obtain a license on commercially reasonable terms, if at all.14Government RegulationWe are subject to a number foreign and domestic laws and regulations that involve matters central to our business. These laws and regulations mayinvolve privacy, data protection, intellectual property, or other subjects. Many of the laws and regulations to which we are subject are still evolving and being testedin courts and could be interpreted in ways that could harm our business. In addition, the application and interpretation of these laws and regulations often areuncertain, particularly in the new and rapidly evolving industry in which we operate. Because global laws and regulations have continued to develop and evolverapidly, it is possible that we, our products, or our platform may not be, or may not have been, compliant with each such applicable law or regulation.In particular, we are subject to a variety of federal, state and international laws and regulations governing the processing of personal data. Many U.S. stateshave passed laws requiring notification to data subjects when there is a security breach of personally identifiable data. There are also a number of legislativeproposals pending before the U.S. Congress, various state legislative bodies and foreign governments concerning data protection. In addition, data protection lawsin Europe and other jurisdictions outside the United States can be more restrictive than those within the United States, and the interpretation and application ofthese laws are still uncertain and in flux.For example, the General Data Protection Regulation, or GDPR, which took effect on May 25, 2018, enhances data protection obligations for entities thatprocess personal data about individuals, including obligations to cooperate with European data protection authorities, implement security measures and keeprecords of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to the greater of €20 million or 4% of global annual revenue. Inaddition, the California Consumer Privacy Act of 2018, or CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and requiredeletion of their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used.The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further,failure to comply with the Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may exposeus to administrative fines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the currentenforcement measures and sanctions. Given the breadth and depth of changes in data protection obligations, meeting the requirements of GDPR and otherapplicable laws and regulations has required significant time and resources, including a review of our technology and systems currently in use against therequirements of GDPR and other applicable laws and regulations. We have taken various steps to prepare for complying with GDPR and other applicable laws andregulations however there can be no assurance that these steps are sufficient to assure compliance. Further, additional EU laws and regulations (and member states’implementations thereof) further govern the protection of individuals and of electronic communications. If our efforts to comply with GDPR or other applicable lawsand regulations are not successful, we may be subject to penalties and fines that would adversely impact our business and results of operations, and our ability touse personal data of individuals could be significantly impaired.CompetitionWe operate in a highly competitive industry that is characterized by constant change and innovation. Changes in the applications and the programinglanguages used to develop applications, devices, operating systems, and technology landscape result in evolving customer requirements. Our competitors includeTrue Fit, Fit analytics and 3DLook.The principal competitive factors in our market include the following:●High Accuracy Size Recommendations: the highest accuracy and the lowest margin of error by combining patented technology including AI and ML,size chart or spec data, and MySizeID property body data measurement;●Integration○Fast 1 week integration including size chart size chart review and product mapping○Easy 1 line of “all included” script implementation●Technical Advantages○Very small library that weighs ±50kb (minimum widget loading time on product page)○UltraFast loading and size recommendation presenting○Restful API option (API integration with any website or app)15●Optimizations○Adjustments of size charts based on performance○Widget usage analysis by FashTech and BI teams○Automatic pairing of size charts with products/collections●User Experience○Easy to use interface (1015 seconds to receive size recommendations)○Option to add/deduct questions to/from widget wizards○Users automatically receive size recommendations on all products after initial sign up●Product and platform features, architecture, reliability, privacy and security, performance, effectiveness, and supported environments;●Product extensibility and ability to integrate with other technology infrastructures;●Digital operations expertise;●Ease of use of products and platform capabilities;●Total cost of ownership;●Adherence to industry standards and certifications;●Strength of sales and marketing efforts;●Brand awareness and reputation; and●Focus on customer successWe believe we generally compete favorably with our competitors on the basis of these factors. We expect competition to increase as other established andemerging companies enter our markets, as customer requirements evolve, and as new products and technologies are introduced. We expect this to be particularlytrue as we offer a smartphonebased offering that does not need to utilize the smartphone’s camera, and our competitors may also seek to repurpose their existingofferings to provide similar solutions. Many of our competitors have substantially greater financial, technical, and other resources, greater name recognition, largersales and marketing budgets, broader distribution, and larger and more mature intellectual property portfolios.Human Capital ManagementAs of March 31, 2023, we had a total of 35 employees, of which 30 were fulltime employees, including 9 in sales and marketing, 12 in technology anddevelopment and 9 in administration and finance.None of our employees are represented by a collective bargaining agreement, nor have we experienced any work stoppage. We consider our relationshipwith our employees to be good. Our future success depends on our continuing ability to attract and retain highly qualified engineers, sales and marketing, accountmanagement, and senior management personnel.We also believe we have built a strong sales team focused on expanding into new markets through the acquisition of Naiz and our current team.We believe that our future success will depend, in part, on our continued ability to attract, hire and retain qualified personnel. In particular, we depend onthe skills, experience and performance of our senior management and research personnel. We compete for qualified personnel with other hitech companies, as wellas universities and nonprofit research institutions.16We provide competitive compensation and benefits programs to help meet the needs of our employees. In addition to salaries, these programs (which varyby country/region and employment classification) include incentive compensation plan, pension, and insurance benefits, paid time off, , among others. We also usetargeted equitybased grants with vesting conditions to facilitate retention of personnel, particularly for our key employees.The success of our business is fundamentally connected to the wellbeing of our people. Accordingly, we implemented an hybrid work policy in which theemployees can work from home twice a week.We consider our employees to be a key factor to our success and we are focused on attracting and retaining the best employees at all levels of ourbusiness. Inclusion and diversity is a strategic, business priority. We employ people based on relevant qualifications, demonstrated skills, performance and otherjobrelated factors. We do not tolerate unlawful discrimination related to employment, and strive to ensure that employment decisions related to recruitment,selection, evaluation, compensation, and development, among others, are not influenced by race, color, religion, gender, age, ethnic origin, nationality, sexualorientation, marital status, or disability. Continuous monitoring to ensure pay equity has been a focus in 2022. We have continued to improve gender balance in 2022with a focus on increasing the representation of women hired as new college graduates. We are committed to creating a trusting environment where all ideas arewelcomed and employees feel comfortable and empowered to draw on their unique experiences and backgrounds.We consider our relations with our employees to be good.Company InformationOur principal executive offices are located at HaYarden 4 St., POB 1026, Airport City, Israel 7010000, and our telephone number is +97236009030. Ourwebsite address is www.mysizeid.com. Any information contained on, or that can be accessed through, our website is not incorporated by reference into, nor is it inany way a part of, this Annual Report on Form 10K.We use our website (www.mysizeid.com) as a channel of distribution of Company information. The information we post through this channel may bedeemed material. Accordingly, investors should monitor our website, in addition to following our press releases, SEC filings and public conference calls andwebcasts. The contents of our website are not, however, a part of this Annual Report on Form 10K.Corporate HistoryWe were incorporated in the State of Delaware on September 20, 1999 under the name Topspin Medical, Inc. In December 2013, we changed our name toKnowledgetree Ventures Inc. Subsequently, in February 2014, we changed our name to MySize, Inc. In 2020, we created a subsidiary in the Russian Federation, MySize LLC.From inception through 2012, we were engaged in research and development of a medical magnetic resonance imaging, or MRI, technology forinterventional cardiology and in the development of MRI technology for use in the diagnosis and treatment of prostate cancer. In January 2012, we acquiredMetamorefix Ltd., or Metamorefix. Metamorefix was incorporated in 2007, and was engaged in the development of innovative solutions for the rehabilitation oftissues, particularly skin tissues. By the end of 2012, we ceased operations and in January 2013, we sold our entire ownership interest in Metamorefix.In September 2013, Ronen Luzon, our Chief Executive Officer, acquired control of the Company from Asher Shmuelevitch, according to which Mr. Luzonpurchased 70,238 shares of common stock from Mr. Shmuelevitch, which shares represented approximately 40% of the issued and outstanding capital stock of theCompany at such time, thus becoming a controlling shareholder of the Company. In connection with the acquisition, Mr. Luzon reached a settlement with our thencreditors pursuant to which the main creditor, Mr. Shmuelevitch, was paid a total sum of approximately $140,000 in consideration for a full and final waiver of any andall his claims that he may have relating to any monetary indebtedness of the Company to the creditors.17In February 2014, My Size Israel, our wholly owned subsidiary, entered into a Purchase Agreement, or the Purchase Agreement, with Shoshana Zigdon,who at the time was a beneficial owner of more than 20% of our outstanding shares, with respect to the acquisition by us of certain rights related to the collection ofdata for measurement purposes including rights in the venture, the method and a patent application that had been filed by the Seller (PCT/IL2013/050056), or theAssets. In consideration for the sale of the Assets, we agreed to pay to Ms. Zigdon, 18% of our operating profit, directly or indirectly connected with the Assetstogether with valueadded tax in accordance with the law for a period of seven years from the end of the development period of the aforementioned venture. Inaddition to the foregoing, the Purchase Agreement provided that all developments, improvements, knowledge and knowhow developed and/or accumulated by usafter the execution of the Purchase Agreement will be owned by us. Further, Ms. Zigdon agreed not to compete, directly or indirectly, with us in any matter relatingto the Assets for a period of seven years from the end of the development period of the venture.On May 26, 2021, we, My Size Israel, and Ms. Zigdon entered into an Amendment to Purchase Agreement, or the Amendment, which made certainamendments to the Purchase Agreement. Pursuant to the Amendment, Ms. Zigdon agreed to irrevocably waive (i) the right to repurchase certain assets related tothe collection of data for measurement purposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which our business issubstantially dependent, or the Assets, and (ii) all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My SizeIsrael under the Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation, reward orany rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights, or the Waiver. Inconsideration of the Waiver, we issued 100,000 shares of common stock to Ms. Zigdon.In September 2005, we commenced trading on the Tel Aviv Stock Exchange, or TASE. Between 2007 and 2012 we reported as a public company with theSEC. In August 2012, we suspended our reporting obligations. In mid2015 we resumed reporting as a public company. On July 25, 2016, our common stock beganpublicly trading on the Nasdaq Capital Market under the symbol “MYSZ”.ITEM 1A. RISK FACTORSAn investment in our common stock involves a high degree of risk. You should carefully consider the following risk factors and the other information inthis Annual Report on Form 10K before investing in our common stock. Our business and results of operations could be seriously harmed by any of the followingrisks. The risks set out below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterialalso may materially adversely affect our business, financial condition and/or operating results. If any of the following events occur, our business, financial conditionand results of operations could be materially adversely affected. In such case, the value and trading price of our common stock could decline, and you may lose allor part of your investment.Summary Risk FactorsThe principal factors and uncertainties that make investing in our ordinary shares risky, include, among others:Risks Related to Our Financial Position and Capital Requirements●We have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.●Our limited operating history makes it difficult to evaluate our business and prospects.●We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive and maycause the market price of our common stock to decline.●The report of our independent registered public accounting firm contains an explanatory paragraph regarding substantial doubt about our ability tocontinue as a going concern.Risks Related to Our Company and Our Business●The market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and online thirdparty resellers adopting our flagship product, MySizeID.18●Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broader marketacceptance of our products.●We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which may makeit difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.●We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increase ourcapital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.●If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations and financialcondition may be adversely affected.●If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operations andfinancial condition could be adversely affected.●The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile device applications andcustom development services.●Our growth depends, in part, on the success of our strategic relationships with third parties.●Changes in economic conditions could materially affect our business, financial condition and results of operations.●We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.●We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significant interruptionin our network or hosting and cloud services could adversely impact our operations and harm our business.●Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.●We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.●A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.●Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, data protectionand information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive and confidentialinformation. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm our business,results of operations and financial condition.●We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect our business.●We may face intense competition and expect competition to increase in the future, which could limit us in developing a customer base and generatingrevenue.●Our business operations and future development could be significantly disrupted if we lose key members of our management team.19●If we are able to expand our operations, we may be unable to successfully manage our future growth.Risks Related to Our Operations in Israel and Russia●Our headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.●Russia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.Risks Related to Our Common Stock●A more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.●Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions and adversedevelopments with respect to financial institutions and associated liquidity risk;●Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.●Our securities are traded on more than one market which may result in price variations.●We are a former “shell company” and as such are subject to certain limitations not generally applicable to other public companies.Risks Related to Our Financial Position and Capital RequirementsWe have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.We realized a net loss of approximately $8.3 million and $10.5 million for the years ended December 31, 2022 and 2021 and had an accumulated deficit of$53.5 million as at December 31, 2022. Because of the numerous risks and uncertainties associated with the development and commercialization of our products andbusiness, we are unable to predict the extent of any future losses or when we will become profitable, if at all. Expected future operating losses will have an adverseeffect on our cash resources, shareholders’ equity and working capital. Our failure to become and remain profitable could depress the value of our stock and impairour ability to raise capital, expand our business, maintain our development efforts, or continue our operations. A decline in our value could also cause you to lose allor part of your investment in us.Our limited operating history makes it difficult to evaluate our business and prospects.We have only been developing our measurement technology since 2014. Since then, our operating history has been primarily limited to research anddevelopment, pilot studies, raising capital, and more recently acquisitions and sales and marketing efforts. Therefore, it may be difficult to evaluate our business andprospects. We have not yet demonstrated an ability to commercialize our products. Consequently, any predictions about our future performance may not beaccurate, and you may not be able to fully assess our ability to complete development and/or commercialize our products, and any future products.We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive andmay cause the market price of our common stock to decline.Based on our projected cash flows and the cash balances as of the date of this Annual Report on Form 10K, our existing cash is insufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. In order to meet ourbusiness objectives in the future, we will need to raise additional capital, which may not be available on reasonable terms or at all. Additional capital would be usedto accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;20●respond to competitive pressure;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, and a number of otherfactors, many of which are outside our control, and on our financial performance. Accordingly, we cannot assure you that we will be able to successfully raiseadditional capital at all or on terms that are acceptable to us. If we cannot raise additional capital when needed, it may have a material adverse effect on our business,results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.Management has concluded that there is substantial doubt about our ability to continue as a going concern which could prevent us from obtainingnew financing on reasonable terms or at all.We have incurred significant losses and negative cash flows from operations and have an accumulated deficit that raises substantial doubt about its abilityto continue as a going concern. Our audited consolidated financial statements for the year ended December 31, 2022 were prepared under the assumption that wewould continue our operations as a going concern. Our independent registered public accounting firm has included a “going concern” explanatory paragraph in itsreport on our financial statements for the year ended December 31, 2022. If we are unable to improve our liquidity position, by, among other things, raising capitalthrough public or private offerings or reducing our expenses, we may exhaust our cash resources and will be unable to continue our operations. If we cannotcontinue as a viable entity, our shareholders would likely lose most or all of their investment in us.Risks Related to Our Company and Our BusinessThe market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and onlinethirdparty resellers adopting our flagship product, MySizeID.The market for our measurement technology is relatively new and unproven and is subject to a number of risks and uncertainties. We believe that ourfuture success will depend in large part on market adoption of our flagship product, MySizeID, by U.S. retailers and online thirdparty resellers. In order to grow ourbusiness, we intend to focus on educating retailers and resellers and other potential customers about the benefits of our measurement technology, expanding thefunctionality of our products and bringing new products to market to increase market acceptance and use of our technology. Our ability to develop and expand themarket that our products address depends upon a number of factors, including the cost savings, performance and perceived value associated with such products.The market for our products could fail to develop or there could be a reduction in interest or demand for our products as a result of a lack of consumer acceptance,technological challenges, competing products and services, weakening economic conditions and other causes. We may never successfully commercialize ourproducts and if our products fail to achieve market acceptance, this would have a material adverse effect on our business, results of operations and financialcondition.21Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broadermarket acceptance of our products.Our ability to achieve customer adoption, especially among U.S. retailers will depend, in part, on our ability to effectively organize, focus and train our salesand marketing personnel. We have limited experience selling to U.S. retailers and only recently established a U.S. sales force. We believe that there is significantcompetition for experienced sales professionals with the skills and industry knowledge that we require. Our ability to achieve significant revenue growth in thefuture will depend, in part, on our ability to recruit, train and retain a sufficient number of experienced sales professionals, particularly those with experience sellingto U.S. retailers. In addition, even if we are successful in hiring qualified sales personnel, new hires require significant training and experience before they achievefull productivity, particularly for sales efforts targeted at U.S. retailers and new markets. Because we only recently started sales efforts, we cannot predict whether, orto what extent, our sales efforts will be successful.We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which maymake it difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.In this market segment, the decision to adopt our products may require the approval of multiple technical and business decision makers, including security,compliance, procurement, operations and IT. In addition, while U.S. retailers may be willing to deploy our products on a limited basis, before they will commit todeploying our products at scale, they often require extensive education about our products and significant customer support time, engage in protracted pricingnegotiations and seek to secure readily available development resources. As a result, it is difficult to predict when we will obtain new customers and begingenerating revenue from these customers. As part of our sales cycle, we may incur significant expenses before executing a definitive agreement with a prospectivecustomer and before we are able to generate any revenue from such agreement. We have no assurance that the substantial time and money spent on our salesefforts will generate significant revenue. If conditions in the marketplace generally or with a specific prospective customer change negatively, it is possible that nodefinitive agreement will be executed, and we will be unable to recover any of these expenses. If we are not successful in targeting, supporting and streamlining oursales processes and if revenue expected to be generated from a prospective customer is not realized in the time period expected or not realized at all, our ability togrow our business, and our operating results and financial condition may be adversely affected. If our sales cycles lengthen, our future revenue could be lower thanexpected, which would have an adverse impact on our operating results and could cause our stock price to decline.22We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increaseour capital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.In order to reduce time to market and obtain complementary technologies, we are seeking to acquire technologies and businesses that are synergistic to ourproduct offering. For example, we recently acquired Orgad which operates an omnichannel ecommerce platform and Naiz which provides SaaS technology solutionsthat solve size and fit issues for fashion ecommerce companies. We evaluate from time to time various acquisitions and collaborations, including licensing oracquiring complementary technologies, intellectual property rights, or businesses. The process for acquiring a company may take from several months up to a yearand costs can vary greatly. We may also compete with others to acquire companies, and such competition may result in decreased availability of, or an increase inprice for, suitable acquisition candidates. In addition, we may not be able to consummate acquisitions or investments that we have identified as crucial to theimplementation of our strategy for other commercial or economic reasons. As a result, it may be more difficult for us to identify suitable acquisition or investmenttargets or to consummate acquisitions or investments on acceptable terms or at all. If we are not able to execute on any acquisition, we may not be able to achieve afuture growth strategy and may lose market share.In addition, the acquisition of Orgad, Naiz and any potential future acquisition, joint venture or collaboration may entail numerous potential risks, including:●increased operating expenses and cash requirements;●the assumption of additional indebtedness or contingent liabilities;●assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel;●the diversion of our management’s attention from our existing programs and initiatives in pursuing such a strategic merger or acquisition;●retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships;●risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing technologies; and●our inability to generate revenue from acquired technologies or products sufficient to meet our objectives in undertaking the acquisition or even to offsetthe associated acquisition and maintenance costs.All of the foregoing risks may be magnified as the cost, size or complexity of an acquisition or acquired company increases, or where the acquiredcompany’s products, market or business are materially different from ours, or where more than one integration is occurring simultaneously or within a concentratedperiod of time. We may not be able to obtain the necessary regulatory approvals, including those of antitrust authorities and foreign investment authorities, incountries where we seek to consummate acquisitions or make investments. For those and other reasons, we may ultimately fail to consummate an acquisition, even ifwe announce the intended acquisition.In addition, we may require significant financing to complete an acquisition or investment, whether through bank loans, raising of equity or debt orotherwise. We cannot assure you that such financing options will be available to us on reasonable terms, or at all. If we are not able to obtain such necessaryfinancing, it could have an impact on our ability to consummate a substantial acquisition or investment and execute a future growth strategy. Alternatively, we mayissue a significant number of shares as consideration for an acquisition, which would have a dilutive effect on our existing shareholders. For example, in partialconsideration for the acquisition of Orgad, we agreed to issue up to 111,602 shares of our common stock and in the Naiz acquisition we issued 240,000 shares of ourcommon stock. Furthermore, if we undertake acquisitions, we may incur large onetime expenses and acquire intangible assets that could result in significant futureamortization expense.23If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations andfinancial condition may be adversely affected.We believe that enhancing the “MySize” brand identity and increasing market awareness of our company and products, particularly among U.S. retailers, iscritical to achieving widespread acceptance of our products. Our ability to successfully develop new retailers may be adversely affected by a lack of awareness oracceptance of our brand. To the extent that we are unable to foster name recognition and affinity for our brand, our growth may be significantly delayed or impaired.The successful promotion of our brand will depend largely on our continued marketing efforts, market adoption of our products, and our ability to successfullydifferentiate our products from competing products and services. Our brand promotion may not be successful or result in revenue generation. Any incident thaterodes consumer affinity for our brand could significantly reduce our brand value and damage our business. If consumers perceive or experience a reduction inquality, or in any way believe we fail to deliver a consistently positive experience, our brand value could suffer and our business may be adversely affected.In particular, adverse weather conditions can impact guest traffic at our retailers, and, in more severe cases, cause temporary retail closures, sometimes forprolonged periods. Our business is subject to seasonal fluctuations, with retail sales typically higher during certain months, such as December. Adverse weatherconditions during our most favorable months or periods may exacerbate the effect of adverse weather on consumer traffic and may cause fluctuations in ouroperating results from quartertoquarter within a fiscal year.If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operationsand financial condition could be adversely affected.Our ability to attract new customers depends in part on our ability to enhance and improve our existing products, increase adoption and usage of ourproducts and introduce new products. The success of any enhancements or new products depends on several factors, including timely completion, adequatequality testing, actual performance quality, and overall market acceptance. Enhancements and new products that we develop may not be introduced in a timely orcosteffective manner, may contain errors or defects, may have interoperability difficulties with our platform or other products or may not achieve the broad marketacceptance necessary to generate significant revenue. Furthermore, our ability to increase the usage of our products depends, in part, on the development of newuse cases for our products and may be outside of our control. If we are unable to successfully enhance our existing products to meet evolving customerrequirements, increase adoption and usage of our products, develop new products, then our business, results of operations and financial condition would beadversely affected.The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile Apps and customdevelopment services.We must continue to enhance and improve the performance, functionality and reliability of our products. The mobile technology industry is characterizedby rapid technological change, changes in user requirements and preferences, frequent new product and services introductions embodying new technologies andthe emergence of new industry standards and practices that could render our products obsolete. Our success will depend, in part, on our ability to both internallydevelop and enhance our existing products, develop new products that address the increasingly sophisticated and varied needs of our customers, and respond totechnological advances and emerging industry standards and practices on a costeffective and timely basis. The development of our technology involvessignificant technical and business risks. We may fail to use new technologies effectively or to adapt our proprietary technology and systems to customerrequirements or emerging industry standards. If we are unable to adapt to changing market conditions, customer requirements or emerging industry standards, wemay not be able to increase our revenue and expand our business.Changes in economic conditions could materially affect our business, financial condition and results of operations.Because our primary target customers include U.S. retailers , we, together with the rest of the fashion/apparel industry, will depend upon consumerdiscretionary spending. Increases in unemployment rates, reductions in home values, increases in home foreclosures, investment losses, personal bankruptcies andreductions in access to credit and reduced consumer confidence, may impact consumers’ ability and willingness to spend discretionary dollars. In addition, volatileeconomic conditions may repress consumer confidence and discretionary spending. Any of the foregoing may have a material adverse effect on our business,financial condition and results of operations.24Our growth depends, in part, on the success of our strategic relationships with third parties.To grow our business, we anticipate that we will continue to depend on relationships with third parties, such as our customers and thirdparty platforms.Identifying partners, and negotiating and documenting relationships with them, requires significant time and resources. If we are unsuccessful in establishing ormaintaining our relationships with third parties, our ability to compete in the marketplace or to grow our revenue could be impaired, and our results of operationsmay suffer. Even if we are successful, we cannot assure you that these relationships will result in increased customer usage of our products or increased revenue.We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.We currently utilize, and plan on continuing to utilize over the current fiscal year, thirdparty networking providers and distribution through companiesincluding, but not limited to, Apple and Google as well as Shopify, WooCommerce and, Datalogic, Honeywell and Zebra to distribute our technologies. If disruptionsor capacity constraints occur, we may have no means of replacing these services, on a timely basis or at all. This could cause a material adverse condition for ouroperations and financial earnings.We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significantinterruption in our network or hosting and cloud services could adversely impact our operations and harm our business.Our technology infrastructure is critical to the performance of our products and customer satisfaction. Our products run on a complex distributed system,or what is commonly known as cloud computing. We own, operate and maintain elements of this system, but significant elements of this system are operated bythirdparties that we do not control and which would require significant time to replace. We expect this dependence on thirdparties to continue. In particular, asignificant portion, if not almost all data storage, data processing and other computing services and systems is hosted by cloud computing providers. Anydisruptions, outages and other performance problems relating to such services, including infrastructure changes, human or software errors and capacity constraints,could adversely impact our business, financial condition or results of operations.Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.We update our products on a frequent basis. Despite efforts to test our updates, errors, failures or bugs may not be found in our products until after theyare deployed to a customer. We have discovered and expect we will continue to discover errors, failures and bugs in our products and anticipate that certain of theseerrors, failures and bugs will only be discovered and remediated after deployment. Real or perceived errors, failures or bugs in our platform could result in negativepublicity, government inquiries, loss of or delay in market acceptance of our products, loss of competitive position, or claims by customers for losses sustained bythem. In such an event, we may be required, or may choose, for customer relations or other reasons, to expend additional resources in order to help correct theproblem.We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.In connection with the operation of our business, we store, process and transmit data, including personal and payment information, about our employeesand customers, a portion of which is confidential and/or personally sensitive. Unauthorized disclosure or loss of sensitive or confidential data may occur through avariety of methods. These include, but are not limited to, systems failure, employee negligence, fraud or misappropriation, or unauthorized access to or through ourinformation systems, whether by our employees or third parties, including a cyberattack by computer programmers, hackers, members of organized crime and/orstatesponsored organizations, who may develop and deploy viruses, worms or other malicious software programs. Such disclosure, loss or breach could harm ourreputation and subject us to government sanctions and liability under our contracts and laws that protect sensitive or personal data and confidential information,resulting in increased costs or loss of revenues. It is possible that security controls over sensitive or confidential data and other practices we and our thirdpartyvendors follow may not prevent the improper access to, disclosure of, or loss of such information. The potential risk of security breaches and cyberattacks mayincrease as we introduce new products and offerings. Further, data privacy is subject to frequently changing rules and regulations, which sometimes conflict amongthe various jurisdictions in which we provide services. Any failure or perceived failure to successfully manage the collection, use, disclosure, or security of personalinformation or other privacy related matters, or any failure to comply with changing regulatory requirements in this area, could result in legal liability or impairment toour reputation in the marketplace.25A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.Information security risks have generally increased in recent years, in part because of the proliferation of new technologies and the use of the Internet, andthe increased sophistication and activity of organized crime, hackers, terrorists, activists, cybercriminals and other external parties, some of which may be linked toterrorist organizations or hostile foreign governments. For example, a cybercriminal could use cybersecurity threats to gain access to sensitive information aboutanother company or to alter or disrupt news or information to be distributed by PR Newswire. Cybersecurity attacks are becoming more sophisticated and includemalicious software, ransomware, attempts to gain unauthorized access to data and other electronic security breaches that could lead to disruptions in criticalsystems, unauthorized release of confidential or otherwise protected information and corruption of data, substantially damaging our reputation. Any person whocircumvents our security measures could steal proprietary or confidential customer information or cause interruptions in our operations. We incur significant coststo protect against security breaches, and may incur significant additional costs to alleviate problems caused by any breaches. Our failure to prevent securitybreaches, or wellpublicized security breaches affecting the Internet in general, could significantly harm our reputation and business and financial results.Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, dataprotection and information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive andconfidential information. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm ourbusiness, results of operations and financial condition.We and our customers that use our products may be subject to privacy and data protectionrelated laws and regulations that impose obligations inconnection with the collection, processing and use of personal data, financial data, health or other similar data. The U.S. federal and various state and foreigngovernments have adopted or proposed limitations on, or requirements regarding, the collection, distribution, use, security and storage of personally identifiableinformation of individuals. The U.S. Federal Trade Commission and numerous state attorneys general are applying federal and state consumer protection laws toimpose standards on the online collection, use and dissemination of data, and to the security measures applied to such data.Similarly, many foreign countries and governmental bodies, including the EU member states, have laws and regulations concerning the collection and useof personally identifiable information obtained from individuals located in the EU or by businesses operating within their jurisdiction, which are often morerestrictive than those in the United States. Laws and regulations in these jurisdictions apply broadly to the collection, use, storage, disclosure and security ofpersonally identifiable information that identifies or may be used to identify an individual, such as names, telephone numbers, email addresses and, in somejurisdictions, IP addresses and other online identifiers.For example, the GDPR, which took full effect on May 25, 2018. The GDPR enhances data protection obligations for businesses and requires serviceproviders (data processors) processing personal data on behalf of customers to cooperate with European data protection authorities, implement security measuresand keep records of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to or greater of €20 million or 4% of global annualrevenues. In addition, the CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and require deletion of their personalinformation, opt out of certain personal information sharing, and receive detailed information about how their personal information is used. The CCPA provides forcivil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further, failure to comply withthe Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may expose us to administrativefines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the current enforcementmeasures and sanctions. There are also additional laws and regulations in additional jurisdictions around the world which govern the protection of consumers andof electronic communications. If our efforts to comply with GDPR, CCPA or other applicable laws and regulations are not successful, we may be subject to penaltiesand fines that would adversely impact our business and results of operations, and our ability to conduct business could be significantly impaired.26Additionally, although we endeavor to have our products comply with applicable laws and regulations, these and other obligations may be modified, theymay be interpreted and applied in an inconsistent manner from one jurisdiction to another, and they may conflict with one another, other regulatory requirements,contractual commitments or our internal practices. We also may be bound by contractual obligations relating to our collection, use and disclosure of personal,financial and other data or may find it necessary or desirable to join industry or other selfregulatory bodies or other privacy or data protectionrelatedorganizations that require compliance with their rules pertaining to privacy and data protection.We expect that there will continue to be new proposed laws, rules of selfregulatory bodies, regulations and industry standards concerning privacy, dataprotection and information security in the United States, the European Union and other jurisdictions, and we cannot yet determine the impact such future laws,rules, regulations and standards may have on our business. Moreover, existing U.S. federal and various state and foreign privacy and data protectionrelated lawsand regulations are evolving and subject to potentially differing interpretations, and various legislative and regulatory bodies may expand current or enact new lawsand regulations regarding privacy and data protectionrelated matters. Because global laws, regulations and industry standards concerning privacy and datasecurity have continued to develop and evolve rapidly, it is possible that we or our products or platform may not be, or may not have been, compliant with eachsuch applicable law, regulation and industry standard and compliance with such new laws or to changes to existing laws may impact our business and practices,require us to expend significant resources to adapt to these changes, or to stop offering our products in certain countries. These developments could adverselyaffect our business, results of operations and financial condition.We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect ourbusiness.Our ability to implement our business plan successfully depends in part on our ability to build brand recognition using our trademarks, service marks andother proprietary intellectual property, including our names and logos. We currently have no registered trademarks. While we plan to register a number of ourtrademarks; however, no assurance can be given that our trademark applications will be approved. As of December 31, 2022, we own 18 issued patents: six in Europe,four in the U.S., three in each of Russia and Japan and one in each of Canada and Israel which expire between January 20, 2033 and August 18, 2036, and we havetwo additional patent applications in process. As of such date, we do not have any registered trademarks., No assurance can be given that our patent applicationswhich are in process will be approved. If our patent applications are not approved, our ability to expand or develop our business may be negatively affected.Third parties may also oppose our trademark or patent applications, or otherwise challenge our use of the trademarks or patents. In the event that ourtrademarks or patents are successfully challenged, we could be forced to rebrand our goods and services or redesign our technology, which could result in loss ofbrand recognition, and could require us to devote resources to advertising and marketing new brands and products.If our efforts to register, maintain and protect our intellectual property are inadequate, or if any thirdparty misappropriates, dilutes or infringes on ourintellectual property, the value of our brands may be harmed, which could have a material adverse effect on our business and might prevent our brands fromachieving or maintaining market acceptance. We may also face the risk of claims that we have infringed third parties’ intellectual property rights. If third parties claimthat we infringe upon their intellectual property rights, our operating profits could be adversely affected. Any claims of intellectual property infringement, eventhose without merit, could be expensive and time consuming to defend, require us to rebrand our services, if feasible, divert management’s attention and resourcesor require us to enter into royalty or licensing agreements in order to obtain the right to use a thirdparty’s intellectual property.Any royalty or licensing agreements, if required, may not be available to us on acceptable terms or at all. A successful claim of infringement against uscould result in our being required to pay significant damages, enter into costly license or royalty agreements, or stop the sale of certain products or services, any ofwhich could have a negative impact on our operating profits and harm our future prospects.We may face intense competition and expect competition to increase in the future, which could prohibit us from developing a customer base andgenerating revenue.We face significant competition in every aspect of our business. Our competitors include True Fit, Virtusize, EasyMeasure, AR MeasureKit, Smart Measureand 3DLook. These companies may already have an established market in our industry. Most of these companies have significantly greater financial and otherresources than us and have been developing their products and services longer than we have been developing ours.27In addition, some of our larger competitors have substantially broader product offerings and leverage their relationships based on other products orincorporate functionality into existing products to gain business in a manner that discourages potential customers from purchasing our products. Potentialcustomers may also prefer to purchase from their existing solution providers rather than a new solution provider regardless of product performance or features.These larger competitors often have broader product lines and market focus and will therefore not be as susceptible to downturns in a particular market. Conditionsin our market could change rapidly and significantly as a result of technological advancements, partnering by our competitors or continuing market consolidation.New startup companies that innovate and large competitors that are making significant investments in research and development may invent similar or superiorproducts and technologies that compete with our products. In addition, some of our competitors may enter into new alliances with each other or may establish orstrengthen cooperative relationships. Any such consolidation, acquisition, alliance or cooperative relationship could lead to pricing pressure and our loss of anyfuture market share and could result in a competitor with greater financial, technical, marketing, service and other resources, all of which could harm our ability tocompete. Furthermore, organizations may be more willing to incrementally add solutions to their existing infrastructure from competitors than to replace their existinginfrastructure with our products. Any failure to meet and address these factors could harm our business, results of operations and financial condition.Our business operations and future development could be significantly disrupted if we lose key members of our management team.The success of our business continues to depend to a significant degree upon the continued contributions of our senior officers and key employees, bothindividually and as a group. Our future performance will be substantially dependent in particular on our ability to retain and motivate Ronen Luzon, our ChiefExecutive Officer, and certain of our other senior executive officers. The loss of the services of our Chief Executive Officer, senior officers or other key employeescould have a material adverse effect on our business and plans for future development. We have no reason to believe that we will lose the services of any of theseindividuals in the foreseeable future; however, we currently have no effective replacement for any of these individuals due to their experience, reputation in theindustry and special role in our operations. We also do not maintain any key man life insurance policies for any of our employees.If we are able to expand our operations, we may be unable to successfully manage our future growth.Our growth may strain our infrastructure and resources. Any such growth could place increased strain on our management, operational, financial and otherresources, and we will need to train, motivate, and manage employees, as well as attract management, sales, finance and accounting, international, technical, andother professionals. Any failure to expand these areas and implement appropriate procedures and controls in an efficient manner and at a pace consistent with ourbusiness objectives could have a material adverse effect on our business, results of operations and financial condition.Our business operations are conducted in multiple languages and could be disrupted due to miscommunications or translation errors.The success of our business continues to depend on our marketing efforts in the United States, Europe and Israel, each of which is conducted in the locallanguage. Miscommunications or inaccurate foreign language translations could have a material adverse effect on our business operations and financial conditions.Additionally, contracts, communications and complex technical information must be accurately translated into foreign languages.We will continue to incur costs and be subject to various obligations as a result of being a public company, listed in the United States and in Israel.We will continue to incur significant legal, accounting and other expenses as a result of being a public company, listed in the United States and in Israel.Although we will incur costs each year associated with being a publiclytraded company, it is possible that our actual costs of being a publiclytraded company willvary from year to year and may be different than our estimates. In estimating these costs, we take into account expenses related to insurance, legal, accounting andcompliance activities.28Furthermore, the need to maintain the corporate infrastructure demanded of a public company may divert management’s attention from implementing ourgrowth strategy, which could prevent us from improving our business, results of operations and financial condition. We have made, and will continue to make,changes to our internal controls and procedures for financial reporting and accounting systems to meet our reporting obligations as a U.S. publicly traded company.However, the measures we take may not be sufficient to satisfy our obligations as a publicly traded company.Any future or current litigation could have a material adverse impact on our results of operations, financial condition and liquidity.From time to time, we may be subject to litigation, including, among others, potential stockholder derivative actions and class actions. Risks associatedwith legal liability are difficult to assess and quantify, and their existence and magnitude can remain unknown for significant periods of time. Subject to certainexceptions, our Amended and Restated Certificate of Incorporation, or Certificate of Incorporation, and Amended and Restated Bylaws, or Bylaws, require us toindemnify and advance expenses to our officers and directors involved in legal proceedings. To date we have obtained directors and officers’ liability, or D&O,insurance to cover some of the risk exposure for our directors and officers. Such insurance generally pays the expenses (including amounts paid to plaintiffs, fines,and expenses including attorneys’ fees) of officers and directors who are the subject of a lawsuit as a result of their service to us. There can be no assurance that wewill be able to continue to maintain this insurance at reasonable rates or at all, or in amounts adequate to cover such expenses should such a lawsuit occur. WithoutD&O insurance, the amounts we would pay to indemnify our officers and directors should they be subject to legal action based on their service to us could have amaterial adverse effect on our financial condition, results of operations and liquidity. Such lawsuits, and any related publicity, may result in substantial costs and,among other things, divert the attention of management and our employees. An unfavorable outcome in any claim or proceeding against us could have a materialadverse impact on our financial position and results of operations for the period in which the unfavorable outcome occurs, and potentially in future periods. Further,any settlement announced by us may expose us to further claims against us by third parties seeking monetary or other damages which, even if unsuccessful, woulddivert management attention from the business and cause us to incur costs, possibly material, to defend such matters, which could have a material adverse impacton our financial position. See “Legal Proceedings” for more information regarding our involvement in ongoing litigation matters.Federal, state and local or Israeli tax rules may adversely impact our results of operations and financial position.We are subject to federal, state and local taxes in the U.S., as well as local taxes in Israel in respect to our operations in Israel. Although we believe our taxestimates are reasonable, if the Internal Revenue Service or other taxing authority disagrees with the positions we have taken on our tax returns, we could faceadditional tax liability, including interest and penalties. If material, payment of such additional amounts upon final adjudication of any disputes could have a materialimpact on our results of operations and financial position. In addition, complying with new tax rules, laws or regulations could impact our financial condition, andincreases to federal or state statutory tax rates and other changes in tax laws, rules or regulations may increase our effective tax rate. Any increase in our effectivetax rate could have a material impact on our financial results.A significant majority of Orgad’s revenue is from sales of products on Amazon’s U.S. Marketplace and any change, limitation or restriction on ourability to operate on Amazon’s platform or any other marketplace could have a material adverse impact to our business, results of operations, financialcondition and prospects.Orgad, our wholly owned subsidiary, operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com, eBay and others. A substantial percentage of Orgad’s revenue is driven by sales on Amazon’s U.S. marketplace and Orgad is subject toterms of service of Amazon and other maketplaces and various other seller policies and services that apply to third parties selling products on Amazon and othermarketplaces. Generally, a marketplace has the right to terminate or suspend its agreement with Orgad at any time and for any reason. Such marketplace may takeother actions against Orgad such as suspending or terminating a seller account or product listing and withholding payments owed to Orgad indefinitely. Forexample, in July 2022, Amazon deactivated Orgad’s Amazon U.S. store as a result of complaints submitted due to an error in the listed manufacturer of certainproducts on Orgad’s store. Although its account was subsequently reinstated in September 2022, if the deactivation were to occur in the future for a prolongedperiod of time, or if Amazon were to terminate Orgad’s account, this would have a material adverse effect on our business, results of operations, financial conditionand prospects. While Orgad endeavors to materially comply with the terms of services of the marketplaces on which it operates, we can provide no assurance thatthese marketplaces will have the same determination with respect to our compliance.29In addition, Amazon and other marketplaces can make changes to its platform that could require Orgad to change the manner in which it operates, limit itsability to successfully launch new products or increase its costs to operate and such changes could have an adverse effect on our business, results of operations,financial condition and prospects. Examples of changes that could impact us relate to platform fee charges (i.e., selling commissions), exclusivity, inventorywarehouse availability, excluded products and limitations on sales and marketing. Any change, limitation or restriction on our ability to sell on Amazon’s platform orany other marketplace, even if temporary, could have a material impact on our business, results of operations, financial condition and prospects.Orgad also relies on services provided by Amazon’s fulfillment platform, including Prime Certification, which provides for expedited shipping to theconsumer, an important aspect in the buying decision for consumers. For products that Orgad fulfills itself, Orgad is qualified to offer our products for sale withPrime Certification delivery. Any inability to market our products for sale with expedited delivery provided under Prime Certification could have a material impact onour business, results of operations, financial condition and prospects. Failure to remain compliant with the best fulfillment practices on Amazon’s platform couldhave a material impact on our business, results of operations, financial condition and prospects. In addition, due to the COVID19 pandemic, Amazon has changedthe amount of inventory it accepts per product for a period of time. If this were to continue it could cause us to miss sales and/or pay additional shipping costswhich would harm our business operations and financial conditions.Orgad’s business depends on its ability to build and maintain strong product listings on ecommerce platforms. Orgad may not be able to maintain andenhance our product listings if it receives unfavorable customer complaints, negative publicity or otherwise fails to live up to consumers’ expectations, whichcould materially adversely affect our business, results of operations and growth prospects.Maintaining and enhancing Orgad’s product listings is critical in expanding and growing its business. However, a significant portion of Orgad’s perceivedperformance to the customer depends on third parties outside of its control, including suppliers and thirdparty delivery agents as well as online retailers such asAmazon and eBay. Because Orgad’s agreements with its online retail partners are generally terminable at will, it may be unable to maintain these relationships, andour results of operations could fluctuate significantly from period to period. Because Orgad relies on third parties to deliver its products, it is subject to shippingdelays or disruptions caused by inclement weather, natural disasters, labor activism, health epidemics or bioterrorism. It may also experience shipping delays ordisruptions due to other carrierrelated issues relating to their own internal operational capabilities. Further, Orgad relies on the business continuity plans of thesethird parties to operate during pandemics, like the COVID19 pandemic, and it has limited ability to influence their plans, prevent delays, and/or cost increases due toreduced availability and capacity and increased required safety measures.Customer complaints or negative publicity about its products, delivery times, or marketing strategies, even if not accurate, especially on blogs, social mediawebsites and thirdparty market sites, could rapidly and severely diminish consumer view of Orgad’s product listings and result in harm to its brand. Customers mayalso make safetyrelated or other types of claims regarding products sold through our online retail partners, such as Amazon, which may result in an online retailpartner removing the product from its marketplace. We also use and rely on other services from third parties, such as our telecommunications services, and thoseservices may be subject to outages and interruptions that are not within our control.Orgad faces risks related to successfully optimizing and operating its fulfillment and customer service operations.Failures to adequately predict customer demand or otherwise optimize and operate its fulfillment and customer service operations successfully from time totime result in excess or insufficient fulfillment or customer service capacity, increased costs, and impairment charges, any of which could materially harm ourbusiness. As Orgad continues to add fulfillment and customer service capability or add new businesses with different requirements, its fulfillment and customerservice operations become increasingly complex and operating them becomes more challenging. There can be no assurance that Orgad will be able to operate ouroperations effectively.30In addition, failure to optimize inventory in our fulfillment operations increases net shipping cost by requiring longzone or partial shipments. Orgad may beunable to adequately staff its fulfillment and customer service operations. Orgad’s failure to properly handle such inventory or to accurately forecast productdemand may result in it being unable to secure sufficient storage space or to optimize its fulfillment operations or cause other unexpected costs and other harm toour business and reputation.Orgad relies on a limited number of shipping companies to deliver inventory to it and completed orders to our customers. The inability to negotiateacceptable terms with these companies or performance problems or other difficulties experienced by these companies could negatively impact our operating resultsand customer experience. In addition, Orgad’s ability to receive inbound inventory efficiently and ship completed orders to customers also may be negativelyaffected by natural or manmade disasters, extreme weather, geopolitical events and security issues, labor or trade disputes, and similar events.The variability in Orgad’s retail business places increased strain on its operations.Demand for Orgad’s product listings can fluctuate significantly for many reasons, including as a result of seasonality, promotions, product launches, orunforeseeable events, such as in response to natural or manmade disasters, extreme weather, or geopolitical events. For example, Orgad expects a disproportionateamount of our retail sales to occur during our fourth quarter. Failure to stock or restock popular products in sufficient amounts such that Orgad fails to meetcustomer demand could significantly affect our revenue and our future growth. If too many customers access the websites on which Orgad engages in onlineretailing within a short period of time due to increased demand, Orgad may experience system interruptions that make the websites unavailable or prevent us fromefficiently fulfilling orders, which may reduce the volume of goods its offers or sell and the attractiveness of its products. In addition, Orgad may be unable toadequately staff for fulfillment of orders and customer service during these peak periods and delivery and other fulfillment companies and customer service cosourcers may be unable to meet the seasonal demand.Our business is subject to the risks of earthquakes, fire, power outages, floods, health risks and other catastrophic events, and to interruption by manmade problems such as terrorism.Natural disasters, such as fire or floods, a significant power outage, telecommunications failure, terrorism, an armed conflict, cyberattacks, epidemics andpandemics such as COVID19, or other geopolitical unrest could affect our supply chain, manufacturers, logistics providers, channel partners, or endcustomers orthe economy as a whole and such disruption could impact us and the shipments and sales. These risks may be further increased if the disaster recovery plans for usand our suppliers prove to be inadequate. To the extent that any of the above should result in delays or cancellations of customer orders, the loss of customers, orthe delay in the deployment or shipment of products, our business, financial condition, and operating results would be adversely affected.For example, on January 2, 2023, Orgad experienced a fire at its warehouse in Israel. We are not aware of any casualties or injuries associated with the fire.We shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incidentdid not affect the future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of thisincident on the other parties that were involved in the incident (lessor and others that leased properties near the warehouse).Our business could be negatively impacted by unsolicited takeover proposals, by shareholder activism or by proxy contests relating to the election ofdirectors or other matters.Our business could be negatively affected as a result of an unsolicited takeover proposal, by shareholder activism or a proxy contest. During 2021, anactivist shareholder sought to make changes to our board of directors, among other matters, which ultimately resulted in us entering into a settlement agreementwith the activist shareholder and another shareholder, and for which considerable costs were incurred and absorbed significant time and attention by managementand the board of directors. A future proxy contest, unsolicited takeover proposal, or other shareholder activism relating to the election of directors or other matterswould most likely require us to incur significant legal fees and proxy solicitation expenses and require significant time and attention by management and our Boardof Directors. The potential of a proxy contest, unsolicited takeover proposal, or other shareholder activism could interfere with our ability to execute our strategicplan, give rise to perceived uncertainties as to our future direction, result in the loss of potential business opportunities or make it more difficult to attract and retainqualified personnel, any of which could materially and adversely affect our business and operating results.31Environmental, social and corporate governance (ESG) issues, including those related to climate change and sustainability, may have an adverseeffect on our business, financial condition and results of operations and damage our reputation.There is an increasing focus from certain investors, customers, consumers, employees and other stakeholders concerning ESG matters. Additionally, publicinterest and legislative pressure related to public companies’ ESG practices continue to grow. If our ESG practices fail to meet regulatory requirements or investor,customer, consumer, employee or other shareholders’ evolving expectations and standards for responsible corporate citizenship in areas including environmentalstewardship, support for local communities, Board of Director and employee diversity, human capital management, employee health and safety practices, productquality, supply chain management, corporate governance and transparency, our reputation, brand and employee retention may be negatively impacted, and ourcustomers and suppliers may be unwilling to continue to do business with us.Customers, consumers, investors and other shareholders are increasingly focusing on environmental issues, including climate change, energy and wateruse, plastic waste and other sustainability concerns. Concern over climate change may result in new or increased legal and regulatory requirements to reduce ormitigate impacts to the environment. Changing customer and consumer preferences or increased regulatory requirements may result in increased demands orrequirements. Complying with these demands or requirements could cause us to incur additional manufacturing, operating or product development costs.If we do not adapt to or comply with new regulations, including the SEC’s published proposed rules that would require companies to provide significantlyexpanded climaterelated disclosures in their periodic reporting, which may require us to incur significant additional costs to comply and impose increased oversightobligations on our management and board of directors, or fail to meet evolving investor, industry or stakeholder expectations and concerns regarding ESG issues,investors may reconsider their capital investment in our company, we may become subject to penalties, and customers and consumers may choose to stoppurchasing our products, if approved for commercialization, which could have a material adverse effect on our reputation, business or financial condition.Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions andadverse developments with respect to financial institutions and associated liquidity risk.Our business depends on the economic health of the global economies. If the conditions in the global economies remain uncertain or continue to bevolatile, or if they deteriorate, including as a result of the impact of military conflict, such as the war between Russia and Ukraine, terrorism or other geopoliticalevents, our business, operating results and financial condition may be materially adversely affected. Economic weakness, inflation and increases in interest rates,limited availability of credit, liquidity shortages and constrained capital spending have at times in the past resulted, and may in the future result, in challenging anddelayed sales cycles, slower adoption of new technologies and increased price competition, and could negatively affect our ability to forecast future periods, whichcould result in an inability to satisfy demand for our products and a loss of market share.In addition, increases in inflation raise our costs for commodities, labor, materials and services and other costs required to grow and operate our business,and failure to secure these on reasonable terms may adversely impact our financial condition. Additionally, increases in inflation, along with the uncertaintiessurrounding COVID19, geopolitical developments and global supply chain disruptions, have caused, and may in the future cause, global economic uncertainty anduncertainty about the interest rate environment, which may make it more difficult, costly or dilutive for us to secure additional financing. A failure to adequatelyrespond to these risks could have a material adverse impact on our financial condition, results of operations or cash flows.More recently, the closures of SVB and Signature Bank and their placement into receivership with the FDIC created bankspecific and broader financialinstitution liquidity risk and concerns. Although the Department of the Treasury, the Federal Reserve and the FDIC jointly released a statement that depositors atSVB and Signature Bank would have access to their funds, even those in excess of the standard FDIC insurance limits, under a systemic risk exception, futureadverse developments with respect to specific financial institutions or the broader financial services industry may lead to marketwide liquidity shortages, impair theability of companies to access nearterm working capital needs, and create additional market and economic uncertainty. There can be no assurance that future creditand financial market instability and a deterioration in confidence in economic conditions will not occur. Our general business strategy may be adversely affected byany such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions. If the current equityand credit markets deteriorate, or if adverse developments are experienced by financial institutions, it may cause shortterm liquidity risk and also make anynecessary debt or equity financing more difficult, more costly, more onerous with respect to financial and operating covenants and more dilutive. Failure to secureany necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stockprice and could require us to alter our operating plans. In addition, there is a risk that one or more of our service providers, financial institutions, manufacturers,suppliers and other partners may be adversely affected by the foregoing risks, which could directly affect our ability to attain our operating goals on schedule andon budget.Our business may be adversely affected by the impact of any renewed outbreak of the COVID19 pandemic.Public health epidemics or outbreaks could adversely impact our business. In late 2019, a novel strain of COVID19, also known as coronavirus, wasreported in Wuhan, China. While initially the outbreak was largely concentrated in China, it spread worldwide. Many countries around the world, including in Israel,implemented significant governmental measures to control the spread of the virus, including temporary closure of businesses, severe restrictions on travel and themovement of people, and other material limitations on the conduct of business. These measures haven historically resulted in work stoppages and other disruptions.If there is a resurgence of the COVID19 pandemic, this could adversely impact our operations, including among others, our sales and marketing efforts and ourability to raise additional funds, and accordingly, the impact of COVID19 could have an adverse impact on our business and our financial results.32Risks Related to Our Operations in RussiaRussia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.In addition to our Israel operations, we have operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia and we engage two software developers through a third party who are based in Ukraine. On February 24,2022, Russia invaded Ukraine. The outbreak of hostilities between the two countries could result in more widespread conflict and could have a severe adverse effecton the region.Following Russia’s actions, various countries, including the U.S., Canada, the United Kingdom, Germany and France, as well as the European Union,issued broadranging economic sanctions against Russia. Such sanctions included, among other things, a prohibition on doing business with certain Russiancompanies, officials and oligarchs; a commitment by certain countries and the European Union to remove selected Russian banks from the Society for WorldwideInterbank Financial Telecommunications (SWIFT) electronic banking network that connects banks globally; and restrictive measures to prevent the Russian CentralBank from undermining the impact of the sanctions. In response to sanctions, the Russian Central Bank raised its interest rates and banned sales of local securitiesby foreigners. Russia may take additional counter measures or retaliatory actions in the future. While diplomatic efforts have been ongoing, the conflict betweenRussia and Ukraine is currently unpredictable and has the potential to result in broadened military actions. The duration of ongoing hostilities and such sanctionsand related events cannot be predicted. Uncertainty as to future relations between Russia and the U.S. and other countries in the west, or between Russia and othereastern European countries, may have a negative impact on our operations.Such international sanctions and potential responses to such sanctions, including those that may limit or restrict transfer funds into Russia, may in thefuture significantly affect our ability to conduct our activities in Russia including paying our personnel. To date, the conflict has had minimal impact on operations .Nevertheless, we have no way to predict the progress or outcome of the situation in Ukraine, as the conflict and governmental reactions are rapidly developing andbeyond our control. Prolonged unrest, intensified military activities or more extensive sanctions impacting the region could have a material adverse effect on ouroperations, results of operations, financial condition, liquidity and business outlook.Political, military conditions or other risks in Russia could adversely affect our business.Russia is a federative state consisting of 85 constituent entities, or “subjects.” The Russian Constitution reserves some governmental powers for theRussian Government, some for the subjects and some for areas of joint competence. In addition, eight “federal districts” (“federal’nye okruga”), which are overseenby a plenipotentiary representative of the President, supplement the country’s federal system. The delineation of authority among and within the subjects is, inmany instances, unclear and contested, particularly with respect to the division of tax revenues and authority over regulatory matters. For these reasons, theRussian political system is vulnerable to tension and conflict between federal, subject and local authorities. This tension creates uncertainties in the operatingenvironment in Russia, which may prevent us from carrying out our strategy effectively. The risks associated with these events or potential events could materiallyand adversely affect the investment environment and overall consumer and entrepreneurial confidence in Russia, and our business, prospects, financial condition,hiring ability, and results of operations could be materially and adversely affected.Furthermore, high levels of corruption reportedly exist in Russia, including the bribing of officials for the purpose of initiating investigations bygovernment agencies. Corruption and other illegal activities could disrupt our ability to conduct our business effectively, and claims that the we are involved in suchcorruption or illegal activities could generate negative publicity, of which could harm our development, financial condition, results of operations or prospects.Economic and other risks in Russia could adversely affect our business.Operating a business in an emerging market such as Russia can involve a greater degree of risk than operating a business in more developed markets.Over the last two decades, the Russian economy has experienced or continues to experience at various times:●significant volatility in its GDP;33●the impact of international sanctions;●high levels of inflation;●increases in, or high, interest rates;●sudden price declines in oil and other natural resources;●instability in the local currency market;●budget deficits;●the continued operation of lossmaking enterprises due to the lack of effective bankruptcy proceedings;●capital flight; and●significant increases in poverty rates, unemployment and underemployment.The Russian economy has been subject to abrupt downturns in the past, including as a result of the invasion of Ukraine, global financial crisis, and, as anemerging market, remains particularly vulnerable to further external shocks and any future fluctuations in the global markets. Any further deterioration in the generaleconomic conditions in Russia (whether or not as a result of the events mentioned above) could have a material adverse effect on the Russian economy and mayresult in hiring and operational difficulties, as well as potential flight of human capital, which could have a material adverse effect on our business, productdevelopment and results of operations.Legal risks in Russia could materially adversely affect our operations and Russian tax legislation is subject to frequent change.Among the risks of the Russian legal system are: inconsistencies among laws, presidential decrees, and government and ministerial orders and resolutions;conflicting local, regional and federal laws and regulations; the untested nature of the independence of the judiciary and its sensitivity to economic or politicalinfluences; substantial gaps in the regulatory structure due to the delay or absence of implementing legislation; a high degree of discretion on the part ofgovernmental authorities; reported corruption within governmental entities and other governmental authorities; the relative inexperience of judges and courts ininterpreting laws applicable to complex transactions; and the unpredictability of enforcement of foreign judgments and foreign arbitral awards. Many Russian lawsand regulations are construed in a way that provides for significant administrative discretion in application and enforcement. Unlawful, selective or arbitrary actionsof the Russian Government have reportedly included the denial or withdrawal of licenses, sudden and unexpected tax audits, criminal prosecutions, and civil claims.Any of the above events may have a material adverse effect on our product development and results of operations.Despite certain improvements in the taxation system made by the Russian Government over the past decade, Russian tax legislation is still subject tofrequent change, varying interpretations, and inconsistent and selective enforcement. There are currently no clear rules for distinguishing between lawful taxoptimization and tax evasion. In addition, Russian tax laws do not contain detailed rules on the taxation in Russia of foreign companies. As such, taxpayers oftenhave to resort to court proceedings to defend their position against the Russian tax authorities. However, in the absence of consistent court practice or bindingprecedents, there is inconsistency amongst court decisions. Further, the possibility exists that the Russian Federation would impose arbitrary or onerous taxes andpenalties in the future, which could have a material adverse effect on our product development and results of operations.34Risks Related to Our Operations In IsraelOur headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.Our headquarters and most of our operations are located in central Israel and our key employees, officers and directors are residents of Israel. Accordingly,political, economic and military conditions in Israel and the surrounding region may directly affect our business. Since the establishment of the State of Israel in1948, a number of armed conflicts have taken place between Israel and its Arab neighbors. Any hostilities involving Israel or the interruption or curtailment of tradewithin Israel or between Israel and its trading partners could adversely affect our operations and results of operations and could make it more difficult for us to raisecapital. During the winter of 2008, winter of 2012 and the summer of 2014, Israel was engaged in an armed conflict with Hamas, a militia group and political partyoperating in the Gaza Strip, and during the summer of 2006, Israel was engaged in an armed conflict with Hezbollah, a Lebanese Islamist Shiite militia group andpolitical party. Israel faces political tension with respect to its relationships with Turkey, Iran and certain Arab neighbor countries. In addition, recent conflictsinvolved missile strikes against civilian targets in various parts of Israel, and negatively affected business conditions in Israel. Recent political uprisings and socialunrest in various countries in the Middle East and North Africa are affecting the political stability of those countries. This instability may lead to deterioration of thepolitical relationships that exist between Israel and these countries, and have raised concerns regarding security in the region and the potential for armed conflict.Any armed conflicts, terrorist activities or political instability in the region could adversely affect business conditions and could harm our results of operations. Forexample, any major escalation in hostilities in the region could result in a portion of our employees and service providers being called up to perform military duty foran extended period of time. Parties with whom we do business have sometimes declined to travel to Israel during periods of heightened unrest or tension, forcing usto make alternative arrangements when necessary. In addition, the political and security situation in Israel may result in parties with whom we have agreementsinvolving performance in Israel claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions insuch agreements. Any future deterioration in the political and security situation in Israel will negatively impact our business.Our commercial insurance does not cover losses that may occur as a result of events associated with the security situation in the Middle East. Althoughthe Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that thisgovernment coverage will be maintained. Any losses or damages incurred by us could have a material adverse effect on our business. Any armed conflicts orpolitical instability in the region would likely negatively affect business conditions and could harm our results of operations.Further, in the past, the State of Israel and Israeli companies have been subjected to an economic boycott. Several countries still restrict business with theState of Israel and with Israeli companies. These restrictive laws and policies may have an adverse impact on our operating results, financial condition or theexpansion of our business.The legislative power of the State resides in the Knesset, a unicameral parliament that consists of 120 members elected by nationwide voting under asystem of proportional representation. Israel’s most recent general elections were held on April 9, 2019, September 17, 2019, March 2, 2020 and November 1, 2022.The uncertainty surrounding the results of the recent elections may continue. Actual or perceived political instability in Israel or any negative changes in thepolitical environment, may individually or in the aggregate adversely affect the Israeli economy and, in turn, our business, financial condition, results of operationsand prospects.Some of our employees are obligated to perform military reserve duty in Israel.Many Israeli citizens, including our employees are obligated to perform one month, and in some cases more, of annual military reserve duty until they reachthe age of 40 (or older, for reservists with certain occupations) and, in the event of a military conflict, may be called to active duty. In response to increases interrorist activity, there have been periods of significant callups of military reservists. It is possible that there will be military reserve duty callups in the future. Ouroperations could be disrupted by such callups. Such disruption could materially adversely affect our business, results of operations and financial condition.35It may be difficult to enforce a nonIsraeli judgment against the Company or its officers and directors.The operating subsidiary of ours is incorporated in Israel. All of our executive officers and directors are not residents of the United States, and asubstantial portion of our assets and the assets of our executive officers and directors are located outside the United States. Therefore, a judgment obtained againstus, or any of these persons, including a judgment based on the civil liability provisions of the U.S. federal securities laws, may not be collectible in the United Statesand may not necessarily be enforced by an Israeli court. It also may be difficult to affect service of process on these persons in the United States or to assert U.S.securities law claims in original actions instituted in Israel. Additionally, it may be difficult for an investor, or any other person or entity, to initiate an action withrespect to U.S. securities laws in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of U.S. securities laws reasoning that Israel is not themost appropriate forum in which to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law isapplicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law often involves the testimony of expert witnesses, which can be a timeconsuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel that addresses the mattersdescribed above. As a result of the difficulty associated with enforcing a judgment against us in Israel, it may be impossible to collect any damages awarded byeither a U.S. or foreign court.Our international operations could expose us to additional risks, including exchange rate fluctuations, legal regulations and political or economicinstability that could harm our business and operating results.Our international operations expose us to the following risks which may have a material adverse effect on our business and operating results:●devaluations and fluctuations in currency exchange rates including fluctuations between the U.S. dollar and the NIS and the Russian Ruble;●costs of compliance with local laws, including labor laws and intellectual property laws;●compliance with domestic and foreign government policies, including compliance with Israeli securities laws and TASE;●changes in trade regulations and procedures affecting approval, production, pricing, marketing, reimbursement for and access to, our products;●compliance with applicable foreign anticorruption laws, antitrust/competition laws, antiBoycott Israel law and antimoney laundering laws; and●economic and geopolitical developments and conditions, including ongoing instability in global economies and financial markets, international hostilities,acts of terrorism and governmental reactions, inflation, outbreaks of contagious disease (e.g., the COVID19 pandemic) and military and political alliances.Risks Related to Our Common StockA more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.Although our common stock is listed on the Nasdaq Capital Market, it has only been traded on the Nasdaq Capital Market since July 25, 2016. There hasbeen relatively limited trading volume in the market for our common stock, and a more active, liquid public trading market may not develop or may not be sustained.Limited liquidity in the trading market for our common stock may adversely affect a stockholder’s ability to sell its shares of common stock at the time it wishes tosell them or at a price that it considers acceptable. If a more active, liquid public trading market does not develop, we may be limited in our ability to raise capital byselling shares of common stock and our ability to acquire other companies or assets by using shares of our common stock as consideration. In addition, if there is athin trading market or “float” for our stock, the market price for our common stock may fluctuate significantly more than the stock market as a whole. Without a largefloat, our common stock would be less liquid than the stock of companies with broader public ownership and, as a result, the trading prices of our common stockmay be more volatile and it would be harder for you to liquidate any investment in our common stock. Furthermore, the stock market is subject to significant priceand volume fluctuations, and the price of our common stock could fluctuate widely in response to several factors, including:●our quarterly or annual operating results;●changes in our earnings estimates;●investment recommendations by securities analysts following our business or our industry;●additions or departures of key personnel;●changes in the business, earnings estimates or market perceptions of our competitors;36●our failure to achieve operating results consistent with securities analysts’ projections;●changes in industry, general market or economic conditions;●announcements of legislative or regulatory changes; and●natural disasters (including for example, the recent fire in the Orgad warehouse) and political and economic instability, including wars, terrorism, politicalunrest, results of certain elections and votes, emergence of a pandemic, or other widespread health emergencies (or concerns over the possibility of suchan emergency, including for example, the recent the COVID19 pandemic), boycotts, adoption or expansion of government trade restrictions, and otherbusiness restrictions.The stock market has experienced extreme price and volume fluctuations in recent years that have significantly affected the quoted prices of the securitiesof many companies. The changes often appear to occur without regard to specific operating performance. The price of our common stock could fluctuate basedupon factors that have little or nothing to do with us and these fluctuations could materially reduce our stock price.Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.If any of our shareholders were to decide to sell large amounts of stock over a short period of time (presuming such sales were permitted) such sales couldcause the market price of our common stock to drop significantly, even if our business is doing well. Further, the market price of our common stock could decline as aresult of the perception that such sales could occur. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equitysecurities in the future at a time and price that we deem appropriate.Our securities are traded on more than one market which may result in price variations.Our securities have been trading on the Nasdaq Capital Market since July 2016 and on TASE since September 2005. Trading in our securities on suchexchanges occurs in different currencies (U.S. dollars on the Nasdaq Capital Market and NIS on the TASE), and at different times (due to different time zones,trading days and public holidays in the United States and Israel). The trading prices of our securities on the two exchanges may differ due to the foregoing andother factors. Any decrease in the price of our shares on the TASE could cause a decrease in the trading price of our shares on the Nasdaq Capital Market and viceversa.We are a smaller reporting company and, as a result of the reduced disclosure and governance requirements applicable to such companies, ourcommon stock may be less attractive to investors.We are a smaller reporting company, (i.e. a company with “public float” held by nonaffiliates with a market value of less than $250 million) and we areeligible to take advantage of certain exemptions from various reporting requirements applicable to other public companies. We have elected to adopt these reduceddisclosure requirements. We cannot predict if investors will find our common stock less attractive as a result of our taking advantage of these exemptions. If someinvestors find our common stock less attractive as a result of our choices, there may be a less active trading market for our common stock and our stock price may bemore volatile.We do not expect to pay any cash dividends in the foreseeable future.We have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our board of directors deems relevant. Investors should not purchase our common stock expecting to receive cash dividends. Because we do notpay dividends, and there may be limited trading, investors may not have any manner to liquidate or receive any payment on their investment. Therefore, our failureto pay dividends may cause investors to not see any return on investment even if we are successful in our business operations. In addition, because we do not paydividends we may have trouble raising additional funds, which could affect our ability to expand our business operations.37UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2022☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ________ to _________Commission file number 00137370MY SIZE, INC.(Exact name of registrant as specified in charter)Delaware510394637(State or jurisdiction ofIncorporation or organization)I.R.S EmployerIdentification No.4 Hayarden, POB 1026, Airport City, Israel7010000(Address of principal executive offices)(Zip code)+9723 6009030(Registrant’s telephone number, including area code)Securities registered pursuant to Section 12(b) of the Act:Title of each classTrading Symbol(s)Name of Each Exchange on Which RegisteredCommon Stock, par value $0.001 per shareMYSZThe Nasdaq Capital MarketSecurities registered pursuant to Section 12(g) of the Act: None.Indicate by check mark whether the registrant is a wellknown seasoned issuer as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes☒ No ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer, a smaller reporting company, or an emerginggrowth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 of theExchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☒Smaller Reporting Company☒Emerging Growth Company☐If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revisedfinancial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b2 of the Exchange Act) Yes ☐No☒Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control overfinancial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflectthe correction of an error to previously issued financial statements. ☐Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by anyof the registrant’s executive officers during the relevant recovery period pursuant to §240.10D1(b). ☐The aggregate market value of voting and nonvoting common equity held by nonaffiliates of the registrant as of June 30, 2022, the last business day of theregistrant’s most recently completed second fiscal quarter, was approximately $25,551,906.Number of shares of common stock outstanding as of March 31, 2023 was 2,446,780.Documents Incorporated by Reference: None.Table of ContentsPart IItem 1.Business2Item 1A.Risk Factors18Item 1B.Unresolved Staff Comments41Item 2.Properties41Item 3.Legal Proceedings41Item 4.Mine Safety Disclosures42Part IIItem 5.Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities43Item 6.Selected Financial Data43Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations43Item 7A.Quantitative and Qualitative Disclosures about Market Risk50Item 8.Financial Statements and Supplementary DataF1Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure51Item 9A.Controls and Procedures51Item 9B.Other Information51Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.51Part IIIItem 10.Directors, Executive Officers and Corporate Governance52Item 11.Executive Compensation57Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters60Item 13.Certain Relationships and Related Transactions, and Director Independence62Item 14.Principal Accounting Fees and Services65Part IVItem 15.Exhibits, Financial Statement Schedules66Signatures69iPART IIn this Annual Report on Form 10K, unless the context requires otherwise, the terms “we,” “our,” “us,” or “the Company” refer to MySize, Inc., a Delawarecorporation, and its subsidiaries, including MySize Israel 2014 Ltd. My Size LLC, Orgad International Marketing Ltd., or Orgad, and Naiz Bespoke Technologies, S.L,or Naiz, taken as a whole.References to “U.S. dollars” and “$” are to currency of the United States of America, and references to “NIS” are to New Israeli Shekels. Unless otherwiseindicated, U.S. dollar translations of NIS amounts presented in this Annual Report on Form 10K for the year ended on December 31, 2022 are translated using therate of NIS 3.358 to $1.00.All information in this Annual Report on Form 10K relating to shares or price per share reflects the 1for25 reverse stock split effected by us on December8, 2022.CAUTIONARY NOTE ON FORWARDLOOKING STATEMENTSThis Annual Report on Form 10K contains certain forwardlooking statements within the meaning of Section 27A of the Securities Act and Section 21E ofthe Exchange Act. Any statements in Annual Report on Form 10K about our expectations, beliefs, plans, objectives, assumptions or future events or performanceare not historical facts and are forwardlooking statements. These statements are often, but not always, made through the use of words or phrases such as“believe,” “will,” “expect,” “anticipate,” “estimate,” “intend,” “plan” and “would.” For example, statements concerning financial condition, possible or assumedfuture results of operations, growth opportunities, industry ranking, plans and objectives of management, markets for our common stock and future managementand organizational structure are all forwardlooking statements. Forwardlooking statements are not guarantees of performance. They involve known and unknownrisks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to differ materially from any results, levels ofactivity, performance or achievements expressed or implied by any forwardlooking statement.Any forwardlooking statements are qualified in their entirety by reference to the risk factors discussed throughout this Annual Report on Form 10K. Someof the risks, uncertainties and assumptions that could cause actual results to differ materially from estimates or projections contained in the forwardlookingstatements include but are not limited to:●our history of losses and needs for additional capital to fund our operations and our inability to obtain additional capital on acceptable terms, or at all;●risks related to our ability to continue as a going concern;●the new and unproven nature of the measurement technology markets;●our ability to achieve customer adoption of our products;●our ability to realize the benefits of our acquisitions of Orgad and Naiz;●our dependence on assets we purchased from a related party;●our ability to enhance our brand and increase market awareness;●our ability to introduce new products and continually enhance our product offerings;●the success of our strategic relationships with third parties;●information technology system failures or breaches of our network security;●competition from competitors;●our reliance on key members of our management team;●current or future litigation;●current or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated liquidityrisk; and●the impact of the political and security situation in Israel on our business.1The foregoing list sets forth some, but not all, of the factors that could affect our ability to achieve results described in any forwardlooking statements.You should read this Annual Report on Form 10K and the documents that we reference herein and have filed as exhibits to the Annual Report on Form 10K,completely and with the understanding that our actual future results may be materially different from what we expect. You should assume that the informationappearing in this Annual Report on Form 10K is accurate as of the date hereof. Because the risk factors referred to in this Annual Report on Form 10K, could causeactual results or outcomes to differ materially from those expressed in any forwardlooking statements made by us or on our behalf, you should not place unduereliance on any forwardlooking statements.Further, any forwardlooking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forwardlookingstatement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. New factors emergefrom time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extentto which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements. We qualify all ofthe information presented in this Annual Report on Form 10K, and particularly our forwardlooking statements, by these cautionary statements.ITEM 1. BUSINESSOverviewWe are an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile phone or through MySizeID Widget: a simple questionnaire which uses a database collected over the years.MySizeID syncs the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and only presents itemsfor purchase that match their measurements to ensure a correct fit.We are positioning ourselves as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empower brand design teams, which are designed to increase endconsumer satisfaction, contributing to a sustainable world and reduce operation costs.Recent DevelopmentsOrgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,602 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.2The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz, a limitedliability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.3The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Warehouse FireOn January 2, 2023, Orgad experienced a fire at its warehouse in Israel. we are not aware of any casualties or injuries associated with the fire. We shiftedOrgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incident did not affectthe future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of this incident on the otherparties that were involved in the incident (lessor and others that leased properties near the warehouse).January 2023 FinancingOn January 10, 2023, we entered into a securities purchase agreement, or the RD Purchase Agreement, pursuant to which we agreed to sell and issue in theRD Offering an aggregate of 162,000 of our shares of common stock, or the RD Shares, and prefunded warrants, or the Prefunded Warrants, to purchase up to279,899 shares of common stock and, in a concurrent private placement, unregistered warrants to purchase up to 883,798 shares of common stock, or the RDWarrants, consisting of Series A warrants, or Series A Warrants, to purchase up to 441,899 shares of common stock and Series B warrants, or Series B Warrants, topurchase up to 441,899 shares of common stock, at an offering price of $3.055 per RD Share and associated Series A and Series B Warrants and an offering price of$3.054 per Prefunded Warrant and associated Series A and Series B Warrants.4In addition, we entered into a securities purchase agreement, or the PIPE Purchase Agreement, and together with the RD Purchase Agreement, thePurchase Agreements, pursuant to which we agreed to sell and issue in the PIPE Offering an aggregate of up to 540,098 unregistered Prefunded Warrants andunregistered warrants to purchase up to an aggregate of 1,080,196 shares of common stock, or the PIPE Warrants and together with the RD Warrants, the Warrants,consisting of Series A Warrants to purchase up to 540,098 shares of common stock and Series B Warrants to purchase up to 540,098 shares of common stock at anoffering price of $3.054 per Prefunded Warrant and associated Series A and Series B Warrants.The Prefunded Warrants are immediately exercisable at an exercise price of $0.001 per share and will not expire until exercised in full. The Warrants areimmediately exercisable upon issuance at an exercise price of $2.805 per share, subject to adjustment as set forth therein. The Series A Warrants have a term of fiveand onehalf years from the date of issuance and the Series B Warrants have a term of 28 months from the date of issuance. The Warrants may be exercised on acashless basis if there is no effective registration statement registering the shares underlying the warrants.In connection with the PIPE Purchase Agreement, we entered into a registration rights agreement, or the Registration Rights Agreement. Pursuant to theRegistration Rights Agreement, we are required to file a resale registration statement, or the Registration Statement, with the Securities and Exchange Commission, orthe SEC, to register for resale the shares issuable upon exercise of the unregistered Prefunded Warrants and the Series A and Series B Warrants, within 20 days ofthe signing date of the PIPE Purchase Agreement, or the Signing Date, and to have such Registration Statement declared effective within 60 days after the SigningDate in the event the Registration Statement is not reviewed by the SEC, or 90 days of the Signing Date in the event the Registration Statement is reviewed by theSEC. we will be obligated to pay certain liquidated damages if we fail to maintain the effectiveness of the Registration Statement.The Purchase Agreements and the Registration Rights Agreements also contain representations, warranties, indemnification and other provisionscustomary for transactions of this nature. In addition, subject to limited exceptions, the Purchase Agreements provide that for a period of one year following theclosing of the Offerings, we will not effect or enter into an agreement to effect a “variable rate transaction” as defined in the Purchase Agreements.Aggregate gross proceeds to the Company in respect of the Offerings was approximately $3.0 million, before deducting fees payable to the placement agentand other offering expenses payable by the Company.We also entered into a letter agreement, or the Engagement Agreement, with H.C. Wainwright & Co., LLC, or Wainwright, pursuant to which Wainwrightagreed to serve as the exclusive placement agent for the Company in connection with the Offerings. We paid Wainwright a cash placement fee equal to 7% of theaggregate gross proceeds raised in the Offerings, a management fee of 1% of the aggregate gross proceeds raised in the Offerings, a nonaccountable expenseallowance of $85,000 and clearing fees of $15,950. Wainwright also received placement agent warrants, or the Placement Agent Warrants, with substantially the sameterms as the Series A Warrants issued in the Offering in an amount equal to 7% of the aggregate number of Shares and Prefunded Warrants sold in the Offerings, or68,740 shares, at an exercise price of $3.8188 per share and a term expiring on January 10, 2028.Our SolutionOur cloudbased software platform provides highly accurate sizing and measurement with broad applications including the online fashion/apparel industry,logistics and courier services and home DIY. Currently, we are mainly focusing on the ecommerce fashion/apparel industry. This proprietary technology is driven byseveral patented algorithms which are able to calculate and record measurements in a variety of novel ways. Although specific functionality varies by product, webelieve that our core solutions address the need for highly accurate measurements in a variety of consumer friendly, every day uses.5We have developed three products, MySizeID for the fashion/apparel industry, BoxSize for the logistics and courier services market and SizeUp for thehome DIY market.●MySizeID enables shoppers to generate highly accurate measurements of their body to find proper fitting clothes and accessories, through the use ofour application on their mobile phone or through a simple questionnaire if the user decides not to download the application. MySizeID syncs the user’smeasurement data to a sizing chart and presents items for purchase that match their measurements to ensure a correct fit. MySizeID is available forlicense by retailers and accessable by consumers through a web page.●BoxSize enables customers to quickly and easily measure the size and volume of a parcel to accurately calculate shipping fees. It also offers shippingcompanies a variety of precise logistical data for more efficiently managing their supply chain, providing them with an accurate way to compare thephysical package with what is in the shipping manifest. BoxSize solution is available for license on both iOS and Android operating systems. BoxSizeis available on the Honeywell Marketplace and in August 2019 was approved for Honeywell’s Independent Software Vendor Program, and MySize wasgranted an independent software vendor (ISV) status on the Zebra Technologies and on DataLogic platforms.●SizeUp is a digital tape measure that allows users to measure length, width and height of a surface by moving their smartphone from point to point ofan object or space. SizeUp is a valueadd for DIY and home improvement retailers whose customers struggle to find the appropriately sized items (likeblinds or curtains) for their homes or projects due to inaccurate measurements. SizeUp also is designed to replace rulers, tape measures and othermeasuring tools used for DIY projects. SizeUp is available for consumer download on both iOS and Android operating systems.The following are some select key features of our solutions:●Integration Capability. We design our solutions to be flexible and configurable, allowing our clients to match their use of our algorithms and softwarewith their specific business processes and workflows. Our platform has been organically developed from a common code base, data structure and userinterface, providing a consistent user experience with powerful features that are easily adaptable to our clients’ needs. The MySizeID widget can beintegrated via oneline JavaScript code, or through RESTful API;●Intuitive user experience. Our intuitive, easytouse interface is based on current technology, multiple focus groups and automatically adapts to users’devices, including mobile platforms, thereby significantly increasing accessibility of our solutions;●Big Data Generation. While we supply to the user the information he/she requires, we gather certain vital information such as body measurement andpackage volume which can be used anonymously to help the retailer acquire predictive size information on stocking, operations and consumers thatmay be in between sizes. All the information is being gathered and stored on our servers where it can be used by retailers;●NonInvasive. In taking measurements using our solution, the smartphone camera is not utilized; instead, the measurements are captured by scanningthe smartphone over the consumer’s body or package, thus ensuring greater privacy.Our Growth StrategyWe aim to drive revenue primarily through penetration of the U.S. and Europe markets through a business to business to consumer (B2B2C) model in theverticals we are targeting. We are pursuing the following growth strategies:●Sign Additional Commercial Agreements with U.S. Retailers. During 2022, we expanded our commercial agreements with Levi’s, introducing NorthAmerica (U.S. and Canada) and Latin America regions, and by extension Levis’ native apps in EU and U.S. regions. We also entered into commercialagreements with Baby Fresh, Galax, Punto Blanco, GEF France, Diesel, Gaala, Superdry, Uniontex Industries, and Temperlay London among others. Weare in various stages of discussions with U.S. and foreign retailers for the deployment of our size recommendation and measurement technology with aview to entering into additional commercial agreements.6●Pursue a TwoPronged Commercialization Strategy. We are seeking to accelerate adoption of our solutions both through direct partnerships with ecommerce websites as well as through thirdparty platform websites. While we seek to directly enter into partnerships with companies maintaining ecommerce websites in the apparel, courier and DIY markets, we are also seeking to deploy our solutions on thirdparty platforms. Furthermore, with theexpansion of MySizeID through the release of our FirstLook Smart Mirror, which we are offering to brick and mortar stores to digitize the physicalstores, MySizeID is now available for online retailers utilizing the WooCoomerce, Shopify, Lightspeed, PrestaShop, Bitrix and Wix platforms and tobrick and mortar stores through GK Software POS solution while BoxSize is available on the Honeywell, Zebra Technologies and Datalogic.●Ongoing Investment in our Technology Platform. We continue to invest in building new software capabilities and extending our platform to bring thepower of accurate measurement to a broader range of applications. In particular, we seek not only to deliver size recommendations but to provide arobust, endtoend,artificial intelligence, or AIdriven platform that inspires consumer confidence and drives revenue growth by providing a superiorconsumer journey to both online and the brick and mortar stores.●Grow our database. As the usage of our measurement apps increases, our database of information including user behaviour and body measurementsgenerates valuable statistics. Such data can be used in the big data market for targeted advertising and for blind consumer data mining.●Identify and acquire synergistic businesses. In order to reduce our time to market and obtain complementary technologies, we are seeking to acquiretechnologies and businesses that are synergistic to our product offering. We recently completed an acquisition of Orgad which operates anomnichannel ecommerce platform and Naiz which provides SaaS technology solutions that solve size and fit issues for fashion ecommerce companies.●Partnerships and cooperation. In order to bring a wider solution for the retail market we are working to partner and integrate our technology withpartners that can increase our penetration and offering to the market.Market OpportunityThe global ecommerce market was $5.7 trillion in 2022, and the industry is expected to grow significantly in the coming years with no signs of slowingdown. Market specialists expect a compound annual growth rate of 27.43% from 2023 to 2028: according to data from Statista, the market is expected to reach $6.5trillion in 2023. While many sectors have found ways to increase revenue through ecommerce, ecommerce is still plagued by issues that cut into profits andnegatively impact the bottom line, such as customer returns, low consumer conversion, and associated restocking and shipping costs.Fashion/ApparelSince the onset of the COVID19 pandemic, an immense shift to digital was recorded, with 85.9% growth vs. prepandemic, according to Mastercard, andover 2 billion people worldwide who shop online, according to data from Oberlo. In November 2022, online shoppers broke records with $11.3 billion in spending onCyber Monday, driving 5.8% yearoveryear growth and making the day the biggest online shopping day of all time, according to Adobe Analytics.In 2021, fashion companies invested between 1.6% and 1.8% of their revenues in technology, according to Mckinsey, and are expected to double theinvestment by 2030 in order to keep up with digital natives and keep a competitive edge. Personalization in ecommerce and hybrid connectivity in brickandmortarretail are two key themes in the future of fashtech, according to Mckinsey’s 2022 State of Fashion Technology.7In the upcoming years, inflation is expected to impact the fashion world. As prices for goods increase, the challenge will be to inspire confidence inconsumers, via different smart digital tools. Brands will need to embrace creative digital tools and new channels to deepen customer relationships, and as Mckinseyforecasts in their State of Fashion report for 2023, they will need to execute on priorities such as sustainability and digital acceleration.The global fashion ecommerce market size is expected to grow from $744.4 billion in 2022 to $821.19 billion in 2023 at a compound annual growth rate of10.3%. In 2027, the market size is expected to grow to $1,222.32 billion, at a compound annual growth rate of 10.5%, according to BRC.Based on the importance which shoppers attribute to free shipping 50% of cart abandonment rate is due to extra shipping costs (Baymard Institute) theneed for fashion retailers to substantiate the optimal size for a customer, thus minimizing returns, has never been more crucial.As brands move online or significantly expand their online presence, we believe that developing innovative ways to connect with shoppers, both onlineand offline, has become a top priority.Shipping/ParcelAccording to Pitney Bowes, parcel revenue in 13 major countries around the world increased by 17% year over year from $420 billion in 2020 (reflecting 131billion parcels) to $491 billion in 2021 (reflecting 159 billion parcels). In the shipping/parcel industry, the dimensions of a package are critical. It is not merely themeasurement of a package or box – but rather the amount of space that the package or box will take up on a truck, airplane, or ship that will be transporting thepackage or box. Far too often, retailers use unfit packaging for their items, adding additional costs in materials and shipping fees.DIYSimilar to issues in the apparel and fashion market, big box, hardware, furniture, and DIY stores are plagued by returns due to incorrect fit andmeasurements. In an industry where precise measurement for projects is an absolute necessity, ecommerce has not grown as quickly as in other industries which webelieve is due to lack of consumer confidence in measurements at home and buying the correct item online.MySizeIDWe have released the MySizeID app for both iOS and Android which assists consumers to take highly accurate measurement of their own body in order tosize clothing in the best way possible without the need to try the clothes on before purchasing. MySizeID is designed to simplify the process of purchasing clothesonline and significantly reduce the rate of returns of poorfitting clothing. During 2022, MySizeID delivered over 23.5 million size recommendations.The application is the result of a research and development effort that combines:●anthropometric research – analyses of information pertaining to body measurements derived from a survey and the subsequent determination ofcorrelations between body parts;●body measurement algorithm research – an algorithm created by us to measure body parts; and●retailers size chart analyses – adopting a deep understanding of the size charts of retailers and the corresponding “body to garment size.”MySizeID allows consumers to create a secure, online profile of their personal measurements, which can then be utilized, with partnered online retailers, toensure that no matter the manufacturer or size chart, they will get the right fit. MySizeID operates based on the use of existing sensors in smart phones which enable,through a specific purpose application, the measurement of the body of any consumer by moving the smartphone along his or her body. The MySizeID applicationdoes not rely on user photographs or any additional hardware; all a user needs to do is scan their body with their smartphone and the application records theirmeasurements. The measurements can then be saved in our database in the cloud, enabling the user to search for clothes in various retailer websites withoutworrying about size. When a search is made, the retailer will connect to our cloud database, and then provide results based on the user’s measurements and otherparameters as he or she may have defined. This data is also saved for use when a customer enters a brickandmortar store to help serve the customer moreefficiently and to provide a better shopping experience.8Figure 1: Screenshot of MySizeID on smartphone and ecommerce websiteAs part of the integration process, we offer to the retailer five main components:●Mobile App. MySizeID comes in the form of a native app or website. Our native app can be used “as is” integrated into the retailer’s ecommercewebsite. The website users can build a body profile on the app and receive size recommendations for their profile both in the app and on a widgetintegrated with their website.9●Widget. When a consumer enters into the retailer’s website and looks for a specific item, he or she can click on the MySizeID widget which will informthe consumer of his or her recommended size, based on his or her actual measurements, as measured using the app and the item he or she is looking at.The widget has two features:AI Wizard mode allows the user to obtain size from the following parameters: gender, height, weight, belly shape, hip shape and bra size only. Thegender, height and weight questions are mandatory, while the body shape questions are optional and can be added to increase accuracy for specificapparel categories.Guest mode allows a user that does not wish to sign up to MySizeID as a user to obtain size recommendations as well.●Analytic Pixel. MySizeID analytic pixel allows retailer to track and analyze the widget usage. By adding the pixel to the retailer’s website, MySizeID BIteam can track engagement, order, and return data and provide retailers with tools to understand the advantages and benefits of MySizeID.Use your own device using MySizeID instore solution, shoppers can receive size recommendations for all store items, when shopping in the offlinestores. The shoppers can build their body profile using an easy to use 3 to 6 questions form, scan an item barcode and receive a size recommendationfor the scanned item based on their body profile and the item’s size chart.Another feature we added is the “inbetween sizing” feature. Our system can detect a user that has body dimensions that place the user inbetweenthe clothes sizes being offered and lets the user know that. A user can then choose between the two sizes according to the user’s fit preference(tight/loose/average).In addition, we have recently released our InstantApp feature which allows shoppers to generate their body measurements directly from our widget,without the need to download our mobile app. Using this technology, the shoppers can create their online profile of their personal measurements andcomplete a purchase faster and easier with minimum distractions.The body profile can be created while shoppers are viewing the page from their mobile phone, or by scanning a QR code on desktop that will open thesame page on the mobile phone.Screenshot of InstantApp widget on desktop on yumyumfashion website10●MyDash Platform. The MyDash platform is a smart backoffice system where the retailer enters all the information regarding its size charts thatcorrelates to every product in its ecommerce site, and where the retailer can access the information on its users. This system is customizable based onthe retailer’s needs. In 2021, we changed the MyDash system to increase the system’s accessibility, added walkthroughs, user guides and changed theuser interface and much more for the ease of use. We added the option to use our generic size charts, added the option upload size chart files insteadof typing the size charts values manually, added more widget styling options and changed the pairing mechanism between the size chart and theproducts to be more userfriendly.Figure 3: Screenshot of BackOffice System●FirstLook Smart Mirror. The Smart Mirror provides an interactive, mirrorlike touch display that allows brands to provide instore customers with anenhanced, online shopping experience, contactless checkout and obtains the recommended size. The MySizeIDFirstLook Smart Mirror can be placedin numerous locations throughout a retail store, including the fitting rooms (without cameras) or other hightraffic locations of the store. Highlightcapabilities of the FirstLook Smart Mirror include a 3D “Tryiton” interactive avatar experience, personalized and highly accurate sizerecommendations by MySizeID, thirdparty point of sale systems integration, styling recommendations and contactless “select and collect” at theregister feature.Illustration of MySizeID “first look” smart mirror in a fashion store11We are currently offering MySizeID technology to retailers through either a payperuse model or a monthly subscription model. In our payperusebusiness model, every time the consumer obtains a recommended size, the retailer is charged for the usage.BoxSizeBoxSize is a parcel measurement application that can provide realtime logistic data on package volumes and transportation, resulting in improvedoperational efficiency and reduced operating expenses. In addition, BoxSize allows customers to easily measure the size of their parcel with their smartphone,calculate shipping costs and arrange for a convenient pickup time for the package. BoxSize is available both on iOS and Android.In 2020 we released the “One Click” feature on BoxSize that enables the user to measure a package with just one swipe of the handheld device. Previously,measurements through BoxSize would require three separate swipes.Figure 4: Screenshot of BoxSizeOur BoxSize mobile measurement solution is available on the Honeywell Marketplace. In addition, BoxSize was approved for Honeywell’s Global VendorProgram, and is available to provide highly accurate mobile measurement solutions for thousands of Honeywell clients. We also developed a new dashboard for thecourier companies to have all the required data about each package in one place. It includes package dimensions, pictures, scan geo location and more. Thedashboard also let the courier use Webhooks, which allows him to get the information from his own system.12In 2020, we announced our partnership with Datalogic, a company focused on the automatic data capture and process automation markets. The partnershipmakes our BoxSize measurement solution available to thousands of Datalogic customers in the Transportation and Logistics vertical.Agreement with Delhivery Private Limited, IndiaWe entered into an agreement with Delhivery Private Limited, one of the largest courier pickup, delivery, and online shipping services in India. Delhivery’sreputation as a frontrunner in delivery and logistics tech makes its decision to select Boxsize a particularly strong testament to the value the solution provides.BoxSize provides Delhivery’s employees on the B2B side with critical information that will allow them to effortlessly optimize loading efficiency and add even morerealtime visibility to operations.SizeUpWe are working on additional consumer applications, including a DIY application. Our SizeUp application is a smart tape measure for the business toconsumer market which allows users to utilize their smartphone as a tape measure. The application provides measurements with an accuracy of within twocentimeters. Through the use of SizeUp, users will be able to visualize how an object or a piece of furniture will fit in an existing room in their home or office. It alsoadded Google Vision for image content analysis, object detection, and title suggestions.Currently the SizeUp app for Android and iOS is available for free for the first 30 days, after which a user will be required to register via email and pay aonetime fee of $1.99 to continue using the application. To date, revenues from downloads have been minimal.Research and DevelopmentOur research and development team are responsible for the research, algorithm, design, development, and testing of all aspects of our measurementplatform technology. We invest in these efforts to continuously improve, innovate, and add new features to our solutions.We incurred research and development expenses of approximately $1.7 million in 2022 and $4.25 million in 2021, relating to the development of itsapplications and technologies. The decrease from the corresponding period primarily resulted from share based payment in amount of $2,618,000 attributed to theshare issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021. We intend to continue to invest in our research anddevelopment capabilities to extend our platform and bring our measurement technology to a broader range of applications.13In 2022, the R&D department experienced significant success in their efforts to improve the performance of their size recommendation system. Through acombination of optimized algorithms and the incorporation of cuttingedge technologies, the team was able to achieve a threefold increase in the system’s speed.This breakthrough not only makes the system one of the fastest and most accurate on the market, but also reduced the operation costs, making it more costeffective for businesses to use. Additionally, the solution is now highly scalable, allowing it to easily adapt to the needs of businesses of any size. The R&D team isnow focused on further improving the system and exploring new applications for the technology.Sales and MarketingIn 2019, we launched a commercialization strategy that directs our sales efforts toward both sales to ecommerce players in specific vertical markets such asfashion/apparel and shipping/delivery as well as to ecommerce thirdparty platform providers. As of March 15, 2023, our products are being sold in the followingcountries: US, UK, France, Netherlands, Spain, Portugal Turkey, Germany, Israel and Italy, generating customer leads, building out a sales pipeline, and developingcustomer relationships.We believe an effective method to market our suite of products is for users to actively use and explore its capabilities. We encourage free trials of one ormore of our products in order to successfully convert those accounts to paid subscriptions.Proprietary RightsWe rely on a combination of patent, copyright, trademark and trade secret laws in the United States and other jurisdictions, as well as contractualprotections, to protect our proprietary technology.As of December 31, 2022, we owned 18 issued patents: six in Europe, four in the U.S., three in each of Russia and Japan and one in each of Canada andIsrael which expire between January 20, 2033 and August 18, 2036, and we have two additional patent applications in process. As of such date, we do not have anyregistered trademarks.We cannot provide any assurance that our proprietary rights with respect to our products will be viable or have value in the future since the validity,enforceability and type of protection of proprietary rights in softwarerelated industries are uncertain and still evolving.Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products or to obtain and use informationthat we regard as proprietary. Policing unauthorized use of our products is difficult, and while we are unable to determine the extent to which piracy of our softwareproducts exists, software piracy can be expected to be a persistent problem. In addition, the laws of some foreign countries do not protect proprietary rights to asgreat an extent as do the laws of the United States, and effective copyright, trademark, trade secret and patent protection may not be available in those jurisdictions.Our means of protecting our proprietary rights may not be adequate to protect us from the infringement or misappropriation of such rights by others.Further, in recent years, there has been significant litigation in the United States involving patents and other intellectual property rights, particularly in thesoftware and Internetrelated industries. We can become subject to intellectual property infringement claims as the number of our competitors grows and ourproducts and services overlap with competitive offerings. These claims, even if not meritorious, could be expensive to defend and could divert management’sattention from operating our business. If we become liable to third parties for infringing their intellectual property rights, we could be required to pay a substantialaward of damages and to develop noninfringing technology, obtain a license or cease selling the products that contain the infringing intellectual property. We maybe unable to develop noninfringing technology or obtain a license on commercially reasonable terms, if at all.14Government RegulationWe are subject to a number foreign and domestic laws and regulations that involve matters central to our business. These laws and regulations mayinvolve privacy, data protection, intellectual property, or other subjects. Many of the laws and regulations to which we are subject are still evolving and being testedin courts and could be interpreted in ways that could harm our business. In addition, the application and interpretation of these laws and regulations often areuncertain, particularly in the new and rapidly evolving industry in which we operate. Because global laws and regulations have continued to develop and evolverapidly, it is possible that we, our products, or our platform may not be, or may not have been, compliant with each such applicable law or regulation.In particular, we are subject to a variety of federal, state and international laws and regulations governing the processing of personal data. Many U.S. stateshave passed laws requiring notification to data subjects when there is a security breach of personally identifiable data. There are also a number of legislativeproposals pending before the U.S. Congress, various state legislative bodies and foreign governments concerning data protection. In addition, data protection lawsin Europe and other jurisdictions outside the United States can be more restrictive than those within the United States, and the interpretation and application ofthese laws are still uncertain and in flux.For example, the General Data Protection Regulation, or GDPR, which took effect on May 25, 2018, enhances data protection obligations for entities thatprocess personal data about individuals, including obligations to cooperate with European data protection authorities, implement security measures and keeprecords of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to the greater of €20 million or 4% of global annual revenue. Inaddition, the California Consumer Privacy Act of 2018, or CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and requiredeletion of their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used.The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further,failure to comply with the Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may exposeus to administrative fines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the currentenforcement measures and sanctions. Given the breadth and depth of changes in data protection obligations, meeting the requirements of GDPR and otherapplicable laws and regulations has required significant time and resources, including a review of our technology and systems currently in use against therequirements of GDPR and other applicable laws and regulations. We have taken various steps to prepare for complying with GDPR and other applicable laws andregulations however there can be no assurance that these steps are sufficient to assure compliance. Further, additional EU laws and regulations (and member states’implementations thereof) further govern the protection of individuals and of electronic communications. If our efforts to comply with GDPR or other applicable lawsand regulations are not successful, we may be subject to penalties and fines that would adversely impact our business and results of operations, and our ability touse personal data of individuals could be significantly impaired.CompetitionWe operate in a highly competitive industry that is characterized by constant change and innovation. Changes in the applications and the programinglanguages used to develop applications, devices, operating systems, and technology landscape result in evolving customer requirements. Our competitors includeTrue Fit, Fit analytics and 3DLook.The principal competitive factors in our market include the following:●High Accuracy Size Recommendations: the highest accuracy and the lowest margin of error by combining patented technology including AI and ML,size chart or spec data, and MySizeID property body data measurement;●Integration○Fast 1 week integration including size chart size chart review and product mapping○Easy 1 line of “all included” script implementation●Technical Advantages○Very small library that weighs ±50kb (minimum widget loading time on product page)○UltraFast loading and size recommendation presenting○Restful API option (API integration with any website or app)15●Optimizations○Adjustments of size charts based on performance○Widget usage analysis by FashTech and BI teams○Automatic pairing of size charts with products/collections●User Experience○Easy to use interface (1015 seconds to receive size recommendations)○Option to add/deduct questions to/from widget wizards○Users automatically receive size recommendations on all products after initial sign up●Product and platform features, architecture, reliability, privacy and security, performance, effectiveness, and supported environments;●Product extensibility and ability to integrate with other technology infrastructures;●Digital operations expertise;●Ease of use of products and platform capabilities;●Total cost of ownership;●Adherence to industry standards and certifications;●Strength of sales and marketing efforts;●Brand awareness and reputation; and●Focus on customer successWe believe we generally compete favorably with our competitors on the basis of these factors. We expect competition to increase as other established andemerging companies enter our markets, as customer requirements evolve, and as new products and technologies are introduced. We expect this to be particularlytrue as we offer a smartphonebased offering that does not need to utilize the smartphone’s camera, and our competitors may also seek to repurpose their existingofferings to provide similar solutions. Many of our competitors have substantially greater financial, technical, and other resources, greater name recognition, largersales and marketing budgets, broader distribution, and larger and more mature intellectual property portfolios.Human Capital ManagementAs of March 31, 2023, we had a total of 35 employees, of which 30 were fulltime employees, including 9 in sales and marketing, 12 in technology anddevelopment and 9 in administration and finance.None of our employees are represented by a collective bargaining agreement, nor have we experienced any work stoppage. We consider our relationshipwith our employees to be good. Our future success depends on our continuing ability to attract and retain highly qualified engineers, sales and marketing, accountmanagement, and senior management personnel.We also believe we have built a strong sales team focused on expanding into new markets through the acquisition of Naiz and our current team.We believe that our future success will depend, in part, on our continued ability to attract, hire and retain qualified personnel. In particular, we depend onthe skills, experience and performance of our senior management and research personnel. We compete for qualified personnel with other hitech companies, as wellas universities and nonprofit research institutions.16We provide competitive compensation and benefits programs to help meet the needs of our employees. In addition to salaries, these programs (which varyby country/region and employment classification) include incentive compensation plan, pension, and insurance benefits, paid time off, , among others. We also usetargeted equitybased grants with vesting conditions to facilitate retention of personnel, particularly for our key employees.The success of our business is fundamentally connected to the wellbeing of our people. Accordingly, we implemented an hybrid work policy in which theemployees can work from home twice a week.We consider our employees to be a key factor to our success and we are focused on attracting and retaining the best employees at all levels of ourbusiness. Inclusion and diversity is a strategic, business priority. We employ people based on relevant qualifications, demonstrated skills, performance and otherjobrelated factors. We do not tolerate unlawful discrimination related to employment, and strive to ensure that employment decisions related to recruitment,selection, evaluation, compensation, and development, among others, are not influenced by race, color, religion, gender, age, ethnic origin, nationality, sexualorientation, marital status, or disability. Continuous monitoring to ensure pay equity has been a focus in 2022. We have continued to improve gender balance in 2022with a focus on increasing the representation of women hired as new college graduates. We are committed to creating a trusting environment where all ideas arewelcomed and employees feel comfortable and empowered to draw on their unique experiences and backgrounds.We consider our relations with our employees to be good.Company InformationOur principal executive offices are located at HaYarden 4 St., POB 1026, Airport City, Israel 7010000, and our telephone number is +97236009030. Ourwebsite address is www.mysizeid.com. Any information contained on, or that can be accessed through, our website is not incorporated by reference into, nor is it inany way a part of, this Annual Report on Form 10K.We use our website (www.mysizeid.com) as a channel of distribution of Company information. The information we post through this channel may bedeemed material. Accordingly, investors should monitor our website, in addition to following our press releases, SEC filings and public conference calls andwebcasts. The contents of our website are not, however, a part of this Annual Report on Form 10K.Corporate HistoryWe were incorporated in the State of Delaware on September 20, 1999 under the name Topspin Medical, Inc. In December 2013, we changed our name toKnowledgetree Ventures Inc. Subsequently, in February 2014, we changed our name to MySize, Inc. In 2020, we created a subsidiary in the Russian Federation, MySize LLC.From inception through 2012, we were engaged in research and development of a medical magnetic resonance imaging, or MRI, technology forinterventional cardiology and in the development of MRI technology for use in the diagnosis and treatment of prostate cancer. In January 2012, we acquiredMetamorefix Ltd., or Metamorefix. Metamorefix was incorporated in 2007, and was engaged in the development of innovative solutions for the rehabilitation oftissues, particularly skin tissues. By the end of 2012, we ceased operations and in January 2013, we sold our entire ownership interest in Metamorefix.In September 2013, Ronen Luzon, our Chief Executive Officer, acquired control of the Company from Asher Shmuelevitch, according to which Mr. Luzonpurchased 70,238 shares of common stock from Mr. Shmuelevitch, which shares represented approximately 40% of the issued and outstanding capital stock of theCompany at such time, thus becoming a controlling shareholder of the Company. In connection with the acquisition, Mr. Luzon reached a settlement with our thencreditors pursuant to which the main creditor, Mr. Shmuelevitch, was paid a total sum of approximately $140,000 in consideration for a full and final waiver of any andall his claims that he may have relating to any monetary indebtedness of the Company to the creditors.17In February 2014, My Size Israel, our wholly owned subsidiary, entered into a Purchase Agreement, or the Purchase Agreement, with Shoshana Zigdon,who at the time was a beneficial owner of more than 20% of our outstanding shares, with respect to the acquisition by us of certain rights related to the collection ofdata for measurement purposes including rights in the venture, the method and a patent application that had been filed by the Seller (PCT/IL2013/050056), or theAssets. In consideration for the sale of the Assets, we agreed to pay to Ms. Zigdon, 18% of our operating profit, directly or indirectly connected with the Assetstogether with valueadded tax in accordance with the law for a period of seven years from the end of the development period of the aforementioned venture. Inaddition to the foregoing, the Purchase Agreement provided that all developments, improvements, knowledge and knowhow developed and/or accumulated by usafter the execution of the Purchase Agreement will be owned by us. Further, Ms. Zigdon agreed not to compete, directly or indirectly, with us in any matter relatingto the Assets for a period of seven years from the end of the development period of the venture.On May 26, 2021, we, My Size Israel, and Ms. Zigdon entered into an Amendment to Purchase Agreement, or the Amendment, which made certainamendments to the Purchase Agreement. Pursuant to the Amendment, Ms. Zigdon agreed to irrevocably waive (i) the right to repurchase certain assets related tothe collection of data for measurement purposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which our business issubstantially dependent, or the Assets, and (ii) all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My SizeIsrael under the Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation, reward orany rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights, or the Waiver. Inconsideration of the Waiver, we issued 100,000 shares of common stock to Ms. Zigdon.In September 2005, we commenced trading on the Tel Aviv Stock Exchange, or TASE. Between 2007 and 2012 we reported as a public company with theSEC. In August 2012, we suspended our reporting obligations. In mid2015 we resumed reporting as a public company. On July 25, 2016, our common stock beganpublicly trading on the Nasdaq Capital Market under the symbol “MYSZ”.ITEM 1A. RISK FACTORSAn investment in our common stock involves a high degree of risk. You should carefully consider the following risk factors and the other information inthis Annual Report on Form 10K before investing in our common stock. Our business and results of operations could be seriously harmed by any of the followingrisks. The risks set out below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterialalso may materially adversely affect our business, financial condition and/or operating results. If any of the following events occur, our business, financial conditionand results of operations could be materially adversely affected. In such case, the value and trading price of our common stock could decline, and you may lose allor part of your investment.Summary Risk FactorsThe principal factors and uncertainties that make investing in our ordinary shares risky, include, among others:Risks Related to Our Financial Position and Capital Requirements●We have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.●Our limited operating history makes it difficult to evaluate our business and prospects.●We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive and maycause the market price of our common stock to decline.●The report of our independent registered public accounting firm contains an explanatory paragraph regarding substantial doubt about our ability tocontinue as a going concern.Risks Related to Our Company and Our Business●The market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and online thirdparty resellers adopting our flagship product, MySizeID.18●Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broader marketacceptance of our products.●We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which may makeit difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.●We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increase ourcapital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.●If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations and financialcondition may be adversely affected.●If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operations andfinancial condition could be adversely affected.●The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile device applications andcustom development services.●Our growth depends, in part, on the success of our strategic relationships with third parties.●Changes in economic conditions could materially affect our business, financial condition and results of operations.●We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.●We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significant interruptionin our network or hosting and cloud services could adversely impact our operations and harm our business.●Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.●We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.●A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.●Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, data protectionand information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive and confidentialinformation. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm our business,results of operations and financial condition.●We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect our business.●We may face intense competition and expect competition to increase in the future, which could limit us in developing a customer base and generatingrevenue.●Our business operations and future development could be significantly disrupted if we lose key members of our management team.19●If we are able to expand our operations, we may be unable to successfully manage our future growth.Risks Related to Our Operations in Israel and Russia●Our headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.●Russia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.Risks Related to Our Common Stock●A more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.●Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions and adversedevelopments with respect to financial institutions and associated liquidity risk;●Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.●Our securities are traded on more than one market which may result in price variations.●We are a former “shell company” and as such are subject to certain limitations not generally applicable to other public companies.Risks Related to Our Financial Position and Capital RequirementsWe have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.We realized a net loss of approximately $8.3 million and $10.5 million for the years ended December 31, 2022 and 2021 and had an accumulated deficit of$53.5 million as at December 31, 2022. Because of the numerous risks and uncertainties associated with the development and commercialization of our products andbusiness, we are unable to predict the extent of any future losses or when we will become profitable, if at all. Expected future operating losses will have an adverseeffect on our cash resources, shareholders’ equity and working capital. Our failure to become and remain profitable could depress the value of our stock and impairour ability to raise capital, expand our business, maintain our development efforts, or continue our operations. A decline in our value could also cause you to lose allor part of your investment in us.Our limited operating history makes it difficult to evaluate our business and prospects.We have only been developing our measurement technology since 2014. Since then, our operating history has been primarily limited to research anddevelopment, pilot studies, raising capital, and more recently acquisitions and sales and marketing efforts. Therefore, it may be difficult to evaluate our business andprospects. We have not yet demonstrated an ability to commercialize our products. Consequently, any predictions about our future performance may not beaccurate, and you may not be able to fully assess our ability to complete development and/or commercialize our products, and any future products.We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive andmay cause the market price of our common stock to decline.Based on our projected cash flows and the cash balances as of the date of this Annual Report on Form 10K, our existing cash is insufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. In order to meet ourbusiness objectives in the future, we will need to raise additional capital, which may not be available on reasonable terms or at all. Additional capital would be usedto accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;20●respond to competitive pressure;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, and a number of otherfactors, many of which are outside our control, and on our financial performance. Accordingly, we cannot assure you that we will be able to successfully raiseadditional capital at all or on terms that are acceptable to us. If we cannot raise additional capital when needed, it may have a material adverse effect on our business,results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.Management has concluded that there is substantial doubt about our ability to continue as a going concern which could prevent us from obtainingnew financing on reasonable terms or at all.We have incurred significant losses and negative cash flows from operations and have an accumulated deficit that raises substantial doubt about its abilityto continue as a going concern. Our audited consolidated financial statements for the year ended December 31, 2022 were prepared under the assumption that wewould continue our operations as a going concern. Our independent registered public accounting firm has included a “going concern” explanatory paragraph in itsreport on our financial statements for the year ended December 31, 2022. If we are unable to improve our liquidity position, by, among other things, raising capitalthrough public or private offerings or reducing our expenses, we may exhaust our cash resources and will be unable to continue our operations. If we cannotcontinue as a viable entity, our shareholders would likely lose most or all of their investment in us.Risks Related to Our Company and Our BusinessThe market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and onlinethirdparty resellers adopting our flagship product, MySizeID.The market for our measurement technology is relatively new and unproven and is subject to a number of risks and uncertainties. We believe that ourfuture success will depend in large part on market adoption of our flagship product, MySizeID, by U.S. retailers and online thirdparty resellers. In order to grow ourbusiness, we intend to focus on educating retailers and resellers and other potential customers about the benefits of our measurement technology, expanding thefunctionality of our products and bringing new products to market to increase market acceptance and use of our technology. Our ability to develop and expand themarket that our products address depends upon a number of factors, including the cost savings, performance and perceived value associated with such products.The market for our products could fail to develop or there could be a reduction in interest or demand for our products as a result of a lack of consumer acceptance,technological challenges, competing products and services, weakening economic conditions and other causes. We may never successfully commercialize ourproducts and if our products fail to achieve market acceptance, this would have a material adverse effect on our business, results of operations and financialcondition.21Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broadermarket acceptance of our products.Our ability to achieve customer adoption, especially among U.S. retailers will depend, in part, on our ability to effectively organize, focus and train our salesand marketing personnel. We have limited experience selling to U.S. retailers and only recently established a U.S. sales force. We believe that there is significantcompetition for experienced sales professionals with the skills and industry knowledge that we require. Our ability to achieve significant revenue growth in thefuture will depend, in part, on our ability to recruit, train and retain a sufficient number of experienced sales professionals, particularly those with experience sellingto U.S. retailers. In addition, even if we are successful in hiring qualified sales personnel, new hires require significant training and experience before they achievefull productivity, particularly for sales efforts targeted at U.S. retailers and new markets. Because we only recently started sales efforts, we cannot predict whether, orto what extent, our sales efforts will be successful.We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which maymake it difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.In this market segment, the decision to adopt our products may require the approval of multiple technical and business decision makers, including security,compliance, procurement, operations and IT. In addition, while U.S. retailers may be willing to deploy our products on a limited basis, before they will commit todeploying our products at scale, they often require extensive education about our products and significant customer support time, engage in protracted pricingnegotiations and seek to secure readily available development resources. As a result, it is difficult to predict when we will obtain new customers and begingenerating revenue from these customers. As part of our sales cycle, we may incur significant expenses before executing a definitive agreement with a prospectivecustomer and before we are able to generate any revenue from such agreement. We have no assurance that the substantial time and money spent on our salesefforts will generate significant revenue. If conditions in the marketplace generally or with a specific prospective customer change negatively, it is possible that nodefinitive agreement will be executed, and we will be unable to recover any of these expenses. If we are not successful in targeting, supporting and streamlining oursales processes and if revenue expected to be generated from a prospective customer is not realized in the time period expected or not realized at all, our ability togrow our business, and our operating results and financial condition may be adversely affected. If our sales cycles lengthen, our future revenue could be lower thanexpected, which would have an adverse impact on our operating results and could cause our stock price to decline.22We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increaseour capital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.In order to reduce time to market and obtain complementary technologies, we are seeking to acquire technologies and businesses that are synergistic to ourproduct offering. For example, we recently acquired Orgad which operates an omnichannel ecommerce platform and Naiz which provides SaaS technology solutionsthat solve size and fit issues for fashion ecommerce companies. We evaluate from time to time various acquisitions and collaborations, including licensing oracquiring complementary technologies, intellectual property rights, or businesses. The process for acquiring a company may take from several months up to a yearand costs can vary greatly. We may also compete with others to acquire companies, and such competition may result in decreased availability of, or an increase inprice for, suitable acquisition candidates. In addition, we may not be able to consummate acquisitions or investments that we have identified as crucial to theimplementation of our strategy for other commercial or economic reasons. As a result, it may be more difficult for us to identify suitable acquisition or investmenttargets or to consummate acquisitions or investments on acceptable terms or at all. If we are not able to execute on any acquisition, we may not be able to achieve afuture growth strategy and may lose market share.In addition, the acquisition of Orgad, Naiz and any potential future acquisition, joint venture or collaboration may entail numerous potential risks, including:●increased operating expenses and cash requirements;●the assumption of additional indebtedness or contingent liabilities;●assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel;●the diversion of our management’s attention from our existing programs and initiatives in pursuing such a strategic merger or acquisition;●retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships;●risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing technologies; and●our inability to generate revenue from acquired technologies or products sufficient to meet our objectives in undertaking the acquisition or even to offsetthe associated acquisition and maintenance costs.All of the foregoing risks may be magnified as the cost, size or complexity of an acquisition or acquired company increases, or where the acquiredcompany’s products, market or business are materially different from ours, or where more than one integration is occurring simultaneously or within a concentratedperiod of time. We may not be able to obtain the necessary regulatory approvals, including those of antitrust authorities and foreign investment authorities, incountries where we seek to consummate acquisitions or make investments. For those and other reasons, we may ultimately fail to consummate an acquisition, even ifwe announce the intended acquisition.In addition, we may require significant financing to complete an acquisition or investment, whether through bank loans, raising of equity or debt orotherwise. We cannot assure you that such financing options will be available to us on reasonable terms, or at all. If we are not able to obtain such necessaryfinancing, it could have an impact on our ability to consummate a substantial acquisition or investment and execute a future growth strategy. Alternatively, we mayissue a significant number of shares as consideration for an acquisition, which would have a dilutive effect on our existing shareholders. For example, in partialconsideration for the acquisition of Orgad, we agreed to issue up to 111,602 shares of our common stock and in the Naiz acquisition we issued 240,000 shares of ourcommon stock. Furthermore, if we undertake acquisitions, we may incur large onetime expenses and acquire intangible assets that could result in significant futureamortization expense.23If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations andfinancial condition may be adversely affected.We believe that enhancing the “MySize” brand identity and increasing market awareness of our company and products, particularly among U.S. retailers, iscritical to achieving widespread acceptance of our products. Our ability to successfully develop new retailers may be adversely affected by a lack of awareness oracceptance of our brand. To the extent that we are unable to foster name recognition and affinity for our brand, our growth may be significantly delayed or impaired.The successful promotion of our brand will depend largely on our continued marketing efforts, market adoption of our products, and our ability to successfullydifferentiate our products from competing products and services. Our brand promotion may not be successful or result in revenue generation. Any incident thaterodes consumer affinity for our brand could significantly reduce our brand value and damage our business. If consumers perceive or experience a reduction inquality, or in any way believe we fail to deliver a consistently positive experience, our brand value could suffer and our business may be adversely affected.In particular, adverse weather conditions can impact guest traffic at our retailers, and, in more severe cases, cause temporary retail closures, sometimes forprolonged periods. Our business is subject to seasonal fluctuations, with retail sales typically higher during certain months, such as December. Adverse weatherconditions during our most favorable months or periods may exacerbate the effect of adverse weather on consumer traffic and may cause fluctuations in ouroperating results from quartertoquarter within a fiscal year.If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operationsand financial condition could be adversely affected.Our ability to attract new customers depends in part on our ability to enhance and improve our existing products, increase adoption and usage of ourproducts and introduce new products. The success of any enhancements or new products depends on several factors, including timely completion, adequatequality testing, actual performance quality, and overall market acceptance. Enhancements and new products that we develop may not be introduced in a timely orcosteffective manner, may contain errors or defects, may have interoperability difficulties with our platform or other products or may not achieve the broad marketacceptance necessary to generate significant revenue. Furthermore, our ability to increase the usage of our products depends, in part, on the development of newuse cases for our products and may be outside of our control. If we are unable to successfully enhance our existing products to meet evolving customerrequirements, increase adoption and usage of our products, develop new products, then our business, results of operations and financial condition would beadversely affected.The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile Apps and customdevelopment services.We must continue to enhance and improve the performance, functionality and reliability of our products. The mobile technology industry is characterizedby rapid technological change, changes in user requirements and preferences, frequent new product and services introductions embodying new technologies andthe emergence of new industry standards and practices that could render our products obsolete. Our success will depend, in part, on our ability to both internallydevelop and enhance our existing products, develop new products that address the increasingly sophisticated and varied needs of our customers, and respond totechnological advances and emerging industry standards and practices on a costeffective and timely basis. The development of our technology involvessignificant technical and business risks. We may fail to use new technologies effectively or to adapt our proprietary technology and systems to customerrequirements or emerging industry standards. If we are unable to adapt to changing market conditions, customer requirements or emerging industry standards, wemay not be able to increase our revenue and expand our business.Changes in economic conditions could materially affect our business, financial condition and results of operations.Because our primary target customers include U.S. retailers , we, together with the rest of the fashion/apparel industry, will depend upon consumerdiscretionary spending. Increases in unemployment rates, reductions in home values, increases in home foreclosures, investment losses, personal bankruptcies andreductions in access to credit and reduced consumer confidence, may impact consumers’ ability and willingness to spend discretionary dollars. In addition, volatileeconomic conditions may repress consumer confidence and discretionary spending. Any of the foregoing may have a material adverse effect on our business,financial condition and results of operations.24Our growth depends, in part, on the success of our strategic relationships with third parties.To grow our business, we anticipate that we will continue to depend on relationships with third parties, such as our customers and thirdparty platforms.Identifying partners, and negotiating and documenting relationships with them, requires significant time and resources. If we are unsuccessful in establishing ormaintaining our relationships with third parties, our ability to compete in the marketplace or to grow our revenue could be impaired, and our results of operationsmay suffer. Even if we are successful, we cannot assure you that these relationships will result in increased customer usage of our products or increased revenue.We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.We currently utilize, and plan on continuing to utilize over the current fiscal year, thirdparty networking providers and distribution through companiesincluding, but not limited to, Apple and Google as well as Shopify, WooCommerce and, Datalogic, Honeywell and Zebra to distribute our technologies. If disruptionsor capacity constraints occur, we may have no means of replacing these services, on a timely basis or at all. This could cause a material adverse condition for ouroperations and financial earnings.We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significantinterruption in our network or hosting and cloud services could adversely impact our operations and harm our business.Our technology infrastructure is critical to the performance of our products and customer satisfaction. Our products run on a complex distributed system,or what is commonly known as cloud computing. We own, operate and maintain elements of this system, but significant elements of this system are operated bythirdparties that we do not control and which would require significant time to replace. We expect this dependence on thirdparties to continue. In particular, asignificant portion, if not almost all data storage, data processing and other computing services and systems is hosted by cloud computing providers. Anydisruptions, outages and other performance problems relating to such services, including infrastructure changes, human or software errors and capacity constraints,could adversely impact our business, financial condition or results of operations.Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.We update our products on a frequent basis. Despite efforts to test our updates, errors, failures or bugs may not be found in our products until after theyare deployed to a customer. We have discovered and expect we will continue to discover errors, failures and bugs in our products and anticipate that certain of theseerrors, failures and bugs will only be discovered and remediated after deployment. Real or perceived errors, failures or bugs in our platform could result in negativepublicity, government inquiries, loss of or delay in market acceptance of our products, loss of competitive position, or claims by customers for losses sustained bythem. In such an event, we may be required, or may choose, for customer relations or other reasons, to expend additional resources in order to help correct theproblem.We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.In connection with the operation of our business, we store, process and transmit data, including personal and payment information, about our employeesand customers, a portion of which is confidential and/or personally sensitive. Unauthorized disclosure or loss of sensitive or confidential data may occur through avariety of methods. These include, but are not limited to, systems failure, employee negligence, fraud or misappropriation, or unauthorized access to or through ourinformation systems, whether by our employees or third parties, including a cyberattack by computer programmers, hackers, members of organized crime and/orstatesponsored organizations, who may develop and deploy viruses, worms or other malicious software programs. Such disclosure, loss or breach could harm ourreputation and subject us to government sanctions and liability under our contracts and laws that protect sensitive or personal data and confidential information,resulting in increased costs or loss of revenues. It is possible that security controls over sensitive or confidential data and other practices we and our thirdpartyvendors follow may not prevent the improper access to, disclosure of, or loss of such information. The potential risk of security breaches and cyberattacks mayincrease as we introduce new products and offerings. Further, data privacy is subject to frequently changing rules and regulations, which sometimes conflict amongthe various jurisdictions in which we provide services. Any failure or perceived failure to successfully manage the collection, use, disclosure, or security of personalinformation or other privacy related matters, or any failure to comply with changing regulatory requirements in this area, could result in legal liability or impairment toour reputation in the marketplace.25A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.Information security risks have generally increased in recent years, in part because of the proliferation of new technologies and the use of the Internet, andthe increased sophistication and activity of organized crime, hackers, terrorists, activists, cybercriminals and other external parties, some of which may be linked toterrorist organizations or hostile foreign governments. For example, a cybercriminal could use cybersecurity threats to gain access to sensitive information aboutanother company or to alter or disrupt news or information to be distributed by PR Newswire. Cybersecurity attacks are becoming more sophisticated and includemalicious software, ransomware, attempts to gain unauthorized access to data and other electronic security breaches that could lead to disruptions in criticalsystems, unauthorized release of confidential or otherwise protected information and corruption of data, substantially damaging our reputation. Any person whocircumvents our security measures could steal proprietary or confidential customer information or cause interruptions in our operations. We incur significant coststo protect against security breaches, and may incur significant additional costs to alleviate problems caused by any breaches. Our failure to prevent securitybreaches, or wellpublicized security breaches affecting the Internet in general, could significantly harm our reputation and business and financial results.Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, dataprotection and information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive andconfidential information. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm ourbusiness, results of operations and financial condition.We and our customers that use our products may be subject to privacy and data protectionrelated laws and regulations that impose obligations inconnection with the collection, processing and use of personal data, financial data, health or other similar data. The U.S. federal and various state and foreigngovernments have adopted or proposed limitations on, or requirements regarding, the collection, distribution, use, security and storage of personally identifiableinformation of individuals. The U.S. Federal Trade Commission and numerous state attorneys general are applying federal and state consumer protection laws toimpose standards on the online collection, use and dissemination of data, and to the security measures applied to such data.Similarly, many foreign countries and governmental bodies, including the EU member states, have laws and regulations concerning the collection and useof personally identifiable information obtained from individuals located in the EU or by businesses operating within their jurisdiction, which are often morerestrictive than those in the United States. Laws and regulations in these jurisdictions apply broadly to the collection, use, storage, disclosure and security ofpersonally identifiable information that identifies or may be used to identify an individual, such as names, telephone numbers, email addresses and, in somejurisdictions, IP addresses and other online identifiers.For example, the GDPR, which took full effect on May 25, 2018. The GDPR enhances data protection obligations for businesses and requires serviceproviders (data processors) processing personal data on behalf of customers to cooperate with European data protection authorities, implement security measuresand keep records of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to or greater of €20 million or 4% of global annualrevenues. In addition, the CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and require deletion of their personalinformation, opt out of certain personal information sharing, and receive detailed information about how their personal information is used. The CCPA provides forcivil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further, failure to comply withthe Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may expose us to administrativefines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the current enforcementmeasures and sanctions. There are also additional laws and regulations in additional jurisdictions around the world which govern the protection of consumers andof electronic communications. If our efforts to comply with GDPR, CCPA or other applicable laws and regulations are not successful, we may be subject to penaltiesand fines that would adversely impact our business and results of operations, and our ability to conduct business could be significantly impaired.26Additionally, although we endeavor to have our products comply with applicable laws and regulations, these and other obligations may be modified, theymay be interpreted and applied in an inconsistent manner from one jurisdiction to another, and they may conflict with one another, other regulatory requirements,contractual commitments or our internal practices. We also may be bound by contractual obligations relating to our collection, use and disclosure of personal,financial and other data or may find it necessary or desirable to join industry or other selfregulatory bodies or other privacy or data protectionrelatedorganizations that require compliance with their rules pertaining to privacy and data protection.We expect that there will continue to be new proposed laws, rules of selfregulatory bodies, regulations and industry standards concerning privacy, dataprotection and information security in the United States, the European Union and other jurisdictions, and we cannot yet determine the impact such future laws,rules, regulations and standards may have on our business. Moreover, existing U.S. federal and various state and foreign privacy and data protectionrelated lawsand regulations are evolving and subject to potentially differing interpretations, and various legislative and regulatory bodies may expand current or enact new lawsand regulations regarding privacy and data protectionrelated matters. Because global laws, regulations and industry standards concerning privacy and datasecurity have continued to develop and evolve rapidly, it is possible that we or our products or platform may not be, or may not have been, compliant with eachsuch applicable law, regulation and industry standard and compliance with such new laws or to changes to existing laws may impact our business and practices,require us to expend significant resources to adapt to these changes, or to stop offering our products in certain countries. These developments could adverselyaffect our business, results of operations and financial condition.We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect ourbusiness.Our ability to implement our business plan successfully depends in part on our ability to build brand recognition using our trademarks, service marks andother proprietary intellectual property, including our names and logos. We currently have no registered trademarks. While we plan to register a number of ourtrademarks; however, no assurance can be given that our trademark applications will be approved. As of December 31, 2022, we own 18 issued patents: six in Europe,four in the U.S., three in each of Russia and Japan and one in each of Canada and Israel which expire between January 20, 2033 and August 18, 2036, and we havetwo additional patent applications in process. As of such date, we do not have any registered trademarks., No assurance can be given that our patent applicationswhich are in process will be approved. If our patent applications are not approved, our ability to expand or develop our business may be negatively affected.Third parties may also oppose our trademark or patent applications, or otherwise challenge our use of the trademarks or patents. In the event that ourtrademarks or patents are successfully challenged, we could be forced to rebrand our goods and services or redesign our technology, which could result in loss ofbrand recognition, and could require us to devote resources to advertising and marketing new brands and products.If our efforts to register, maintain and protect our intellectual property are inadequate, or if any thirdparty misappropriates, dilutes or infringes on ourintellectual property, the value of our brands may be harmed, which could have a material adverse effect on our business and might prevent our brands fromachieving or maintaining market acceptance. We may also face the risk of claims that we have infringed third parties’ intellectual property rights. If third parties claimthat we infringe upon their intellectual property rights, our operating profits could be adversely affected. Any claims of intellectual property infringement, eventhose without merit, could be expensive and time consuming to defend, require us to rebrand our services, if feasible, divert management’s attention and resourcesor require us to enter into royalty or licensing agreements in order to obtain the right to use a thirdparty’s intellectual property.Any royalty or licensing agreements, if required, may not be available to us on acceptable terms or at all. A successful claim of infringement against uscould result in our being required to pay significant damages, enter into costly license or royalty agreements, or stop the sale of certain products or services, any ofwhich could have a negative impact on our operating profits and harm our future prospects.We may face intense competition and expect competition to increase in the future, which could prohibit us from developing a customer base andgenerating revenue.We face significant competition in every aspect of our business. Our competitors include True Fit, Virtusize, EasyMeasure, AR MeasureKit, Smart Measureand 3DLook. These companies may already have an established market in our industry. Most of these companies have significantly greater financial and otherresources than us and have been developing their products and services longer than we have been developing ours.27In addition, some of our larger competitors have substantially broader product offerings and leverage their relationships based on other products orincorporate functionality into existing products to gain business in a manner that discourages potential customers from purchasing our products. Potentialcustomers may also prefer to purchase from their existing solution providers rather than a new solution provider regardless of product performance or features.These larger competitors often have broader product lines and market focus and will therefore not be as susceptible to downturns in a particular market. Conditionsin our market could change rapidly and significantly as a result of technological advancements, partnering by our competitors or continuing market consolidation.New startup companies that innovate and large competitors that are making significant investments in research and development may invent similar or superiorproducts and technologies that compete with our products. In addition, some of our competitors may enter into new alliances with each other or may establish orstrengthen cooperative relationships. Any such consolidation, acquisition, alliance or cooperative relationship could lead to pricing pressure and our loss of anyfuture market share and could result in a competitor with greater financial, technical, marketing, service and other resources, all of which could harm our ability tocompete. Furthermore, organizations may be more willing to incrementally add solutions to their existing infrastructure from competitors than to replace their existinginfrastructure with our products. Any failure to meet and address these factors could harm our business, results of operations and financial condition.Our business operations and future development could be significantly disrupted if we lose key members of our management team.The success of our business continues to depend to a significant degree upon the continued contributions of our senior officers and key employees, bothindividually and as a group. Our future performance will be substantially dependent in particular on our ability to retain and motivate Ronen Luzon, our ChiefExecutive Officer, and certain of our other senior executive officers. The loss of the services of our Chief Executive Officer, senior officers or other key employeescould have a material adverse effect on our business and plans for future development. We have no reason to believe that we will lose the services of any of theseindividuals in the foreseeable future; however, we currently have no effective replacement for any of these individuals due to their experience, reputation in theindustry and special role in our operations. We also do not maintain any key man life insurance policies for any of our employees.If we are able to expand our operations, we may be unable to successfully manage our future growth.Our growth may strain our infrastructure and resources. Any such growth could place increased strain on our management, operational, financial and otherresources, and we will need to train, motivate, and manage employees, as well as attract management, sales, finance and accounting, international, technical, andother professionals. Any failure to expand these areas and implement appropriate procedures and controls in an efficient manner and at a pace consistent with ourbusiness objectives could have a material adverse effect on our business, results of operations and financial condition.Our business operations are conducted in multiple languages and could be disrupted due to miscommunications or translation errors.The success of our business continues to depend on our marketing efforts in the United States, Europe and Israel, each of which is conducted in the locallanguage. Miscommunications or inaccurate foreign language translations could have a material adverse effect on our business operations and financial conditions.Additionally, contracts, communications and complex technical information must be accurately translated into foreign languages.We will continue to incur costs and be subject to various obligations as a result of being a public company, listed in the United States and in Israel.We will continue to incur significant legal, accounting and other expenses as a result of being a public company, listed in the United States and in Israel.Although we will incur costs each year associated with being a publiclytraded company, it is possible that our actual costs of being a publiclytraded company willvary from year to year and may be different than our estimates. In estimating these costs, we take into account expenses related to insurance, legal, accounting andcompliance activities.28Furthermore, the need to maintain the corporate infrastructure demanded of a public company may divert management’s attention from implementing ourgrowth strategy, which could prevent us from improving our business, results of operations and financial condition. We have made, and will continue to make,changes to our internal controls and procedures for financial reporting and accounting systems to meet our reporting obligations as a U.S. publicly traded company.However, the measures we take may not be sufficient to satisfy our obligations as a publicly traded company.Any future or current litigation could have a material adverse impact on our results of operations, financial condition and liquidity.From time to time, we may be subject to litigation, including, among others, potential stockholder derivative actions and class actions. Risks associatedwith legal liability are difficult to assess and quantify, and their existence and magnitude can remain unknown for significant periods of time. Subject to certainexceptions, our Amended and Restated Certificate of Incorporation, or Certificate of Incorporation, and Amended and Restated Bylaws, or Bylaws, require us toindemnify and advance expenses to our officers and directors involved in legal proceedings. To date we have obtained directors and officers’ liability, or D&O,insurance to cover some of the risk exposure for our directors and officers. Such insurance generally pays the expenses (including amounts paid to plaintiffs, fines,and expenses including attorneys’ fees) of officers and directors who are the subject of a lawsuit as a result of their service to us. There can be no assurance that wewill be able to continue to maintain this insurance at reasonable rates or at all, or in amounts adequate to cover such expenses should such a lawsuit occur. WithoutD&O insurance, the amounts we would pay to indemnify our officers and directors should they be subject to legal action based on their service to us could have amaterial adverse effect on our financial condition, results of operations and liquidity. Such lawsuits, and any related publicity, may result in substantial costs and,among other things, divert the attention of management and our employees. An unfavorable outcome in any claim or proceeding against us could have a materialadverse impact on our financial position and results of operations for the period in which the unfavorable outcome occurs, and potentially in future periods. Further,any settlement announced by us may expose us to further claims against us by third parties seeking monetary or other damages which, even if unsuccessful, woulddivert management attention from the business and cause us to incur costs, possibly material, to defend such matters, which could have a material adverse impacton our financial position. See “Legal Proceedings” for more information regarding our involvement in ongoing litigation matters.Federal, state and local or Israeli tax rules may adversely impact our results of operations and financial position.We are subject to federal, state and local taxes in the U.S., as well as local taxes in Israel in respect to our operations in Israel. Although we believe our taxestimates are reasonable, if the Internal Revenue Service or other taxing authority disagrees with the positions we have taken on our tax returns, we could faceadditional tax liability, including interest and penalties. If material, payment of such additional amounts upon final adjudication of any disputes could have a materialimpact on our results of operations and financial position. In addition, complying with new tax rules, laws or regulations could impact our financial condition, andincreases to federal or state statutory tax rates and other changes in tax laws, rules or regulations may increase our effective tax rate. Any increase in our effectivetax rate could have a material impact on our financial results.A significant majority of Orgad’s revenue is from sales of products on Amazon’s U.S. Marketplace and any change, limitation or restriction on ourability to operate on Amazon’s platform or any other marketplace could have a material adverse impact to our business, results of operations, financialcondition and prospects.Orgad, our wholly owned subsidiary, operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com, eBay and others. A substantial percentage of Orgad’s revenue is driven by sales on Amazon’s U.S. marketplace and Orgad is subject toterms of service of Amazon and other maketplaces and various other seller policies and services that apply to third parties selling products on Amazon and othermarketplaces. Generally, a marketplace has the right to terminate or suspend its agreement with Orgad at any time and for any reason. Such marketplace may takeother actions against Orgad such as suspending or terminating a seller account or product listing and withholding payments owed to Orgad indefinitely. Forexample, in July 2022, Amazon deactivated Orgad’s Amazon U.S. store as a result of complaints submitted due to an error in the listed manufacturer of certainproducts on Orgad’s store. Although its account was subsequently reinstated in September 2022, if the deactivation were to occur in the future for a prolongedperiod of time, or if Amazon were to terminate Orgad’s account, this would have a material adverse effect on our business, results of operations, financial conditionand prospects. While Orgad endeavors to materially comply with the terms of services of the marketplaces on which it operates, we can provide no assurance thatthese marketplaces will have the same determination with respect to our compliance.29In addition, Amazon and other marketplaces can make changes to its platform that could require Orgad to change the manner in which it operates, limit itsability to successfully launch new products or increase its costs to operate and such changes could have an adverse effect on our business, results of operations,financial condition and prospects. Examples of changes that could impact us relate to platform fee charges (i.e., selling commissions), exclusivity, inventorywarehouse availability, excluded products and limitations on sales and marketing. Any change, limitation or restriction on our ability to sell on Amazon’s platform orany other marketplace, even if temporary, could have a material impact on our business, results of operations, financial condition and prospects.Orgad also relies on services provided by Amazon’s fulfillment platform, including Prime Certification, which provides for expedited shipping to theconsumer, an important aspect in the buying decision for consumers. For products that Orgad fulfills itself, Orgad is qualified to offer our products for sale withPrime Certification delivery. Any inability to market our products for sale with expedited delivery provided under Prime Certification could have a material impact onour business, results of operations, financial condition and prospects. Failure to remain compliant with the best fulfillment practices on Amazon’s platform couldhave a material impact on our business, results of operations, financial condition and prospects. In addition, due to the COVID19 pandemic, Amazon has changedthe amount of inventory it accepts per product for a period of time. If this were to continue it could cause us to miss sales and/or pay additional shipping costswhich would harm our business operations and financial conditions.Orgad’s business depends on its ability to build and maintain strong product listings on ecommerce platforms. Orgad may not be able to maintain andenhance our product listings if it receives unfavorable customer complaints, negative publicity or otherwise fails to live up to consumers’ expectations, whichcould materially adversely affect our business, results of operations and growth prospects.Maintaining and enhancing Orgad’s product listings is critical in expanding and growing its business. However, a significant portion of Orgad’s perceivedperformance to the customer depends on third parties outside of its control, including suppliers and thirdparty delivery agents as well as online retailers such asAmazon and eBay. Because Orgad’s agreements with its online retail partners are generally terminable at will, it may be unable to maintain these relationships, andour results of operations could fluctuate significantly from period to period. Because Orgad relies on third parties to deliver its products, it is subject to shippingdelays or disruptions caused by inclement weather, natural disasters, labor activism, health epidemics or bioterrorism. It may also experience shipping delays ordisruptions due to other carrierrelated issues relating to their own internal operational capabilities. Further, Orgad relies on the business continuity plans of thesethird parties to operate during pandemics, like the COVID19 pandemic, and it has limited ability to influence their plans, prevent delays, and/or cost increases due toreduced availability and capacity and increased required safety measures.Customer complaints or negative publicity about its products, delivery times, or marketing strategies, even if not accurate, especially on blogs, social mediawebsites and thirdparty market sites, could rapidly and severely diminish consumer view of Orgad’s product listings and result in harm to its brand. Customers mayalso make safetyrelated or other types of claims regarding products sold through our online retail partners, such as Amazon, which may result in an online retailpartner removing the product from its marketplace. We also use and rely on other services from third parties, such as our telecommunications services, and thoseservices may be subject to outages and interruptions that are not within our control.Orgad faces risks related to successfully optimizing and operating its fulfillment and customer service operations.Failures to adequately predict customer demand or otherwise optimize and operate its fulfillment and customer service operations successfully from time totime result in excess or insufficient fulfillment or customer service capacity, increased costs, and impairment charges, any of which could materially harm ourbusiness. As Orgad continues to add fulfillment and customer service capability or add new businesses with different requirements, its fulfillment and customerservice operations become increasingly complex and operating them becomes more challenging. There can be no assurance that Orgad will be able to operate ouroperations effectively.30In addition, failure to optimize inventory in our fulfillment operations increases net shipping cost by requiring longzone or partial shipments. Orgad may beunable to adequately staff its fulfillment and customer service operations. Orgad’s failure to properly handle such inventory or to accurately forecast productdemand may result in it being unable to secure sufficient storage space or to optimize its fulfillment operations or cause other unexpected costs and other harm toour business and reputation.Orgad relies on a limited number of shipping companies to deliver inventory to it and completed orders to our customers. The inability to negotiateacceptable terms with these companies or performance problems or other difficulties experienced by these companies could negatively impact our operating resultsand customer experience. In addition, Orgad’s ability to receive inbound inventory efficiently and ship completed orders to customers also may be negativelyaffected by natural or manmade disasters, extreme weather, geopolitical events and security issues, labor or trade disputes, and similar events.The variability in Orgad’s retail business places increased strain on its operations.Demand for Orgad’s product listings can fluctuate significantly for many reasons, including as a result of seasonality, promotions, product launches, orunforeseeable events, such as in response to natural or manmade disasters, extreme weather, or geopolitical events. For example, Orgad expects a disproportionateamount of our retail sales to occur during our fourth quarter. Failure to stock or restock popular products in sufficient amounts such that Orgad fails to meetcustomer demand could significantly affect our revenue and our future growth. If too many customers access the websites on which Orgad engages in onlineretailing within a short period of time due to increased demand, Orgad may experience system interruptions that make the websites unavailable or prevent us fromefficiently fulfilling orders, which may reduce the volume of goods its offers or sell and the attractiveness of its products. In addition, Orgad may be unable toadequately staff for fulfillment of orders and customer service during these peak periods and delivery and other fulfillment companies and customer service cosourcers may be unable to meet the seasonal demand.Our business is subject to the risks of earthquakes, fire, power outages, floods, health risks and other catastrophic events, and to interruption by manmade problems such as terrorism.Natural disasters, such as fire or floods, a significant power outage, telecommunications failure, terrorism, an armed conflict, cyberattacks, epidemics andpandemics such as COVID19, or other geopolitical unrest could affect our supply chain, manufacturers, logistics providers, channel partners, or endcustomers orthe economy as a whole and such disruption could impact us and the shipments and sales. These risks may be further increased if the disaster recovery plans for usand our suppliers prove to be inadequate. To the extent that any of the above should result in delays or cancellations of customer orders, the loss of customers, orthe delay in the deployment or shipment of products, our business, financial condition, and operating results would be adversely affected.For example, on January 2, 2023, Orgad experienced a fire at its warehouse in Israel. We are not aware of any casualties or injuries associated with the fire.We shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incidentdid not affect the future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of thisincident on the other parties that were involved in the incident (lessor and others that leased properties near the warehouse).Our business could be negatively impacted by unsolicited takeover proposals, by shareholder activism or by proxy contests relating to the election ofdirectors or other matters.Our business could be negatively affected as a result of an unsolicited takeover proposal, by shareholder activism or a proxy contest. During 2021, anactivist shareholder sought to make changes to our board of directors, among other matters, which ultimately resulted in us entering into a settlement agreementwith the activist shareholder and another shareholder, and for which considerable costs were incurred and absorbed significant time and attention by managementand the board of directors. A future proxy contest, unsolicited takeover proposal, or other shareholder activism relating to the election of directors or other matterswould most likely require us to incur significant legal fees and proxy solicitation expenses and require significant time and attention by management and our Boardof Directors. The potential of a proxy contest, unsolicited takeover proposal, or other shareholder activism could interfere with our ability to execute our strategicplan, give rise to perceived uncertainties as to our future direction, result in the loss of potential business opportunities or make it more difficult to attract and retainqualified personnel, any of which could materially and adversely affect our business and operating results.31Environmental, social and corporate governance (ESG) issues, including those related to climate change and sustainability, may have an adverseeffect on our business, financial condition and results of operations and damage our reputation.There is an increasing focus from certain investors, customers, consumers, employees and other stakeholders concerning ESG matters. Additionally, publicinterest and legislative pressure related to public companies’ ESG practices continue to grow. If our ESG practices fail to meet regulatory requirements or investor,customer, consumer, employee or other shareholders’ evolving expectations and standards for responsible corporate citizenship in areas including environmentalstewardship, support for local communities, Board of Director and employee diversity, human capital management, employee health and safety practices, productquality, supply chain management, corporate governance and transparency, our reputation, brand and employee retention may be negatively impacted, and ourcustomers and suppliers may be unwilling to continue to do business with us.Customers, consumers, investors and other shareholders are increasingly focusing on environmental issues, including climate change, energy and wateruse, plastic waste and other sustainability concerns. Concern over climate change may result in new or increased legal and regulatory requirements to reduce ormitigate impacts to the environment. Changing customer and consumer preferences or increased regulatory requirements may result in increased demands orrequirements. Complying with these demands or requirements could cause us to incur additional manufacturing, operating or product development costs.If we do not adapt to or comply with new regulations, including the SEC’s published proposed rules that would require companies to provide significantlyexpanded climaterelated disclosures in their periodic reporting, which may require us to incur significant additional costs to comply and impose increased oversightobligations on our management and board of directors, or fail to meet evolving investor, industry or stakeholder expectations and concerns regarding ESG issues,investors may reconsider their capital investment in our company, we may become subject to penalties, and customers and consumers may choose to stoppurchasing our products, if approved for commercialization, which could have a material adverse effect on our reputation, business or financial condition.Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions andadverse developments with respect to financial institutions and associated liquidity risk.Our business depends on the economic health of the global economies. If the conditions in the global economies remain uncertain or continue to bevolatile, or if they deteriorate, including as a result of the impact of military conflict, such as the war between Russia and Ukraine, terrorism or other geopoliticalevents, our business, operating results and financial condition may be materially adversely affected. Economic weakness, inflation and increases in interest rates,limited availability of credit, liquidity shortages and constrained capital spending have at times in the past resulted, and may in the future result, in challenging anddelayed sales cycles, slower adoption of new technologies and increased price competition, and could negatively affect our ability to forecast future periods, whichcould result in an inability to satisfy demand for our products and a loss of market share.In addition, increases in inflation raise our costs for commodities, labor, materials and services and other costs required to grow and operate our business,and failure to secure these on reasonable terms may adversely impact our financial condition. Additionally, increases in inflation, along with the uncertaintiessurrounding COVID19, geopolitical developments and global supply chain disruptions, have caused, and may in the future cause, global economic uncertainty anduncertainty about the interest rate environment, which may make it more difficult, costly or dilutive for us to secure additional financing. A failure to adequatelyrespond to these risks could have a material adverse impact on our financial condition, results of operations or cash flows.More recently, the closures of SVB and Signature Bank and their placement into receivership with the FDIC created bankspecific and broader financialinstitution liquidity risk and concerns. Although the Department of the Treasury, the Federal Reserve and the FDIC jointly released a statement that depositors atSVB and Signature Bank would have access to their funds, even those in excess of the standard FDIC insurance limits, under a systemic risk exception, futureadverse developments with respect to specific financial institutions or the broader financial services industry may lead to marketwide liquidity shortages, impair theability of companies to access nearterm working capital needs, and create additional market and economic uncertainty. There can be no assurance that future creditand financial market instability and a deterioration in confidence in economic conditions will not occur. Our general business strategy may be adversely affected byany such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions. If the current equityand credit markets deteriorate, or if adverse developments are experienced by financial institutions, it may cause shortterm liquidity risk and also make anynecessary debt or equity financing more difficult, more costly, more onerous with respect to financial and operating covenants and more dilutive. Failure to secureany necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stockprice and could require us to alter our operating plans. In addition, there is a risk that one or more of our service providers, financial institutions, manufacturers,suppliers and other partners may be adversely affected by the foregoing risks, which could directly affect our ability to attain our operating goals on schedule andon budget.Our business may be adversely affected by the impact of any renewed outbreak of the COVID19 pandemic.Public health epidemics or outbreaks could adversely impact our business. In late 2019, a novel strain of COVID19, also known as coronavirus, wasreported in Wuhan, China. While initially the outbreak was largely concentrated in China, it spread worldwide. Many countries around the world, including in Israel,implemented significant governmental measures to control the spread of the virus, including temporary closure of businesses, severe restrictions on travel and themovement of people, and other material limitations on the conduct of business. These measures haven historically resulted in work stoppages and other disruptions.If there is a resurgence of the COVID19 pandemic, this could adversely impact our operations, including among others, our sales and marketing efforts and ourability to raise additional funds, and accordingly, the impact of COVID19 could have an adverse impact on our business and our financial results.32Risks Related to Our Operations in RussiaRussia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.In addition to our Israel operations, we have operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia and we engage two software developers through a third party who are based in Ukraine. On February 24,2022, Russia invaded Ukraine. The outbreak of hostilities between the two countries could result in more widespread conflict and could have a severe adverse effecton the region.Following Russia’s actions, various countries, including the U.S., Canada, the United Kingdom, Germany and France, as well as the European Union,issued broadranging economic sanctions against Russia. Such sanctions included, among other things, a prohibition on doing business with certain Russiancompanies, officials and oligarchs; a commitment by certain countries and the European Union to remove selected Russian banks from the Society for WorldwideInterbank Financial Telecommunications (SWIFT) electronic banking network that connects banks globally; and restrictive measures to prevent the Russian CentralBank from undermining the impact of the sanctions. In response to sanctions, the Russian Central Bank raised its interest rates and banned sales of local securitiesby foreigners. Russia may take additional counter measures or retaliatory actions in the future. While diplomatic efforts have been ongoing, the conflict betweenRussia and Ukraine is currently unpredictable and has the potential to result in broadened military actions. The duration of ongoing hostilities and such sanctionsand related events cannot be predicted. Uncertainty as to future relations between Russia and the U.S. and other countries in the west, or between Russia and othereastern European countries, may have a negative impact on our operations.Such international sanctions and potential responses to such sanctions, including those that may limit or restrict transfer funds into Russia, may in thefuture significantly affect our ability to conduct our activities in Russia including paying our personnel. To date, the conflict has had minimal impact on operations .Nevertheless, we have no way to predict the progress or outcome of the situation in Ukraine, as the conflict and governmental reactions are rapidly developing andbeyond our control. Prolonged unrest, intensified military activities or more extensive sanctions impacting the region could have a material adverse effect on ouroperations, results of operations, financial condition, liquidity and business outlook.Political, military conditions or other risks in Russia could adversely affect our business.Russia is a federative state consisting of 85 constituent entities, or “subjects.” The Russian Constitution reserves some governmental powers for theRussian Government, some for the subjects and some for areas of joint competence. In addition, eight “federal districts” (“federal’nye okruga”), which are overseenby a plenipotentiary representative of the President, supplement the country’s federal system. The delineation of authority among and within the subjects is, inmany instances, unclear and contested, particularly with respect to the division of tax revenues and authority over regulatory matters. For these reasons, theRussian political system is vulnerable to tension and conflict between federal, subject and local authorities. This tension creates uncertainties in the operatingenvironment in Russia, which may prevent us from carrying out our strategy effectively. The risks associated with these events or potential events could materiallyand adversely affect the investment environment and overall consumer and entrepreneurial confidence in Russia, and our business, prospects, financial condition,hiring ability, and results of operations could be materially and adversely affected.Furthermore, high levels of corruption reportedly exist in Russia, including the bribing of officials for the purpose of initiating investigations bygovernment agencies. Corruption and other illegal activities could disrupt our ability to conduct our business effectively, and claims that the we are involved in suchcorruption or illegal activities could generate negative publicity, of which could harm our development, financial condition, results of operations or prospects.Economic and other risks in Russia could adversely affect our business.Operating a business in an emerging market such as Russia can involve a greater degree of risk than operating a business in more developed markets.Over the last two decades, the Russian economy has experienced or continues to experience at various times:●significant volatility in its GDP;33●the impact of international sanctions;●high levels of inflation;●increases in, or high, interest rates;●sudden price declines in oil and other natural resources;●instability in the local currency market;●budget deficits;●the continued operation of lossmaking enterprises due to the lack of effective bankruptcy proceedings;●capital flight; and●significant increases in poverty rates, unemployment and underemployment.The Russian economy has been subject to abrupt downturns in the past, including as a result of the invasion of Ukraine, global financial crisis, and, as anemerging market, remains particularly vulnerable to further external shocks and any future fluctuations in the global markets. Any further deterioration in the generaleconomic conditions in Russia (whether or not as a result of the events mentioned above) could have a material adverse effect on the Russian economy and mayresult in hiring and operational difficulties, as well as potential flight of human capital, which could have a material adverse effect on our business, productdevelopment and results of operations.Legal risks in Russia could materially adversely affect our operations and Russian tax legislation is subject to frequent change.Among the risks of the Russian legal system are: inconsistencies among laws, presidential decrees, and government and ministerial orders and resolutions;conflicting local, regional and federal laws and regulations; the untested nature of the independence of the judiciary and its sensitivity to economic or politicalinfluences; substantial gaps in the regulatory structure due to the delay or absence of implementing legislation; a high degree of discretion on the part ofgovernmental authorities; reported corruption within governmental entities and other governmental authorities; the relative inexperience of judges and courts ininterpreting laws applicable to complex transactions; and the unpredictability of enforcement of foreign judgments and foreign arbitral awards. Many Russian lawsand regulations are construed in a way that provides for significant administrative discretion in application and enforcement. Unlawful, selective or arbitrary actionsof the Russian Government have reportedly included the denial or withdrawal of licenses, sudden and unexpected tax audits, criminal prosecutions, and civil claims.Any of the above events may have a material adverse effect on our product development and results of operations.Despite certain improvements in the taxation system made by the Russian Government over the past decade, Russian tax legislation is still subject tofrequent change, varying interpretations, and inconsistent and selective enforcement. There are currently no clear rules for distinguishing between lawful taxoptimization and tax evasion. In addition, Russian tax laws do not contain detailed rules on the taxation in Russia of foreign companies. As such, taxpayers oftenhave to resort to court proceedings to defend their position against the Russian tax authorities. However, in the absence of consistent court practice or bindingprecedents, there is inconsistency amongst court decisions. Further, the possibility exists that the Russian Federation would impose arbitrary or onerous taxes andpenalties in the future, which could have a material adverse effect on our product development and results of operations.34Risks Related to Our Operations In IsraelOur headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.Our headquarters and most of our operations are located in central Israel and our key employees, officers and directors are residents of Israel. Accordingly,political, economic and military conditions in Israel and the surrounding region may directly affect our business. Since the establishment of the State of Israel in1948, a number of armed conflicts have taken place between Israel and its Arab neighbors. Any hostilities involving Israel or the interruption or curtailment of tradewithin Israel or between Israel and its trading partners could adversely affect our operations and results of operations and could make it more difficult for us to raisecapital. During the winter of 2008, winter of 2012 and the summer of 2014, Israel was engaged in an armed conflict with Hamas, a militia group and political partyoperating in the Gaza Strip, and during the summer of 2006, Israel was engaged in an armed conflict with Hezbollah, a Lebanese Islamist Shiite militia group andpolitical party. Israel faces political tension with respect to its relationships with Turkey, Iran and certain Arab neighbor countries. In addition, recent conflictsinvolved missile strikes against civilian targets in various parts of Israel, and negatively affected business conditions in Israel. Recent political uprisings and socialunrest in various countries in the Middle East and North Africa are affecting the political stability of those countries. This instability may lead to deterioration of thepolitical relationships that exist between Israel and these countries, and have raised concerns regarding security in the region and the potential for armed conflict.Any armed conflicts, terrorist activities or political instability in the region could adversely affect business conditions and could harm our results of operations. Forexample, any major escalation in hostilities in the region could result in a portion of our employees and service providers being called up to perform military duty foran extended period of time. Parties with whom we do business have sometimes declined to travel to Israel during periods of heightened unrest or tension, forcing usto make alternative arrangements when necessary. In addition, the political and security situation in Israel may result in parties with whom we have agreementsinvolving performance in Israel claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions insuch agreements. Any future deterioration in the political and security situation in Israel will negatively impact our business.Our commercial insurance does not cover losses that may occur as a result of events associated with the security situation in the Middle East. Althoughthe Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that thisgovernment coverage will be maintained. Any losses or damages incurred by us could have a material adverse effect on our business. Any armed conflicts orpolitical instability in the region would likely negatively affect business conditions and could harm our results of operations.Further, in the past, the State of Israel and Israeli companies have been subjected to an economic boycott. Several countries still restrict business with theState of Israel and with Israeli companies. These restrictive laws and policies may have an adverse impact on our operating results, financial condition or theexpansion of our business.The legislative power of the State resides in the Knesset, a unicameral parliament that consists of 120 members elected by nationwide voting under asystem of proportional representation. Israel’s most recent general elections were held on April 9, 2019, September 17, 2019, March 2, 2020 and November 1, 2022.The uncertainty surrounding the results of the recent elections may continue. Actual or perceived political instability in Israel or any negative changes in thepolitical environment, may individually or in the aggregate adversely affect the Israeli economy and, in turn, our business, financial condition, results of operationsand prospects.Some of our employees are obligated to perform military reserve duty in Israel.Many Israeli citizens, including our employees are obligated to perform one month, and in some cases more, of annual military reserve duty until they reachthe age of 40 (or older, for reservists with certain occupations) and, in the event of a military conflict, may be called to active duty. In response to increases interrorist activity, there have been periods of significant callups of military reservists. It is possible that there will be military reserve duty callups in the future. Ouroperations could be disrupted by such callups. Such disruption could materially adversely affect our business, results of operations and financial condition.35It may be difficult to enforce a nonIsraeli judgment against the Company or its officers and directors.The operating subsidiary of ours is incorporated in Israel. All of our executive officers and directors are not residents of the United States, and asubstantial portion of our assets and the assets of our executive officers and directors are located outside the United States. Therefore, a judgment obtained againstus, or any of these persons, including a judgment based on the civil liability provisions of the U.S. federal securities laws, may not be collectible in the United Statesand may not necessarily be enforced by an Israeli court. It also may be difficult to affect service of process on these persons in the United States or to assert U.S.securities law claims in original actions instituted in Israel. Additionally, it may be difficult for an investor, or any other person or entity, to initiate an action withrespect to U.S. securities laws in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of U.S. securities laws reasoning that Israel is not themost appropriate forum in which to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law isapplicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law often involves the testimony of expert witnesses, which can be a timeconsuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel that addresses the mattersdescribed above. As a result of the difficulty associated with enforcing a judgment against us in Israel, it may be impossible to collect any damages awarded byeither a U.S. or foreign court.Our international operations could expose us to additional risks, including exchange rate fluctuations, legal regulations and political or economicinstability that could harm our business and operating results.Our international operations expose us to the following risks which may have a material adverse effect on our business and operating results:●devaluations and fluctuations in currency exchange rates including fluctuations between the U.S. dollar and the NIS and the Russian Ruble;●costs of compliance with local laws, including labor laws and intellectual property laws;●compliance with domestic and foreign government policies, including compliance with Israeli securities laws and TASE;●changes in trade regulations and procedures affecting approval, production, pricing, marketing, reimbursement for and access to, our products;●compliance with applicable foreign anticorruption laws, antitrust/competition laws, antiBoycott Israel law and antimoney laundering laws; and●economic and geopolitical developments and conditions, including ongoing instability in global economies and financial markets, international hostilities,acts of terrorism and governmental reactions, inflation, outbreaks of contagious disease (e.g., the COVID19 pandemic) and military and political alliances.Risks Related to Our Common StockA more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.Although our common stock is listed on the Nasdaq Capital Market, it has only been traded on the Nasdaq Capital Market since July 25, 2016. There hasbeen relatively limited trading volume in the market for our common stock, and a more active, liquid public trading market may not develop or may not be sustained.Limited liquidity in the trading market for our common stock may adversely affect a stockholder’s ability to sell its shares of common stock at the time it wishes tosell them or at a price that it considers acceptable. If a more active, liquid public trading market does not develop, we may be limited in our ability to raise capital byselling shares of common stock and our ability to acquire other companies or assets by using shares of our common stock as consideration. In addition, if there is athin trading market or “float” for our stock, the market price for our common stock may fluctuate significantly more than the stock market as a whole. Without a largefloat, our common stock would be less liquid than the stock of companies with broader public ownership and, as a result, the trading prices of our common stockmay be more volatile and it would be harder for you to liquidate any investment in our common stock. Furthermore, the stock market is subject to significant priceand volume fluctuations, and the price of our common stock could fluctuate widely in response to several factors, including:●our quarterly or annual operating results;●changes in our earnings estimates;●investment recommendations by securities analysts following our business or our industry;●additions or departures of key personnel;●changes in the business, earnings estimates or market perceptions of our competitors;36●our failure to achieve operating results consistent with securities analysts’ projections;●changes in industry, general market or economic conditions;●announcements of legislative or regulatory changes; and●natural disasters (including for example, the recent fire in the Orgad warehouse) and political and economic instability, including wars, terrorism, politicalunrest, results of certain elections and votes, emergence of a pandemic, or other widespread health emergencies (or concerns over the possibility of suchan emergency, including for example, the recent the COVID19 pandemic), boycotts, adoption or expansion of government trade restrictions, and otherbusiness restrictions.The stock market has experienced extreme price and volume fluctuations in recent years that have significantly affected the quoted prices of the securitiesof many companies. The changes often appear to occur without regard to specific operating performance. The price of our common stock could fluctuate basedupon factors that have little or nothing to do with us and these fluctuations could materially reduce our stock price.Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.If any of our shareholders were to decide to sell large amounts of stock over a short period of time (presuming such sales were permitted) such sales couldcause the market price of our common stock to drop significantly, even if our business is doing well. Further, the market price of our common stock could decline as aresult of the perception that such sales could occur. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equitysecurities in the future at a time and price that we deem appropriate.Our securities are traded on more than one market which may result in price variations.Our securities have been trading on the Nasdaq Capital Market since July 2016 and on TASE since September 2005. Trading in our securities on suchexchanges occurs in different currencies (U.S. dollars on the Nasdaq Capital Market and NIS on the TASE), and at different times (due to different time zones,trading days and public holidays in the United States and Israel). The trading prices of our securities on the two exchanges may differ due to the foregoing andother factors. Any decrease in the price of our shares on the TASE could cause a decrease in the trading price of our shares on the Nasdaq Capital Market and viceversa.We are a smaller reporting company and, as a result of the reduced disclosure and governance requirements applicable to such companies, ourcommon stock may be less attractive to investors.We are a smaller reporting company, (i.e. a company with “public float” held by nonaffiliates with a market value of less than $250 million) and we areeligible to take advantage of certain exemptions from various reporting requirements applicable to other public companies. We have elected to adopt these reduceddisclosure requirements. We cannot predict if investors will find our common stock less attractive as a result of our taking advantage of these exemptions. If someinvestors find our common stock less attractive as a result of our choices, there may be a less active trading market for our common stock and our stock price may bemore volatile.We do not expect to pay any cash dividends in the foreseeable future.We have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our board of directors deems relevant. Investors should not purchase our common stock expecting to receive cash dividends. Because we do notpay dividends, and there may be limited trading, investors may not have any manner to liquidate or receive any payment on their investment. Therefore, our failureto pay dividends may cause investors to not see any return on investment even if we are successful in our business operations. In addition, because we do not paydividends we may have trouble raising additional funds, which could affect our ability to expand our business operations.37UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2022☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ________ to _________Commission file number 00137370MY SIZE, INC.(Exact name of registrant as specified in charter)Delaware510394637(State or jurisdiction ofIncorporation or organization)I.R.S EmployerIdentification No.4 Hayarden, POB 1026, Airport City, Israel7010000(Address of principal executive offices)(Zip code)+9723 6009030(Registrant’s telephone number, including area code)Securities registered pursuant to Section 12(b) of the Act:Title of each classTrading Symbol(s)Name of Each Exchange on Which RegisteredCommon Stock, par value $0.001 per shareMYSZThe Nasdaq Capital MarketSecurities registered pursuant to Section 12(g) of the Act: None.Indicate by check mark whether the registrant is a wellknown seasoned issuer as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes☒ No ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer, a smaller reporting company, or an emerginggrowth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 of theExchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☒Smaller Reporting Company☒Emerging Growth Company☐If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revisedfinancial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b2 of the Exchange Act) Yes ☐No☒Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control overfinancial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflectthe correction of an error to previously issued financial statements. ☐Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by anyof the registrant’s executive officers during the relevant recovery period pursuant to §240.10D1(b). ☐The aggregate market value of voting and nonvoting common equity held by nonaffiliates of the registrant as of June 30, 2022, the last business day of theregistrant’s most recently completed second fiscal quarter, was approximately $25,551,906.Number of shares of common stock outstanding as of March 31, 2023 was 2,446,780.Documents Incorporated by Reference: None.Table of ContentsPart IItem 1.Business2Item 1A.Risk Factors18Item 1B.Unresolved Staff Comments41Item 2.Properties41Item 3.Legal Proceedings41Item 4.Mine Safety Disclosures42Part IIItem 5.Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities43Item 6.Selected Financial Data43Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations43Item 7A.Quantitative and Qualitative Disclosures about Market Risk50Item 8.Financial Statements and Supplementary DataF1Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure51Item 9A.Controls and Procedures51Item 9B.Other Information51Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.51Part IIIItem 10.Directors, Executive Officers and Corporate Governance52Item 11.Executive Compensation57Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters60Item 13.Certain Relationships and Related Transactions, and Director Independence62Item 14.Principal Accounting Fees and Services65Part IVItem 15.Exhibits, Financial Statement Schedules66Signatures69iPART IIn this Annual Report on Form 10K, unless the context requires otherwise, the terms “we,” “our,” “us,” or “the Company” refer to MySize, Inc., a Delawarecorporation, and its subsidiaries, including MySize Israel 2014 Ltd. My Size LLC, Orgad International Marketing Ltd., or Orgad, and Naiz Bespoke Technologies, S.L,or Naiz, taken as a whole.References to “U.S. dollars” and “$” are to currency of the United States of America, and references to “NIS” are to New Israeli Shekels. Unless otherwiseindicated, U.S. dollar translations of NIS amounts presented in this Annual Report on Form 10K for the year ended on December 31, 2022 are translated using therate of NIS 3.358 to $1.00.All information in this Annual Report on Form 10K relating to shares or price per share reflects the 1for25 reverse stock split effected by us on December8, 2022.CAUTIONARY NOTE ON FORWARDLOOKING STATEMENTSThis Annual Report on Form 10K contains certain forwardlooking statements within the meaning of Section 27A of the Securities Act and Section 21E ofthe Exchange Act. Any statements in Annual Report on Form 10K about our expectations, beliefs, plans, objectives, assumptions or future events or performanceare not historical facts and are forwardlooking statements. These statements are often, but not always, made through the use of words or phrases such as“believe,” “will,” “expect,” “anticipate,” “estimate,” “intend,” “plan” and “would.” For example, statements concerning financial condition, possible or assumedfuture results of operations, growth opportunities, industry ranking, plans and objectives of management, markets for our common stock and future managementand organizational structure are all forwardlooking statements. Forwardlooking statements are not guarantees of performance. They involve known and unknownrisks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to differ materially from any results, levels ofactivity, performance or achievements expressed or implied by any forwardlooking statement.Any forwardlooking statements are qualified in their entirety by reference to the risk factors discussed throughout this Annual Report on Form 10K. Someof the risks, uncertainties and assumptions that could cause actual results to differ materially from estimates or projections contained in the forwardlookingstatements include but are not limited to:●our history of losses and needs for additional capital to fund our operations and our inability to obtain additional capital on acceptable terms, or at all;●risks related to our ability to continue as a going concern;●the new and unproven nature of the measurement technology markets;●our ability to achieve customer adoption of our products;●our ability to realize the benefits of our acquisitions of Orgad and Naiz;●our dependence on assets we purchased from a related party;●our ability to enhance our brand and increase market awareness;●our ability to introduce new products and continually enhance our product offerings;●the success of our strategic relationships with third parties;●information technology system failures or breaches of our network security;●competition from competitors;●our reliance on key members of our management team;●current or future litigation;●current or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated liquidityrisk; and●the impact of the political and security situation in Israel on our business.1The foregoing list sets forth some, but not all, of the factors that could affect our ability to achieve results described in any forwardlooking statements.You should read this Annual Report on Form 10K and the documents that we reference herein and have filed as exhibits to the Annual Report on Form 10K,completely and with the understanding that our actual future results may be materially different from what we expect. You should assume that the informationappearing in this Annual Report on Form 10K is accurate as of the date hereof. Because the risk factors referred to in this Annual Report on Form 10K, could causeactual results or outcomes to differ materially from those expressed in any forwardlooking statements made by us or on our behalf, you should not place unduereliance on any forwardlooking statements.Further, any forwardlooking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forwardlookingstatement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. New factors emergefrom time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extentto which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements. We qualify all ofthe information presented in this Annual Report on Form 10K, and particularly our forwardlooking statements, by these cautionary statements.ITEM 1. BUSINESSOverviewWe are an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile phone or through MySizeID Widget: a simple questionnaire which uses a database collected over the years.MySizeID syncs the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and only presents itemsfor purchase that match their measurements to ensure a correct fit.We are positioning ourselves as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empower brand design teams, which are designed to increase endconsumer satisfaction, contributing to a sustainable world and reduce operation costs.Recent DevelopmentsOrgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,602 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.2The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz, a limitedliability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.3The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Warehouse FireOn January 2, 2023, Orgad experienced a fire at its warehouse in Israel. we are not aware of any casualties or injuries associated with the fire. We shiftedOrgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incident did not affectthe future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of this incident on the otherparties that were involved in the incident (lessor and others that leased properties near the warehouse).January 2023 FinancingOn January 10, 2023, we entered into a securities purchase agreement, or the RD Purchase Agreement, pursuant to which we agreed to sell and issue in theRD Offering an aggregate of 162,000 of our shares of common stock, or the RD Shares, and prefunded warrants, or the Prefunded Warrants, to purchase up to279,899 shares of common stock and, in a concurrent private placement, unregistered warrants to purchase up to 883,798 shares of common stock, or the RDWarrants, consisting of Series A warrants, or Series A Warrants, to purchase up to 441,899 shares of common stock and Series B warrants, or Series B Warrants, topurchase up to 441,899 shares of common stock, at an offering price of $3.055 per RD Share and associated Series A and Series B Warrants and an offering price of$3.054 per Prefunded Warrant and associated Series A and Series B Warrants.4In addition, we entered into a securities purchase agreement, or the PIPE Purchase Agreement, and together with the RD Purchase Agreement, thePurchase Agreements, pursuant to which we agreed to sell and issue in the PIPE Offering an aggregate of up to 540,098 unregistered Prefunded Warrants andunregistered warrants to purchase up to an aggregate of 1,080,196 shares of common stock, or the PIPE Warrants and together with the RD Warrants, the Warrants,consisting of Series A Warrants to purchase up to 540,098 shares of common stock and Series B Warrants to purchase up to 540,098 shares of common stock at anoffering price of $3.054 per Prefunded Warrant and associated Series A and Series B Warrants.The Prefunded Warrants are immediately exercisable at an exercise price of $0.001 per share and will not expire until exercised in full. The Warrants areimmediately exercisable upon issuance at an exercise price of $2.805 per share, subject to adjustment as set forth therein. The Series A Warrants have a term of fiveand onehalf years from the date of issuance and the Series B Warrants have a term of 28 months from the date of issuance. The Warrants may be exercised on acashless basis if there is no effective registration statement registering the shares underlying the warrants.In connection with the PIPE Purchase Agreement, we entered into a registration rights agreement, or the Registration Rights Agreement. Pursuant to theRegistration Rights Agreement, we are required to file a resale registration statement, or the Registration Statement, with the Securities and Exchange Commission, orthe SEC, to register for resale the shares issuable upon exercise of the unregistered Prefunded Warrants and the Series A and Series B Warrants, within 20 days ofthe signing date of the PIPE Purchase Agreement, or the Signing Date, and to have such Registration Statement declared effective within 60 days after the SigningDate in the event the Registration Statement is not reviewed by the SEC, or 90 days of the Signing Date in the event the Registration Statement is reviewed by theSEC. we will be obligated to pay certain liquidated damages if we fail to maintain the effectiveness of the Registration Statement.The Purchase Agreements and the Registration Rights Agreements also contain representations, warranties, indemnification and other provisionscustomary for transactions of this nature. In addition, subject to limited exceptions, the Purchase Agreements provide that for a period of one year following theclosing of the Offerings, we will not effect or enter into an agreement to effect a “variable rate transaction” as defined in the Purchase Agreements.Aggregate gross proceeds to the Company in respect of the Offerings was approximately $3.0 million, before deducting fees payable to the placement agentand other offering expenses payable by the Company.We also entered into a letter agreement, or the Engagement Agreement, with H.C. Wainwright & Co., LLC, or Wainwright, pursuant to which Wainwrightagreed to serve as the exclusive placement agent for the Company in connection with the Offerings. We paid Wainwright a cash placement fee equal to 7% of theaggregate gross proceeds raised in the Offerings, a management fee of 1% of the aggregate gross proceeds raised in the Offerings, a nonaccountable expenseallowance of $85,000 and clearing fees of $15,950. Wainwright also received placement agent warrants, or the Placement Agent Warrants, with substantially the sameterms as the Series A Warrants issued in the Offering in an amount equal to 7% of the aggregate number of Shares and Prefunded Warrants sold in the Offerings, or68,740 shares, at an exercise price of $3.8188 per share and a term expiring on January 10, 2028.Our SolutionOur cloudbased software platform provides highly accurate sizing and measurement with broad applications including the online fashion/apparel industry,logistics and courier services and home DIY. Currently, we are mainly focusing on the ecommerce fashion/apparel industry. This proprietary technology is driven byseveral patented algorithms which are able to calculate and record measurements in a variety of novel ways. Although specific functionality varies by product, webelieve that our core solutions address the need for highly accurate measurements in a variety of consumer friendly, every day uses.5We have developed three products, MySizeID for the fashion/apparel industry, BoxSize for the logistics and courier services market and SizeUp for thehome DIY market.●MySizeID enables shoppers to generate highly accurate measurements of their body to find proper fitting clothes and accessories, through the use ofour application on their mobile phone or through a simple questionnaire if the user decides not to download the application. MySizeID syncs the user’smeasurement data to a sizing chart and presents items for purchase that match their measurements to ensure a correct fit. MySizeID is available forlicense by retailers and accessable by consumers through a web page.●BoxSize enables customers to quickly and easily measure the size and volume of a parcel to accurately calculate shipping fees. It also offers shippingcompanies a variety of precise logistical data for more efficiently managing their supply chain, providing them with an accurate way to compare thephysical package with what is in the shipping manifest. BoxSize solution is available for license on both iOS and Android operating systems. BoxSizeis available on the Honeywell Marketplace and in August 2019 was approved for Honeywell’s Independent Software Vendor Program, and MySize wasgranted an independent software vendor (ISV) status on the Zebra Technologies and on DataLogic platforms.●SizeUp is a digital tape measure that allows users to measure length, width and height of a surface by moving their smartphone from point to point ofan object or space. SizeUp is a valueadd for DIY and home improvement retailers whose customers struggle to find the appropriately sized items (likeblinds or curtains) for their homes or projects due to inaccurate measurements. SizeUp also is designed to replace rulers, tape measures and othermeasuring tools used for DIY projects. SizeUp is available for consumer download on both iOS and Android operating systems.The following are some select key features of our solutions:●Integration Capability. We design our solutions to be flexible and configurable, allowing our clients to match their use of our algorithms and softwarewith their specific business processes and workflows. Our platform has been organically developed from a common code base, data structure and userinterface, providing a consistent user experience with powerful features that are easily adaptable to our clients’ needs. The MySizeID widget can beintegrated via oneline JavaScript code, or through RESTful API;●Intuitive user experience. Our intuitive, easytouse interface is based on current technology, multiple focus groups and automatically adapts to users’devices, including mobile platforms, thereby significantly increasing accessibility of our solutions;●Big Data Generation. While we supply to the user the information he/she requires, we gather certain vital information such as body measurement andpackage volume which can be used anonymously to help the retailer acquire predictive size information on stocking, operations and consumers thatmay be in between sizes. All the information is being gathered and stored on our servers where it can be used by retailers;●NonInvasive. In taking measurements using our solution, the smartphone camera is not utilized; instead, the measurements are captured by scanningthe smartphone over the consumer’s body or package, thus ensuring greater privacy.Our Growth StrategyWe aim to drive revenue primarily through penetration of the U.S. and Europe markets through a business to business to consumer (B2B2C) model in theverticals we are targeting. We are pursuing the following growth strategies:●Sign Additional Commercial Agreements with U.S. Retailers. During 2022, we expanded our commercial agreements with Levi’s, introducing NorthAmerica (U.S. and Canada) and Latin America regions, and by extension Levis’ native apps in EU and U.S. regions. We also entered into commercialagreements with Baby Fresh, Galax, Punto Blanco, GEF France, Diesel, Gaala, Superdry, Uniontex Industries, and Temperlay London among others. Weare in various stages of discussions with U.S. and foreign retailers for the deployment of our size recommendation and measurement technology with aview to entering into additional commercial agreements.6●Pursue a TwoPronged Commercialization Strategy. We are seeking to accelerate adoption of our solutions both through direct partnerships with ecommerce websites as well as through thirdparty platform websites. While we seek to directly enter into partnerships with companies maintaining ecommerce websites in the apparel, courier and DIY markets, we are also seeking to deploy our solutions on thirdparty platforms. Furthermore, with theexpansion of MySizeID through the release of our FirstLook Smart Mirror, which we are offering to brick and mortar stores to digitize the physicalstores, MySizeID is now available for online retailers utilizing the WooCoomerce, Shopify, Lightspeed, PrestaShop, Bitrix and Wix platforms and tobrick and mortar stores through GK Software POS solution while BoxSize is available on the Honeywell, Zebra Technologies and Datalogic.●Ongoing Investment in our Technology Platform. We continue to invest in building new software capabilities and extending our platform to bring thepower of accurate measurement to a broader range of applications. In particular, we seek not only to deliver size recommendations but to provide arobust, endtoend,artificial intelligence, or AIdriven platform that inspires consumer confidence and drives revenue growth by providing a superiorconsumer journey to both online and the brick and mortar stores.●Grow our database. As the usage of our measurement apps increases, our database of information including user behaviour and body measurementsgenerates valuable statistics. Such data can be used in the big data market for targeted advertising and for blind consumer data mining.●Identify and acquire synergistic businesses. In order to reduce our time to market and obtain complementary technologies, we are seeking to acquiretechnologies and businesses that are synergistic to our product offering. We recently completed an acquisition of Orgad which operates anomnichannel ecommerce platform and Naiz which provides SaaS technology solutions that solve size and fit issues for fashion ecommerce companies.●Partnerships and cooperation. In order to bring a wider solution for the retail market we are working to partner and integrate our technology withpartners that can increase our penetration and offering to the market.Market OpportunityThe global ecommerce market was $5.7 trillion in 2022, and the industry is expected to grow significantly in the coming years with no signs of slowingdown. Market specialists expect a compound annual growth rate of 27.43% from 2023 to 2028: according to data from Statista, the market is expected to reach $6.5trillion in 2023. While many sectors have found ways to increase revenue through ecommerce, ecommerce is still plagued by issues that cut into profits andnegatively impact the bottom line, such as customer returns, low consumer conversion, and associated restocking and shipping costs.Fashion/ApparelSince the onset of the COVID19 pandemic, an immense shift to digital was recorded, with 85.9% growth vs. prepandemic, according to Mastercard, andover 2 billion people worldwide who shop online, according to data from Oberlo. In November 2022, online shoppers broke records with $11.3 billion in spending onCyber Monday, driving 5.8% yearoveryear growth and making the day the biggest online shopping day of all time, according to Adobe Analytics.In 2021, fashion companies invested between 1.6% and 1.8% of their revenues in technology, according to Mckinsey, and are expected to double theinvestment by 2030 in order to keep up with digital natives and keep a competitive edge. Personalization in ecommerce and hybrid connectivity in brickandmortarretail are two key themes in the future of fashtech, according to Mckinsey’s 2022 State of Fashion Technology.7In the upcoming years, inflation is expected to impact the fashion world. As prices for goods increase, the challenge will be to inspire confidence inconsumers, via different smart digital tools. Brands will need to embrace creative digital tools and new channels to deepen customer relationships, and as Mckinseyforecasts in their State of Fashion report for 2023, they will need to execute on priorities such as sustainability and digital acceleration.The global fashion ecommerce market size is expected to grow from $744.4 billion in 2022 to $821.19 billion in 2023 at a compound annual growth rate of10.3%. In 2027, the market size is expected to grow to $1,222.32 billion, at a compound annual growth rate of 10.5%, according to BRC.Based on the importance which shoppers attribute to free shipping 50% of cart abandonment rate is due to extra shipping costs (Baymard Institute) theneed for fashion retailers to substantiate the optimal size for a customer, thus minimizing returns, has never been more crucial.As brands move online or significantly expand their online presence, we believe that developing innovative ways to connect with shoppers, both onlineand offline, has become a top priority.Shipping/ParcelAccording to Pitney Bowes, parcel revenue in 13 major countries around the world increased by 17% year over year from $420 billion in 2020 (reflecting 131billion parcels) to $491 billion in 2021 (reflecting 159 billion parcels). In the shipping/parcel industry, the dimensions of a package are critical. It is not merely themeasurement of a package or box – but rather the amount of space that the package or box will take up on a truck, airplane, or ship that will be transporting thepackage or box. Far too often, retailers use unfit packaging for their items, adding additional costs in materials and shipping fees.DIYSimilar to issues in the apparel and fashion market, big box, hardware, furniture, and DIY stores are plagued by returns due to incorrect fit andmeasurements. In an industry where precise measurement for projects is an absolute necessity, ecommerce has not grown as quickly as in other industries which webelieve is due to lack of consumer confidence in measurements at home and buying the correct item online.MySizeIDWe have released the MySizeID app for both iOS and Android which assists consumers to take highly accurate measurement of their own body in order tosize clothing in the best way possible without the need to try the clothes on before purchasing. MySizeID is designed to simplify the process of purchasing clothesonline and significantly reduce the rate of returns of poorfitting clothing. During 2022, MySizeID delivered over 23.5 million size recommendations.The application is the result of a research and development effort that combines:●anthropometric research – analyses of information pertaining to body measurements derived from a survey and the subsequent determination ofcorrelations between body parts;●body measurement algorithm research – an algorithm created by us to measure body parts; and●retailers size chart analyses – adopting a deep understanding of the size charts of retailers and the corresponding “body to garment size.”MySizeID allows consumers to create a secure, online profile of their personal measurements, which can then be utilized, with partnered online retailers, toensure that no matter the manufacturer or size chart, they will get the right fit. MySizeID operates based on the use of existing sensors in smart phones which enable,through a specific purpose application, the measurement of the body of any consumer by moving the smartphone along his or her body. The MySizeID applicationdoes not rely on user photographs or any additional hardware; all a user needs to do is scan their body with their smartphone and the application records theirmeasurements. The measurements can then be saved in our database in the cloud, enabling the user to search for clothes in various retailer websites withoutworrying about size. When a search is made, the retailer will connect to our cloud database, and then provide results based on the user’s measurements and otherparameters as he or she may have defined. This data is also saved for use when a customer enters a brickandmortar store to help serve the customer moreefficiently and to provide a better shopping experience.8Figure 1: Screenshot of MySizeID on smartphone and ecommerce websiteAs part of the integration process, we offer to the retailer five main components:●Mobile App. MySizeID comes in the form of a native app or website. Our native app can be used “as is” integrated into the retailer’s ecommercewebsite. The website users can build a body profile on the app and receive size recommendations for their profile both in the app and on a widgetintegrated with their website.9●Widget. When a consumer enters into the retailer’s website and looks for a specific item, he or she can click on the MySizeID widget which will informthe consumer of his or her recommended size, based on his or her actual measurements, as measured using the app and the item he or she is looking at.The widget has two features:AI Wizard mode allows the user to obtain size from the following parameters: gender, height, weight, belly shape, hip shape and bra size only. Thegender, height and weight questions are mandatory, while the body shape questions are optional and can be added to increase accuracy for specificapparel categories.Guest mode allows a user that does not wish to sign up to MySizeID as a user to obtain size recommendations as well.●Analytic Pixel. MySizeID analytic pixel allows retailer to track and analyze the widget usage. By adding the pixel to the retailer’s website, MySizeID BIteam can track engagement, order, and return data and provide retailers with tools to understand the advantages and benefits of MySizeID.Use your own device using MySizeID instore solution, shoppers can receive size recommendations for all store items, when shopping in the offlinestores. The shoppers can build their body profile using an easy to use 3 to 6 questions form, scan an item barcode and receive a size recommendationfor the scanned item based on their body profile and the item’s size chart.Another feature we added is the “inbetween sizing” feature. Our system can detect a user that has body dimensions that place the user inbetweenthe clothes sizes being offered and lets the user know that. A user can then choose between the two sizes according to the user’s fit preference(tight/loose/average).In addition, we have recently released our InstantApp feature which allows shoppers to generate their body measurements directly from our widget,without the need to download our mobile app. Using this technology, the shoppers can create their online profile of their personal measurements andcomplete a purchase faster and easier with minimum distractions.The body profile can be created while shoppers are viewing the page from their mobile phone, or by scanning a QR code on desktop that will open thesame page on the mobile phone.Screenshot of InstantApp widget on desktop on yumyumfashion website10●MyDash Platform. The MyDash platform is a smart backoffice system where the retailer enters all the information regarding its size charts thatcorrelates to every product in its ecommerce site, and where the retailer can access the information on its users. This system is customizable based onthe retailer’s needs. In 2021, we changed the MyDash system to increase the system’s accessibility, added walkthroughs, user guides and changed theuser interface and much more for the ease of use. We added the option to use our generic size charts, added the option upload size chart files insteadof typing the size charts values manually, added more widget styling options and changed the pairing mechanism between the size chart and theproducts to be more userfriendly.Figure 3: Screenshot of BackOffice System●FirstLook Smart Mirror. The Smart Mirror provides an interactive, mirrorlike touch display that allows brands to provide instore customers with anenhanced, online shopping experience, contactless checkout and obtains the recommended size. The MySizeIDFirstLook Smart Mirror can be placedin numerous locations throughout a retail store, including the fitting rooms (without cameras) or other hightraffic locations of the store. Highlightcapabilities of the FirstLook Smart Mirror include a 3D “Tryiton” interactive avatar experience, personalized and highly accurate sizerecommendations by MySizeID, thirdparty point of sale systems integration, styling recommendations and contactless “select and collect” at theregister feature.Illustration of MySizeID “first look” smart mirror in a fashion store11We are currently offering MySizeID technology to retailers through either a payperuse model or a monthly subscription model. In our payperusebusiness model, every time the consumer obtains a recommended size, the retailer is charged for the usage.BoxSizeBoxSize is a parcel measurement application that can provide realtime logistic data on package volumes and transportation, resulting in improvedoperational efficiency and reduced operating expenses. In addition, BoxSize allows customers to easily measure the size of their parcel with their smartphone,calculate shipping costs and arrange for a convenient pickup time for the package. BoxSize is available both on iOS and Android.In 2020 we released the “One Click” feature on BoxSize that enables the user to measure a package with just one swipe of the handheld device. Previously,measurements through BoxSize would require three separate swipes.Figure 4: Screenshot of BoxSizeOur BoxSize mobile measurement solution is available on the Honeywell Marketplace. In addition, BoxSize was approved for Honeywell’s Global VendorProgram, and is available to provide highly accurate mobile measurement solutions for thousands of Honeywell clients. We also developed a new dashboard for thecourier companies to have all the required data about each package in one place. It includes package dimensions, pictures, scan geo location and more. Thedashboard also let the courier use Webhooks, which allows him to get the information from his own system.12In 2020, we announced our partnership with Datalogic, a company focused on the automatic data capture and process automation markets. The partnershipmakes our BoxSize measurement solution available to thousands of Datalogic customers in the Transportation and Logistics vertical.Agreement with Delhivery Private Limited, IndiaWe entered into an agreement with Delhivery Private Limited, one of the largest courier pickup, delivery, and online shipping services in India. Delhivery’sreputation as a frontrunner in delivery and logistics tech makes its decision to select Boxsize a particularly strong testament to the value the solution provides.BoxSize provides Delhivery’s employees on the B2B side with critical information that will allow them to effortlessly optimize loading efficiency and add even morerealtime visibility to operations.SizeUpWe are working on additional consumer applications, including a DIY application. Our SizeUp application is a smart tape measure for the business toconsumer market which allows users to utilize their smartphone as a tape measure. The application provides measurements with an accuracy of within twocentimeters. Through the use of SizeUp, users will be able to visualize how an object or a piece of furniture will fit in an existing room in their home or office. It alsoadded Google Vision for image content analysis, object detection, and title suggestions.Currently the SizeUp app for Android and iOS is available for free for the first 30 days, after which a user will be required to register via email and pay aonetime fee of $1.99 to continue using the application. To date, revenues from downloads have been minimal.Research and DevelopmentOur research and development team are responsible for the research, algorithm, design, development, and testing of all aspects of our measurementplatform technology. We invest in these efforts to continuously improve, innovate, and add new features to our solutions.We incurred research and development expenses of approximately $1.7 million in 2022 and $4.25 million in 2021, relating to the development of itsapplications and technologies. The decrease from the corresponding period primarily resulted from share based payment in amount of $2,618,000 attributed to theshare issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021. We intend to continue to invest in our research anddevelopment capabilities to extend our platform and bring our measurement technology to a broader range of applications.13In 2022, the R&D department experienced significant success in their efforts to improve the performance of their size recommendation system. Through acombination of optimized algorithms and the incorporation of cuttingedge technologies, the team was able to achieve a threefold increase in the system’s speed.This breakthrough not only makes the system one of the fastest and most accurate on the market, but also reduced the operation costs, making it more costeffective for businesses to use. Additionally, the solution is now highly scalable, allowing it to easily adapt to the needs of businesses of any size. The R&D team isnow focused on further improving the system and exploring new applications for the technology.Sales and MarketingIn 2019, we launched a commercialization strategy that directs our sales efforts toward both sales to ecommerce players in specific vertical markets such asfashion/apparel and shipping/delivery as well as to ecommerce thirdparty platform providers. As of March 15, 2023, our products are being sold in the followingcountries: US, UK, France, Netherlands, Spain, Portugal Turkey, Germany, Israel and Italy, generating customer leads, building out a sales pipeline, and developingcustomer relationships.We believe an effective method to market our suite of products is for users to actively use and explore its capabilities. We encourage free trials of one ormore of our products in order to successfully convert those accounts to paid subscriptions.Proprietary RightsWe rely on a combination of patent, copyright, trademark and trade secret laws in the United States and other jurisdictions, as well as contractualprotections, to protect our proprietary technology.As of December 31, 2022, we owned 18 issued patents: six in Europe, four in the U.S., three in each of Russia and Japan and one in each of Canada andIsrael which expire between January 20, 2033 and August 18, 2036, and we have two additional patent applications in process. As of such date, we do not have anyregistered trademarks.We cannot provide any assurance that our proprietary rights with respect to our products will be viable or have value in the future since the validity,enforceability and type of protection of proprietary rights in softwarerelated industries are uncertain and still evolving.Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products or to obtain and use informationthat we regard as proprietary. Policing unauthorized use of our products is difficult, and while we are unable to determine the extent to which piracy of our softwareproducts exists, software piracy can be expected to be a persistent problem. In addition, the laws of some foreign countries do not protect proprietary rights to asgreat an extent as do the laws of the United States, and effective copyright, trademark, trade secret and patent protection may not be available in those jurisdictions.Our means of protecting our proprietary rights may not be adequate to protect us from the infringement or misappropriation of such rights by others.Further, in recent years, there has been significant litigation in the United States involving patents and other intellectual property rights, particularly in thesoftware and Internetrelated industries. We can become subject to intellectual property infringement claims as the number of our competitors grows and ourproducts and services overlap with competitive offerings. These claims, even if not meritorious, could be expensive to defend and could divert management’sattention from operating our business. If we become liable to third parties for infringing their intellectual property rights, we could be required to pay a substantialaward of damages and to develop noninfringing technology, obtain a license or cease selling the products that contain the infringing intellectual property. We maybe unable to develop noninfringing technology or obtain a license on commercially reasonable terms, if at all.14Government RegulationWe are subject to a number foreign and domestic laws and regulations that involve matters central to our business. These laws and regulations mayinvolve privacy, data protection, intellectual property, or other subjects. Many of the laws and regulations to which we are subject are still evolving and being testedin courts and could be interpreted in ways that could harm our business. In addition, the application and interpretation of these laws and regulations often areuncertain, particularly in the new and rapidly evolving industry in which we operate. Because global laws and regulations have continued to develop and evolverapidly, it is possible that we, our products, or our platform may not be, or may not have been, compliant with each such applicable law or regulation.In particular, we are subject to a variety of federal, state and international laws and regulations governing the processing of personal data. Many U.S. stateshave passed laws requiring notification to data subjects when there is a security breach of personally identifiable data. There are also a number of legislativeproposals pending before the U.S. Congress, various state legislative bodies and foreign governments concerning data protection. In addition, data protection lawsin Europe and other jurisdictions outside the United States can be more restrictive than those within the United States, and the interpretation and application ofthese laws are still uncertain and in flux.For example, the General Data Protection Regulation, or GDPR, which took effect on May 25, 2018, enhances data protection obligations for entities thatprocess personal data about individuals, including obligations to cooperate with European data protection authorities, implement security measures and keeprecords of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to the greater of €20 million or 4% of global annual revenue. Inaddition, the California Consumer Privacy Act of 2018, or CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and requiredeletion of their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used.The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further,failure to comply with the Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may exposeus to administrative fines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the currentenforcement measures and sanctions. Given the breadth and depth of changes in data protection obligations, meeting the requirements of GDPR and otherapplicable laws and regulations has required significant time and resources, including a review of our technology and systems currently in use against therequirements of GDPR and other applicable laws and regulations. We have taken various steps to prepare for complying with GDPR and other applicable laws andregulations however there can be no assurance that these steps are sufficient to assure compliance. Further, additional EU laws and regulations (and member states’implementations thereof) further govern the protection of individuals and of electronic communications. If our efforts to comply with GDPR or other applicable lawsand regulations are not successful, we may be subject to penalties and fines that would adversely impact our business and results of operations, and our ability touse personal data of individuals could be significantly impaired.CompetitionWe operate in a highly competitive industry that is characterized by constant change and innovation. Changes in the applications and the programinglanguages used to develop applications, devices, operating systems, and technology landscape result in evolving customer requirements. Our competitors includeTrue Fit, Fit analytics and 3DLook.The principal competitive factors in our market include the following:●High Accuracy Size Recommendations: the highest accuracy and the lowest margin of error by combining patented technology including AI and ML,size chart or spec data, and MySizeID property body data measurement;●Integration○Fast 1 week integration including size chart size chart review and product mapping○Easy 1 line of “all included” script implementation●Technical Advantages○Very small library that weighs ±50kb (minimum widget loading time on product page)○UltraFast loading and size recommendation presenting○Restful API option (API integration with any website or app)15●Optimizations○Adjustments of size charts based on performance○Widget usage analysis by FashTech and BI teams○Automatic pairing of size charts with products/collections●User Experience○Easy to use interface (1015 seconds to receive size recommendations)○Option to add/deduct questions to/from widget wizards○Users automatically receive size recommendations on all products after initial sign up●Product and platform features, architecture, reliability, privacy and security, performance, effectiveness, and supported environments;●Product extensibility and ability to integrate with other technology infrastructures;●Digital operations expertise;●Ease of use of products and platform capabilities;●Total cost of ownership;●Adherence to industry standards and certifications;●Strength of sales and marketing efforts;●Brand awareness and reputation; and●Focus on customer successWe believe we generally compete favorably with our competitors on the basis of these factors. We expect competition to increase as other established andemerging companies enter our markets, as customer requirements evolve, and as new products and technologies are introduced. We expect this to be particularlytrue as we offer a smartphonebased offering that does not need to utilize the smartphone’s camera, and our competitors may also seek to repurpose their existingofferings to provide similar solutions. Many of our competitors have substantially greater financial, technical, and other resources, greater name recognition, largersales and marketing budgets, broader distribution, and larger and more mature intellectual property portfolios.Human Capital ManagementAs of March 31, 2023, we had a total of 35 employees, of which 30 were fulltime employees, including 9 in sales and marketing, 12 in technology anddevelopment and 9 in administration and finance.None of our employees are represented by a collective bargaining agreement, nor have we experienced any work stoppage. We consider our relationshipwith our employees to be good. Our future success depends on our continuing ability to attract and retain highly qualified engineers, sales and marketing, accountmanagement, and senior management personnel.We also believe we have built a strong sales team focused on expanding into new markets through the acquisition of Naiz and our current team.We believe that our future success will depend, in part, on our continued ability to attract, hire and retain qualified personnel. In particular, we depend onthe skills, experience and performance of our senior management and research personnel. We compete for qualified personnel with other hitech companies, as wellas universities and nonprofit research institutions.16We provide competitive compensation and benefits programs to help meet the needs of our employees. In addition to salaries, these programs (which varyby country/region and employment classification) include incentive compensation plan, pension, and insurance benefits, paid time off, , among others. We also usetargeted equitybased grants with vesting conditions to facilitate retention of personnel, particularly for our key employees.The success of our business is fundamentally connected to the wellbeing of our people. Accordingly, we implemented an hybrid work policy in which theemployees can work from home twice a week.We consider our employees to be a key factor to our success and we are focused on attracting and retaining the best employees at all levels of ourbusiness. Inclusion and diversity is a strategic, business priority. We employ people based on relevant qualifications, demonstrated skills, performance and otherjobrelated factors. We do not tolerate unlawful discrimination related to employment, and strive to ensure that employment decisions related to recruitment,selection, evaluation, compensation, and development, among others, are not influenced by race, color, religion, gender, age, ethnic origin, nationality, sexualorientation, marital status, or disability. Continuous monitoring to ensure pay equity has been a focus in 2022. We have continued to improve gender balance in 2022with a focus on increasing the representation of women hired as new college graduates. We are committed to creating a trusting environment where all ideas arewelcomed and employees feel comfortable and empowered to draw on their unique experiences and backgrounds.We consider our relations with our employees to be good.Company InformationOur principal executive offices are located at HaYarden 4 St., POB 1026, Airport City, Israel 7010000, and our telephone number is +97236009030. Ourwebsite address is www.mysizeid.com. Any information contained on, or that can be accessed through, our website is not incorporated by reference into, nor is it inany way a part of, this Annual Report on Form 10K.We use our website (www.mysizeid.com) as a channel of distribution of Company information. The information we post through this channel may bedeemed material. Accordingly, investors should monitor our website, in addition to following our press releases, SEC filings and public conference calls andwebcasts. The contents of our website are not, however, a part of this Annual Report on Form 10K.Corporate HistoryWe were incorporated in the State of Delaware on September 20, 1999 under the name Topspin Medical, Inc. In December 2013, we changed our name toKnowledgetree Ventures Inc. Subsequently, in February 2014, we changed our name to MySize, Inc. In 2020, we created a subsidiary in the Russian Federation, MySize LLC.From inception through 2012, we were engaged in research and development of a medical magnetic resonance imaging, or MRI, technology forinterventional cardiology and in the development of MRI technology for use in the diagnosis and treatment of prostate cancer. In January 2012, we acquiredMetamorefix Ltd., or Metamorefix. Metamorefix was incorporated in 2007, and was engaged in the development of innovative solutions for the rehabilitation oftissues, particularly skin tissues. By the end of 2012, we ceased operations and in January 2013, we sold our entire ownership interest in Metamorefix.In September 2013, Ronen Luzon, our Chief Executive Officer, acquired control of the Company from Asher Shmuelevitch, according to which Mr. Luzonpurchased 70,238 shares of common stock from Mr. Shmuelevitch, which shares represented approximately 40% of the issued and outstanding capital stock of theCompany at such time, thus becoming a controlling shareholder of the Company. In connection with the acquisition, Mr. Luzon reached a settlement with our thencreditors pursuant to which the main creditor, Mr. Shmuelevitch, was paid a total sum of approximately $140,000 in consideration for a full and final waiver of any andall his claims that he may have relating to any monetary indebtedness of the Company to the creditors.17In February 2014, My Size Israel, our wholly owned subsidiary, entered into a Purchase Agreement, or the Purchase Agreement, with Shoshana Zigdon,who at the time was a beneficial owner of more than 20% of our outstanding shares, with respect to the acquisition by us of certain rights related to the collection ofdata for measurement purposes including rights in the venture, the method and a patent application that had been filed by the Seller (PCT/IL2013/050056), or theAssets. In consideration for the sale of the Assets, we agreed to pay to Ms. Zigdon, 18% of our operating profit, directly or indirectly connected with the Assetstogether with valueadded tax in accordance with the law for a period of seven years from the end of the development period of the aforementioned venture. Inaddition to the foregoing, the Purchase Agreement provided that all developments, improvements, knowledge and knowhow developed and/or accumulated by usafter the execution of the Purchase Agreement will be owned by us. Further, Ms. Zigdon agreed not to compete, directly or indirectly, with us in any matter relatingto the Assets for a period of seven years from the end of the development period of the venture.On May 26, 2021, we, My Size Israel, and Ms. Zigdon entered into an Amendment to Purchase Agreement, or the Amendment, which made certainamendments to the Purchase Agreement. Pursuant to the Amendment, Ms. Zigdon agreed to irrevocably waive (i) the right to repurchase certain assets related tothe collection of data for measurement purposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which our business issubstantially dependent, or the Assets, and (ii) all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My SizeIsrael under the Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation, reward orany rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights, or the Waiver. Inconsideration of the Waiver, we issued 100,000 shares of common stock to Ms. Zigdon.In September 2005, we commenced trading on the Tel Aviv Stock Exchange, or TASE. Between 2007 and 2012 we reported as a public company with theSEC. In August 2012, we suspended our reporting obligations. In mid2015 we resumed reporting as a public company. On July 25, 2016, our common stock beganpublicly trading on the Nasdaq Capital Market under the symbol “MYSZ”.ITEM 1A. RISK FACTORSAn investment in our common stock involves a high degree of risk. You should carefully consider the following risk factors and the other information inthis Annual Report on Form 10K before investing in our common stock. Our business and results of operations could be seriously harmed by any of the followingrisks. The risks set out below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterialalso may materially adversely affect our business, financial condition and/or operating results. If any of the following events occur, our business, financial conditionand results of operations could be materially adversely affected. In such case, the value and trading price of our common stock could decline, and you may lose allor part of your investment.Summary Risk FactorsThe principal factors and uncertainties that make investing in our ordinary shares risky, include, among others:Risks Related to Our Financial Position and Capital Requirements●We have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.●Our limited operating history makes it difficult to evaluate our business and prospects.●We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive and maycause the market price of our common stock to decline.●The report of our independent registered public accounting firm contains an explanatory paragraph regarding substantial doubt about our ability tocontinue as a going concern.Risks Related to Our Company and Our Business●The market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and online thirdparty resellers adopting our flagship product, MySizeID.18●Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broader marketacceptance of our products.●We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which may makeit difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.●We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increase ourcapital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.●If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations and financialcondition may be adversely affected.●If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operations andfinancial condition could be adversely affected.●The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile device applications andcustom development services.●Our growth depends, in part, on the success of our strategic relationships with third parties.●Changes in economic conditions could materially affect our business, financial condition and results of operations.●We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.●We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significant interruptionin our network or hosting and cloud services could adversely impact our operations and harm our business.●Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.●We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.●A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.●Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, data protectionand information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive and confidentialinformation. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm our business,results of operations and financial condition.●We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect our business.●We may face intense competition and expect competition to increase in the future, which could limit us in developing a customer base and generatingrevenue.●Our business operations and future development could be significantly disrupted if we lose key members of our management team.19●If we are able to expand our operations, we may be unable to successfully manage our future growth.Risks Related to Our Operations in Israel and Russia●Our headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.●Russia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.Risks Related to Our Common Stock●A more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.●Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions and adversedevelopments with respect to financial institutions and associated liquidity risk;●Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.●Our securities are traded on more than one market which may result in price variations.●We are a former “shell company” and as such are subject to certain limitations not generally applicable to other public companies.Risks Related to Our Financial Position and Capital RequirementsWe have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.We realized a net loss of approximately $8.3 million and $10.5 million for the years ended December 31, 2022 and 2021 and had an accumulated deficit of$53.5 million as at December 31, 2022. Because of the numerous risks and uncertainties associated with the development and commercialization of our products andbusiness, we are unable to predict the extent of any future losses or when we will become profitable, if at all. Expected future operating losses will have an adverseeffect on our cash resources, shareholders’ equity and working capital. Our failure to become and remain profitable could depress the value of our stock and impairour ability to raise capital, expand our business, maintain our development efforts, or continue our operations. A decline in our value could also cause you to lose allor part of your investment in us.Our limited operating history makes it difficult to evaluate our business and prospects.We have only been developing our measurement technology since 2014. Since then, our operating history has been primarily limited to research anddevelopment, pilot studies, raising capital, and more recently acquisitions and sales and marketing efforts. Therefore, it may be difficult to evaluate our business andprospects. We have not yet demonstrated an ability to commercialize our products. Consequently, any predictions about our future performance may not beaccurate, and you may not be able to fully assess our ability to complete development and/or commercialize our products, and any future products.We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive andmay cause the market price of our common stock to decline.Based on our projected cash flows and the cash balances as of the date of this Annual Report on Form 10K, our existing cash is insufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. In order to meet ourbusiness objectives in the future, we will need to raise additional capital, which may not be available on reasonable terms or at all. Additional capital would be usedto accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;20●respond to competitive pressure;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, and a number of otherfactors, many of which are outside our control, and on our financial performance. Accordingly, we cannot assure you that we will be able to successfully raiseadditional capital at all or on terms that are acceptable to us. If we cannot raise additional capital when needed, it may have a material adverse effect on our business,results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.Management has concluded that there is substantial doubt about our ability to continue as a going concern which could prevent us from obtainingnew financing on reasonable terms or at all.We have incurred significant losses and negative cash flows from operations and have an accumulated deficit that raises substantial doubt about its abilityto continue as a going concern. Our audited consolidated financial statements for the year ended December 31, 2022 were prepared under the assumption that wewould continue our operations as a going concern. Our independent registered public accounting firm has included a “going concern” explanatory paragraph in itsreport on our financial statements for the year ended December 31, 2022. If we are unable to improve our liquidity position, by, among other things, raising capitalthrough public or private offerings or reducing our expenses, we may exhaust our cash resources and will be unable to continue our operations. If we cannotcontinue as a viable entity, our shareholders would likely lose most or all of their investment in us.Risks Related to Our Company and Our BusinessThe market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and onlinethirdparty resellers adopting our flagship product, MySizeID.The market for our measurement technology is relatively new and unproven and is subject to a number of risks and uncertainties. We believe that ourfuture success will depend in large part on market adoption of our flagship product, MySizeID, by U.S. retailers and online thirdparty resellers. In order to grow ourbusiness, we intend to focus on educating retailers and resellers and other potential customers about the benefits of our measurement technology, expanding thefunctionality of our products and bringing new products to market to increase market acceptance and use of our technology. Our ability to develop and expand themarket that our products address depends upon a number of factors, including the cost savings, performance and perceived value associated with such products.The market for our products could fail to develop or there could be a reduction in interest or demand for our products as a result of a lack of consumer acceptance,technological challenges, competing products and services, weakening economic conditions and other causes. We may never successfully commercialize ourproducts and if our products fail to achieve market acceptance, this would have a material adverse effect on our business, results of operations and financialcondition.21Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broadermarket acceptance of our products.Our ability to achieve customer adoption, especially among U.S. retailers will depend, in part, on our ability to effectively organize, focus and train our salesand marketing personnel. We have limited experience selling to U.S. retailers and only recently established a U.S. sales force. We believe that there is significantcompetition for experienced sales professionals with the skills and industry knowledge that we require. Our ability to achieve significant revenue growth in thefuture will depend, in part, on our ability to recruit, train and retain a sufficient number of experienced sales professionals, particularly those with experience sellingto U.S. retailers. In addition, even if we are successful in hiring qualified sales personnel, new hires require significant training and experience before they achievefull productivity, particularly for sales efforts targeted at U.S. retailers and new markets. Because we only recently started sales efforts, we cannot predict whether, orto what extent, our sales efforts will be successful.We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which maymake it difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.In this market segment, the decision to adopt our products may require the approval of multiple technical and business decision makers, including security,compliance, procurement, operations and IT. In addition, while U.S. retailers may be willing to deploy our products on a limited basis, before they will commit todeploying our products at scale, they often require extensive education about our products and significant customer support time, engage in protracted pricingnegotiations and seek to secure readily available development resources. As a result, it is difficult to predict when we will obtain new customers and begingenerating revenue from these customers. As part of our sales cycle, we may incur significant expenses before executing a definitive agreement with a prospectivecustomer and before we are able to generate any revenue from such agreement. We have no assurance that the substantial time and money spent on our salesefforts will generate significant revenue. If conditions in the marketplace generally or with a specific prospective customer change negatively, it is possible that nodefinitive agreement will be executed, and we will be unable to recover any of these expenses. If we are not successful in targeting, supporting and streamlining oursales processes and if revenue expected to be generated from a prospective customer is not realized in the time period expected or not realized at all, our ability togrow our business, and our operating results and financial condition may be adversely affected. If our sales cycles lengthen, our future revenue could be lower thanexpected, which would have an adverse impact on our operating results and could cause our stock price to decline.22We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increaseour capital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.In order to reduce time to market and obtain complementary technologies, we are seeking to acquire technologies and businesses that are synergistic to ourproduct offering. For example, we recently acquired Orgad which operates an omnichannel ecommerce platform and Naiz which provides SaaS technology solutionsthat solve size and fit issues for fashion ecommerce companies. We evaluate from time to time various acquisitions and collaborations, including licensing oracquiring complementary technologies, intellectual property rights, or businesses. The process for acquiring a company may take from several months up to a yearand costs can vary greatly. We may also compete with others to acquire companies, and such competition may result in decreased availability of, or an increase inprice for, suitable acquisition candidates. In addition, we may not be able to consummate acquisitions or investments that we have identified as crucial to theimplementation of our strategy for other commercial or economic reasons. As a result, it may be more difficult for us to identify suitable acquisition or investmenttargets or to consummate acquisitions or investments on acceptable terms or at all. If we are not able to execute on any acquisition, we may not be able to achieve afuture growth strategy and may lose market share.In addition, the acquisition of Orgad, Naiz and any potential future acquisition, joint venture or collaboration may entail numerous potential risks, including:●increased operating expenses and cash requirements;●the assumption of additional indebtedness or contingent liabilities;●assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel;●the diversion of our management’s attention from our existing programs and initiatives in pursuing such a strategic merger or acquisition;●retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships;●risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing technologies; and●our inability to generate revenue from acquired technologies or products sufficient to meet our objectives in undertaking the acquisition or even to offsetthe associated acquisition and maintenance costs.All of the foregoing risks may be magnified as the cost, size or complexity of an acquisition or acquired company increases, or where the acquiredcompany’s products, market or business are materially different from ours, or where more than one integration is occurring simultaneously or within a concentratedperiod of time. We may not be able to obtain the necessary regulatory approvals, including those of antitrust authorities and foreign investment authorities, incountries where we seek to consummate acquisitions or make investments. For those and other reasons, we may ultimately fail to consummate an acquisition, even ifwe announce the intended acquisition.In addition, we may require significant financing to complete an acquisition or investment, whether through bank loans, raising of equity or debt orotherwise. We cannot assure you that such financing options will be available to us on reasonable terms, or at all. If we are not able to obtain such necessaryfinancing, it could have an impact on our ability to consummate a substantial acquisition or investment and execute a future growth strategy. Alternatively, we mayissue a significant number of shares as consideration for an acquisition, which would have a dilutive effect on our existing shareholders. For example, in partialconsideration for the acquisition of Orgad, we agreed to issue up to 111,602 shares of our common stock and in the Naiz acquisition we issued 240,000 shares of ourcommon stock. Furthermore, if we undertake acquisitions, we may incur large onetime expenses and acquire intangible assets that could result in significant futureamortization expense.23If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations andfinancial condition may be adversely affected.We believe that enhancing the “MySize” brand identity and increasing market awareness of our company and products, particularly among U.S. retailers, iscritical to achieving widespread acceptance of our products. Our ability to successfully develop new retailers may be adversely affected by a lack of awareness oracceptance of our brand. To the extent that we are unable to foster name recognition and affinity for our brand, our growth may be significantly delayed or impaired.The successful promotion of our brand will depend largely on our continued marketing efforts, market adoption of our products, and our ability to successfullydifferentiate our products from competing products and services. Our brand promotion may not be successful or result in revenue generation. Any incident thaterodes consumer affinity for our brand could significantly reduce our brand value and damage our business. If consumers perceive or experience a reduction inquality, or in any way believe we fail to deliver a consistently positive experience, our brand value could suffer and our business may be adversely affected.In particular, adverse weather conditions can impact guest traffic at our retailers, and, in more severe cases, cause temporary retail closures, sometimes forprolonged periods. Our business is subject to seasonal fluctuations, with retail sales typically higher during certain months, such as December. Adverse weatherconditions during our most favorable months or periods may exacerbate the effect of adverse weather on consumer traffic and may cause fluctuations in ouroperating results from quartertoquarter within a fiscal year.If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operationsand financial condition could be adversely affected.Our ability to attract new customers depends in part on our ability to enhance and improve our existing products, increase adoption and usage of ourproducts and introduce new products. The success of any enhancements or new products depends on several factors, including timely completion, adequatequality testing, actual performance quality, and overall market acceptance. Enhancements and new products that we develop may not be introduced in a timely orcosteffective manner, may contain errors or defects, may have interoperability difficulties with our platform or other products or may not achieve the broad marketacceptance necessary to generate significant revenue. Furthermore, our ability to increase the usage of our products depends, in part, on the development of newuse cases for our products and may be outside of our control. If we are unable to successfully enhance our existing products to meet evolving customerrequirements, increase adoption and usage of our products, develop new products, then our business, results of operations and financial condition would beadversely affected.The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile Apps and customdevelopment services.We must continue to enhance and improve the performance, functionality and reliability of our products. The mobile technology industry is characterizedby rapid technological change, changes in user requirements and preferences, frequent new product and services introductions embodying new technologies andthe emergence of new industry standards and practices that could render our products obsolete. Our success will depend, in part, on our ability to both internallydevelop and enhance our existing products, develop new products that address the increasingly sophisticated and varied needs of our customers, and respond totechnological advances and emerging industry standards and practices on a costeffective and timely basis. The development of our technology involvessignificant technical and business risks. We may fail to use new technologies effectively or to adapt our proprietary technology and systems to customerrequirements or emerging industry standards. If we are unable to adapt to changing market conditions, customer requirements or emerging industry standards, wemay not be able to increase our revenue and expand our business.Changes in economic conditions could materially affect our business, financial condition and results of operations.Because our primary target customers include U.S. retailers , we, together with the rest of the fashion/apparel industry, will depend upon consumerdiscretionary spending. Increases in unemployment rates, reductions in home values, increases in home foreclosures, investment losses, personal bankruptcies andreductions in access to credit and reduced consumer confidence, may impact consumers’ ability and willingness to spend discretionary dollars. In addition, volatileeconomic conditions may repress consumer confidence and discretionary spending. Any of the foregoing may have a material adverse effect on our business,financial condition and results of operations.24Our growth depends, in part, on the success of our strategic relationships with third parties.To grow our business, we anticipate that we will continue to depend on relationships with third parties, such as our customers and thirdparty platforms.Identifying partners, and negotiating and documenting relationships with them, requires significant time and resources. If we are unsuccessful in establishing ormaintaining our relationships with third parties, our ability to compete in the marketplace or to grow our revenue could be impaired, and our results of operationsmay suffer. Even if we are successful, we cannot assure you that these relationships will result in increased customer usage of our products or increased revenue.We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.We currently utilize, and plan on continuing to utilize over the current fiscal year, thirdparty networking providers and distribution through companiesincluding, but not limited to, Apple and Google as well as Shopify, WooCommerce and, Datalogic, Honeywell and Zebra to distribute our technologies. If disruptionsor capacity constraints occur, we may have no means of replacing these services, on a timely basis or at all. This could cause a material adverse condition for ouroperations and financial earnings.We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significantinterruption in our network or hosting and cloud services could adversely impact our operations and harm our business.Our technology infrastructure is critical to the performance of our products and customer satisfaction. Our products run on a complex distributed system,or what is commonly known as cloud computing. We own, operate and maintain elements of this system, but significant elements of this system are operated bythirdparties that we do not control and which would require significant time to replace. We expect this dependence on thirdparties to continue. In particular, asignificant portion, if not almost all data storage, data processing and other computing services and systems is hosted by cloud computing providers. Anydisruptions, outages and other performance problems relating to such services, including infrastructure changes, human or software errors and capacity constraints,could adversely impact our business, financial condition or results of operations.Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.We update our products on a frequent basis. Despite efforts to test our updates, errors, failures or bugs may not be found in our products until after theyare deployed to a customer. We have discovered and expect we will continue to discover errors, failures and bugs in our products and anticipate that certain of theseerrors, failures and bugs will only be discovered and remediated after deployment. Real or perceived errors, failures or bugs in our platform could result in negativepublicity, government inquiries, loss of or delay in market acceptance of our products, loss of competitive position, or claims by customers for losses sustained bythem. In such an event, we may be required, or may choose, for customer relations or other reasons, to expend additional resources in order to help correct theproblem.We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.In connection with the operation of our business, we store, process and transmit data, including personal and payment information, about our employeesand customers, a portion of which is confidential and/or personally sensitive. Unauthorized disclosure or loss of sensitive or confidential data may occur through avariety of methods. These include, but are not limited to, systems failure, employee negligence, fraud or misappropriation, or unauthorized access to or through ourinformation systems, whether by our employees or third parties, including a cyberattack by computer programmers, hackers, members of organized crime and/orstatesponsored organizations, who may develop and deploy viruses, worms or other malicious software programs. Such disclosure, loss or breach could harm ourreputation and subject us to government sanctions and liability under our contracts and laws that protect sensitive or personal data and confidential information,resulting in increased costs or loss of revenues. It is possible that security controls over sensitive or confidential data and other practices we and our thirdpartyvendors follow may not prevent the improper access to, disclosure of, or loss of such information. The potential risk of security breaches and cyberattacks mayincrease as we introduce new products and offerings. Further, data privacy is subject to frequently changing rules and regulations, which sometimes conflict amongthe various jurisdictions in which we provide services. Any failure or perceived failure to successfully manage the collection, use, disclosure, or security of personalinformation or other privacy related matters, or any failure to comply with changing regulatory requirements in this area, could result in legal liability or impairment toour reputation in the marketplace.25A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.Information security risks have generally increased in recent years, in part because of the proliferation of new technologies and the use of the Internet, andthe increased sophistication and activity of organized crime, hackers, terrorists, activists, cybercriminals and other external parties, some of which may be linked toterrorist organizations or hostile foreign governments. For example, a cybercriminal could use cybersecurity threats to gain access to sensitive information aboutanother company or to alter or disrupt news or information to be distributed by PR Newswire. Cybersecurity attacks are becoming more sophisticated and includemalicious software, ransomware, attempts to gain unauthorized access to data and other electronic security breaches that could lead to disruptions in criticalsystems, unauthorized release of confidential or otherwise protected information and corruption of data, substantially damaging our reputation. Any person whocircumvents our security measures could steal proprietary or confidential customer information or cause interruptions in our operations. We incur significant coststo protect against security breaches, and may incur significant additional costs to alleviate problems caused by any breaches. Our failure to prevent securitybreaches, or wellpublicized security breaches affecting the Internet in general, could significantly harm our reputation and business and financial results.Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, dataprotection and information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive andconfidential information. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm ourbusiness, results of operations and financial condition.We and our customers that use our products may be subject to privacy and data protectionrelated laws and regulations that impose obligations inconnection with the collection, processing and use of personal data, financial data, health or other similar data. The U.S. federal and various state and foreigngovernments have adopted or proposed limitations on, or requirements regarding, the collection, distribution, use, security and storage of personally identifiableinformation of individuals. The U.S. Federal Trade Commission and numerous state attorneys general are applying federal and state consumer protection laws toimpose standards on the online collection, use and dissemination of data, and to the security measures applied to such data.Similarly, many foreign countries and governmental bodies, including the EU member states, have laws and regulations concerning the collection and useof personally identifiable information obtained from individuals located in the EU or by businesses operating within their jurisdiction, which are often morerestrictive than those in the United States. Laws and regulations in these jurisdictions apply broadly to the collection, use, storage, disclosure and security ofpersonally identifiable information that identifies or may be used to identify an individual, such as names, telephone numbers, email addresses and, in somejurisdictions, IP addresses and other online identifiers.For example, the GDPR, which took full effect on May 25, 2018. The GDPR enhances data protection obligations for businesses and requires serviceproviders (data processors) processing personal data on behalf of customers to cooperate with European data protection authorities, implement security measuresand keep records of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to or greater of €20 million or 4% of global annualrevenues. In addition, the CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and require deletion of their personalinformation, opt out of certain personal information sharing, and receive detailed information about how their personal information is used. The CCPA provides forcivil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further, failure to comply withthe Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may expose us to administrativefines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the current enforcementmeasures and sanctions. There are also additional laws and regulations in additional jurisdictions around the world which govern the protection of consumers andof electronic communications. If our efforts to comply with GDPR, CCPA or other applicable laws and regulations are not successful, we may be subject to penaltiesand fines that would adversely impact our business and results of operations, and our ability to conduct business could be significantly impaired.26Additionally, although we endeavor to have our products comply with applicable laws and regulations, these and other obligations may be modified, theymay be interpreted and applied in an inconsistent manner from one jurisdiction to another, and they may conflict with one another, other regulatory requirements,contractual commitments or our internal practices. We also may be bound by contractual obligations relating to our collection, use and disclosure of personal,financial and other data or may find it necessary or desirable to join industry or other selfregulatory bodies or other privacy or data protectionrelatedorganizations that require compliance with their rules pertaining to privacy and data protection.We expect that there will continue to be new proposed laws, rules of selfregulatory bodies, regulations and industry standards concerning privacy, dataprotection and information security in the United States, the European Union and other jurisdictions, and we cannot yet determine the impact such future laws,rules, regulations and standards may have on our business. Moreover, existing U.S. federal and various state and foreign privacy and data protectionrelated lawsand regulations are evolving and subject to potentially differing interpretations, and various legislative and regulatory bodies may expand current or enact new lawsand regulations regarding privacy and data protectionrelated matters. Because global laws, regulations and industry standards concerning privacy and datasecurity have continued to develop and evolve rapidly, it is possible that we or our products or platform may not be, or may not have been, compliant with eachsuch applicable law, regulation and industry standard and compliance with such new laws or to changes to existing laws may impact our business and practices,require us to expend significant resources to adapt to these changes, or to stop offering our products in certain countries. These developments could adverselyaffect our business, results of operations and financial condition.We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect ourbusiness.Our ability to implement our business plan successfully depends in part on our ability to build brand recognition using our trademarks, service marks andother proprietary intellectual property, including our names and logos. We currently have no registered trademarks. While we plan to register a number of ourtrademarks; however, no assurance can be given that our trademark applications will be approved. As of December 31, 2022, we own 18 issued patents: six in Europe,four in the U.S., three in each of Russia and Japan and one in each of Canada and Israel which expire between January 20, 2033 and August 18, 2036, and we havetwo additional patent applications in process. As of such date, we do not have any registered trademarks., No assurance can be given that our patent applicationswhich are in process will be approved. If our patent applications are not approved, our ability to expand or develop our business may be negatively affected.Third parties may also oppose our trademark or patent applications, or otherwise challenge our use of the trademarks or patents. In the event that ourtrademarks or patents are successfully challenged, we could be forced to rebrand our goods and services or redesign our technology, which could result in loss ofbrand recognition, and could require us to devote resources to advertising and marketing new brands and products.If our efforts to register, maintain and protect our intellectual property are inadequate, or if any thirdparty misappropriates, dilutes or infringes on ourintellectual property, the value of our brands may be harmed, which could have a material adverse effect on our business and might prevent our brands fromachieving or maintaining market acceptance. We may also face the risk of claims that we have infringed third parties’ intellectual property rights. If third parties claimthat we infringe upon their intellectual property rights, our operating profits could be adversely affected. Any claims of intellectual property infringement, eventhose without merit, could be expensive and time consuming to defend, require us to rebrand our services, if feasible, divert management’s attention and resourcesor require us to enter into royalty or licensing agreements in order to obtain the right to use a thirdparty’s intellectual property.Any royalty or licensing agreements, if required, may not be available to us on acceptable terms or at all. A successful claim of infringement against uscould result in our being required to pay significant damages, enter into costly license or royalty agreements, or stop the sale of certain products or services, any ofwhich could have a negative impact on our operating profits and harm our future prospects.We may face intense competition and expect competition to increase in the future, which could prohibit us from developing a customer base andgenerating revenue.We face significant competition in every aspect of our business. Our competitors include True Fit, Virtusize, EasyMeasure, AR MeasureKit, Smart Measureand 3DLook. These companies may already have an established market in our industry. Most of these companies have significantly greater financial and otherresources than us and have been developing their products and services longer than we have been developing ours.27In addition, some of our larger competitors have substantially broader product offerings and leverage their relationships based on other products orincorporate functionality into existing products to gain business in a manner that discourages potential customers from purchasing our products. Potentialcustomers may also prefer to purchase from their existing solution providers rather than a new solution provider regardless of product performance or features.These larger competitors often have broader product lines and market focus and will therefore not be as susceptible to downturns in a particular market. Conditionsin our market could change rapidly and significantly as a result of technological advancements, partnering by our competitors or continuing market consolidation.New startup companies that innovate and large competitors that are making significant investments in research and development may invent similar or superiorproducts and technologies that compete with our products. In addition, some of our competitors may enter into new alliances with each other or may establish orstrengthen cooperative relationships. Any such consolidation, acquisition, alliance or cooperative relationship could lead to pricing pressure and our loss of anyfuture market share and could result in a competitor with greater financial, technical, marketing, service and other resources, all of which could harm our ability tocompete. Furthermore, organizations may be more willing to incrementally add solutions to their existing infrastructure from competitors than to replace their existinginfrastructure with our products. Any failure to meet and address these factors could harm our business, results of operations and financial condition.Our business operations and future development could be significantly disrupted if we lose key members of our management team.The success of our business continues to depend to a significant degree upon the continued contributions of our senior officers and key employees, bothindividually and as a group. Our future performance will be substantially dependent in particular on our ability to retain and motivate Ronen Luzon, our ChiefExecutive Officer, and certain of our other senior executive officers. The loss of the services of our Chief Executive Officer, senior officers or other key employeescould have a material adverse effect on our business and plans for future development. We have no reason to believe that we will lose the services of any of theseindividuals in the foreseeable future; however, we currently have no effective replacement for any of these individuals due to their experience, reputation in theindustry and special role in our operations. We also do not maintain any key man life insurance policies for any of our employees.If we are able to expand our operations, we may be unable to successfully manage our future growth.Our growth may strain our infrastructure and resources. Any such growth could place increased strain on our management, operational, financial and otherresources, and we will need to train, motivate, and manage employees, as well as attract management, sales, finance and accounting, international, technical, andother professionals. Any failure to expand these areas and implement appropriate procedures and controls in an efficient manner and at a pace consistent with ourbusiness objectives could have a material adverse effect on our business, results of operations and financial condition.Our business operations are conducted in multiple languages and could be disrupted due to miscommunications or translation errors.The success of our business continues to depend on our marketing efforts in the United States, Europe and Israel, each of which is conducted in the locallanguage. Miscommunications or inaccurate foreign language translations could have a material adverse effect on our business operations and financial conditions.Additionally, contracts, communications and complex technical information must be accurately translated into foreign languages.We will continue to incur costs and be subject to various obligations as a result of being a public company, listed in the United States and in Israel.We will continue to incur significant legal, accounting and other expenses as a result of being a public company, listed in the United States and in Israel.Although we will incur costs each year associated with being a publiclytraded company, it is possible that our actual costs of being a publiclytraded company willvary from year to year and may be different than our estimates. In estimating these costs, we take into account expenses related to insurance, legal, accounting andcompliance activities.28Furthermore, the need to maintain the corporate infrastructure demanded of a public company may divert management’s attention from implementing ourgrowth strategy, which could prevent us from improving our business, results of operations and financial condition. We have made, and will continue to make,changes to our internal controls and procedures for financial reporting and accounting systems to meet our reporting obligations as a U.S. publicly traded company.However, the measures we take may not be sufficient to satisfy our obligations as a publicly traded company.Any future or current litigation could have a material adverse impact on our results of operations, financial condition and liquidity.From time to time, we may be subject to litigation, including, among others, potential stockholder derivative actions and class actions. Risks associatedwith legal liability are difficult to assess and quantify, and their existence and magnitude can remain unknown for significant periods of time. Subject to certainexceptions, our Amended and Restated Certificate of Incorporation, or Certificate of Incorporation, and Amended and Restated Bylaws, or Bylaws, require us toindemnify and advance expenses to our officers and directors involved in legal proceedings. To date we have obtained directors and officers’ liability, or D&O,insurance to cover some of the risk exposure for our directors and officers. Such insurance generally pays the expenses (including amounts paid to plaintiffs, fines,and expenses including attorneys’ fees) of officers and directors who are the subject of a lawsuit as a result of their service to us. There can be no assurance that wewill be able to continue to maintain this insurance at reasonable rates or at all, or in amounts adequate to cover such expenses should such a lawsuit occur. WithoutD&O insurance, the amounts we would pay to indemnify our officers and directors should they be subject to legal action based on their service to us could have amaterial adverse effect on our financial condition, results of operations and liquidity. Such lawsuits, and any related publicity, may result in substantial costs and,among other things, divert the attention of management and our employees. An unfavorable outcome in any claim or proceeding against us could have a materialadverse impact on our financial position and results of operations for the period in which the unfavorable outcome occurs, and potentially in future periods. Further,any settlement announced by us may expose us to further claims against us by third parties seeking monetary or other damages which, even if unsuccessful, woulddivert management attention from the business and cause us to incur costs, possibly material, to defend such matters, which could have a material adverse impacton our financial position. See “Legal Proceedings” for more information regarding our involvement in ongoing litigation matters.Federal, state and local or Israeli tax rules may adversely impact our results of operations and financial position.We are subject to federal, state and local taxes in the U.S., as well as local taxes in Israel in respect to our operations in Israel. Although we believe our taxestimates are reasonable, if the Internal Revenue Service or other taxing authority disagrees with the positions we have taken on our tax returns, we could faceadditional tax liability, including interest and penalties. If material, payment of such additional amounts upon final adjudication of any disputes could have a materialimpact on our results of operations and financial position. In addition, complying with new tax rules, laws or regulations could impact our financial condition, andincreases to federal or state statutory tax rates and other changes in tax laws, rules or regulations may increase our effective tax rate. Any increase in our effectivetax rate could have a material impact on our financial results.A significant majority of Orgad’s revenue is from sales of products on Amazon’s U.S. Marketplace and any change, limitation or restriction on ourability to operate on Amazon’s platform or any other marketplace could have a material adverse impact to our business, results of operations, financialcondition and prospects.Orgad, our wholly owned subsidiary, operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com, eBay and others. A substantial percentage of Orgad’s revenue is driven by sales on Amazon’s U.S. marketplace and Orgad is subject toterms of service of Amazon and other maketplaces and various other seller policies and services that apply to third parties selling products on Amazon and othermarketplaces. Generally, a marketplace has the right to terminate or suspend its agreement with Orgad at any time and for any reason. Such marketplace may takeother actions against Orgad such as suspending or terminating a seller account or product listing and withholding payments owed to Orgad indefinitely. Forexample, in July 2022, Amazon deactivated Orgad’s Amazon U.S. store as a result of complaints submitted due to an error in the listed manufacturer of certainproducts on Orgad’s store. Although its account was subsequently reinstated in September 2022, if the deactivation were to occur in the future for a prolongedperiod of time, or if Amazon were to terminate Orgad’s account, this would have a material adverse effect on our business, results of operations, financial conditionand prospects. While Orgad endeavors to materially comply with the terms of services of the marketplaces on which it operates, we can provide no assurance thatthese marketplaces will have the same determination with respect to our compliance.29In addition, Amazon and other marketplaces can make changes to its platform that could require Orgad to change the manner in which it operates, limit itsability to successfully launch new products or increase its costs to operate and such changes could have an adverse effect on our business, results of operations,financial condition and prospects. Examples of changes that could impact us relate to platform fee charges (i.e., selling commissions), exclusivity, inventorywarehouse availability, excluded products and limitations on sales and marketing. Any change, limitation or restriction on our ability to sell on Amazon’s platform orany other marketplace, even if temporary, could have a material impact on our business, results of operations, financial condition and prospects.Orgad also relies on services provided by Amazon’s fulfillment platform, including Prime Certification, which provides for expedited shipping to theconsumer, an important aspect in the buying decision for consumers. For products that Orgad fulfills itself, Orgad is qualified to offer our products for sale withPrime Certification delivery. Any inability to market our products for sale with expedited delivery provided under Prime Certification could have a material impact onour business, results of operations, financial condition and prospects. Failure to remain compliant with the best fulfillment practices on Amazon’s platform couldhave a material impact on our business, results of operations, financial condition and prospects. In addition, due to the COVID19 pandemic, Amazon has changedthe amount of inventory it accepts per product for a period of time. If this were to continue it could cause us to miss sales and/or pay additional shipping costswhich would harm our business operations and financial conditions.Orgad’s business depends on its ability to build and maintain strong product listings on ecommerce platforms. Orgad may not be able to maintain andenhance our product listings if it receives unfavorable customer complaints, negative publicity or otherwise fails to live up to consumers’ expectations, whichcould materially adversely affect our business, results of operations and growth prospects.Maintaining and enhancing Orgad’s product listings is critical in expanding and growing its business. However, a significant portion of Orgad’s perceivedperformance to the customer depends on third parties outside of its control, including suppliers and thirdparty delivery agents as well as online retailers such asAmazon and eBay. Because Orgad’s agreements with its online retail partners are generally terminable at will, it may be unable to maintain these relationships, andour results of operations could fluctuate significantly from period to period. Because Orgad relies on third parties to deliver its products, it is subject to shippingdelays or disruptions caused by inclement weather, natural disasters, labor activism, health epidemics or bioterrorism. It may also experience shipping delays ordisruptions due to other carrierrelated issues relating to their own internal operational capabilities. Further, Orgad relies on the business continuity plans of thesethird parties to operate during pandemics, like the COVID19 pandemic, and it has limited ability to influence their plans, prevent delays, and/or cost increases due toreduced availability and capacity and increased required safety measures.Customer complaints or negative publicity about its products, delivery times, or marketing strategies, even if not accurate, especially on blogs, social mediawebsites and thirdparty market sites, could rapidly and severely diminish consumer view of Orgad’s product listings and result in harm to its brand. Customers mayalso make safetyrelated or other types of claims regarding products sold through our online retail partners, such as Amazon, which may result in an online retailpartner removing the product from its marketplace. We also use and rely on other services from third parties, such as our telecommunications services, and thoseservices may be subject to outages and interruptions that are not within our control.Orgad faces risks related to successfully optimizing and operating its fulfillment and customer service operations.Failures to adequately predict customer demand or otherwise optimize and operate its fulfillment and customer service operations successfully from time totime result in excess or insufficient fulfillment or customer service capacity, increased costs, and impairment charges, any of which could materially harm ourbusiness. As Orgad continues to add fulfillment and customer service capability or add new businesses with different requirements, its fulfillment and customerservice operations become increasingly complex and operating them becomes more challenging. There can be no assurance that Orgad will be able to operate ouroperations effectively.30In addition, failure to optimize inventory in our fulfillment operations increases net shipping cost by requiring longzone or partial shipments. Orgad may beunable to adequately staff its fulfillment and customer service operations. Orgad’s failure to properly handle such inventory or to accurately forecast productdemand may result in it being unable to secure sufficient storage space or to optimize its fulfillment operations or cause other unexpected costs and other harm toour business and reputation.Orgad relies on a limited number of shipping companies to deliver inventory to it and completed orders to our customers. The inability to negotiateacceptable terms with these companies or performance problems or other difficulties experienced by these companies could negatively impact our operating resultsand customer experience. In addition, Orgad’s ability to receive inbound inventory efficiently and ship completed orders to customers also may be negativelyaffected by natural or manmade disasters, extreme weather, geopolitical events and security issues, labor or trade disputes, and similar events.The variability in Orgad’s retail business places increased strain on its operations.Demand for Orgad’s product listings can fluctuate significantly for many reasons, including as a result of seasonality, promotions, product launches, orunforeseeable events, such as in response to natural or manmade disasters, extreme weather, or geopolitical events. For example, Orgad expects a disproportionateamount of our retail sales to occur during our fourth quarter. Failure to stock or restock popular products in sufficient amounts such that Orgad fails to meetcustomer demand could significantly affect our revenue and our future growth. If too many customers access the websites on which Orgad engages in onlineretailing within a short period of time due to increased demand, Orgad may experience system interruptions that make the websites unavailable or prevent us fromefficiently fulfilling orders, which may reduce the volume of goods its offers or sell and the attractiveness of its products. In addition, Orgad may be unable toadequately staff for fulfillment of orders and customer service during these peak periods and delivery and other fulfillment companies and customer service cosourcers may be unable to meet the seasonal demand.Our business is subject to the risks of earthquakes, fire, power outages, floods, health risks and other catastrophic events, and to interruption by manmade problems such as terrorism.Natural disasters, such as fire or floods, a significant power outage, telecommunications failure, terrorism, an armed conflict, cyberattacks, epidemics andpandemics such as COVID19, or other geopolitical unrest could affect our supply chain, manufacturers, logistics providers, channel partners, or endcustomers orthe economy as a whole and such disruption could impact us and the shipments and sales. These risks may be further increased if the disaster recovery plans for usand our suppliers prove to be inadequate. To the extent that any of the above should result in delays or cancellations of customer orders, the loss of customers, orthe delay in the deployment or shipment of products, our business, financial condition, and operating results would be adversely affected.For example, on January 2, 2023, Orgad experienced a fire at its warehouse in Israel. We are not aware of any casualties or injuries associated with the fire.We shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incidentdid not affect the future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of thisincident on the other parties that were involved in the incident (lessor and others that leased properties near the warehouse).Our business could be negatively impacted by unsolicited takeover proposals, by shareholder activism or by proxy contests relating to the election ofdirectors or other matters.Our business could be negatively affected as a result of an unsolicited takeover proposal, by shareholder activism or a proxy contest. During 2021, anactivist shareholder sought to make changes to our board of directors, among other matters, which ultimately resulted in us entering into a settlement agreementwith the activist shareholder and another shareholder, and for which considerable costs were incurred and absorbed significant time and attention by managementand the board of directors. A future proxy contest, unsolicited takeover proposal, or other shareholder activism relating to the election of directors or other matterswould most likely require us to incur significant legal fees and proxy solicitation expenses and require significant time and attention by management and our Boardof Directors. The potential of a proxy contest, unsolicited takeover proposal, or other shareholder activism could interfere with our ability to execute our strategicplan, give rise to perceived uncertainties as to our future direction, result in the loss of potential business opportunities or make it more difficult to attract and retainqualified personnel, any of which could materially and adversely affect our business and operating results.31Environmental, social and corporate governance (ESG) issues, including those related to climate change and sustainability, may have an adverseeffect on our business, financial condition and results of operations and damage our reputation.There is an increasing focus from certain investors, customers, consumers, employees and other stakeholders concerning ESG matters. Additionally, publicinterest and legislative pressure related to public companies’ ESG practices continue to grow. If our ESG practices fail to meet regulatory requirements or investor,customer, consumer, employee or other shareholders’ evolving expectations and standards for responsible corporate citizenship in areas including environmentalstewardship, support for local communities, Board of Director and employee diversity, human capital management, employee health and safety practices, productquality, supply chain management, corporate governance and transparency, our reputation, brand and employee retention may be negatively impacted, and ourcustomers and suppliers may be unwilling to continue to do business with us.Customers, consumers, investors and other shareholders are increasingly focusing on environmental issues, including climate change, energy and wateruse, plastic waste and other sustainability concerns. Concern over climate change may result in new or increased legal and regulatory requirements to reduce ormitigate impacts to the environment. Changing customer and consumer preferences or increased regulatory requirements may result in increased demands orrequirements. Complying with these demands or requirements could cause us to incur additional manufacturing, operating or product development costs.If we do not adapt to or comply with new regulations, including the SEC’s published proposed rules that would require companies to provide significantlyexpanded climaterelated disclosures in their periodic reporting, which may require us to incur significant additional costs to comply and impose increased oversightobligations on our management and board of directors, or fail to meet evolving investor, industry or stakeholder expectations and concerns regarding ESG issues,investors may reconsider their capital investment in our company, we may become subject to penalties, and customers and consumers may choose to stoppurchasing our products, if approved for commercialization, which could have a material adverse effect on our reputation, business or financial condition.Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions andadverse developments with respect to financial institutions and associated liquidity risk.Our business depends on the economic health of the global economies. If the conditions in the global economies remain uncertain or continue to bevolatile, or if they deteriorate, including as a result of the impact of military conflict, such as the war between Russia and Ukraine, terrorism or other geopoliticalevents, our business, operating results and financial condition may be materially adversely affected. Economic weakness, inflation and increases in interest rates,limited availability of credit, liquidity shortages and constrained capital spending have at times in the past resulted, and may in the future result, in challenging anddelayed sales cycles, slower adoption of new technologies and increased price competition, and could negatively affect our ability to forecast future periods, whichcould result in an inability to satisfy demand for our products and a loss of market share.In addition, increases in inflation raise our costs for commodities, labor, materials and services and other costs required to grow and operate our business,and failure to secure these on reasonable terms may adversely impact our financial condition. Additionally, increases in inflation, along with the uncertaintiessurrounding COVID19, geopolitical developments and global supply chain disruptions, have caused, and may in the future cause, global economic uncertainty anduncertainty about the interest rate environment, which may make it more difficult, costly or dilutive for us to secure additional financing. A failure to adequatelyrespond to these risks could have a material adverse impact on our financial condition, results of operations or cash flows.More recently, the closures of SVB and Signature Bank and their placement into receivership with the FDIC created bankspecific and broader financialinstitution liquidity risk and concerns. Although the Department of the Treasury, the Federal Reserve and the FDIC jointly released a statement that depositors atSVB and Signature Bank would have access to their funds, even those in excess of the standard FDIC insurance limits, under a systemic risk exception, futureadverse developments with respect to specific financial institutions or the broader financial services industry may lead to marketwide liquidity shortages, impair theability of companies to access nearterm working capital needs, and create additional market and economic uncertainty. There can be no assurance that future creditand financial market instability and a deterioration in confidence in economic conditions will not occur. Our general business strategy may be adversely affected byany such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions. If the current equityand credit markets deteriorate, or if adverse developments are experienced by financial institutions, it may cause shortterm liquidity risk and also make anynecessary debt or equity financing more difficult, more costly, more onerous with respect to financial and operating covenants and more dilutive. Failure to secureany necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stockprice and could require us to alter our operating plans. In addition, there is a risk that one or more of our service providers, financial institutions, manufacturers,suppliers and other partners may be adversely affected by the foregoing risks, which could directly affect our ability to attain our operating goals on schedule andon budget.Our business may be adversely affected by the impact of any renewed outbreak of the COVID19 pandemic.Public health epidemics or outbreaks could adversely impact our business. In late 2019, a novel strain of COVID19, also known as coronavirus, wasreported in Wuhan, China. While initially the outbreak was largely concentrated in China, it spread worldwide. Many countries around the world, including in Israel,implemented significant governmental measures to control the spread of the virus, including temporary closure of businesses, severe restrictions on travel and themovement of people, and other material limitations on the conduct of business. These measures haven historically resulted in work stoppages and other disruptions.If there is a resurgence of the COVID19 pandemic, this could adversely impact our operations, including among others, our sales and marketing efforts and ourability to raise additional funds, and accordingly, the impact of COVID19 could have an adverse impact on our business and our financial results.32Risks Related to Our Operations in RussiaRussia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.In addition to our Israel operations, we have operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia and we engage two software developers through a third party who are based in Ukraine. On February 24,2022, Russia invaded Ukraine. The outbreak of hostilities between the two countries could result in more widespread conflict and could have a severe adverse effecton the region.Following Russia’s actions, various countries, including the U.S., Canada, the United Kingdom, Germany and France, as well as the European Union,issued broadranging economic sanctions against Russia. Such sanctions included, among other things, a prohibition on doing business with certain Russiancompanies, officials and oligarchs; a commitment by certain countries and the European Union to remove selected Russian banks from the Society for WorldwideInterbank Financial Telecommunications (SWIFT) electronic banking network that connects banks globally; and restrictive measures to prevent the Russian CentralBank from undermining the impact of the sanctions. In response to sanctions, the Russian Central Bank raised its interest rates and banned sales of local securitiesby foreigners. Russia may take additional counter measures or retaliatory actions in the future. While diplomatic efforts have been ongoing, the conflict betweenRussia and Ukraine is currently unpredictable and has the potential to result in broadened military actions. The duration of ongoing hostilities and such sanctionsand related events cannot be predicted. Uncertainty as to future relations between Russia and the U.S. and other countries in the west, or between Russia and othereastern European countries, may have a negative impact on our operations.Such international sanctions and potential responses to such sanctions, including those that may limit or restrict transfer funds into Russia, may in thefuture significantly affect our ability to conduct our activities in Russia including paying our personnel. To date, the conflict has had minimal impact on operations .Nevertheless, we have no way to predict the progress or outcome of the situation in Ukraine, as the conflict and governmental reactions are rapidly developing andbeyond our control. Prolonged unrest, intensified military activities or more extensive sanctions impacting the region could have a material adverse effect on ouroperations, results of operations, financial condition, liquidity and business outlook.Political, military conditions or other risks in Russia could adversely affect our business.Russia is a federative state consisting of 85 constituent entities, or “subjects.” The Russian Constitution reserves some governmental powers for theRussian Government, some for the subjects and some for areas of joint competence. In addition, eight “federal districts” (“federal’nye okruga”), which are overseenby a plenipotentiary representative of the President, supplement the country’s federal system. The delineation of authority among and within the subjects is, inmany instances, unclear and contested, particularly with respect to the division of tax revenues and authority over regulatory matters. For these reasons, theRussian political system is vulnerable to tension and conflict between federal, subject and local authorities. This tension creates uncertainties in the operatingenvironment in Russia, which may prevent us from carrying out our strategy effectively. The risks associated with these events or potential events could materiallyand adversely affect the investment environment and overall consumer and entrepreneurial confidence in Russia, and our business, prospects, financial condition,hiring ability, and results of operations could be materially and adversely affected.Furthermore, high levels of corruption reportedly exist in Russia, including the bribing of officials for the purpose of initiating investigations bygovernment agencies. Corruption and other illegal activities could disrupt our ability to conduct our business effectively, and claims that the we are involved in suchcorruption or illegal activities could generate negative publicity, of which could harm our development, financial condition, results of operations or prospects.Economic and other risks in Russia could adversely affect our business.Operating a business in an emerging market such as Russia can involve a greater degree of risk than operating a business in more developed markets.Over the last two decades, the Russian economy has experienced or continues to experience at various times:●significant volatility in its GDP;33●the impact of international sanctions;●high levels of inflation;●increases in, or high, interest rates;●sudden price declines in oil and other natural resources;●instability in the local currency market;●budget deficits;●the continued operation of lossmaking enterprises due to the lack of effective bankruptcy proceedings;●capital flight; and●significant increases in poverty rates, unemployment and underemployment.The Russian economy has been subject to abrupt downturns in the past, including as a result of the invasion of Ukraine, global financial crisis, and, as anemerging market, remains particularly vulnerable to further external shocks and any future fluctuations in the global markets. Any further deterioration in the generaleconomic conditions in Russia (whether or not as a result of the events mentioned above) could have a material adverse effect on the Russian economy and mayresult in hiring and operational difficulties, as well as potential flight of human capital, which could have a material adverse effect on our business, productdevelopment and results of operations.Legal risks in Russia could materially adversely affect our operations and Russian tax legislation is subject to frequent change.Among the risks of the Russian legal system are: inconsistencies among laws, presidential decrees, and government and ministerial orders and resolutions;conflicting local, regional and federal laws and regulations; the untested nature of the independence of the judiciary and its sensitivity to economic or politicalinfluences; substantial gaps in the regulatory structure due to the delay or absence of implementing legislation; a high degree of discretion on the part ofgovernmental authorities; reported corruption within governmental entities and other governmental authorities; the relative inexperience of judges and courts ininterpreting laws applicable to complex transactions; and the unpredictability of enforcement of foreign judgments and foreign arbitral awards. Many Russian lawsand regulations are construed in a way that provides for significant administrative discretion in application and enforcement. Unlawful, selective or arbitrary actionsof the Russian Government have reportedly included the denial or withdrawal of licenses, sudden and unexpected tax audits, criminal prosecutions, and civil claims.Any of the above events may have a material adverse effect on our product development and results of operations.Despite certain improvements in the taxation system made by the Russian Government over the past decade, Russian tax legislation is still subject tofrequent change, varying interpretations, and inconsistent and selective enforcement. There are currently no clear rules for distinguishing between lawful taxoptimization and tax evasion. In addition, Russian tax laws do not contain detailed rules on the taxation in Russia of foreign companies. As such, taxpayers oftenhave to resort to court proceedings to defend their position against the Russian tax authorities. However, in the absence of consistent court practice or bindingprecedents, there is inconsistency amongst court decisions. Further, the possibility exists that the Russian Federation would impose arbitrary or onerous taxes andpenalties in the future, which could have a material adverse effect on our product development and results of operations.34Risks Related to Our Operations In IsraelOur headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.Our headquarters and most of our operations are located in central Israel and our key employees, officers and directors are residents of Israel. Accordingly,political, economic and military conditions in Israel and the surrounding region may directly affect our business. Since the establishment of the State of Israel in1948, a number of armed conflicts have taken place between Israel and its Arab neighbors. Any hostilities involving Israel or the interruption or curtailment of tradewithin Israel or between Israel and its trading partners could adversely affect our operations and results of operations and could make it more difficult for us to raisecapital. During the winter of 2008, winter of 2012 and the summer of 2014, Israel was engaged in an armed conflict with Hamas, a militia group and political partyoperating in the Gaza Strip, and during the summer of 2006, Israel was engaged in an armed conflict with Hezbollah, a Lebanese Islamist Shiite militia group andpolitical party. Israel faces political tension with respect to its relationships with Turkey, Iran and certain Arab neighbor countries. In addition, recent conflictsinvolved missile strikes against civilian targets in various parts of Israel, and negatively affected business conditions in Israel. Recent political uprisings and socialunrest in various countries in the Middle East and North Africa are affecting the political stability of those countries. This instability may lead to deterioration of thepolitical relationships that exist between Israel and these countries, and have raised concerns regarding security in the region and the potential for armed conflict.Any armed conflicts, terrorist activities or political instability in the region could adversely affect business conditions and could harm our results of operations. Forexample, any major escalation in hostilities in the region could result in a portion of our employees and service providers being called up to perform military duty foran extended period of time. Parties with whom we do business have sometimes declined to travel to Israel during periods of heightened unrest or tension, forcing usto make alternative arrangements when necessary. In addition, the political and security situation in Israel may result in parties with whom we have agreementsinvolving performance in Israel claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions insuch agreements. Any future deterioration in the political and security situation in Israel will negatively impact our business.Our commercial insurance does not cover losses that may occur as a result of events associated with the security situation in the Middle East. Althoughthe Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that thisgovernment coverage will be maintained. Any losses or damages incurred by us could have a material adverse effect on our business. Any armed conflicts orpolitical instability in the region would likely negatively affect business conditions and could harm our results of operations.Further, in the past, the State of Israel and Israeli companies have been subjected to an economic boycott. Several countries still restrict business with theState of Israel and with Israeli companies. These restrictive laws and policies may have an adverse impact on our operating results, financial condition or theexpansion of our business.The legislative power of the State resides in the Knesset, a unicameral parliament that consists of 120 members elected by nationwide voting under asystem of proportional representation. Israel’s most recent general elections were held on April 9, 2019, September 17, 2019, March 2, 2020 and November 1, 2022.The uncertainty surrounding the results of the recent elections may continue. Actual or perceived political instability in Israel or any negative changes in thepolitical environment, may individually or in the aggregate adversely affect the Israeli economy and, in turn, our business, financial condition, results of operationsand prospects.Some of our employees are obligated to perform military reserve duty in Israel.Many Israeli citizens, including our employees are obligated to perform one month, and in some cases more, of annual military reserve duty until they reachthe age of 40 (or older, for reservists with certain occupations) and, in the event of a military conflict, may be called to active duty. In response to increases interrorist activity, there have been periods of significant callups of military reservists. It is possible that there will be military reserve duty callups in the future. Ouroperations could be disrupted by such callups. Such disruption could materially adversely affect our business, results of operations and financial condition.35It may be difficult to enforce a nonIsraeli judgment against the Company or its officers and directors.The operating subsidiary of ours is incorporated in Israel. All of our executive officers and directors are not residents of the United States, and asubstantial portion of our assets and the assets of our executive officers and directors are located outside the United States. Therefore, a judgment obtained againstus, or any of these persons, including a judgment based on the civil liability provisions of the U.S. federal securities laws, may not be collectible in the United Statesand may not necessarily be enforced by an Israeli court. It also may be difficult to affect service of process on these persons in the United States or to assert U.S.securities law claims in original actions instituted in Israel. Additionally, it may be difficult for an investor, or any other person or entity, to initiate an action withrespect to U.S. securities laws in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of U.S. securities laws reasoning that Israel is not themost appropriate forum in which to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law isapplicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law often involves the testimony of expert witnesses, which can be a timeconsuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel that addresses the mattersdescribed above. As a result of the difficulty associated with enforcing a judgment against us in Israel, it may be impossible to collect any damages awarded byeither a U.S. or foreign court.Our international operations could expose us to additional risks, including exchange rate fluctuations, legal regulations and political or economicinstability that could harm our business and operating results.Our international operations expose us to the following risks which may have a material adverse effect on our business and operating results:●devaluations and fluctuations in currency exchange rates including fluctuations between the U.S. dollar and the NIS and the Russian Ruble;●costs of compliance with local laws, including labor laws and intellectual property laws;●compliance with domestic and foreign government policies, including compliance with Israeli securities laws and TASE;●changes in trade regulations and procedures affecting approval, production, pricing, marketing, reimbursement for and access to, our products;●compliance with applicable foreign anticorruption laws, antitrust/competition laws, antiBoycott Israel law and antimoney laundering laws; and●economic and geopolitical developments and conditions, including ongoing instability in global economies and financial markets, international hostilities,acts of terrorism and governmental reactions, inflation, outbreaks of contagious disease (e.g., the COVID19 pandemic) and military and political alliances.Risks Related to Our Common StockA more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.Although our common stock is listed on the Nasdaq Capital Market, it has only been traded on the Nasdaq Capital Market since July 25, 2016. There hasbeen relatively limited trading volume in the market for our common stock, and a more active, liquid public trading market may not develop or may not be sustained.Limited liquidity in the trading market for our common stock may adversely affect a stockholder’s ability to sell its shares of common stock at the time it wishes tosell them or at a price that it considers acceptable. If a more active, liquid public trading market does not develop, we may be limited in our ability to raise capital byselling shares of common stock and our ability to acquire other companies or assets by using shares of our common stock as consideration. In addition, if there is athin trading market or “float” for our stock, the market price for our common stock may fluctuate significantly more than the stock market as a whole. Without a largefloat, our common stock would be less liquid than the stock of companies with broader public ownership and, as a result, the trading prices of our common stockmay be more volatile and it would be harder for you to liquidate any investment in our common stock. Furthermore, the stock market is subject to significant priceand volume fluctuations, and the price of our common stock could fluctuate widely in response to several factors, including:●our quarterly or annual operating results;●changes in our earnings estimates;●investment recommendations by securities analysts following our business or our industry;●additions or departures of key personnel;●changes in the business, earnings estimates or market perceptions of our competitors;36●our failure to achieve operating results consistent with securities analysts’ projections;●changes in industry, general market or economic conditions;●announcements of legislative or regulatory changes; and●natural disasters (including for example, the recent fire in the Orgad warehouse) and political and economic instability, including wars, terrorism, politicalunrest, results of certain elections and votes, emergence of a pandemic, or other widespread health emergencies (or concerns over the possibility of suchan emergency, including for example, the recent the COVID19 pandemic), boycotts, adoption or expansion of government trade restrictions, and otherbusiness restrictions.The stock market has experienced extreme price and volume fluctuations in recent years that have significantly affected the quoted prices of the securitiesof many companies. The changes often appear to occur without regard to specific operating performance. The price of our common stock could fluctuate basedupon factors that have little or nothing to do with us and these fluctuations could materially reduce our stock price.Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.If any of our shareholders were to decide to sell large amounts of stock over a short period of time (presuming such sales were permitted) such sales couldcause the market price of our common stock to drop significantly, even if our business is doing well. Further, the market price of our common stock could decline as aresult of the perception that such sales could occur. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equitysecurities in the future at a time and price that we deem appropriate.Our securities are traded on more than one market which may result in price variations.Our securities have been trading on the Nasdaq Capital Market since July 2016 and on TASE since September 2005. Trading in our securities on suchexchanges occurs in different currencies (U.S. dollars on the Nasdaq Capital Market and NIS on the TASE), and at different times (due to different time zones,trading days and public holidays in the United States and Israel). The trading prices of our securities on the two exchanges may differ due to the foregoing andother factors. Any decrease in the price of our shares on the TASE could cause a decrease in the trading price of our shares on the Nasdaq Capital Market and viceversa.We are a smaller reporting company and, as a result of the reduced disclosure and governance requirements applicable to such companies, ourcommon stock may be less attractive to investors.We are a smaller reporting company, (i.e. a company with “public float” held by nonaffiliates with a market value of less than $250 million) and we areeligible to take advantage of certain exemptions from various reporting requirements applicable to other public companies. We have elected to adopt these reduceddisclosure requirements. We cannot predict if investors will find our common stock less attractive as a result of our taking advantage of these exemptions. If someinvestors find our common stock less attractive as a result of our choices, there may be a less active trading market for our common stock and our stock price may bemore volatile.We do not expect to pay any cash dividends in the foreseeable future.We have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our board of directors deems relevant. Investors should not purchase our common stock expecting to receive cash dividends. Because we do notpay dividends, and there may be limited trading, investors may not have any manner to liquidate or receive any payment on their investment. Therefore, our failureto pay dividends may cause investors to not see any return on investment even if we are successful in our business operations. In addition, because we do not paydividends we may have trouble raising additional funds, which could affect our ability to expand our business operations.37UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2022☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ________ to _________Commission file number 00137370MY SIZE, INC.(Exact name of registrant as specified in charter)Delaware510394637(State or jurisdiction ofIncorporation or organization)I.R.S EmployerIdentification No.4 Hayarden, POB 1026, Airport City, Israel7010000(Address of principal executive offices)(Zip code)+9723 6009030(Registrant’s telephone number, including area code)Securities registered pursuant to Section 12(b) of the Act:Title of each classTrading Symbol(s)Name of Each Exchange on Which RegisteredCommon Stock, par value $0.001 per shareMYSZThe Nasdaq Capital MarketSecurities registered pursuant to Section 12(g) of the Act: None.Indicate by check mark whether the registrant is a wellknown seasoned issuer as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes☒ No ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer, a smaller reporting company, or an emerginggrowth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 of theExchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☒Smaller Reporting Company☒Emerging Growth Company☐If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revisedfinancial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b2 of the Exchange Act) Yes ☐No☒Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control overfinancial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflectthe correction of an error to previously issued financial statements. ☐Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by anyof the registrant’s executive officers during the relevant recovery period pursuant to §240.10D1(b). ☐The aggregate market value of voting and nonvoting common equity held by nonaffiliates of the registrant as of June 30, 2022, the last business day of theregistrant’s most recently completed second fiscal quarter, was approximately $25,551,906.Number of shares of common stock outstanding as of March 31, 2023 was 2,446,780.Documents Incorporated by Reference: None.Table of ContentsPart IItem 1.Business2Item 1A.Risk Factors18Item 1B.Unresolved Staff Comments41Item 2.Properties41Item 3.Legal Proceedings41Item 4.Mine Safety Disclosures42Part IIItem 5.Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities43Item 6.Selected Financial Data43Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations43Item 7A.Quantitative and Qualitative Disclosures about Market Risk50Item 8.Financial Statements and Supplementary DataF1Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure51Item 9A.Controls and Procedures51Item 9B.Other Information51Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.51Part IIIItem 10.Directors, Executive Officers and Corporate Governance52Item 11.Executive Compensation57Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters60Item 13.Certain Relationships and Related Transactions, and Director Independence62Item 14.Principal Accounting Fees and Services65Part IVItem 15.Exhibits, Financial Statement Schedules66Signatures69iPART IIn this Annual Report on Form 10K, unless the context requires otherwise, the terms “we,” “our,” “us,” or “the Company” refer to MySize, Inc., a Delawarecorporation, and its subsidiaries, including MySize Israel 2014 Ltd. My Size LLC, Orgad International Marketing Ltd., or Orgad, and Naiz Bespoke Technologies, S.L,or Naiz, taken as a whole.References to “U.S. dollars” and “$” are to currency of the United States of America, and references to “NIS” are to New Israeli Shekels. Unless otherwiseindicated, U.S. dollar translations of NIS amounts presented in this Annual Report on Form 10K for the year ended on December 31, 2022 are translated using therate of NIS 3.358 to $1.00.All information in this Annual Report on Form 10K relating to shares or price per share reflects the 1for25 reverse stock split effected by us on December8, 2022.CAUTIONARY NOTE ON FORWARDLOOKING STATEMENTSThis Annual Report on Form 10K contains certain forwardlooking statements within the meaning of Section 27A of the Securities Act and Section 21E ofthe Exchange Act. Any statements in Annual Report on Form 10K about our expectations, beliefs, plans, objectives, assumptions or future events or performanceare not historical facts and are forwardlooking statements. These statements are often, but not always, made through the use of words or phrases such as“believe,” “will,” “expect,” “anticipate,” “estimate,” “intend,” “plan” and “would.” For example, statements concerning financial condition, possible or assumedfuture results of operations, growth opportunities, industry ranking, plans and objectives of management, markets for our common stock and future managementand organizational structure are all forwardlooking statements. Forwardlooking statements are not guarantees of performance. They involve known and unknownrisks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to differ materially from any results, levels ofactivity, performance or achievements expressed or implied by any forwardlooking statement.Any forwardlooking statements are qualified in their entirety by reference to the risk factors discussed throughout this Annual Report on Form 10K. Someof the risks, uncertainties and assumptions that could cause actual results to differ materially from estimates or projections contained in the forwardlookingstatements include but are not limited to:●our history of losses and needs for additional capital to fund our operations and our inability to obtain additional capital on acceptable terms, or at all;●risks related to our ability to continue as a going concern;●the new and unproven nature of the measurement technology markets;●our ability to achieve customer adoption of our products;●our ability to realize the benefits of our acquisitions of Orgad and Naiz;●our dependence on assets we purchased from a related party;●our ability to enhance our brand and increase market awareness;●our ability to introduce new products and continually enhance our product offerings;●the success of our strategic relationships with third parties;●information technology system failures or breaches of our network security;●competition from competitors;●our reliance on key members of our management team;●current or future litigation;●current or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated liquidityrisk; and●the impact of the political and security situation in Israel on our business.1The foregoing list sets forth some, but not all, of the factors that could affect our ability to achieve results described in any forwardlooking statements.You should read this Annual Report on Form 10K and the documents that we reference herein and have filed as exhibits to the Annual Report on Form 10K,completely and with the understanding that our actual future results may be materially different from what we expect. You should assume that the informationappearing in this Annual Report on Form 10K is accurate as of the date hereof. Because the risk factors referred to in this Annual Report on Form 10K, could causeactual results or outcomes to differ materially from those expressed in any forwardlooking statements made by us or on our behalf, you should not place unduereliance on any forwardlooking statements.Further, any forwardlooking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forwardlookingstatement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. New factors emergefrom time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extentto which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements. We qualify all ofthe information presented in this Annual Report on Form 10K, and particularly our forwardlooking statements, by these cautionary statements.ITEM 1. BUSINESSOverviewWe are an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile phone or through MySizeID Widget: a simple questionnaire which uses a database collected over the years.MySizeID syncs the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and only presents itemsfor purchase that match their measurements to ensure a correct fit.We are positioning ourselves as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empower brand design teams, which are designed to increase endconsumer satisfaction, contributing to a sustainable world and reduce operation costs.Recent DevelopmentsOrgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,602 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.2The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz, a limitedliability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.3The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Warehouse FireOn January 2, 2023, Orgad experienced a fire at its warehouse in Israel. we are not aware of any casualties or injuries associated with the fire. We shiftedOrgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incident did not affectthe future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of this incident on the otherparties that were involved in the incident (lessor and others that leased properties near the warehouse).January 2023 FinancingOn January 10, 2023, we entered into a securities purchase agreement, or the RD Purchase Agreement, pursuant to which we agreed to sell and issue in theRD Offering an aggregate of 162,000 of our shares of common stock, or the RD Shares, and prefunded warrants, or the Prefunded Warrants, to purchase up to279,899 shares of common stock and, in a concurrent private placement, unregistered warrants to purchase up to 883,798 shares of common stock, or the RDWarrants, consisting of Series A warrants, or Series A Warrants, to purchase up to 441,899 shares of common stock and Series B warrants, or Series B Warrants, topurchase up to 441,899 shares of common stock, at an offering price of $3.055 per RD Share and associated Series A and Series B Warrants and an offering price of$3.054 per Prefunded Warrant and associated Series A and Series B Warrants.4In addition, we entered into a securities purchase agreement, or the PIPE Purchase Agreement, and together with the RD Purchase Agreement, thePurchase Agreements, pursuant to which we agreed to sell and issue in the PIPE Offering an aggregate of up to 540,098 unregistered Prefunded Warrants andunregistered warrants to purchase up to an aggregate of 1,080,196 shares of common stock, or the PIPE Warrants and together with the RD Warrants, the Warrants,consisting of Series A Warrants to purchase up to 540,098 shares of common stock and Series B Warrants to purchase up to 540,098 shares of common stock at anoffering price of $3.054 per Prefunded Warrant and associated Series A and Series B Warrants.The Prefunded Warrants are immediately exercisable at an exercise price of $0.001 per share and will not expire until exercised in full. The Warrants areimmediately exercisable upon issuance at an exercise price of $2.805 per share, subject to adjustment as set forth therein. The Series A Warrants have a term of fiveand onehalf years from the date of issuance and the Series B Warrants have a term of 28 months from the date of issuance. The Warrants may be exercised on acashless basis if there is no effective registration statement registering the shares underlying the warrants.In connection with the PIPE Purchase Agreement, we entered into a registration rights agreement, or the Registration Rights Agreement. Pursuant to theRegistration Rights Agreement, we are required to file a resale registration statement, or the Registration Statement, with the Securities and Exchange Commission, orthe SEC, to register for resale the shares issuable upon exercise of the unregistered Prefunded Warrants and the Series A and Series B Warrants, within 20 days ofthe signing date of the PIPE Purchase Agreement, or the Signing Date, and to have such Registration Statement declared effective within 60 days after the SigningDate in the event the Registration Statement is not reviewed by the SEC, or 90 days of the Signing Date in the event the Registration Statement is reviewed by theSEC. we will be obligated to pay certain liquidated damages if we fail to maintain the effectiveness of the Registration Statement.The Purchase Agreements and the Registration Rights Agreements also contain representations, warranties, indemnification and other provisionscustomary for transactions of this nature. In addition, subject to limited exceptions, the Purchase Agreements provide that for a period of one year following theclosing of the Offerings, we will not effect or enter into an agreement to effect a “variable rate transaction” as defined in the Purchase Agreements.Aggregate gross proceeds to the Company in respect of the Offerings was approximately $3.0 million, before deducting fees payable to the placement agentand other offering expenses payable by the Company.We also entered into a letter agreement, or the Engagement Agreement, with H.C. Wainwright & Co., LLC, or Wainwright, pursuant to which Wainwrightagreed to serve as the exclusive placement agent for the Company in connection with the Offerings. We paid Wainwright a cash placement fee equal to 7% of theaggregate gross proceeds raised in the Offerings, a management fee of 1% of the aggregate gross proceeds raised in the Offerings, a nonaccountable expenseallowance of $85,000 and clearing fees of $15,950. Wainwright also received placement agent warrants, or the Placement Agent Warrants, with substantially the sameterms as the Series A Warrants issued in the Offering in an amount equal to 7% of the aggregate number of Shares and Prefunded Warrants sold in the Offerings, or68,740 shares, at an exercise price of $3.8188 per share and a term expiring on January 10, 2028.Our SolutionOur cloudbased software platform provides highly accurate sizing and measurement with broad applications including the online fashion/apparel industry,logistics and courier services and home DIY. Currently, we are mainly focusing on the ecommerce fashion/apparel industry. This proprietary technology is driven byseveral patented algorithms which are able to calculate and record measurements in a variety of novel ways. Although specific functionality varies by product, webelieve that our core solutions address the need for highly accurate measurements in a variety of consumer friendly, every day uses.5We have developed three products, MySizeID for the fashion/apparel industry, BoxSize for the logistics and courier services market and SizeUp for thehome DIY market.●MySizeID enables shoppers to generate highly accurate measurements of their body to find proper fitting clothes and accessories, through the use ofour application on their mobile phone or through a simple questionnaire if the user decides not to download the application. MySizeID syncs the user’smeasurement data to a sizing chart and presents items for purchase that match their measurements to ensure a correct fit. MySizeID is available forlicense by retailers and accessable by consumers through a web page.●BoxSize enables customers to quickly and easily measure the size and volume of a parcel to accurately calculate shipping fees. It also offers shippingcompanies a variety of precise logistical data for more efficiently managing their supply chain, providing them with an accurate way to compare thephysical package with what is in the shipping manifest. BoxSize solution is available for license on both iOS and Android operating systems. BoxSizeis available on the Honeywell Marketplace and in August 2019 was approved for Honeywell’s Independent Software Vendor Program, and MySize wasgranted an independent software vendor (ISV) status on the Zebra Technologies and on DataLogic platforms.●SizeUp is a digital tape measure that allows users to measure length, width and height of a surface by moving their smartphone from point to point ofan object or space. SizeUp is a valueadd for DIY and home improvement retailers whose customers struggle to find the appropriately sized items (likeblinds or curtains) for their homes or projects due to inaccurate measurements. SizeUp also is designed to replace rulers, tape measures and othermeasuring tools used for DIY projects. SizeUp is available for consumer download on both iOS and Android operating systems.The following are some select key features of our solutions:●Integration Capability. We design our solutions to be flexible and configurable, allowing our clients to match their use of our algorithms and softwarewith their specific business processes and workflows. Our platform has been organically developed from a common code base, data structure and userinterface, providing a consistent user experience with powerful features that are easily adaptable to our clients’ needs. The MySizeID widget can beintegrated via oneline JavaScript code, or through RESTful API;●Intuitive user experience. Our intuitive, easytouse interface is based on current technology, multiple focus groups and automatically adapts to users’devices, including mobile platforms, thereby significantly increasing accessibility of our solutions;●Big Data Generation. While we supply to the user the information he/she requires, we gather certain vital information such as body measurement andpackage volume which can be used anonymously to help the retailer acquire predictive size information on stocking, operations and consumers thatmay be in between sizes. All the information is being gathered and stored on our servers where it can be used by retailers;●NonInvasive. In taking measurements using our solution, the smartphone camera is not utilized; instead, the measurements are captured by scanningthe smartphone over the consumer’s body or package, thus ensuring greater privacy.Our Growth StrategyWe aim to drive revenue primarily through penetration of the U.S. and Europe markets through a business to business to consumer (B2B2C) model in theverticals we are targeting. We are pursuing the following growth strategies:●Sign Additional Commercial Agreements with U.S. Retailers. During 2022, we expanded our commercial agreements with Levi’s, introducing NorthAmerica (U.S. and Canada) and Latin America regions, and by extension Levis’ native apps in EU and U.S. regions. We also entered into commercialagreements with Baby Fresh, Galax, Punto Blanco, GEF France, Diesel, Gaala, Superdry, Uniontex Industries, and Temperlay London among others. Weare in various stages of discussions with U.S. and foreign retailers for the deployment of our size recommendation and measurement technology with aview to entering into additional commercial agreements.6●Pursue a TwoPronged Commercialization Strategy. We are seeking to accelerate adoption of our solutions both through direct partnerships with ecommerce websites as well as through thirdparty platform websites. While we seek to directly enter into partnerships with companies maintaining ecommerce websites in the apparel, courier and DIY markets, we are also seeking to deploy our solutions on thirdparty platforms. Furthermore, with theexpansion of MySizeID through the release of our FirstLook Smart Mirror, which we are offering to brick and mortar stores to digitize the physicalstores, MySizeID is now available for online retailers utilizing the WooCoomerce, Shopify, Lightspeed, PrestaShop, Bitrix and Wix platforms and tobrick and mortar stores through GK Software POS solution while BoxSize is available on the Honeywell, Zebra Technologies and Datalogic.●Ongoing Investment in our Technology Platform. We continue to invest in building new software capabilities and extending our platform to bring thepower of accurate measurement to a broader range of applications. In particular, we seek not only to deliver size recommendations but to provide arobust, endtoend,artificial intelligence, or AIdriven platform that inspires consumer confidence and drives revenue growth by providing a superiorconsumer journey to both online and the brick and mortar stores.●Grow our database. As the usage of our measurement apps increases, our database of information including user behaviour and body measurementsgenerates valuable statistics. Such data can be used in the big data market for targeted advertising and for blind consumer data mining.●Identify and acquire synergistic businesses. In order to reduce our time to market and obtain complementary technologies, we are seeking to acquiretechnologies and businesses that are synergistic to our product offering. We recently completed an acquisition of Orgad which operates anomnichannel ecommerce platform and Naiz which provides SaaS technology solutions that solve size and fit issues for fashion ecommerce companies.●Partnerships and cooperation. In order to bring a wider solution for the retail market we are working to partner and integrate our technology withpartners that can increase our penetration and offering to the market.Market OpportunityThe global ecommerce market was $5.7 trillion in 2022, and the industry is expected to grow significantly in the coming years with no signs of slowingdown. Market specialists expect a compound annual growth rate of 27.43% from 2023 to 2028: according to data from Statista, the market is expected to reach $6.5trillion in 2023. While many sectors have found ways to increase revenue through ecommerce, ecommerce is still plagued by issues that cut into profits andnegatively impact the bottom line, such as customer returns, low consumer conversion, and associated restocking and shipping costs.Fashion/ApparelSince the onset of the COVID19 pandemic, an immense shift to digital was recorded, with 85.9% growth vs. prepandemic, according to Mastercard, andover 2 billion people worldwide who shop online, according to data from Oberlo. In November 2022, online shoppers broke records with $11.3 billion in spending onCyber Monday, driving 5.8% yearoveryear growth and making the day the biggest online shopping day of all time, according to Adobe Analytics.In 2021, fashion companies invested between 1.6% and 1.8% of their revenues in technology, according to Mckinsey, and are expected to double theinvestment by 2030 in order to keep up with digital natives and keep a competitive edge. Personalization in ecommerce and hybrid connectivity in brickandmortarretail are two key themes in the future of fashtech, according to Mckinsey’s 2022 State of Fashion Technology.7In the upcoming years, inflation is expected to impact the fashion world. As prices for goods increase, the challenge will be to inspire confidence inconsumers, via different smart digital tools. Brands will need to embrace creative digital tools and new channels to deepen customer relationships, and as Mckinseyforecasts in their State of Fashion report for 2023, they will need to execute on priorities such as sustainability and digital acceleration.The global fashion ecommerce market size is expected to grow from $744.4 billion in 2022 to $821.19 billion in 2023 at a compound annual growth rate of10.3%. In 2027, the market size is expected to grow to $1,222.32 billion, at a compound annual growth rate of 10.5%, according to BRC.Based on the importance which shoppers attribute to free shipping 50% of cart abandonment rate is due to extra shipping costs (Baymard Institute) theneed for fashion retailers to substantiate the optimal size for a customer, thus minimizing returns, has never been more crucial.As brands move online or significantly expand their online presence, we believe that developing innovative ways to connect with shoppers, both onlineand offline, has become a top priority.Shipping/ParcelAccording to Pitney Bowes, parcel revenue in 13 major countries around the world increased by 17% year over year from $420 billion in 2020 (reflecting 131billion parcels) to $491 billion in 2021 (reflecting 159 billion parcels). In the shipping/parcel industry, the dimensions of a package are critical. It is not merely themeasurement of a package or box – but rather the amount of space that the package or box will take up on a truck, airplane, or ship that will be transporting thepackage or box. Far too often, retailers use unfit packaging for their items, adding additional costs in materials and shipping fees.DIYSimilar to issues in the apparel and fashion market, big box, hardware, furniture, and DIY stores are plagued by returns due to incorrect fit andmeasurements. In an industry where precise measurement for projects is an absolute necessity, ecommerce has not grown as quickly as in other industries which webelieve is due to lack of consumer confidence in measurements at home and buying the correct item online.MySizeIDWe have released the MySizeID app for both iOS and Android which assists consumers to take highly accurate measurement of their own body in order tosize clothing in the best way possible without the need to try the clothes on before purchasing. MySizeID is designed to simplify the process of purchasing clothesonline and significantly reduce the rate of returns of poorfitting clothing. During 2022, MySizeID delivered over 23.5 million size recommendations.The application is the result of a research and development effort that combines:●anthropometric research – analyses of information pertaining to body measurements derived from a survey and the subsequent determination ofcorrelations between body parts;●body measurement algorithm research – an algorithm created by us to measure body parts; and●retailers size chart analyses – adopting a deep understanding of the size charts of retailers and the corresponding “body to garment size.”MySizeID allows consumers to create a secure, online profile of their personal measurements, which can then be utilized, with partnered online retailers, toensure that no matter the manufacturer or size chart, they will get the right fit. MySizeID operates based on the use of existing sensors in smart phones which enable,through a specific purpose application, the measurement of the body of any consumer by moving the smartphone along his or her body. The MySizeID applicationdoes not rely on user photographs or any additional hardware; all a user needs to do is scan their body with their smartphone and the application records theirmeasurements. The measurements can then be saved in our database in the cloud, enabling the user to search for clothes in various retailer websites withoutworrying about size. When a search is made, the retailer will connect to our cloud database, and then provide results based on the user’s measurements and otherparameters as he or she may have defined. This data is also saved for use when a customer enters a brickandmortar store to help serve the customer moreefficiently and to provide a better shopping experience.8Figure 1: Screenshot of MySizeID on smartphone and ecommerce websiteAs part of the integration process, we offer to the retailer five main components:●Mobile App. MySizeID comes in the form of a native app or website. Our native app can be used “as is” integrated into the retailer’s ecommercewebsite. The website users can build a body profile on the app and receive size recommendations for their profile both in the app and on a widgetintegrated with their website.9●Widget. When a consumer enters into the retailer’s website and looks for a specific item, he or she can click on the MySizeID widget which will informthe consumer of his or her recommended size, based on his or her actual measurements, as measured using the app and the item he or she is looking at.The widget has two features:AI Wizard mode allows the user to obtain size from the following parameters: gender, height, weight, belly shape, hip shape and bra size only. Thegender, height and weight questions are mandatory, while the body shape questions are optional and can be added to increase accuracy for specificapparel categories.Guest mode allows a user that does not wish to sign up to MySizeID as a user to obtain size recommendations as well.●Analytic Pixel. MySizeID analytic pixel allows retailer to track and analyze the widget usage. By adding the pixel to the retailer’s website, MySizeID BIteam can track engagement, order, and return data and provide retailers with tools to understand the advantages and benefits of MySizeID.Use your own device using MySizeID instore solution, shoppers can receive size recommendations for all store items, when shopping in the offlinestores. The shoppers can build their body profile using an easy to use 3 to 6 questions form, scan an item barcode and receive a size recommendationfor the scanned item based on their body profile and the item’s size chart.Another feature we added is the “inbetween sizing” feature. Our system can detect a user that has body dimensions that place the user inbetweenthe clothes sizes being offered and lets the user know that. A user can then choose between the two sizes according to the user’s fit preference(tight/loose/average).In addition, we have recently released our InstantApp feature which allows shoppers to generate their body measurements directly from our widget,without the need to download our mobile app. Using this technology, the shoppers can create their online profile of their personal measurements andcomplete a purchase faster and easier with minimum distractions.The body profile can be created while shoppers are viewing the page from their mobile phone, or by scanning a QR code on desktop that will open thesame page on the mobile phone.Screenshot of InstantApp widget on desktop on yumyumfashion website10●MyDash Platform. The MyDash platform is a smart backoffice system where the retailer enters all the information regarding its size charts thatcorrelates to every product in its ecommerce site, and where the retailer can access the information on its users. This system is customizable based onthe retailer’s needs. In 2021, we changed the MyDash system to increase the system’s accessibility, added walkthroughs, user guides and changed theuser interface and much more for the ease of use. We added the option to use our generic size charts, added the option upload size chart files insteadof typing the size charts values manually, added more widget styling options and changed the pairing mechanism between the size chart and theproducts to be more userfriendly.Figure 3: Screenshot of BackOffice System●FirstLook Smart Mirror. The Smart Mirror provides an interactive, mirrorlike touch display that allows brands to provide instore customers with anenhanced, online shopping experience, contactless checkout and obtains the recommended size. The MySizeIDFirstLook Smart Mirror can be placedin numerous locations throughout a retail store, including the fitting rooms (without cameras) or other hightraffic locations of the store. Highlightcapabilities of the FirstLook Smart Mirror include a 3D “Tryiton” interactive avatar experience, personalized and highly accurate sizerecommendations by MySizeID, thirdparty point of sale systems integration, styling recommendations and contactless “select and collect” at theregister feature.Illustration of MySizeID “first look” smart mirror in a fashion store11We are currently offering MySizeID technology to retailers through either a payperuse model or a monthly subscription model. In our payperusebusiness model, every time the consumer obtains a recommended size, the retailer is charged for the usage.BoxSizeBoxSize is a parcel measurement application that can provide realtime logistic data on package volumes and transportation, resulting in improvedoperational efficiency and reduced operating expenses. In addition, BoxSize allows customers to easily measure the size of their parcel with their smartphone,calculate shipping costs and arrange for a convenient pickup time for the package. BoxSize is available both on iOS and Android.In 2020 we released the “One Click” feature on BoxSize that enables the user to measure a package with just one swipe of the handheld device. Previously,measurements through BoxSize would require three separate swipes.Figure 4: Screenshot of BoxSizeOur BoxSize mobile measurement solution is available on the Honeywell Marketplace. In addition, BoxSize was approved for Honeywell’s Global VendorProgram, and is available to provide highly accurate mobile measurement solutions for thousands of Honeywell clients. We also developed a new dashboard for thecourier companies to have all the required data about each package in one place. It includes package dimensions, pictures, scan geo location and more. Thedashboard also let the courier use Webhooks, which allows him to get the information from his own system.12In 2020, we announced our partnership with Datalogic, a company focused on the automatic data capture and process automation markets. The partnershipmakes our BoxSize measurement solution available to thousands of Datalogic customers in the Transportation and Logistics vertical.Agreement with Delhivery Private Limited, IndiaWe entered into an agreement with Delhivery Private Limited, one of the largest courier pickup, delivery, and online shipping services in India. Delhivery’sreputation as a frontrunner in delivery and logistics tech makes its decision to select Boxsize a particularly strong testament to the value the solution provides.BoxSize provides Delhivery’s employees on the B2B side with critical information that will allow them to effortlessly optimize loading efficiency and add even morerealtime visibility to operations.SizeUpWe are working on additional consumer applications, including a DIY application. Our SizeUp application is a smart tape measure for the business toconsumer market which allows users to utilize their smartphone as a tape measure. The application provides measurements with an accuracy of within twocentimeters. Through the use of SizeUp, users will be able to visualize how an object or a piece of furniture will fit in an existing room in their home or office. It alsoadded Google Vision for image content analysis, object detection, and title suggestions.Currently the SizeUp app for Android and iOS is available for free for the first 30 days, after which a user will be required to register via email and pay aonetime fee of $1.99 to continue using the application. To date, revenues from downloads have been minimal.Research and DevelopmentOur research and development team are responsible for the research, algorithm, design, development, and testing of all aspects of our measurementplatform technology. We invest in these efforts to continuously improve, innovate, and add new features to our solutions.We incurred research and development expenses of approximately $1.7 million in 2022 and $4.25 million in 2021, relating to the development of itsapplications and technologies. The decrease from the corresponding period primarily resulted from share based payment in amount of $2,618,000 attributed to theshare issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021. We intend to continue to invest in our research anddevelopment capabilities to extend our platform and bring our measurement technology to a broader range of applications.13In 2022, the R&D department experienced significant success in their efforts to improve the performance of their size recommendation system. Through acombination of optimized algorithms and the incorporation of cuttingedge technologies, the team was able to achieve a threefold increase in the system’s speed.This breakthrough not only makes the system one of the fastest and most accurate on the market, but also reduced the operation costs, making it more costeffective for businesses to use. Additionally, the solution is now highly scalable, allowing it to easily adapt to the needs of businesses of any size. The R&D team isnow focused on further improving the system and exploring new applications for the technology.Sales and MarketingIn 2019, we launched a commercialization strategy that directs our sales efforts toward both sales to ecommerce players in specific vertical markets such asfashion/apparel and shipping/delivery as well as to ecommerce thirdparty platform providers. As of March 15, 2023, our products are being sold in the followingcountries: US, UK, France, Netherlands, Spain, Portugal Turkey, Germany, Israel and Italy, generating customer leads, building out a sales pipeline, and developingcustomer relationships.We believe an effective method to market our suite of products is for users to actively use and explore its capabilities. We encourage free trials of one ormore of our products in order to successfully convert those accounts to paid subscriptions.Proprietary RightsWe rely on a combination of patent, copyright, trademark and trade secret laws in the United States and other jurisdictions, as well as contractualprotections, to protect our proprietary technology.As of December 31, 2022, we owned 18 issued patents: six in Europe, four in the U.S., three in each of Russia and Japan and one in each of Canada andIsrael which expire between January 20, 2033 and August 18, 2036, and we have two additional patent applications in process. As of such date, we do not have anyregistered trademarks.We cannot provide any assurance that our proprietary rights with respect to our products will be viable or have value in the future since the validity,enforceability and type of protection of proprietary rights in softwarerelated industries are uncertain and still evolving.Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products or to obtain and use informationthat we regard as proprietary. Policing unauthorized use of our products is difficult, and while we are unable to determine the extent to which piracy of our softwareproducts exists, software piracy can be expected to be a persistent problem. In addition, the laws of some foreign countries do not protect proprietary rights to asgreat an extent as do the laws of the United States, and effective copyright, trademark, trade secret and patent protection may not be available in those jurisdictions.Our means of protecting our proprietary rights may not be adequate to protect us from the infringement or misappropriation of such rights by others.Further, in recent years, there has been significant litigation in the United States involving patents and other intellectual property rights, particularly in thesoftware and Internetrelated industries. We can become subject to intellectual property infringement claims as the number of our competitors grows and ourproducts and services overlap with competitive offerings. These claims, even if not meritorious, could be expensive to defend and could divert management’sattention from operating our business. If we become liable to third parties for infringing their intellectual property rights, we could be required to pay a substantialaward of damages and to develop noninfringing technology, obtain a license or cease selling the products that contain the infringing intellectual property. We maybe unable to develop noninfringing technology or obtain a license on commercially reasonable terms, if at all.14Government RegulationWe are subject to a number foreign and domestic laws and regulations that involve matters central to our business. These laws and regulations mayinvolve privacy, data protection, intellectual property, or other subjects. Many of the laws and regulations to which we are subject are still evolving and being testedin courts and could be interpreted in ways that could harm our business. In addition, the application and interpretation of these laws and regulations often areuncertain, particularly in the new and rapidly evolving industry in which we operate. Because global laws and regulations have continued to develop and evolverapidly, it is possible that we, our products, or our platform may not be, or may not have been, compliant with each such applicable law or regulation.In particular, we are subject to a variety of federal, state and international laws and regulations governing the processing of personal data. Many U.S. stateshave passed laws requiring notification to data subjects when there is a security breach of personally identifiable data. There are also a number of legislativeproposals pending before the U.S. Congress, various state legislative bodies and foreign governments concerning data protection. In addition, data protection lawsin Europe and other jurisdictions outside the United States can be more restrictive than those within the United States, and the interpretation and application ofthese laws are still uncertain and in flux.For example, the General Data Protection Regulation, or GDPR, which took effect on May 25, 2018, enhances data protection obligations for entities thatprocess personal data about individuals, including obligations to cooperate with European data protection authorities, implement security measures and keeprecords of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to the greater of €20 million or 4% of global annual revenue. Inaddition, the California Consumer Privacy Act of 2018, or CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and requiredeletion of their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used.The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further,failure to comply with the Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may exposeus to administrative fines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the currentenforcement measures and sanctions. Given the breadth and depth of changes in data protection obligations, meeting the requirements of GDPR and otherapplicable laws and regulations has required significant time and resources, including a review of our technology and systems currently in use against therequirements of GDPR and other applicable laws and regulations. We have taken various steps to prepare for complying with GDPR and other applicable laws andregulations however there can be no assurance that these steps are sufficient to assure compliance. Further, additional EU laws and regulations (and member states’implementations thereof) further govern the protection of individuals and of electronic communications. If our efforts to comply with GDPR or other applicable lawsand regulations are not successful, we may be subject to penalties and fines that would adversely impact our business and results of operations, and our ability touse personal data of individuals could be significantly impaired.CompetitionWe operate in a highly competitive industry that is characterized by constant change and innovation. Changes in the applications and the programinglanguages used to develop applications, devices, operating systems, and technology landscape result in evolving customer requirements. Our competitors includeTrue Fit, Fit analytics and 3DLook.The principal competitive factors in our market include the following:●High Accuracy Size Recommendations: the highest accuracy and the lowest margin of error by combining patented technology including AI and ML,size chart or spec data, and MySizeID property body data measurement;●Integration○Fast 1 week integration including size chart size chart review and product mapping○Easy 1 line of “all included” script implementation●Technical Advantages○Very small library that weighs ±50kb (minimum widget loading time on product page)○UltraFast loading and size recommendation presenting○Restful API option (API integration with any website or app)15●Optimizations○Adjustments of size charts based on performance○Widget usage analysis by FashTech and BI teams○Automatic pairing of size charts with products/collections●User Experience○Easy to use interface (1015 seconds to receive size recommendations)○Option to add/deduct questions to/from widget wizards○Users automatically receive size recommendations on all products after initial sign up●Product and platform features, architecture, reliability, privacy and security, performance, effectiveness, and supported environments;●Product extensibility and ability to integrate with other technology infrastructures;●Digital operations expertise;●Ease of use of products and platform capabilities;●Total cost of ownership;●Adherence to industry standards and certifications;●Strength of sales and marketing efforts;●Brand awareness and reputation; and●Focus on customer successWe believe we generally compete favorably with our competitors on the basis of these factors. We expect competition to increase as other established andemerging companies enter our markets, as customer requirements evolve, and as new products and technologies are introduced. We expect this to be particularlytrue as we offer a smartphonebased offering that does not need to utilize the smartphone’s camera, and our competitors may also seek to repurpose their existingofferings to provide similar solutions. Many of our competitors have substantially greater financial, technical, and other resources, greater name recognition, largersales and marketing budgets, broader distribution, and larger and more mature intellectual property portfolios.Human Capital ManagementAs of March 31, 2023, we had a total of 35 employees, of which 30 were fulltime employees, including 9 in sales and marketing, 12 in technology anddevelopment and 9 in administration and finance.None of our employees are represented by a collective bargaining agreement, nor have we experienced any work stoppage. We consider our relationshipwith our employees to be good. Our future success depends on our continuing ability to attract and retain highly qualified engineers, sales and marketing, accountmanagement, and senior management personnel.We also believe we have built a strong sales team focused on expanding into new markets through the acquisition of Naiz and our current team.We believe that our future success will depend, in part, on our continued ability to attract, hire and retain qualified personnel. In particular, we depend onthe skills, experience and performance of our senior management and research personnel. We compete for qualified personnel with other hitech companies, as wellas universities and nonprofit research institutions.16We provide competitive compensation and benefits programs to help meet the needs of our employees. In addition to salaries, these programs (which varyby country/region and employment classification) include incentive compensation plan, pension, and insurance benefits, paid time off, , among others. We also usetargeted equitybased grants with vesting conditions to facilitate retention of personnel, particularly for our key employees.The success of our business is fundamentally connected to the wellbeing of our people. Accordingly, we implemented an hybrid work policy in which theemployees can work from home twice a week.We consider our employees to be a key factor to our success and we are focused on attracting and retaining the best employees at all levels of ourbusiness. Inclusion and diversity is a strategic, business priority. We employ people based on relevant qualifications, demonstrated skills, performance and otherjobrelated factors. We do not tolerate unlawful discrimination related to employment, and strive to ensure that employment decisions related to recruitment,selection, evaluation, compensation, and development, among others, are not influenced by race, color, religion, gender, age, ethnic origin, nationality, sexualorientation, marital status, or disability. Continuous monitoring to ensure pay equity has been a focus in 2022. We have continued to improve gender balance in 2022with a focus on increasing the representation of women hired as new college graduates. We are committed to creating a trusting environment where all ideas arewelcomed and employees feel comfortable and empowered to draw on their unique experiences and backgrounds.We consider our relations with our employees to be good.Company InformationOur principal executive offices are located at HaYarden 4 St., POB 1026, Airport City, Israel 7010000, and our telephone number is +97236009030. Ourwebsite address is www.mysizeid.com. Any information contained on, or that can be accessed through, our website is not incorporated by reference into, nor is it inany way a part of, this Annual Report on Form 10K.We use our website (www.mysizeid.com) as a channel of distribution of Company information. The information we post through this channel may bedeemed material. Accordingly, investors should monitor our website, in addition to following our press releases, SEC filings and public conference calls andwebcasts. The contents of our website are not, however, a part of this Annual Report on Form 10K.Corporate HistoryWe were incorporated in the State of Delaware on September 20, 1999 under the name Topspin Medical, Inc. In December 2013, we changed our name toKnowledgetree Ventures Inc. Subsequently, in February 2014, we changed our name to MySize, Inc. In 2020, we created a subsidiary in the Russian Federation, MySize LLC.From inception through 2012, we were engaged in research and development of a medical magnetic resonance imaging, or MRI, technology forinterventional cardiology and in the development of MRI technology for use in the diagnosis and treatment of prostate cancer. In January 2012, we acquiredMetamorefix Ltd., or Metamorefix. Metamorefix was incorporated in 2007, and was engaged in the development of innovative solutions for the rehabilitation oftissues, particularly skin tissues. By the end of 2012, we ceased operations and in January 2013, we sold our entire ownership interest in Metamorefix.In September 2013, Ronen Luzon, our Chief Executive Officer, acquired control of the Company from Asher Shmuelevitch, according to which Mr. Luzonpurchased 70,238 shares of common stock from Mr. Shmuelevitch, which shares represented approximately 40% of the issued and outstanding capital stock of theCompany at such time, thus becoming a controlling shareholder of the Company. In connection with the acquisition, Mr. Luzon reached a settlement with our thencreditors pursuant to which the main creditor, Mr. Shmuelevitch, was paid a total sum of approximately $140,000 in consideration for a full and final waiver of any andall his claims that he may have relating to any monetary indebtedness of the Company to the creditors.17In February 2014, My Size Israel, our wholly owned subsidiary, entered into a Purchase Agreement, or the Purchase Agreement, with Shoshana Zigdon,who at the time was a beneficial owner of more than 20% of our outstanding shares, with respect to the acquisition by us of certain rights related to the collection ofdata for measurement purposes including rights in the venture, the method and a patent application that had been filed by the Seller (PCT/IL2013/050056), or theAssets. In consideration for the sale of the Assets, we agreed to pay to Ms. Zigdon, 18% of our operating profit, directly or indirectly connected with the Assetstogether with valueadded tax in accordance with the law for a period of seven years from the end of the development period of the aforementioned venture. Inaddition to the foregoing, the Purchase Agreement provided that all developments, improvements, knowledge and knowhow developed and/or accumulated by usafter the execution of the Purchase Agreement will be owned by us. Further, Ms. Zigdon agreed not to compete, directly or indirectly, with us in any matter relatingto the Assets for a period of seven years from the end of the development period of the venture.On May 26, 2021, we, My Size Israel, and Ms. Zigdon entered into an Amendment to Purchase Agreement, or the Amendment, which made certainamendments to the Purchase Agreement. Pursuant to the Amendment, Ms. Zigdon agreed to irrevocably waive (i) the right to repurchase certain assets related tothe collection of data for measurement purposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which our business issubstantially dependent, or the Assets, and (ii) all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My SizeIsrael under the Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation, reward orany rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights, or the Waiver. Inconsideration of the Waiver, we issued 100,000 shares of common stock to Ms. Zigdon.In September 2005, we commenced trading on the Tel Aviv Stock Exchange, or TASE. Between 2007 and 2012 we reported as a public company with theSEC. In August 2012, we suspended our reporting obligations. In mid2015 we resumed reporting as a public company. On July 25, 2016, our common stock beganpublicly trading on the Nasdaq Capital Market under the symbol “MYSZ”.ITEM 1A. RISK FACTORSAn investment in our common stock involves a high degree of risk. You should carefully consider the following risk factors and the other information inthis Annual Report on Form 10K before investing in our common stock. Our business and results of operations could be seriously harmed by any of the followingrisks. The risks set out below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterialalso may materially adversely affect our business, financial condition and/or operating results. If any of the following events occur, our business, financial conditionand results of operations could be materially adversely affected. In such case, the value and trading price of our common stock could decline, and you may lose allor part of your investment.Summary Risk FactorsThe principal factors and uncertainties that make investing in our ordinary shares risky, include, among others:Risks Related to Our Financial Position and Capital Requirements●We have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.●Our limited operating history makes it difficult to evaluate our business and prospects.●We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive and maycause the market price of our common stock to decline.●The report of our independent registered public accounting firm contains an explanatory paragraph regarding substantial doubt about our ability tocontinue as a going concern.Risks Related to Our Company and Our Business●The market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and online thirdparty resellers adopting our flagship product, MySizeID.18●Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broader marketacceptance of our products.●We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which may makeit difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.●We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increase ourcapital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.●If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations and financialcondition may be adversely affected.●If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operations andfinancial condition could be adversely affected.●The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile device applications andcustom development services.●Our growth depends, in part, on the success of our strategic relationships with third parties.●Changes in economic conditions could materially affect our business, financial condition and results of operations.●We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.●We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significant interruptionin our network or hosting and cloud services could adversely impact our operations and harm our business.●Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.●We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.●A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.●Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, data protectionand information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive and confidentialinformation. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm our business,results of operations and financial condition.●We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect our business.●We may face intense competition and expect competition to increase in the future, which could limit us in developing a customer base and generatingrevenue.●Our business operations and future development could be significantly disrupted if we lose key members of our management team.19●If we are able to expand our operations, we may be unable to successfully manage our future growth.Risks Related to Our Operations in Israel and Russia●Our headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.●Russia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.Risks Related to Our Common Stock●A more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.●Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions and adversedevelopments with respect to financial institutions and associated liquidity risk;●Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.●Our securities are traded on more than one market which may result in price variations.●We are a former “shell company” and as such are subject to certain limitations not generally applicable to other public companies.Risks Related to Our Financial Position and Capital RequirementsWe have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.We realized a net loss of approximately $8.3 million and $10.5 million for the years ended December 31, 2022 and 2021 and had an accumulated deficit of$53.5 million as at December 31, 2022. Because of the numerous risks and uncertainties associated with the development and commercialization of our products andbusiness, we are unable to predict the extent of any future losses or when we will become profitable, if at all. Expected future operating losses will have an adverseeffect on our cash resources, shareholders’ equity and working capital. Our failure to become and remain profitable could depress the value of our stock and impairour ability to raise capital, expand our business, maintain our development efforts, or continue our operations. A decline in our value could also cause you to lose allor part of your investment in us.Our limited operating history makes it difficult to evaluate our business and prospects.We have only been developing our measurement technology since 2014. Since then, our operating history has been primarily limited to research anddevelopment, pilot studies, raising capital, and more recently acquisitions and sales and marketing efforts. Therefore, it may be difficult to evaluate our business andprospects. We have not yet demonstrated an ability to commercialize our products. Consequently, any predictions about our future performance may not beaccurate, and you may not be able to fully assess our ability to complete development and/or commercialize our products, and any future products.We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive andmay cause the market price of our common stock to decline.Based on our projected cash flows and the cash balances as of the date of this Annual Report on Form 10K, our existing cash is insufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. In order to meet ourbusiness objectives in the future, we will need to raise additional capital, which may not be available on reasonable terms or at all. Additional capital would be usedto accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;20●respond to competitive pressure;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, and a number of otherfactors, many of which are outside our control, and on our financial performance. Accordingly, we cannot assure you that we will be able to successfully raiseadditional capital at all or on terms that are acceptable to us. If we cannot raise additional capital when needed, it may have a material adverse effect on our business,results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.Management has concluded that there is substantial doubt about our ability to continue as a going concern which could prevent us from obtainingnew financing on reasonable terms or at all.We have incurred significant losses and negative cash flows from operations and have an accumulated deficit that raises substantial doubt about its abilityto continue as a going concern. Our audited consolidated financial statements for the year ended December 31, 2022 were prepared under the assumption that wewould continue our operations as a going concern. Our independent registered public accounting firm has included a “going concern” explanatory paragraph in itsreport on our financial statements for the year ended December 31, 2022. If we are unable to improve our liquidity position, by, among other things, raising capitalthrough public or private offerings or reducing our expenses, we may exhaust our cash resources and will be unable to continue our operations. If we cannotcontinue as a viable entity, our shareholders would likely lose most or all of their investment in us.Risks Related to Our Company and Our BusinessThe market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and onlinethirdparty resellers adopting our flagship product, MySizeID.The market for our measurement technology is relatively new and unproven and is subject to a number of risks and uncertainties. We believe that ourfuture success will depend in large part on market adoption of our flagship product, MySizeID, by U.S. retailers and online thirdparty resellers. In order to grow ourbusiness, we intend to focus on educating retailers and resellers and other potential customers about the benefits of our measurement technology, expanding thefunctionality of our products and bringing new products to market to increase market acceptance and use of our technology. Our ability to develop and expand themarket that our products address depends upon a number of factors, including the cost savings, performance and perceived value associated with such products.The market for our products could fail to develop or there could be a reduction in interest or demand for our products as a result of a lack of consumer acceptance,technological challenges, competing products and services, weakening economic conditions and other causes. We may never successfully commercialize ourproducts and if our products fail to achieve market acceptance, this would have a material adverse effect on our business, results of operations and financialcondition.21Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broadermarket acceptance of our products.Our ability to achieve customer adoption, especially among U.S. retailers will depend, in part, on our ability to effectively organize, focus and train our salesand marketing personnel. We have limited experience selling to U.S. retailers and only recently established a U.S. sales force. We believe that there is significantcompetition for experienced sales professionals with the skills and industry knowledge that we require. Our ability to achieve significant revenue growth in thefuture will depend, in part, on our ability to recruit, train and retain a sufficient number of experienced sales professionals, particularly those with experience sellingto U.S. retailers. In addition, even if we are successful in hiring qualified sales personnel, new hires require significant training and experience before they achievefull productivity, particularly for sales efforts targeted at U.S. retailers and new markets. Because we only recently started sales efforts, we cannot predict whether, orto what extent, our sales efforts will be successful.We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which maymake it difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.In this market segment, the decision to adopt our products may require the approval of multiple technical and business decision makers, including security,compliance, procurement, operations and IT. In addition, while U.S. retailers may be willing to deploy our products on a limited basis, before they will commit todeploying our products at scale, they often require extensive education about our products and significant customer support time, engage in protracted pricingnegotiations and seek to secure readily available development resources. As a result, it is difficult to predict when we will obtain new customers and begingenerating revenue from these customers. As part of our sales cycle, we may incur significant expenses before executing a definitive agreement with a prospectivecustomer and before we are able to generate any revenue from such agreement. We have no assurance that the substantial time and money spent on our salesefforts will generate significant revenue. If conditions in the marketplace generally or with a specific prospective customer change negatively, it is possible that nodefinitive agreement will be executed, and we will be unable to recover any of these expenses. If we are not successful in targeting, supporting and streamlining oursales processes and if revenue expected to be generated from a prospective customer is not realized in the time period expected or not realized at all, our ability togrow our business, and our operating results and financial condition may be adversely affected. If our sales cycles lengthen, our future revenue could be lower thanexpected, which would have an adverse impact on our operating results and could cause our stock price to decline.22We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increaseour capital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.In order to reduce time to market and obtain complementary technologies, we are seeking to acquire technologies and businesses that are synergistic to ourproduct offering. For example, we recently acquired Orgad which operates an omnichannel ecommerce platform and Naiz which provides SaaS technology solutionsthat solve size and fit issues for fashion ecommerce companies. We evaluate from time to time various acquisitions and collaborations, including licensing oracquiring complementary technologies, intellectual property rights, or businesses. The process for acquiring a company may take from several months up to a yearand costs can vary greatly. We may also compete with others to acquire companies, and such competition may result in decreased availability of, or an increase inprice for, suitable acquisition candidates. In addition, we may not be able to consummate acquisitions or investments that we have identified as crucial to theimplementation of our strategy for other commercial or economic reasons. As a result, it may be more difficult for us to identify suitable acquisition or investmenttargets or to consummate acquisitions or investments on acceptable terms or at all. If we are not able to execute on any acquisition, we may not be able to achieve afuture growth strategy and may lose market share.In addition, the acquisition of Orgad, Naiz and any potential future acquisition, joint venture or collaboration may entail numerous potential risks, including:●increased operating expenses and cash requirements;●the assumption of additional indebtedness or contingent liabilities;●assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel;●the diversion of our management’s attention from our existing programs and initiatives in pursuing such a strategic merger or acquisition;●retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships;●risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing technologies; and●our inability to generate revenue from acquired technologies or products sufficient to meet our objectives in undertaking the acquisition or even to offsetthe associated acquisition and maintenance costs.All of the foregoing risks may be magnified as the cost, size or complexity of an acquisition or acquired company increases, or where the acquiredcompany’s products, market or business are materially different from ours, or where more than one integration is occurring simultaneously or within a concentratedperiod of time. We may not be able to obtain the necessary regulatory approvals, including those of antitrust authorities and foreign investment authorities, incountries where we seek to consummate acquisitions or make investments. For those and other reasons, we may ultimately fail to consummate an acquisition, even ifwe announce the intended acquisition.In addition, we may require significant financing to complete an acquisition or investment, whether through bank loans, raising of equity or debt orotherwise. We cannot assure you that such financing options will be available to us on reasonable terms, or at all. If we are not able to obtain such necessaryfinancing, it could have an impact on our ability to consummate a substantial acquisition or investment and execute a future growth strategy. Alternatively, we mayissue a significant number of shares as consideration for an acquisition, which would have a dilutive effect on our existing shareholders. For example, in partialconsideration for the acquisition of Orgad, we agreed to issue up to 111,602 shares of our common stock and in the Naiz acquisition we issued 240,000 shares of ourcommon stock. Furthermore, if we undertake acquisitions, we may incur large onetime expenses and acquire intangible assets that could result in significant futureamortization expense.23If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations andfinancial condition may be adversely affected.We believe that enhancing the “MySize” brand identity and increasing market awareness of our company and products, particularly among U.S. retailers, iscritical to achieving widespread acceptance of our products. Our ability to successfully develop new retailers may be adversely affected by a lack of awareness oracceptance of our brand. To the extent that we are unable to foster name recognition and affinity for our brand, our growth may be significantly delayed or impaired.The successful promotion of our brand will depend largely on our continued marketing efforts, market adoption of our products, and our ability to successfullydifferentiate our products from competing products and services. Our brand promotion may not be successful or result in revenue generation. Any incident thaterodes consumer affinity for our brand could significantly reduce our brand value and damage our business. If consumers perceive or experience a reduction inquality, or in any way believe we fail to deliver a consistently positive experience, our brand value could suffer and our business may be adversely affected.In particular, adverse weather conditions can impact guest traffic at our retailers, and, in more severe cases, cause temporary retail closures, sometimes forprolonged periods. Our business is subject to seasonal fluctuations, with retail sales typically higher during certain months, such as December. Adverse weatherconditions during our most favorable months or periods may exacerbate the effect of adverse weather on consumer traffic and may cause fluctuations in ouroperating results from quartertoquarter within a fiscal year.If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operationsand financial condition could be adversely affected.Our ability to attract new customers depends in part on our ability to enhance and improve our existing products, increase adoption and usage of ourproducts and introduce new products. The success of any enhancements or new products depends on several factors, including timely completion, adequatequality testing, actual performance quality, and overall market acceptance. Enhancements and new products that we develop may not be introduced in a timely orcosteffective manner, may contain errors or defects, may have interoperability difficulties with our platform or other products or may not achieve the broad marketacceptance necessary to generate significant revenue. Furthermore, our ability to increase the usage of our products depends, in part, on the development of newuse cases for our products and may be outside of our control. If we are unable to successfully enhance our existing products to meet evolving customerrequirements, increase adoption and usage of our products, develop new products, then our business, results of operations and financial condition would beadversely affected.The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile Apps and customdevelopment services.We must continue to enhance and improve the performance, functionality and reliability of our products. The mobile technology industry is characterizedby rapid technological change, changes in user requirements and preferences, frequent new product and services introductions embodying new technologies andthe emergence of new industry standards and practices that could render our products obsolete. Our success will depend, in part, on our ability to both internallydevelop and enhance our existing products, develop new products that address the increasingly sophisticated and varied needs of our customers, and respond totechnological advances and emerging industry standards and practices on a costeffective and timely basis. The development of our technology involvessignificant technical and business risks. We may fail to use new technologies effectively or to adapt our proprietary technology and systems to customerrequirements or emerging industry standards. If we are unable to adapt to changing market conditions, customer requirements or emerging industry standards, wemay not be able to increase our revenue and expand our business.Changes in economic conditions could materially affect our business, financial condition and results of operations.Because our primary target customers include U.S. retailers , we, together with the rest of the fashion/apparel industry, will depend upon consumerdiscretionary spending. Increases in unemployment rates, reductions in home values, increases in home foreclosures, investment losses, personal bankruptcies andreductions in access to credit and reduced consumer confidence, may impact consumers’ ability and willingness to spend discretionary dollars. In addition, volatileeconomic conditions may repress consumer confidence and discretionary spending. Any of the foregoing may have a material adverse effect on our business,financial condition and results of operations.24Our growth depends, in part, on the success of our strategic relationships with third parties.To grow our business, we anticipate that we will continue to depend on relationships with third parties, such as our customers and thirdparty platforms.Identifying partners, and negotiating and documenting relationships with them, requires significant time and resources. If we are unsuccessful in establishing ormaintaining our relationships with third parties, our ability to compete in the marketplace or to grow our revenue could be impaired, and our results of operationsmay suffer. Even if we are successful, we cannot assure you that these relationships will result in increased customer usage of our products or increased revenue.We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.We currently utilize, and plan on continuing to utilize over the current fiscal year, thirdparty networking providers and distribution through companiesincluding, but not limited to, Apple and Google as well as Shopify, WooCommerce and, Datalogic, Honeywell and Zebra to distribute our technologies. If disruptionsor capacity constraints occur, we may have no means of replacing these services, on a timely basis or at all. This could cause a material adverse condition for ouroperations and financial earnings.We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significantinterruption in our network or hosting and cloud services could adversely impact our operations and harm our business.Our technology infrastructure is critical to the performance of our products and customer satisfaction. Our products run on a complex distributed system,or what is commonly known as cloud computing. We own, operate and maintain elements of this system, but significant elements of this system are operated bythirdparties that we do not control and which would require significant time to replace. We expect this dependence on thirdparties to continue. In particular, asignificant portion, if not almost all data storage, data processing and other computing services and systems is hosted by cloud computing providers. Anydisruptions, outages and other performance problems relating to such services, including infrastructure changes, human or software errors and capacity constraints,could adversely impact our business, financial condition or results of operations.Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.We update our products on a frequent basis. Despite efforts to test our updates, errors, failures or bugs may not be found in our products until after theyare deployed to a customer. We have discovered and expect we will continue to discover errors, failures and bugs in our products and anticipate that certain of theseerrors, failures and bugs will only be discovered and remediated after deployment. Real or perceived errors, failures or bugs in our platform could result in negativepublicity, government inquiries, loss of or delay in market acceptance of our products, loss of competitive position, or claims by customers for losses sustained bythem. In such an event, we may be required, or may choose, for customer relations or other reasons, to expend additional resources in order to help correct theproblem.We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.In connection with the operation of our business, we store, process and transmit data, including personal and payment information, about our employeesand customers, a portion of which is confidential and/or personally sensitive. Unauthorized disclosure or loss of sensitive or confidential data may occur through avariety of methods. These include, but are not limited to, systems failure, employee negligence, fraud or misappropriation, or unauthorized access to or through ourinformation systems, whether by our employees or third parties, including a cyberattack by computer programmers, hackers, members of organized crime and/orstatesponsored organizations, who may develop and deploy viruses, worms or other malicious software programs. Such disclosure, loss or breach could harm ourreputation and subject us to government sanctions and liability under our contracts and laws that protect sensitive or personal data and confidential information,resulting in increased costs or loss of revenues. It is possible that security controls over sensitive or confidential data and other practices we and our thirdpartyvendors follow may not prevent the improper access to, disclosure of, or loss of such information. The potential risk of security breaches and cyberattacks mayincrease as we introduce new products and offerings. Further, data privacy is subject to frequently changing rules and regulations, which sometimes conflict amongthe various jurisdictions in which we provide services. Any failure or perceived failure to successfully manage the collection, use, disclosure, or security of personalinformation or other privacy related matters, or any failure to comply with changing regulatory requirements in this area, could result in legal liability or impairment toour reputation in the marketplace.25A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.Information security risks have generally increased in recent years, in part because of the proliferation of new technologies and the use of the Internet, andthe increased sophistication and activity of organized crime, hackers, terrorists, activists, cybercriminals and other external parties, some of which may be linked toterrorist organizations or hostile foreign governments. For example, a cybercriminal could use cybersecurity threats to gain access to sensitive information aboutanother company or to alter or disrupt news or information to be distributed by PR Newswire. Cybersecurity attacks are becoming more sophisticated and includemalicious software, ransomware, attempts to gain unauthorized access to data and other electronic security breaches that could lead to disruptions in criticalsystems, unauthorized release of confidential or otherwise protected information and corruption of data, substantially damaging our reputation. Any person whocircumvents our security measures could steal proprietary or confidential customer information or cause interruptions in our operations. We incur significant coststo protect against security breaches, and may incur significant additional costs to alleviate problems caused by any breaches. Our failure to prevent securitybreaches, or wellpublicized security breaches affecting the Internet in general, could significantly harm our reputation and business and financial results.Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, dataprotection and information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive andconfidential information. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm ourbusiness, results of operations and financial condition.We and our customers that use our products may be subject to privacy and data protectionrelated laws and regulations that impose obligations inconnection with the collection, processing and use of personal data, financial data, health or other similar data. The U.S. federal and various state and foreigngovernments have adopted or proposed limitations on, or requirements regarding, the collection, distribution, use, security and storage of personally identifiableinformation of individuals. The U.S. Federal Trade Commission and numerous state attorneys general are applying federal and state consumer protection laws toimpose standards on the online collection, use and dissemination of data, and to the security measures applied to such data.Similarly, many foreign countries and governmental bodies, including the EU member states, have laws and regulations concerning the collection and useof personally identifiable information obtained from individuals located in the EU or by businesses operating within their jurisdiction, which are often morerestrictive than those in the United States. Laws and regulations in these jurisdictions apply broadly to the collection, use, storage, disclosure and security ofpersonally identifiable information that identifies or may be used to identify an individual, such as names, telephone numbers, email addresses and, in somejurisdictions, IP addresses and other online identifiers.For example, the GDPR, which took full effect on May 25, 2018. The GDPR enhances data protection obligations for businesses and requires serviceproviders (data processors) processing personal data on behalf of customers to cooperate with European data protection authorities, implement security measuresand keep records of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to or greater of €20 million or 4% of global annualrevenues. In addition, the CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and require deletion of their personalinformation, opt out of certain personal information sharing, and receive detailed information about how their personal information is used. The CCPA provides forcivil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further, failure to comply withthe Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may expose us to administrativefines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the current enforcementmeasures and sanctions. There are also additional laws and regulations in additional jurisdictions around the world which govern the protection of consumers andof electronic communications. If our efforts to comply with GDPR, CCPA or other applicable laws and regulations are not successful, we may be subject to penaltiesand fines that would adversely impact our business and results of operations, and our ability to conduct business could be significantly impaired.26Additionally, although we endeavor to have our products comply with applicable laws and regulations, these and other obligations may be modified, theymay be interpreted and applied in an inconsistent manner from one jurisdiction to another, and they may conflict with one another, other regulatory requirements,contractual commitments or our internal practices. We also may be bound by contractual obligations relating to our collection, use and disclosure of personal,financial and other data or may find it necessary or desirable to join industry or other selfregulatory bodies or other privacy or data protectionrelatedorganizations that require compliance with their rules pertaining to privacy and data protection.We expect that there will continue to be new proposed laws, rules of selfregulatory bodies, regulations and industry standards concerning privacy, dataprotection and information security in the United States, the European Union and other jurisdictions, and we cannot yet determine the impact such future laws,rules, regulations and standards may have on our business. Moreover, existing U.S. federal and various state and foreign privacy and data protectionrelated lawsand regulations are evolving and subject to potentially differing interpretations, and various legislative and regulatory bodies may expand current or enact new lawsand regulations regarding privacy and data protectionrelated matters. Because global laws, regulations and industry standards concerning privacy and datasecurity have continued to develop and evolve rapidly, it is possible that we or our products or platform may not be, or may not have been, compliant with eachsuch applicable law, regulation and industry standard and compliance with such new laws or to changes to existing laws may impact our business and practices,require us to expend significant resources to adapt to these changes, or to stop offering our products in certain countries. These developments could adverselyaffect our business, results of operations and financial condition.We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect ourbusiness.Our ability to implement our business plan successfully depends in part on our ability to build brand recognition using our trademarks, service marks andother proprietary intellectual property, including our names and logos. We currently have no registered trademarks. While we plan to register a number of ourtrademarks; however, no assurance can be given that our trademark applications will be approved. As of December 31, 2022, we own 18 issued patents: six in Europe,four in the U.S., three in each of Russia and Japan and one in each of Canada and Israel which expire between January 20, 2033 and August 18, 2036, and we havetwo additional patent applications in process. As of such date, we do not have any registered trademarks., No assurance can be given that our patent applicationswhich are in process will be approved. If our patent applications are not approved, our ability to expand or develop our business may be negatively affected.Third parties may also oppose our trademark or patent applications, or otherwise challenge our use of the trademarks or patents. In the event that ourtrademarks or patents are successfully challenged, we could be forced to rebrand our goods and services or redesign our technology, which could result in loss ofbrand recognition, and could require us to devote resources to advertising and marketing new brands and products.If our efforts to register, maintain and protect our intellectual property are inadequate, or if any thirdparty misappropriates, dilutes or infringes on ourintellectual property, the value of our brands may be harmed, which could have a material adverse effect on our business and might prevent our brands fromachieving or maintaining market acceptance. We may also face the risk of claims that we have infringed third parties’ intellectual property rights. If third parties claimthat we infringe upon their intellectual property rights, our operating profits could be adversely affected. Any claims of intellectual property infringement, eventhose without merit, could be expensive and time consuming to defend, require us to rebrand our services, if feasible, divert management’s attention and resourcesor require us to enter into royalty or licensing agreements in order to obtain the right to use a thirdparty’s intellectual property.Any royalty or licensing agreements, if required, may not be available to us on acceptable terms or at all. A successful claim of infringement against uscould result in our being required to pay significant damages, enter into costly license or royalty agreements, or stop the sale of certain products or services, any ofwhich could have a negative impact on our operating profits and harm our future prospects.We may face intense competition and expect competition to increase in the future, which could prohibit us from developing a customer base andgenerating revenue.We face significant competition in every aspect of our business. Our competitors include True Fit, Virtusize, EasyMeasure, AR MeasureKit, Smart Measureand 3DLook. These companies may already have an established market in our industry. Most of these companies have significantly greater financial and otherresources than us and have been developing their products and services longer than we have been developing ours.27In addition, some of our larger competitors have substantially broader product offerings and leverage their relationships based on other products orincorporate functionality into existing products to gain business in a manner that discourages potential customers from purchasing our products. Potentialcustomers may also prefer to purchase from their existing solution providers rather than a new solution provider regardless of product performance or features.These larger competitors often have broader product lines and market focus and will therefore not be as susceptible to downturns in a particular market. Conditionsin our market could change rapidly and significantly as a result of technological advancements, partnering by our competitors or continuing market consolidation.New startup companies that innovate and large competitors that are making significant investments in research and development may invent similar or superiorproducts and technologies that compete with our products. In addition, some of our competitors may enter into new alliances with each other or may establish orstrengthen cooperative relationships. Any such consolidation, acquisition, alliance or cooperative relationship could lead to pricing pressure and our loss of anyfuture market share and could result in a competitor with greater financial, technical, marketing, service and other resources, all of which could harm our ability tocompete. Furthermore, organizations may be more willing to incrementally add solutions to their existing infrastructure from competitors than to replace their existinginfrastructure with our products. Any failure to meet and address these factors could harm our business, results of operations and financial condition.Our business operations and future development could be significantly disrupted if we lose key members of our management team.The success of our business continues to depend to a significant degree upon the continued contributions of our senior officers and key employees, bothindividually and as a group. Our future performance will be substantially dependent in particular on our ability to retain and motivate Ronen Luzon, our ChiefExecutive Officer, and certain of our other senior executive officers. The loss of the services of our Chief Executive Officer, senior officers or other key employeescould have a material adverse effect on our business and plans for future development. We have no reason to believe that we will lose the services of any of theseindividuals in the foreseeable future; however, we currently have no effective replacement for any of these individuals due to their experience, reputation in theindustry and special role in our operations. We also do not maintain any key man life insurance policies for any of our employees.If we are able to expand our operations, we may be unable to successfully manage our future growth.Our growth may strain our infrastructure and resources. Any such growth could place increased strain on our management, operational, financial and otherresources, and we will need to train, motivate, and manage employees, as well as attract management, sales, finance and accounting, international, technical, andother professionals. Any failure to expand these areas and implement appropriate procedures and controls in an efficient manner and at a pace consistent with ourbusiness objectives could have a material adverse effect on our business, results of operations and financial condition.Our business operations are conducted in multiple languages and could be disrupted due to miscommunications or translation errors.The success of our business continues to depend on our marketing efforts in the United States, Europe and Israel, each of which is conducted in the locallanguage. Miscommunications or inaccurate foreign language translations could have a material adverse effect on our business operations and financial conditions.Additionally, contracts, communications and complex technical information must be accurately translated into foreign languages.We will continue to incur costs and be subject to various obligations as a result of being a public company, listed in the United States and in Israel.We will continue to incur significant legal, accounting and other expenses as a result of being a public company, listed in the United States and in Israel.Although we will incur costs each year associated with being a publiclytraded company, it is possible that our actual costs of being a publiclytraded company willvary from year to year and may be different than our estimates. In estimating these costs, we take into account expenses related to insurance, legal, accounting andcompliance activities.28Furthermore, the need to maintain the corporate infrastructure demanded of a public company may divert management’s attention from implementing ourgrowth strategy, which could prevent us from improving our business, results of operations and financial condition. We have made, and will continue to make,changes to our internal controls and procedures for financial reporting and accounting systems to meet our reporting obligations as a U.S. publicly traded company.However, the measures we take may not be sufficient to satisfy our obligations as a publicly traded company.Any future or current litigation could have a material adverse impact on our results of operations, financial condition and liquidity.From time to time, we may be subject to litigation, including, among others, potential stockholder derivative actions and class actions. Risks associatedwith legal liability are difficult to assess and quantify, and their existence and magnitude can remain unknown for significant periods of time. Subject to certainexceptions, our Amended and Restated Certificate of Incorporation, or Certificate of Incorporation, and Amended and Restated Bylaws, or Bylaws, require us toindemnify and advance expenses to our officers and directors involved in legal proceedings. To date we have obtained directors and officers’ liability, or D&O,insurance to cover some of the risk exposure for our directors and officers. Such insurance generally pays the expenses (including amounts paid to plaintiffs, fines,and expenses including attorneys’ fees) of officers and directors who are the subject of a lawsuit as a result of their service to us. There can be no assurance that wewill be able to continue to maintain this insurance at reasonable rates or at all, or in amounts adequate to cover such expenses should such a lawsuit occur. WithoutD&O insurance, the amounts we would pay to indemnify our officers and directors should they be subject to legal action based on their service to us could have amaterial adverse effect on our financial condition, results of operations and liquidity. Such lawsuits, and any related publicity, may result in substantial costs and,among other things, divert the attention of management and our employees. An unfavorable outcome in any claim or proceeding against us could have a materialadverse impact on our financial position and results of operations for the period in which the unfavorable outcome occurs, and potentially in future periods. Further,any settlement announced by us may expose us to further claims against us by third parties seeking monetary or other damages which, even if unsuccessful, woulddivert management attention from the business and cause us to incur costs, possibly material, to defend such matters, which could have a material adverse impacton our financial position. See “Legal Proceedings” for more information regarding our involvement in ongoing litigation matters.Federal, state and local or Israeli tax rules may adversely impact our results of operations and financial position.We are subject to federal, state and local taxes in the U.S., as well as local taxes in Israel in respect to our operations in Israel. Although we believe our taxestimates are reasonable, if the Internal Revenue Service or other taxing authority disagrees with the positions we have taken on our tax returns, we could faceadditional tax liability, including interest and penalties. If material, payment of such additional amounts upon final adjudication of any disputes could have a materialimpact on our results of operations and financial position. In addition, complying with new tax rules, laws or regulations could impact our financial condition, andincreases to federal or state statutory tax rates and other changes in tax laws, rules or regulations may increase our effective tax rate. Any increase in our effectivetax rate could have a material impact on our financial results.A significant majority of Orgad’s revenue is from sales of products on Amazon’s U.S. Marketplace and any change, limitation or restriction on ourability to operate on Amazon’s platform or any other marketplace could have a material adverse impact to our business, results of operations, financialcondition and prospects.Orgad, our wholly owned subsidiary, operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com, eBay and others. A substantial percentage of Orgad’s revenue is driven by sales on Amazon’s U.S. marketplace and Orgad is subject toterms of service of Amazon and other maketplaces and various other seller policies and services that apply to third parties selling products on Amazon and othermarketplaces. Generally, a marketplace has the right to terminate or suspend its agreement with Orgad at any time and for any reason. Such marketplace may takeother actions against Orgad such as suspending or terminating a seller account or product listing and withholding payments owed to Orgad indefinitely. Forexample, in July 2022, Amazon deactivated Orgad’s Amazon U.S. store as a result of complaints submitted due to an error in the listed manufacturer of certainproducts on Orgad’s store. Although its account was subsequently reinstated in September 2022, if the deactivation were to occur in the future for a prolongedperiod of time, or if Amazon were to terminate Orgad’s account, this would have a material adverse effect on our business, results of operations, financial conditionand prospects. While Orgad endeavors to materially comply with the terms of services of the marketplaces on which it operates, we can provide no assurance thatthese marketplaces will have the same determination with respect to our compliance.29In addition, Amazon and other marketplaces can make changes to its platform that could require Orgad to change the manner in which it operates, limit itsability to successfully launch new products or increase its costs to operate and such changes could have an adverse effect on our business, results of operations,financial condition and prospects. Examples of changes that could impact us relate to platform fee charges (i.e., selling commissions), exclusivity, inventorywarehouse availability, excluded products and limitations on sales and marketing. Any change, limitation or restriction on our ability to sell on Amazon’s platform orany other marketplace, even if temporary, could have a material impact on our business, results of operations, financial condition and prospects.Orgad also relies on services provided by Amazon’s fulfillment platform, including Prime Certification, which provides for expedited shipping to theconsumer, an important aspect in the buying decision for consumers. For products that Orgad fulfills itself, Orgad is qualified to offer our products for sale withPrime Certification delivery. Any inability to market our products for sale with expedited delivery provided under Prime Certification could have a material impact onour business, results of operations, financial condition and prospects. Failure to remain compliant with the best fulfillment practices on Amazon’s platform couldhave a material impact on our business, results of operations, financial condition and prospects. In addition, due to the COVID19 pandemic, Amazon has changedthe amount of inventory it accepts per product for a period of time. If this were to continue it could cause us to miss sales and/or pay additional shipping costswhich would harm our business operations and financial conditions.Orgad’s business depends on its ability to build and maintain strong product listings on ecommerce platforms. Orgad may not be able to maintain andenhance our product listings if it receives unfavorable customer complaints, negative publicity or otherwise fails to live up to consumers’ expectations, whichcould materially adversely affect our business, results of operations and growth prospects.Maintaining and enhancing Orgad’s product listings is critical in expanding and growing its business. However, a significant portion of Orgad’s perceivedperformance to the customer depends on third parties outside of its control, including suppliers and thirdparty delivery agents as well as online retailers such asAmazon and eBay. Because Orgad’s agreements with its online retail partners are generally terminable at will, it may be unable to maintain these relationships, andour results of operations could fluctuate significantly from period to period. Because Orgad relies on third parties to deliver its products, it is subject to shippingdelays or disruptions caused by inclement weather, natural disasters, labor activism, health epidemics or bioterrorism. It may also experience shipping delays ordisruptions due to other carrierrelated issues relating to their own internal operational capabilities. Further, Orgad relies on the business continuity plans of thesethird parties to operate during pandemics, like the COVID19 pandemic, and it has limited ability to influence their plans, prevent delays, and/or cost increases due toreduced availability and capacity and increased required safety measures.Customer complaints or negative publicity about its products, delivery times, or marketing strategies, even if not accurate, especially on blogs, social mediawebsites and thirdparty market sites, could rapidly and severely diminish consumer view of Orgad’s product listings and result in harm to its brand. Customers mayalso make safetyrelated or other types of claims regarding products sold through our online retail partners, such as Amazon, which may result in an online retailpartner removing the product from its marketplace. We also use and rely on other services from third parties, such as our telecommunications services, and thoseservices may be subject to outages and interruptions that are not within our control.Orgad faces risks related to successfully optimizing and operating its fulfillment and customer service operations.Failures to adequately predict customer demand or otherwise optimize and operate its fulfillment and customer service operations successfully from time totime result in excess or insufficient fulfillment or customer service capacity, increased costs, and impairment charges, any of which could materially harm ourbusiness. As Orgad continues to add fulfillment and customer service capability or add new businesses with different requirements, its fulfillment and customerservice operations become increasingly complex and operating them becomes more challenging. There can be no assurance that Orgad will be able to operate ouroperations effectively.30In addition, failure to optimize inventory in our fulfillment operations increases net shipping cost by requiring longzone or partial shipments. Orgad may beunable to adequately staff its fulfillment and customer service operations. Orgad’s failure to properly handle such inventory or to accurately forecast productdemand may result in it being unable to secure sufficient storage space or to optimize its fulfillment operations or cause other unexpected costs and other harm toour business and reputation.Orgad relies on a limited number of shipping companies to deliver inventory to it and completed orders to our customers. The inability to negotiateacceptable terms with these companies or performance problems or other difficulties experienced by these companies could negatively impact our operating resultsand customer experience. In addition, Orgad’s ability to receive inbound inventory efficiently and ship completed orders to customers also may be negativelyaffected by natural or manmade disasters, extreme weather, geopolitical events and security issues, labor or trade disputes, and similar events.The variability in Orgad’s retail business places increased strain on its operations.Demand for Orgad’s product listings can fluctuate significantly for many reasons, including as a result of seasonality, promotions, product launches, orunforeseeable events, such as in response to natural or manmade disasters, extreme weather, or geopolitical events. For example, Orgad expects a disproportionateamount of our retail sales to occur during our fourth quarter. Failure to stock or restock popular products in sufficient amounts such that Orgad fails to meetcustomer demand could significantly affect our revenue and our future growth. If too many customers access the websites on which Orgad engages in onlineretailing within a short period of time due to increased demand, Orgad may experience system interruptions that make the websites unavailable or prevent us fromefficiently fulfilling orders, which may reduce the volume of goods its offers or sell and the attractiveness of its products. In addition, Orgad may be unable toadequately staff for fulfillment of orders and customer service during these peak periods and delivery and other fulfillment companies and customer service cosourcers may be unable to meet the seasonal demand.Our business is subject to the risks of earthquakes, fire, power outages, floods, health risks and other catastrophic events, and to interruption by manmade problems such as terrorism.Natural disasters, such as fire or floods, a significant power outage, telecommunications failure, terrorism, an armed conflict, cyberattacks, epidemics andpandemics such as COVID19, or other geopolitical unrest could affect our supply chain, manufacturers, logistics providers, channel partners, or endcustomers orthe economy as a whole and such disruption could impact us and the shipments and sales. These risks may be further increased if the disaster recovery plans for usand our suppliers prove to be inadequate. To the extent that any of the above should result in delays or cancellations of customer orders, the loss of customers, orthe delay in the deployment or shipment of products, our business, financial condition, and operating results would be adversely affected.For example, on January 2, 2023, Orgad experienced a fire at its warehouse in Israel. We are not aware of any casualties or injuries associated with the fire.We shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incidentdid not affect the future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of thisincident on the other parties that were involved in the incident (lessor and others that leased properties near the warehouse).Our business could be negatively impacted by unsolicited takeover proposals, by shareholder activism or by proxy contests relating to the election ofdirectors or other matters.Our business could be negatively affected as a result of an unsolicited takeover proposal, by shareholder activism or a proxy contest. During 2021, anactivist shareholder sought to make changes to our board of directors, among other matters, which ultimately resulted in us entering into a settlement agreementwith the activist shareholder and another shareholder, and for which considerable costs were incurred and absorbed significant time and attention by managementand the board of directors. A future proxy contest, unsolicited takeover proposal, or other shareholder activism relating to the election of directors or other matterswould most likely require us to incur significant legal fees and proxy solicitation expenses and require significant time and attention by management and our Boardof Directors. The potential of a proxy contest, unsolicited takeover proposal, or other shareholder activism could interfere with our ability to execute our strategicplan, give rise to perceived uncertainties as to our future direction, result in the loss of potential business opportunities or make it more difficult to attract and retainqualified personnel, any of which could materially and adversely affect our business and operating results.31Environmental, social and corporate governance (ESG) issues, including those related to climate change and sustainability, may have an adverseeffect on our business, financial condition and results of operations and damage our reputation.There is an increasing focus from certain investors, customers, consumers, employees and other stakeholders concerning ESG matters. Additionally, publicinterest and legislative pressure related to public companies’ ESG practices continue to grow. If our ESG practices fail to meet regulatory requirements or investor,customer, consumer, employee or other shareholders’ evolving expectations and standards for responsible corporate citizenship in areas including environmentalstewardship, support for local communities, Board of Director and employee diversity, human capital management, employee health and safety practices, productquality, supply chain management, corporate governance and transparency, our reputation, brand and employee retention may be negatively impacted, and ourcustomers and suppliers may be unwilling to continue to do business with us.Customers, consumers, investors and other shareholders are increasingly focusing on environmental issues, including climate change, energy and wateruse, plastic waste and other sustainability concerns. Concern over climate change may result in new or increased legal and regulatory requirements to reduce ormitigate impacts to the environment. Changing customer and consumer preferences or increased regulatory requirements may result in increased demands orrequirements. Complying with these demands or requirements could cause us to incur additional manufacturing, operating or product development costs.If we do not adapt to or comply with new regulations, including the SEC’s published proposed rules that would require companies to provide significantlyexpanded climaterelated disclosures in their periodic reporting, which may require us to incur significant additional costs to comply and impose increased oversightobligations on our management and board of directors, or fail to meet evolving investor, industry or stakeholder expectations and concerns regarding ESG issues,investors may reconsider their capital investment in our company, we may become subject to penalties, and customers and consumers may choose to stoppurchasing our products, if approved for commercialization, which could have a material adverse effect on our reputation, business or financial condition.Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions andadverse developments with respect to financial institutions and associated liquidity risk.Our business depends on the economic health of the global economies. If the conditions in the global economies remain uncertain or continue to bevolatile, or if they deteriorate, including as a result of the impact of military conflict, such as the war between Russia and Ukraine, terrorism or other geopoliticalevents, our business, operating results and financial condition may be materially adversely affected. Economic weakness, inflation and increases in interest rates,limited availability of credit, liquidity shortages and constrained capital spending have at times in the past resulted, and may in the future result, in challenging anddelayed sales cycles, slower adoption of new technologies and increased price competition, and could negatively affect our ability to forecast future periods, whichcould result in an inability to satisfy demand for our products and a loss of market share.In addition, increases in inflation raise our costs for commodities, labor, materials and services and other costs required to grow and operate our business,and failure to secure these on reasonable terms may adversely impact our financial condition. Additionally, increases in inflation, along with the uncertaintiessurrounding COVID19, geopolitical developments and global supply chain disruptions, have caused, and may in the future cause, global economic uncertainty anduncertainty about the interest rate environment, which may make it more difficult, costly or dilutive for us to secure additional financing. A failure to adequatelyrespond to these risks could have a material adverse impact on our financial condition, results of operations or cash flows.More recently, the closures of SVB and Signature Bank and their placement into receivership with the FDIC created bankspecific and broader financialinstitution liquidity risk and concerns. Although the Department of the Treasury, the Federal Reserve and the FDIC jointly released a statement that depositors atSVB and Signature Bank would have access to their funds, even those in excess of the standard FDIC insurance limits, under a systemic risk exception, futureadverse developments with respect to specific financial institutions or the broader financial services industry may lead to marketwide liquidity shortages, impair theability of companies to access nearterm working capital needs, and create additional market and economic uncertainty. There can be no assurance that future creditand financial market instability and a deterioration in confidence in economic conditions will not occur. Our general business strategy may be adversely affected byany such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions. If the current equityand credit markets deteriorate, or if adverse developments are experienced by financial institutions, it may cause shortterm liquidity risk and also make anynecessary debt or equity financing more difficult, more costly, more onerous with respect to financial and operating covenants and more dilutive. Failure to secureany necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stockprice and could require us to alter our operating plans. In addition, there is a risk that one or more of our service providers, financial institutions, manufacturers,suppliers and other partners may be adversely affected by the foregoing risks, which could directly affect our ability to attain our operating goals on schedule andon budget.Our business may be adversely affected by the impact of any renewed outbreak of the COVID19 pandemic.Public health epidemics or outbreaks could adversely impact our business. In late 2019, a novel strain of COVID19, also known as coronavirus, wasreported in Wuhan, China. While initially the outbreak was largely concentrated in China, it spread worldwide. Many countries around the world, including in Israel,implemented significant governmental measures to control the spread of the virus, including temporary closure of businesses, severe restrictions on travel and themovement of people, and other material limitations on the conduct of business. These measures haven historically resulted in work stoppages and other disruptions.If there is a resurgence of the COVID19 pandemic, this could adversely impact our operations, including among others, our sales and marketing efforts and ourability to raise additional funds, and accordingly, the impact of COVID19 could have an adverse impact on our business and our financial results.32Risks Related to Our Operations in RussiaRussia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.In addition to our Israel operations, we have operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia and we engage two software developers through a third party who are based in Ukraine. On February 24,2022, Russia invaded Ukraine. The outbreak of hostilities between the two countries could result in more widespread conflict and could have a severe adverse effecton the region.Following Russia’s actions, various countries, including the U.S., Canada, the United Kingdom, Germany and France, as well as the European Union,issued broadranging economic sanctions against Russia. Such sanctions included, among other things, a prohibition on doing business with certain Russiancompanies, officials and oligarchs; a commitment by certain countries and the European Union to remove selected Russian banks from the Society for WorldwideInterbank Financial Telecommunications (SWIFT) electronic banking network that connects banks globally; and restrictive measures to prevent the Russian CentralBank from undermining the impact of the sanctions. In response to sanctions, the Russian Central Bank raised its interest rates and banned sales of local securitiesby foreigners. Russia may take additional counter measures or retaliatory actions in the future. While diplomatic efforts have been ongoing, the conflict betweenRussia and Ukraine is currently unpredictable and has the potential to result in broadened military actions. The duration of ongoing hostilities and such sanctionsand related events cannot be predicted. Uncertainty as to future relations between Russia and the U.S. and other countries in the west, or between Russia and othereastern European countries, may have a negative impact on our operations.Such international sanctions and potential responses to such sanctions, including those that may limit or restrict transfer funds into Russia, may in thefuture significantly affect our ability to conduct our activities in Russia including paying our personnel. To date, the conflict has had minimal impact on operations .Nevertheless, we have no way to predict the progress or outcome of the situation in Ukraine, as the conflict and governmental reactions are rapidly developing andbeyond our control. Prolonged unrest, intensified military activities or more extensive sanctions impacting the region could have a material adverse effect on ouroperations, results of operations, financial condition, liquidity and business outlook.Political, military conditions or other risks in Russia could adversely affect our business.Russia is a federative state consisting of 85 constituent entities, or “subjects.” The Russian Constitution reserves some governmental powers for theRussian Government, some for the subjects and some for areas of joint competence. In addition, eight “federal districts” (“federal’nye okruga”), which are overseenby a plenipotentiary representative of the President, supplement the country’s federal system. The delineation of authority among and within the subjects is, inmany instances, unclear and contested, particularly with respect to the division of tax revenues and authority over regulatory matters. For these reasons, theRussian political system is vulnerable to tension and conflict between federal, subject and local authorities. This tension creates uncertainties in the operatingenvironment in Russia, which may prevent us from carrying out our strategy effectively. The risks associated with these events or potential events could materiallyand adversely affect the investment environment and overall consumer and entrepreneurial confidence in Russia, and our business, prospects, financial condition,hiring ability, and results of operations could be materially and adversely affected.Furthermore, high levels of corruption reportedly exist in Russia, including the bribing of officials for the purpose of initiating investigations bygovernment agencies. Corruption and other illegal activities could disrupt our ability to conduct our business effectively, and claims that the we are involved in suchcorruption or illegal activities could generate negative publicity, of which could harm our development, financial condition, results of operations or prospects.Economic and other risks in Russia could adversely affect our business.Operating a business in an emerging market such as Russia can involve a greater degree of risk than operating a business in more developed markets.Over the last two decades, the Russian economy has experienced or continues to experience at various times:●significant volatility in its GDP;33●the impact of international sanctions;●high levels of inflation;●increases in, or high, interest rates;●sudden price declines in oil and other natural resources;●instability in the local currency market;●budget deficits;●the continued operation of lossmaking enterprises due to the lack of effective bankruptcy proceedings;●capital flight; and●significant increases in poverty rates, unemployment and underemployment.The Russian economy has been subject to abrupt downturns in the past, including as a result of the invasion of Ukraine, global financial crisis, and, as anemerging market, remains particularly vulnerable to further external shocks and any future fluctuations in the global markets. Any further deterioration in the generaleconomic conditions in Russia (whether or not as a result of the events mentioned above) could have a material adverse effect on the Russian economy and mayresult in hiring and operational difficulties, as well as potential flight of human capital, which could have a material adverse effect on our business, productdevelopment and results of operations.Legal risks in Russia could materially adversely affect our operations and Russian tax legislation is subject to frequent change.Among the risks of the Russian legal system are: inconsistencies among laws, presidential decrees, and government and ministerial orders and resolutions;conflicting local, regional and federal laws and regulations; the untested nature of the independence of the judiciary and its sensitivity to economic or politicalinfluences; substantial gaps in the regulatory structure due to the delay or absence of implementing legislation; a high degree of discretion on the part ofgovernmental authorities; reported corruption within governmental entities and other governmental authorities; the relative inexperience of judges and courts ininterpreting laws applicable to complex transactions; and the unpredictability of enforcement of foreign judgments and foreign arbitral awards. Many Russian lawsand regulations are construed in a way that provides for significant administrative discretion in application and enforcement. Unlawful, selective or arbitrary actionsof the Russian Government have reportedly included the denial or withdrawal of licenses, sudden and unexpected tax audits, criminal prosecutions, and civil claims.Any of the above events may have a material adverse effect on our product development and results of operations.Despite certain improvements in the taxation system made by the Russian Government over the past decade, Russian tax legislation is still subject tofrequent change, varying interpretations, and inconsistent and selective enforcement. There are currently no clear rules for distinguishing between lawful taxoptimization and tax evasion. In addition, Russian tax laws do not contain detailed rules on the taxation in Russia of foreign companies. As such, taxpayers oftenhave to resort to court proceedings to defend their position against the Russian tax authorities. However, in the absence of consistent court practice or bindingprecedents, there is inconsistency amongst court decisions. Further, the possibility exists that the Russian Federation would impose arbitrary or onerous taxes andpenalties in the future, which could have a material adverse effect on our product development and results of operations.34Risks Related to Our Operations In IsraelOur headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.Our headquarters and most of our operations are located in central Israel and our key employees, officers and directors are residents of Israel. Accordingly,political, economic and military conditions in Israel and the surrounding region may directly affect our business. Since the establishment of the State of Israel in1948, a number of armed conflicts have taken place between Israel and its Arab neighbors. Any hostilities involving Israel or the interruption or curtailment of tradewithin Israel or between Israel and its trading partners could adversely affect our operations and results of operations and could make it more difficult for us to raisecapital. During the winter of 2008, winter of 2012 and the summer of 2014, Israel was engaged in an armed conflict with Hamas, a militia group and political partyoperating in the Gaza Strip, and during the summer of 2006, Israel was engaged in an armed conflict with Hezbollah, a Lebanese Islamist Shiite militia group andpolitical party. Israel faces political tension with respect to its relationships with Turkey, Iran and certain Arab neighbor countries. In addition, recent conflictsinvolved missile strikes against civilian targets in various parts of Israel, and negatively affected business conditions in Israel. Recent political uprisings and socialunrest in various countries in the Middle East and North Africa are affecting the political stability of those countries. This instability may lead to deterioration of thepolitical relationships that exist between Israel and these countries, and have raised concerns regarding security in the region and the potential for armed conflict.Any armed conflicts, terrorist activities or political instability in the region could adversely affect business conditions and could harm our results of operations. Forexample, any major escalation in hostilities in the region could result in a portion of our employees and service providers being called up to perform military duty foran extended period of time. Parties with whom we do business have sometimes declined to travel to Israel during periods of heightened unrest or tension, forcing usto make alternative arrangements when necessary. In addition, the political and security situation in Israel may result in parties with whom we have agreementsinvolving performance in Israel claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions insuch agreements. Any future deterioration in the political and security situation in Israel will negatively impact our business.Our commercial insurance does not cover losses that may occur as a result of events associated with the security situation in the Middle East. Althoughthe Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that thisgovernment coverage will be maintained. Any losses or damages incurred by us could have a material adverse effect on our business. Any armed conflicts orpolitical instability in the region would likely negatively affect business conditions and could harm our results of operations.Further, in the past, the State of Israel and Israeli companies have been subjected to an economic boycott. Several countries still restrict business with theState of Israel and with Israeli companies. These restrictive laws and policies may have an adverse impact on our operating results, financial condition or theexpansion of our business.The legislative power of the State resides in the Knesset, a unicameral parliament that consists of 120 members elected by nationwide voting under asystem of proportional representation. Israel’s most recent general elections were held on April 9, 2019, September 17, 2019, March 2, 2020 and November 1, 2022.The uncertainty surrounding the results of the recent elections may continue. Actual or perceived political instability in Israel or any negative changes in thepolitical environment, may individually or in the aggregate adversely affect the Israeli economy and, in turn, our business, financial condition, results of operationsand prospects.Some of our employees are obligated to perform military reserve duty in Israel.Many Israeli citizens, including our employees are obligated to perform one month, and in some cases more, of annual military reserve duty until they reachthe age of 40 (or older, for reservists with certain occupations) and, in the event of a military conflict, may be called to active duty. In response to increases interrorist activity, there have been periods of significant callups of military reservists. It is possible that there will be military reserve duty callups in the future. Ouroperations could be disrupted by such callups. Such disruption could materially adversely affect our business, results of operations and financial condition.35It may be difficult to enforce a nonIsraeli judgment against the Company or its officers and directors.The operating subsidiary of ours is incorporated in Israel. All of our executive officers and directors are not residents of the United States, and asubstantial portion of our assets and the assets of our executive officers and directors are located outside the United States. Therefore, a judgment obtained againstus, or any of these persons, including a judgment based on the civil liability provisions of the U.S. federal securities laws, may not be collectible in the United Statesand may not necessarily be enforced by an Israeli court. It also may be difficult to affect service of process on these persons in the United States or to assert U.S.securities law claims in original actions instituted in Israel. Additionally, it may be difficult for an investor, or any other person or entity, to initiate an action withrespect to U.S. securities laws in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of U.S. securities laws reasoning that Israel is not themost appropriate forum in which to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law isapplicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law often involves the testimony of expert witnesses, which can be a timeconsuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel that addresses the mattersdescribed above. As a result of the difficulty associated with enforcing a judgment against us in Israel, it may be impossible to collect any damages awarded byeither a U.S. or foreign court.Our international operations could expose us to additional risks, including exchange rate fluctuations, legal regulations and political or economicinstability that could harm our business and operating results.Our international operations expose us to the following risks which may have a material adverse effect on our business and operating results:●devaluations and fluctuations in currency exchange rates including fluctuations between the U.S. dollar and the NIS and the Russian Ruble;●costs of compliance with local laws, including labor laws and intellectual property laws;●compliance with domestic and foreign government policies, including compliance with Israeli securities laws and TASE;●changes in trade regulations and procedures affecting approval, production, pricing, marketing, reimbursement for and access to, our products;●compliance with applicable foreign anticorruption laws, antitrust/competition laws, antiBoycott Israel law and antimoney laundering laws; and●economic and geopolitical developments and conditions, including ongoing instability in global economies and financial markets, international hostilities,acts of terrorism and governmental reactions, inflation, outbreaks of contagious disease (e.g., the COVID19 pandemic) and military and political alliances.Risks Related to Our Common StockA more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.Although our common stock is listed on the Nasdaq Capital Market, it has only been traded on the Nasdaq Capital Market since July 25, 2016. There hasbeen relatively limited trading volume in the market for our common stock, and a more active, liquid public trading market may not develop or may not be sustained.Limited liquidity in the trading market for our common stock may adversely affect a stockholder’s ability to sell its shares of common stock at the time it wishes tosell them or at a price that it considers acceptable. If a more active, liquid public trading market does not develop, we may be limited in our ability to raise capital byselling shares of common stock and our ability to acquire other companies or assets by using shares of our common stock as consideration. In addition, if there is athin trading market or “float” for our stock, the market price for our common stock may fluctuate significantly more than the stock market as a whole. Without a largefloat, our common stock would be less liquid than the stock of companies with broader public ownership and, as a result, the trading prices of our common stockmay be more volatile and it would be harder for you to liquidate any investment in our common stock. Furthermore, the stock market is subject to significant priceand volume fluctuations, and the price of our common stock could fluctuate widely in response to several factors, including:●our quarterly or annual operating results;●changes in our earnings estimates;●investment recommendations by securities analysts following our business or our industry;●additions or departures of key personnel;●changes in the business, earnings estimates or market perceptions of our competitors;36●our failure to achieve operating results consistent with securities analysts’ projections;●changes in industry, general market or economic conditions;●announcements of legislative or regulatory changes; and●natural disasters (including for example, the recent fire in the Orgad warehouse) and political and economic instability, including wars, terrorism, politicalunrest, results of certain elections and votes, emergence of a pandemic, or other widespread health emergencies (or concerns over the possibility of suchan emergency, including for example, the recent the COVID19 pandemic), boycotts, adoption or expansion of government trade restrictions, and otherbusiness restrictions.The stock market has experienced extreme price and volume fluctuations in recent years that have significantly affected the quoted prices of the securitiesof many companies. The changes often appear to occur without regard to specific operating performance. The price of our common stock could fluctuate basedupon factors that have little or nothing to do with us and these fluctuations could materially reduce our stock price.Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.If any of our shareholders were to decide to sell large amounts of stock over a short period of time (presuming such sales were permitted) such sales couldcause the market price of our common stock to drop significantly, even if our business is doing well. Further, the market price of our common stock could decline as aresult of the perception that such sales could occur. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equitysecurities in the future at a time and price that we deem appropriate.Our securities are traded on more than one market which may result in price variations.Our securities have been trading on the Nasdaq Capital Market since July 2016 and on TASE since September 2005. Trading in our securities on suchexchanges occurs in different currencies (U.S. dollars on the Nasdaq Capital Market and NIS on the TASE), and at different times (due to different time zones,trading days and public holidays in the United States and Israel). The trading prices of our securities on the two exchanges may differ due to the foregoing andother factors. Any decrease in the price of our shares on the TASE could cause a decrease in the trading price of our shares on the Nasdaq Capital Market and viceversa.We are a smaller reporting company and, as a result of the reduced disclosure and governance requirements applicable to such companies, ourcommon stock may be less attractive to investors.We are a smaller reporting company, (i.e. a company with “public float” held by nonaffiliates with a market value of less than $250 million) and we areeligible to take advantage of certain exemptions from various reporting requirements applicable to other public companies. We have elected to adopt these reduceddisclosure requirements. We cannot predict if investors will find our common stock less attractive as a result of our taking advantage of these exemptions. If someinvestors find our common stock less attractive as a result of our choices, there may be a less active trading market for our common stock and our stock price may bemore volatile.We do not expect to pay any cash dividends in the foreseeable future.We have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our board of directors deems relevant. Investors should not purchase our common stock expecting to receive cash dividends. Because we do notpay dividends, and there may be limited trading, investors may not have any manner to liquidate or receive any payment on their investment. Therefore, our failureto pay dividends may cause investors to not see any return on investment even if we are successful in our business operations. In addition, because we do not paydividends we may have trouble raising additional funds, which could affect our ability to expand our business operations.37UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2022☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ________ to _________Commission file number 00137370MY SIZE, INC.(Exact name of registrant as specified in charter)Delaware510394637(State or jurisdiction ofIncorporation or organization)I.R.S EmployerIdentification No.4 Hayarden, POB 1026, Airport City, Israel7010000(Address of principal executive offices)(Zip code)+9723 6009030(Registrant’s telephone number, including area code)Securities registered pursuant to Section 12(b) of the Act:Title of each classTrading Symbol(s)Name of Each Exchange on Which RegisteredCommon Stock, par value $0.001 per shareMYSZThe Nasdaq Capital MarketSecurities registered pursuant to Section 12(g) of the Act: None.Indicate by check mark whether the registrant is a wellknown seasoned issuer as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes☒ No ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer, a smaller reporting company, or an emerginggrowth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 of theExchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☒Smaller Reporting Company☒Emerging Growth Company☐If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revisedfinancial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b2 of the Exchange Act) Yes ☐No☒Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control overfinancial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflectthe correction of an error to previously issued financial statements. ☐Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by anyof the registrant’s executive officers during the relevant recovery period pursuant to §240.10D1(b). ☐The aggregate market value of voting and nonvoting common equity held by nonaffiliates of the registrant as of June 30, 2022, the last business day of theregistrant’s most recently completed second fiscal quarter, was approximately $25,551,906.Number of shares of common stock outstanding as of March 31, 2023 was 2,446,780.Documents Incorporated by Reference: None.Table of ContentsPart IItem 1.Business2Item 1A.Risk Factors18Item 1B.Unresolved Staff Comments41Item 2.Properties41Item 3.Legal Proceedings41Item 4.Mine Safety Disclosures42Part IIItem 5.Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities43Item 6.Selected Financial Data43Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations43Item 7A.Quantitative and Qualitative Disclosures about Market Risk50Item 8.Financial Statements and Supplementary DataF1Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure51Item 9A.Controls and Procedures51Item 9B.Other Information51Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.51Part IIIItem 10.Directors, Executive Officers and Corporate Governance52Item 11.Executive Compensation57Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters60Item 13.Certain Relationships and Related Transactions, and Director Independence62Item 14.Principal Accounting Fees and Services65Part IVItem 15.Exhibits, Financial Statement Schedules66Signatures69iPART IIn this Annual Report on Form 10K, unless the context requires otherwise, the terms “we,” “our,” “us,” or “the Company” refer to MySize, Inc., a Delawarecorporation, and its subsidiaries, including MySize Israel 2014 Ltd. My Size LLC, Orgad International Marketing Ltd., or Orgad, and Naiz Bespoke Technologies, S.L,or Naiz, taken as a whole.References to “U.S. dollars” and “$” are to currency of the United States of America, and references to “NIS” are to New Israeli Shekels. Unless otherwiseindicated, U.S. dollar translations of NIS amounts presented in this Annual Report on Form 10K for the year ended on December 31, 2022 are translated using therate of NIS 3.358 to $1.00.All information in this Annual Report on Form 10K relating to shares or price per share reflects the 1for25 reverse stock split effected by us on December8, 2022.CAUTIONARY NOTE ON FORWARDLOOKING STATEMENTSThis Annual Report on Form 10K contains certain forwardlooking statements within the meaning of Section 27A of the Securities Act and Section 21E ofthe Exchange Act. Any statements in Annual Report on Form 10K about our expectations, beliefs, plans, objectives, assumptions or future events or performanceare not historical facts and are forwardlooking statements. These statements are often, but not always, made through the use of words or phrases such as“believe,” “will,” “expect,” “anticipate,” “estimate,” “intend,” “plan” and “would.” For example, statements concerning financial condition, possible or assumedfuture results of operations, growth opportunities, industry ranking, plans and objectives of management, markets for our common stock and future managementand organizational structure are all forwardlooking statements. Forwardlooking statements are not guarantees of performance. They involve known and unknownrisks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to differ materially from any results, levels ofactivity, performance or achievements expressed or implied by any forwardlooking statement.Any forwardlooking statements are qualified in their entirety by reference to the risk factors discussed throughout this Annual Report on Form 10K. Someof the risks, uncertainties and assumptions that could cause actual results to differ materially from estimates or projections contained in the forwardlookingstatements include but are not limited to:●our history of losses and needs for additional capital to fund our operations and our inability to obtain additional capital on acceptable terms, or at all;●risks related to our ability to continue as a going concern;●the new and unproven nature of the measurement technology markets;●our ability to achieve customer adoption of our products;●our ability to realize the benefits of our acquisitions of Orgad and Naiz;●our dependence on assets we purchased from a related party;●our ability to enhance our brand and increase market awareness;●our ability to introduce new products and continually enhance our product offerings;●the success of our strategic relationships with third parties;●information technology system failures or breaches of our network security;●competition from competitors;●our reliance on key members of our management team;●current or future litigation;●current or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated liquidityrisk; and●the impact of the political and security situation in Israel on our business.1The foregoing list sets forth some, but not all, of the factors that could affect our ability to achieve results described in any forwardlooking statements.You should read this Annual Report on Form 10K and the documents that we reference herein and have filed as exhibits to the Annual Report on Form 10K,completely and with the understanding that our actual future results may be materially different from what we expect. You should assume that the informationappearing in this Annual Report on Form 10K is accurate as of the date hereof. Because the risk factors referred to in this Annual Report on Form 10K, could causeactual results or outcomes to differ materially from those expressed in any forwardlooking statements made by us or on our behalf, you should not place unduereliance on any forwardlooking statements.Further, any forwardlooking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forwardlookingstatement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. New factors emergefrom time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extentto which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements. We qualify all ofthe information presented in this Annual Report on Form 10K, and particularly our forwardlooking statements, by these cautionary statements.ITEM 1. BUSINESSOverviewWe are an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile phone or through MySizeID Widget: a simple questionnaire which uses a database collected over the years.MySizeID syncs the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and only presents itemsfor purchase that match their measurements to ensure a correct fit.We are positioning ourselves as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empower brand design teams, which are designed to increase endconsumer satisfaction, contributing to a sustainable world and reduce operation costs.Recent DevelopmentsOrgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,602 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.2The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz, a limitedliability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.3The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Warehouse FireOn January 2, 2023, Orgad experienced a fire at its warehouse in Israel. we are not aware of any casualties or injuries associated with the fire. We shiftedOrgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incident did not affectthe future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of this incident on the otherparties that were involved in the incident (lessor and others that leased properties near the warehouse).January 2023 FinancingOn January 10, 2023, we entered into a securities purchase agreement, or the RD Purchase Agreement, pursuant to which we agreed to sell and issue in theRD Offering an aggregate of 162,000 of our shares of common stock, or the RD Shares, and prefunded warrants, or the Prefunded Warrants, to purchase up to279,899 shares of common stock and, in a concurrent private placement, unregistered warrants to purchase up to 883,798 shares of common stock, or the RDWarrants, consisting of Series A warrants, or Series A Warrants, to purchase up to 441,899 shares of common stock and Series B warrants, or Series B Warrants, topurchase up to 441,899 shares of common stock, at an offering price of $3.055 per RD Share and associated Series A and Series B Warrants and an offering price of$3.054 per Prefunded Warrant and associated Series A and Series B Warrants.4In addition, we entered into a securities purchase agreement, or the PIPE Purchase Agreement, and together with the RD Purchase Agreement, thePurchase Agreements, pursuant to which we agreed to sell and issue in the PIPE Offering an aggregate of up to 540,098 unregistered Prefunded Warrants andunregistered warrants to purchase up to an aggregate of 1,080,196 shares of common stock, or the PIPE Warrants and together with the RD Warrants, the Warrants,consisting of Series A Warrants to purchase up to 540,098 shares of common stock and Series B Warrants to purchase up to 540,098 shares of common stock at anoffering price of $3.054 per Prefunded Warrant and associated Series A and Series B Warrants.The Prefunded Warrants are immediately exercisable at an exercise price of $0.001 per share and will not expire until exercised in full. The Warrants areimmediately exercisable upon issuance at an exercise price of $2.805 per share, subject to adjustment as set forth therein. The Series A Warrants have a term of fiveand onehalf years from the date of issuance and the Series B Warrants have a term of 28 months from the date of issuance. The Warrants may be exercised on acashless basis if there is no effective registration statement registering the shares underlying the warrants.In connection with the PIPE Purchase Agreement, we entered into a registration rights agreement, or the Registration Rights Agreement. Pursuant to theRegistration Rights Agreement, we are required to file a resale registration statement, or the Registration Statement, with the Securities and Exchange Commission, orthe SEC, to register for resale the shares issuable upon exercise of the unregistered Prefunded Warrants and the Series A and Series B Warrants, within 20 days ofthe signing date of the PIPE Purchase Agreement, or the Signing Date, and to have such Registration Statement declared effective within 60 days after the SigningDate in the event the Registration Statement is not reviewed by the SEC, or 90 days of the Signing Date in the event the Registration Statement is reviewed by theSEC. we will be obligated to pay certain liquidated damages if we fail to maintain the effectiveness of the Registration Statement.The Purchase Agreements and the Registration Rights Agreements also contain representations, warranties, indemnification and other provisionscustomary for transactions of this nature. In addition, subject to limited exceptions, the Purchase Agreements provide that for a period of one year following theclosing of the Offerings, we will not effect or enter into an agreement to effect a “variable rate transaction” as defined in the Purchase Agreements.Aggregate gross proceeds to the Company in respect of the Offerings was approximately $3.0 million, before deducting fees payable to the placement agentand other offering expenses payable by the Company.We also entered into a letter agreement, or the Engagement Agreement, with H.C. Wainwright & Co., LLC, or Wainwright, pursuant to which Wainwrightagreed to serve as the exclusive placement agent for the Company in connection with the Offerings. We paid Wainwright a cash placement fee equal to 7% of theaggregate gross proceeds raised in the Offerings, a management fee of 1% of the aggregate gross proceeds raised in the Offerings, a nonaccountable expenseallowance of $85,000 and clearing fees of $15,950. Wainwright also received placement agent warrants, or the Placement Agent Warrants, with substantially the sameterms as the Series A Warrants issued in the Offering in an amount equal to 7% of the aggregate number of Shares and Prefunded Warrants sold in the Offerings, or68,740 shares, at an exercise price of $3.8188 per share and a term expiring on January 10, 2028.Our SolutionOur cloudbased software platform provides highly accurate sizing and measurement with broad applications including the online fashion/apparel industry,logistics and courier services and home DIY. Currently, we are mainly focusing on the ecommerce fashion/apparel industry. This proprietary technology is driven byseveral patented algorithms which are able to calculate and record measurements in a variety of novel ways. Although specific functionality varies by product, webelieve that our core solutions address the need for highly accurate measurements in a variety of consumer friendly, every day uses.5We have developed three products, MySizeID for the fashion/apparel industry, BoxSize for the logistics and courier services market and SizeUp for thehome DIY market.●MySizeID enables shoppers to generate highly accurate measurements of their body to find proper fitting clothes and accessories, through the use ofour application on their mobile phone or through a simple questionnaire if the user decides not to download the application. MySizeID syncs the user’smeasurement data to a sizing chart and presents items for purchase that match their measurements to ensure a correct fit. MySizeID is available forlicense by retailers and accessable by consumers through a web page.●BoxSize enables customers to quickly and easily measure the size and volume of a parcel to accurately calculate shipping fees. It also offers shippingcompanies a variety of precise logistical data for more efficiently managing their supply chain, providing them with an accurate way to compare thephysical package with what is in the shipping manifest. BoxSize solution is available for license on both iOS and Android operating systems. BoxSizeis available on the Honeywell Marketplace and in August 2019 was approved for Honeywell’s Independent Software Vendor Program, and MySize wasgranted an independent software vendor (ISV) status on the Zebra Technologies and on DataLogic platforms.●SizeUp is a digital tape measure that allows users to measure length, width and height of a surface by moving their smartphone from point to point ofan object or space. SizeUp is a valueadd for DIY and home improvement retailers whose customers struggle to find the appropriately sized items (likeblinds or curtains) for their homes or projects due to inaccurate measurements. SizeUp also is designed to replace rulers, tape measures and othermeasuring tools used for DIY projects. SizeUp is available for consumer download on both iOS and Android operating systems.The following are some select key features of our solutions:●Integration Capability. We design our solutions to be flexible and configurable, allowing our clients to match their use of our algorithms and softwarewith their specific business processes and workflows. Our platform has been organically developed from a common code base, data structure and userinterface, providing a consistent user experience with powerful features that are easily adaptable to our clients’ needs. The MySizeID widget can beintegrated via oneline JavaScript code, or through RESTful API;●Intuitive user experience. Our intuitive, easytouse interface is based on current technology, multiple focus groups and automatically adapts to users’devices, including mobile platforms, thereby significantly increasing accessibility of our solutions;●Big Data Generation. While we supply to the user the information he/she requires, we gather certain vital information such as body measurement andpackage volume which can be used anonymously to help the retailer acquire predictive size information on stocking, operations and consumers thatmay be in between sizes. All the information is being gathered and stored on our servers where it can be used by retailers;●NonInvasive. In taking measurements using our solution, the smartphone camera is not utilized; instead, the measurements are captured by scanningthe smartphone over the consumer’s body or package, thus ensuring greater privacy.Our Growth StrategyWe aim to drive revenue primarily through penetration of the U.S. and Europe markets through a business to business to consumer (B2B2C) model in theverticals we are targeting. We are pursuing the following growth strategies:●Sign Additional Commercial Agreements with U.S. Retailers. During 2022, we expanded our commercial agreements with Levi’s, introducing NorthAmerica (U.S. and Canada) and Latin America regions, and by extension Levis’ native apps in EU and U.S. regions. We also entered into commercialagreements with Baby Fresh, Galax, Punto Blanco, GEF France, Diesel, Gaala, Superdry, Uniontex Industries, and Temperlay London among others. Weare in various stages of discussions with U.S. and foreign retailers for the deployment of our size recommendation and measurement technology with aview to entering into additional commercial agreements.6●Pursue a TwoPronged Commercialization Strategy. We are seeking to accelerate adoption of our solutions both through direct partnerships with ecommerce websites as well as through thirdparty platform websites. While we seek to directly enter into partnerships with companies maintaining ecommerce websites in the apparel, courier and DIY markets, we are also seeking to deploy our solutions on thirdparty platforms. Furthermore, with theexpansion of MySizeID through the release of our FirstLook Smart Mirror, which we are offering to brick and mortar stores to digitize the physicalstores, MySizeID is now available for online retailers utilizing the WooCoomerce, Shopify, Lightspeed, PrestaShop, Bitrix and Wix platforms and tobrick and mortar stores through GK Software POS solution while BoxSize is available on the Honeywell, Zebra Technologies and Datalogic.●Ongoing Investment in our Technology Platform. We continue to invest in building new software capabilities and extending our platform to bring thepower of accurate measurement to a broader range of applications. In particular, we seek not only to deliver size recommendations but to provide arobust, endtoend,artificial intelligence, or AIdriven platform that inspires consumer confidence and drives revenue growth by providing a superiorconsumer journey to both online and the brick and mortar stores.●Grow our database. As the usage of our measurement apps increases, our database of information including user behaviour and body measurementsgenerates valuable statistics. Such data can be used in the big data market for targeted advertising and for blind consumer data mining.●Identify and acquire synergistic businesses. In order to reduce our time to market and obtain complementary technologies, we are seeking to acquiretechnologies and businesses that are synergistic to our product offering. We recently completed an acquisition of Orgad which operates anomnichannel ecommerce platform and Naiz which provides SaaS technology solutions that solve size and fit issues for fashion ecommerce companies.●Partnerships and cooperation. In order to bring a wider solution for the retail market we are working to partner and integrate our technology withpartners that can increase our penetration and offering to the market.Market OpportunityThe global ecommerce market was $5.7 trillion in 2022, and the industry is expected to grow significantly in the coming years with no signs of slowingdown. Market specialists expect a compound annual growth rate of 27.43% from 2023 to 2028: according to data from Statista, the market is expected to reach $6.5trillion in 2023. While many sectors have found ways to increase revenue through ecommerce, ecommerce is still plagued by issues that cut into profits andnegatively impact the bottom line, such as customer returns, low consumer conversion, and associated restocking and shipping costs.Fashion/ApparelSince the onset of the COVID19 pandemic, an immense shift to digital was recorded, with 85.9% growth vs. prepandemic, according to Mastercard, andover 2 billion people worldwide who shop online, according to data from Oberlo. In November 2022, online shoppers broke records with $11.3 billion in spending onCyber Monday, driving 5.8% yearoveryear growth and making the day the biggest online shopping day of all time, according to Adobe Analytics.In 2021, fashion companies invested between 1.6% and 1.8% of their revenues in technology, according to Mckinsey, and are expected to double theinvestment by 2030 in order to keep up with digital natives and keep a competitive edge. Personalization in ecommerce and hybrid connectivity in brickandmortarretail are two key themes in the future of fashtech, according to Mckinsey’s 2022 State of Fashion Technology.7In the upcoming years, inflation is expected to impact the fashion world. As prices for goods increase, the challenge will be to inspire confidence inconsumers, via different smart digital tools. Brands will need to embrace creative digital tools and new channels to deepen customer relationships, and as Mckinseyforecasts in their State of Fashion report for 2023, they will need to execute on priorities such as sustainability and digital acceleration.The global fashion ecommerce market size is expected to grow from $744.4 billion in 2022 to $821.19 billion in 2023 at a compound annual growth rate of10.3%. In 2027, the market size is expected to grow to $1,222.32 billion, at a compound annual growth rate of 10.5%, according to BRC.Based on the importance which shoppers attribute to free shipping 50% of cart abandonment rate is due to extra shipping costs (Baymard Institute) theneed for fashion retailers to substantiate the optimal size for a customer, thus minimizing returns, has never been more crucial.As brands move online or significantly expand their online presence, we believe that developing innovative ways to connect with shoppers, both onlineand offline, has become a top priority.Shipping/ParcelAccording to Pitney Bowes, parcel revenue in 13 major countries around the world increased by 17% year over year from $420 billion in 2020 (reflecting 131billion parcels) to $491 billion in 2021 (reflecting 159 billion parcels). In the shipping/parcel industry, the dimensions of a package are critical. It is not merely themeasurement of a package or box – but rather the amount of space that the package or box will take up on a truck, airplane, or ship that will be transporting thepackage or box. Far too often, retailers use unfit packaging for their items, adding additional costs in materials and shipping fees.DIYSimilar to issues in the apparel and fashion market, big box, hardware, furniture, and DIY stores are plagued by returns due to incorrect fit andmeasurements. In an industry where precise measurement for projects is an absolute necessity, ecommerce has not grown as quickly as in other industries which webelieve is due to lack of consumer confidence in measurements at home and buying the correct item online.MySizeIDWe have released the MySizeID app for both iOS and Android which assists consumers to take highly accurate measurement of their own body in order tosize clothing in the best way possible without the need to try the clothes on before purchasing. MySizeID is designed to simplify the process of purchasing clothesonline and significantly reduce the rate of returns of poorfitting clothing. During 2022, MySizeID delivered over 23.5 million size recommendations.The application is the result of a research and development effort that combines:●anthropometric research – analyses of information pertaining to body measurements derived from a survey and the subsequent determination ofcorrelations between body parts;●body measurement algorithm research – an algorithm created by us to measure body parts; and●retailers size chart analyses – adopting a deep understanding of the size charts of retailers and the corresponding “body to garment size.”MySizeID allows consumers to create a secure, online profile of their personal measurements, which can then be utilized, with partnered online retailers, toensure that no matter the manufacturer or size chart, they will get the right fit. MySizeID operates based on the use of existing sensors in smart phones which enable,through a specific purpose application, the measurement of the body of any consumer by moving the smartphone along his or her body. The MySizeID applicationdoes not rely on user photographs or any additional hardware; all a user needs to do is scan their body with their smartphone and the application records theirmeasurements. The measurements can then be saved in our database in the cloud, enabling the user to search for clothes in various retailer websites withoutworrying about size. When a search is made, the retailer will connect to our cloud database, and then provide results based on the user’s measurements and otherparameters as he or she may have defined. This data is also saved for use when a customer enters a brickandmortar store to help serve the customer moreefficiently and to provide a better shopping experience.8Figure 1: Screenshot of MySizeID on smartphone and ecommerce websiteAs part of the integration process, we offer to the retailer five main components:●Mobile App. MySizeID comes in the form of a native app or website. Our native app can be used “as is” integrated into the retailer’s ecommercewebsite. The website users can build a body profile on the app and receive size recommendations for their profile both in the app and on a widgetintegrated with their website.9●Widget. When a consumer enters into the retailer’s website and looks for a specific item, he or she can click on the MySizeID widget which will informthe consumer of his or her recommended size, based on his or her actual measurements, as measured using the app and the item he or she is looking at.The widget has two features:AI Wizard mode allows the user to obtain size from the following parameters: gender, height, weight, belly shape, hip shape and bra size only. Thegender, height and weight questions are mandatory, while the body shape questions are optional and can be added to increase accuracy for specificapparel categories.Guest mode allows a user that does not wish to sign up to MySizeID as a user to obtain size recommendations as well.●Analytic Pixel. MySizeID analytic pixel allows retailer to track and analyze the widget usage. By adding the pixel to the retailer’s website, MySizeID BIteam can track engagement, order, and return data and provide retailers with tools to understand the advantages and benefits of MySizeID.Use your own device using MySizeID instore solution, shoppers can receive size recommendations for all store items, when shopping in the offlinestores. The shoppers can build their body profile using an easy to use 3 to 6 questions form, scan an item barcode and receive a size recommendationfor the scanned item based on their body profile and the item’s size chart.Another feature we added is the “inbetween sizing” feature. Our system can detect a user that has body dimensions that place the user inbetweenthe clothes sizes being offered and lets the user know that. A user can then choose between the two sizes according to the user’s fit preference(tight/loose/average).In addition, we have recently released our InstantApp feature which allows shoppers to generate their body measurements directly from our widget,without the need to download our mobile app. Using this technology, the shoppers can create their online profile of their personal measurements andcomplete a purchase faster and easier with minimum distractions.The body profile can be created while shoppers are viewing the page from their mobile phone, or by scanning a QR code on desktop that will open thesame page on the mobile phone.Screenshot of InstantApp widget on desktop on yumyumfashion website10●MyDash Platform. The MyDash platform is a smart backoffice system where the retailer enters all the information regarding its size charts thatcorrelates to every product in its ecommerce site, and where the retailer can access the information on its users. This system is customizable based onthe retailer’s needs. In 2021, we changed the MyDash system to increase the system’s accessibility, added walkthroughs, user guides and changed theuser interface and much more for the ease of use. We added the option to use our generic size charts, added the option upload size chart files insteadof typing the size charts values manually, added more widget styling options and changed the pairing mechanism between the size chart and theproducts to be more userfriendly.Figure 3: Screenshot of BackOffice System●FirstLook Smart Mirror. The Smart Mirror provides an interactive, mirrorlike touch display that allows brands to provide instore customers with anenhanced, online shopping experience, contactless checkout and obtains the recommended size. The MySizeIDFirstLook Smart Mirror can be placedin numerous locations throughout a retail store, including the fitting rooms (without cameras) or other hightraffic locations of the store. Highlightcapabilities of the FirstLook Smart Mirror include a 3D “Tryiton” interactive avatar experience, personalized and highly accurate sizerecommendations by MySizeID, thirdparty point of sale systems integration, styling recommendations and contactless “select and collect” at theregister feature.Illustration of MySizeID “first look” smart mirror in a fashion store11We are currently offering MySizeID technology to retailers through either a payperuse model or a monthly subscription model. In our payperusebusiness model, every time the consumer obtains a recommended size, the retailer is charged for the usage.BoxSizeBoxSize is a parcel measurement application that can provide realtime logistic data on package volumes and transportation, resulting in improvedoperational efficiency and reduced operating expenses. In addition, BoxSize allows customers to easily measure the size of their parcel with their smartphone,calculate shipping costs and arrange for a convenient pickup time for the package. BoxSize is available both on iOS and Android.In 2020 we released the “One Click” feature on BoxSize that enables the user to measure a package with just one swipe of the handheld device. Previously,measurements through BoxSize would require three separate swipes.Figure 4: Screenshot of BoxSizeOur BoxSize mobile measurement solution is available on the Honeywell Marketplace. In addition, BoxSize was approved for Honeywell’s Global VendorProgram, and is available to provide highly accurate mobile measurement solutions for thousands of Honeywell clients. We also developed a new dashboard for thecourier companies to have all the required data about each package in one place. It includes package dimensions, pictures, scan geo location and more. Thedashboard also let the courier use Webhooks, which allows him to get the information from his own system.12In 2020, we announced our partnership with Datalogic, a company focused on the automatic data capture and process automation markets. The partnershipmakes our BoxSize measurement solution available to thousands of Datalogic customers in the Transportation and Logistics vertical.Agreement with Delhivery Private Limited, IndiaWe entered into an agreement with Delhivery Private Limited, one of the largest courier pickup, delivery, and online shipping services in India. Delhivery’sreputation as a frontrunner in delivery and logistics tech makes its decision to select Boxsize a particularly strong testament to the value the solution provides.BoxSize provides Delhivery’s employees on the B2B side with critical information that will allow them to effortlessly optimize loading efficiency and add even morerealtime visibility to operations.SizeUpWe are working on additional consumer applications, including a DIY application. Our SizeUp application is a smart tape measure for the business toconsumer market which allows users to utilize their smartphone as a tape measure. The application provides measurements with an accuracy of within twocentimeters. Through the use of SizeUp, users will be able to visualize how an object or a piece of furniture will fit in an existing room in their home or office. It alsoadded Google Vision for image content analysis, object detection, and title suggestions.Currently the SizeUp app for Android and iOS is available for free for the first 30 days, after which a user will be required to register via email and pay aonetime fee of $1.99 to continue using the application. To date, revenues from downloads have been minimal.Research and DevelopmentOur research and development team are responsible for the research, algorithm, design, development, and testing of all aspects of our measurementplatform technology. We invest in these efforts to continuously improve, innovate, and add new features to our solutions.We incurred research and development expenses of approximately $1.7 million in 2022 and $4.25 million in 2021, relating to the development of itsapplications and technologies. The decrease from the corresponding period primarily resulted from share based payment in amount of $2,618,000 attributed to theshare issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021. We intend to continue to invest in our research anddevelopment capabilities to extend our platform and bring our measurement technology to a broader range of applications.13In 2022, the R&D department experienced significant success in their efforts to improve the performance of their size recommendation system. Through acombination of optimized algorithms and the incorporation of cuttingedge technologies, the team was able to achieve a threefold increase in the system’s speed.This breakthrough not only makes the system one of the fastest and most accurate on the market, but also reduced the operation costs, making it more costeffective for businesses to use. Additionally, the solution is now highly scalable, allowing it to easily adapt to the needs of businesses of any size. The R&D team isnow focused on further improving the system and exploring new applications for the technology.Sales and MarketingIn 2019, we launched a commercialization strategy that directs our sales efforts toward both sales to ecommerce players in specific vertical markets such asfashion/apparel and shipping/delivery as well as to ecommerce thirdparty platform providers. As of March 15, 2023, our products are being sold in the followingcountries: US, UK, France, Netherlands, Spain, Portugal Turkey, Germany, Israel and Italy, generating customer leads, building out a sales pipeline, and developingcustomer relationships.We believe an effective method to market our suite of products is for users to actively use and explore its capabilities. We encourage free trials of one ormore of our products in order to successfully convert those accounts to paid subscriptions.Proprietary RightsWe rely on a combination of patent, copyright, trademark and trade secret laws in the United States and other jurisdictions, as well as contractualprotections, to protect our proprietary technology.As of December 31, 2022, we owned 18 issued patents: six in Europe, four in the U.S., three in each of Russia and Japan and one in each of Canada andIsrael which expire between January 20, 2033 and August 18, 2036, and we have two additional patent applications in process. As of such date, we do not have anyregistered trademarks.We cannot provide any assurance that our proprietary rights with respect to our products will be viable or have value in the future since the validity,enforceability and type of protection of proprietary rights in softwarerelated industries are uncertain and still evolving.Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products or to obtain and use informationthat we regard as proprietary. Policing unauthorized use of our products is difficult, and while we are unable to determine the extent to which piracy of our softwareproducts exists, software piracy can be expected to be a persistent problem. In addition, the laws of some foreign countries do not protect proprietary rights to asgreat an extent as do the laws of the United States, and effective copyright, trademark, trade secret and patent protection may not be available in those jurisdictions.Our means of protecting our proprietary rights may not be adequate to protect us from the infringement or misappropriation of such rights by others.Further, in recent years, there has been significant litigation in the United States involving patents and other intellectual property rights, particularly in thesoftware and Internetrelated industries. We can become subject to intellectual property infringement claims as the number of our competitors grows and ourproducts and services overlap with competitive offerings. These claims, even if not meritorious, could be expensive to defend and could divert management’sattention from operating our business. If we become liable to third parties for infringing their intellectual property rights, we could be required to pay a substantialaward of damages and to develop noninfringing technology, obtain a license or cease selling the products that contain the infringing intellectual property. We maybe unable to develop noninfringing technology or obtain a license on commercially reasonable terms, if at all.14Government RegulationWe are subject to a number foreign and domestic laws and regulations that involve matters central to our business. These laws and regulations mayinvolve privacy, data protection, intellectual property, or other subjects. Many of the laws and regulations to which we are subject are still evolving and being testedin courts and could be interpreted in ways that could harm our business. In addition, the application and interpretation of these laws and regulations often areuncertain, particularly in the new and rapidly evolving industry in which we operate. Because global laws and regulations have continued to develop and evolverapidly, it is possible that we, our products, or our platform may not be, or may not have been, compliant with each such applicable law or regulation.In particular, we are subject to a variety of federal, state and international laws and regulations governing the processing of personal data. Many U.S. stateshave passed laws requiring notification to data subjects when there is a security breach of personally identifiable data. There are also a number of legislativeproposals pending before the U.S. Congress, various state legislative bodies and foreign governments concerning data protection. In addition, data protection lawsin Europe and other jurisdictions outside the United States can be more restrictive than those within the United States, and the interpretation and application ofthese laws are still uncertain and in flux.For example, the General Data Protection Regulation, or GDPR, which took effect on May 25, 2018, enhances data protection obligations for entities thatprocess personal data about individuals, including obligations to cooperate with European data protection authorities, implement security measures and keeprecords of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to the greater of €20 million or 4% of global annual revenue. Inaddition, the California Consumer Privacy Act of 2018, or CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and requiredeletion of their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used.The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further,failure to comply with the Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may exposeus to administrative fines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the currentenforcement measures and sanctions. Given the breadth and depth of changes in data protection obligations, meeting the requirements of GDPR and otherapplicable laws and regulations has required significant time and resources, including a review of our technology and systems currently in use against therequirements of GDPR and other applicable laws and regulations. We have taken various steps to prepare for complying with GDPR and other applicable laws andregulations however there can be no assurance that these steps are sufficient to assure compliance. Further, additional EU laws and regulations (and member states’implementations thereof) further govern the protection of individuals and of electronic communications. If our efforts to comply with GDPR or other applicable lawsand regulations are not successful, we may be subject to penalties and fines that would adversely impact our business and results of operations, and our ability touse personal data of individuals could be significantly impaired.CompetitionWe operate in a highly competitive industry that is characterized by constant change and innovation. Changes in the applications and the programinglanguages used to develop applications, devices, operating systems, and technology landscape result in evolving customer requirements. Our competitors includeTrue Fit, Fit analytics and 3DLook.The principal competitive factors in our market include the following:●High Accuracy Size Recommendations: the highest accuracy and the lowest margin of error by combining patented technology including AI and ML,size chart or spec data, and MySizeID property body data measurement;●Integration○Fast 1 week integration including size chart size chart review and product mapping○Easy 1 line of “all included” script implementation●Technical Advantages○Very small library that weighs ±50kb (minimum widget loading time on product page)○UltraFast loading and size recommendation presenting○Restful API option (API integration with any website or app)15●Optimizations○Adjustments of size charts based on performance○Widget usage analysis by FashTech and BI teams○Automatic pairing of size charts with products/collections●User Experience○Easy to use interface (1015 seconds to receive size recommendations)○Option to add/deduct questions to/from widget wizards○Users automatically receive size recommendations on all products after initial sign up●Product and platform features, architecture, reliability, privacy and security, performance, effectiveness, and supported environments;●Product extensibility and ability to integrate with other technology infrastructures;●Digital operations expertise;●Ease of use of products and platform capabilities;●Total cost of ownership;●Adherence to industry standards and certifications;●Strength of sales and marketing efforts;●Brand awareness and reputation; and●Focus on customer successWe believe we generally compete favorably with our competitors on the basis of these factors. We expect competition to increase as other established andemerging companies enter our markets, as customer requirements evolve, and as new products and technologies are introduced. We expect this to be particularlytrue as we offer a smartphonebased offering that does not need to utilize the smartphone’s camera, and our competitors may also seek to repurpose their existingofferings to provide similar solutions. Many of our competitors have substantially greater financial, technical, and other resources, greater name recognition, largersales and marketing budgets, broader distribution, and larger and more mature intellectual property portfolios.Human Capital ManagementAs of March 31, 2023, we had a total of 35 employees, of which 30 were fulltime employees, including 9 in sales and marketing, 12 in technology anddevelopment and 9 in administration and finance.None of our employees are represented by a collective bargaining agreement, nor have we experienced any work stoppage. We consider our relationshipwith our employees to be good. Our future success depends on our continuing ability to attract and retain highly qualified engineers, sales and marketing, accountmanagement, and senior management personnel.We also believe we have built a strong sales team focused on expanding into new markets through the acquisition of Naiz and our current team.We believe that our future success will depend, in part, on our continued ability to attract, hire and retain qualified personnel. In particular, we depend onthe skills, experience and performance of our senior management and research personnel. We compete for qualified personnel with other hitech companies, as wellas universities and nonprofit research institutions.16We provide competitive compensation and benefits programs to help meet the needs of our employees. In addition to salaries, these programs (which varyby country/region and employment classification) include incentive compensation plan, pension, and insurance benefits, paid time off, , among others. We also usetargeted equitybased grants with vesting conditions to facilitate retention of personnel, particularly for our key employees.The success of our business is fundamentally connected to the wellbeing of our people. Accordingly, we implemented an hybrid work policy in which theemployees can work from home twice a week.We consider our employees to be a key factor to our success and we are focused on attracting and retaining the best employees at all levels of ourbusiness. Inclusion and diversity is a strategic, business priority. We employ people based on relevant qualifications, demonstrated skills, performance and otherjobrelated factors. We do not tolerate unlawful discrimination related to employment, and strive to ensure that employment decisions related to recruitment,selection, evaluation, compensation, and development, among others, are not influenced by race, color, religion, gender, age, ethnic origin, nationality, sexualorientation, marital status, or disability. Continuous monitoring to ensure pay equity has been a focus in 2022. We have continued to improve gender balance in 2022with a focus on increasing the representation of women hired as new college graduates. We are committed to creating a trusting environment where all ideas arewelcomed and employees feel comfortable and empowered to draw on their unique experiences and backgrounds.We consider our relations with our employees to be good.Company InformationOur principal executive offices are located at HaYarden 4 St., POB 1026, Airport City, Israel 7010000, and our telephone number is +97236009030. Ourwebsite address is www.mysizeid.com. Any information contained on, or that can be accessed through, our website is not incorporated by reference into, nor is it inany way a part of, this Annual Report on Form 10K.We use our website (www.mysizeid.com) as a channel of distribution of Company information. The information we post through this channel may bedeemed material. Accordingly, investors should monitor our website, in addition to following our press releases, SEC filings and public conference calls andwebcasts. The contents of our website are not, however, a part of this Annual Report on Form 10K.Corporate HistoryWe were incorporated in the State of Delaware on September 20, 1999 under the name Topspin Medical, Inc. In December 2013, we changed our name toKnowledgetree Ventures Inc. Subsequently, in February 2014, we changed our name to MySize, Inc. In 2020, we created a subsidiary in the Russian Federation, MySize LLC.From inception through 2012, we were engaged in research and development of a medical magnetic resonance imaging, or MRI, technology forinterventional cardiology and in the development of MRI technology for use in the diagnosis and treatment of prostate cancer. In January 2012, we acquiredMetamorefix Ltd., or Metamorefix. Metamorefix was incorporated in 2007, and was engaged in the development of innovative solutions for the rehabilitation oftissues, particularly skin tissues. By the end of 2012, we ceased operations and in January 2013, we sold our entire ownership interest in Metamorefix.In September 2013, Ronen Luzon, our Chief Executive Officer, acquired control of the Company from Asher Shmuelevitch, according to which Mr. Luzonpurchased 70,238 shares of common stock from Mr. Shmuelevitch, which shares represented approximately 40% of the issued and outstanding capital stock of theCompany at such time, thus becoming a controlling shareholder of the Company. In connection with the acquisition, Mr. Luzon reached a settlement with our thencreditors pursuant to which the main creditor, Mr. Shmuelevitch, was paid a total sum of approximately $140,000 in consideration for a full and final waiver of any andall his claims that he may have relating to any monetary indebtedness of the Company to the creditors.17In February 2014, My Size Israel, our wholly owned subsidiary, entered into a Purchase Agreement, or the Purchase Agreement, with Shoshana Zigdon,who at the time was a beneficial owner of more than 20% of our outstanding shares, with respect to the acquisition by us of certain rights related to the collection ofdata for measurement purposes including rights in the venture, the method and a patent application that had been filed by the Seller (PCT/IL2013/050056), or theAssets. In consideration for the sale of the Assets, we agreed to pay to Ms. Zigdon, 18% of our operating profit, directly or indirectly connected with the Assetstogether with valueadded tax in accordance with the law for a period of seven years from the end of the development period of the aforementioned venture. Inaddition to the foregoing, the Purchase Agreement provided that all developments, improvements, knowledge and knowhow developed and/or accumulated by usafter the execution of the Purchase Agreement will be owned by us. Further, Ms. Zigdon agreed not to compete, directly or indirectly, with us in any matter relatingto the Assets for a period of seven years from the end of the development period of the venture.On May 26, 2021, we, My Size Israel, and Ms. Zigdon entered into an Amendment to Purchase Agreement, or the Amendment, which made certainamendments to the Purchase Agreement. Pursuant to the Amendment, Ms. Zigdon agreed to irrevocably waive (i) the right to repurchase certain assets related tothe collection of data for measurement purposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which our business issubstantially dependent, or the Assets, and (ii) all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My SizeIsrael under the Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation, reward orany rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights, or the Waiver. Inconsideration of the Waiver, we issued 100,000 shares of common stock to Ms. Zigdon.In September 2005, we commenced trading on the Tel Aviv Stock Exchange, or TASE. Between 2007 and 2012 we reported as a public company with theSEC. In August 2012, we suspended our reporting obligations. In mid2015 we resumed reporting as a public company. On July 25, 2016, our common stock beganpublicly trading on the Nasdaq Capital Market under the symbol “MYSZ”.ITEM 1A. RISK FACTORSAn investment in our common stock involves a high degree of risk. You should carefully consider the following risk factors and the other information inthis Annual Report on Form 10K before investing in our common stock. Our business and results of operations could be seriously harmed by any of the followingrisks. The risks set out below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterialalso may materially adversely affect our business, financial condition and/or operating results. If any of the following events occur, our business, financial conditionand results of operations could be materially adversely affected. In such case, the value and trading price of our common stock could decline, and you may lose allor part of your investment.Summary Risk FactorsThe principal factors and uncertainties that make investing in our ordinary shares risky, include, among others:Risks Related to Our Financial Position and Capital Requirements●We have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.●Our limited operating history makes it difficult to evaluate our business and prospects.●We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive and maycause the market price of our common stock to decline.●The report of our independent registered public accounting firm contains an explanatory paragraph regarding substantial doubt about our ability tocontinue as a going concern.Risks Related to Our Company and Our Business●The market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and online thirdparty resellers adopting our flagship product, MySizeID.18●Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broader marketacceptance of our products.●We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which may makeit difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.●We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increase ourcapital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.●If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations and financialcondition may be adversely affected.●If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operations andfinancial condition could be adversely affected.●The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile device applications andcustom development services.●Our growth depends, in part, on the success of our strategic relationships with third parties.●Changes in economic conditions could materially affect our business, financial condition and results of operations.●We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.●We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significant interruptionin our network or hosting and cloud services could adversely impact our operations and harm our business.●Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.●We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.●A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.●Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, data protectionand information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive and confidentialinformation. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm our business,results of operations and financial condition.●We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect our business.●We may face intense competition and expect competition to increase in the future, which could limit us in developing a customer base and generatingrevenue.●Our business operations and future development could be significantly disrupted if we lose key members of our management team.19●If we are able to expand our operations, we may be unable to successfully manage our future growth.Risks Related to Our Operations in Israel and Russia●Our headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.●Russia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.Risks Related to Our Common Stock●A more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.●Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions and adversedevelopments with respect to financial institutions and associated liquidity risk;●Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.●Our securities are traded on more than one market which may result in price variations.●We are a former “shell company” and as such are subject to certain limitations not generally applicable to other public companies.Risks Related to Our Financial Position and Capital RequirementsWe have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.We realized a net loss of approximately $8.3 million and $10.5 million for the years ended December 31, 2022 and 2021 and had an accumulated deficit of$53.5 million as at December 31, 2022. Because of the numerous risks and uncertainties associated with the development and commercialization of our products andbusiness, we are unable to predict the extent of any future losses or when we will become profitable, if at all. Expected future operating losses will have an adverseeffect on our cash resources, shareholders’ equity and working capital. Our failure to become and remain profitable could depress the value of our stock and impairour ability to raise capital, expand our business, maintain our development efforts, or continue our operations. A decline in our value could also cause you to lose allor part of your investment in us.Our limited operating history makes it difficult to evaluate our business and prospects.We have only been developing our measurement technology since 2014. Since then, our operating history has been primarily limited to research anddevelopment, pilot studies, raising capital, and more recently acquisitions and sales and marketing efforts. Therefore, it may be difficult to evaluate our business andprospects. We have not yet demonstrated an ability to commercialize our products. Consequently, any predictions about our future performance may not beaccurate, and you may not be able to fully assess our ability to complete development and/or commercialize our products, and any future products.We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive andmay cause the market price of our common stock to decline.Based on our projected cash flows and the cash balances as of the date of this Annual Report on Form 10K, our existing cash is insufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. In order to meet ourbusiness objectives in the future, we will need to raise additional capital, which may not be available on reasonable terms or at all. Additional capital would be usedto accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;20●respond to competitive pressure;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, and a number of otherfactors, many of which are outside our control, and on our financial performance. Accordingly, we cannot assure you that we will be able to successfully raiseadditional capital at all or on terms that are acceptable to us. If we cannot raise additional capital when needed, it may have a material adverse effect on our business,results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.Management has concluded that there is substantial doubt about our ability to continue as a going concern which could prevent us from obtainingnew financing on reasonable terms or at all.We have incurred significant losses and negative cash flows from operations and have an accumulated deficit that raises substantial doubt about its abilityto continue as a going concern. Our audited consolidated financial statements for the year ended December 31, 2022 were prepared under the assumption that wewould continue our operations as a going concern. Our independent registered public accounting firm has included a “going concern” explanatory paragraph in itsreport on our financial statements for the year ended December 31, 2022. If we are unable to improve our liquidity position, by, among other things, raising capitalthrough public or private offerings or reducing our expenses, we may exhaust our cash resources and will be unable to continue our operations. If we cannotcontinue as a viable entity, our shareholders would likely lose most or all of their investment in us.Risks Related to Our Company and Our BusinessThe market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and onlinethirdparty resellers adopting our flagship product, MySizeID.The market for our measurement technology is relatively new and unproven and is subject to a number of risks and uncertainties. We believe that ourfuture success will depend in large part on market adoption of our flagship product, MySizeID, by U.S. retailers and online thirdparty resellers. In order to grow ourbusiness, we intend to focus on educating retailers and resellers and other potential customers about the benefits of our measurement technology, expanding thefunctionality of our products and bringing new products to market to increase market acceptance and use of our technology. Our ability to develop and expand themarket that our products address depends upon a number of factors, including the cost savings, performance and perceived value associated with such products.The market for our products could fail to develop or there could be a reduction in interest or demand for our products as a result of a lack of consumer acceptance,technological challenges, competing products and services, weakening economic conditions and other causes. We may never successfully commercialize ourproducts and if our products fail to achieve market acceptance, this would have a material adverse effect on our business, results of operations and financialcondition.21Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broadermarket acceptance of our products.Our ability to achieve customer adoption, especially among U.S. retailers will depend, in part, on our ability to effectively organize, focus and train our salesand marketing personnel. We have limited experience selling to U.S. retailers and only recently established a U.S. sales force. We believe that there is significantcompetition for experienced sales professionals with the skills and industry knowledge that we require. Our ability to achieve significant revenue growth in thefuture will depend, in part, on our ability to recruit, train and retain a sufficient number of experienced sales professionals, particularly those with experience sellingto U.S. retailers. In addition, even if we are successful in hiring qualified sales personnel, new hires require significant training and experience before they achievefull productivity, particularly for sales efforts targeted at U.S. retailers and new markets. Because we only recently started sales efforts, we cannot predict whether, orto what extent, our sales efforts will be successful.We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which maymake it difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.In this market segment, the decision to adopt our products may require the approval of multiple technical and business decision makers, including security,compliance, procurement, operations and IT. In addition, while U.S. retailers may be willing to deploy our products on a limited basis, before they will commit todeploying our products at scale, they often require extensive education about our products and significant customer support time, engage in protracted pricingnegotiations and seek to secure readily available development resources. As a result, it is difficult to predict when we will obtain new customers and begingenerating revenue from these customers. As part of our sales cycle, we may incur significant expenses before executing a definitive agreement with a prospectivecustomer and before we are able to generate any revenue from such agreement. We have no assurance that the substantial time and money spent on our salesefforts will generate significant revenue. If conditions in the marketplace generally or with a specific prospective customer change negatively, it is possible that nodefinitive agreement will be executed, and we will be unable to recover any of these expenses. If we are not successful in targeting, supporting and streamlining oursales processes and if revenue expected to be generated from a prospective customer is not realized in the time period expected or not realized at all, our ability togrow our business, and our operating results and financial condition may be adversely affected. If our sales cycles lengthen, our future revenue could be lower thanexpected, which would have an adverse impact on our operating results and could cause our stock price to decline.22We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increaseour capital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.In order to reduce time to market and obtain complementary technologies, we are seeking to acquire technologies and businesses that are synergistic to ourproduct offering. For example, we recently acquired Orgad which operates an omnichannel ecommerce platform and Naiz which provides SaaS technology solutionsthat solve size and fit issues for fashion ecommerce companies. We evaluate from time to time various acquisitions and collaborations, including licensing oracquiring complementary technologies, intellectual property rights, or businesses. The process for acquiring a company may take from several months up to a yearand costs can vary greatly. We may also compete with others to acquire companies, and such competition may result in decreased availability of, or an increase inprice for, suitable acquisition candidates. In addition, we may not be able to consummate acquisitions or investments that we have identified as crucial to theimplementation of our strategy for other commercial or economic reasons. As a result, it may be more difficult for us to identify suitable acquisition or investmenttargets or to consummate acquisitions or investments on acceptable terms or at all. If we are not able to execute on any acquisition, we may not be able to achieve afuture growth strategy and may lose market share.In addition, the acquisition of Orgad, Naiz and any potential future acquisition, joint venture or collaboration may entail numerous potential risks, including:●increased operating expenses and cash requirements;●the assumption of additional indebtedness or contingent liabilities;●assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel;●the diversion of our management’s attention from our existing programs and initiatives in pursuing such a strategic merger or acquisition;●retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships;●risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing technologies; and●our inability to generate revenue from acquired technologies or products sufficient to meet our objectives in undertaking the acquisition or even to offsetthe associated acquisition and maintenance costs.All of the foregoing risks may be magnified as the cost, size or complexity of an acquisition or acquired company increases, or where the acquiredcompany’s products, market or business are materially different from ours, or where more than one integration is occurring simultaneously or within a concentratedperiod of time. We may not be able to obtain the necessary regulatory approvals, including those of antitrust authorities and foreign investment authorities, incountries where we seek to consummate acquisitions or make investments. For those and other reasons, we may ultimately fail to consummate an acquisition, even ifwe announce the intended acquisition.In addition, we may require significant financing to complete an acquisition or investment, whether through bank loans, raising of equity or debt orotherwise. We cannot assure you that such financing options will be available to us on reasonable terms, or at all. If we are not able to obtain such necessaryfinancing, it could have an impact on our ability to consummate a substantial acquisition or investment and execute a future growth strategy. Alternatively, we mayissue a significant number of shares as consideration for an acquisition, which would have a dilutive effect on our existing shareholders. For example, in partialconsideration for the acquisition of Orgad, we agreed to issue up to 111,602 shares of our common stock and in the Naiz acquisition we issued 240,000 shares of ourcommon stock. Furthermore, if we undertake acquisitions, we may incur large onetime expenses and acquire intangible assets that could result in significant futureamortization expense.23If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations andfinancial condition may be adversely affected.We believe that enhancing the “MySize” brand identity and increasing market awareness of our company and products, particularly among U.S. retailers, iscritical to achieving widespread acceptance of our products. Our ability to successfully develop new retailers may be adversely affected by a lack of awareness oracceptance of our brand. To the extent that we are unable to foster name recognition and affinity for our brand, our growth may be significantly delayed or impaired.The successful promotion of our brand will depend largely on our continued marketing efforts, market adoption of our products, and our ability to successfullydifferentiate our products from competing products and services. Our brand promotion may not be successful or result in revenue generation. Any incident thaterodes consumer affinity for our brand could significantly reduce our brand value and damage our business. If consumers perceive or experience a reduction inquality, or in any way believe we fail to deliver a consistently positive experience, our brand value could suffer and our business may be adversely affected.In particular, adverse weather conditions can impact guest traffic at our retailers, and, in more severe cases, cause temporary retail closures, sometimes forprolonged periods. Our business is subject to seasonal fluctuations, with retail sales typically higher during certain months, such as December. Adverse weatherconditions during our most favorable months or periods may exacerbate the effect of adverse weather on consumer traffic and may cause fluctuations in ouroperating results from quartertoquarter within a fiscal year.If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operationsand financial condition could be adversely affected.Our ability to attract new customers depends in part on our ability to enhance and improve our existing products, increase adoption and usage of ourproducts and introduce new products. The success of any enhancements or new products depends on several factors, including timely completion, adequatequality testing, actual performance quality, and overall market acceptance. Enhancements and new products that we develop may not be introduced in a timely orcosteffective manner, may contain errors or defects, may have interoperability difficulties with our platform or other products or may not achieve the broad marketacceptance necessary to generate significant revenue. Furthermore, our ability to increase the usage of our products depends, in part, on the development of newuse cases for our products and may be outside of our control. If we are unable to successfully enhance our existing products to meet evolving customerrequirements, increase adoption and usage of our products, develop new products, then our business, results of operations and financial condition would beadversely affected.The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile Apps and customdevelopment services.We must continue to enhance and improve the performance, functionality and reliability of our products. The mobile technology industry is characterizedby rapid technological change, changes in user requirements and preferences, frequent new product and services introductions embodying new technologies andthe emergence of new industry standards and practices that could render our products obsolete. Our success will depend, in part, on our ability to both internallydevelop and enhance our existing products, develop new products that address the increasingly sophisticated and varied needs of our customers, and respond totechnological advances and emerging industry standards and practices on a costeffective and timely basis. The development of our technology involvessignificant technical and business risks. We may fail to use new technologies effectively or to adapt our proprietary technology and systems to customerrequirements or emerging industry standards. If we are unable to adapt to changing market conditions, customer requirements or emerging industry standards, wemay not be able to increase our revenue and expand our business.Changes in economic conditions could materially affect our business, financial condition and results of operations.Because our primary target customers include U.S. retailers , we, together with the rest of the fashion/apparel industry, will depend upon consumerdiscretionary spending. Increases in unemployment rates, reductions in home values, increases in home foreclosures, investment losses, personal bankruptcies andreductions in access to credit and reduced consumer confidence, may impact consumers’ ability and willingness to spend discretionary dollars. In addition, volatileeconomic conditions may repress consumer confidence and discretionary spending. Any of the foregoing may have a material adverse effect on our business,financial condition and results of operations.24Our growth depends, in part, on the success of our strategic relationships with third parties.To grow our business, we anticipate that we will continue to depend on relationships with third parties, such as our customers and thirdparty platforms.Identifying partners, and negotiating and documenting relationships with them, requires significant time and resources. If we are unsuccessful in establishing ormaintaining our relationships with third parties, our ability to compete in the marketplace or to grow our revenue could be impaired, and our results of operationsmay suffer. Even if we are successful, we cannot assure you that these relationships will result in increased customer usage of our products or increased revenue.We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.We currently utilize, and plan on continuing to utilize over the current fiscal year, thirdparty networking providers and distribution through companiesincluding, but not limited to, Apple and Google as well as Shopify, WooCommerce and, Datalogic, Honeywell and Zebra to distribute our technologies. If disruptionsor capacity constraints occur, we may have no means of replacing these services, on a timely basis or at all. This could cause a material adverse condition for ouroperations and financial earnings.We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significantinterruption in our network or hosting and cloud services could adversely impact our operations and harm our business.Our technology infrastructure is critical to the performance of our products and customer satisfaction. Our products run on a complex distributed system,or what is commonly known as cloud computing. We own, operate and maintain elements of this system, but significant elements of this system are operated bythirdparties that we do not control and which would require significant time to replace. We expect this dependence on thirdparties to continue. In particular, asignificant portion, if not almost all data storage, data processing and other computing services and systems is hosted by cloud computing providers. Anydisruptions, outages and other performance problems relating to such services, including infrastructure changes, human or software errors and capacity constraints,could adversely impact our business, financial condition or results of operations.Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.We update our products on a frequent basis. Despite efforts to test our updates, errors, failures or bugs may not be found in our products until after theyare deployed to a customer. We have discovered and expect we will continue to discover errors, failures and bugs in our products and anticipate that certain of theseerrors, failures and bugs will only be discovered and remediated after deployment. Real or perceived errors, failures or bugs in our platform could result in negativepublicity, government inquiries, loss of or delay in market acceptance of our products, loss of competitive position, or claims by customers for losses sustained bythem. In such an event, we may be required, or may choose, for customer relations or other reasons, to expend additional resources in order to help correct theproblem.We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.In connection with the operation of our business, we store, process and transmit data, including personal and payment information, about our employeesand customers, a portion of which is confidential and/or personally sensitive. Unauthorized disclosure or loss of sensitive or confidential data may occur through avariety of methods. These include, but are not limited to, systems failure, employee negligence, fraud or misappropriation, or unauthorized access to or through ourinformation systems, whether by our employees or third parties, including a cyberattack by computer programmers, hackers, members of organized crime and/orstatesponsored organizations, who may develop and deploy viruses, worms or other malicious software programs. Such disclosure, loss or breach could harm ourreputation and subject us to government sanctions and liability under our contracts and laws that protect sensitive or personal data and confidential information,resulting in increased costs or loss of revenues. It is possible that security controls over sensitive or confidential data and other practices we and our thirdpartyvendors follow may not prevent the improper access to, disclosure of, or loss of such information. The potential risk of security breaches and cyberattacks mayincrease as we introduce new products and offerings. Further, data privacy is subject to frequently changing rules and regulations, which sometimes conflict amongthe various jurisdictions in which we provide services. Any failure or perceived failure to successfully manage the collection, use, disclosure, or security of personalinformation or other privacy related matters, or any failure to comply with changing regulatory requirements in this area, could result in legal liability or impairment toour reputation in the marketplace.25A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.Information security risks have generally increased in recent years, in part because of the proliferation of new technologies and the use of the Internet, andthe increased sophistication and activity of organized crime, hackers, terrorists, activists, cybercriminals and other external parties, some of which may be linked toterrorist organizations or hostile foreign governments. For example, a cybercriminal could use cybersecurity threats to gain access to sensitive information aboutanother company or to alter or disrupt news or information to be distributed by PR Newswire. Cybersecurity attacks are becoming more sophisticated and includemalicious software, ransomware, attempts to gain unauthorized access to data and other electronic security breaches that could lead to disruptions in criticalsystems, unauthorized release of confidential or otherwise protected information and corruption of data, substantially damaging our reputation. Any person whocircumvents our security measures could steal proprietary or confidential customer information or cause interruptions in our operations. We incur significant coststo protect against security breaches, and may incur significant additional costs to alleviate problems caused by any breaches. Our failure to prevent securitybreaches, or wellpublicized security breaches affecting the Internet in general, could significantly harm our reputation and business and financial results.Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, dataprotection and information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive andconfidential information. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm ourbusiness, results of operations and financial condition.We and our customers that use our products may be subject to privacy and data protectionrelated laws and regulations that impose obligations inconnection with the collection, processing and use of personal data, financial data, health or other similar data. The U.S. federal and various state and foreigngovernments have adopted or proposed limitations on, or requirements regarding, the collection, distribution, use, security and storage of personally identifiableinformation of individuals. The U.S. Federal Trade Commission and numerous state attorneys general are applying federal and state consumer protection laws toimpose standards on the online collection, use and dissemination of data, and to the security measures applied to such data.Similarly, many foreign countries and governmental bodies, including the EU member states, have laws and regulations concerning the collection and useof personally identifiable information obtained from individuals located in the EU or by businesses operating within their jurisdiction, which are often morerestrictive than those in the United States. Laws and regulations in these jurisdictions apply broadly to the collection, use, storage, disclosure and security ofpersonally identifiable information that identifies or may be used to identify an individual, such as names, telephone numbers, email addresses and, in somejurisdictions, IP addresses and other online identifiers.For example, the GDPR, which took full effect on May 25, 2018. The GDPR enhances data protection obligations for businesses and requires serviceproviders (data processors) processing personal data on behalf of customers to cooperate with European data protection authorities, implement security measuresand keep records of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to or greater of €20 million or 4% of global annualrevenues. In addition, the CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and require deletion of their personalinformation, opt out of certain personal information sharing, and receive detailed information about how their personal information is used. The CCPA provides forcivil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further, failure to comply withthe Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may expose us to administrativefines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the current enforcementmeasures and sanctions. There are also additional laws and regulations in additional jurisdictions around the world which govern the protection of consumers andof electronic communications. If our efforts to comply with GDPR, CCPA or other applicable laws and regulations are not successful, we may be subject to penaltiesand fines that would adversely impact our business and results of operations, and our ability to conduct business could be significantly impaired.26Additionally, although we endeavor to have our products comply with applicable laws and regulations, these and other obligations may be modified, theymay be interpreted and applied in an inconsistent manner from one jurisdiction to another, and they may conflict with one another, other regulatory requirements,contractual commitments or our internal practices. We also may be bound by contractual obligations relating to our collection, use and disclosure of personal,financial and other data or may find it necessary or desirable to join industry or other selfregulatory bodies or other privacy or data protectionrelatedorganizations that require compliance with their rules pertaining to privacy and data protection.We expect that there will continue to be new proposed laws, rules of selfregulatory bodies, regulations and industry standards concerning privacy, dataprotection and information security in the United States, the European Union and other jurisdictions, and we cannot yet determine the impact such future laws,rules, regulations and standards may have on our business. Moreover, existing U.S. federal and various state and foreign privacy and data protectionrelated lawsand regulations are evolving and subject to potentially differing interpretations, and various legislative and regulatory bodies may expand current or enact new lawsand regulations regarding privacy and data protectionrelated matters. Because global laws, regulations and industry standards concerning privacy and datasecurity have continued to develop and evolve rapidly, it is possible that we or our products or platform may not be, or may not have been, compliant with eachsuch applicable law, regulation and industry standard and compliance with such new laws or to changes to existing laws may impact our business and practices,require us to expend significant resources to adapt to these changes, or to stop offering our products in certain countries. These developments could adverselyaffect our business, results of operations and financial condition.We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect ourbusiness.Our ability to implement our business plan successfully depends in part on our ability to build brand recognition using our trademarks, service marks andother proprietary intellectual property, including our names and logos. We currently have no registered trademarks. While we plan to register a number of ourtrademarks; however, no assurance can be given that our trademark applications will be approved. As of December 31, 2022, we own 18 issued patents: six in Europe,four in the U.S., three in each of Russia and Japan and one in each of Canada and Israel which expire between January 20, 2033 and August 18, 2036, and we havetwo additional patent applications in process. As of such date, we do not have any registered trademarks., No assurance can be given that our patent applicationswhich are in process will be approved. If our patent applications are not approved, our ability to expand or develop our business may be negatively affected.Third parties may also oppose our trademark or patent applications, or otherwise challenge our use of the trademarks or patents. In the event that ourtrademarks or patents are successfully challenged, we could be forced to rebrand our goods and services or redesign our technology, which could result in loss ofbrand recognition, and could require us to devote resources to advertising and marketing new brands and products.If our efforts to register, maintain and protect our intellectual property are inadequate, or if any thirdparty misappropriates, dilutes or infringes on ourintellectual property, the value of our brands may be harmed, which could have a material adverse effect on our business and might prevent our brands fromachieving or maintaining market acceptance. We may also face the risk of claims that we have infringed third parties’ intellectual property rights. If third parties claimthat we infringe upon their intellectual property rights, our operating profits could be adversely affected. Any claims of intellectual property infringement, eventhose without merit, could be expensive and time consuming to defend, require us to rebrand our services, if feasible, divert management’s attention and resourcesor require us to enter into royalty or licensing agreements in order to obtain the right to use a thirdparty’s intellectual property.Any royalty or licensing agreements, if required, may not be available to us on acceptable terms or at all. A successful claim of infringement against uscould result in our being required to pay significant damages, enter into costly license or royalty agreements, or stop the sale of certain products or services, any ofwhich could have a negative impact on our operating profits and harm our future prospects.We may face intense competition and expect competition to increase in the future, which could prohibit us from developing a customer base andgenerating revenue.We face significant competition in every aspect of our business. Our competitors include True Fit, Virtusize, EasyMeasure, AR MeasureKit, Smart Measureand 3DLook. These companies may already have an established market in our industry. Most of these companies have significantly greater financial and otherresources than us and have been developing their products and services longer than we have been developing ours.27In addition, some of our larger competitors have substantially broader product offerings and leverage their relationships based on other products orincorporate functionality into existing products to gain business in a manner that discourages potential customers from purchasing our products. Potentialcustomers may also prefer to purchase from their existing solution providers rather than a new solution provider regardless of product performance or features.These larger competitors often have broader product lines and market focus and will therefore not be as susceptible to downturns in a particular market. Conditionsin our market could change rapidly and significantly as a result of technological advancements, partnering by our competitors or continuing market consolidation.New startup companies that innovate and large competitors that are making significant investments in research and development may invent similar or superiorproducts and technologies that compete with our products. In addition, some of our competitors may enter into new alliances with each other or may establish orstrengthen cooperative relationships. Any such consolidation, acquisition, alliance or cooperative relationship could lead to pricing pressure and our loss of anyfuture market share and could result in a competitor with greater financial, technical, marketing, service and other resources, all of which could harm our ability tocompete. Furthermore, organizations may be more willing to incrementally add solutions to their existing infrastructure from competitors than to replace their existinginfrastructure with our products. Any failure to meet and address these factors could harm our business, results of operations and financial condition.Our business operations and future development could be significantly disrupted if we lose key members of our management team.The success of our business continues to depend to a significant degree upon the continued contributions of our senior officers and key employees, bothindividually and as a group. Our future performance will be substantially dependent in particular on our ability to retain and motivate Ronen Luzon, our ChiefExecutive Officer, and certain of our other senior executive officers. The loss of the services of our Chief Executive Officer, senior officers or other key employeescould have a material adverse effect on our business and plans for future development. We have no reason to believe that we will lose the services of any of theseindividuals in the foreseeable future; however, we currently have no effective replacement for any of these individuals due to their experience, reputation in theindustry and special role in our operations. We also do not maintain any key man life insurance policies for any of our employees.If we are able to expand our operations, we may be unable to successfully manage our future growth.Our growth may strain our infrastructure and resources. Any such growth could place increased strain on our management, operational, financial and otherresources, and we will need to train, motivate, and manage employees, as well as attract management, sales, finance and accounting, international, technical, andother professionals. Any failure to expand these areas and implement appropriate procedures and controls in an efficient manner and at a pace consistent with ourbusiness objectives could have a material adverse effect on our business, results of operations and financial condition.Our business operations are conducted in multiple languages and could be disrupted due to miscommunications or translation errors.The success of our business continues to depend on our marketing efforts in the United States, Europe and Israel, each of which is conducted in the locallanguage. Miscommunications or inaccurate foreign language translations could have a material adverse effect on our business operations and financial conditions.Additionally, contracts, communications and complex technical information must be accurately translated into foreign languages.We will continue to incur costs and be subject to various obligations as a result of being a public company, listed in the United States and in Israel.We will continue to incur significant legal, accounting and other expenses as a result of being a public company, listed in the United States and in Israel.Although we will incur costs each year associated with being a publiclytraded company, it is possible that our actual costs of being a publiclytraded company willvary from year to year and may be different than our estimates. In estimating these costs, we take into account expenses related to insurance, legal, accounting andcompliance activities.28Furthermore, the need to maintain the corporate infrastructure demanded of a public company may divert management’s attention from implementing ourgrowth strategy, which could prevent us from improving our business, results of operations and financial condition. We have made, and will continue to make,changes to our internal controls and procedures for financial reporting and accounting systems to meet our reporting obligations as a U.S. publicly traded company.However, the measures we take may not be sufficient to satisfy our obligations as a publicly traded company.Any future or current litigation could have a material adverse impact on our results of operations, financial condition and liquidity.From time to time, we may be subject to litigation, including, among others, potential stockholder derivative actions and class actions. Risks associatedwith legal liability are difficult to assess and quantify, and their existence and magnitude can remain unknown for significant periods of time. Subject to certainexceptions, our Amended and Restated Certificate of Incorporation, or Certificate of Incorporation, and Amended and Restated Bylaws, or Bylaws, require us toindemnify and advance expenses to our officers and directors involved in legal proceedings. To date we have obtained directors and officers’ liability, or D&O,insurance to cover some of the risk exposure for our directors and officers. Such insurance generally pays the expenses (including amounts paid to plaintiffs, fines,and expenses including attorneys’ fees) of officers and directors who are the subject of a lawsuit as a result of their service to us. There can be no assurance that wewill be able to continue to maintain this insurance at reasonable rates or at all, or in amounts adequate to cover such expenses should such a lawsuit occur. WithoutD&O insurance, the amounts we would pay to indemnify our officers and directors should they be subject to legal action based on their service to us could have amaterial adverse effect on our financial condition, results of operations and liquidity. Such lawsuits, and any related publicity, may result in substantial costs and,among other things, divert the attention of management and our employees. An unfavorable outcome in any claim or proceeding against us could have a materialadverse impact on our financial position and results of operations for the period in which the unfavorable outcome occurs, and potentially in future periods. Further,any settlement announced by us may expose us to further claims against us by third parties seeking monetary or other damages which, even if unsuccessful, woulddivert management attention from the business and cause us to incur costs, possibly material, to defend such matters, which could have a material adverse impacton our financial position. See “Legal Proceedings” for more information regarding our involvement in ongoing litigation matters.Federal, state and local or Israeli tax rules may adversely impact our results of operations and financial position.We are subject to federal, state and local taxes in the U.S., as well as local taxes in Israel in respect to our operations in Israel. Although we believe our taxestimates are reasonable, if the Internal Revenue Service or other taxing authority disagrees with the positions we have taken on our tax returns, we could faceadditional tax liability, including interest and penalties. If material, payment of such additional amounts upon final adjudication of any disputes could have a materialimpact on our results of operations and financial position. In addition, complying with new tax rules, laws or regulations could impact our financial condition, andincreases to federal or state statutory tax rates and other changes in tax laws, rules or regulations may increase our effective tax rate. Any increase in our effectivetax rate could have a material impact on our financial results.A significant majority of Orgad’s revenue is from sales of products on Amazon’s U.S. Marketplace and any change, limitation or restriction on ourability to operate on Amazon’s platform or any other marketplace could have a material adverse impact to our business, results of operations, financialcondition and prospects.Orgad, our wholly owned subsidiary, operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com, eBay and others. A substantial percentage of Orgad’s revenue is driven by sales on Amazon’s U.S. marketplace and Orgad is subject toterms of service of Amazon and other maketplaces and various other seller policies and services that apply to third parties selling products on Amazon and othermarketplaces. Generally, a marketplace has the right to terminate or suspend its agreement with Orgad at any time and for any reason. Such marketplace may takeother actions against Orgad such as suspending or terminating a seller account or product listing and withholding payments owed to Orgad indefinitely. Forexample, in July 2022, Amazon deactivated Orgad’s Amazon U.S. store as a result of complaints submitted due to an error in the listed manufacturer of certainproducts on Orgad’s store. Although its account was subsequently reinstated in September 2022, if the deactivation were to occur in the future for a prolongedperiod of time, or if Amazon were to terminate Orgad’s account, this would have a material adverse effect on our business, results of operations, financial conditionand prospects. While Orgad endeavors to materially comply with the terms of services of the marketplaces on which it operates, we can provide no assurance thatthese marketplaces will have the same determination with respect to our compliance.29In addition, Amazon and other marketplaces can make changes to its platform that could require Orgad to change the manner in which it operates, limit itsability to successfully launch new products or increase its costs to operate and such changes could have an adverse effect on our business, results of operations,financial condition and prospects. Examples of changes that could impact us relate to platform fee charges (i.e., selling commissions), exclusivity, inventorywarehouse availability, excluded products and limitations on sales and marketing. Any change, limitation or restriction on our ability to sell on Amazon’s platform orany other marketplace, even if temporary, could have a material impact on our business, results of operations, financial condition and prospects.Orgad also relies on services provided by Amazon’s fulfillment platform, including Prime Certification, which provides for expedited shipping to theconsumer, an important aspect in the buying decision for consumers. For products that Orgad fulfills itself, Orgad is qualified to offer our products for sale withPrime Certification delivery. Any inability to market our products for sale with expedited delivery provided under Prime Certification could have a material impact onour business, results of operations, financial condition and prospects. Failure to remain compliant with the best fulfillment practices on Amazon’s platform couldhave a material impact on our business, results of operations, financial condition and prospects. In addition, due to the COVID19 pandemic, Amazon has changedthe amount of inventory it accepts per product for a period of time. If this were to continue it could cause us to miss sales and/or pay additional shipping costswhich would harm our business operations and financial conditions.Orgad’s business depends on its ability to build and maintain strong product listings on ecommerce platforms. Orgad may not be able to maintain andenhance our product listings if it receives unfavorable customer complaints, negative publicity or otherwise fails to live up to consumers’ expectations, whichcould materially adversely affect our business, results of operations and growth prospects.Maintaining and enhancing Orgad’s product listings is critical in expanding and growing its business. However, a significant portion of Orgad’s perceivedperformance to the customer depends on third parties outside of its control, including suppliers and thirdparty delivery agents as well as online retailers such asAmazon and eBay. Because Orgad’s agreements with its online retail partners are generally terminable at will, it may be unable to maintain these relationships, andour results of operations could fluctuate significantly from period to period. Because Orgad relies on third parties to deliver its products, it is subject to shippingdelays or disruptions caused by inclement weather, natural disasters, labor activism, health epidemics or bioterrorism. It may also experience shipping delays ordisruptions due to other carrierrelated issues relating to their own internal operational capabilities. Further, Orgad relies on the business continuity plans of thesethird parties to operate during pandemics, like the COVID19 pandemic, and it has limited ability to influence their plans, prevent delays, and/or cost increases due toreduced availability and capacity and increased required safety measures.Customer complaints or negative publicity about its products, delivery times, or marketing strategies, even if not accurate, especially on blogs, social mediawebsites and thirdparty market sites, could rapidly and severely diminish consumer view of Orgad’s product listings and result in harm to its brand. Customers mayalso make safetyrelated or other types of claims regarding products sold through our online retail partners, such as Amazon, which may result in an online retailpartner removing the product from its marketplace. We also use and rely on other services from third parties, such as our telecommunications services, and thoseservices may be subject to outages and interruptions that are not within our control.Orgad faces risks related to successfully optimizing and operating its fulfillment and customer service operations.Failures to adequately predict customer demand or otherwise optimize and operate its fulfillment and customer service operations successfully from time totime result in excess or insufficient fulfillment or customer service capacity, increased costs, and impairment charges, any of which could materially harm ourbusiness. As Orgad continues to add fulfillment and customer service capability or add new businesses with different requirements, its fulfillment and customerservice operations become increasingly complex and operating them becomes more challenging. There can be no assurance that Orgad will be able to operate ouroperations effectively.30In addition, failure to optimize inventory in our fulfillment operations increases net shipping cost by requiring longzone or partial shipments. Orgad may beunable to adequately staff its fulfillment and customer service operations. Orgad’s failure to properly handle such inventory or to accurately forecast productdemand may result in it being unable to secure sufficient storage space or to optimize its fulfillment operations or cause other unexpected costs and other harm toour business and reputation.Orgad relies on a limited number of shipping companies to deliver inventory to it and completed orders to our customers. The inability to negotiateacceptable terms with these companies or performance problems or other difficulties experienced by these companies could negatively impact our operating resultsand customer experience. In addition, Orgad’s ability to receive inbound inventory efficiently and ship completed orders to customers also may be negativelyaffected by natural or manmade disasters, extreme weather, geopolitical events and security issues, labor or trade disputes, and similar events.The variability in Orgad’s retail business places increased strain on its operations.Demand for Orgad’s product listings can fluctuate significantly for many reasons, including as a result of seasonality, promotions, product launches, orunforeseeable events, such as in response to natural or manmade disasters, extreme weather, or geopolitical events. For example, Orgad expects a disproportionateamount of our retail sales to occur during our fourth quarter. Failure to stock or restock popular products in sufficient amounts such that Orgad fails to meetcustomer demand could significantly affect our revenue and our future growth. If too many customers access the websites on which Orgad engages in onlineretailing within a short period of time due to increased demand, Orgad may experience system interruptions that make the websites unavailable or prevent us fromefficiently fulfilling orders, which may reduce the volume of goods its offers or sell and the attractiveness of its products. In addition, Orgad may be unable toadequately staff for fulfillment of orders and customer service during these peak periods and delivery and other fulfillment companies and customer service cosourcers may be unable to meet the seasonal demand.Our business is subject to the risks of earthquakes, fire, power outages, floods, health risks and other catastrophic events, and to interruption by manmade problems such as terrorism.Natural disasters, such as fire or floods, a significant power outage, telecommunications failure, terrorism, an armed conflict, cyberattacks, epidemics andpandemics such as COVID19, or other geopolitical unrest could affect our supply chain, manufacturers, logistics providers, channel partners, or endcustomers orthe economy as a whole and such disruption could impact us and the shipments and sales. These risks may be further increased if the disaster recovery plans for usand our suppliers prove to be inadequate. To the extent that any of the above should result in delays or cancellations of customer orders, the loss of customers, orthe delay in the deployment or shipment of products, our business, financial condition, and operating results would be adversely affected.For example, on January 2, 2023, Orgad experienced a fire at its warehouse in Israel. We are not aware of any casualties or injuries associated with the fire.We shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incidentdid not affect the future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of thisincident on the other parties that were involved in the incident (lessor and others that leased properties near the warehouse).Our business could be negatively impacted by unsolicited takeover proposals, by shareholder activism or by proxy contests relating to the election ofdirectors or other matters.Our business could be negatively affected as a result of an unsolicited takeover proposal, by shareholder activism or a proxy contest. During 2021, anactivist shareholder sought to make changes to our board of directors, among other matters, which ultimately resulted in us entering into a settlement agreementwith the activist shareholder and another shareholder, and for which considerable costs were incurred and absorbed significant time and attention by managementand the board of directors. A future proxy contest, unsolicited takeover proposal, or other shareholder activism relating to the election of directors or other matterswould most likely require us to incur significant legal fees and proxy solicitation expenses and require significant time and attention by management and our Boardof Directors. The potential of a proxy contest, unsolicited takeover proposal, or other shareholder activism could interfere with our ability to execute our strategicplan, give rise to perceived uncertainties as to our future direction, result in the loss of potential business opportunities or make it more difficult to attract and retainqualified personnel, any of which could materially and adversely affect our business and operating results.31Environmental, social and corporate governance (ESG) issues, including those related to climate change and sustainability, may have an adverseeffect on our business, financial condition and results of operations and damage our reputation.There is an increasing focus from certain investors, customers, consumers, employees and other stakeholders concerning ESG matters. Additionally, publicinterest and legislative pressure related to public companies’ ESG practices continue to grow. If our ESG practices fail to meet regulatory requirements or investor,customer, consumer, employee or other shareholders’ evolving expectations and standards for responsible corporate citizenship in areas including environmentalstewardship, support for local communities, Board of Director and employee diversity, human capital management, employee health and safety practices, productquality, supply chain management, corporate governance and transparency, our reputation, brand and employee retention may be negatively impacted, and ourcustomers and suppliers may be unwilling to continue to do business with us.Customers, consumers, investors and other shareholders are increasingly focusing on environmental issues, including climate change, energy and wateruse, plastic waste and other sustainability concerns. Concern over climate change may result in new or increased legal and regulatory requirements to reduce ormitigate impacts to the environment. Changing customer and consumer preferences or increased regulatory requirements may result in increased demands orrequirements. Complying with these demands or requirements could cause us to incur additional manufacturing, operating or product development costs.If we do not adapt to or comply with new regulations, including the SEC’s published proposed rules that would require companies to provide significantlyexpanded climaterelated disclosures in their periodic reporting, which may require us to incur significant additional costs to comply and impose increased oversightobligations on our management and board of directors, or fail to meet evolving investor, industry or stakeholder expectations and concerns regarding ESG issues,investors may reconsider their capital investment in our company, we may become subject to penalties, and customers and consumers may choose to stoppurchasing our products, if approved for commercialization, which could have a material adverse effect on our reputation, business or financial condition.Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions andadverse developments with respect to financial institutions and associated liquidity risk.Our business depends on the economic health of the global economies. If the conditions in the global economies remain uncertain or continue to bevolatile, or if they deteriorate, including as a result of the impact of military conflict, such as the war between Russia and Ukraine, terrorism or other geopoliticalevents, our business, operating results and financial condition may be materially adversely affected. Economic weakness, inflation and increases in interest rates,limited availability of credit, liquidity shortages and constrained capital spending have at times in the past resulted, and may in the future result, in challenging anddelayed sales cycles, slower adoption of new technologies and increased price competition, and could negatively affect our ability to forecast future periods, whichcould result in an inability to satisfy demand for our products and a loss of market share.In addition, increases in inflation raise our costs for commodities, labor, materials and services and other costs required to grow and operate our business,and failure to secure these on reasonable terms may adversely impact our financial condition. Additionally, increases in inflation, along with the uncertaintiessurrounding COVID19, geopolitical developments and global supply chain disruptions, have caused, and may in the future cause, global economic uncertainty anduncertainty about the interest rate environment, which may make it more difficult, costly or dilutive for us to secure additional financing. A failure to adequatelyrespond to these risks could have a material adverse impact on our financial condition, results of operations or cash flows.More recently, the closures of SVB and Signature Bank and their placement into receivership with the FDIC created bankspecific and broader financialinstitution liquidity risk and concerns. Although the Department of the Treasury, the Federal Reserve and the FDIC jointly released a statement that depositors atSVB and Signature Bank would have access to their funds, even those in excess of the standard FDIC insurance limits, under a systemic risk exception, futureadverse developments with respect to specific financial institutions or the broader financial services industry may lead to marketwide liquidity shortages, impair theability of companies to access nearterm working capital needs, and create additional market and economic uncertainty. There can be no assurance that future creditand financial market instability and a deterioration in confidence in economic conditions will not occur. Our general business strategy may be adversely affected byany such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions. If the current equityand credit markets deteriorate, or if adverse developments are experienced by financial institutions, it may cause shortterm liquidity risk and also make anynecessary debt or equity financing more difficult, more costly, more onerous with respect to financial and operating covenants and more dilutive. Failure to secureany necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stockprice and could require us to alter our operating plans. In addition, there is a risk that one or more of our service providers, financial institutions, manufacturers,suppliers and other partners may be adversely affected by the foregoing risks, which could directly affect our ability to attain our operating goals on schedule andon budget.Our business may be adversely affected by the impact of any renewed outbreak of the COVID19 pandemic.Public health epidemics or outbreaks could adversely impact our business. In late 2019, a novel strain of COVID19, also known as coronavirus, wasreported in Wuhan, China. While initially the outbreak was largely concentrated in China, it spread worldwide. Many countries around the world, including in Israel,implemented significant governmental measures to control the spread of the virus, including temporary closure of businesses, severe restrictions on travel and themovement of people, and other material limitations on the conduct of business. These measures haven historically resulted in work stoppages and other disruptions.If there is a resurgence of the COVID19 pandemic, this could adversely impact our operations, including among others, our sales and marketing efforts and ourability to raise additional funds, and accordingly, the impact of COVID19 could have an adverse impact on our business and our financial results.32Risks Related to Our Operations in RussiaRussia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.In addition to our Israel operations, we have operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia and we engage two software developers through a third party who are based in Ukraine. On February 24,2022, Russia invaded Ukraine. The outbreak of hostilities between the two countries could result in more widespread conflict and could have a severe adverse effecton the region.Following Russia’s actions, various countries, including the U.S., Canada, the United Kingdom, Germany and France, as well as the European Union,issued broadranging economic sanctions against Russia. Such sanctions included, among other things, a prohibition on doing business with certain Russiancompanies, officials and oligarchs; a commitment by certain countries and the European Union to remove selected Russian banks from the Society for WorldwideInterbank Financial Telecommunications (SWIFT) electronic banking network that connects banks globally; and restrictive measures to prevent the Russian CentralBank from undermining the impact of the sanctions. In response to sanctions, the Russian Central Bank raised its interest rates and banned sales of local securitiesby foreigners. Russia may take additional counter measures or retaliatory actions in the future. While diplomatic efforts have been ongoing, the conflict betweenRussia and Ukraine is currently unpredictable and has the potential to result in broadened military actions. The duration of ongoing hostilities and such sanctionsand related events cannot be predicted. Uncertainty as to future relations between Russia and the U.S. and other countries in the west, or between Russia and othereastern European countries, may have a negative impact on our operations.Such international sanctions and potential responses to such sanctions, including those that may limit or restrict transfer funds into Russia, may in thefuture significantly affect our ability to conduct our activities in Russia including paying our personnel. To date, the conflict has had minimal impact on operations .Nevertheless, we have no way to predict the progress or outcome of the situation in Ukraine, as the conflict and governmental reactions are rapidly developing andbeyond our control. Prolonged unrest, intensified military activities or more extensive sanctions impacting the region could have a material adverse effect on ouroperations, results of operations, financial condition, liquidity and business outlook.Political, military conditions or other risks in Russia could adversely affect our business.Russia is a federative state consisting of 85 constituent entities, or “subjects.” The Russian Constitution reserves some governmental powers for theRussian Government, some for the subjects and some for areas of joint competence. In addition, eight “federal districts” (“federal’nye okruga”), which are overseenby a plenipotentiary representative of the President, supplement the country’s federal system. The delineation of authority among and within the subjects is, inmany instances, unclear and contested, particularly with respect to the division of tax revenues and authority over regulatory matters. For these reasons, theRussian political system is vulnerable to tension and conflict between federal, subject and local authorities. This tension creates uncertainties in the operatingenvironment in Russia, which may prevent us from carrying out our strategy effectively. The risks associated with these events or potential events could materiallyand adversely affect the investment environment and overall consumer and entrepreneurial confidence in Russia, and our business, prospects, financial condition,hiring ability, and results of operations could be materially and adversely affected.Furthermore, high levels of corruption reportedly exist in Russia, including the bribing of officials for the purpose of initiating investigations bygovernment agencies. Corruption and other illegal activities could disrupt our ability to conduct our business effectively, and claims that the we are involved in suchcorruption or illegal activities could generate negative publicity, of which could harm our development, financial condition, results of operations or prospects.Economic and other risks in Russia could adversely affect our business.Operating a business in an emerging market such as Russia can involve a greater degree of risk than operating a business in more developed markets.Over the last two decades, the Russian economy has experienced or continues to experience at various times:●significant volatility in its GDP;33●the impact of international sanctions;●high levels of inflation;●increases in, or high, interest rates;●sudden price declines in oil and other natural resources;●instability in the local currency market;●budget deficits;●the continued operation of lossmaking enterprises due to the lack of effective bankruptcy proceedings;●capital flight; and●significant increases in poverty rates, unemployment and underemployment.The Russian economy has been subject to abrupt downturns in the past, including as a result of the invasion of Ukraine, global financial crisis, and, as anemerging market, remains particularly vulnerable to further external shocks and any future fluctuations in the global markets. Any further deterioration in the generaleconomic conditions in Russia (whether or not as a result of the events mentioned above) could have a material adverse effect on the Russian economy and mayresult in hiring and operational difficulties, as well as potential flight of human capital, which could have a material adverse effect on our business, productdevelopment and results of operations.Legal risks in Russia could materially adversely affect our operations and Russian tax legislation is subject to frequent change.Among the risks of the Russian legal system are: inconsistencies among laws, presidential decrees, and government and ministerial orders and resolutions;conflicting local, regional and federal laws and regulations; the untested nature of the independence of the judiciary and its sensitivity to economic or politicalinfluences; substantial gaps in the regulatory structure due to the delay or absence of implementing legislation; a high degree of discretion on the part ofgovernmental authorities; reported corruption within governmental entities and other governmental authorities; the relative inexperience of judges and courts ininterpreting laws applicable to complex transactions; and the unpredictability of enforcement of foreign judgments and foreign arbitral awards. Many Russian lawsand regulations are construed in a way that provides for significant administrative discretion in application and enforcement. Unlawful, selective or arbitrary actionsof the Russian Government have reportedly included the denial or withdrawal of licenses, sudden and unexpected tax audits, criminal prosecutions, and civil claims.Any of the above events may have a material adverse effect on our product development and results of operations.Despite certain improvements in the taxation system made by the Russian Government over the past decade, Russian tax legislation is still subject tofrequent change, varying interpretations, and inconsistent and selective enforcement. There are currently no clear rules for distinguishing between lawful taxoptimization and tax evasion. In addition, Russian tax laws do not contain detailed rules on the taxation in Russia of foreign companies. As such, taxpayers oftenhave to resort to court proceedings to defend their position against the Russian tax authorities. However, in the absence of consistent court practice or bindingprecedents, there is inconsistency amongst court decisions. Further, the possibility exists that the Russian Federation would impose arbitrary or onerous taxes andpenalties in the future, which could have a material adverse effect on our product development and results of operations.34Risks Related to Our Operations In IsraelOur headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.Our headquarters and most of our operations are located in central Israel and our key employees, officers and directors are residents of Israel. Accordingly,political, economic and military conditions in Israel and the surrounding region may directly affect our business. Since the establishment of the State of Israel in1948, a number of armed conflicts have taken place between Israel and its Arab neighbors. Any hostilities involving Israel or the interruption or curtailment of tradewithin Israel or between Israel and its trading partners could adversely affect our operations and results of operations and could make it more difficult for us to raisecapital. During the winter of 2008, winter of 2012 and the summer of 2014, Israel was engaged in an armed conflict with Hamas, a militia group and political partyoperating in the Gaza Strip, and during the summer of 2006, Israel was engaged in an armed conflict with Hezbollah, a Lebanese Islamist Shiite militia group andpolitical party. Israel faces political tension with respect to its relationships with Turkey, Iran and certain Arab neighbor countries. In addition, recent conflictsinvolved missile strikes against civilian targets in various parts of Israel, and negatively affected business conditions in Israel. Recent political uprisings and socialunrest in various countries in the Middle East and North Africa are affecting the political stability of those countries. This instability may lead to deterioration of thepolitical relationships that exist between Israel and these countries, and have raised concerns regarding security in the region and the potential for armed conflict.Any armed conflicts, terrorist activities or political instability in the region could adversely affect business conditions and could harm our results of operations. Forexample, any major escalation in hostilities in the region could result in a portion of our employees and service providers being called up to perform military duty foran extended period of time. Parties with whom we do business have sometimes declined to travel to Israel during periods of heightened unrest or tension, forcing usto make alternative arrangements when necessary. In addition, the political and security situation in Israel may result in parties with whom we have agreementsinvolving performance in Israel claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions insuch agreements. Any future deterioration in the political and security situation in Israel will negatively impact our business.Our commercial insurance does not cover losses that may occur as a result of events associated with the security situation in the Middle East. Althoughthe Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that thisgovernment coverage will be maintained. Any losses or damages incurred by us could have a material adverse effect on our business. Any armed conflicts orpolitical instability in the region would likely negatively affect business conditions and could harm our results of operations.Further, in the past, the State of Israel and Israeli companies have been subjected to an economic boycott. Several countries still restrict business with theState of Israel and with Israeli companies. These restrictive laws and policies may have an adverse impact on our operating results, financial condition or theexpansion of our business.The legislative power of the State resides in the Knesset, a unicameral parliament that consists of 120 members elected by nationwide voting under asystem of proportional representation. Israel’s most recent general elections were held on April 9, 2019, September 17, 2019, March 2, 2020 and November 1, 2022.The uncertainty surrounding the results of the recent elections may continue. Actual or perceived political instability in Israel or any negative changes in thepolitical environment, may individually or in the aggregate adversely affect the Israeli economy and, in turn, our business, financial condition, results of operationsand prospects.Some of our employees are obligated to perform military reserve duty in Israel.Many Israeli citizens, including our employees are obligated to perform one month, and in some cases more, of annual military reserve duty until they reachthe age of 40 (or older, for reservists with certain occupations) and, in the event of a military conflict, may be called to active duty. In response to increases interrorist activity, there have been periods of significant callups of military reservists. It is possible that there will be military reserve duty callups in the future. Ouroperations could be disrupted by such callups. Such disruption could materially adversely affect our business, results of operations and financial condition.35It may be difficult to enforce a nonIsraeli judgment against the Company or its officers and directors.The operating subsidiary of ours is incorporated in Israel. All of our executive officers and directors are not residents of the United States, and asubstantial portion of our assets and the assets of our executive officers and directors are located outside the United States. Therefore, a judgment obtained againstus, or any of these persons, including a judgment based on the civil liability provisions of the U.S. federal securities laws, may not be collectible in the United Statesand may not necessarily be enforced by an Israeli court. It also may be difficult to affect service of process on these persons in the United States or to assert U.S.securities law claims in original actions instituted in Israel. Additionally, it may be difficult for an investor, or any other person or entity, to initiate an action withrespect to U.S. securities laws in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of U.S. securities laws reasoning that Israel is not themost appropriate forum in which to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law isapplicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law often involves the testimony of expert witnesses, which can be a timeconsuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel that addresses the mattersdescribed above. As a result of the difficulty associated with enforcing a judgment against us in Israel, it may be impossible to collect any damages awarded byeither a U.S. or foreign court.Our international operations could expose us to additional risks, including exchange rate fluctuations, legal regulations and political or economicinstability that could harm our business and operating results.Our international operations expose us to the following risks which may have a material adverse effect on our business and operating results:●devaluations and fluctuations in currency exchange rates including fluctuations between the U.S. dollar and the NIS and the Russian Ruble;●costs of compliance with local laws, including labor laws and intellectual property laws;●compliance with domestic and foreign government policies, including compliance with Israeli securities laws and TASE;●changes in trade regulations and procedures affecting approval, production, pricing, marketing, reimbursement for and access to, our products;●compliance with applicable foreign anticorruption laws, antitrust/competition laws, antiBoycott Israel law and antimoney laundering laws; and●economic and geopolitical developments and conditions, including ongoing instability in global economies and financial markets, international hostilities,acts of terrorism and governmental reactions, inflation, outbreaks of contagious disease (e.g., the COVID19 pandemic) and military and political alliances.Risks Related to Our Common StockA more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.Although our common stock is listed on the Nasdaq Capital Market, it has only been traded on the Nasdaq Capital Market since July 25, 2016. There hasbeen relatively limited trading volume in the market for our common stock, and a more active, liquid public trading market may not develop or may not be sustained.Limited liquidity in the trading market for our common stock may adversely affect a stockholder’s ability to sell its shares of common stock at the time it wishes tosell them or at a price that it considers acceptable. If a more active, liquid public trading market does not develop, we may be limited in our ability to raise capital byselling shares of common stock and our ability to acquire other companies or assets by using shares of our common stock as consideration. In addition, if there is athin trading market or “float” for our stock, the market price for our common stock may fluctuate significantly more than the stock market as a whole. Without a largefloat, our common stock would be less liquid than the stock of companies with broader public ownership and, as a result, the trading prices of our common stockmay be more volatile and it would be harder for you to liquidate any investment in our common stock. Furthermore, the stock market is subject to significant priceand volume fluctuations, and the price of our common stock could fluctuate widely in response to several factors, including:●our quarterly or annual operating results;●changes in our earnings estimates;●investment recommendations by securities analysts following our business or our industry;●additions or departures of key personnel;●changes in the business, earnings estimates or market perceptions of our competitors;36●our failure to achieve operating results consistent with securities analysts’ projections;●changes in industry, general market or economic conditions;●announcements of legislative or regulatory changes; and●natural disasters (including for example, the recent fire in the Orgad warehouse) and political and economic instability, including wars, terrorism, politicalunrest, results of certain elections and votes, emergence of a pandemic, or other widespread health emergencies (or concerns over the possibility of suchan emergency, including for example, the recent the COVID19 pandemic), boycotts, adoption or expansion of government trade restrictions, and otherbusiness restrictions.The stock market has experienced extreme price and volume fluctuations in recent years that have significantly affected the quoted prices of the securitiesof many companies. The changes often appear to occur without regard to specific operating performance. The price of our common stock could fluctuate basedupon factors that have little or nothing to do with us and these fluctuations could materially reduce our stock price.Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.If any of our shareholders were to decide to sell large amounts of stock over a short period of time (presuming such sales were permitted) such sales couldcause the market price of our common stock to drop significantly, even if our business is doing well. Further, the market price of our common stock could decline as aresult of the perception that such sales could occur. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equitysecurities in the future at a time and price that we deem appropriate.Our securities are traded on more than one market which may result in price variations.Our securities have been trading on the Nasdaq Capital Market since July 2016 and on TASE since September 2005. Trading in our securities on suchexchanges occurs in different currencies (U.S. dollars on the Nasdaq Capital Market and NIS on the TASE), and at different times (due to different time zones,trading days and public holidays in the United States and Israel). The trading prices of our securities on the two exchanges may differ due to the foregoing andother factors. Any decrease in the price of our shares on the TASE could cause a decrease in the trading price of our shares on the Nasdaq Capital Market and viceversa.We are a smaller reporting company and, as a result of the reduced disclosure and governance requirements applicable to such companies, ourcommon stock may be less attractive to investors.We are a smaller reporting company, (i.e. a company with “public float” held by nonaffiliates with a market value of less than $250 million) and we areeligible to take advantage of certain exemptions from various reporting requirements applicable to other public companies. We have elected to adopt these reduceddisclosure requirements. We cannot predict if investors will find our common stock less attractive as a result of our taking advantage of these exemptions. If someinvestors find our common stock less attractive as a result of our choices, there may be a less active trading market for our common stock and our stock price may bemore volatile.We do not expect to pay any cash dividends in the foreseeable future.We have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our board of directors deems relevant. Investors should not purchase our common stock expecting to receive cash dividends. Because we do notpay dividends, and there may be limited trading, investors may not have any manner to liquidate or receive any payment on their investment. Therefore, our failureto pay dividends may cause investors to not see any return on investment even if we are successful in our business operations. In addition, because we do not paydividends we may have trouble raising additional funds, which could affect our ability to expand our business operations.37UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2022☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ________ to _________Commission file number 00137370MY SIZE, INC.(Exact name of registrant as specified in charter)Delaware510394637(State or jurisdiction ofIncorporation or organization)I.R.S EmployerIdentification No.4 Hayarden, POB 1026, Airport City, Israel7010000(Address of principal executive offices)(Zip code)+9723 6009030(Registrant’s telephone number, including area code)Securities registered pursuant to Section 12(b) of the Act:Title of each classTrading Symbol(s)Name of Each Exchange on Which RegisteredCommon Stock, par value $0.001 per shareMYSZThe Nasdaq Capital MarketSecurities registered pursuant to Section 12(g) of the Act: None.Indicate by check mark whether the registrant is a wellknown seasoned issuer as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes☒ No ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer, a smaller reporting company, or an emerginggrowth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 of theExchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☒Smaller Reporting Company☒Emerging Growth Company☐If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revisedfinancial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b2 of the Exchange Act) Yes ☐No☒Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control overfinancial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflectthe correction of an error to previously issued financial statements. ☐Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by anyof the registrant’s executive officers during the relevant recovery period pursuant to §240.10D1(b). ☐The aggregate market value of voting and nonvoting common equity held by nonaffiliates of the registrant as of June 30, 2022, the last business day of theregistrant’s most recently completed second fiscal quarter, was approximately $25,551,906.Number of shares of common stock outstanding as of March 31, 2023 was 2,446,780.Documents Incorporated by Reference: None.Table of ContentsPart IItem 1.Business2Item 1A.Risk Factors18Item 1B.Unresolved Staff Comments41Item 2.Properties41Item 3.Legal Proceedings41Item 4.Mine Safety Disclosures42Part IIItem 5.Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities43Item 6.Selected Financial Data43Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations43Item 7A.Quantitative and Qualitative Disclosures about Market Risk50Item 8.Financial Statements and Supplementary DataF1Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure51Item 9A.Controls and Procedures51Item 9B.Other Information51Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.51Part IIIItem 10.Directors, Executive Officers and Corporate Governance52Item 11.Executive Compensation57Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters60Item 13.Certain Relationships and Related Transactions, and Director Independence62Item 14.Principal Accounting Fees and Services65Part IVItem 15.Exhibits, Financial Statement Schedules66Signatures69iPART IIn this Annual Report on Form 10K, unless the context requires otherwise, the terms “we,” “our,” “us,” or “the Company” refer to MySize, Inc., a Delawarecorporation, and its subsidiaries, including MySize Israel 2014 Ltd. My Size LLC, Orgad International Marketing Ltd., or Orgad, and Naiz Bespoke Technologies, S.L,or Naiz, taken as a whole.References to “U.S. dollars” and “$” are to currency of the United States of America, and references to “NIS” are to New Israeli Shekels. Unless otherwiseindicated, U.S. dollar translations of NIS amounts presented in this Annual Report on Form 10K for the year ended on December 31, 2022 are translated using therate of NIS 3.358 to $1.00.All information in this Annual Report on Form 10K relating to shares or price per share reflects the 1for25 reverse stock split effected by us on December8, 2022.CAUTIONARY NOTE ON FORWARDLOOKING STATEMENTSThis Annual Report on Form 10K contains certain forwardlooking statements within the meaning of Section 27A of the Securities Act and Section 21E ofthe Exchange Act. Any statements in Annual Report on Form 10K about our expectations, beliefs, plans, objectives, assumptions or future events or performanceare not historical facts and are forwardlooking statements. These statements are often, but not always, made through the use of words or phrases such as“believe,” “will,” “expect,” “anticipate,” “estimate,” “intend,” “plan” and “would.” For example, statements concerning financial condition, possible or assumedfuture results of operations, growth opportunities, industry ranking, plans and objectives of management, markets for our common stock and future managementand organizational structure are all forwardlooking statements. Forwardlooking statements are not guarantees of performance. They involve known and unknownrisks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to differ materially from any results, levels ofactivity, performance or achievements expressed or implied by any forwardlooking statement.Any forwardlooking statements are qualified in their entirety by reference to the risk factors discussed throughout this Annual Report on Form 10K. Someof the risks, uncertainties and assumptions that could cause actual results to differ materially from estimates or projections contained in the forwardlookingstatements include but are not limited to:●our history of losses and needs for additional capital to fund our operations and our inability to obtain additional capital on acceptable terms, or at all;●risks related to our ability to continue as a going concern;●the new and unproven nature of the measurement technology markets;●our ability to achieve customer adoption of our products;●our ability to realize the benefits of our acquisitions of Orgad and Naiz;●our dependence on assets we purchased from a related party;●our ability to enhance our brand and increase market awareness;●our ability to introduce new products and continually enhance our product offerings;●the success of our strategic relationships with third parties;●information technology system failures or breaches of our network security;●competition from competitors;●our reliance on key members of our management team;●current or future litigation;●current or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated liquidityrisk; and●the impact of the political and security situation in Israel on our business.1The foregoing list sets forth some, but not all, of the factors that could affect our ability to achieve results described in any forwardlooking statements.You should read this Annual Report on Form 10K and the documents that we reference herein and have filed as exhibits to the Annual Report on Form 10K,completely and with the understanding that our actual future results may be materially different from what we expect. You should assume that the informationappearing in this Annual Report on Form 10K is accurate as of the date hereof. Because the risk factors referred to in this Annual Report on Form 10K, could causeactual results or outcomes to differ materially from those expressed in any forwardlooking statements made by us or on our behalf, you should not place unduereliance on any forwardlooking statements.Further, any forwardlooking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forwardlookingstatement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. New factors emergefrom time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extentto which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements. We qualify all ofthe information presented in this Annual Report on Form 10K, and particularly our forwardlooking statements, by these cautionary statements.ITEM 1. BUSINESSOverviewWe are an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile phone or through MySizeID Widget: a simple questionnaire which uses a database collected over the years.MySizeID syncs the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and only presents itemsfor purchase that match their measurements to ensure a correct fit.We are positioning ourselves as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empower brand design teams, which are designed to increase endconsumer satisfaction, contributing to a sustainable world and reduce operation costs.Recent DevelopmentsOrgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,602 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.2The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz, a limitedliability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.3The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Warehouse FireOn January 2, 2023, Orgad experienced a fire at its warehouse in Israel. we are not aware of any casualties or injuries associated with the fire. We shiftedOrgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incident did not affectthe future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of this incident on the otherparties that were involved in the incident (lessor and others that leased properties near the warehouse).January 2023 FinancingOn January 10, 2023, we entered into a securities purchase agreement, or the RD Purchase Agreement, pursuant to which we agreed to sell and issue in theRD Offering an aggregate of 162,000 of our shares of common stock, or the RD Shares, and prefunded warrants, or the Prefunded Warrants, to purchase up to279,899 shares of common stock and, in a concurrent private placement, unregistered warrants to purchase up to 883,798 shares of common stock, or the RDWarrants, consisting of Series A warrants, or Series A Warrants, to purchase up to 441,899 shares of common stock and Series B warrants, or Series B Warrants, topurchase up to 441,899 shares of common stock, at an offering price of $3.055 per RD Share and associated Series A and Series B Warrants and an offering price of$3.054 per Prefunded Warrant and associated Series A and Series B Warrants.4In addition, we entered into a securities purchase agreement, or the PIPE Purchase Agreement, and together with the RD Purchase Agreement, thePurchase Agreements, pursuant to which we agreed to sell and issue in the PIPE Offering an aggregate of up to 540,098 unregistered Prefunded Warrants andunregistered warrants to purchase up to an aggregate of 1,080,196 shares of common stock, or the PIPE Warrants and together with the RD Warrants, the Warrants,consisting of Series A Warrants to purchase up to 540,098 shares of common stock and Series B Warrants to purchase up to 540,098 shares of common stock at anoffering price of $3.054 per Prefunded Warrant and associated Series A and Series B Warrants.The Prefunded Warrants are immediately exercisable at an exercise price of $0.001 per share and will not expire until exercised in full. The Warrants areimmediately exercisable upon issuance at an exercise price of $2.805 per share, subject to adjustment as set forth therein. The Series A Warrants have a term of fiveand onehalf years from the date of issuance and the Series B Warrants have a term of 28 months from the date of issuance. The Warrants may be exercised on acashless basis if there is no effective registration statement registering the shares underlying the warrants.In connection with the PIPE Purchase Agreement, we entered into a registration rights agreement, or the Registration Rights Agreement. Pursuant to theRegistration Rights Agreement, we are required to file a resale registration statement, or the Registration Statement, with the Securities and Exchange Commission, orthe SEC, to register for resale the shares issuable upon exercise of the unregistered Prefunded Warrants and the Series A and Series B Warrants, within 20 days ofthe signing date of the PIPE Purchase Agreement, or the Signing Date, and to have such Registration Statement declared effective within 60 days after the SigningDate in the event the Registration Statement is not reviewed by the SEC, or 90 days of the Signing Date in the event the Registration Statement is reviewed by theSEC. we will be obligated to pay certain liquidated damages if we fail to maintain the effectiveness of the Registration Statement.The Purchase Agreements and the Registration Rights Agreements also contain representations, warranties, indemnification and other provisionscustomary for transactions of this nature. In addition, subject to limited exceptions, the Purchase Agreements provide that for a period of one year following theclosing of the Offerings, we will not effect or enter into an agreement to effect a “variable rate transaction” as defined in the Purchase Agreements.Aggregate gross proceeds to the Company in respect of the Offerings was approximately $3.0 million, before deducting fees payable to the placement agentand other offering expenses payable by the Company.We also entered into a letter agreement, or the Engagement Agreement, with H.C. Wainwright & Co., LLC, or Wainwright, pursuant to which Wainwrightagreed to serve as the exclusive placement agent for the Company in connection with the Offerings. We paid Wainwright a cash placement fee equal to 7% of theaggregate gross proceeds raised in the Offerings, a management fee of 1% of the aggregate gross proceeds raised in the Offerings, a nonaccountable expenseallowance of $85,000 and clearing fees of $15,950. Wainwright also received placement agent warrants, or the Placement Agent Warrants, with substantially the sameterms as the Series A Warrants issued in the Offering in an amount equal to 7% of the aggregate number of Shares and Prefunded Warrants sold in the Offerings, or68,740 shares, at an exercise price of $3.8188 per share and a term expiring on January 10, 2028.Our SolutionOur cloudbased software platform provides highly accurate sizing and measurement with broad applications including the online fashion/apparel industry,logistics and courier services and home DIY. Currently, we are mainly focusing on the ecommerce fashion/apparel industry. This proprietary technology is driven byseveral patented algorithms which are able to calculate and record measurements in a variety of novel ways. Although specific functionality varies by product, webelieve that our core solutions address the need for highly accurate measurements in a variety of consumer friendly, every day uses.5We have developed three products, MySizeID for the fashion/apparel industry, BoxSize for the logistics and courier services market and SizeUp for thehome DIY market.●MySizeID enables shoppers to generate highly accurate measurements of their body to find proper fitting clothes and accessories, through the use ofour application on their mobile phone or through a simple questionnaire if the user decides not to download the application. MySizeID syncs the user’smeasurement data to a sizing chart and presents items for purchase that match their measurements to ensure a correct fit. MySizeID is available forlicense by retailers and accessable by consumers through a web page.●BoxSize enables customers to quickly and easily measure the size and volume of a parcel to accurately calculate shipping fees. It also offers shippingcompanies a variety of precise logistical data for more efficiently managing their supply chain, providing them with an accurate way to compare thephysical package with what is in the shipping manifest. BoxSize solution is available for license on both iOS and Android operating systems. BoxSizeis available on the Honeywell Marketplace and in August 2019 was approved for Honeywell’s Independent Software Vendor Program, and MySize wasgranted an independent software vendor (ISV) status on the Zebra Technologies and on DataLogic platforms.●SizeUp is a digital tape measure that allows users to measure length, width and height of a surface by moving their smartphone from point to point ofan object or space. SizeUp is a valueadd for DIY and home improvement retailers whose customers struggle to find the appropriately sized items (likeblinds or curtains) for their homes or projects due to inaccurate measurements. SizeUp also is designed to replace rulers, tape measures and othermeasuring tools used for DIY projects. SizeUp is available for consumer download on both iOS and Android operating systems.The following are some select key features of our solutions:●Integration Capability. We design our solutions to be flexible and configurable, allowing our clients to match their use of our algorithms and softwarewith their specific business processes and workflows. Our platform has been organically developed from a common code base, data structure and userinterface, providing a consistent user experience with powerful features that are easily adaptable to our clients’ needs. The MySizeID widget can beintegrated via oneline JavaScript code, or through RESTful API;●Intuitive user experience. Our intuitive, easytouse interface is based on current technology, multiple focus groups and automatically adapts to users’devices, including mobile platforms, thereby significantly increasing accessibility of our solutions;●Big Data Generation. While we supply to the user the information he/she requires, we gather certain vital information such as body measurement andpackage volume which can be used anonymously to help the retailer acquire predictive size information on stocking, operations and consumers thatmay be in between sizes. All the information is being gathered and stored on our servers where it can be used by retailers;●NonInvasive. In taking measurements using our solution, the smartphone camera is not utilized; instead, the measurements are captured by scanningthe smartphone over the consumer’s body or package, thus ensuring greater privacy.Our Growth StrategyWe aim to drive revenue primarily through penetration of the U.S. and Europe markets through a business to business to consumer (B2B2C) model in theverticals we are targeting. We are pursuing the following growth strategies:●Sign Additional Commercial Agreements with U.S. Retailers. During 2022, we expanded our commercial agreements with Levi’s, introducing NorthAmerica (U.S. and Canada) and Latin America regions, and by extension Levis’ native apps in EU and U.S. regions. We also entered into commercialagreements with Baby Fresh, Galax, Punto Blanco, GEF France, Diesel, Gaala, Superdry, Uniontex Industries, and Temperlay London among others. Weare in various stages of discussions with U.S. and foreign retailers for the deployment of our size recommendation and measurement technology with aview to entering into additional commercial agreements.6●Pursue a TwoPronged Commercialization Strategy. We are seeking to accelerate adoption of our solutions both through direct partnerships with ecommerce websites as well as through thirdparty platform websites. While we seek to directly enter into partnerships with companies maintaining ecommerce websites in the apparel, courier and DIY markets, we are also seeking to deploy our solutions on thirdparty platforms. Furthermore, with theexpansion of MySizeID through the release of our FirstLook Smart Mirror, which we are offering to brick and mortar stores to digitize the physicalstores, MySizeID is now available for online retailers utilizing the WooCoomerce, Shopify, Lightspeed, PrestaShop, Bitrix and Wix platforms and tobrick and mortar stores through GK Software POS solution while BoxSize is available on the Honeywell, Zebra Technologies and Datalogic.●Ongoing Investment in our Technology Platform. We continue to invest in building new software capabilities and extending our platform to bring thepower of accurate measurement to a broader range of applications. In particular, we seek not only to deliver size recommendations but to provide arobust, endtoend,artificial intelligence, or AIdriven platform that inspires consumer confidence and drives revenue growth by providing a superiorconsumer journey to both online and the brick and mortar stores.●Grow our database. As the usage of our measurement apps increases, our database of information including user behaviour and body measurementsgenerates valuable statistics. Such data can be used in the big data market for targeted advertising and for blind consumer data mining.●Identify and acquire synergistic businesses. In order to reduce our time to market and obtain complementary technologies, we are seeking to acquiretechnologies and businesses that are synergistic to our product offering. We recently completed an acquisition of Orgad which operates anomnichannel ecommerce platform and Naiz which provides SaaS technology solutions that solve size and fit issues for fashion ecommerce companies.●Partnerships and cooperation. In order to bring a wider solution for the retail market we are working to partner and integrate our technology withpartners that can increase our penetration and offering to the market.Market OpportunityThe global ecommerce market was $5.7 trillion in 2022, and the industry is expected to grow significantly in the coming years with no signs of slowingdown. Market specialists expect a compound annual growth rate of 27.43% from 2023 to 2028: according to data from Statista, the market is expected to reach $6.5trillion in 2023. While many sectors have found ways to increase revenue through ecommerce, ecommerce is still plagued by issues that cut into profits andnegatively impact the bottom line, such as customer returns, low consumer conversion, and associated restocking and shipping costs.Fashion/ApparelSince the onset of the COVID19 pandemic, an immense shift to digital was recorded, with 85.9% growth vs. prepandemic, according to Mastercard, andover 2 billion people worldwide who shop online, according to data from Oberlo. In November 2022, online shoppers broke records with $11.3 billion in spending onCyber Monday, driving 5.8% yearoveryear growth and making the day the biggest online shopping day of all time, according to Adobe Analytics.In 2021, fashion companies invested between 1.6% and 1.8% of their revenues in technology, according to Mckinsey, and are expected to double theinvestment by 2030 in order to keep up with digital natives and keep a competitive edge. Personalization in ecommerce and hybrid connectivity in brickandmortarretail are two key themes in the future of fashtech, according to Mckinsey’s 2022 State of Fashion Technology.7In the upcoming years, inflation is expected to impact the fashion world. As prices for goods increase, the challenge will be to inspire confidence inconsumers, via different smart digital tools. Brands will need to embrace creative digital tools and new channels to deepen customer relationships, and as Mckinseyforecasts in their State of Fashion report for 2023, they will need to execute on priorities such as sustainability and digital acceleration.The global fashion ecommerce market size is expected to grow from $744.4 billion in 2022 to $821.19 billion in 2023 at a compound annual growth rate of10.3%. In 2027, the market size is expected to grow to $1,222.32 billion, at a compound annual growth rate of 10.5%, according to BRC.Based on the importance which shoppers attribute to free shipping 50% of cart abandonment rate is due to extra shipping costs (Baymard Institute) theneed for fashion retailers to substantiate the optimal size for a customer, thus minimizing returns, has never been more crucial.As brands move online or significantly expand their online presence, we believe that developing innovative ways to connect with shoppers, both onlineand offline, has become a top priority.Shipping/ParcelAccording to Pitney Bowes, parcel revenue in 13 major countries around the world increased by 17% year over year from $420 billion in 2020 (reflecting 131billion parcels) to $491 billion in 2021 (reflecting 159 billion parcels). In the shipping/parcel industry, the dimensions of a package are critical. It is not merely themeasurement of a package or box – but rather the amount of space that the package or box will take up on a truck, airplane, or ship that will be transporting thepackage or box. Far too often, retailers use unfit packaging for their items, adding additional costs in materials and shipping fees.DIYSimilar to issues in the apparel and fashion market, big box, hardware, furniture, and DIY stores are plagued by returns due to incorrect fit andmeasurements. In an industry where precise measurement for projects is an absolute necessity, ecommerce has not grown as quickly as in other industries which webelieve is due to lack of consumer confidence in measurements at home and buying the correct item online.MySizeIDWe have released the MySizeID app for both iOS and Android which assists consumers to take highly accurate measurement of their own body in order tosize clothing in the best way possible without the need to try the clothes on before purchasing. MySizeID is designed to simplify the process of purchasing clothesonline and significantly reduce the rate of returns of poorfitting clothing. During 2022, MySizeID delivered over 23.5 million size recommendations.The application is the result of a research and development effort that combines:●anthropometric research – analyses of information pertaining to body measurements derived from a survey and the subsequent determination ofcorrelations between body parts;●body measurement algorithm research – an algorithm created by us to measure body parts; and●retailers size chart analyses – adopting a deep understanding of the size charts of retailers and the corresponding “body to garment size.”MySizeID allows consumers to create a secure, online profile of their personal measurements, which can then be utilized, with partnered online retailers, toensure that no matter the manufacturer or size chart, they will get the right fit. MySizeID operates based on the use of existing sensors in smart phones which enable,through a specific purpose application, the measurement of the body of any consumer by moving the smartphone along his or her body. The MySizeID applicationdoes not rely on user photographs or any additional hardware; all a user needs to do is scan their body with their smartphone and the application records theirmeasurements. The measurements can then be saved in our database in the cloud, enabling the user to search for clothes in various retailer websites withoutworrying about size. When a search is made, the retailer will connect to our cloud database, and then provide results based on the user’s measurements and otherparameters as he or she may have defined. This data is also saved for use when a customer enters a brickandmortar store to help serve the customer moreefficiently and to provide a better shopping experience.8Figure 1: Screenshot of MySizeID on smartphone and ecommerce websiteAs part of the integration process, we offer to the retailer five main components:●Mobile App. MySizeID comes in the form of a native app or website. Our native app can be used “as is” integrated into the retailer’s ecommercewebsite. The website users can build a body profile on the app and receive size recommendations for their profile both in the app and on a widgetintegrated with their website.9●Widget. When a consumer enters into the retailer’s website and looks for a specific item, he or she can click on the MySizeID widget which will informthe consumer of his or her recommended size, based on his or her actual measurements, as measured using the app and the item he or she is looking at.The widget has two features:AI Wizard mode allows the user to obtain size from the following parameters: gender, height, weight, belly shape, hip shape and bra size only. Thegender, height and weight questions are mandatory, while the body shape questions are optional and can be added to increase accuracy for specificapparel categories.Guest mode allows a user that does not wish to sign up to MySizeID as a user to obtain size recommendations as well.●Analytic Pixel. MySizeID analytic pixel allows retailer to track and analyze the widget usage. By adding the pixel to the retailer’s website, MySizeID BIteam can track engagement, order, and return data and provide retailers with tools to understand the advantages and benefits of MySizeID.Use your own device using MySizeID instore solution, shoppers can receive size recommendations for all store items, when shopping in the offlinestores. The shoppers can build their body profile using an easy to use 3 to 6 questions form, scan an item barcode and receive a size recommendationfor the scanned item based on their body profile and the item’s size chart.Another feature we added is the “inbetween sizing” feature. Our system can detect a user that has body dimensions that place the user inbetweenthe clothes sizes being offered and lets the user know that. A user can then choose between the two sizes according to the user’s fit preference(tight/loose/average).In addition, we have recently released our InstantApp feature which allows shoppers to generate their body measurements directly from our widget,without the need to download our mobile app. Using this technology, the shoppers can create their online profile of their personal measurements andcomplete a purchase faster and easier with minimum distractions.The body profile can be created while shoppers are viewing the page from their mobile phone, or by scanning a QR code on desktop that will open thesame page on the mobile phone.Screenshot of InstantApp widget on desktop on yumyumfashion website10●MyDash Platform. The MyDash platform is a smart backoffice system where the retailer enters all the information regarding its size charts thatcorrelates to every product in its ecommerce site, and where the retailer can access the information on its users. This system is customizable based onthe retailer’s needs. In 2021, we changed the MyDash system to increase the system’s accessibility, added walkthroughs, user guides and changed theuser interface and much more for the ease of use. We added the option to use our generic size charts, added the option upload size chart files insteadof typing the size charts values manually, added more widget styling options and changed the pairing mechanism between the size chart and theproducts to be more userfriendly.Figure 3: Screenshot of BackOffice System●FirstLook Smart Mirror. The Smart Mirror provides an interactive, mirrorlike touch display that allows brands to provide instore customers with anenhanced, online shopping experience, contactless checkout and obtains the recommended size. The MySizeIDFirstLook Smart Mirror can be placedin numerous locations throughout a retail store, including the fitting rooms (without cameras) or other hightraffic locations of the store. Highlightcapabilities of the FirstLook Smart Mirror include a 3D “Tryiton” interactive avatar experience, personalized and highly accurate sizerecommendations by MySizeID, thirdparty point of sale systems integration, styling recommendations and contactless “select and collect” at theregister feature.Illustration of MySizeID “first look” smart mirror in a fashion store11We are currently offering MySizeID technology to retailers through either a payperuse model or a monthly subscription model. In our payperusebusiness model, every time the consumer obtains a recommended size, the retailer is charged for the usage.BoxSizeBoxSize is a parcel measurement application that can provide realtime logistic data on package volumes and transportation, resulting in improvedoperational efficiency and reduced operating expenses. In addition, BoxSize allows customers to easily measure the size of their parcel with their smartphone,calculate shipping costs and arrange for a convenient pickup time for the package. BoxSize is available both on iOS and Android.In 2020 we released the “One Click” feature on BoxSize that enables the user to measure a package with just one swipe of the handheld device. Previously,measurements through BoxSize would require three separate swipes.Figure 4: Screenshot of BoxSizeOur BoxSize mobile measurement solution is available on the Honeywell Marketplace. In addition, BoxSize was approved for Honeywell’s Global VendorProgram, and is available to provide highly accurate mobile measurement solutions for thousands of Honeywell clients. We also developed a new dashboard for thecourier companies to have all the required data about each package in one place. It includes package dimensions, pictures, scan geo location and more. Thedashboard also let the courier use Webhooks, which allows him to get the information from his own system.12In 2020, we announced our partnership with Datalogic, a company focused on the automatic data capture and process automation markets. The partnershipmakes our BoxSize measurement solution available to thousands of Datalogic customers in the Transportation and Logistics vertical.Agreement with Delhivery Private Limited, IndiaWe entered into an agreement with Delhivery Private Limited, one of the largest courier pickup, delivery, and online shipping services in India. Delhivery’sreputation as a frontrunner in delivery and logistics tech makes its decision to select Boxsize a particularly strong testament to the value the solution provides.BoxSize provides Delhivery’s employees on the B2B side with critical information that will allow them to effortlessly optimize loading efficiency and add even morerealtime visibility to operations.SizeUpWe are working on additional consumer applications, including a DIY application. Our SizeUp application is a smart tape measure for the business toconsumer market which allows users to utilize their smartphone as a tape measure. The application provides measurements with an accuracy of within twocentimeters. Through the use of SizeUp, users will be able to visualize how an object or a piece of furniture will fit in an existing room in their home or office. It alsoadded Google Vision for image content analysis, object detection, and title suggestions.Currently the SizeUp app for Android and iOS is available for free for the first 30 days, after which a user will be required to register via email and pay aonetime fee of $1.99 to continue using the application. To date, revenues from downloads have been minimal.Research and DevelopmentOur research and development team are responsible for the research, algorithm, design, development, and testing of all aspects of our measurementplatform technology. We invest in these efforts to continuously improve, innovate, and add new features to our solutions.We incurred research and development expenses of approximately $1.7 million in 2022 and $4.25 million in 2021, relating to the development of itsapplications and technologies. The decrease from the corresponding period primarily resulted from share based payment in amount of $2,618,000 attributed to theshare issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021. We intend to continue to invest in our research anddevelopment capabilities to extend our platform and bring our measurement technology to a broader range of applications.13In 2022, the R&D department experienced significant success in their efforts to improve the performance of their size recommendation system. Through acombination of optimized algorithms and the incorporation of cuttingedge technologies, the team was able to achieve a threefold increase in the system’s speed.This breakthrough not only makes the system one of the fastest and most accurate on the market, but also reduced the operation costs, making it more costeffective for businesses to use. Additionally, the solution is now highly scalable, allowing it to easily adapt to the needs of businesses of any size. The R&D team isnow focused on further improving the system and exploring new applications for the technology.Sales and MarketingIn 2019, we launched a commercialization strategy that directs our sales efforts toward both sales to ecommerce players in specific vertical markets such asfashion/apparel and shipping/delivery as well as to ecommerce thirdparty platform providers. As of March 15, 2023, our products are being sold in the followingcountries: US, UK, France, Netherlands, Spain, Portugal Turkey, Germany, Israel and Italy, generating customer leads, building out a sales pipeline, and developingcustomer relationships.We believe an effective method to market our suite of products is for users to actively use and explore its capabilities. We encourage free trials of one ormore of our products in order to successfully convert those accounts to paid subscriptions.Proprietary RightsWe rely on a combination of patent, copyright, trademark and trade secret laws in the United States and other jurisdictions, as well as contractualprotections, to protect our proprietary technology.As of December 31, 2022, we owned 18 issued patents: six in Europe, four in the U.S., three in each of Russia and Japan and one in each of Canada andIsrael which expire between January 20, 2033 and August 18, 2036, and we have two additional patent applications in process. As of such date, we do not have anyregistered trademarks.We cannot provide any assurance that our proprietary rights with respect to our products will be viable or have value in the future since the validity,enforceability and type of protection of proprietary rights in softwarerelated industries are uncertain and still evolving.Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products or to obtain and use informationthat we regard as proprietary. Policing unauthorized use of our products is difficult, and while we are unable to determine the extent to which piracy of our softwareproducts exists, software piracy can be expected to be a persistent problem. In addition, the laws of some foreign countries do not protect proprietary rights to asgreat an extent as do the laws of the United States, and effective copyright, trademark, trade secret and patent protection may not be available in those jurisdictions.Our means of protecting our proprietary rights may not be adequate to protect us from the infringement or misappropriation of such rights by others.Further, in recent years, there has been significant litigation in the United States involving patents and other intellectual property rights, particularly in thesoftware and Internetrelated industries. We can become subject to intellectual property infringement claims as the number of our competitors grows and ourproducts and services overlap with competitive offerings. These claims, even if not meritorious, could be expensive to defend and could divert management’sattention from operating our business. If we become liable to third parties for infringing their intellectual property rights, we could be required to pay a substantialaward of damages and to develop noninfringing technology, obtain a license or cease selling the products that contain the infringing intellectual property. We maybe unable to develop noninfringing technology or obtain a license on commercially reasonable terms, if at all.14Government RegulationWe are subject to a number foreign and domestic laws and regulations that involve matters central to our business. These laws and regulations mayinvolve privacy, data protection, intellectual property, or other subjects. Many of the laws and regulations to which we are subject are still evolving and being testedin courts and could be interpreted in ways that could harm our business. In addition, the application and interpretation of these laws and regulations often areuncertain, particularly in the new and rapidly evolving industry in which we operate. Because global laws and regulations have continued to develop and evolverapidly, it is possible that we, our products, or our platform may not be, or may not have been, compliant with each such applicable law or regulation.In particular, we are subject to a variety of federal, state and international laws and regulations governing the processing of personal data. Many U.S. stateshave passed laws requiring notification to data subjects when there is a security breach of personally identifiable data. There are also a number of legislativeproposals pending before the U.S. Congress, various state legislative bodies and foreign governments concerning data protection. In addition, data protection lawsin Europe and other jurisdictions outside the United States can be more restrictive than those within the United States, and the interpretation and application ofthese laws are still uncertain and in flux.For example, the General Data Protection Regulation, or GDPR, which took effect on May 25, 2018, enhances data protection obligations for entities thatprocess personal data about individuals, including obligations to cooperate with European data protection authorities, implement security measures and keeprecords of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to the greater of €20 million or 4% of global annual revenue. Inaddition, the California Consumer Privacy Act of 2018, or CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and requiredeletion of their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used.The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further,failure to comply with the Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may exposeus to administrative fines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the currentenforcement measures and sanctions. Given the breadth and depth of changes in data protection obligations, meeting the requirements of GDPR and otherapplicable laws and regulations has required significant time and resources, including a review of our technology and systems currently in use against therequirements of GDPR and other applicable laws and regulations. We have taken various steps to prepare for complying with GDPR and other applicable laws andregulations however there can be no assurance that these steps are sufficient to assure compliance. Further, additional EU laws and regulations (and member states’implementations thereof) further govern the protection of individuals and of electronic communications. If our efforts to comply with GDPR or other applicable lawsand regulations are not successful, we may be subject to penalties and fines that would adversely impact our business and results of operations, and our ability touse personal data of individuals could be significantly impaired.CompetitionWe operate in a highly competitive industry that is characterized by constant change and innovation. Changes in the applications and the programinglanguages used to develop applications, devices, operating systems, and technology landscape result in evolving customer requirements. Our competitors includeTrue Fit, Fit analytics and 3DLook.The principal competitive factors in our market include the following:●High Accuracy Size Recommendations: the highest accuracy and the lowest margin of error by combining patented technology including AI and ML,size chart or spec data, and MySizeID property body data measurement;●Integration○Fast 1 week integration including size chart size chart review and product mapping○Easy 1 line of “all included” script implementation●Technical Advantages○Very small library that weighs ±50kb (minimum widget loading time on product page)○UltraFast loading and size recommendation presenting○Restful API option (API integration with any website or app)15●Optimizations○Adjustments of size charts based on performance○Widget usage analysis by FashTech and BI teams○Automatic pairing of size charts with products/collections●User Experience○Easy to use interface (1015 seconds to receive size recommendations)○Option to add/deduct questions to/from widget wizards○Users automatically receive size recommendations on all products after initial sign up●Product and platform features, architecture, reliability, privacy and security, performance, effectiveness, and supported environments;●Product extensibility and ability to integrate with other technology infrastructures;●Digital operations expertise;●Ease of use of products and platform capabilities;●Total cost of ownership;●Adherence to industry standards and certifications;●Strength of sales and marketing efforts;●Brand awareness and reputation; and●Focus on customer successWe believe we generally compete favorably with our competitors on the basis of these factors. We expect competition to increase as other established andemerging companies enter our markets, as customer requirements evolve, and as new products and technologies are introduced. We expect this to be particularlytrue as we offer a smartphonebased offering that does not need to utilize the smartphone’s camera, and our competitors may also seek to repurpose their existingofferings to provide similar solutions. Many of our competitors have substantially greater financial, technical, and other resources, greater name recognition, largersales and marketing budgets, broader distribution, and larger and more mature intellectual property portfolios.Human Capital ManagementAs of March 31, 2023, we had a total of 35 employees, of which 30 were fulltime employees, including 9 in sales and marketing, 12 in technology anddevelopment and 9 in administration and finance.None of our employees are represented by a collective bargaining agreement, nor have we experienced any work stoppage. We consider our relationshipwith our employees to be good. Our future success depends on our continuing ability to attract and retain highly qualified engineers, sales and marketing, accountmanagement, and senior management personnel.We also believe we have built a strong sales team focused on expanding into new markets through the acquisition of Naiz and our current team.We believe that our future success will depend, in part, on our continued ability to attract, hire and retain qualified personnel. In particular, we depend onthe skills, experience and performance of our senior management and research personnel. We compete for qualified personnel with other hitech companies, as wellas universities and nonprofit research institutions.16We provide competitive compensation and benefits programs to help meet the needs of our employees. In addition to salaries, these programs (which varyby country/region and employment classification) include incentive compensation plan, pension, and insurance benefits, paid time off, , among others. We also usetargeted equitybased grants with vesting conditions to facilitate retention of personnel, particularly for our key employees.The success of our business is fundamentally connected to the wellbeing of our people. Accordingly, we implemented an hybrid work policy in which theemployees can work from home twice a week.We consider our employees to be a key factor to our success and we are focused on attracting and retaining the best employees at all levels of ourbusiness. Inclusion and diversity is a strategic, business priority. We employ people based on relevant qualifications, demonstrated skills, performance and otherjobrelated factors. We do not tolerate unlawful discrimination related to employment, and strive to ensure that employment decisions related to recruitment,selection, evaluation, compensation, and development, among others, are not influenced by race, color, religion, gender, age, ethnic origin, nationality, sexualorientation, marital status, or disability. Continuous monitoring to ensure pay equity has been a focus in 2022. We have continued to improve gender balance in 2022with a focus on increasing the representation of women hired as new college graduates. We are committed to creating a trusting environment where all ideas arewelcomed and employees feel comfortable and empowered to draw on their unique experiences and backgrounds.We consider our relations with our employees to be good.Company InformationOur principal executive offices are located at HaYarden 4 St., POB 1026, Airport City, Israel 7010000, and our telephone number is +97236009030. Ourwebsite address is www.mysizeid.com. Any information contained on, or that can be accessed through, our website is not incorporated by reference into, nor is it inany way a part of, this Annual Report on Form 10K.We use our website (www.mysizeid.com) as a channel of distribution of Company information. The information we post through this channel may bedeemed material. Accordingly, investors should monitor our website, in addition to following our press releases, SEC filings and public conference calls andwebcasts. The contents of our website are not, however, a part of this Annual Report on Form 10K.Corporate HistoryWe were incorporated in the State of Delaware on September 20, 1999 under the name Topspin Medical, Inc. In December 2013, we changed our name toKnowledgetree Ventures Inc. Subsequently, in February 2014, we changed our name to MySize, Inc. In 2020, we created a subsidiary in the Russian Federation, MySize LLC.From inception through 2012, we were engaged in research and development of a medical magnetic resonance imaging, or MRI, technology forinterventional cardiology and in the development of MRI technology for use in the diagnosis and treatment of prostate cancer. In January 2012, we acquiredMetamorefix Ltd., or Metamorefix. Metamorefix was incorporated in 2007, and was engaged in the development of innovative solutions for the rehabilitation oftissues, particularly skin tissues. By the end of 2012, we ceased operations and in January 2013, we sold our entire ownership interest in Metamorefix.In September 2013, Ronen Luzon, our Chief Executive Officer, acquired control of the Company from Asher Shmuelevitch, according to which Mr. Luzonpurchased 70,238 shares of common stock from Mr. Shmuelevitch, which shares represented approximately 40% of the issued and outstanding capital stock of theCompany at such time, thus becoming a controlling shareholder of the Company. In connection with the acquisition, Mr. Luzon reached a settlement with our thencreditors pursuant to which the main creditor, Mr. Shmuelevitch, was paid a total sum of approximately $140,000 in consideration for a full and final waiver of any andall his claims that he may have relating to any monetary indebtedness of the Company to the creditors.17In February 2014, My Size Israel, our wholly owned subsidiary, entered into a Purchase Agreement, or the Purchase Agreement, with Shoshana Zigdon,who at the time was a beneficial owner of more than 20% of our outstanding shares, with respect to the acquisition by us of certain rights related to the collection ofdata for measurement purposes including rights in the venture, the method and a patent application that had been filed by the Seller (PCT/IL2013/050056), or theAssets. In consideration for the sale of the Assets, we agreed to pay to Ms. Zigdon, 18% of our operating profit, directly or indirectly connected with the Assetstogether with valueadded tax in accordance with the law for a period of seven years from the end of the development period of the aforementioned venture. Inaddition to the foregoing, the Purchase Agreement provided that all developments, improvements, knowledge and knowhow developed and/or accumulated by usafter the execution of the Purchase Agreement will be owned by us. Further, Ms. Zigdon agreed not to compete, directly or indirectly, with us in any matter relatingto the Assets for a period of seven years from the end of the development period of the venture.On May 26, 2021, we, My Size Israel, and Ms. Zigdon entered into an Amendment to Purchase Agreement, or the Amendment, which made certainamendments to the Purchase Agreement. Pursuant to the Amendment, Ms. Zigdon agreed to irrevocably waive (i) the right to repurchase certain assets related tothe collection of data for measurement purposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which our business issubstantially dependent, or the Assets, and (ii) all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My SizeIsrael under the Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation, reward orany rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights, or the Waiver. Inconsideration of the Waiver, we issued 100,000 shares of common stock to Ms. Zigdon.In September 2005, we commenced trading on the Tel Aviv Stock Exchange, or TASE. Between 2007 and 2012 we reported as a public company with theSEC. In August 2012, we suspended our reporting obligations. In mid2015 we resumed reporting as a public company. On July 25, 2016, our common stock beganpublicly trading on the Nasdaq Capital Market under the symbol “MYSZ”.ITEM 1A. RISK FACTORSAn investment in our common stock involves a high degree of risk. You should carefully consider the following risk factors and the other information inthis Annual Report on Form 10K before investing in our common stock. Our business and results of operations could be seriously harmed by any of the followingrisks. The risks set out below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterialalso may materially adversely affect our business, financial condition and/or operating results. If any of the following events occur, our business, financial conditionand results of operations could be materially adversely affected. In such case, the value and trading price of our common stock could decline, and you may lose allor part of your investment.Summary Risk FactorsThe principal factors and uncertainties that make investing in our ordinary shares risky, include, among others:Risks Related to Our Financial Position and Capital Requirements●We have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.●Our limited operating history makes it difficult to evaluate our business and prospects.●We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive and maycause the market price of our common stock to decline.●The report of our independent registered public accounting firm contains an explanatory paragraph regarding substantial doubt about our ability tocontinue as a going concern.Risks Related to Our Company and Our Business●The market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and online thirdparty resellers adopting our flagship product, MySizeID.18●Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broader marketacceptance of our products.●We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which may makeit difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.●We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increase ourcapital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.●If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations and financialcondition may be adversely affected.●If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operations andfinancial condition could be adversely affected.●The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile device applications andcustom development services.●Our growth depends, in part, on the success of our strategic relationships with third parties.●Changes in economic conditions could materially affect our business, financial condition and results of operations.●We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.●We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significant interruptionin our network or hosting and cloud services could adversely impact our operations and harm our business.●Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.●We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.●A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.●Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, data protectionand information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive and confidentialinformation. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm our business,results of operations and financial condition.●We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect our business.●We may face intense competition and expect competition to increase in the future, which could limit us in developing a customer base and generatingrevenue.●Our business operations and future development could be significantly disrupted if we lose key members of our management team.19●If we are able to expand our operations, we may be unable to successfully manage our future growth.Risks Related to Our Operations in Israel and Russia●Our headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.●Russia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.Risks Related to Our Common Stock●A more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.●Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions and adversedevelopments with respect to financial institutions and associated liquidity risk;●Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.●Our securities are traded on more than one market which may result in price variations.●We are a former “shell company” and as such are subject to certain limitations not generally applicable to other public companies.Risks Related to Our Financial Position and Capital RequirementsWe have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.We realized a net loss of approximately $8.3 million and $10.5 million for the years ended December 31, 2022 and 2021 and had an accumulated deficit of$53.5 million as at December 31, 2022. Because of the numerous risks and uncertainties associated with the development and commercialization of our products andbusiness, we are unable to predict the extent of any future losses or when we will become profitable, if at all. Expected future operating losses will have an adverseeffect on our cash resources, shareholders’ equity and working capital. Our failure to become and remain profitable could depress the value of our stock and impairour ability to raise capital, expand our business, maintain our development efforts, or continue our operations. A decline in our value could also cause you to lose allor part of your investment in us.Our limited operating history makes it difficult to evaluate our business and prospects.We have only been developing our measurement technology since 2014. Since then, our operating history has been primarily limited to research anddevelopment, pilot studies, raising capital, and more recently acquisitions and sales and marketing efforts. Therefore, it may be difficult to evaluate our business andprospects. We have not yet demonstrated an ability to commercialize our products. Consequently, any predictions about our future performance may not beaccurate, and you may not be able to fully assess our ability to complete development and/or commercialize our products, and any future products.We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive andmay cause the market price of our common stock to decline.Based on our projected cash flows and the cash balances as of the date of this Annual Report on Form 10K, our existing cash is insufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. In order to meet ourbusiness objectives in the future, we will need to raise additional capital, which may not be available on reasonable terms or at all. Additional capital would be usedto accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;20●respond to competitive pressure;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, and a number of otherfactors, many of which are outside our control, and on our financial performance. Accordingly, we cannot assure you that we will be able to successfully raiseadditional capital at all or on terms that are acceptable to us. If we cannot raise additional capital when needed, it may have a material adverse effect on our business,results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.Management has concluded that there is substantial doubt about our ability to continue as a going concern which could prevent us from obtainingnew financing on reasonable terms or at all.We have incurred significant losses and negative cash flows from operations and have an accumulated deficit that raises substantial doubt about its abilityto continue as a going concern. Our audited consolidated financial statements for the year ended December 31, 2022 were prepared under the assumption that wewould continue our operations as a going concern. Our independent registered public accounting firm has included a “going concern” explanatory paragraph in itsreport on our financial statements for the year ended December 31, 2022. If we are unable to improve our liquidity position, by, among other things, raising capitalthrough public or private offerings or reducing our expenses, we may exhaust our cash resources and will be unable to continue our operations. If we cannotcontinue as a viable entity, our shareholders would likely lose most or all of their investment in us.Risks Related to Our Company and Our BusinessThe market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and onlinethirdparty resellers adopting our flagship product, MySizeID.The market for our measurement technology is relatively new and unproven and is subject to a number of risks and uncertainties. We believe that ourfuture success will depend in large part on market adoption of our flagship product, MySizeID, by U.S. retailers and online thirdparty resellers. In order to grow ourbusiness, we intend to focus on educating retailers and resellers and other potential customers about the benefits of our measurement technology, expanding thefunctionality of our products and bringing new products to market to increase market acceptance and use of our technology. Our ability to develop and expand themarket that our products address depends upon a number of factors, including the cost savings, performance and perceived value associated with such products.The market for our products could fail to develop or there could be a reduction in interest or demand for our products as a result of a lack of consumer acceptance,technological challenges, competing products and services, weakening economic conditions and other causes. We may never successfully commercialize ourproducts and if our products fail to achieve market acceptance, this would have a material adverse effect on our business, results of operations and financialcondition.21Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broadermarket acceptance of our products.Our ability to achieve customer adoption, especially among U.S. retailers will depend, in part, on our ability to effectively organize, focus and train our salesand marketing personnel. We have limited experience selling to U.S. retailers and only recently established a U.S. sales force. We believe that there is significantcompetition for experienced sales professionals with the skills and industry knowledge that we require. Our ability to achieve significant revenue growth in thefuture will depend, in part, on our ability to recruit, train and retain a sufficient number of experienced sales professionals, particularly those with experience sellingto U.S. retailers. In addition, even if we are successful in hiring qualified sales personnel, new hires require significant training and experience before they achievefull productivity, particularly for sales efforts targeted at U.S. retailers and new markets. Because we only recently started sales efforts, we cannot predict whether, orto what extent, our sales efforts will be successful.We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which maymake it difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.In this market segment, the decision to adopt our products may require the approval of multiple technical and business decision makers, including security,compliance, procurement, operations and IT. In addition, while U.S. retailers may be willing to deploy our products on a limited basis, before they will commit todeploying our products at scale, they often require extensive education about our products and significant customer support time, engage in protracted pricingnegotiations and seek to secure readily available development resources. As a result, it is difficult to predict when we will obtain new customers and begingenerating revenue from these customers. As part of our sales cycle, we may incur significant expenses before executing a definitive agreement with a prospectivecustomer and before we are able to generate any revenue from such agreement. We have no assurance that the substantial time and money spent on our salesefforts will generate significant revenue. If conditions in the marketplace generally or with a specific prospective customer change negatively, it is possible that nodefinitive agreement will be executed, and we will be unable to recover any of these expenses. If we are not successful in targeting, supporting and streamlining oursales processes and if revenue expected to be generated from a prospective customer is not realized in the time period expected or not realized at all, our ability togrow our business, and our operating results and financial condition may be adversely affected. If our sales cycles lengthen, our future revenue could be lower thanexpected, which would have an adverse impact on our operating results and could cause our stock price to decline.22We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increaseour capital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.In order to reduce time to market and obtain complementary technologies, we are seeking to acquire technologies and businesses that are synergistic to ourproduct offering. For example, we recently acquired Orgad which operates an omnichannel ecommerce platform and Naiz which provides SaaS technology solutionsthat solve size and fit issues for fashion ecommerce companies. We evaluate from time to time various acquisitions and collaborations, including licensing oracquiring complementary technologies, intellectual property rights, or businesses. The process for acquiring a company may take from several months up to a yearand costs can vary greatly. We may also compete with others to acquire companies, and such competition may result in decreased availability of, or an increase inprice for, suitable acquisition candidates. In addition, we may not be able to consummate acquisitions or investments that we have identified as crucial to theimplementation of our strategy for other commercial or economic reasons. As a result, it may be more difficult for us to identify suitable acquisition or investmenttargets or to consummate acquisitions or investments on acceptable terms or at all. If we are not able to execute on any acquisition, we may not be able to achieve afuture growth strategy and may lose market share.In addition, the acquisition of Orgad, Naiz and any potential future acquisition, joint venture or collaboration may entail numerous potential risks, including:●increased operating expenses and cash requirements;●the assumption of additional indebtedness or contingent liabilities;●assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel;●the diversion of our management’s attention from our existing programs and initiatives in pursuing such a strategic merger or acquisition;●retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships;●risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing technologies; and●our inability to generate revenue from acquired technologies or products sufficient to meet our objectives in undertaking the acquisition or even to offsetthe associated acquisition and maintenance costs.All of the foregoing risks may be magnified as the cost, size or complexity of an acquisition or acquired company increases, or where the acquiredcompany’s products, market or business are materially different from ours, or where more than one integration is occurring simultaneously or within a concentratedperiod of time. We may not be able to obtain the necessary regulatory approvals, including those of antitrust authorities and foreign investment authorities, incountries where we seek to consummate acquisitions or make investments. For those and other reasons, we may ultimately fail to consummate an acquisition, even ifwe announce the intended acquisition.In addition, we may require significant financing to complete an acquisition or investment, whether through bank loans, raising of equity or debt orotherwise. We cannot assure you that such financing options will be available to us on reasonable terms, or at all. If we are not able to obtain such necessaryfinancing, it could have an impact on our ability to consummate a substantial acquisition or investment and execute a future growth strategy. Alternatively, we mayissue a significant number of shares as consideration for an acquisition, which would have a dilutive effect on our existing shareholders. For example, in partialconsideration for the acquisition of Orgad, we agreed to issue up to 111,602 shares of our common stock and in the Naiz acquisition we issued 240,000 shares of ourcommon stock. Furthermore, if we undertake acquisitions, we may incur large onetime expenses and acquire intangible assets that could result in significant futureamortization expense.23If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations andfinancial condition may be adversely affected.We believe that enhancing the “MySize” brand identity and increasing market awareness of our company and products, particularly among U.S. retailers, iscritical to achieving widespread acceptance of our products. Our ability to successfully develop new retailers may be adversely affected by a lack of awareness oracceptance of our brand. To the extent that we are unable to foster name recognition and affinity for our brand, our growth may be significantly delayed or impaired.The successful promotion of our brand will depend largely on our continued marketing efforts, market adoption of our products, and our ability to successfullydifferentiate our products from competing products and services. Our brand promotion may not be successful or result in revenue generation. Any incident thaterodes consumer affinity for our brand could significantly reduce our brand value and damage our business. If consumers perceive or experience a reduction inquality, or in any way believe we fail to deliver a consistently positive experience, our brand value could suffer and our business may be adversely affected.In particular, adverse weather conditions can impact guest traffic at our retailers, and, in more severe cases, cause temporary retail closures, sometimes forprolonged periods. Our business is subject to seasonal fluctuations, with retail sales typically higher during certain months, such as December. Adverse weatherconditions during our most favorable months or periods may exacerbate the effect of adverse weather on consumer traffic and may cause fluctuations in ouroperating results from quartertoquarter within a fiscal year.If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operationsand financial condition could be adversely affected.Our ability to attract new customers depends in part on our ability to enhance and improve our existing products, increase adoption and usage of ourproducts and introduce new products. The success of any enhancements or new products depends on several factors, including timely completion, adequatequality testing, actual performance quality, and overall market acceptance. Enhancements and new products that we develop may not be introduced in a timely orcosteffective manner, may contain errors or defects, may have interoperability difficulties with our platform or other products or may not achieve the broad marketacceptance necessary to generate significant revenue. Furthermore, our ability to increase the usage of our products depends, in part, on the development of newuse cases for our products and may be outside of our control. If we are unable to successfully enhance our existing products to meet evolving customerrequirements, increase adoption and usage of our products, develop new products, then our business, results of operations and financial condition would beadversely affected.The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile Apps and customdevelopment services.We must continue to enhance and improve the performance, functionality and reliability of our products. The mobile technology industry is characterizedby rapid technological change, changes in user requirements and preferences, frequent new product and services introductions embodying new technologies andthe emergence of new industry standards and practices that could render our products obsolete. Our success will depend, in part, on our ability to both internallydevelop and enhance our existing products, develop new products that address the increasingly sophisticated and varied needs of our customers, and respond totechnological advances and emerging industry standards and practices on a costeffective and timely basis. The development of our technology involvessignificant technical and business risks. We may fail to use new technologies effectively or to adapt our proprietary technology and systems to customerrequirements or emerging industry standards. If we are unable to adapt to changing market conditions, customer requirements or emerging industry standards, wemay not be able to increase our revenue and expand our business.Changes in economic conditions could materially affect our business, financial condition and results of operations.Because our primary target customers include U.S. retailers , we, together with the rest of the fashion/apparel industry, will depend upon consumerdiscretionary spending. Increases in unemployment rates, reductions in home values, increases in home foreclosures, investment losses, personal bankruptcies andreductions in access to credit and reduced consumer confidence, may impact consumers’ ability and willingness to spend discretionary dollars. In addition, volatileeconomic conditions may repress consumer confidence and discretionary spending. Any of the foregoing may have a material adverse effect on our business,financial condition and results of operations.24Our growth depends, in part, on the success of our strategic relationships with third parties.To grow our business, we anticipate that we will continue to depend on relationships with third parties, such as our customers and thirdparty platforms.Identifying partners, and negotiating and documenting relationships with them, requires significant time and resources. If we are unsuccessful in establishing ormaintaining our relationships with third parties, our ability to compete in the marketplace or to grow our revenue could be impaired, and our results of operationsmay suffer. Even if we are successful, we cannot assure you that these relationships will result in increased customer usage of our products or increased revenue.We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.We currently utilize, and plan on continuing to utilize over the current fiscal year, thirdparty networking providers and distribution through companiesincluding, but not limited to, Apple and Google as well as Shopify, WooCommerce and, Datalogic, Honeywell and Zebra to distribute our technologies. If disruptionsor capacity constraints occur, we may have no means of replacing these services, on a timely basis or at all. This could cause a material adverse condition for ouroperations and financial earnings.We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significantinterruption in our network or hosting and cloud services could adversely impact our operations and harm our business.Our technology infrastructure is critical to the performance of our products and customer satisfaction. Our products run on a complex distributed system,or what is commonly known as cloud computing. We own, operate and maintain elements of this system, but significant elements of this system are operated bythirdparties that we do not control and which would require significant time to replace. We expect this dependence on thirdparties to continue. In particular, asignificant portion, if not almost all data storage, data processing and other computing services and systems is hosted by cloud computing providers. Anydisruptions, outages and other performance problems relating to such services, including infrastructure changes, human or software errors and capacity constraints,could adversely impact our business, financial condition or results of operations.Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.We update our products on a frequent basis. Despite efforts to test our updates, errors, failures or bugs may not be found in our products until after theyare deployed to a customer. We have discovered and expect we will continue to discover errors, failures and bugs in our products and anticipate that certain of theseerrors, failures and bugs will only be discovered and remediated after deployment. Real or perceived errors, failures or bugs in our platform could result in negativepublicity, government inquiries, loss of or delay in market acceptance of our products, loss of competitive position, or claims by customers for losses sustained bythem. In such an event, we may be required, or may choose, for customer relations or other reasons, to expend additional resources in order to help correct theproblem.We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.In connection with the operation of our business, we store, process and transmit data, including personal and payment information, about our employeesand customers, a portion of which is confidential and/or personally sensitive. Unauthorized disclosure or loss of sensitive or confidential data may occur through avariety of methods. These include, but are not limited to, systems failure, employee negligence, fraud or misappropriation, or unauthorized access to or through ourinformation systems, whether by our employees or third parties, including a cyberattack by computer programmers, hackers, members of organized crime and/orstatesponsored organizations, who may develop and deploy viruses, worms or other malicious software programs. Such disclosure, loss or breach could harm ourreputation and subject us to government sanctions and liability under our contracts and laws that protect sensitive or personal data and confidential information,resulting in increased costs or loss of revenues. It is possible that security controls over sensitive or confidential data and other practices we and our thirdpartyvendors follow may not prevent the improper access to, disclosure of, or loss of such information. The potential risk of security breaches and cyberattacks mayincrease as we introduce new products and offerings. Further, data privacy is subject to frequently changing rules and regulations, which sometimes conflict amongthe various jurisdictions in which we provide services. Any failure or perceived failure to successfully manage the collection, use, disclosure, or security of personalinformation or other privacy related matters, or any failure to comply with changing regulatory requirements in this area, could result in legal liability or impairment toour reputation in the marketplace.25A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.Information security risks have generally increased in recent years, in part because of the proliferation of new technologies and the use of the Internet, andthe increased sophistication and activity of organized crime, hackers, terrorists, activists, cybercriminals and other external parties, some of which may be linked toterrorist organizations or hostile foreign governments. For example, a cybercriminal could use cybersecurity threats to gain access to sensitive information aboutanother company or to alter or disrupt news or information to be distributed by PR Newswire. Cybersecurity attacks are becoming more sophisticated and includemalicious software, ransomware, attempts to gain unauthorized access to data and other electronic security breaches that could lead to disruptions in criticalsystems, unauthorized release of confidential or otherwise protected information and corruption of data, substantially damaging our reputation. Any person whocircumvents our security measures could steal proprietary or confidential customer information or cause interruptions in our operations. We incur significant coststo protect against security breaches, and may incur significant additional costs to alleviate problems caused by any breaches. Our failure to prevent securitybreaches, or wellpublicized security breaches affecting the Internet in general, could significantly harm our reputation and business and financial results.Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, dataprotection and information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive andconfidential information. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm ourbusiness, results of operations and financial condition.We and our customers that use our products may be subject to privacy and data protectionrelated laws and regulations that impose obligations inconnection with the collection, processing and use of personal data, financial data, health or other similar data. The U.S. federal and various state and foreigngovernments have adopted or proposed limitations on, or requirements regarding, the collection, distribution, use, security and storage of personally identifiableinformation of individuals. The U.S. Federal Trade Commission and numerous state attorneys general are applying federal and state consumer protection laws toimpose standards on the online collection, use and dissemination of data, and to the security measures applied to such data.Similarly, many foreign countries and governmental bodies, including the EU member states, have laws and regulations concerning the collection and useof personally identifiable information obtained from individuals located in the EU or by businesses operating within their jurisdiction, which are often morerestrictive than those in the United States. Laws and regulations in these jurisdictions apply broadly to the collection, use, storage, disclosure and security ofpersonally identifiable information that identifies or may be used to identify an individual, such as names, telephone numbers, email addresses and, in somejurisdictions, IP addresses and other online identifiers.For example, the GDPR, which took full effect on May 25, 2018. The GDPR enhances data protection obligations for businesses and requires serviceproviders (data processors) processing personal data on behalf of customers to cooperate with European data protection authorities, implement security measuresand keep records of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to or greater of €20 million or 4% of global annualrevenues. In addition, the CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and require deletion of their personalinformation, opt out of certain personal information sharing, and receive detailed information about how their personal information is used. The CCPA provides forcivil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further, failure to comply withthe Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may expose us to administrativefines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the current enforcementmeasures and sanctions. There are also additional laws and regulations in additional jurisdictions around the world which govern the protection of consumers andof electronic communications. If our efforts to comply with GDPR, CCPA or other applicable laws and regulations are not successful, we may be subject to penaltiesand fines that would adversely impact our business and results of operations, and our ability to conduct business could be significantly impaired.26Additionally, although we endeavor to have our products comply with applicable laws and regulations, these and other obligations may be modified, theymay be interpreted and applied in an inconsistent manner from one jurisdiction to another, and they may conflict with one another, other regulatory requirements,contractual commitments or our internal practices. We also may be bound by contractual obligations relating to our collection, use and disclosure of personal,financial and other data or may find it necessary or desirable to join industry or other selfregulatory bodies or other privacy or data protectionrelatedorganizations that require compliance with their rules pertaining to privacy and data protection.We expect that there will continue to be new proposed laws, rules of selfregulatory bodies, regulations and industry standards concerning privacy, dataprotection and information security in the United States, the European Union and other jurisdictions, and we cannot yet determine the impact such future laws,rules, regulations and standards may have on our business. Moreover, existing U.S. federal and various state and foreign privacy and data protectionrelated lawsand regulations are evolving and subject to potentially differing interpretations, and various legislative and regulatory bodies may expand current or enact new lawsand regulations regarding privacy and data protectionrelated matters. Because global laws, regulations and industry standards concerning privacy and datasecurity have continued to develop and evolve rapidly, it is possible that we or our products or platform may not be, or may not have been, compliant with eachsuch applicable law, regulation and industry standard and compliance with such new laws or to changes to existing laws may impact our business and practices,require us to expend significant resources to adapt to these changes, or to stop offering our products in certain countries. These developments could adverselyaffect our business, results of operations and financial condition.We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect ourbusiness.Our ability to implement our business plan successfully depends in part on our ability to build brand recognition using our trademarks, service marks andother proprietary intellectual property, including our names and logos. We currently have no registered trademarks. While we plan to register a number of ourtrademarks; however, no assurance can be given that our trademark applications will be approved. As of December 31, 2022, we own 18 issued patents: six in Europe,four in the U.S., three in each of Russia and Japan and one in each of Canada and Israel which expire between January 20, 2033 and August 18, 2036, and we havetwo additional patent applications in process. As of such date, we do not have any registered trademarks., No assurance can be given that our patent applicationswhich are in process will be approved. If our patent applications are not approved, our ability to expand or develop our business may be negatively affected.Third parties may also oppose our trademark or patent applications, or otherwise challenge our use of the trademarks or patents. In the event that ourtrademarks or patents are successfully challenged, we could be forced to rebrand our goods and services or redesign our technology, which could result in loss ofbrand recognition, and could require us to devote resources to advertising and marketing new brands and products.If our efforts to register, maintain and protect our intellectual property are inadequate, or if any thirdparty misappropriates, dilutes or infringes on ourintellectual property, the value of our brands may be harmed, which could have a material adverse effect on our business and might prevent our brands fromachieving or maintaining market acceptance. We may also face the risk of claims that we have infringed third parties’ intellectual property rights. If third parties claimthat we infringe upon their intellectual property rights, our operating profits could be adversely affected. Any claims of intellectual property infringement, eventhose without merit, could be expensive and time consuming to defend, require us to rebrand our services, if feasible, divert management’s attention and resourcesor require us to enter into royalty or licensing agreements in order to obtain the right to use a thirdparty’s intellectual property.Any royalty or licensing agreements, if required, may not be available to us on acceptable terms or at all. A successful claim of infringement against uscould result in our being required to pay significant damages, enter into costly license or royalty agreements, or stop the sale of certain products or services, any ofwhich could have a negative impact on our operating profits and harm our future prospects.We may face intense competition and expect competition to increase in the future, which could prohibit us from developing a customer base andgenerating revenue.We face significant competition in every aspect of our business. Our competitors include True Fit, Virtusize, EasyMeasure, AR MeasureKit, Smart Measureand 3DLook. These companies may already have an established market in our industry. Most of these companies have significantly greater financial and otherresources than us and have been developing their products and services longer than we have been developing ours.27In addition, some of our larger competitors have substantially broader product offerings and leverage their relationships based on other products orincorporate functionality into existing products to gain business in a manner that discourages potential customers from purchasing our products. Potentialcustomers may also prefer to purchase from their existing solution providers rather than a new solution provider regardless of product performance or features.These larger competitors often have broader product lines and market focus and will therefore not be as susceptible to downturns in a particular market. Conditionsin our market could change rapidly and significantly as a result of technological advancements, partnering by our competitors or continuing market consolidation.New startup companies that innovate and large competitors that are making significant investments in research and development may invent similar or superiorproducts and technologies that compete with our products. In addition, some of our competitors may enter into new alliances with each other or may establish orstrengthen cooperative relationships. Any such consolidation, acquisition, alliance or cooperative relationship could lead to pricing pressure and our loss of anyfuture market share and could result in a competitor with greater financial, technical, marketing, service and other resources, all of which could harm our ability tocompete. Furthermore, organizations may be more willing to incrementally add solutions to their existing infrastructure from competitors than to replace their existinginfrastructure with our products. Any failure to meet and address these factors could harm our business, results of operations and financial condition.Our business operations and future development could be significantly disrupted if we lose key members of our management team.The success of our business continues to depend to a significant degree upon the continued contributions of our senior officers and key employees, bothindividually and as a group. Our future performance will be substantially dependent in particular on our ability to retain and motivate Ronen Luzon, our ChiefExecutive Officer, and certain of our other senior executive officers. The loss of the services of our Chief Executive Officer, senior officers or other key employeescould have a material adverse effect on our business and plans for future development. We have no reason to believe that we will lose the services of any of theseindividuals in the foreseeable future; however, we currently have no effective replacement for any of these individuals due to their experience, reputation in theindustry and special role in our operations. We also do not maintain any key man life insurance policies for any of our employees.If we are able to expand our operations, we may be unable to successfully manage our future growth.Our growth may strain our infrastructure and resources. Any such growth could place increased strain on our management, operational, financial and otherresources, and we will need to train, motivate, and manage employees, as well as attract management, sales, finance and accounting, international, technical, andother professionals. Any failure to expand these areas and implement appropriate procedures and controls in an efficient manner and at a pace consistent with ourbusiness objectives could have a material adverse effect on our business, results of operations and financial condition.Our business operations are conducted in multiple languages and could be disrupted due to miscommunications or translation errors.The success of our business continues to depend on our marketing efforts in the United States, Europe and Israel, each of which is conducted in the locallanguage. Miscommunications or inaccurate foreign language translations could have a material adverse effect on our business operations and financial conditions.Additionally, contracts, communications and complex technical information must be accurately translated into foreign languages.We will continue to incur costs and be subject to various obligations as a result of being a public company, listed in the United States and in Israel.We will continue to incur significant legal, accounting and other expenses as a result of being a public company, listed in the United States and in Israel.Although we will incur costs each year associated with being a publiclytraded company, it is possible that our actual costs of being a publiclytraded company willvary from year to year and may be different than our estimates. In estimating these costs, we take into account expenses related to insurance, legal, accounting andcompliance activities.28Furthermore, the need to maintain the corporate infrastructure demanded of a public company may divert management’s attention from implementing ourgrowth strategy, which could prevent us from improving our business, results of operations and financial condition. We have made, and will continue to make,changes to our internal controls and procedures for financial reporting and accounting systems to meet our reporting obligations as a U.S. publicly traded company.However, the measures we take may not be sufficient to satisfy our obligations as a publicly traded company.Any future or current litigation could have a material adverse impact on our results of operations, financial condition and liquidity.From time to time, we may be subject to litigation, including, among others, potential stockholder derivative actions and class actions. Risks associatedwith legal liability are difficult to assess and quantify, and their existence and magnitude can remain unknown for significant periods of time. Subject to certainexceptions, our Amended and Restated Certificate of Incorporation, or Certificate of Incorporation, and Amended and Restated Bylaws, or Bylaws, require us toindemnify and advance expenses to our officers and directors involved in legal proceedings. To date we have obtained directors and officers’ liability, or D&O,insurance to cover some of the risk exposure for our directors and officers. Such insurance generally pays the expenses (including amounts paid to plaintiffs, fines,and expenses including attorneys’ fees) of officers and directors who are the subject of a lawsuit as a result of their service to us. There can be no assurance that wewill be able to continue to maintain this insurance at reasonable rates or at all, or in amounts adequate to cover such expenses should such a lawsuit occur. WithoutD&O insurance, the amounts we would pay to indemnify our officers and directors should they be subject to legal action based on their service to us could have amaterial adverse effect on our financial condition, results of operations and liquidity. Such lawsuits, and any related publicity, may result in substantial costs and,among other things, divert the attention of management and our employees. An unfavorable outcome in any claim or proceeding against us could have a materialadverse impact on our financial position and results of operations for the period in which the unfavorable outcome occurs, and potentially in future periods. Further,any settlement announced by us may expose us to further claims against us by third parties seeking monetary or other damages which, even if unsuccessful, woulddivert management attention from the business and cause us to incur costs, possibly material, to defend such matters, which could have a material adverse impacton our financial position. See “Legal Proceedings” for more information regarding our involvement in ongoing litigation matters.Federal, state and local or Israeli tax rules may adversely impact our results of operations and financial position.We are subject to federal, state and local taxes in the U.S., as well as local taxes in Israel in respect to our operations in Israel. Although we believe our taxestimates are reasonable, if the Internal Revenue Service or other taxing authority disagrees with the positions we have taken on our tax returns, we could faceadditional tax liability, including interest and penalties. If material, payment of such additional amounts upon final adjudication of any disputes could have a materialimpact on our results of operations and financial position. In addition, complying with new tax rules, laws or regulations could impact our financial condition, andincreases to federal or state statutory tax rates and other changes in tax laws, rules or regulations may increase our effective tax rate. Any increase in our effectivetax rate could have a material impact on our financial results.A significant majority of Orgad’s revenue is from sales of products on Amazon’s U.S. Marketplace and any change, limitation or restriction on ourability to operate on Amazon’s platform or any other marketplace could have a material adverse impact to our business, results of operations, financialcondition and prospects.Orgad, our wholly owned subsidiary, operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com, eBay and others. A substantial percentage of Orgad’s revenue is driven by sales on Amazon’s U.S. marketplace and Orgad is subject toterms of service of Amazon and other maketplaces and various other seller policies and services that apply to third parties selling products on Amazon and othermarketplaces. Generally, a marketplace has the right to terminate or suspend its agreement with Orgad at any time and for any reason. Such marketplace may takeother actions against Orgad such as suspending or terminating a seller account or product listing and withholding payments owed to Orgad indefinitely. Forexample, in July 2022, Amazon deactivated Orgad’s Amazon U.S. store as a result of complaints submitted due to an error in the listed manufacturer of certainproducts on Orgad’s store. Although its account was subsequently reinstated in September 2022, if the deactivation were to occur in the future for a prolongedperiod of time, or if Amazon were to terminate Orgad’s account, this would have a material adverse effect on our business, results of operations, financial conditionand prospects. While Orgad endeavors to materially comply with the terms of services of the marketplaces on which it operates, we can provide no assurance thatthese marketplaces will have the same determination with respect to our compliance.29In addition, Amazon and other marketplaces can make changes to its platform that could require Orgad to change the manner in which it operates, limit itsability to successfully launch new products or increase its costs to operate and such changes could have an adverse effect on our business, results of operations,financial condition and prospects. Examples of changes that could impact us relate to platform fee charges (i.e., selling commissions), exclusivity, inventorywarehouse availability, excluded products and limitations on sales and marketing. Any change, limitation or restriction on our ability to sell on Amazon’s platform orany other marketplace, even if temporary, could have a material impact on our business, results of operations, financial condition and prospects.Orgad also relies on services provided by Amazon’s fulfillment platform, including Prime Certification, which provides for expedited shipping to theconsumer, an important aspect in the buying decision for consumers. For products that Orgad fulfills itself, Orgad is qualified to offer our products for sale withPrime Certification delivery. Any inability to market our products for sale with expedited delivery provided under Prime Certification could have a material impact onour business, results of operations, financial condition and prospects. Failure to remain compliant with the best fulfillment practices on Amazon’s platform couldhave a material impact on our business, results of operations, financial condition and prospects. In addition, due to the COVID19 pandemic, Amazon has changedthe amount of inventory it accepts per product for a period of time. If this were to continue it could cause us to miss sales and/or pay additional shipping costswhich would harm our business operations and financial conditions.Orgad’s business depends on its ability to build and maintain strong product listings on ecommerce platforms. Orgad may not be able to maintain andenhance our product listings if it receives unfavorable customer complaints, negative publicity or otherwise fails to live up to consumers’ expectations, whichcould materially adversely affect our business, results of operations and growth prospects.Maintaining and enhancing Orgad’s product listings is critical in expanding and growing its business. However, a significant portion of Orgad’s perceivedperformance to the customer depends on third parties outside of its control, including suppliers and thirdparty delivery agents as well as online retailers such asAmazon and eBay. Because Orgad’s agreements with its online retail partners are generally terminable at will, it may be unable to maintain these relationships, andour results of operations could fluctuate significantly from period to period. Because Orgad relies on third parties to deliver its products, it is subject to shippingdelays or disruptions caused by inclement weather, natural disasters, labor activism, health epidemics or bioterrorism. It may also experience shipping delays ordisruptions due to other carrierrelated issues relating to their own internal operational capabilities. Further, Orgad relies on the business continuity plans of thesethird parties to operate during pandemics, like the COVID19 pandemic, and it has limited ability to influence their plans, prevent delays, and/or cost increases due toreduced availability and capacity and increased required safety measures.Customer complaints or negative publicity about its products, delivery times, or marketing strategies, even if not accurate, especially on blogs, social mediawebsites and thirdparty market sites, could rapidly and severely diminish consumer view of Orgad’s product listings and result in harm to its brand. Customers mayalso make safetyrelated or other types of claims regarding products sold through our online retail partners, such as Amazon, which may result in an online retailpartner removing the product from its marketplace. We also use and rely on other services from third parties, such as our telecommunications services, and thoseservices may be subject to outages and interruptions that are not within our control.Orgad faces risks related to successfully optimizing and operating its fulfillment and customer service operations.Failures to adequately predict customer demand or otherwise optimize and operate its fulfillment and customer service operations successfully from time totime result in excess or insufficient fulfillment or customer service capacity, increased costs, and impairment charges, any of which could materially harm ourbusiness. As Orgad continues to add fulfillment and customer service capability or add new businesses with different requirements, its fulfillment and customerservice operations become increasingly complex and operating them becomes more challenging. There can be no assurance that Orgad will be able to operate ouroperations effectively.30In addition, failure to optimize inventory in our fulfillment operations increases net shipping cost by requiring longzone or partial shipments. Orgad may beunable to adequately staff its fulfillment and customer service operations. Orgad’s failure to properly handle such inventory or to accurately forecast productdemand may result in it being unable to secure sufficient storage space or to optimize its fulfillment operations or cause other unexpected costs and other harm toour business and reputation.Orgad relies on a limited number of shipping companies to deliver inventory to it and completed orders to our customers. The inability to negotiateacceptable terms with these companies or performance problems or other difficulties experienced by these companies could negatively impact our operating resultsand customer experience. In addition, Orgad’s ability to receive inbound inventory efficiently and ship completed orders to customers also may be negativelyaffected by natural or manmade disasters, extreme weather, geopolitical events and security issues, labor or trade disputes, and similar events.The variability in Orgad’s retail business places increased strain on its operations.Demand for Orgad’s product listings can fluctuate significantly for many reasons, including as a result of seasonality, promotions, product launches, orunforeseeable events, such as in response to natural or manmade disasters, extreme weather, or geopolitical events. For example, Orgad expects a disproportionateamount of our retail sales to occur during our fourth quarter. Failure to stock or restock popular products in sufficient amounts such that Orgad fails to meetcustomer demand could significantly affect our revenue and our future growth. If too many customers access the websites on which Orgad engages in onlineretailing within a short period of time due to increased demand, Orgad may experience system interruptions that make the websites unavailable or prevent us fromefficiently fulfilling orders, which may reduce the volume of goods its offers or sell and the attractiveness of its products. In addition, Orgad may be unable toadequately staff for fulfillment of orders and customer service during these peak periods and delivery and other fulfillment companies and customer service cosourcers may be unable to meet the seasonal demand.Our business is subject to the risks of earthquakes, fire, power outages, floods, health risks and other catastrophic events, and to interruption by manmade problems such as terrorism.Natural disasters, such as fire or floods, a significant power outage, telecommunications failure, terrorism, an armed conflict, cyberattacks, epidemics andpandemics such as COVID19, or other geopolitical unrest could affect our supply chain, manufacturers, logistics providers, channel partners, or endcustomers orthe economy as a whole and such disruption could impact us and the shipments and sales. These risks may be further increased if the disaster recovery plans for usand our suppliers prove to be inadequate. To the extent that any of the above should result in delays or cancellations of customer orders, the loss of customers, orthe delay in the deployment or shipment of products, our business, financial condition, and operating results would be adversely affected.For example, on January 2, 2023, Orgad experienced a fire at its warehouse in Israel. We are not aware of any casualties or injuries associated with the fire.We shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incidentdid not affect the future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of thisincident on the other parties that were involved in the incident (lessor and others that leased properties near the warehouse).Our business could be negatively impacted by unsolicited takeover proposals, by shareholder activism or by proxy contests relating to the election ofdirectors or other matters.Our business could be negatively affected as a result of an unsolicited takeover proposal, by shareholder activism or a proxy contest. During 2021, anactivist shareholder sought to make changes to our board of directors, among other matters, which ultimately resulted in us entering into a settlement agreementwith the activist shareholder and another shareholder, and for which considerable costs were incurred and absorbed significant time and attention by managementand the board of directors. A future proxy contest, unsolicited takeover proposal, or other shareholder activism relating to the election of directors or other matterswould most likely require us to incur significant legal fees and proxy solicitation expenses and require significant time and attention by management and our Boardof Directors. The potential of a proxy contest, unsolicited takeover proposal, or other shareholder activism could interfere with our ability to execute our strategicplan, give rise to perceived uncertainties as to our future direction, result in the loss of potential business opportunities or make it more difficult to attract and retainqualified personnel, any of which could materially and adversely affect our business and operating results.31Environmental, social and corporate governance (ESG) issues, including those related to climate change and sustainability, may have an adverseeffect on our business, financial condition and results of operations and damage our reputation.There is an increasing focus from certain investors, customers, consumers, employees and other stakeholders concerning ESG matters. Additionally, publicinterest and legislative pressure related to public companies’ ESG practices continue to grow. If our ESG practices fail to meet regulatory requirements or investor,customer, consumer, employee or other shareholders’ evolving expectations and standards for responsible corporate citizenship in areas including environmentalstewardship, support for local communities, Board of Director and employee diversity, human capital management, employee health and safety practices, productquality, supply chain management, corporate governance and transparency, our reputation, brand and employee retention may be negatively impacted, and ourcustomers and suppliers may be unwilling to continue to do business with us.Customers, consumers, investors and other shareholders are increasingly focusing on environmental issues, including climate change, energy and wateruse, plastic waste and other sustainability concerns. Concern over climate change may result in new or increased legal and regulatory requirements to reduce ormitigate impacts to the environment. Changing customer and consumer preferences or increased regulatory requirements may result in increased demands orrequirements. Complying with these demands or requirements could cause us to incur additional manufacturing, operating or product development costs.If we do not adapt to or comply with new regulations, including the SEC’s published proposed rules that would require companies to provide significantlyexpanded climaterelated disclosures in their periodic reporting, which may require us to incur significant additional costs to comply and impose increased oversightobligations on our management and board of directors, or fail to meet evolving investor, industry or stakeholder expectations and concerns regarding ESG issues,investors may reconsider their capital investment in our company, we may become subject to penalties, and customers and consumers may choose to stoppurchasing our products, if approved for commercialization, which could have a material adverse effect on our reputation, business or financial condition.Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions andadverse developments with respect to financial institutions and associated liquidity risk.Our business depends on the economic health of the global economies. If the conditions in the global economies remain uncertain or continue to bevolatile, or if they deteriorate, including as a result of the impact of military conflict, such as the war between Russia and Ukraine, terrorism or other geopoliticalevents, our business, operating results and financial condition may be materially adversely affected. Economic weakness, inflation and increases in interest rates,limited availability of credit, liquidity shortages and constrained capital spending have at times in the past resulted, and may in the future result, in challenging anddelayed sales cycles, slower adoption of new technologies and increased price competition, and could negatively affect our ability to forecast future periods, whichcould result in an inability to satisfy demand for our products and a loss of market share.In addition, increases in inflation raise our costs for commodities, labor, materials and services and other costs required to grow and operate our business,and failure to secure these on reasonable terms may adversely impact our financial condition. Additionally, increases in inflation, along with the uncertaintiessurrounding COVID19, geopolitical developments and global supply chain disruptions, have caused, and may in the future cause, global economic uncertainty anduncertainty about the interest rate environment, which may make it more difficult, costly or dilutive for us to secure additional financing. A failure to adequatelyrespond to these risks could have a material adverse impact on our financial condition, results of operations or cash flows.More recently, the closures of SVB and Signature Bank and their placement into receivership with the FDIC created bankspecific and broader financialinstitution liquidity risk and concerns. Although the Department of the Treasury, the Federal Reserve and the FDIC jointly released a statement that depositors atSVB and Signature Bank would have access to their funds, even those in excess of the standard FDIC insurance limits, under a systemic risk exception, futureadverse developments with respect to specific financial institutions or the broader financial services industry may lead to marketwide liquidity shortages, impair theability of companies to access nearterm working capital needs, and create additional market and economic uncertainty. There can be no assurance that future creditand financial market instability and a deterioration in confidence in economic conditions will not occur. Our general business strategy may be adversely affected byany such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions. If the current equityand credit markets deteriorate, or if adverse developments are experienced by financial institutions, it may cause shortterm liquidity risk and also make anynecessary debt or equity financing more difficult, more costly, more onerous with respect to financial and operating covenants and more dilutive. Failure to secureany necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stockprice and could require us to alter our operating plans. In addition, there is a risk that one or more of our service providers, financial institutions, manufacturers,suppliers and other partners may be adversely affected by the foregoing risks, which could directly affect our ability to attain our operating goals on schedule andon budget.Our business may be adversely affected by the impact of any renewed outbreak of the COVID19 pandemic.Public health epidemics or outbreaks could adversely impact our business. In late 2019, a novel strain of COVID19, also known as coronavirus, wasreported in Wuhan, China. While initially the outbreak was largely concentrated in China, it spread worldwide. Many countries around the world, including in Israel,implemented significant governmental measures to control the spread of the virus, including temporary closure of businesses, severe restrictions on travel and themovement of people, and other material limitations on the conduct of business. These measures haven historically resulted in work stoppages and other disruptions.If there is a resurgence of the COVID19 pandemic, this could adversely impact our operations, including among others, our sales and marketing efforts and ourability to raise additional funds, and accordingly, the impact of COVID19 could have an adverse impact on our business and our financial results.32Risks Related to Our Operations in RussiaRussia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.In addition to our Israel operations, we have operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia and we engage two software developers through a third party who are based in Ukraine. On February 24,2022, Russia invaded Ukraine. The outbreak of hostilities between the two countries could result in more widespread conflict and could have a severe adverse effecton the region.Following Russia’s actions, various countries, including the U.S., Canada, the United Kingdom, Germany and France, as well as the European Union,issued broadranging economic sanctions against Russia. Such sanctions included, among other things, a prohibition on doing business with certain Russiancompanies, officials and oligarchs; a commitment by certain countries and the European Union to remove selected Russian banks from the Society for WorldwideInterbank Financial Telecommunications (SWIFT) electronic banking network that connects banks globally; and restrictive measures to prevent the Russian CentralBank from undermining the impact of the sanctions. In response to sanctions, the Russian Central Bank raised its interest rates and banned sales of local securitiesby foreigners. Russia may take additional counter measures or retaliatory actions in the future. While diplomatic efforts have been ongoing, the conflict betweenRussia and Ukraine is currently unpredictable and has the potential to result in broadened military actions. The duration of ongoing hostilities and such sanctionsand related events cannot be predicted. Uncertainty as to future relations between Russia and the U.S. and other countries in the west, or between Russia and othereastern European countries, may have a negative impact on our operations.Such international sanctions and potential responses to such sanctions, including those that may limit or restrict transfer funds into Russia, may in thefuture significantly affect our ability to conduct our activities in Russia including paying our personnel. To date, the conflict has had minimal impact on operations .Nevertheless, we have no way to predict the progress or outcome of the situation in Ukraine, as the conflict and governmental reactions are rapidly developing andbeyond our control. Prolonged unrest, intensified military activities or more extensive sanctions impacting the region could have a material adverse effect on ouroperations, results of operations, financial condition, liquidity and business outlook.Political, military conditions or other risks in Russia could adversely affect our business.Russia is a federative state consisting of 85 constituent entities, or “subjects.” The Russian Constitution reserves some governmental powers for theRussian Government, some for the subjects and some for areas of joint competence. In addition, eight “federal districts” (“federal’nye okruga”), which are overseenby a plenipotentiary representative of the President, supplement the country’s federal system. The delineation of authority among and within the subjects is, inmany instances, unclear and contested, particularly with respect to the division of tax revenues and authority over regulatory matters. For these reasons, theRussian political system is vulnerable to tension and conflict between federal, subject and local authorities. This tension creates uncertainties in the operatingenvironment in Russia, which may prevent us from carrying out our strategy effectively. The risks associated with these events or potential events could materiallyand adversely affect the investment environment and overall consumer and entrepreneurial confidence in Russia, and our business, prospects, financial condition,hiring ability, and results of operations could be materially and adversely affected.Furthermore, high levels of corruption reportedly exist in Russia, including the bribing of officials for the purpose of initiating investigations bygovernment agencies. Corruption and other illegal activities could disrupt our ability to conduct our business effectively, and claims that the we are involved in suchcorruption or illegal activities could generate negative publicity, of which could harm our development, financial condition, results of operations or prospects.Economic and other risks in Russia could adversely affect our business.Operating a business in an emerging market such as Russia can involve a greater degree of risk than operating a business in more developed markets.Over the last two decades, the Russian economy has experienced or continues to experience at various times:●significant volatility in its GDP;33●the impact of international sanctions;●high levels of inflation;●increases in, or high, interest rates;●sudden price declines in oil and other natural resources;●instability in the local currency market;●budget deficits;●the continued operation of lossmaking enterprises due to the lack of effective bankruptcy proceedings;●capital flight; and●significant increases in poverty rates, unemployment and underemployment.The Russian economy has been subject to abrupt downturns in the past, including as a result of the invasion of Ukraine, global financial crisis, and, as anemerging market, remains particularly vulnerable to further external shocks and any future fluctuations in the global markets. Any further deterioration in the generaleconomic conditions in Russia (whether or not as a result of the events mentioned above) could have a material adverse effect on the Russian economy and mayresult in hiring and operational difficulties, as well as potential flight of human capital, which could have a material adverse effect on our business, productdevelopment and results of operations.Legal risks in Russia could materially adversely affect our operations and Russian tax legislation is subject to frequent change.Among the risks of the Russian legal system are: inconsistencies among laws, presidential decrees, and government and ministerial orders and resolutions;conflicting local, regional and federal laws and regulations; the untested nature of the independence of the judiciary and its sensitivity to economic or politicalinfluences; substantial gaps in the regulatory structure due to the delay or absence of implementing legislation; a high degree of discretion on the part ofgovernmental authorities; reported corruption within governmental entities and other governmental authorities; the relative inexperience of judges and courts ininterpreting laws applicable to complex transactions; and the unpredictability of enforcement of foreign judgments and foreign arbitral awards. Many Russian lawsand regulations are construed in a way that provides for significant administrative discretion in application and enforcement. Unlawful, selective or arbitrary actionsof the Russian Government have reportedly included the denial or withdrawal of licenses, sudden and unexpected tax audits, criminal prosecutions, and civil claims.Any of the above events may have a material adverse effect on our product development and results of operations.Despite certain improvements in the taxation system made by the Russian Government over the past decade, Russian tax legislation is still subject tofrequent change, varying interpretations, and inconsistent and selective enforcement. There are currently no clear rules for distinguishing between lawful taxoptimization and tax evasion. In addition, Russian tax laws do not contain detailed rules on the taxation in Russia of foreign companies. As such, taxpayers oftenhave to resort to court proceedings to defend their position against the Russian tax authorities. However, in the absence of consistent court practice or bindingprecedents, there is inconsistency amongst court decisions. Further, the possibility exists that the Russian Federation would impose arbitrary or onerous taxes andpenalties in the future, which could have a material adverse effect on our product development and results of operations.34Risks Related to Our Operations In IsraelOur headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.Our headquarters and most of our operations are located in central Israel and our key employees, officers and directors are residents of Israel. Accordingly,political, economic and military conditions in Israel and the surrounding region may directly affect our business. Since the establishment of the State of Israel in1948, a number of armed conflicts have taken place between Israel and its Arab neighbors. Any hostilities involving Israel or the interruption or curtailment of tradewithin Israel or between Israel and its trading partners could adversely affect our operations and results of operations and could make it more difficult for us to raisecapital. During the winter of 2008, winter of 2012 and the summer of 2014, Israel was engaged in an armed conflict with Hamas, a militia group and political partyoperating in the Gaza Strip, and during the summer of 2006, Israel was engaged in an armed conflict with Hezbollah, a Lebanese Islamist Shiite militia group andpolitical party. Israel faces political tension with respect to its relationships with Turkey, Iran and certain Arab neighbor countries. In addition, recent conflictsinvolved missile strikes against civilian targets in various parts of Israel, and negatively affected business conditions in Israel. Recent political uprisings and socialunrest in various countries in the Middle East and North Africa are affecting the political stability of those countries. This instability may lead to deterioration of thepolitical relationships that exist between Israel and these countries, and have raised concerns regarding security in the region and the potential for armed conflict.Any armed conflicts, terrorist activities or political instability in the region could adversely affect business conditions and could harm our results of operations. Forexample, any major escalation in hostilities in the region could result in a portion of our employees and service providers being called up to perform military duty foran extended period of time. Parties with whom we do business have sometimes declined to travel to Israel during periods of heightened unrest or tension, forcing usto make alternative arrangements when necessary. In addition, the political and security situation in Israel may result in parties with whom we have agreementsinvolving performance in Israel claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions insuch agreements. Any future deterioration in the political and security situation in Israel will negatively impact our business.Our commercial insurance does not cover losses that may occur as a result of events associated with the security situation in the Middle East. Althoughthe Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that thisgovernment coverage will be maintained. Any losses or damages incurred by us could have a material adverse effect on our business. Any armed conflicts orpolitical instability in the region would likely negatively affect business conditions and could harm our results of operations.Further, in the past, the State of Israel and Israeli companies have been subjected to an economic boycott. Several countries still restrict business with theState of Israel and with Israeli companies. These restrictive laws and policies may have an adverse impact on our operating results, financial condition or theexpansion of our business.The legislative power of the State resides in the Knesset, a unicameral parliament that consists of 120 members elected by nationwide voting under asystem of proportional representation. Israel’s most recent general elections were held on April 9, 2019, September 17, 2019, March 2, 2020 and November 1, 2022.The uncertainty surrounding the results of the recent elections may continue. Actual or perceived political instability in Israel or any negative changes in thepolitical environment, may individually or in the aggregate adversely affect the Israeli economy and, in turn, our business, financial condition, results of operationsand prospects.Some of our employees are obligated to perform military reserve duty in Israel.Many Israeli citizens, including our employees are obligated to perform one month, and in some cases more, of annual military reserve duty until they reachthe age of 40 (or older, for reservists with certain occupations) and, in the event of a military conflict, may be called to active duty. In response to increases interrorist activity, there have been periods of significant callups of military reservists. It is possible that there will be military reserve duty callups in the future. Ouroperations could be disrupted by such callups. Such disruption could materially adversely affect our business, results of operations and financial condition.35It may be difficult to enforce a nonIsraeli judgment against the Company or its officers and directors.The operating subsidiary of ours is incorporated in Israel. All of our executive officers and directors are not residents of the United States, and asubstantial portion of our assets and the assets of our executive officers and directors are located outside the United States. Therefore, a judgment obtained againstus, or any of these persons, including a judgment based on the civil liability provisions of the U.S. federal securities laws, may not be collectible in the United Statesand may not necessarily be enforced by an Israeli court. It also may be difficult to affect service of process on these persons in the United States or to assert U.S.securities law claims in original actions instituted in Israel. Additionally, it may be difficult for an investor, or any other person or entity, to initiate an action withrespect to U.S. securities laws in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of U.S. securities laws reasoning that Israel is not themost appropriate forum in which to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law isapplicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law often involves the testimony of expert witnesses, which can be a timeconsuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel that addresses the mattersdescribed above. As a result of the difficulty associated with enforcing a judgment against us in Israel, it may be impossible to collect any damages awarded byeither a U.S. or foreign court.Our international operations could expose us to additional risks, including exchange rate fluctuations, legal regulations and political or economicinstability that could harm our business and operating results.Our international operations expose us to the following risks which may have a material adverse effect on our business and operating results:●devaluations and fluctuations in currency exchange rates including fluctuations between the U.S. dollar and the NIS and the Russian Ruble;●costs of compliance with local laws, including labor laws and intellectual property laws;●compliance with domestic and foreign government policies, including compliance with Israeli securities laws and TASE;●changes in trade regulations and procedures affecting approval, production, pricing, marketing, reimbursement for and access to, our products;●compliance with applicable foreign anticorruption laws, antitrust/competition laws, antiBoycott Israel law and antimoney laundering laws; and●economic and geopolitical developments and conditions, including ongoing instability in global economies and financial markets, international hostilities,acts of terrorism and governmental reactions, inflation, outbreaks of contagious disease (e.g., the COVID19 pandemic) and military and political alliances.Risks Related to Our Common StockA more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.Although our common stock is listed on the Nasdaq Capital Market, it has only been traded on the Nasdaq Capital Market since July 25, 2016. There hasbeen relatively limited trading volume in the market for our common stock, and a more active, liquid public trading market may not develop or may not be sustained.Limited liquidity in the trading market for our common stock may adversely affect a stockholder’s ability to sell its shares of common stock at the time it wishes tosell them or at a price that it considers acceptable. If a more active, liquid public trading market does not develop, we may be limited in our ability to raise capital byselling shares of common stock and our ability to acquire other companies or assets by using shares of our common stock as consideration. In addition, if there is athin trading market or “float” for our stock, the market price for our common stock may fluctuate significantly more than the stock market as a whole. Without a largefloat, our common stock would be less liquid than the stock of companies with broader public ownership and, as a result, the trading prices of our common stockmay be more volatile and it would be harder for you to liquidate any investment in our common stock. Furthermore, the stock market is subject to significant priceand volume fluctuations, and the price of our common stock could fluctuate widely in response to several factors, including:●our quarterly or annual operating results;●changes in our earnings estimates;●investment recommendations by securities analysts following our business or our industry;●additions or departures of key personnel;●changes in the business, earnings estimates or market perceptions of our competitors;36●our failure to achieve operating results consistent with securities analysts’ projections;●changes in industry, general market or economic conditions;●announcements of legislative or regulatory changes; and●natural disasters (including for example, the recent fire in the Orgad warehouse) and political and economic instability, including wars, terrorism, politicalunrest, results of certain elections and votes, emergence of a pandemic, or other widespread health emergencies (or concerns over the possibility of suchan emergency, including for example, the recent the COVID19 pandemic), boycotts, adoption or expansion of government trade restrictions, and otherbusiness restrictions.The stock market has experienced extreme price and volume fluctuations in recent years that have significantly affected the quoted prices of the securitiesof many companies. The changes often appear to occur without regard to specific operating performance. The price of our common stock could fluctuate basedupon factors that have little or nothing to do with us and these fluctuations could materially reduce our stock price.Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.If any of our shareholders were to decide to sell large amounts of stock over a short period of time (presuming such sales were permitted) such sales couldcause the market price of our common stock to drop significantly, even if our business is doing well. Further, the market price of our common stock could decline as aresult of the perception that such sales could occur. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equitysecurities in the future at a time and price that we deem appropriate.Our securities are traded on more than one market which may result in price variations.Our securities have been trading on the Nasdaq Capital Market since July 2016 and on TASE since September 2005. Trading in our securities on suchexchanges occurs in different currencies (U.S. dollars on the Nasdaq Capital Market and NIS on the TASE), and at different times (due to different time zones,trading days and public holidays in the United States and Israel). The trading prices of our securities on the two exchanges may differ due to the foregoing andother factors. Any decrease in the price of our shares on the TASE could cause a decrease in the trading price of our shares on the Nasdaq Capital Market and viceversa.We are a smaller reporting company and, as a result of the reduced disclosure and governance requirements applicable to such companies, ourcommon stock may be less attractive to investors.We are a smaller reporting company, (i.e. a company with “public float” held by nonaffiliates with a market value of less than $250 million) and we areeligible to take advantage of certain exemptions from various reporting requirements applicable to other public companies. We have elected to adopt these reduceddisclosure requirements. We cannot predict if investors will find our common stock less attractive as a result of our taking advantage of these exemptions. If someinvestors find our common stock less attractive as a result of our choices, there may be a less active trading market for our common stock and our stock price may bemore volatile.We do not expect to pay any cash dividends in the foreseeable future.We have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our board of directors deems relevant. Investors should not purchase our common stock expecting to receive cash dividends. Because we do notpay dividends, and there may be limited trading, investors may not have any manner to liquidate or receive any payment on their investment. Therefore, our failureto pay dividends may cause investors to not see any return on investment even if we are successful in our business operations. In addition, because we do not paydividends we may have trouble raising additional funds, which could affect our ability to expand our business operations.37UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2022☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ________ to _________Commission file number 00137370MY SIZE, INC.(Exact name of registrant as specified in charter)Delaware510394637(State or jurisdiction ofIncorporation or organization)I.R.S EmployerIdentification No.4 Hayarden, POB 1026, Airport City, Israel7010000(Address of principal executive offices)(Zip code)+9723 6009030(Registrant’s telephone number, including area code)Securities registered pursuant to Section 12(b) of the Act:Title of each classTrading Symbol(s)Name of Each Exchange on Which RegisteredCommon Stock, par value $0.001 per shareMYSZThe Nasdaq Capital MarketSecurities registered pursuant to Section 12(g) of the Act: None.Indicate by check mark whether the registrant is a wellknown seasoned issuer as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes☒ No ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer, a smaller reporting company, or an emerginggrowth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 of theExchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☒Smaller Reporting Company☒Emerging Growth Company☐If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revisedfinancial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b2 of the Exchange Act) Yes ☐No☒Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control overfinancial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflectthe correction of an error to previously issued financial statements. ☐Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by anyof the registrant’s executive officers during the relevant recovery period pursuant to §240.10D1(b). ☐The aggregate market value of voting and nonvoting common equity held by nonaffiliates of the registrant as of June 30, 2022, the last business day of theregistrant’s most recently completed second fiscal quarter, was approximately $25,551,906.Number of shares of common stock outstanding as of March 31, 2023 was 2,446,780.Documents Incorporated by Reference: None.Table of ContentsPart IItem 1.Business2Item 1A.Risk Factors18Item 1B.Unresolved Staff Comments41Item 2.Properties41Item 3.Legal Proceedings41Item 4.Mine Safety Disclosures42Part IIItem 5.Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities43Item 6.Selected Financial Data43Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations43Item 7A.Quantitative and Qualitative Disclosures about Market Risk50Item 8.Financial Statements and Supplementary DataF1Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure51Item 9A.Controls and Procedures51Item 9B.Other Information51Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.51Part IIIItem 10.Directors, Executive Officers and Corporate Governance52Item 11.Executive Compensation57Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters60Item 13.Certain Relationships and Related Transactions, and Director Independence62Item 14.Principal Accounting Fees and Services65Part IVItem 15.Exhibits, Financial Statement Schedules66Signatures69iPART IIn this Annual Report on Form 10K, unless the context requires otherwise, the terms “we,” “our,” “us,” or “the Company” refer to MySize, Inc., a Delawarecorporation, and its subsidiaries, including MySize Israel 2014 Ltd. My Size LLC, Orgad International Marketing Ltd., or Orgad, and Naiz Bespoke Technologies, S.L,or Naiz, taken as a whole.References to “U.S. dollars” and “$” are to currency of the United States of America, and references to “NIS” are to New Israeli Shekels. Unless otherwiseindicated, U.S. dollar translations of NIS amounts presented in this Annual Report on Form 10K for the year ended on December 31, 2022 are translated using therate of NIS 3.358 to $1.00.All information in this Annual Report on Form 10K relating to shares or price per share reflects the 1for25 reverse stock split effected by us on December8, 2022.CAUTIONARY NOTE ON FORWARDLOOKING STATEMENTSThis Annual Report on Form 10K contains certain forwardlooking statements within the meaning of Section 27A of the Securities Act and Section 21E ofthe Exchange Act. Any statements in Annual Report on Form 10K about our expectations, beliefs, plans, objectives, assumptions or future events or performanceare not historical facts and are forwardlooking statements. These statements are often, but not always, made through the use of words or phrases such as“believe,” “will,” “expect,” “anticipate,” “estimate,” “intend,” “plan” and “would.” For example, statements concerning financial condition, possible or assumedfuture results of operations, growth opportunities, industry ranking, plans and objectives of management, markets for our common stock and future managementand organizational structure are all forwardlooking statements. Forwardlooking statements are not guarantees of performance. They involve known and unknownrisks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to differ materially from any results, levels ofactivity, performance or achievements expressed or implied by any forwardlooking statement.Any forwardlooking statements are qualified in their entirety by reference to the risk factors discussed throughout this Annual Report on Form 10K. Someof the risks, uncertainties and assumptions that could cause actual results to differ materially from estimates or projections contained in the forwardlookingstatements include but are not limited to:●our history of losses and needs for additional capital to fund our operations and our inability to obtain additional capital on acceptable terms, or at all;●risks related to our ability to continue as a going concern;●the new and unproven nature of the measurement technology markets;●our ability to achieve customer adoption of our products;●our ability to realize the benefits of our acquisitions of Orgad and Naiz;●our dependence on assets we purchased from a related party;●our ability to enhance our brand and increase market awareness;●our ability to introduce new products and continually enhance our product offerings;●the success of our strategic relationships with third parties;●information technology system failures or breaches of our network security;●competition from competitors;●our reliance on key members of our management team;●current or future litigation;●current or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated liquidityrisk; and●the impact of the political and security situation in Israel on our business.1The foregoing list sets forth some, but not all, of the factors that could affect our ability to achieve results described in any forwardlooking statements.You should read this Annual Report on Form 10K and the documents that we reference herein and have filed as exhibits to the Annual Report on Form 10K,completely and with the understanding that our actual future results may be materially different from what we expect. You should assume that the informationappearing in this Annual Report on Form 10K is accurate as of the date hereof. Because the risk factors referred to in this Annual Report on Form 10K, could causeactual results or outcomes to differ materially from those expressed in any forwardlooking statements made by us or on our behalf, you should not place unduereliance on any forwardlooking statements.Further, any forwardlooking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forwardlookingstatement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. New factors emergefrom time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extentto which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements. We qualify all ofthe information presented in this Annual Report on Form 10K, and particularly our forwardlooking statements, by these cautionary statements.ITEM 1. BUSINESSOverviewWe are an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile phone or through MySizeID Widget: a simple questionnaire which uses a database collected over the years.MySizeID syncs the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and only presents itemsfor purchase that match their measurements to ensure a correct fit.We are positioning ourselves as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empower brand design teams, which are designed to increase endconsumer satisfaction, contributing to a sustainable world and reduce operation costs.Recent DevelopmentsOrgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,602 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.2The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz, a limitedliability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.3The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Warehouse FireOn January 2, 2023, Orgad experienced a fire at its warehouse in Israel. we are not aware of any casualties or injuries associated with the fire. We shiftedOrgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incident did not affectthe future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of this incident on the otherparties that were involved in the incident (lessor and others that leased properties near the warehouse).January 2023 FinancingOn January 10, 2023, we entered into a securities purchase agreement, or the RD Purchase Agreement, pursuant to which we agreed to sell and issue in theRD Offering an aggregate of 162,000 of our shares of common stock, or the RD Shares, and prefunded warrants, or the Prefunded Warrants, to purchase up to279,899 shares of common stock and, in a concurrent private placement, unregistered warrants to purchase up to 883,798 shares of common stock, or the RDWarrants, consisting of Series A warrants, or Series A Warrants, to purchase up to 441,899 shares of common stock and Series B warrants, or Series B Warrants, topurchase up to 441,899 shares of common stock, at an offering price of $3.055 per RD Share and associated Series A and Series B Warrants and an offering price of$3.054 per Prefunded Warrant and associated Series A and Series B Warrants.4In addition, we entered into a securities purchase agreement, or the PIPE Purchase Agreement, and together with the RD Purchase Agreement, thePurchase Agreements, pursuant to which we agreed to sell and issue in the PIPE Offering an aggregate of up to 540,098 unregistered Prefunded Warrants andunregistered warrants to purchase up to an aggregate of 1,080,196 shares of common stock, or the PIPE Warrants and together with the RD Warrants, the Warrants,consisting of Series A Warrants to purchase up to 540,098 shares of common stock and Series B Warrants to purchase up to 540,098 shares of common stock at anoffering price of $3.054 per Prefunded Warrant and associated Series A and Series B Warrants.The Prefunded Warrants are immediately exercisable at an exercise price of $0.001 per share and will not expire until exercised in full. The Warrants areimmediately exercisable upon issuance at an exercise price of $2.805 per share, subject to adjustment as set forth therein. The Series A Warrants have a term of fiveand onehalf years from the date of issuance and the Series B Warrants have a term of 28 months from the date of issuance. The Warrants may be exercised on acashless basis if there is no effective registration statement registering the shares underlying the warrants.In connection with the PIPE Purchase Agreement, we entered into a registration rights agreement, or the Registration Rights Agreement. Pursuant to theRegistration Rights Agreement, we are required to file a resale registration statement, or the Registration Statement, with the Securities and Exchange Commission, orthe SEC, to register for resale the shares issuable upon exercise of the unregistered Prefunded Warrants and the Series A and Series B Warrants, within 20 days ofthe signing date of the PIPE Purchase Agreement, or the Signing Date, and to have such Registration Statement declared effective within 60 days after the SigningDate in the event the Registration Statement is not reviewed by the SEC, or 90 days of the Signing Date in the event the Registration Statement is reviewed by theSEC. we will be obligated to pay certain liquidated damages if we fail to maintain the effectiveness of the Registration Statement.The Purchase Agreements and the Registration Rights Agreements also contain representations, warranties, indemnification and other provisionscustomary for transactions of this nature. In addition, subject to limited exceptions, the Purchase Agreements provide that for a period of one year following theclosing of the Offerings, we will not effect or enter into an agreement to effect a “variable rate transaction” as defined in the Purchase Agreements.Aggregate gross proceeds to the Company in respect of the Offerings was approximately $3.0 million, before deducting fees payable to the placement agentand other offering expenses payable by the Company.We also entered into a letter agreement, or the Engagement Agreement, with H.C. Wainwright & Co., LLC, or Wainwright, pursuant to which Wainwrightagreed to serve as the exclusive placement agent for the Company in connection with the Offerings. We paid Wainwright a cash placement fee equal to 7% of theaggregate gross proceeds raised in the Offerings, a management fee of 1% of the aggregate gross proceeds raised in the Offerings, a nonaccountable expenseallowance of $85,000 and clearing fees of $15,950. Wainwright also received placement agent warrants, or the Placement Agent Warrants, with substantially the sameterms as the Series A Warrants issued in the Offering in an amount equal to 7% of the aggregate number of Shares and Prefunded Warrants sold in the Offerings, or68,740 shares, at an exercise price of $3.8188 per share and a term expiring on January 10, 2028.Our SolutionOur cloudbased software platform provides highly accurate sizing and measurement with broad applications including the online fashion/apparel industry,logistics and courier services and home DIY. Currently, we are mainly focusing on the ecommerce fashion/apparel industry. This proprietary technology is driven byseveral patented algorithms which are able to calculate and record measurements in a variety of novel ways. Although specific functionality varies by product, webelieve that our core solutions address the need for highly accurate measurements in a variety of consumer friendly, every day uses.5We have developed three products, MySizeID for the fashion/apparel industry, BoxSize for the logistics and courier services market and SizeUp for thehome DIY market.●MySizeID enables shoppers to generate highly accurate measurements of their body to find proper fitting clothes and accessories, through the use ofour application on their mobile phone or through a simple questionnaire if the user decides not to download the application. MySizeID syncs the user’smeasurement data to a sizing chart and presents items for purchase that match their measurements to ensure a correct fit. MySizeID is available forlicense by retailers and accessable by consumers through a web page.●BoxSize enables customers to quickly and easily measure the size and volume of a parcel to accurately calculate shipping fees. It also offers shippingcompanies a variety of precise logistical data for more efficiently managing their supply chain, providing them with an accurate way to compare thephysical package with what is in the shipping manifest. BoxSize solution is available for license on both iOS and Android operating systems. BoxSizeis available on the Honeywell Marketplace and in August 2019 was approved for Honeywell’s Independent Software Vendor Program, and MySize wasgranted an independent software vendor (ISV) status on the Zebra Technologies and on DataLogic platforms.●SizeUp is a digital tape measure that allows users to measure length, width and height of a surface by moving their smartphone from point to point ofan object or space. SizeUp is a valueadd for DIY and home improvement retailers whose customers struggle to find the appropriately sized items (likeblinds or curtains) for their homes or projects due to inaccurate measurements. SizeUp also is designed to replace rulers, tape measures and othermeasuring tools used for DIY projects. SizeUp is available for consumer download on both iOS and Android operating systems.The following are some select key features of our solutions:●Integration Capability. We design our solutions to be flexible and configurable, allowing our clients to match their use of our algorithms and softwarewith their specific business processes and workflows. Our platform has been organically developed from a common code base, data structure and userinterface, providing a consistent user experience with powerful features that are easily adaptable to our clients’ needs. The MySizeID widget can beintegrated via oneline JavaScript code, or through RESTful API;●Intuitive user experience. Our intuitive, easytouse interface is based on current technology, multiple focus groups and automatically adapts to users’devices, including mobile platforms, thereby significantly increasing accessibility of our solutions;●Big Data Generation. While we supply to the user the information he/she requires, we gather certain vital information such as body measurement andpackage volume which can be used anonymously to help the retailer acquire predictive size information on stocking, operations and consumers thatmay be in between sizes. All the information is being gathered and stored on our servers where it can be used by retailers;●NonInvasive. In taking measurements using our solution, the smartphone camera is not utilized; instead, the measurements are captured by scanningthe smartphone over the consumer’s body or package, thus ensuring greater privacy.Our Growth StrategyWe aim to drive revenue primarily through penetration of the U.S. and Europe markets through a business to business to consumer (B2B2C) model in theverticals we are targeting. We are pursuing the following growth strategies:●Sign Additional Commercial Agreements with U.S. Retailers. During 2022, we expanded our commercial agreements with Levi’s, introducing NorthAmerica (U.S. and Canada) and Latin America regions, and by extension Levis’ native apps in EU and U.S. regions. We also entered into commercialagreements with Baby Fresh, Galax, Punto Blanco, GEF France, Diesel, Gaala, Superdry, Uniontex Industries, and Temperlay London among others. Weare in various stages of discussions with U.S. and foreign retailers for the deployment of our size recommendation and measurement technology with aview to entering into additional commercial agreements.6●Pursue a TwoPronged Commercialization Strategy. We are seeking to accelerate adoption of our solutions both through direct partnerships with ecommerce websites as well as through thirdparty platform websites. While we seek to directly enter into partnerships with companies maintaining ecommerce websites in the apparel, courier and DIY markets, we are also seeking to deploy our solutions on thirdparty platforms. Furthermore, with theexpansion of MySizeID through the release of our FirstLook Smart Mirror, which we are offering to brick and mortar stores to digitize the physicalstores, MySizeID is now available for online retailers utilizing the WooCoomerce, Shopify, Lightspeed, PrestaShop, Bitrix and Wix platforms and tobrick and mortar stores through GK Software POS solution while BoxSize is available on the Honeywell, Zebra Technologies and Datalogic.●Ongoing Investment in our Technology Platform. We continue to invest in building new software capabilities and extending our platform to bring thepower of accurate measurement to a broader range of applications. In particular, we seek not only to deliver size recommendations but to provide arobust, endtoend,artificial intelligence, or AIdriven platform that inspires consumer confidence and drives revenue growth by providing a superiorconsumer journey to both online and the brick and mortar stores.●Grow our database. As the usage of our measurement apps increases, our database of information including user behaviour and body measurementsgenerates valuable statistics. Such data can be used in the big data market for targeted advertising and for blind consumer data mining.●Identify and acquire synergistic businesses. In order to reduce our time to market and obtain complementary technologies, we are seeking to acquiretechnologies and businesses that are synergistic to our product offering. We recently completed an acquisition of Orgad which operates anomnichannel ecommerce platform and Naiz which provides SaaS technology solutions that solve size and fit issues for fashion ecommerce companies.●Partnerships and cooperation. In order to bring a wider solution for the retail market we are working to partner and integrate our technology withpartners that can increase our penetration and offering to the market.Market OpportunityThe global ecommerce market was $5.7 trillion in 2022, and the industry is expected to grow significantly in the coming years with no signs of slowingdown. Market specialists expect a compound annual growth rate of 27.43% from 2023 to 2028: according to data from Statista, the market is expected to reach $6.5trillion in 2023. While many sectors have found ways to increase revenue through ecommerce, ecommerce is still plagued by issues that cut into profits andnegatively impact the bottom line, such as customer returns, low consumer conversion, and associated restocking and shipping costs.Fashion/ApparelSince the onset of the COVID19 pandemic, an immense shift to digital was recorded, with 85.9% growth vs. prepandemic, according to Mastercard, andover 2 billion people worldwide who shop online, according to data from Oberlo. In November 2022, online shoppers broke records with $11.3 billion in spending onCyber Monday, driving 5.8% yearoveryear growth and making the day the biggest online shopping day of all time, according to Adobe Analytics.In 2021, fashion companies invested between 1.6% and 1.8% of their revenues in technology, according to Mckinsey, and are expected to double theinvestment by 2030 in order to keep up with digital natives and keep a competitive edge. Personalization in ecommerce and hybrid connectivity in brickandmortarretail are two key themes in the future of fashtech, according to Mckinsey’s 2022 State of Fashion Technology.7In the upcoming years, inflation is expected to impact the fashion world. As prices for goods increase, the challenge will be to inspire confidence inconsumers, via different smart digital tools. Brands will need to embrace creative digital tools and new channels to deepen customer relationships, and as Mckinseyforecasts in their State of Fashion report for 2023, they will need to execute on priorities such as sustainability and digital acceleration.The global fashion ecommerce market size is expected to grow from $744.4 billion in 2022 to $821.19 billion in 2023 at a compound annual growth rate of10.3%. In 2027, the market size is expected to grow to $1,222.32 billion, at a compound annual growth rate of 10.5%, according to BRC.Based on the importance which shoppers attribute to free shipping 50% of cart abandonment rate is due to extra shipping costs (Baymard Institute) theneed for fashion retailers to substantiate the optimal size for a customer, thus minimizing returns, has never been more crucial.As brands move online or significantly expand their online presence, we believe that developing innovative ways to connect with shoppers, both onlineand offline, has become a top priority.Shipping/ParcelAccording to Pitney Bowes, parcel revenue in 13 major countries around the world increased by 17% year over year from $420 billion in 2020 (reflecting 131billion parcels) to $491 billion in 2021 (reflecting 159 billion parcels). In the shipping/parcel industry, the dimensions of a package are critical. It is not merely themeasurement of a package or box – but rather the amount of space that the package or box will take up on a truck, airplane, or ship that will be transporting thepackage or box. Far too often, retailers use unfit packaging for their items, adding additional costs in materials and shipping fees.DIYSimilar to issues in the apparel and fashion market, big box, hardware, furniture, and DIY stores are plagued by returns due to incorrect fit andmeasurements. In an industry where precise measurement for projects is an absolute necessity, ecommerce has not grown as quickly as in other industries which webelieve is due to lack of consumer confidence in measurements at home and buying the correct item online.MySizeIDWe have released the MySizeID app for both iOS and Android which assists consumers to take highly accurate measurement of their own body in order tosize clothing in the best way possible without the need to try the clothes on before purchasing. MySizeID is designed to simplify the process of purchasing clothesonline and significantly reduce the rate of returns of poorfitting clothing. During 2022, MySizeID delivered over 23.5 million size recommendations.The application is the result of a research and development effort that combines:●anthropometric research – analyses of information pertaining to body measurements derived from a survey and the subsequent determination ofcorrelations between body parts;●body measurement algorithm research – an algorithm created by us to measure body parts; and●retailers size chart analyses – adopting a deep understanding of the size charts of retailers and the corresponding “body to garment size.”MySizeID allows consumers to create a secure, online profile of their personal measurements, which can then be utilized, with partnered online retailers, toensure that no matter the manufacturer or size chart, they will get the right fit. MySizeID operates based on the use of existing sensors in smart phones which enable,through a specific purpose application, the measurement of the body of any consumer by moving the smartphone along his or her body. The MySizeID applicationdoes not rely on user photographs or any additional hardware; all a user needs to do is scan their body with their smartphone and the application records theirmeasurements. The measurements can then be saved in our database in the cloud, enabling the user to search for clothes in various retailer websites withoutworrying about size. When a search is made, the retailer will connect to our cloud database, and then provide results based on the user’s measurements and otherparameters as he or she may have defined. This data is also saved for use when a customer enters a brickandmortar store to help serve the customer moreefficiently and to provide a better shopping experience.8Figure 1: Screenshot of MySizeID on smartphone and ecommerce websiteAs part of the integration process, we offer to the retailer five main components:●Mobile App. MySizeID comes in the form of a native app or website. Our native app can be used “as is” integrated into the retailer’s ecommercewebsite. The website users can build a body profile on the app and receive size recommendations for their profile both in the app and on a widgetintegrated with their website.9●Widget. When a consumer enters into the retailer’s website and looks for a specific item, he or she can click on the MySizeID widget which will informthe consumer of his or her recommended size, based on his or her actual measurements, as measured using the app and the item he or she is looking at.The widget has two features:AI Wizard mode allows the user to obtain size from the following parameters: gender, height, weight, belly shape, hip shape and bra size only. Thegender, height and weight questions are mandatory, while the body shape questions are optional and can be added to increase accuracy for specificapparel categories.Guest mode allows a user that does not wish to sign up to MySizeID as a user to obtain size recommendations as well.●Analytic Pixel. MySizeID analytic pixel allows retailer to track and analyze the widget usage. By adding the pixel to the retailer’s website, MySizeID BIteam can track engagement, order, and return data and provide retailers with tools to understand the advantages and benefits of MySizeID.Use your own device using MySizeID instore solution, shoppers can receive size recommendations for all store items, when shopping in the offlinestores. The shoppers can build their body profile using an easy to use 3 to 6 questions form, scan an item barcode and receive a size recommendationfor the scanned item based on their body profile and the item’s size chart.Another feature we added is the “inbetween sizing” feature. Our system can detect a user that has body dimensions that place the user inbetweenthe clothes sizes being offered and lets the user know that. A user can then choose between the two sizes according to the user’s fit preference(tight/loose/average).In addition, we have recently released our InstantApp feature which allows shoppers to generate their body measurements directly from our widget,without the need to download our mobile app. Using this technology, the shoppers can create their online profile of their personal measurements andcomplete a purchase faster and easier with minimum distractions.The body profile can be created while shoppers are viewing the page from their mobile phone, or by scanning a QR code on desktop that will open thesame page on the mobile phone.Screenshot of InstantApp widget on desktop on yumyumfashion website10●MyDash Platform. The MyDash platform is a smart backoffice system where the retailer enters all the information regarding its size charts thatcorrelates to every product in its ecommerce site, and where the retailer can access the information on its users. This system is customizable based onthe retailer’s needs. In 2021, we changed the MyDash system to increase the system’s accessibility, added walkthroughs, user guides and changed theuser interface and much more for the ease of use. We added the option to use our generic size charts, added the option upload size chart files insteadof typing the size charts values manually, added more widget styling options and changed the pairing mechanism between the size chart and theproducts to be more userfriendly.Figure 3: Screenshot of BackOffice System●FirstLook Smart Mirror. The Smart Mirror provides an interactive, mirrorlike touch display that allows brands to provide instore customers with anenhanced, online shopping experience, contactless checkout and obtains the recommended size. The MySizeIDFirstLook Smart Mirror can be placedin numerous locations throughout a retail store, including the fitting rooms (without cameras) or other hightraffic locations of the store. Highlightcapabilities of the FirstLook Smart Mirror include a 3D “Tryiton” interactive avatar experience, personalized and highly accurate sizerecommendations by MySizeID, thirdparty point of sale systems integration, styling recommendations and contactless “select and collect” at theregister feature.Illustration of MySizeID “first look” smart mirror in a fashion store11We are currently offering MySizeID technology to retailers through either a payperuse model or a monthly subscription model. In our payperusebusiness model, every time the consumer obtains a recommended size, the retailer is charged for the usage.BoxSizeBoxSize is a parcel measurement application that can provide realtime logistic data on package volumes and transportation, resulting in improvedoperational efficiency and reduced operating expenses. In addition, BoxSize allows customers to easily measure the size of their parcel with their smartphone,calculate shipping costs and arrange for a convenient pickup time for the package. BoxSize is available both on iOS and Android.In 2020 we released the “One Click” feature on BoxSize that enables the user to measure a package with just one swipe of the handheld device. Previously,measurements through BoxSize would require three separate swipes.Figure 4: Screenshot of BoxSizeOur BoxSize mobile measurement solution is available on the Honeywell Marketplace. In addition, BoxSize was approved for Honeywell’s Global VendorProgram, and is available to provide highly accurate mobile measurement solutions for thousands of Honeywell clients. We also developed a new dashboard for thecourier companies to have all the required data about each package in one place. It includes package dimensions, pictures, scan geo location and more. Thedashboard also let the courier use Webhooks, which allows him to get the information from his own system.12In 2020, we announced our partnership with Datalogic, a company focused on the automatic data capture and process automation markets. The partnershipmakes our BoxSize measurement solution available to thousands of Datalogic customers in the Transportation and Logistics vertical.Agreement with Delhivery Private Limited, IndiaWe entered into an agreement with Delhivery Private Limited, one of the largest courier pickup, delivery, and online shipping services in India. Delhivery’sreputation as a frontrunner in delivery and logistics tech makes its decision to select Boxsize a particularly strong testament to the value the solution provides.BoxSize provides Delhivery’s employees on the B2B side with critical information that will allow them to effortlessly optimize loading efficiency and add even morerealtime visibility to operations.SizeUpWe are working on additional consumer applications, including a DIY application. Our SizeUp application is a smart tape measure for the business toconsumer market which allows users to utilize their smartphone as a tape measure. The application provides measurements with an accuracy of within twocentimeters. Through the use of SizeUp, users will be able to visualize how an object or a piece of furniture will fit in an existing room in their home or office. It alsoadded Google Vision for image content analysis, object detection, and title suggestions.Currently the SizeUp app for Android and iOS is available for free for the first 30 days, after which a user will be required to register via email and pay aonetime fee of $1.99 to continue using the application. To date, revenues from downloads have been minimal.Research and DevelopmentOur research and development team are responsible for the research, algorithm, design, development, and testing of all aspects of our measurementplatform technology. We invest in these efforts to continuously improve, innovate, and add new features to our solutions.We incurred research and development expenses of approximately $1.7 million in 2022 and $4.25 million in 2021, relating to the development of itsapplications and technologies. The decrease from the corresponding period primarily resulted from share based payment in amount of $2,618,000 attributed to theshare issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021. We intend to continue to invest in our research anddevelopment capabilities to extend our platform and bring our measurement technology to a broader range of applications.13In 2022, the R&D department experienced significant success in their efforts to improve the performance of their size recommendation system. Through acombination of optimized algorithms and the incorporation of cuttingedge technologies, the team was able to achieve a threefold increase in the system’s speed.This breakthrough not only makes the system one of the fastest and most accurate on the market, but also reduced the operation costs, making it more costeffective for businesses to use. Additionally, the solution is now highly scalable, allowing it to easily adapt to the needs of businesses of any size. The R&D team isnow focused on further improving the system and exploring new applications for the technology.Sales and MarketingIn 2019, we launched a commercialization strategy that directs our sales efforts toward both sales to ecommerce players in specific vertical markets such asfashion/apparel and shipping/delivery as well as to ecommerce thirdparty platform providers. As of March 15, 2023, our products are being sold in the followingcountries: US, UK, France, Netherlands, Spain, Portugal Turkey, Germany, Israel and Italy, generating customer leads, building out a sales pipeline, and developingcustomer relationships.We believe an effective method to market our suite of products is for users to actively use and explore its capabilities. We encourage free trials of one ormore of our products in order to successfully convert those accounts to paid subscriptions.Proprietary RightsWe rely on a combination of patent, copyright, trademark and trade secret laws in the United States and other jurisdictions, as well as contractualprotections, to protect our proprietary technology.As of December 31, 2022, we owned 18 issued patents: six in Europe, four in the U.S., three in each of Russia and Japan and one in each of Canada andIsrael which expire between January 20, 2033 and August 18, 2036, and we have two additional patent applications in process. As of such date, we do not have anyregistered trademarks.We cannot provide any assurance that our proprietary rights with respect to our products will be viable or have value in the future since the validity,enforceability and type of protection of proprietary rights in softwarerelated industries are uncertain and still evolving.Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products or to obtain and use informationthat we regard as proprietary. Policing unauthorized use of our products is difficult, and while we are unable to determine the extent to which piracy of our softwareproducts exists, software piracy can be expected to be a persistent problem. In addition, the laws of some foreign countries do not protect proprietary rights to asgreat an extent as do the laws of the United States, and effective copyright, trademark, trade secret and patent protection may not be available in those jurisdictions.Our means of protecting our proprietary rights may not be adequate to protect us from the infringement or misappropriation of such rights by others.Further, in recent years, there has been significant litigation in the United States involving patents and other intellectual property rights, particularly in thesoftware and Internetrelated industries. We can become subject to intellectual property infringement claims as the number of our competitors grows and ourproducts and services overlap with competitive offerings. These claims, even if not meritorious, could be expensive to defend and could divert management’sattention from operating our business. If we become liable to third parties for infringing their intellectual property rights, we could be required to pay a substantialaward of damages and to develop noninfringing technology, obtain a license or cease selling the products that contain the infringing intellectual property. We maybe unable to develop noninfringing technology or obtain a license on commercially reasonable terms, if at all.14Government RegulationWe are subject to a number foreign and domestic laws and regulations that involve matters central to our business. These laws and regulations mayinvolve privacy, data protection, intellectual property, or other subjects. Many of the laws and regulations to which we are subject are still evolving and being testedin courts and could be interpreted in ways that could harm our business. In addition, the application and interpretation of these laws and regulations often areuncertain, particularly in the new and rapidly evolving industry in which we operate. Because global laws and regulations have continued to develop and evolverapidly, it is possible that we, our products, or our platform may not be, or may not have been, compliant with each such applicable law or regulation.In particular, we are subject to a variety of federal, state and international laws and regulations governing the processing of personal data. Many U.S. stateshave passed laws requiring notification to data subjects when there is a security breach of personally identifiable data. There are also a number of legislativeproposals pending before the U.S. Congress, various state legislative bodies and foreign governments concerning data protection. In addition, data protection lawsin Europe and other jurisdictions outside the United States can be more restrictive than those within the United States, and the interpretation and application ofthese laws are still uncertain and in flux.For example, the General Data Protection Regulation, or GDPR, which took effect on May 25, 2018, enhances data protection obligations for entities thatprocess personal data about individuals, including obligations to cooperate with European data protection authorities, implement security measures and keeprecords of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to the greater of €20 million or 4% of global annual revenue. Inaddition, the California Consumer Privacy Act of 2018, or CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and requiredeletion of their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used.The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further,failure to comply with the Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may exposeus to administrative fines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the currentenforcement measures and sanctions. Given the breadth and depth of changes in data protection obligations, meeting the requirements of GDPR and otherapplicable laws and regulations has required significant time and resources, including a review of our technology and systems currently in use against therequirements of GDPR and other applicable laws and regulations. We have taken various steps to prepare for complying with GDPR and other applicable laws andregulations however there can be no assurance that these steps are sufficient to assure compliance. Further, additional EU laws and regulations (and member states’implementations thereof) further govern the protection of individuals and of electronic communications. If our efforts to comply with GDPR or other applicable lawsand regulations are not successful, we may be subject to penalties and fines that would adversely impact our business and results of operations, and our ability touse personal data of individuals could be significantly impaired.CompetitionWe operate in a highly competitive industry that is characterized by constant change and innovation. Changes in the applications and the programinglanguages used to develop applications, devices, operating systems, and technology landscape result in evolving customer requirements. Our competitors includeTrue Fit, Fit analytics and 3DLook.The principal competitive factors in our market include the following:●High Accuracy Size Recommendations: the highest accuracy and the lowest margin of error by combining patented technology including AI and ML,size chart or spec data, and MySizeID property body data measurement;●Integration○Fast 1 week integration including size chart size chart review and product mapping○Easy 1 line of “all included” script implementation●Technical Advantages○Very small library that weighs ±50kb (minimum widget loading time on product page)○UltraFast loading and size recommendation presenting○Restful API option (API integration with any website or app)15●Optimizations○Adjustments of size charts based on performance○Widget usage analysis by FashTech and BI teams○Automatic pairing of size charts with products/collections●User Experience○Easy to use interface (1015 seconds to receive size recommendations)○Option to add/deduct questions to/from widget wizards○Users automatically receive size recommendations on all products after initial sign up●Product and platform features, architecture, reliability, privacy and security, performance, effectiveness, and supported environments;●Product extensibility and ability to integrate with other technology infrastructures;●Digital operations expertise;●Ease of use of products and platform capabilities;●Total cost of ownership;●Adherence to industry standards and certifications;●Strength of sales and marketing efforts;●Brand awareness and reputation; and●Focus on customer successWe believe we generally compete favorably with our competitors on the basis of these factors. We expect competition to increase as other established andemerging companies enter our markets, as customer requirements evolve, and as new products and technologies are introduced. We expect this to be particularlytrue as we offer a smartphonebased offering that does not need to utilize the smartphone’s camera, and our competitors may also seek to repurpose their existingofferings to provide similar solutions. Many of our competitors have substantially greater financial, technical, and other resources, greater name recognition, largersales and marketing budgets, broader distribution, and larger and more mature intellectual property portfolios.Human Capital ManagementAs of March 31, 2023, we had a total of 35 employees, of which 30 were fulltime employees, including 9 in sales and marketing, 12 in technology anddevelopment and 9 in administration and finance.None of our employees are represented by a collective bargaining agreement, nor have we experienced any work stoppage. We consider our relationshipwith our employees to be good. Our future success depends on our continuing ability to attract and retain highly qualified engineers, sales and marketing, accountmanagement, and senior management personnel.We also believe we have built a strong sales team focused on expanding into new markets through the acquisition of Naiz and our current team.We believe that our future success will depend, in part, on our continued ability to attract, hire and retain qualified personnel. In particular, we depend onthe skills, experience and performance of our senior management and research personnel. We compete for qualified personnel with other hitech companies, as wellas universities and nonprofit research institutions.16We provide competitive compensation and benefits programs to help meet the needs of our employees. In addition to salaries, these programs (which varyby country/region and employment classification) include incentive compensation plan, pension, and insurance benefits, paid time off, , among others. We also usetargeted equitybased grants with vesting conditions to facilitate retention of personnel, particularly for our key employees.The success of our business is fundamentally connected to the wellbeing of our people. Accordingly, we implemented an hybrid work policy in which theemployees can work from home twice a week.We consider our employees to be a key factor to our success and we are focused on attracting and retaining the best employees at all levels of ourbusiness. Inclusion and diversity is a strategic, business priority. We employ people based on relevant qualifications, demonstrated skills, performance and otherjobrelated factors. We do not tolerate unlawful discrimination related to employment, and strive to ensure that employment decisions related to recruitment,selection, evaluation, compensation, and development, among others, are not influenced by race, color, religion, gender, age, ethnic origin, nationality, sexualorientation, marital status, or disability. Continuous monitoring to ensure pay equity has been a focus in 2022. We have continued to improve gender balance in 2022with a focus on increasing the representation of women hired as new college graduates. We are committed to creating a trusting environment where all ideas arewelcomed and employees feel comfortable and empowered to draw on their unique experiences and backgrounds.We consider our relations with our employees to be good.Company InformationOur principal executive offices are located at HaYarden 4 St., POB 1026, Airport City, Israel 7010000, and our telephone number is +97236009030. Ourwebsite address is www.mysizeid.com. Any information contained on, or that can be accessed through, our website is not incorporated by reference into, nor is it inany way a part of, this Annual Report on Form 10K.We use our website (www.mysizeid.com) as a channel of distribution of Company information. The information we post through this channel may bedeemed material. Accordingly, investors should monitor our website, in addition to following our press releases, SEC filings and public conference calls andwebcasts. The contents of our website are not, however, a part of this Annual Report on Form 10K.Corporate HistoryWe were incorporated in the State of Delaware on September 20, 1999 under the name Topspin Medical, Inc. In December 2013, we changed our name toKnowledgetree Ventures Inc. Subsequently, in February 2014, we changed our name to MySize, Inc. In 2020, we created a subsidiary in the Russian Federation, MySize LLC.From inception through 2012, we were engaged in research and development of a medical magnetic resonance imaging, or MRI, technology forinterventional cardiology and in the development of MRI technology for use in the diagnosis and treatment of prostate cancer. In January 2012, we acquiredMetamorefix Ltd., or Metamorefix. Metamorefix was incorporated in 2007, and was engaged in the development of innovative solutions for the rehabilitation oftissues, particularly skin tissues. By the end of 2012, we ceased operations and in January 2013, we sold our entire ownership interest in Metamorefix.In September 2013, Ronen Luzon, our Chief Executive Officer, acquired control of the Company from Asher Shmuelevitch, according to which Mr. Luzonpurchased 70,238 shares of common stock from Mr. Shmuelevitch, which shares represented approximately 40% of the issued and outstanding capital stock of theCompany at such time, thus becoming a controlling shareholder of the Company. In connection with the acquisition, Mr. Luzon reached a settlement with our thencreditors pursuant to which the main creditor, Mr. Shmuelevitch, was paid a total sum of approximately $140,000 in consideration for a full and final waiver of any andall his claims that he may have relating to any monetary indebtedness of the Company to the creditors.17In February 2014, My Size Israel, our wholly owned subsidiary, entered into a Purchase Agreement, or the Purchase Agreement, with Shoshana Zigdon,who at the time was a beneficial owner of more than 20% of our outstanding shares, with respect to the acquisition by us of certain rights related to the collection ofdata for measurement purposes including rights in the venture, the method and a patent application that had been filed by the Seller (PCT/IL2013/050056), or theAssets. In consideration for the sale of the Assets, we agreed to pay to Ms. Zigdon, 18% of our operating profit, directly or indirectly connected with the Assetstogether with valueadded tax in accordance with the law for a period of seven years from the end of the development period of the aforementioned venture. Inaddition to the foregoing, the Purchase Agreement provided that all developments, improvements, knowledge and knowhow developed and/or accumulated by usafter the execution of the Purchase Agreement will be owned by us. Further, Ms. Zigdon agreed not to compete, directly or indirectly, with us in any matter relatingto the Assets for a period of seven years from the end of the development period of the venture.On May 26, 2021, we, My Size Israel, and Ms. Zigdon entered into an Amendment to Purchase Agreement, or the Amendment, which made certainamendments to the Purchase Agreement. Pursuant to the Amendment, Ms. Zigdon agreed to irrevocably waive (i) the right to repurchase certain assets related tothe collection of data for measurement purposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which our business issubstantially dependent, or the Assets, and (ii) all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My SizeIsrael under the Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation, reward orany rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights, or the Waiver. Inconsideration of the Waiver, we issued 100,000 shares of common stock to Ms. Zigdon.In September 2005, we commenced trading on the Tel Aviv Stock Exchange, or TASE. Between 2007 and 2012 we reported as a public company with theSEC. In August 2012, we suspended our reporting obligations. In mid2015 we resumed reporting as a public company. On July 25, 2016, our common stock beganpublicly trading on the Nasdaq Capital Market under the symbol “MYSZ”.ITEM 1A. RISK FACTORSAn investment in our common stock involves a high degree of risk. You should carefully consider the following risk factors and the other information inthis Annual Report on Form 10K before investing in our common stock. Our business and results of operations could be seriously harmed by any of the followingrisks. The risks set out below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterialalso may materially adversely affect our business, financial condition and/or operating results. If any of the following events occur, our business, financial conditionand results of operations could be materially adversely affected. In such case, the value and trading price of our common stock could decline, and you may lose allor part of your investment.Summary Risk FactorsThe principal factors and uncertainties that make investing in our ordinary shares risky, include, among others:Risks Related to Our Financial Position and Capital Requirements●We have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.●Our limited operating history makes it difficult to evaluate our business and prospects.●We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive and maycause the market price of our common stock to decline.●The report of our independent registered public accounting firm contains an explanatory paragraph regarding substantial doubt about our ability tocontinue as a going concern.Risks Related to Our Company and Our Business●The market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and online thirdparty resellers adopting our flagship product, MySizeID.18●Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broader marketacceptance of our products.●We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which may makeit difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.●We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increase ourcapital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.●If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations and financialcondition may be adversely affected.●If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operations andfinancial condition could be adversely affected.●The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile device applications andcustom development services.●Our growth depends, in part, on the success of our strategic relationships with third parties.●Changes in economic conditions could materially affect our business, financial condition and results of operations.●We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.●We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significant interruptionin our network or hosting and cloud services could adversely impact our operations and harm our business.●Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.●We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.●A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.●Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, data protectionand information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive and confidentialinformation. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm our business,results of operations and financial condition.●We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect our business.●We may face intense competition and expect competition to increase in the future, which could limit us in developing a customer base and generatingrevenue.●Our business operations and future development could be significantly disrupted if we lose key members of our management team.19●If we are able to expand our operations, we may be unable to successfully manage our future growth.Risks Related to Our Operations in Israel and Russia●Our headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.●Russia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.Risks Related to Our Common Stock●A more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.●Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions and adversedevelopments with respect to financial institutions and associated liquidity risk;●Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.●Our securities are traded on more than one market which may result in price variations.●We are a former “shell company” and as such are subject to certain limitations not generally applicable to other public companies.Risks Related to Our Financial Position and Capital RequirementsWe have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.We realized a net loss of approximately $8.3 million and $10.5 million for the years ended December 31, 2022 and 2021 and had an accumulated deficit of$53.5 million as at December 31, 2022. Because of the numerous risks and uncertainties associated with the development and commercialization of our products andbusiness, we are unable to predict the extent of any future losses or when we will become profitable, if at all. Expected future operating losses will have an adverseeffect on our cash resources, shareholders’ equity and working capital. Our failure to become and remain profitable could depress the value of our stock and impairour ability to raise capital, expand our business, maintain our development efforts, or continue our operations. A decline in our value could also cause you to lose allor part of your investment in us.Our limited operating history makes it difficult to evaluate our business and prospects.We have only been developing our measurement technology since 2014. Since then, our operating history has been primarily limited to research anddevelopment, pilot studies, raising capital, and more recently acquisitions and sales and marketing efforts. Therefore, it may be difficult to evaluate our business andprospects. We have not yet demonstrated an ability to commercialize our products. Consequently, any predictions about our future performance may not beaccurate, and you may not be able to fully assess our ability to complete development and/or commercialize our products, and any future products.We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive andmay cause the market price of our common stock to decline.Based on our projected cash flows and the cash balances as of the date of this Annual Report on Form 10K, our existing cash is insufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. In order to meet ourbusiness objectives in the future, we will need to raise additional capital, which may not be available on reasonable terms or at all. Additional capital would be usedto accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;20●respond to competitive pressure;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, and a number of otherfactors, many of which are outside our control, and on our financial performance. Accordingly, we cannot assure you that we will be able to successfully raiseadditional capital at all or on terms that are acceptable to us. If we cannot raise additional capital when needed, it may have a material adverse effect on our business,results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.Management has concluded that there is substantial doubt about our ability to continue as a going concern which could prevent us from obtainingnew financing on reasonable terms or at all.We have incurred significant losses and negative cash flows from operations and have an accumulated deficit that raises substantial doubt about its abilityto continue as a going concern. Our audited consolidated financial statements for the year ended December 31, 2022 were prepared under the assumption that wewould continue our operations as a going concern. Our independent registered public accounting firm has included a “going concern” explanatory paragraph in itsreport on our financial statements for the year ended December 31, 2022. If we are unable to improve our liquidity position, by, among other things, raising capitalthrough public or private offerings or reducing our expenses, we may exhaust our cash resources and will be unable to continue our operations. If we cannotcontinue as a viable entity, our shareholders would likely lose most or all of their investment in us.Risks Related to Our Company and Our BusinessThe market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and onlinethirdparty resellers adopting our flagship product, MySizeID.The market for our measurement technology is relatively new and unproven and is subject to a number of risks and uncertainties. We believe that ourfuture success will depend in large part on market adoption of our flagship product, MySizeID, by U.S. retailers and online thirdparty resellers. In order to grow ourbusiness, we intend to focus on educating retailers and resellers and other potential customers about the benefits of our measurement technology, expanding thefunctionality of our products and bringing new products to market to increase market acceptance and use of our technology. Our ability to develop and expand themarket that our products address depends upon a number of factors, including the cost savings, performance and perceived value associated with such products.The market for our products could fail to develop or there could be a reduction in interest or demand for our products as a result of a lack of consumer acceptance,technological challenges, competing products and services, weakening economic conditions and other causes. We may never successfully commercialize ourproducts and if our products fail to achieve market acceptance, this would have a material adverse effect on our business, results of operations and financialcondition.21Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broadermarket acceptance of our products.Our ability to achieve customer adoption, especially among U.S. retailers will depend, in part, on our ability to effectively organize, focus and train our salesand marketing personnel. We have limited experience selling to U.S. retailers and only recently established a U.S. sales force. We believe that there is significantcompetition for experienced sales professionals with the skills and industry knowledge that we require. Our ability to achieve significant revenue growth in thefuture will depend, in part, on our ability to recruit, train and retain a sufficient number of experienced sales professionals, particularly those with experience sellingto U.S. retailers. In addition, even if we are successful in hiring qualified sales personnel, new hires require significant training and experience before they achievefull productivity, particularly for sales efforts targeted at U.S. retailers and new markets. Because we only recently started sales efforts, we cannot predict whether, orto what extent, our sales efforts will be successful.We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which maymake it difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.In this market segment, the decision to adopt our products may require the approval of multiple technical and business decision makers, including security,compliance, procurement, operations and IT. In addition, while U.S. retailers may be willing to deploy our products on a limited basis, before they will commit todeploying our products at scale, they often require extensive education about our products and significant customer support time, engage in protracted pricingnegotiations and seek to secure readily available development resources. As a result, it is difficult to predict when we will obtain new customers and begingenerating revenue from these customers. As part of our sales cycle, we may incur significant expenses before executing a definitive agreement with a prospectivecustomer and before we are able to generate any revenue from such agreement. We have no assurance that the substantial time and money spent on our salesefforts will generate significant revenue. If conditions in the marketplace generally or with a specific prospective customer change negatively, it is possible that nodefinitive agreement will be executed, and we will be unable to recover any of these expenses. If we are not successful in targeting, supporting and streamlining oursales processes and if revenue expected to be generated from a prospective customer is not realized in the time period expected or not realized at all, our ability togrow our business, and our operating results and financial condition may be adversely affected. If our sales cycles lengthen, our future revenue could be lower thanexpected, which would have an adverse impact on our operating results and could cause our stock price to decline.22We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increaseour capital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.In order to reduce time to market and obtain complementary technologies, we are seeking to acquire technologies and businesses that are synergistic to ourproduct offering. For example, we recently acquired Orgad which operates an omnichannel ecommerce platform and Naiz which provides SaaS technology solutionsthat solve size and fit issues for fashion ecommerce companies. We evaluate from time to time various acquisitions and collaborations, including licensing oracquiring complementary technologies, intellectual property rights, or businesses. The process for acquiring a company may take from several months up to a yearand costs can vary greatly. We may also compete with others to acquire companies, and such competition may result in decreased availability of, or an increase inprice for, suitable acquisition candidates. In addition, we may not be able to consummate acquisitions or investments that we have identified as crucial to theimplementation of our strategy for other commercial or economic reasons. As a result, it may be more difficult for us to identify suitable acquisition or investmenttargets or to consummate acquisitions or investments on acceptable terms or at all. If we are not able to execute on any acquisition, we may not be able to achieve afuture growth strategy and may lose market share.In addition, the acquisition of Orgad, Naiz and any potential future acquisition, joint venture or collaboration may entail numerous potential risks, including:●increased operating expenses and cash requirements;●the assumption of additional indebtedness or contingent liabilities;●assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel;●the diversion of our management’s attention from our existing programs and initiatives in pursuing such a strategic merger or acquisition;●retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships;●risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing technologies; and●our inability to generate revenue from acquired technologies or products sufficient to meet our objectives in undertaking the acquisition or even to offsetthe associated acquisition and maintenance costs.All of the foregoing risks may be magnified as the cost, size or complexity of an acquisition or acquired company increases, or where the acquiredcompany’s products, market or business are materially different from ours, or where more than one integration is occurring simultaneously or within a concentratedperiod of time. We may not be able to obtain the necessary regulatory approvals, including those of antitrust authorities and foreign investment authorities, incountries where we seek to consummate acquisitions or make investments. For those and other reasons, we may ultimately fail to consummate an acquisition, even ifwe announce the intended acquisition.In addition, we may require significant financing to complete an acquisition or investment, whether through bank loans, raising of equity or debt orotherwise. We cannot assure you that such financing options will be available to us on reasonable terms, or at all. If we are not able to obtain such necessaryfinancing, it could have an impact on our ability to consummate a substantial acquisition or investment and execute a future growth strategy. Alternatively, we mayissue a significant number of shares as consideration for an acquisition, which would have a dilutive effect on our existing shareholders. For example, in partialconsideration for the acquisition of Orgad, we agreed to issue up to 111,602 shares of our common stock and in the Naiz acquisition we issued 240,000 shares of ourcommon stock. Furthermore, if we undertake acquisitions, we may incur large onetime expenses and acquire intangible assets that could result in significant futureamortization expense.23If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations andfinancial condition may be adversely affected.We believe that enhancing the “MySize” brand identity and increasing market awareness of our company and products, particularly among U.S. retailers, iscritical to achieving widespread acceptance of our products. Our ability to successfully develop new retailers may be adversely affected by a lack of awareness oracceptance of our brand. To the extent that we are unable to foster name recognition and affinity for our brand, our growth may be significantly delayed or impaired.The successful promotion of our brand will depend largely on our continued marketing efforts, market adoption of our products, and our ability to successfullydifferentiate our products from competing products and services. Our brand promotion may not be successful or result in revenue generation. Any incident thaterodes consumer affinity for our brand could significantly reduce our brand value and damage our business. If consumers perceive or experience a reduction inquality, or in any way believe we fail to deliver a consistently positive experience, our brand value could suffer and our business may be adversely affected.In particular, adverse weather conditions can impact guest traffic at our retailers, and, in more severe cases, cause temporary retail closures, sometimes forprolonged periods. Our business is subject to seasonal fluctuations, with retail sales typically higher during certain months, such as December. Adverse weatherconditions during our most favorable months or periods may exacerbate the effect of adverse weather on consumer traffic and may cause fluctuations in ouroperating results from quartertoquarter within a fiscal year.If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operationsand financial condition could be adversely affected.Our ability to attract new customers depends in part on our ability to enhance and improve our existing products, increase adoption and usage of ourproducts and introduce new products. The success of any enhancements or new products depends on several factors, including timely completion, adequatequality testing, actual performance quality, and overall market acceptance. Enhancements and new products that we develop may not be introduced in a timely orcosteffective manner, may contain errors or defects, may have interoperability difficulties with our platform or other products or may not achieve the broad marketacceptance necessary to generate significant revenue. Furthermore, our ability to increase the usage of our products depends, in part, on the development of newuse cases for our products and may be outside of our control. If we are unable to successfully enhance our existing products to meet evolving customerrequirements, increase adoption and usage of our products, develop new products, then our business, results of operations and financial condition would beadversely affected.The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile Apps and customdevelopment services.We must continue to enhance and improve the performance, functionality and reliability of our products. The mobile technology industry is characterizedby rapid technological change, changes in user requirements and preferences, frequent new product and services introductions embodying new technologies andthe emergence of new industry standards and practices that could render our products obsolete. Our success will depend, in part, on our ability to both internallydevelop and enhance our existing products, develop new products that address the increasingly sophisticated and varied needs of our customers, and respond totechnological advances and emerging industry standards and practices on a costeffective and timely basis. The development of our technology involvessignificant technical and business risks. We may fail to use new technologies effectively or to adapt our proprietary technology and systems to customerrequirements or emerging industry standards. If we are unable to adapt to changing market conditions, customer requirements or emerging industry standards, wemay not be able to increase our revenue and expand our business.Changes in economic conditions could materially affect our business, financial condition and results of operations.Because our primary target customers include U.S. retailers , we, together with the rest of the fashion/apparel industry, will depend upon consumerdiscretionary spending. Increases in unemployment rates, reductions in home values, increases in home foreclosures, investment losses, personal bankruptcies andreductions in access to credit and reduced consumer confidence, may impact consumers’ ability and willingness to spend discretionary dollars. In addition, volatileeconomic conditions may repress consumer confidence and discretionary spending. Any of the foregoing may have a material adverse effect on our business,financial condition and results of operations.24Our growth depends, in part, on the success of our strategic relationships with third parties.To grow our business, we anticipate that we will continue to depend on relationships with third parties, such as our customers and thirdparty platforms.Identifying partners, and negotiating and documenting relationships with them, requires significant time and resources. If we are unsuccessful in establishing ormaintaining our relationships with third parties, our ability to compete in the marketplace or to grow our revenue could be impaired, and our results of operationsmay suffer. Even if we are successful, we cannot assure you that these relationships will result in increased customer usage of our products or increased revenue.We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.We currently utilize, and plan on continuing to utilize over the current fiscal year, thirdparty networking providers and distribution through companiesincluding, but not limited to, Apple and Google as well as Shopify, WooCommerce and, Datalogic, Honeywell and Zebra to distribute our technologies. If disruptionsor capacity constraints occur, we may have no means of replacing these services, on a timely basis or at all. This could cause a material adverse condition for ouroperations and financial earnings.We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significantinterruption in our network or hosting and cloud services could adversely impact our operations and harm our business.Our technology infrastructure is critical to the performance of our products and customer satisfaction. Our products run on a complex distributed system,or what is commonly known as cloud computing. We own, operate and maintain elements of this system, but significant elements of this system are operated bythirdparties that we do not control and which would require significant time to replace. We expect this dependence on thirdparties to continue. In particular, asignificant portion, if not almost all data storage, data processing and other computing services and systems is hosted by cloud computing providers. Anydisruptions, outages and other performance problems relating to such services, including infrastructure changes, human or software errors and capacity constraints,could adversely impact our business, financial condition or results of operations.Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.We update our products on a frequent basis. Despite efforts to test our updates, errors, failures or bugs may not be found in our products until after theyare deployed to a customer. We have discovered and expect we will continue to discover errors, failures and bugs in our products and anticipate that certain of theseerrors, failures and bugs will only be discovered and remediated after deployment. Real or perceived errors, failures or bugs in our platform could result in negativepublicity, government inquiries, loss of or delay in market acceptance of our products, loss of competitive position, or claims by customers for losses sustained bythem. In such an event, we may be required, or may choose, for customer relations or other reasons, to expend additional resources in order to help correct theproblem.We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.In connection with the operation of our business, we store, process and transmit data, including personal and payment information, about our employeesand customers, a portion of which is confidential and/or personally sensitive. Unauthorized disclosure or loss of sensitive or confidential data may occur through avariety of methods. These include, but are not limited to, systems failure, employee negligence, fraud or misappropriation, or unauthorized access to or through ourinformation systems, whether by our employees or third parties, including a cyberattack by computer programmers, hackers, members of organized crime and/orstatesponsored organizations, who may develop and deploy viruses, worms or other malicious software programs. Such disclosure, loss or breach could harm ourreputation and subject us to government sanctions and liability under our contracts and laws that protect sensitive or personal data and confidential information,resulting in increased costs or loss of revenues. It is possible that security controls over sensitive or confidential data and other practices we and our thirdpartyvendors follow may not prevent the improper access to, disclosure of, or loss of such information. The potential risk of security breaches and cyberattacks mayincrease as we introduce new products and offerings. Further, data privacy is subject to frequently changing rules and regulations, which sometimes conflict amongthe various jurisdictions in which we provide services. Any failure or perceived failure to successfully manage the collection, use, disclosure, or security of personalinformation or other privacy related matters, or any failure to comply with changing regulatory requirements in this area, could result in legal liability or impairment toour reputation in the marketplace.25A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.Information security risks have generally increased in recent years, in part because of the proliferation of new technologies and the use of the Internet, andthe increased sophistication and activity of organized crime, hackers, terrorists, activists, cybercriminals and other external parties, some of which may be linked toterrorist organizations or hostile foreign governments. For example, a cybercriminal could use cybersecurity threats to gain access to sensitive information aboutanother company or to alter or disrupt news or information to be distributed by PR Newswire. Cybersecurity attacks are becoming more sophisticated and includemalicious software, ransomware, attempts to gain unauthorized access to data and other electronic security breaches that could lead to disruptions in criticalsystems, unauthorized release of confidential or otherwise protected information and corruption of data, substantially damaging our reputation. Any person whocircumvents our security measures could steal proprietary or confidential customer information or cause interruptions in our operations. We incur significant coststo protect against security breaches, and may incur significant additional costs to alleviate problems caused by any breaches. Our failure to prevent securitybreaches, or wellpublicized security breaches affecting the Internet in general, could significantly harm our reputation and business and financial results.Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, dataprotection and information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive andconfidential information. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm ourbusiness, results of operations and financial condition.We and our customers that use our products may be subject to privacy and data protectionrelated laws and regulations that impose obligations inconnection with the collection, processing and use of personal data, financial data, health or other similar data. The U.S. federal and various state and foreigngovernments have adopted or proposed limitations on, or requirements regarding, the collection, distribution, use, security and storage of personally identifiableinformation of individuals. The U.S. Federal Trade Commission and numerous state attorneys general are applying federal and state consumer protection laws toimpose standards on the online collection, use and dissemination of data, and to the security measures applied to such data.Similarly, many foreign countries and governmental bodies, including the EU member states, have laws and regulations concerning the collection and useof personally identifiable information obtained from individuals located in the EU or by businesses operating within their jurisdiction, which are often morerestrictive than those in the United States. Laws and regulations in these jurisdictions apply broadly to the collection, use, storage, disclosure and security ofpersonally identifiable information that identifies or may be used to identify an individual, such as names, telephone numbers, email addresses and, in somejurisdictions, IP addresses and other online identifiers.For example, the GDPR, which took full effect on May 25, 2018. The GDPR enhances data protection obligations for businesses and requires serviceproviders (data processors) processing personal data on behalf of customers to cooperate with European data protection authorities, implement security measuresand keep records of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to or greater of €20 million or 4% of global annualrevenues. In addition, the CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and require deletion of their personalinformation, opt out of certain personal information sharing, and receive detailed information about how their personal information is used. The CCPA provides forcivil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further, failure to comply withthe Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may expose us to administrativefines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the current enforcementmeasures and sanctions. There are also additional laws and regulations in additional jurisdictions around the world which govern the protection of consumers andof electronic communications. If our efforts to comply with GDPR, CCPA or other applicable laws and regulations are not successful, we may be subject to penaltiesand fines that would adversely impact our business and results of operations, and our ability to conduct business could be significantly impaired.26Additionally, although we endeavor to have our products comply with applicable laws and regulations, these and other obligations may be modified, theymay be interpreted and applied in an inconsistent manner from one jurisdiction to another, and they may conflict with one another, other regulatory requirements,contractual commitments or our internal practices. We also may be bound by contractual obligations relating to our collection, use and disclosure of personal,financial and other data or may find it necessary or desirable to join industry or other selfregulatory bodies or other privacy or data protectionrelatedorganizations that require compliance with their rules pertaining to privacy and data protection.We expect that there will continue to be new proposed laws, rules of selfregulatory bodies, regulations and industry standards concerning privacy, dataprotection and information security in the United States, the European Union and other jurisdictions, and we cannot yet determine the impact such future laws,rules, regulations and standards may have on our business. Moreover, existing U.S. federal and various state and foreign privacy and data protectionrelated lawsand regulations are evolving and subject to potentially differing interpretations, and various legislative and regulatory bodies may expand current or enact new lawsand regulations regarding privacy and data protectionrelated matters. Because global laws, regulations and industry standards concerning privacy and datasecurity have continued to develop and evolve rapidly, it is possible that we or our products or platform may not be, or may not have been, compliant with eachsuch applicable law, regulation and industry standard and compliance with such new laws or to changes to existing laws may impact our business and practices,require us to expend significant resources to adapt to these changes, or to stop offering our products in certain countries. These developments could adverselyaffect our business, results of operations and financial condition.We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect ourbusiness.Our ability to implement our business plan successfully depends in part on our ability to build brand recognition using our trademarks, service marks andother proprietary intellectual property, including our names and logos. We currently have no registered trademarks. While we plan to register a number of ourtrademarks; however, no assurance can be given that our trademark applications will be approved. As of December 31, 2022, we own 18 issued patents: six in Europe,four in the U.S., three in each of Russia and Japan and one in each of Canada and Israel which expire between January 20, 2033 and August 18, 2036, and we havetwo additional patent applications in process. As of such date, we do not have any registered trademarks., No assurance can be given that our patent applicationswhich are in process will be approved. If our patent applications are not approved, our ability to expand or develop our business may be negatively affected.Third parties may also oppose our trademark or patent applications, or otherwise challenge our use of the trademarks or patents. In the event that ourtrademarks or patents are successfully challenged, we could be forced to rebrand our goods and services or redesign our technology, which could result in loss ofbrand recognition, and could require us to devote resources to advertising and marketing new brands and products.If our efforts to register, maintain and protect our intellectual property are inadequate, or if any thirdparty misappropriates, dilutes or infringes on ourintellectual property, the value of our brands may be harmed, which could have a material adverse effect on our business and might prevent our brands fromachieving or maintaining market acceptance. We may also face the risk of claims that we have infringed third parties’ intellectual property rights. If third parties claimthat we infringe upon their intellectual property rights, our operating profits could be adversely affected. Any claims of intellectual property infringement, eventhose without merit, could be expensive and time consuming to defend, require us to rebrand our services, if feasible, divert management’s attention and resourcesor require us to enter into royalty or licensing agreements in order to obtain the right to use a thirdparty’s intellectual property.Any royalty or licensing agreements, if required, may not be available to us on acceptable terms or at all. A successful claim of infringement against uscould result in our being required to pay significant damages, enter into costly license or royalty agreements, or stop the sale of certain products or services, any ofwhich could have a negative impact on our operating profits and harm our future prospects.We may face intense competition and expect competition to increase in the future, which could prohibit us from developing a customer base andgenerating revenue.We face significant competition in every aspect of our business. Our competitors include True Fit, Virtusize, EasyMeasure, AR MeasureKit, Smart Measureand 3DLook. These companies may already have an established market in our industry. Most of these companies have significantly greater financial and otherresources than us and have been developing their products and services longer than we have been developing ours.27In addition, some of our larger competitors have substantially broader product offerings and leverage their relationships based on other products orincorporate functionality into existing products to gain business in a manner that discourages potential customers from purchasing our products. Potentialcustomers may also prefer to purchase from their existing solution providers rather than a new solution provider regardless of product performance or features.These larger competitors often have broader product lines and market focus and will therefore not be as susceptible to downturns in a particular market. Conditionsin our market could change rapidly and significantly as a result of technological advancements, partnering by our competitors or continuing market consolidation.New startup companies that innovate and large competitors that are making significant investments in research and development may invent similar or superiorproducts and technologies that compete with our products. In addition, some of our competitors may enter into new alliances with each other or may establish orstrengthen cooperative relationships. Any such consolidation, acquisition, alliance or cooperative relationship could lead to pricing pressure and our loss of anyfuture market share and could result in a competitor with greater financial, technical, marketing, service and other resources, all of which could harm our ability tocompete. Furthermore, organizations may be more willing to incrementally add solutions to their existing infrastructure from competitors than to replace their existinginfrastructure with our products. Any failure to meet and address these factors could harm our business, results of operations and financial condition.Our business operations and future development could be significantly disrupted if we lose key members of our management team.The success of our business continues to depend to a significant degree upon the continued contributions of our senior officers and key employees, bothindividually and as a group. Our future performance will be substantially dependent in particular on our ability to retain and motivate Ronen Luzon, our ChiefExecutive Officer, and certain of our other senior executive officers. The loss of the services of our Chief Executive Officer, senior officers or other key employeescould have a material adverse effect on our business and plans for future development. We have no reason to believe that we will lose the services of any of theseindividuals in the foreseeable future; however, we currently have no effective replacement for any of these individuals due to their experience, reputation in theindustry and special role in our operations. We also do not maintain any key man life insurance policies for any of our employees.If we are able to expand our operations, we may be unable to successfully manage our future growth.Our growth may strain our infrastructure and resources. Any such growth could place increased strain on our management, operational, financial and otherresources, and we will need to train, motivate, and manage employees, as well as attract management, sales, finance and accounting, international, technical, andother professionals. Any failure to expand these areas and implement appropriate procedures and controls in an efficient manner and at a pace consistent with ourbusiness objectives could have a material adverse effect on our business, results of operations and financial condition.Our business operations are conducted in multiple languages and could be disrupted due to miscommunications or translation errors.The success of our business continues to depend on our marketing efforts in the United States, Europe and Israel, each of which is conducted in the locallanguage. Miscommunications or inaccurate foreign language translations could have a material adverse effect on our business operations and financial conditions.Additionally, contracts, communications and complex technical information must be accurately translated into foreign languages.We will continue to incur costs and be subject to various obligations as a result of being a public company, listed in the United States and in Israel.We will continue to incur significant legal, accounting and other expenses as a result of being a public company, listed in the United States and in Israel.Although we will incur costs each year associated with being a publiclytraded company, it is possible that our actual costs of being a publiclytraded company willvary from year to year and may be different than our estimates. In estimating these costs, we take into account expenses related to insurance, legal, accounting andcompliance activities.28Furthermore, the need to maintain the corporate infrastructure demanded of a public company may divert management’s attention from implementing ourgrowth strategy, which could prevent us from improving our business, results of operations and financial condition. We have made, and will continue to make,changes to our internal controls and procedures for financial reporting and accounting systems to meet our reporting obligations as a U.S. publicly traded company.However, the measures we take may not be sufficient to satisfy our obligations as a publicly traded company.Any future or current litigation could have a material adverse impact on our results of operations, financial condition and liquidity.From time to time, we may be subject to litigation, including, among others, potential stockholder derivative actions and class actions. Risks associatedwith legal liability are difficult to assess and quantify, and their existence and magnitude can remain unknown for significant periods of time. Subject to certainexceptions, our Amended and Restated Certificate of Incorporation, or Certificate of Incorporation, and Amended and Restated Bylaws, or Bylaws, require us toindemnify and advance expenses to our officers and directors involved in legal proceedings. To date we have obtained directors and officers’ liability, or D&O,insurance to cover some of the risk exposure for our directors and officers. Such insurance generally pays the expenses (including amounts paid to plaintiffs, fines,and expenses including attorneys’ fees) of officers and directors who are the subject of a lawsuit as a result of their service to us. There can be no assurance that wewill be able to continue to maintain this insurance at reasonable rates or at all, or in amounts adequate to cover such expenses should such a lawsuit occur. WithoutD&O insurance, the amounts we would pay to indemnify our officers and directors should they be subject to legal action based on their service to us could have amaterial adverse effect on our financial condition, results of operations and liquidity. Such lawsuits, and any related publicity, may result in substantial costs and,among other things, divert the attention of management and our employees. An unfavorable outcome in any claim or proceeding against us could have a materialadverse impact on our financial position and results of operations for the period in which the unfavorable outcome occurs, and potentially in future periods. Further,any settlement announced by us may expose us to further claims against us by third parties seeking monetary or other damages which, even if unsuccessful, woulddivert management attention from the business and cause us to incur costs, possibly material, to defend such matters, which could have a material adverse impacton our financial position. See “Legal Proceedings” for more information regarding our involvement in ongoing litigation matters.Federal, state and local or Israeli tax rules may adversely impact our results of operations and financial position.We are subject to federal, state and local taxes in the U.S., as well as local taxes in Israel in respect to our operations in Israel. Although we believe our taxestimates are reasonable, if the Internal Revenue Service or other taxing authority disagrees with the positions we have taken on our tax returns, we could faceadditional tax liability, including interest and penalties. If material, payment of such additional amounts upon final adjudication of any disputes could have a materialimpact on our results of operations and financial position. In addition, complying with new tax rules, laws or regulations could impact our financial condition, andincreases to federal or state statutory tax rates and other changes in tax laws, rules or regulations may increase our effective tax rate. Any increase in our effectivetax rate could have a material impact on our financial results.A significant majority of Orgad’s revenue is from sales of products on Amazon’s U.S. Marketplace and any change, limitation or restriction on ourability to operate on Amazon’s platform or any other marketplace could have a material adverse impact to our business, results of operations, financialcondition and prospects.Orgad, our wholly owned subsidiary, operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com, eBay and others. A substantial percentage of Orgad’s revenue is driven by sales on Amazon’s U.S. marketplace and Orgad is subject toterms of service of Amazon and other maketplaces and various other seller policies and services that apply to third parties selling products on Amazon and othermarketplaces. Generally, a marketplace has the right to terminate or suspend its agreement with Orgad at any time and for any reason. Such marketplace may takeother actions against Orgad such as suspending or terminating a seller account or product listing and withholding payments owed to Orgad indefinitely. Forexample, in July 2022, Amazon deactivated Orgad’s Amazon U.S. store as a result of complaints submitted due to an error in the listed manufacturer of certainproducts on Orgad’s store. Although its account was subsequently reinstated in September 2022, if the deactivation were to occur in the future for a prolongedperiod of time, or if Amazon were to terminate Orgad’s account, this would have a material adverse effect on our business, results of operations, financial conditionand prospects. While Orgad endeavors to materially comply with the terms of services of the marketplaces on which it operates, we can provide no assurance thatthese marketplaces will have the same determination with respect to our compliance.29In addition, Amazon and other marketplaces can make changes to its platform that could require Orgad to change the manner in which it operates, limit itsability to successfully launch new products or increase its costs to operate and such changes could have an adverse effect on our business, results of operations,financial condition and prospects. Examples of changes that could impact us relate to platform fee charges (i.e., selling commissions), exclusivity, inventorywarehouse availability, excluded products and limitations on sales and marketing. Any change, limitation or restriction on our ability to sell on Amazon’s platform orany other marketplace, even if temporary, could have a material impact on our business, results of operations, financial condition and prospects.Orgad also relies on services provided by Amazon’s fulfillment platform, including Prime Certification, which provides for expedited shipping to theconsumer, an important aspect in the buying decision for consumers. For products that Orgad fulfills itself, Orgad is qualified to offer our products for sale withPrime Certification delivery. Any inability to market our products for sale with expedited delivery provided under Prime Certification could have a material impact onour business, results of operations, financial condition and prospects. Failure to remain compliant with the best fulfillment practices on Amazon’s platform couldhave a material impact on our business, results of operations, financial condition and prospects. In addition, due to the COVID19 pandemic, Amazon has changedthe amount of inventory it accepts per product for a period of time. If this were to continue it could cause us to miss sales and/or pay additional shipping costswhich would harm our business operations and financial conditions.Orgad’s business depends on its ability to build and maintain strong product listings on ecommerce platforms. Orgad may not be able to maintain andenhance our product listings if it receives unfavorable customer complaints, negative publicity or otherwise fails to live up to consumers’ expectations, whichcould materially adversely affect our business, results of operations and growth prospects.Maintaining and enhancing Orgad’s product listings is critical in expanding and growing its business. However, a significant portion of Orgad’s perceivedperformance to the customer depends on third parties outside of its control, including suppliers and thirdparty delivery agents as well as online retailers such asAmazon and eBay. Because Orgad’s agreements with its online retail partners are generally terminable at will, it may be unable to maintain these relationships, andour results of operations could fluctuate significantly from period to period. Because Orgad relies on third parties to deliver its products, it is subject to shippingdelays or disruptions caused by inclement weather, natural disasters, labor activism, health epidemics or bioterrorism. It may also experience shipping delays ordisruptions due to other carrierrelated issues relating to their own internal operational capabilities. Further, Orgad relies on the business continuity plans of thesethird parties to operate during pandemics, like the COVID19 pandemic, and it has limited ability to influence their plans, prevent delays, and/or cost increases due toreduced availability and capacity and increased required safety measures.Customer complaints or negative publicity about its products, delivery times, or marketing strategies, even if not accurate, especially on blogs, social mediawebsites and thirdparty market sites, could rapidly and severely diminish consumer view of Orgad’s product listings and result in harm to its brand. Customers mayalso make safetyrelated or other types of claims regarding products sold through our online retail partners, such as Amazon, which may result in an online retailpartner removing the product from its marketplace. We also use and rely on other services from third parties, such as our telecommunications services, and thoseservices may be subject to outages and interruptions that are not within our control.Orgad faces risks related to successfully optimizing and operating its fulfillment and customer service operations.Failures to adequately predict customer demand or otherwise optimize and operate its fulfillment and customer service operations successfully from time totime result in excess or insufficient fulfillment or customer service capacity, increased costs, and impairment charges, any of which could materially harm ourbusiness. As Orgad continues to add fulfillment and customer service capability or add new businesses with different requirements, its fulfillment and customerservice operations become increasingly complex and operating them becomes more challenging. There can be no assurance that Orgad will be able to operate ouroperations effectively.30In addition, failure to optimize inventory in our fulfillment operations increases net shipping cost by requiring longzone or partial shipments. Orgad may beunable to adequately staff its fulfillment and customer service operations. Orgad’s failure to properly handle such inventory or to accurately forecast productdemand may result in it being unable to secure sufficient storage space or to optimize its fulfillment operations or cause other unexpected costs and other harm toour business and reputation.Orgad relies on a limited number of shipping companies to deliver inventory to it and completed orders to our customers. The inability to negotiateacceptable terms with these companies or performance problems or other difficulties experienced by these companies could negatively impact our operating resultsand customer experience. In addition, Orgad’s ability to receive inbound inventory efficiently and ship completed orders to customers also may be negativelyaffected by natural or manmade disasters, extreme weather, geopolitical events and security issues, labor or trade disputes, and similar events.The variability in Orgad’s retail business places increased strain on its operations.Demand for Orgad’s product listings can fluctuate significantly for many reasons, including as a result of seasonality, promotions, product launches, orunforeseeable events, such as in response to natural or manmade disasters, extreme weather, or geopolitical events. For example, Orgad expects a disproportionateamount of our retail sales to occur during our fourth quarter. Failure to stock or restock popular products in sufficient amounts such that Orgad fails to meetcustomer demand could significantly affect our revenue and our future growth. If too many customers access the websites on which Orgad engages in onlineretailing within a short period of time due to increased demand, Orgad may experience system interruptions that make the websites unavailable or prevent us fromefficiently fulfilling orders, which may reduce the volume of goods its offers or sell and the attractiveness of its products. In addition, Orgad may be unable toadequately staff for fulfillment of orders and customer service during these peak periods and delivery and other fulfillment companies and customer service cosourcers may be unable to meet the seasonal demand.Our business is subject to the risks of earthquakes, fire, power outages, floods, health risks and other catastrophic events, and to interruption by manmade problems such as terrorism.Natural disasters, such as fire or floods, a significant power outage, telecommunications failure, terrorism, an armed conflict, cyberattacks, epidemics andpandemics such as COVID19, or other geopolitical unrest could affect our supply chain, manufacturers, logistics providers, channel partners, or endcustomers orthe economy as a whole and such disruption could impact us and the shipments and sales. These risks may be further increased if the disaster recovery plans for usand our suppliers prove to be inadequate. To the extent that any of the above should result in delays or cancellations of customer orders, the loss of customers, orthe delay in the deployment or shipment of products, our business, financial condition, and operating results would be adversely affected.For example, on January 2, 2023, Orgad experienced a fire at its warehouse in Israel. We are not aware of any casualties or injuries associated with the fire.We shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incidentdid not affect the future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of thisincident on the other parties that were involved in the incident (lessor and others that leased properties near the warehouse).Our business could be negatively impacted by unsolicited takeover proposals, by shareholder activism or by proxy contests relating to the election ofdirectors or other matters.Our business could be negatively affected as a result of an unsolicited takeover proposal, by shareholder activism or a proxy contest. During 2021, anactivist shareholder sought to make changes to our board of directors, among other matters, which ultimately resulted in us entering into a settlement agreementwith the activist shareholder and another shareholder, and for which considerable costs were incurred and absorbed significant time and attention by managementand the board of directors. A future proxy contest, unsolicited takeover proposal, or other shareholder activism relating to the election of directors or other matterswould most likely require us to incur significant legal fees and proxy solicitation expenses and require significant time and attention by management and our Boardof Directors. The potential of a proxy contest, unsolicited takeover proposal, or other shareholder activism could interfere with our ability to execute our strategicplan, give rise to perceived uncertainties as to our future direction, result in the loss of potential business opportunities or make it more difficult to attract and retainqualified personnel, any of which could materially and adversely affect our business and operating results.31Environmental, social and corporate governance (ESG) issues, including those related to climate change and sustainability, may have an adverseeffect on our business, financial condition and results of operations and damage our reputation.There is an increasing focus from certain investors, customers, consumers, employees and other stakeholders concerning ESG matters. Additionally, publicinterest and legislative pressure related to public companies’ ESG practices continue to grow. If our ESG practices fail to meet regulatory requirements or investor,customer, consumer, employee or other shareholders’ evolving expectations and standards for responsible corporate citizenship in areas including environmentalstewardship, support for local communities, Board of Director and employee diversity, human capital management, employee health and safety practices, productquality, supply chain management, corporate governance and transparency, our reputation, brand and employee retention may be negatively impacted, and ourcustomers and suppliers may be unwilling to continue to do business with us.Customers, consumers, investors and other shareholders are increasingly focusing on environmental issues, including climate change, energy and wateruse, plastic waste and other sustainability concerns. Concern over climate change may result in new or increased legal and regulatory requirements to reduce ormitigate impacts to the environment. Changing customer and consumer preferences or increased regulatory requirements may result in increased demands orrequirements. Complying with these demands or requirements could cause us to incur additional manufacturing, operating or product development costs.If we do not adapt to or comply with new regulations, including the SEC’s published proposed rules that would require companies to provide significantlyexpanded climaterelated disclosures in their periodic reporting, which may require us to incur significant additional costs to comply and impose increased oversightobligations on our management and board of directors, or fail to meet evolving investor, industry or stakeholder expectations and concerns regarding ESG issues,investors may reconsider their capital investment in our company, we may become subject to penalties, and customers and consumers may choose to stoppurchasing our products, if approved for commercialization, which could have a material adverse effect on our reputation, business or financial condition.Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions andadverse developments with respect to financial institutions and associated liquidity risk.Our business depends on the economic health of the global economies. If the conditions in the global economies remain uncertain or continue to bevolatile, or if they deteriorate, including as a result of the impact of military conflict, such as the war between Russia and Ukraine, terrorism or other geopoliticalevents, our business, operating results and financial condition may be materially adversely affected. Economic weakness, inflation and increases in interest rates,limited availability of credit, liquidity shortages and constrained capital spending have at times in the past resulted, and may in the future result, in challenging anddelayed sales cycles, slower adoption of new technologies and increased price competition, and could negatively affect our ability to forecast future periods, whichcould result in an inability to satisfy demand for our products and a loss of market share.In addition, increases in inflation raise our costs for commodities, labor, materials and services and other costs required to grow and operate our business,and failure to secure these on reasonable terms may adversely impact our financial condition. Additionally, increases in inflation, along with the uncertaintiessurrounding COVID19, geopolitical developments and global supply chain disruptions, have caused, and may in the future cause, global economic uncertainty anduncertainty about the interest rate environment, which may make it more difficult, costly or dilutive for us to secure additional financing. A failure to adequatelyrespond to these risks could have a material adverse impact on our financial condition, results of operations or cash flows.More recently, the closures of SVB and Signature Bank and their placement into receivership with the FDIC created bankspecific and broader financialinstitution liquidity risk and concerns. Although the Department of the Treasury, the Federal Reserve and the FDIC jointly released a statement that depositors atSVB and Signature Bank would have access to their funds, even those in excess of the standard FDIC insurance limits, under a systemic risk exception, futureadverse developments with respect to specific financial institutions or the broader financial services industry may lead to marketwide liquidity shortages, impair theability of companies to access nearterm working capital needs, and create additional market and economic uncertainty. There can be no assurance that future creditand financial market instability and a deterioration in confidence in economic conditions will not occur. Our general business strategy may be adversely affected byany such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions. If the current equityand credit markets deteriorate, or if adverse developments are experienced by financial institutions, it may cause shortterm liquidity risk and also make anynecessary debt or equity financing more difficult, more costly, more onerous with respect to financial and operating covenants and more dilutive. Failure to secureany necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stockprice and could require us to alter our operating plans. In addition, there is a risk that one or more of our service providers, financial institutions, manufacturers,suppliers and other partners may be adversely affected by the foregoing risks, which could directly affect our ability to attain our operating goals on schedule andon budget.Our business may be adversely affected by the impact of any renewed outbreak of the COVID19 pandemic.Public health epidemics or outbreaks could adversely impact our business. In late 2019, a novel strain of COVID19, also known as coronavirus, wasreported in Wuhan, China. While initially the outbreak was largely concentrated in China, it spread worldwide. Many countries around the world, including in Israel,implemented significant governmental measures to control the spread of the virus, including temporary closure of businesses, severe restrictions on travel and themovement of people, and other material limitations on the conduct of business. These measures haven historically resulted in work stoppages and other disruptions.If there is a resurgence of the COVID19 pandemic, this could adversely impact our operations, including among others, our sales and marketing efforts and ourability to raise additional funds, and accordingly, the impact of COVID19 could have an adverse impact on our business and our financial results.32Risks Related to Our Operations in RussiaRussia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.In addition to our Israel operations, we have operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia and we engage two software developers through a third party who are based in Ukraine. On February 24,2022, Russia invaded Ukraine. The outbreak of hostilities between the two countries could result in more widespread conflict and could have a severe adverse effecton the region.Following Russia’s actions, various countries, including the U.S., Canada, the United Kingdom, Germany and France, as well as the European Union,issued broadranging economic sanctions against Russia. Such sanctions included, among other things, a prohibition on doing business with certain Russiancompanies, officials and oligarchs; a commitment by certain countries and the European Union to remove selected Russian banks from the Society for WorldwideInterbank Financial Telecommunications (SWIFT) electronic banking network that connects banks globally; and restrictive measures to prevent the Russian CentralBank from undermining the impact of the sanctions. In response to sanctions, the Russian Central Bank raised its interest rates and banned sales of local securitiesby foreigners. Russia may take additional counter measures or retaliatory actions in the future. While diplomatic efforts have been ongoing, the conflict betweenRussia and Ukraine is currently unpredictable and has the potential to result in broadened military actions. The duration of ongoing hostilities and such sanctionsand related events cannot be predicted. Uncertainty as to future relations between Russia and the U.S. and other countries in the west, or between Russia and othereastern European countries, may have a negative impact on our operations.Such international sanctions and potential responses to such sanctions, including those that may limit or restrict transfer funds into Russia, may in thefuture significantly affect our ability to conduct our activities in Russia including paying our personnel. To date, the conflict has had minimal impact on operations .Nevertheless, we have no way to predict the progress or outcome of the situation in Ukraine, as the conflict and governmental reactions are rapidly developing andbeyond our control. Prolonged unrest, intensified military activities or more extensive sanctions impacting the region could have a material adverse effect on ouroperations, results of operations, financial condition, liquidity and business outlook.Political, military conditions or other risks in Russia could adversely affect our business.Russia is a federative state consisting of 85 constituent entities, or “subjects.” The Russian Constitution reserves some governmental powers for theRussian Government, some for the subjects and some for areas of joint competence. In addition, eight “federal districts” (“federal’nye okruga”), which are overseenby a plenipotentiary representative of the President, supplement the country’s federal system. The delineation of authority among and within the subjects is, inmany instances, unclear and contested, particularly with respect to the division of tax revenues and authority over regulatory matters. For these reasons, theRussian political system is vulnerable to tension and conflict between federal, subject and local authorities. This tension creates uncertainties in the operatingenvironment in Russia, which may prevent us from carrying out our strategy effectively. The risks associated with these events or potential events could materiallyand adversely affect the investment environment and overall consumer and entrepreneurial confidence in Russia, and our business, prospects, financial condition,hiring ability, and results of operations could be materially and adversely affected.Furthermore, high levels of corruption reportedly exist in Russia, including the bribing of officials for the purpose of initiating investigations bygovernment agencies. Corruption and other illegal activities could disrupt our ability to conduct our business effectively, and claims that the we are involved in suchcorruption or illegal activities could generate negative publicity, of which could harm our development, financial condition, results of operations or prospects.Economic and other risks in Russia could adversely affect our business.Operating a business in an emerging market such as Russia can involve a greater degree of risk than operating a business in more developed markets.Over the last two decades, the Russian economy has experienced or continues to experience at various times:●significant volatility in its GDP;33●the impact of international sanctions;●high levels of inflation;●increases in, or high, interest rates;●sudden price declines in oil and other natural resources;●instability in the local currency market;●budget deficits;●the continued operation of lossmaking enterprises due to the lack of effective bankruptcy proceedings;●capital flight; and●significant increases in poverty rates, unemployment and underemployment.The Russian economy has been subject to abrupt downturns in the past, including as a result of the invasion of Ukraine, global financial crisis, and, as anemerging market, remains particularly vulnerable to further external shocks and any future fluctuations in the global markets. Any further deterioration in the generaleconomic conditions in Russia (whether or not as a result of the events mentioned above) could have a material adverse effect on the Russian economy and mayresult in hiring and operational difficulties, as well as potential flight of human capital, which could have a material adverse effect on our business, productdevelopment and results of operations.Legal risks in Russia could materially adversely affect our operations and Russian tax legislation is subject to frequent change.Among the risks of the Russian legal system are: inconsistencies among laws, presidential decrees, and government and ministerial orders and resolutions;conflicting local, regional and federal laws and regulations; the untested nature of the independence of the judiciary and its sensitivity to economic or politicalinfluences; substantial gaps in the regulatory structure due to the delay or absence of implementing legislation; a high degree of discretion on the part ofgovernmental authorities; reported corruption within governmental entities and other governmental authorities; the relative inexperience of judges and courts ininterpreting laws applicable to complex transactions; and the unpredictability of enforcement of foreign judgments and foreign arbitral awards. Many Russian lawsand regulations are construed in a way that provides for significant administrative discretion in application and enforcement. Unlawful, selective or arbitrary actionsof the Russian Government have reportedly included the denial or withdrawal of licenses, sudden and unexpected tax audits, criminal prosecutions, and civil claims.Any of the above events may have a material adverse effect on our product development and results of operations.Despite certain improvements in the taxation system made by the Russian Government over the past decade, Russian tax legislation is still subject tofrequent change, varying interpretations, and inconsistent and selective enforcement. There are currently no clear rules for distinguishing between lawful taxoptimization and tax evasion. In addition, Russian tax laws do not contain detailed rules on the taxation in Russia of foreign companies. As such, taxpayers oftenhave to resort to court proceedings to defend their position against the Russian tax authorities. However, in the absence of consistent court practice or bindingprecedents, there is inconsistency amongst court decisions. Further, the possibility exists that the Russian Federation would impose arbitrary or onerous taxes andpenalties in the future, which could have a material adverse effect on our product development and results of operations.34Risks Related to Our Operations In IsraelOur headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.Our headquarters and most of our operations are located in central Israel and our key employees, officers and directors are residents of Israel. Accordingly,political, economic and military conditions in Israel and the surrounding region may directly affect our business. Since the establishment of the State of Israel in1948, a number of armed conflicts have taken place between Israel and its Arab neighbors. Any hostilities involving Israel or the interruption or curtailment of tradewithin Israel or between Israel and its trading partners could adversely affect our operations and results of operations and could make it more difficult for us to raisecapital. During the winter of 2008, winter of 2012 and the summer of 2014, Israel was engaged in an armed conflict with Hamas, a militia group and political partyoperating in the Gaza Strip, and during the summer of 2006, Israel was engaged in an armed conflict with Hezbollah, a Lebanese Islamist Shiite militia group andpolitical party. Israel faces political tension with respect to its relationships with Turkey, Iran and certain Arab neighbor countries. In addition, recent conflictsinvolved missile strikes against civilian targets in various parts of Israel, and negatively affected business conditions in Israel. Recent political uprisings and socialunrest in various countries in the Middle East and North Africa are affecting the political stability of those countries. This instability may lead to deterioration of thepolitical relationships that exist between Israel and these countries, and have raised concerns regarding security in the region and the potential for armed conflict.Any armed conflicts, terrorist activities or political instability in the region could adversely affect business conditions and could harm our results of operations. Forexample, any major escalation in hostilities in the region could result in a portion of our employees and service providers being called up to perform military duty foran extended period of time. Parties with whom we do business have sometimes declined to travel to Israel during periods of heightened unrest or tension, forcing usto make alternative arrangements when necessary. In addition, the political and security situation in Israel may result in parties with whom we have agreementsinvolving performance in Israel claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions insuch agreements. Any future deterioration in the political and security situation in Israel will negatively impact our business.Our commercial insurance does not cover losses that may occur as a result of events associated with the security situation in the Middle East. Althoughthe Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that thisgovernment coverage will be maintained. Any losses or damages incurred by us could have a material adverse effect on our business. Any armed conflicts orpolitical instability in the region would likely negatively affect business conditions and could harm our results of operations.Further, in the past, the State of Israel and Israeli companies have been subjected to an economic boycott. Several countries still restrict business with theState of Israel and with Israeli companies. These restrictive laws and policies may have an adverse impact on our operating results, financial condition or theexpansion of our business.The legislative power of the State resides in the Knesset, a unicameral parliament that consists of 120 members elected by nationwide voting under asystem of proportional representation. Israel’s most recent general elections were held on April 9, 2019, September 17, 2019, March 2, 2020 and November 1, 2022.The uncertainty surrounding the results of the recent elections may continue. Actual or perceived political instability in Israel or any negative changes in thepolitical environment, may individually or in the aggregate adversely affect the Israeli economy and, in turn, our business, financial condition, results of operationsand prospects.Some of our employees are obligated to perform military reserve duty in Israel.Many Israeli citizens, including our employees are obligated to perform one month, and in some cases more, of annual military reserve duty until they reachthe age of 40 (or older, for reservists with certain occupations) and, in the event of a military conflict, may be called to active duty. In response to increases interrorist activity, there have been periods of significant callups of military reservists. It is possible that there will be military reserve duty callups in the future. Ouroperations could be disrupted by such callups. Such disruption could materially adversely affect our business, results of operations and financial condition.35It may be difficult to enforce a nonIsraeli judgment against the Company or its officers and directors.The operating subsidiary of ours is incorporated in Israel. All of our executive officers and directors are not residents of the United States, and asubstantial portion of our assets and the assets of our executive officers and directors are located outside the United States. Therefore, a judgment obtained againstus, or any of these persons, including a judgment based on the civil liability provisions of the U.S. federal securities laws, may not be collectible in the United Statesand may not necessarily be enforced by an Israeli court. It also may be difficult to affect service of process on these persons in the United States or to assert U.S.securities law claims in original actions instituted in Israel. Additionally, it may be difficult for an investor, or any other person or entity, to initiate an action withrespect to U.S. securities laws in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of U.S. securities laws reasoning that Israel is not themost appropriate forum in which to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law isapplicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law often involves the testimony of expert witnesses, which can be a timeconsuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel that addresses the mattersdescribed above. As a result of the difficulty associated with enforcing a judgment against us in Israel, it may be impossible to collect any damages awarded byeither a U.S. or foreign court.Our international operations could expose us to additional risks, including exchange rate fluctuations, legal regulations and political or economicinstability that could harm our business and operating results.Our international operations expose us to the following risks which may have a material adverse effect on our business and operating results:●devaluations and fluctuations in currency exchange rates including fluctuations between the U.S. dollar and the NIS and the Russian Ruble;●costs of compliance with local laws, including labor laws and intellectual property laws;●compliance with domestic and foreign government policies, including compliance with Israeli securities laws and TASE;●changes in trade regulations and procedures affecting approval, production, pricing, marketing, reimbursement for and access to, our products;●compliance with applicable foreign anticorruption laws, antitrust/competition laws, antiBoycott Israel law and antimoney laundering laws; and●economic and geopolitical developments and conditions, including ongoing instability in global economies and financial markets, international hostilities,acts of terrorism and governmental reactions, inflation, outbreaks of contagious disease (e.g., the COVID19 pandemic) and military and political alliances.Risks Related to Our Common StockA more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.Although our common stock is listed on the Nasdaq Capital Market, it has only been traded on the Nasdaq Capital Market since July 25, 2016. There hasbeen relatively limited trading volume in the market for our common stock, and a more active, liquid public trading market may not develop or may not be sustained.Limited liquidity in the trading market for our common stock may adversely affect a stockholder’s ability to sell its shares of common stock at the time it wishes tosell them or at a price that it considers acceptable. If a more active, liquid public trading market does not develop, we may be limited in our ability to raise capital byselling shares of common stock and our ability to acquire other companies or assets by using shares of our common stock as consideration. In addition, if there is athin trading market or “float” for our stock, the market price for our common stock may fluctuate significantly more than the stock market as a whole. Without a largefloat, our common stock would be less liquid than the stock of companies with broader public ownership and, as a result, the trading prices of our common stockmay be more volatile and it would be harder for you to liquidate any investment in our common stock. Furthermore, the stock market is subject to significant priceand volume fluctuations, and the price of our common stock could fluctuate widely in response to several factors, including:●our quarterly or annual operating results;●changes in our earnings estimates;●investment recommendations by securities analysts following our business or our industry;●additions or departures of key personnel;●changes in the business, earnings estimates or market perceptions of our competitors;36●our failure to achieve operating results consistent with securities analysts’ projections;●changes in industry, general market or economic conditions;●announcements of legislative or regulatory changes; and●natural disasters (including for example, the recent fire in the Orgad warehouse) and political and economic instability, including wars, terrorism, politicalunrest, results of certain elections and votes, emergence of a pandemic, or other widespread health emergencies (or concerns over the possibility of suchan emergency, including for example, the recent the COVID19 pandemic), boycotts, adoption or expansion of government trade restrictions, and otherbusiness restrictions.The stock market has experienced extreme price and volume fluctuations in recent years that have significantly affected the quoted prices of the securitiesof many companies. The changes often appear to occur without regard to specific operating performance. The price of our common stock could fluctuate basedupon factors that have little or nothing to do with us and these fluctuations could materially reduce our stock price.Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.If any of our shareholders were to decide to sell large amounts of stock over a short period of time (presuming such sales were permitted) such sales couldcause the market price of our common stock to drop significantly, even if our business is doing well. Further, the market price of our common stock could decline as aresult of the perception that such sales could occur. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equitysecurities in the future at a time and price that we deem appropriate.Our securities are traded on more than one market which may result in price variations.Our securities have been trading on the Nasdaq Capital Market since July 2016 and on TASE since September 2005. Trading in our securities on suchexchanges occurs in different currencies (U.S. dollars on the Nasdaq Capital Market and NIS on the TASE), and at different times (due to different time zones,trading days and public holidays in the United States and Israel). The trading prices of our securities on the two exchanges may differ due to the foregoing andother factors. Any decrease in the price of our shares on the TASE could cause a decrease in the trading price of our shares on the Nasdaq Capital Market and viceversa.We are a smaller reporting company and, as a result of the reduced disclosure and governance requirements applicable to such companies, ourcommon stock may be less attractive to investors.We are a smaller reporting company, (i.e. a company with “public float” held by nonaffiliates with a market value of less than $250 million) and we areeligible to take advantage of certain exemptions from various reporting requirements applicable to other public companies. We have elected to adopt these reduceddisclosure requirements. We cannot predict if investors will find our common stock less attractive as a result of our taking advantage of these exemptions. If someinvestors find our common stock less attractive as a result of our choices, there may be a less active trading market for our common stock and our stock price may bemore volatile.We do not expect to pay any cash dividends in the foreseeable future.We have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our board of directors deems relevant. Investors should not purchase our common stock expecting to receive cash dividends. Because we do notpay dividends, and there may be limited trading, investors may not have any manner to liquidate or receive any payment on their investment. Therefore, our failureto pay dividends may cause investors to not see any return on investment even if we are successful in our business operations. In addition, because we do not paydividends we may have trouble raising additional funds, which could affect our ability to expand our business operations.37UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2022☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ________ to _________Commission file number 00137370MY SIZE, INC.(Exact name of registrant as specified in charter)Delaware510394637(State or jurisdiction ofIncorporation or organization)I.R.S EmployerIdentification No.4 Hayarden, POB 1026, Airport City, Israel7010000(Address of principal executive offices)(Zip code)+9723 6009030(Registrant’s telephone number, including area code)Securities registered pursuant to Section 12(b) of the Act:Title of each classTrading Symbol(s)Name of Each Exchange on Which RegisteredCommon Stock, par value $0.001 per shareMYSZThe Nasdaq Capital MarketSecurities registered pursuant to Section 12(g) of the Act: None.Indicate by check mark whether the registrant is a wellknown seasoned issuer as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes☒ No ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer, a smaller reporting company, or an emerginggrowth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 of theExchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☒Smaller Reporting Company☒Emerging Growth Company☐If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revisedfinancial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b2 of the Exchange Act) Yes ☐No☒Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control overfinancial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflectthe correction of an error to previously issued financial statements. ☐Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by anyof the registrant’s executive officers during the relevant recovery period pursuant to §240.10D1(b). ☐The aggregate market value of voting and nonvoting common equity held by nonaffiliates of the registrant as of June 30, 2022, the last business day of theregistrant’s most recently completed second fiscal quarter, was approximately $25,551,906.Number of shares of common stock outstanding as of March 31, 2023 was 2,446,780.Documents Incorporated by Reference: None.Table of ContentsPart IItem 1.Business2Item 1A.Risk Factors18Item 1B.Unresolved Staff Comments41Item 2.Properties41Item 3.Legal Proceedings41Item 4.Mine Safety Disclosures42Part IIItem 5.Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities43Item 6.Selected Financial Data43Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations43Item 7A.Quantitative and Qualitative Disclosures about Market Risk50Item 8.Financial Statements and Supplementary DataF1Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure51Item 9A.Controls and Procedures51Item 9B.Other Information51Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.51Part IIIItem 10.Directors, Executive Officers and Corporate Governance52Item 11.Executive Compensation57Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters60Item 13.Certain Relationships and Related Transactions, and Director Independence62Item 14.Principal Accounting Fees and Services65Part IVItem 15.Exhibits, Financial Statement Schedules66Signatures69iPART IIn this Annual Report on Form 10K, unless the context requires otherwise, the terms “we,” “our,” “us,” or “the Company” refer to MySize, Inc., a Delawarecorporation, and its subsidiaries, including MySize Israel 2014 Ltd. My Size LLC, Orgad International Marketing Ltd., or Orgad, and Naiz Bespoke Technologies, S.L,or Naiz, taken as a whole.References to “U.S. dollars” and “$” are to currency of the United States of America, and references to “NIS” are to New Israeli Shekels. Unless otherwiseindicated, U.S. dollar translations of NIS amounts presented in this Annual Report on Form 10K for the year ended on December 31, 2022 are translated using therate of NIS 3.358 to $1.00.All information in this Annual Report on Form 10K relating to shares or price per share reflects the 1for25 reverse stock split effected by us on December8, 2022.CAUTIONARY NOTE ON FORWARDLOOKING STATEMENTSThis Annual Report on Form 10K contains certain forwardlooking statements within the meaning of Section 27A of the Securities Act and Section 21E ofthe Exchange Act. Any statements in Annual Report on Form 10K about our expectations, beliefs, plans, objectives, assumptions or future events or performanceare not historical facts and are forwardlooking statements. These statements are often, but not always, made through the use of words or phrases such as“believe,” “will,” “expect,” “anticipate,” “estimate,” “intend,” “plan” and “would.” For example, statements concerning financial condition, possible or assumedfuture results of operations, growth opportunities, industry ranking, plans and objectives of management, markets for our common stock and future managementand organizational structure are all forwardlooking statements. Forwardlooking statements are not guarantees of performance. They involve known and unknownrisks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to differ materially from any results, levels ofactivity, performance or achievements expressed or implied by any forwardlooking statement.Any forwardlooking statements are qualified in their entirety by reference to the risk factors discussed throughout this Annual Report on Form 10K. Someof the risks, uncertainties and assumptions that could cause actual results to differ materially from estimates or projections contained in the forwardlookingstatements include but are not limited to:●our history of losses and needs for additional capital to fund our operations and our inability to obtain additional capital on acceptable terms, or at all;●risks related to our ability to continue as a going concern;●the new and unproven nature of the measurement technology markets;●our ability to achieve customer adoption of our products;●our ability to realize the benefits of our acquisitions of Orgad and Naiz;●our dependence on assets we purchased from a related party;●our ability to enhance our brand and increase market awareness;●our ability to introduce new products and continually enhance our product offerings;●the success of our strategic relationships with third parties;●information technology system failures or breaches of our network security;●competition from competitors;●our reliance on key members of our management team;●current or future litigation;●current or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated liquidityrisk; and●the impact of the political and security situation in Israel on our business.1The foregoing list sets forth some, but not all, of the factors that could affect our ability to achieve results described in any forwardlooking statements.You should read this Annual Report on Form 10K and the documents that we reference herein and have filed as exhibits to the Annual Report on Form 10K,completely and with the understanding that our actual future results may be materially different from what we expect. You should assume that the informationappearing in this Annual Report on Form 10K is accurate as of the date hereof. Because the risk factors referred to in this Annual Report on Form 10K, could causeactual results or outcomes to differ materially from those expressed in any forwardlooking statements made by us or on our behalf, you should not place unduereliance on any forwardlooking statements.Further, any forwardlooking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forwardlookingstatement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. New factors emergefrom time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extentto which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements. We qualify all ofthe information presented in this Annual Report on Form 10K, and particularly our forwardlooking statements, by these cautionary statements.ITEM 1. BUSINESSOverviewWe are an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile phone or through MySizeID Widget: a simple questionnaire which uses a database collected over the years.MySizeID syncs the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and only presents itemsfor purchase that match their measurements to ensure a correct fit.We are positioning ourselves as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empower brand design teams, which are designed to increase endconsumer satisfaction, contributing to a sustainable world and reduce operation costs.Recent DevelopmentsOrgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,602 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.2The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz, a limitedliability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.3The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Warehouse FireOn January 2, 2023, Orgad experienced a fire at its warehouse in Israel. we are not aware of any casualties or injuries associated with the fire. We shiftedOrgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incident did not affectthe future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of this incident on the otherparties that were involved in the incident (lessor and others that leased properties near the warehouse).January 2023 FinancingOn January 10, 2023, we entered into a securities purchase agreement, or the RD Purchase Agreement, pursuant to which we agreed to sell and issue in theRD Offering an aggregate of 162,000 of our shares of common stock, or the RD Shares, and prefunded warrants, or the Prefunded Warrants, to purchase up to279,899 shares of common stock and, in a concurrent private placement, unregistered warrants to purchase up to 883,798 shares of common stock, or the RDWarrants, consisting of Series A warrants, or Series A Warrants, to purchase up to 441,899 shares of common stock and Series B warrants, or Series B Warrants, topurchase up to 441,899 shares of common stock, at an offering price of $3.055 per RD Share and associated Series A and Series B Warrants and an offering price of$3.054 per Prefunded Warrant and associated Series A and Series B Warrants.4In addition, we entered into a securities purchase agreement, or the PIPE Purchase Agreement, and together with the RD Purchase Agreement, thePurchase Agreements, pursuant to which we agreed to sell and issue in the PIPE Offering an aggregate of up to 540,098 unregistered Prefunded Warrants andunregistered warrants to purchase up to an aggregate of 1,080,196 shares of common stock, or the PIPE Warrants and together with the RD Warrants, the Warrants,consisting of Series A Warrants to purchase up to 540,098 shares of common stock and Series B Warrants to purchase up to 540,098 shares of common stock at anoffering price of $3.054 per Prefunded Warrant and associated Series A and Series B Warrants.The Prefunded Warrants are immediately exercisable at an exercise price of $0.001 per share and will not expire until exercised in full. The Warrants areimmediately exercisable upon issuance at an exercise price of $2.805 per share, subject to adjustment as set forth therein. The Series A Warrants have a term of fiveand onehalf years from the date of issuance and the Series B Warrants have a term of 28 months from the date of issuance. The Warrants may be exercised on acashless basis if there is no effective registration statement registering the shares underlying the warrants.In connection with the PIPE Purchase Agreement, we entered into a registration rights agreement, or the Registration Rights Agreement. Pursuant to theRegistration Rights Agreement, we are required to file a resale registration statement, or the Registration Statement, with the Securities and Exchange Commission, orthe SEC, to register for resale the shares issuable upon exercise of the unregistered Prefunded Warrants and the Series A and Series B Warrants, within 20 days ofthe signing date of the PIPE Purchase Agreement, or the Signing Date, and to have such Registration Statement declared effective within 60 days after the SigningDate in the event the Registration Statement is not reviewed by the SEC, or 90 days of the Signing Date in the event the Registration Statement is reviewed by theSEC. we will be obligated to pay certain liquidated damages if we fail to maintain the effectiveness of the Registration Statement.The Purchase Agreements and the Registration Rights Agreements also contain representations, warranties, indemnification and other provisionscustomary for transactions of this nature. In addition, subject to limited exceptions, the Purchase Agreements provide that for a period of one year following theclosing of the Offerings, we will not effect or enter into an agreement to effect a “variable rate transaction” as defined in the Purchase Agreements.Aggregate gross proceeds to the Company in respect of the Offerings was approximately $3.0 million, before deducting fees payable to the placement agentand other offering expenses payable by the Company.We also entered into a letter agreement, or the Engagement Agreement, with H.C. Wainwright & Co., LLC, or Wainwright, pursuant to which Wainwrightagreed to serve as the exclusive placement agent for the Company in connection with the Offerings. We paid Wainwright a cash placement fee equal to 7% of theaggregate gross proceeds raised in the Offerings, a management fee of 1% of the aggregate gross proceeds raised in the Offerings, a nonaccountable expenseallowance of $85,000 and clearing fees of $15,950. Wainwright also received placement agent warrants, or the Placement Agent Warrants, with substantially the sameterms as the Series A Warrants issued in the Offering in an amount equal to 7% of the aggregate number of Shares and Prefunded Warrants sold in the Offerings, or68,740 shares, at an exercise price of $3.8188 per share and a term expiring on January 10, 2028.Our SolutionOur cloudbased software platform provides highly accurate sizing and measurement with broad applications including the online fashion/apparel industry,logistics and courier services and home DIY. Currently, we are mainly focusing on the ecommerce fashion/apparel industry. This proprietary technology is driven byseveral patented algorithms which are able to calculate and record measurements in a variety of novel ways. Although specific functionality varies by product, webelieve that our core solutions address the need for highly accurate measurements in a variety of consumer friendly, every day uses.5We have developed three products, MySizeID for the fashion/apparel industry, BoxSize for the logistics and courier services market and SizeUp for thehome DIY market.●MySizeID enables shoppers to generate highly accurate measurements of their body to find proper fitting clothes and accessories, through the use ofour application on their mobile phone or through a simple questionnaire if the user decides not to download the application. MySizeID syncs the user’smeasurement data to a sizing chart and presents items for purchase that match their measurements to ensure a correct fit. MySizeID is available forlicense by retailers and accessable by consumers through a web page.●BoxSize enables customers to quickly and easily measure the size and volume of a parcel to accurately calculate shipping fees. It also offers shippingcompanies a variety of precise logistical data for more efficiently managing their supply chain, providing them with an accurate way to compare thephysical package with what is in the shipping manifest. BoxSize solution is available for license on both iOS and Android operating systems. BoxSizeis available on the Honeywell Marketplace and in August 2019 was approved for Honeywell’s Independent Software Vendor Program, and MySize wasgranted an independent software vendor (ISV) status on the Zebra Technologies and on DataLogic platforms.●SizeUp is a digital tape measure that allows users to measure length, width and height of a surface by moving their smartphone from point to point ofan object or space. SizeUp is a valueadd for DIY and home improvement retailers whose customers struggle to find the appropriately sized items (likeblinds or curtains) for their homes or projects due to inaccurate measurements. SizeUp also is designed to replace rulers, tape measures and othermeasuring tools used for DIY projects. SizeUp is available for consumer download on both iOS and Android operating systems.The following are some select key features of our solutions:●Integration Capability. We design our solutions to be flexible and configurable, allowing our clients to match their use of our algorithms and softwarewith their specific business processes and workflows. Our platform has been organically developed from a common code base, data structure and userinterface, providing a consistent user experience with powerful features that are easily adaptable to our clients’ needs. The MySizeID widget can beintegrated via oneline JavaScript code, or through RESTful API;●Intuitive user experience. Our intuitive, easytouse interface is based on current technology, multiple focus groups and automatically adapts to users’devices, including mobile platforms, thereby significantly increasing accessibility of our solutions;●Big Data Generation. While we supply to the user the information he/she requires, we gather certain vital information such as body measurement andpackage volume which can be used anonymously to help the retailer acquire predictive size information on stocking, operations and consumers thatmay be in between sizes. All the information is being gathered and stored on our servers where it can be used by retailers;●NonInvasive. In taking measurements using our solution, the smartphone camera is not utilized; instead, the measurements are captured by scanningthe smartphone over the consumer’s body or package, thus ensuring greater privacy.Our Growth StrategyWe aim to drive revenue primarily through penetration of the U.S. and Europe markets through a business to business to consumer (B2B2C) model in theverticals we are targeting. We are pursuing the following growth strategies:●Sign Additional Commercial Agreements with U.S. Retailers. During 2022, we expanded our commercial agreements with Levi’s, introducing NorthAmerica (U.S. and Canada) and Latin America regions, and by extension Levis’ native apps in EU and U.S. regions. We also entered into commercialagreements with Baby Fresh, Galax, Punto Blanco, GEF France, Diesel, Gaala, Superdry, Uniontex Industries, and Temperlay London among others. Weare in various stages of discussions with U.S. and foreign retailers for the deployment of our size recommendation and measurement technology with aview to entering into additional commercial agreements.6●Pursue a TwoPronged Commercialization Strategy. We are seeking to accelerate adoption of our solutions both through direct partnerships with ecommerce websites as well as through thirdparty platform websites. While we seek to directly enter into partnerships with companies maintaining ecommerce websites in the apparel, courier and DIY markets, we are also seeking to deploy our solutions on thirdparty platforms. Furthermore, with theexpansion of MySizeID through the release of our FirstLook Smart Mirror, which we are offering to brick and mortar stores to digitize the physicalstores, MySizeID is now available for online retailers utilizing the WooCoomerce, Shopify, Lightspeed, PrestaShop, Bitrix and Wix platforms and tobrick and mortar stores through GK Software POS solution while BoxSize is available on the Honeywell, Zebra Technologies and Datalogic.●Ongoing Investment in our Technology Platform. We continue to invest in building new software capabilities and extending our platform to bring thepower of accurate measurement to a broader range of applications. In particular, we seek not only to deliver size recommendations but to provide arobust, endtoend,artificial intelligence, or AIdriven platform that inspires consumer confidence and drives revenue growth by providing a superiorconsumer journey to both online and the brick and mortar stores.●Grow our database. As the usage of our measurement apps increases, our database of information including user behaviour and body measurementsgenerates valuable statistics. Such data can be used in the big data market for targeted advertising and for blind consumer data mining.●Identify and acquire synergistic businesses. In order to reduce our time to market and obtain complementary technologies, we are seeking to acquiretechnologies and businesses that are synergistic to our product offering. We recently completed an acquisition of Orgad which operates anomnichannel ecommerce platform and Naiz which provides SaaS technology solutions that solve size and fit issues for fashion ecommerce companies.●Partnerships and cooperation. In order to bring a wider solution for the retail market we are working to partner and integrate our technology withpartners that can increase our penetration and offering to the market.Market OpportunityThe global ecommerce market was $5.7 trillion in 2022, and the industry is expected to grow significantly in the coming years with no signs of slowingdown. Market specialists expect a compound annual growth rate of 27.43% from 2023 to 2028: according to data from Statista, the market is expected to reach $6.5trillion in 2023. While many sectors have found ways to increase revenue through ecommerce, ecommerce is still plagued by issues that cut into profits andnegatively impact the bottom line, such as customer returns, low consumer conversion, and associated restocking and shipping costs.Fashion/ApparelSince the onset of the COVID19 pandemic, an immense shift to digital was recorded, with 85.9% growth vs. prepandemic, according to Mastercard, andover 2 billion people worldwide who shop online, according to data from Oberlo. In November 2022, online shoppers broke records with $11.3 billion in spending onCyber Monday, driving 5.8% yearoveryear growth and making the day the biggest online shopping day of all time, according to Adobe Analytics.In 2021, fashion companies invested between 1.6% and 1.8% of their revenues in technology, according to Mckinsey, and are expected to double theinvestment by 2030 in order to keep up with digital natives and keep a competitive edge. Personalization in ecommerce and hybrid connectivity in brickandmortarretail are two key themes in the future of fashtech, according to Mckinsey’s 2022 State of Fashion Technology.7In the upcoming years, inflation is expected to impact the fashion world. As prices for goods increase, the challenge will be to inspire confidence inconsumers, via different smart digital tools. Brands will need to embrace creative digital tools and new channels to deepen customer relationships, and as Mckinseyforecasts in their State of Fashion report for 2023, they will need to execute on priorities such as sustainability and digital acceleration.The global fashion ecommerce market size is expected to grow from $744.4 billion in 2022 to $821.19 billion in 2023 at a compound annual growth rate of10.3%. In 2027, the market size is expected to grow to $1,222.32 billion, at a compound annual growth rate of 10.5%, according to BRC.Based on the importance which shoppers attribute to free shipping 50% of cart abandonment rate is due to extra shipping costs (Baymard Institute) theneed for fashion retailers to substantiate the optimal size for a customer, thus minimizing returns, has never been more crucial.As brands move online or significantly expand their online presence, we believe that developing innovative ways to connect with shoppers, both onlineand offline, has become a top priority.Shipping/ParcelAccording to Pitney Bowes, parcel revenue in 13 major countries around the world increased by 17% year over year from $420 billion in 2020 (reflecting 131billion parcels) to $491 billion in 2021 (reflecting 159 billion parcels). In the shipping/parcel industry, the dimensions of a package are critical. It is not merely themeasurement of a package or box – but rather the amount of space that the package or box will take up on a truck, airplane, or ship that will be transporting thepackage or box. Far too often, retailers use unfit packaging for their items, adding additional costs in materials and shipping fees.DIYSimilar to issues in the apparel and fashion market, big box, hardware, furniture, and DIY stores are plagued by returns due to incorrect fit andmeasurements. In an industry where precise measurement for projects is an absolute necessity, ecommerce has not grown as quickly as in other industries which webelieve is due to lack of consumer confidence in measurements at home and buying the correct item online.MySizeIDWe have released the MySizeID app for both iOS and Android which assists consumers to take highly accurate measurement of their own body in order tosize clothing in the best way possible without the need to try the clothes on before purchasing. MySizeID is designed to simplify the process of purchasing clothesonline and significantly reduce the rate of returns of poorfitting clothing. During 2022, MySizeID delivered over 23.5 million size recommendations.The application is the result of a research and development effort that combines:●anthropometric research – analyses of information pertaining to body measurements derived from a survey and the subsequent determination ofcorrelations between body parts;●body measurement algorithm research – an algorithm created by us to measure body parts; and●retailers size chart analyses – adopting a deep understanding of the size charts of retailers and the corresponding “body to garment size.”MySizeID allows consumers to create a secure, online profile of their personal measurements, which can then be utilized, with partnered online retailers, toensure that no matter the manufacturer or size chart, they will get the right fit. MySizeID operates based on the use of existing sensors in smart phones which enable,through a specific purpose application, the measurement of the body of any consumer by moving the smartphone along his or her body. The MySizeID applicationdoes not rely on user photographs or any additional hardware; all a user needs to do is scan their body with their smartphone and the application records theirmeasurements. The measurements can then be saved in our database in the cloud, enabling the user to search for clothes in various retailer websites withoutworrying about size. When a search is made, the retailer will connect to our cloud database, and then provide results based on the user’s measurements and otherparameters as he or she may have defined. This data is also saved for use when a customer enters a brickandmortar store to help serve the customer moreefficiently and to provide a better shopping experience.8Figure 1: Screenshot of MySizeID on smartphone and ecommerce websiteAs part of the integration process, we offer to the retailer five main components:●Mobile App. MySizeID comes in the form of a native app or website. Our native app can be used “as is” integrated into the retailer’s ecommercewebsite. The website users can build a body profile on the app and receive size recommendations for their profile both in the app and on a widgetintegrated with their website.9●Widget. When a consumer enters into the retailer’s website and looks for a specific item, he or she can click on the MySizeID widget which will informthe consumer of his or her recommended size, based on his or her actual measurements, as measured using the app and the item he or she is looking at.The widget has two features:AI Wizard mode allows the user to obtain size from the following parameters: gender, height, weight, belly shape, hip shape and bra size only. Thegender, height and weight questions are mandatory, while the body shape questions are optional and can be added to increase accuracy for specificapparel categories.Guest mode allows a user that does not wish to sign up to MySizeID as a user to obtain size recommendations as well.●Analytic Pixel. MySizeID analytic pixel allows retailer to track and analyze the widget usage. By adding the pixel to the retailer’s website, MySizeID BIteam can track engagement, order, and return data and provide retailers with tools to understand the advantages and benefits of MySizeID.Use your own device using MySizeID instore solution, shoppers can receive size recommendations for all store items, when shopping in the offlinestores. The shoppers can build their body profile using an easy to use 3 to 6 questions form, scan an item barcode and receive a size recommendationfor the scanned item based on their body profile and the item’s size chart.Another feature we added is the “inbetween sizing” feature. Our system can detect a user that has body dimensions that place the user inbetweenthe clothes sizes being offered and lets the user know that. A user can then choose between the two sizes according to the user’s fit preference(tight/loose/average).In addition, we have recently released our InstantApp feature which allows shoppers to generate their body measurements directly from our widget,without the need to download our mobile app. Using this technology, the shoppers can create their online profile of their personal measurements andcomplete a purchase faster and easier with minimum distractions.The body profile can be created while shoppers are viewing the page from their mobile phone, or by scanning a QR code on desktop that will open thesame page on the mobile phone.Screenshot of InstantApp widget on desktop on yumyumfashion website10●MyDash Platform. The MyDash platform is a smart backoffice system where the retailer enters all the information regarding its size charts thatcorrelates to every product in its ecommerce site, and where the retailer can access the information on its users. This system is customizable based onthe retailer’s needs. In 2021, we changed the MyDash system to increase the system’s accessibility, added walkthroughs, user guides and changed theuser interface and much more for the ease of use. We added the option to use our generic size charts, added the option upload size chart files insteadof typing the size charts values manually, added more widget styling options and changed the pairing mechanism between the size chart and theproducts to be more userfriendly.Figure 3: Screenshot of BackOffice System●FirstLook Smart Mirror. The Smart Mirror provides an interactive, mirrorlike touch display that allows brands to provide instore customers with anenhanced, online shopping experience, contactless checkout and obtains the recommended size. The MySizeIDFirstLook Smart Mirror can be placedin numerous locations throughout a retail store, including the fitting rooms (without cameras) or other hightraffic locations of the store. Highlightcapabilities of the FirstLook Smart Mirror include a 3D “Tryiton” interactive avatar experience, personalized and highly accurate sizerecommendations by MySizeID, thirdparty point of sale systems integration, styling recommendations and contactless “select and collect” at theregister feature.Illustration of MySizeID “first look” smart mirror in a fashion store11We are currently offering MySizeID technology to retailers through either a payperuse model or a monthly subscription model. In our payperusebusiness model, every time the consumer obtains a recommended size, the retailer is charged for the usage.BoxSizeBoxSize is a parcel measurement application that can provide realtime logistic data on package volumes and transportation, resulting in improvedoperational efficiency and reduced operating expenses. In addition, BoxSize allows customers to easily measure the size of their parcel with their smartphone,calculate shipping costs and arrange for a convenient pickup time for the package. BoxSize is available both on iOS and Android.In 2020 we released the “One Click” feature on BoxSize that enables the user to measure a package with just one swipe of the handheld device. Previously,measurements through BoxSize would require three separate swipes.Figure 4: Screenshot of BoxSizeOur BoxSize mobile measurement solution is available on the Honeywell Marketplace. In addition, BoxSize was approved for Honeywell’s Global VendorProgram, and is available to provide highly accurate mobile measurement solutions for thousands of Honeywell clients. We also developed a new dashboard for thecourier companies to have all the required data about each package in one place. It includes package dimensions, pictures, scan geo location and more. Thedashboard also let the courier use Webhooks, which allows him to get the information from his own system.12In 2020, we announced our partnership with Datalogic, a company focused on the automatic data capture and process automation markets. The partnershipmakes our BoxSize measurement solution available to thousands of Datalogic customers in the Transportation and Logistics vertical.Agreement with Delhivery Private Limited, IndiaWe entered into an agreement with Delhivery Private Limited, one of the largest courier pickup, delivery, and online shipping services in India. Delhivery’sreputation as a frontrunner in delivery and logistics tech makes its decision to select Boxsize a particularly strong testament to the value the solution provides.BoxSize provides Delhivery’s employees on the B2B side with critical information that will allow them to effortlessly optimize loading efficiency and add even morerealtime visibility to operations.SizeUpWe are working on additional consumer applications, including a DIY application. Our SizeUp application is a smart tape measure for the business toconsumer market which allows users to utilize their smartphone as a tape measure. The application provides measurements with an accuracy of within twocentimeters. Through the use of SizeUp, users will be able to visualize how an object or a piece of furniture will fit in an existing room in their home or office. It alsoadded Google Vision for image content analysis, object detection, and title suggestions.Currently the SizeUp app for Android and iOS is available for free for the first 30 days, after which a user will be required to register via email and pay aonetime fee of $1.99 to continue using the application. To date, revenues from downloads have been minimal.Research and DevelopmentOur research and development team are responsible for the research, algorithm, design, development, and testing of all aspects of our measurementplatform technology. We invest in these efforts to continuously improve, innovate, and add new features to our solutions.We incurred research and development expenses of approximately $1.7 million in 2022 and $4.25 million in 2021, relating to the development of itsapplications and technologies. The decrease from the corresponding period primarily resulted from share based payment in amount of $2,618,000 attributed to theshare issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021. We intend to continue to invest in our research anddevelopment capabilities to extend our platform and bring our measurement technology to a broader range of applications.13In 2022, the R&D department experienced significant success in their efforts to improve the performance of their size recommendation system. Through acombination of optimized algorithms and the incorporation of cuttingedge technologies, the team was able to achieve a threefold increase in the system’s speed.This breakthrough not only makes the system one of the fastest and most accurate on the market, but also reduced the operation costs, making it more costeffective for businesses to use. Additionally, the solution is now highly scalable, allowing it to easily adapt to the needs of businesses of any size. The R&D team isnow focused on further improving the system and exploring new applications for the technology.Sales and MarketingIn 2019, we launched a commercialization strategy that directs our sales efforts toward both sales to ecommerce players in specific vertical markets such asfashion/apparel and shipping/delivery as well as to ecommerce thirdparty platform providers. As of March 15, 2023, our products are being sold in the followingcountries: US, UK, France, Netherlands, Spain, Portugal Turkey, Germany, Israel and Italy, generating customer leads, building out a sales pipeline, and developingcustomer relationships.We believe an effective method to market our suite of products is for users to actively use and explore its capabilities. We encourage free trials of one ormore of our products in order to successfully convert those accounts to paid subscriptions.Proprietary RightsWe rely on a combination of patent, copyright, trademark and trade secret laws in the United States and other jurisdictions, as well as contractualprotections, to protect our proprietary technology.As of December 31, 2022, we owned 18 issued patents: six in Europe, four in the U.S., three in each of Russia and Japan and one in each of Canada andIsrael which expire between January 20, 2033 and August 18, 2036, and we have two additional patent applications in process. As of such date, we do not have anyregistered trademarks.We cannot provide any assurance that our proprietary rights with respect to our products will be viable or have value in the future since the validity,enforceability and type of protection of proprietary rights in softwarerelated industries are uncertain and still evolving.Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products or to obtain and use informationthat we regard as proprietary. Policing unauthorized use of our products is difficult, and while we are unable to determine the extent to which piracy of our softwareproducts exists, software piracy can be expected to be a persistent problem. In addition, the laws of some foreign countries do not protect proprietary rights to asgreat an extent as do the laws of the United States, and effective copyright, trademark, trade secret and patent protection may not be available in those jurisdictions.Our means of protecting our proprietary rights may not be adequate to protect us from the infringement or misappropriation of such rights by others.Further, in recent years, there has been significant litigation in the United States involving patents and other intellectual property rights, particularly in thesoftware and Internetrelated industries. We can become subject to intellectual property infringement claims as the number of our competitors grows and ourproducts and services overlap with competitive offerings. These claims, even if not meritorious, could be expensive to defend and could divert management’sattention from operating our business. If we become liable to third parties for infringing their intellectual property rights, we could be required to pay a substantialaward of damages and to develop noninfringing technology, obtain a license or cease selling the products that contain the infringing intellectual property. We maybe unable to develop noninfringing technology or obtain a license on commercially reasonable terms, if at all.14Government RegulationWe are subject to a number foreign and domestic laws and regulations that involve matters central to our business. These laws and regulations mayinvolve privacy, data protection, intellectual property, or other subjects. Many of the laws and regulations to which we are subject are still evolving and being testedin courts and could be interpreted in ways that could harm our business. In addition, the application and interpretation of these laws and regulations often areuncertain, particularly in the new and rapidly evolving industry in which we operate. Because global laws and regulations have continued to develop and evolverapidly, it is possible that we, our products, or our platform may not be, or may not have been, compliant with each such applicable law or regulation.In particular, we are subject to a variety of federal, state and international laws and regulations governing the processing of personal data. Many U.S. stateshave passed laws requiring notification to data subjects when there is a security breach of personally identifiable data. There are also a number of legislativeproposals pending before the U.S. Congress, various state legislative bodies and foreign governments concerning data protection. In addition, data protection lawsin Europe and other jurisdictions outside the United States can be more restrictive than those within the United States, and the interpretation and application ofthese laws are still uncertain and in flux.For example, the General Data Protection Regulation, or GDPR, which took effect on May 25, 2018, enhances data protection obligations for entities thatprocess personal data about individuals, including obligations to cooperate with European data protection authorities, implement security measures and keeprecords of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to the greater of €20 million or 4% of global annual revenue. Inaddition, the California Consumer Privacy Act of 2018, or CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and requiredeletion of their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used.The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further,failure to comply with the Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may exposeus to administrative fines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the currentenforcement measures and sanctions. Given the breadth and depth of changes in data protection obligations, meeting the requirements of GDPR and otherapplicable laws and regulations has required significant time and resources, including a review of our technology and systems currently in use against therequirements of GDPR and other applicable laws and regulations. We have taken various steps to prepare for complying with GDPR and other applicable laws andregulations however there can be no assurance that these steps are sufficient to assure compliance. Further, additional EU laws and regulations (and member states’implementations thereof) further govern the protection of individuals and of electronic communications. If our efforts to comply with GDPR or other applicable lawsand regulations are not successful, we may be subject to penalties and fines that would adversely impact our business and results of operations, and our ability touse personal data of individuals could be significantly impaired.CompetitionWe operate in a highly competitive industry that is characterized by constant change and innovation. Changes in the applications and the programinglanguages used to develop applications, devices, operating systems, and technology landscape result in evolving customer requirements. Our competitors includeTrue Fit, Fit analytics and 3DLook.The principal competitive factors in our market include the following:●High Accuracy Size Recommendations: the highest accuracy and the lowest margin of error by combining patented technology including AI and ML,size chart or spec data, and MySizeID property body data measurement;●Integration○Fast 1 week integration including size chart size chart review and product mapping○Easy 1 line of “all included” script implementation●Technical Advantages○Very small library that weighs ±50kb (minimum widget loading time on product page)○UltraFast loading and size recommendation presenting○Restful API option (API integration with any website or app)15●Optimizations○Adjustments of size charts based on performance○Widget usage analysis by FashTech and BI teams○Automatic pairing of size charts with products/collections●User Experience○Easy to use interface (1015 seconds to receive size recommendations)○Option to add/deduct questions to/from widget wizards○Users automatically receive size recommendations on all products after initial sign up●Product and platform features, architecture, reliability, privacy and security, performance, effectiveness, and supported environments;●Product extensibility and ability to integrate with other technology infrastructures;●Digital operations expertise;●Ease of use of products and platform capabilities;●Total cost of ownership;●Adherence to industry standards and certifications;●Strength of sales and marketing efforts;●Brand awareness and reputation; and●Focus on customer successWe believe we generally compete favorably with our competitors on the basis of these factors. We expect competition to increase as other established andemerging companies enter our markets, as customer requirements evolve, and as new products and technologies are introduced. We expect this to be particularlytrue as we offer a smartphonebased offering that does not need to utilize the smartphone’s camera, and our competitors may also seek to repurpose their existingofferings to provide similar solutions. Many of our competitors have substantially greater financial, technical, and other resources, greater name recognition, largersales and marketing budgets, broader distribution, and larger and more mature intellectual property portfolios.Human Capital ManagementAs of March 31, 2023, we had a total of 35 employees, of which 30 were fulltime employees, including 9 in sales and marketing, 12 in technology anddevelopment and 9 in administration and finance.None of our employees are represented by a collective bargaining agreement, nor have we experienced any work stoppage. We consider our relationshipwith our employees to be good. Our future success depends on our continuing ability to attract and retain highly qualified engineers, sales and marketing, accountmanagement, and senior management personnel.We also believe we have built a strong sales team focused on expanding into new markets through the acquisition of Naiz and our current team.We believe that our future success will depend, in part, on our continued ability to attract, hire and retain qualified personnel. In particular, we depend onthe skills, experience and performance of our senior management and research personnel. We compete for qualified personnel with other hitech companies, as wellas universities and nonprofit research institutions.16We provide competitive compensation and benefits programs to help meet the needs of our employees. In addition to salaries, these programs (which varyby country/region and employment classification) include incentive compensation plan, pension, and insurance benefits, paid time off, , among others. We also usetargeted equitybased grants with vesting conditions to facilitate retention of personnel, particularly for our key employees.The success of our business is fundamentally connected to the wellbeing of our people. Accordingly, we implemented an hybrid work policy in which theemployees can work from home twice a week.We consider our employees to be a key factor to our success and we are focused on attracting and retaining the best employees at all levels of ourbusiness. Inclusion and diversity is a strategic, business priority. We employ people based on relevant qualifications, demonstrated skills, performance and otherjobrelated factors. We do not tolerate unlawful discrimination related to employment, and strive to ensure that employment decisions related to recruitment,selection, evaluation, compensation, and development, among others, are not influenced by race, color, religion, gender, age, ethnic origin, nationality, sexualorientation, marital status, or disability. Continuous monitoring to ensure pay equity has been a focus in 2022. We have continued to improve gender balance in 2022with a focus on increasing the representation of women hired as new college graduates. We are committed to creating a trusting environment where all ideas arewelcomed and employees feel comfortable and empowered to draw on their unique experiences and backgrounds.We consider our relations with our employees to be good.Company InformationOur principal executive offices are located at HaYarden 4 St., POB 1026, Airport City, Israel 7010000, and our telephone number is +97236009030. Ourwebsite address is www.mysizeid.com. Any information contained on, or that can be accessed through, our website is not incorporated by reference into, nor is it inany way a part of, this Annual Report on Form 10K.We use our website (www.mysizeid.com) as a channel of distribution of Company information. The information we post through this channel may bedeemed material. Accordingly, investors should monitor our website, in addition to following our press releases, SEC filings and public conference calls andwebcasts. The contents of our website are not, however, a part of this Annual Report on Form 10K.Corporate HistoryWe were incorporated in the State of Delaware on September 20, 1999 under the name Topspin Medical, Inc. In December 2013, we changed our name toKnowledgetree Ventures Inc. Subsequently, in February 2014, we changed our name to MySize, Inc. In 2020, we created a subsidiary in the Russian Federation, MySize LLC.From inception through 2012, we were engaged in research and development of a medical magnetic resonance imaging, or MRI, technology forinterventional cardiology and in the development of MRI technology for use in the diagnosis and treatment of prostate cancer. In January 2012, we acquiredMetamorefix Ltd., or Metamorefix. Metamorefix was incorporated in 2007, and was engaged in the development of innovative solutions for the rehabilitation oftissues, particularly skin tissues. By the end of 2012, we ceased operations and in January 2013, we sold our entire ownership interest in Metamorefix.In September 2013, Ronen Luzon, our Chief Executive Officer, acquired control of the Company from Asher Shmuelevitch, according to which Mr. Luzonpurchased 70,238 shares of common stock from Mr. Shmuelevitch, which shares represented approximately 40% of the issued and outstanding capital stock of theCompany at such time, thus becoming a controlling shareholder of the Company. In connection with the acquisition, Mr. Luzon reached a settlement with our thencreditors pursuant to which the main creditor, Mr. Shmuelevitch, was paid a total sum of approximately $140,000 in consideration for a full and final waiver of any andall his claims that he may have relating to any monetary indebtedness of the Company to the creditors.17In February 2014, My Size Israel, our wholly owned subsidiary, entered into a Purchase Agreement, or the Purchase Agreement, with Shoshana Zigdon,who at the time was a beneficial owner of more than 20% of our outstanding shares, with respect to the acquisition by us of certain rights related to the collection ofdata for measurement purposes including rights in the venture, the method and a patent application that had been filed by the Seller (PCT/IL2013/050056), or theAssets. In consideration for the sale of the Assets, we agreed to pay to Ms. Zigdon, 18% of our operating profit, directly or indirectly connected with the Assetstogether with valueadded tax in accordance with the law for a period of seven years from the end of the development period of the aforementioned venture. Inaddition to the foregoing, the Purchase Agreement provided that all developments, improvements, knowledge and knowhow developed and/or accumulated by usafter the execution of the Purchase Agreement will be owned by us. Further, Ms. Zigdon agreed not to compete, directly or indirectly, with us in any matter relatingto the Assets for a period of seven years from the end of the development period of the venture.On May 26, 2021, we, My Size Israel, and Ms. Zigdon entered into an Amendment to Purchase Agreement, or the Amendment, which made certainamendments to the Purchase Agreement. Pursuant to the Amendment, Ms. Zigdon agreed to irrevocably waive (i) the right to repurchase certain assets related tothe collection of data for measurement purposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which our business issubstantially dependent, or the Assets, and (ii) all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My SizeIsrael under the Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation, reward orany rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights, or the Waiver. Inconsideration of the Waiver, we issued 100,000 shares of common stock to Ms. Zigdon.In September 2005, we commenced trading on the Tel Aviv Stock Exchange, or TASE. Between 2007 and 2012 we reported as a public company with theSEC. In August 2012, we suspended our reporting obligations. In mid2015 we resumed reporting as a public company. On July 25, 2016, our common stock beganpublicly trading on the Nasdaq Capital Market under the symbol “MYSZ”.ITEM 1A. RISK FACTORSAn investment in our common stock involves a high degree of risk. You should carefully consider the following risk factors and the other information inthis Annual Report on Form 10K before investing in our common stock. Our business and results of operations could be seriously harmed by any of the followingrisks. The risks set out below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterialalso may materially adversely affect our business, financial condition and/or operating results. If any of the following events occur, our business, financial conditionand results of operations could be materially adversely affected. In such case, the value and trading price of our common stock could decline, and you may lose allor part of your investment.Summary Risk FactorsThe principal factors and uncertainties that make investing in our ordinary shares risky, include, among others:Risks Related to Our Financial Position and Capital Requirements●We have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.●Our limited operating history makes it difficult to evaluate our business and prospects.●We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive and maycause the market price of our common stock to decline.●The report of our independent registered public accounting firm contains an explanatory paragraph regarding substantial doubt about our ability tocontinue as a going concern.Risks Related to Our Company and Our Business●The market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and online thirdparty resellers adopting our flagship product, MySizeID.18●Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broader marketacceptance of our products.●We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which may makeit difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.●We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increase ourcapital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.●If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations and financialcondition may be adversely affected.●If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operations andfinancial condition could be adversely affected.●The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile device applications andcustom development services.●Our growth depends, in part, on the success of our strategic relationships with third parties.●Changes in economic conditions could materially affect our business, financial condition and results of operations.●We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.●We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significant interruptionin our network or hosting and cloud services could adversely impact our operations and harm our business.●Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.●We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.●A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.●Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, data protectionand information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive and confidentialinformation. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm our business,results of operations and financial condition.●We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect our business.●We may face intense competition and expect competition to increase in the future, which could limit us in developing a customer base and generatingrevenue.●Our business operations and future development could be significantly disrupted if we lose key members of our management team.19●If we are able to expand our operations, we may be unable to successfully manage our future growth.Risks Related to Our Operations in Israel and Russia●Our headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.●Russia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.Risks Related to Our Common Stock●A more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.●Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions and adversedevelopments with respect to financial institutions and associated liquidity risk;●Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.●Our securities are traded on more than one market which may result in price variations.●We are a former “shell company” and as such are subject to certain limitations not generally applicable to other public companies.Risks Related to Our Financial Position and Capital RequirementsWe have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.We realized a net loss of approximately $8.3 million and $10.5 million for the years ended December 31, 2022 and 2021 and had an accumulated deficit of$53.5 million as at December 31, 2022. Because of the numerous risks and uncertainties associated with the development and commercialization of our products andbusiness, we are unable to predict the extent of any future losses or when we will become profitable, if at all. Expected future operating losses will have an adverseeffect on our cash resources, shareholders’ equity and working capital. Our failure to become and remain profitable could depress the value of our stock and impairour ability to raise capital, expand our business, maintain our development efforts, or continue our operations. A decline in our value could also cause you to lose allor part of your investment in us.Our limited operating history makes it difficult to evaluate our business and prospects.We have only been developing our measurement technology since 2014. Since then, our operating history has been primarily limited to research anddevelopment, pilot studies, raising capital, and more recently acquisitions and sales and marketing efforts. Therefore, it may be difficult to evaluate our business andprospects. We have not yet demonstrated an ability to commercialize our products. Consequently, any predictions about our future performance may not beaccurate, and you may not be able to fully assess our ability to complete development and/or commercialize our products, and any future products.We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive andmay cause the market price of our common stock to decline.Based on our projected cash flows and the cash balances as of the date of this Annual Report on Form 10K, our existing cash is insufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. In order to meet ourbusiness objectives in the future, we will need to raise additional capital, which may not be available on reasonable terms or at all. Additional capital would be usedto accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;20●respond to competitive pressure;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, and a number of otherfactors, many of which are outside our control, and on our financial performance. Accordingly, we cannot assure you that we will be able to successfully raiseadditional capital at all or on terms that are acceptable to us. If we cannot raise additional capital when needed, it may have a material adverse effect on our business,results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.Management has concluded that there is substantial doubt about our ability to continue as a going concern which could prevent us from obtainingnew financing on reasonable terms or at all.We have incurred significant losses and negative cash flows from operations and have an accumulated deficit that raises substantial doubt about its abilityto continue as a going concern. Our audited consolidated financial statements for the year ended December 31, 2022 were prepared under the assumption that wewould continue our operations as a going concern. Our independent registered public accounting firm has included a “going concern” explanatory paragraph in itsreport on our financial statements for the year ended December 31, 2022. If we are unable to improve our liquidity position, by, among other things, raising capitalthrough public or private offerings or reducing our expenses, we may exhaust our cash resources and will be unable to continue our operations. If we cannotcontinue as a viable entity, our shareholders would likely lose most or all of their investment in us.Risks Related to Our Company and Our BusinessThe market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and onlinethirdparty resellers adopting our flagship product, MySizeID.The market for our measurement technology is relatively new and unproven and is subject to a number of risks and uncertainties. We believe that ourfuture success will depend in large part on market adoption of our flagship product, MySizeID, by U.S. retailers and online thirdparty resellers. In order to grow ourbusiness, we intend to focus on educating retailers and resellers and other potential customers about the benefits of our measurement technology, expanding thefunctionality of our products and bringing new products to market to increase market acceptance and use of our technology. Our ability to develop and expand themarket that our products address depends upon a number of factors, including the cost savings, performance and perceived value associated with such products.The market for our products could fail to develop or there could be a reduction in interest or demand for our products as a result of a lack of consumer acceptance,technological challenges, competing products and services, weakening economic conditions and other causes. We may never successfully commercialize ourproducts and if our products fail to achieve market acceptance, this would have a material adverse effect on our business, results of operations and financialcondition.21Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broadermarket acceptance of our products.Our ability to achieve customer adoption, especially among U.S. retailers will depend, in part, on our ability to effectively organize, focus and train our salesand marketing personnel. We have limited experience selling to U.S. retailers and only recently established a U.S. sales force. We believe that there is significantcompetition for experienced sales professionals with the skills and industry knowledge that we require. Our ability to achieve significant revenue growth in thefuture will depend, in part, on our ability to recruit, train and retain a sufficient number of experienced sales professionals, particularly those with experience sellingto U.S. retailers. In addition, even if we are successful in hiring qualified sales personnel, new hires require significant training and experience before they achievefull productivity, particularly for sales efforts targeted at U.S. retailers and new markets. Because we only recently started sales efforts, we cannot predict whether, orto what extent, our sales efforts will be successful.We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which maymake it difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.In this market segment, the decision to adopt our products may require the approval of multiple technical and business decision makers, including security,compliance, procurement, operations and IT. In addition, while U.S. retailers may be willing to deploy our products on a limited basis, before they will commit todeploying our products at scale, they often require extensive education about our products and significant customer support time, engage in protracted pricingnegotiations and seek to secure readily available development resources. As a result, it is difficult to predict when we will obtain new customers and begingenerating revenue from these customers. As part of our sales cycle, we may incur significant expenses before executing a definitive agreement with a prospectivecustomer and before we are able to generate any revenue from such agreement. We have no assurance that the substantial time and money spent on our salesefforts will generate significant revenue. If conditions in the marketplace generally or with a specific prospective customer change negatively, it is possible that nodefinitive agreement will be executed, and we will be unable to recover any of these expenses. If we are not successful in targeting, supporting and streamlining oursales processes and if revenue expected to be generated from a prospective customer is not realized in the time period expected or not realized at all, our ability togrow our business, and our operating results and financial condition may be adversely affected. If our sales cycles lengthen, our future revenue could be lower thanexpected, which would have an adverse impact on our operating results and could cause our stock price to decline.22We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increaseour capital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.In order to reduce time to market and obtain complementary technologies, we are seeking to acquire technologies and businesses that are synergistic to ourproduct offering. For example, we recently acquired Orgad which operates an omnichannel ecommerce platform and Naiz which provides SaaS technology solutionsthat solve size and fit issues for fashion ecommerce companies. We evaluate from time to time various acquisitions and collaborations, including licensing oracquiring complementary technologies, intellectual property rights, or businesses. The process for acquiring a company may take from several months up to a yearand costs can vary greatly. We may also compete with others to acquire companies, and such competition may result in decreased availability of, or an increase inprice for, suitable acquisition candidates. In addition, we may not be able to consummate acquisitions or investments that we have identified as crucial to theimplementation of our strategy for other commercial or economic reasons. As a result, it may be more difficult for us to identify suitable acquisition or investmenttargets or to consummate acquisitions or investments on acceptable terms or at all. If we are not able to execute on any acquisition, we may not be able to achieve afuture growth strategy and may lose market share.In addition, the acquisition of Orgad, Naiz and any potential future acquisition, joint venture or collaboration may entail numerous potential risks, including:●increased operating expenses and cash requirements;●the assumption of additional indebtedness or contingent liabilities;●assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel;●the diversion of our management’s attention from our existing programs and initiatives in pursuing such a strategic merger or acquisition;●retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships;●risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing technologies; and●our inability to generate revenue from acquired technologies or products sufficient to meet our objectives in undertaking the acquisition or even to offsetthe associated acquisition and maintenance costs.All of the foregoing risks may be magnified as the cost, size or complexity of an acquisition or acquired company increases, or where the acquiredcompany’s products, market or business are materially different from ours, or where more than one integration is occurring simultaneously or within a concentratedperiod of time. We may not be able to obtain the necessary regulatory approvals, including those of antitrust authorities and foreign investment authorities, incountries where we seek to consummate acquisitions or make investments. For those and other reasons, we may ultimately fail to consummate an acquisition, even ifwe announce the intended acquisition.In addition, we may require significant financing to complete an acquisition or investment, whether through bank loans, raising of equity or debt orotherwise. We cannot assure you that such financing options will be available to us on reasonable terms, or at all. If we are not able to obtain such necessaryfinancing, it could have an impact on our ability to consummate a substantial acquisition or investment and execute a future growth strategy. Alternatively, we mayissue a significant number of shares as consideration for an acquisition, which would have a dilutive effect on our existing shareholders. For example, in partialconsideration for the acquisition of Orgad, we agreed to issue up to 111,602 shares of our common stock and in the Naiz acquisition we issued 240,000 shares of ourcommon stock. Furthermore, if we undertake acquisitions, we may incur large onetime expenses and acquire intangible assets that could result in significant futureamortization expense.23If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations andfinancial condition may be adversely affected.We believe that enhancing the “MySize” brand identity and increasing market awareness of our company and products, particularly among U.S. retailers, iscritical to achieving widespread acceptance of our products. Our ability to successfully develop new retailers may be adversely affected by a lack of awareness oracceptance of our brand. To the extent that we are unable to foster name recognition and affinity for our brand, our growth may be significantly delayed or impaired.The successful promotion of our brand will depend largely on our continued marketing efforts, market adoption of our products, and our ability to successfullydifferentiate our products from competing products and services. Our brand promotion may not be successful or result in revenue generation. Any incident thaterodes consumer affinity for our brand could significantly reduce our brand value and damage our business. If consumers perceive or experience a reduction inquality, or in any way believe we fail to deliver a consistently positive experience, our brand value could suffer and our business may be adversely affected.In particular, adverse weather conditions can impact guest traffic at our retailers, and, in more severe cases, cause temporary retail closures, sometimes forprolonged periods. Our business is subject to seasonal fluctuations, with retail sales typically higher during certain months, such as December. Adverse weatherconditions during our most favorable months or periods may exacerbate the effect of adverse weather on consumer traffic and may cause fluctuations in ouroperating results from quartertoquarter within a fiscal year.If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operationsand financial condition could be adversely affected.Our ability to attract new customers depends in part on our ability to enhance and improve our existing products, increase adoption and usage of ourproducts and introduce new products. The success of any enhancements or new products depends on several factors, including timely completion, adequatequality testing, actual performance quality, and overall market acceptance. Enhancements and new products that we develop may not be introduced in a timely orcosteffective manner, may contain errors or defects, may have interoperability difficulties with our platform or other products or may not achieve the broad marketacceptance necessary to generate significant revenue. Furthermore, our ability to increase the usage of our products depends, in part, on the development of newuse cases for our products and may be outside of our control. If we are unable to successfully enhance our existing products to meet evolving customerrequirements, increase adoption and usage of our products, develop new products, then our business, results of operations and financial condition would beadversely affected.The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile Apps and customdevelopment services.We must continue to enhance and improve the performance, functionality and reliability of our products. The mobile technology industry is characterizedby rapid technological change, changes in user requirements and preferences, frequent new product and services introductions embodying new technologies andthe emergence of new industry standards and practices that could render our products obsolete. Our success will depend, in part, on our ability to both internallydevelop and enhance our existing products, develop new products that address the increasingly sophisticated and varied needs of our customers, and respond totechnological advances and emerging industry standards and practices on a costeffective and timely basis. The development of our technology involvessignificant technical and business risks. We may fail to use new technologies effectively or to adapt our proprietary technology and systems to customerrequirements or emerging industry standards. If we are unable to adapt to changing market conditions, customer requirements or emerging industry standards, wemay not be able to increase our revenue and expand our business.Changes in economic conditions could materially affect our business, financial condition and results of operations.Because our primary target customers include U.S. retailers , we, together with the rest of the fashion/apparel industry, will depend upon consumerdiscretionary spending. Increases in unemployment rates, reductions in home values, increases in home foreclosures, investment losses, personal bankruptcies andreductions in access to credit and reduced consumer confidence, may impact consumers’ ability and willingness to spend discretionary dollars. In addition, volatileeconomic conditions may repress consumer confidence and discretionary spending. Any of the foregoing may have a material adverse effect on our business,financial condition and results of operations.24Our growth depends, in part, on the success of our strategic relationships with third parties.To grow our business, we anticipate that we will continue to depend on relationships with third parties, such as our customers and thirdparty platforms.Identifying partners, and negotiating and documenting relationships with them, requires significant time and resources. If we are unsuccessful in establishing ormaintaining our relationships with third parties, our ability to compete in the marketplace or to grow our revenue could be impaired, and our results of operationsmay suffer. Even if we are successful, we cannot assure you that these relationships will result in increased customer usage of our products or increased revenue.We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.We currently utilize, and plan on continuing to utilize over the current fiscal year, thirdparty networking providers and distribution through companiesincluding, but not limited to, Apple and Google as well as Shopify, WooCommerce and, Datalogic, Honeywell and Zebra to distribute our technologies. If disruptionsor capacity constraints occur, we may have no means of replacing these services, on a timely basis or at all. This could cause a material adverse condition for ouroperations and financial earnings.We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significantinterruption in our network or hosting and cloud services could adversely impact our operations and harm our business.Our technology infrastructure is critical to the performance of our products and customer satisfaction. Our products run on a complex distributed system,or what is commonly known as cloud computing. We own, operate and maintain elements of this system, but significant elements of this system are operated bythirdparties that we do not control and which would require significant time to replace. We expect this dependence on thirdparties to continue. In particular, asignificant portion, if not almost all data storage, data processing and other computing services and systems is hosted by cloud computing providers. Anydisruptions, outages and other performance problems relating to such services, including infrastructure changes, human or software errors and capacity constraints,could adversely impact our business, financial condition or results of operations.Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.We update our products on a frequent basis. Despite efforts to test our updates, errors, failures or bugs may not be found in our products until after theyare deployed to a customer. We have discovered and expect we will continue to discover errors, failures and bugs in our products and anticipate that certain of theseerrors, failures and bugs will only be discovered and remediated after deployment. Real or perceived errors, failures or bugs in our platform could result in negativepublicity, government inquiries, loss of or delay in market acceptance of our products, loss of competitive position, or claims by customers for losses sustained bythem. In such an event, we may be required, or may choose, for customer relations or other reasons, to expend additional resources in order to help correct theproblem.We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.In connection with the operation of our business, we store, process and transmit data, including personal and payment information, about our employeesand customers, a portion of which is confidential and/or personally sensitive. Unauthorized disclosure or loss of sensitive or confidential data may occur through avariety of methods. These include, but are not limited to, systems failure, employee negligence, fraud or misappropriation, or unauthorized access to or through ourinformation systems, whether by our employees or third parties, including a cyberattack by computer programmers, hackers, members of organized crime and/orstatesponsored organizations, who may develop and deploy viruses, worms or other malicious software programs. Such disclosure, loss or breach could harm ourreputation and subject us to government sanctions and liability under our contracts and laws that protect sensitive or personal data and confidential information,resulting in increased costs or loss of revenues. It is possible that security controls over sensitive or confidential data and other practices we and our thirdpartyvendors follow may not prevent the improper access to, disclosure of, or loss of such information. The potential risk of security breaches and cyberattacks mayincrease as we introduce new products and offerings. Further, data privacy is subject to frequently changing rules and regulations, which sometimes conflict amongthe various jurisdictions in which we provide services. Any failure or perceived failure to successfully manage the collection, use, disclosure, or security of personalinformation or other privacy related matters, or any failure to comply with changing regulatory requirements in this area, could result in legal liability or impairment toour reputation in the marketplace.25A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.Information security risks have generally increased in recent years, in part because of the proliferation of new technologies and the use of the Internet, andthe increased sophistication and activity of organized crime, hackers, terrorists, activists, cybercriminals and other external parties, some of which may be linked toterrorist organizations or hostile foreign governments. For example, a cybercriminal could use cybersecurity threats to gain access to sensitive information aboutanother company or to alter or disrupt news or information to be distributed by PR Newswire. Cybersecurity attacks are becoming more sophisticated and includemalicious software, ransomware, attempts to gain unauthorized access to data and other electronic security breaches that could lead to disruptions in criticalsystems, unauthorized release of confidential or otherwise protected information and corruption of data, substantially damaging our reputation. Any person whocircumvents our security measures could steal proprietary or confidential customer information or cause interruptions in our operations. We incur significant coststo protect against security breaches, and may incur significant additional costs to alleviate problems caused by any breaches. Our failure to prevent securitybreaches, or wellpublicized security breaches affecting the Internet in general, could significantly harm our reputation and business and financial results.Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, dataprotection and information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive andconfidential information. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm ourbusiness, results of operations and financial condition.We and our customers that use our products may be subject to privacy and data protectionrelated laws and regulations that impose obligations inconnection with the collection, processing and use of personal data, financial data, health or other similar data. The U.S. federal and various state and foreigngovernments have adopted or proposed limitations on, or requirements regarding, the collection, distribution, use, security and storage of personally identifiableinformation of individuals. The U.S. Federal Trade Commission and numerous state attorneys general are applying federal and state consumer protection laws toimpose standards on the online collection, use and dissemination of data, and to the security measures applied to such data.Similarly, many foreign countries and governmental bodies, including the EU member states, have laws and regulations concerning the collection and useof personally identifiable information obtained from individuals located in the EU or by businesses operating within their jurisdiction, which are often morerestrictive than those in the United States. Laws and regulations in these jurisdictions apply broadly to the collection, use, storage, disclosure and security ofpersonally identifiable information that identifies or may be used to identify an individual, such as names, telephone numbers, email addresses and, in somejurisdictions, IP addresses and other online identifiers.For example, the GDPR, which took full effect on May 25, 2018. The GDPR enhances data protection obligations for businesses and requires serviceproviders (data processors) processing personal data on behalf of customers to cooperate with European data protection authorities, implement security measuresand keep records of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to or greater of €20 million or 4% of global annualrevenues. In addition, the CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and require deletion of their personalinformation, opt out of certain personal information sharing, and receive detailed information about how their personal information is used. The CCPA provides forcivil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further, failure to comply withthe Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may expose us to administrativefines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the current enforcementmeasures and sanctions. There are also additional laws and regulations in additional jurisdictions around the world which govern the protection of consumers andof electronic communications. If our efforts to comply with GDPR, CCPA or other applicable laws and regulations are not successful, we may be subject to penaltiesand fines that would adversely impact our business and results of operations, and our ability to conduct business could be significantly impaired.26Additionally, although we endeavor to have our products comply with applicable laws and regulations, these and other obligations may be modified, theymay be interpreted and applied in an inconsistent manner from one jurisdiction to another, and they may conflict with one another, other regulatory requirements,contractual commitments or our internal practices. We also may be bound by contractual obligations relating to our collection, use and disclosure of personal,financial and other data or may find it necessary or desirable to join industry or other selfregulatory bodies or other privacy or data protectionrelatedorganizations that require compliance with their rules pertaining to privacy and data protection.We expect that there will continue to be new proposed laws, rules of selfregulatory bodies, regulations and industry standards concerning privacy, dataprotection and information security in the United States, the European Union and other jurisdictions, and we cannot yet determine the impact such future laws,rules, regulations and standards may have on our business. Moreover, existing U.S. federal and various state and foreign privacy and data protectionrelated lawsand regulations are evolving and subject to potentially differing interpretations, and various legislative and regulatory bodies may expand current or enact new lawsand regulations regarding privacy and data protectionrelated matters. Because global laws, regulations and industry standards concerning privacy and datasecurity have continued to develop and evolve rapidly, it is possible that we or our products or platform may not be, or may not have been, compliant with eachsuch applicable law, regulation and industry standard and compliance with such new laws or to changes to existing laws may impact our business and practices,require us to expend significant resources to adapt to these changes, or to stop offering our products in certain countries. These developments could adverselyaffect our business, results of operations and financial condition.We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect ourbusiness.Our ability to implement our business plan successfully depends in part on our ability to build brand recognition using our trademarks, service marks andother proprietary intellectual property, including our names and logos. We currently have no registered trademarks. While we plan to register a number of ourtrademarks; however, no assurance can be given that our trademark applications will be approved. As of December 31, 2022, we own 18 issued patents: six in Europe,four in the U.S., three in each of Russia and Japan and one in each of Canada and Israel which expire between January 20, 2033 and August 18, 2036, and we havetwo additional patent applications in process. As of such date, we do not have any registered trademarks., No assurance can be given that our patent applicationswhich are in process will be approved. If our patent applications are not approved, our ability to expand or develop our business may be negatively affected.Third parties may also oppose our trademark or patent applications, or otherwise challenge our use of the trademarks or patents. In the event that ourtrademarks or patents are successfully challenged, we could be forced to rebrand our goods and services or redesign our technology, which could result in loss ofbrand recognition, and could require us to devote resources to advertising and marketing new brands and products.If our efforts to register, maintain and protect our intellectual property are inadequate, or if any thirdparty misappropriates, dilutes or infringes on ourintellectual property, the value of our brands may be harmed, which could have a material adverse effect on our business and might prevent our brands fromachieving or maintaining market acceptance. We may also face the risk of claims that we have infringed third parties’ intellectual property rights. If third parties claimthat we infringe upon their intellectual property rights, our operating profits could be adversely affected. Any claims of intellectual property infringement, eventhose without merit, could be expensive and time consuming to defend, require us to rebrand our services, if feasible, divert management’s attention and resourcesor require us to enter into royalty or licensing agreements in order to obtain the right to use a thirdparty’s intellectual property.Any royalty or licensing agreements, if required, may not be available to us on acceptable terms or at all. A successful claim of infringement against uscould result in our being required to pay significant damages, enter into costly license or royalty agreements, or stop the sale of certain products or services, any ofwhich could have a negative impact on our operating profits and harm our future prospects.We may face intense competition and expect competition to increase in the future, which could prohibit us from developing a customer base andgenerating revenue.We face significant competition in every aspect of our business. Our competitors include True Fit, Virtusize, EasyMeasure, AR MeasureKit, Smart Measureand 3DLook. These companies may already have an established market in our industry. Most of these companies have significantly greater financial and otherresources than us and have been developing their products and services longer than we have been developing ours.27In addition, some of our larger competitors have substantially broader product offerings and leverage their relationships based on other products orincorporate functionality into existing products to gain business in a manner that discourages potential customers from purchasing our products. Potentialcustomers may also prefer to purchase from their existing solution providers rather than a new solution provider regardless of product performance or features.These larger competitors often have broader product lines and market focus and will therefore not be as susceptible to downturns in a particular market. Conditionsin our market could change rapidly and significantly as a result of technological advancements, partnering by our competitors or continuing market consolidation.New startup companies that innovate and large competitors that are making significant investments in research and development may invent similar or superiorproducts and technologies that compete with our products. In addition, some of our competitors may enter into new alliances with each other or may establish orstrengthen cooperative relationships. Any such consolidation, acquisition, alliance or cooperative relationship could lead to pricing pressure and our loss of anyfuture market share and could result in a competitor with greater financial, technical, marketing, service and other resources, all of which could harm our ability tocompete. Furthermore, organizations may be more willing to incrementally add solutions to their existing infrastructure from competitors than to replace their existinginfrastructure with our products. Any failure to meet and address these factors could harm our business, results of operations and financial condition.Our business operations and future development could be significantly disrupted if we lose key members of our management team.The success of our business continues to depend to a significant degree upon the continued contributions of our senior officers and key employees, bothindividually and as a group. Our future performance will be substantially dependent in particular on our ability to retain and motivate Ronen Luzon, our ChiefExecutive Officer, and certain of our other senior executive officers. The loss of the services of our Chief Executive Officer, senior officers or other key employeescould have a material adverse effect on our business and plans for future development. We have no reason to believe that we will lose the services of any of theseindividuals in the foreseeable future; however, we currently have no effective replacement for any of these individuals due to their experience, reputation in theindustry and special role in our operations. We also do not maintain any key man life insurance policies for any of our employees.If we are able to expand our operations, we may be unable to successfully manage our future growth.Our growth may strain our infrastructure and resources. Any such growth could place increased strain on our management, operational, financial and otherresources, and we will need to train, motivate, and manage employees, as well as attract management, sales, finance and accounting, international, technical, andother professionals. Any failure to expand these areas and implement appropriate procedures and controls in an efficient manner and at a pace consistent with ourbusiness objectives could have a material adverse effect on our business, results of operations and financial condition.Our business operations are conducted in multiple languages and could be disrupted due to miscommunications or translation errors.The success of our business continues to depend on our marketing efforts in the United States, Europe and Israel, each of which is conducted in the locallanguage. Miscommunications or inaccurate foreign language translations could have a material adverse effect on our business operations and financial conditions.Additionally, contracts, communications and complex technical information must be accurately translated into foreign languages.We will continue to incur costs and be subject to various obligations as a result of being a public company, listed in the United States and in Israel.We will continue to incur significant legal, accounting and other expenses as a result of being a public company, listed in the United States and in Israel.Although we will incur costs each year associated with being a publiclytraded company, it is possible that our actual costs of being a publiclytraded company willvary from year to year and may be different than our estimates. In estimating these costs, we take into account expenses related to insurance, legal, accounting andcompliance activities.28Furthermore, the need to maintain the corporate infrastructure demanded of a public company may divert management’s attention from implementing ourgrowth strategy, which could prevent us from improving our business, results of operations and financial condition. We have made, and will continue to make,changes to our internal controls and procedures for financial reporting and accounting systems to meet our reporting obligations as a U.S. publicly traded company.However, the measures we take may not be sufficient to satisfy our obligations as a publicly traded company.Any future or current litigation could have a material adverse impact on our results of operations, financial condition and liquidity.From time to time, we may be subject to litigation, including, among others, potential stockholder derivative actions and class actions. Risks associatedwith legal liability are difficult to assess and quantify, and their existence and magnitude can remain unknown for significant periods of time. Subject to certainexceptions, our Amended and Restated Certificate of Incorporation, or Certificate of Incorporation, and Amended and Restated Bylaws, or Bylaws, require us toindemnify and advance expenses to our officers and directors involved in legal proceedings. To date we have obtained directors and officers’ liability, or D&O,insurance to cover some of the risk exposure for our directors and officers. Such insurance generally pays the expenses (including amounts paid to plaintiffs, fines,and expenses including attorneys’ fees) of officers and directors who are the subject of a lawsuit as a result of their service to us. There can be no assurance that wewill be able to continue to maintain this insurance at reasonable rates or at all, or in amounts adequate to cover such expenses should such a lawsuit occur. WithoutD&O insurance, the amounts we would pay to indemnify our officers and directors should they be subject to legal action based on their service to us could have amaterial adverse effect on our financial condition, results of operations and liquidity. Such lawsuits, and any related publicity, may result in substantial costs and,among other things, divert the attention of management and our employees. An unfavorable outcome in any claim or proceeding against us could have a materialadverse impact on our financial position and results of operations for the period in which the unfavorable outcome occurs, and potentially in future periods. Further,any settlement announced by us may expose us to further claims against us by third parties seeking monetary or other damages which, even if unsuccessful, woulddivert management attention from the business and cause us to incur costs, possibly material, to defend such matters, which could have a material adverse impacton our financial position. See “Legal Proceedings” for more information regarding our involvement in ongoing litigation matters.Federal, state and local or Israeli tax rules may adversely impact our results of operations and financial position.We are subject to federal, state and local taxes in the U.S., as well as local taxes in Israel in respect to our operations in Israel. Although we believe our taxestimates are reasonable, if the Internal Revenue Service or other taxing authority disagrees with the positions we have taken on our tax returns, we could faceadditional tax liability, including interest and penalties. If material, payment of such additional amounts upon final adjudication of any disputes could have a materialimpact on our results of operations and financial position. In addition, complying with new tax rules, laws or regulations could impact our financial condition, andincreases to federal or state statutory tax rates and other changes in tax laws, rules or regulations may increase our effective tax rate. Any increase in our effectivetax rate could have a material impact on our financial results.A significant majority of Orgad’s revenue is from sales of products on Amazon’s U.S. Marketplace and any change, limitation or restriction on ourability to operate on Amazon’s platform or any other marketplace could have a material adverse impact to our business, results of operations, financialcondition and prospects.Orgad, our wholly owned subsidiary, operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com, eBay and others. A substantial percentage of Orgad’s revenue is driven by sales on Amazon’s U.S. marketplace and Orgad is subject toterms of service of Amazon and other maketplaces and various other seller policies and services that apply to third parties selling products on Amazon and othermarketplaces. Generally, a marketplace has the right to terminate or suspend its agreement with Orgad at any time and for any reason. Such marketplace may takeother actions against Orgad such as suspending or terminating a seller account or product listing and withholding payments owed to Orgad indefinitely. Forexample, in July 2022, Amazon deactivated Orgad’s Amazon U.S. store as a result of complaints submitted due to an error in the listed manufacturer of certainproducts on Orgad’s store. Although its account was subsequently reinstated in September 2022, if the deactivation were to occur in the future for a prolongedperiod of time, or if Amazon were to terminate Orgad’s account, this would have a material adverse effect on our business, results of operations, financial conditionand prospects. While Orgad endeavors to materially comply with the terms of services of the marketplaces on which it operates, we can provide no assurance thatthese marketplaces will have the same determination with respect to our compliance.29In addition, Amazon and other marketplaces can make changes to its platform that could require Orgad to change the manner in which it operates, limit itsability to successfully launch new products or increase its costs to operate and such changes could have an adverse effect on our business, results of operations,financial condition and prospects. Examples of changes that could impact us relate to platform fee charges (i.e., selling commissions), exclusivity, inventorywarehouse availability, excluded products and limitations on sales and marketing. Any change, limitation or restriction on our ability to sell on Amazon’s platform orany other marketplace, even if temporary, could have a material impact on our business, results of operations, financial condition and prospects.Orgad also relies on services provided by Amazon’s fulfillment platform, including Prime Certification, which provides for expedited shipping to theconsumer, an important aspect in the buying decision for consumers. For products that Orgad fulfills itself, Orgad is qualified to offer our products for sale withPrime Certification delivery. Any inability to market our products for sale with expedited delivery provided under Prime Certification could have a material impact onour business, results of operations, financial condition and prospects. Failure to remain compliant with the best fulfillment practices on Amazon’s platform couldhave a material impact on our business, results of operations, financial condition and prospects. In addition, due to the COVID19 pandemic, Amazon has changedthe amount of inventory it accepts per product for a period of time. If this were to continue it could cause us to miss sales and/or pay additional shipping costswhich would harm our business operations and financial conditions.Orgad’s business depends on its ability to build and maintain strong product listings on ecommerce platforms. Orgad may not be able to maintain andenhance our product listings if it receives unfavorable customer complaints, negative publicity or otherwise fails to live up to consumers’ expectations, whichcould materially adversely affect our business, results of operations and growth prospects.Maintaining and enhancing Orgad’s product listings is critical in expanding and growing its business. However, a significant portion of Orgad’s perceivedperformance to the customer depends on third parties outside of its control, including suppliers and thirdparty delivery agents as well as online retailers such asAmazon and eBay. Because Orgad’s agreements with its online retail partners are generally terminable at will, it may be unable to maintain these relationships, andour results of operations could fluctuate significantly from period to period. Because Orgad relies on third parties to deliver its products, it is subject to shippingdelays or disruptions caused by inclement weather, natural disasters, labor activism, health epidemics or bioterrorism. It may also experience shipping delays ordisruptions due to other carrierrelated issues relating to their own internal operational capabilities. Further, Orgad relies on the business continuity plans of thesethird parties to operate during pandemics, like the COVID19 pandemic, and it has limited ability to influence their plans, prevent delays, and/or cost increases due toreduced availability and capacity and increased required safety measures.Customer complaints or negative publicity about its products, delivery times, or marketing strategies, even if not accurate, especially on blogs, social mediawebsites and thirdparty market sites, could rapidly and severely diminish consumer view of Orgad’s product listings and result in harm to its brand. Customers mayalso make safetyrelated or other types of claims regarding products sold through our online retail partners, such as Amazon, which may result in an online retailpartner removing the product from its marketplace. We also use and rely on other services from third parties, such as our telecommunications services, and thoseservices may be subject to outages and interruptions that are not within our control.Orgad faces risks related to successfully optimizing and operating its fulfillment and customer service operations.Failures to adequately predict customer demand or otherwise optimize and operate its fulfillment and customer service operations successfully from time totime result in excess or insufficient fulfillment or customer service capacity, increased costs, and impairment charges, any of which could materially harm ourbusiness. As Orgad continues to add fulfillment and customer service capability or add new businesses with different requirements, its fulfillment and customerservice operations become increasingly complex and operating them becomes more challenging. There can be no assurance that Orgad will be able to operate ouroperations effectively.30In addition, failure to optimize inventory in our fulfillment operations increases net shipping cost by requiring longzone or partial shipments. Orgad may beunable to adequately staff its fulfillment and customer service operations. Orgad’s failure to properly handle such inventory or to accurately forecast productdemand may result in it being unable to secure sufficient storage space or to optimize its fulfillment operations or cause other unexpected costs and other harm toour business and reputation.Orgad relies on a limited number of shipping companies to deliver inventory to it and completed orders to our customers. The inability to negotiateacceptable terms with these companies or performance problems or other difficulties experienced by these companies could negatively impact our operating resultsand customer experience. In addition, Orgad’s ability to receive inbound inventory efficiently and ship completed orders to customers also may be negativelyaffected by natural or manmade disasters, extreme weather, geopolitical events and security issues, labor or trade disputes, and similar events.The variability in Orgad’s retail business places increased strain on its operations.Demand for Orgad’s product listings can fluctuate significantly for many reasons, including as a result of seasonality, promotions, product launches, orunforeseeable events, such as in response to natural or manmade disasters, extreme weather, or geopolitical events. For example, Orgad expects a disproportionateamount of our retail sales to occur during our fourth quarter. Failure to stock or restock popular products in sufficient amounts such that Orgad fails to meetcustomer demand could significantly affect our revenue and our future growth. If too many customers access the websites on which Orgad engages in onlineretailing within a short period of time due to increased demand, Orgad may experience system interruptions that make the websites unavailable or prevent us fromefficiently fulfilling orders, which may reduce the volume of goods its offers or sell and the attractiveness of its products. In addition, Orgad may be unable toadequately staff for fulfillment of orders and customer service during these peak periods and delivery and other fulfillment companies and customer service cosourcers may be unable to meet the seasonal demand.Our business is subject to the risks of earthquakes, fire, power outages, floods, health risks and other catastrophic events, and to interruption by manmade problems such as terrorism.Natural disasters, such as fire or floods, a significant power outage, telecommunications failure, terrorism, an armed conflict, cyberattacks, epidemics andpandemics such as COVID19, or other geopolitical unrest could affect our supply chain, manufacturers, logistics providers, channel partners, or endcustomers orthe economy as a whole and such disruption could impact us and the shipments and sales. These risks may be further increased if the disaster recovery plans for usand our suppliers prove to be inadequate. To the extent that any of the above should result in delays or cancellations of customer orders, the loss of customers, orthe delay in the deployment or shipment of products, our business, financial condition, and operating results would be adversely affected.For example, on January 2, 2023, Orgad experienced a fire at its warehouse in Israel. We are not aware of any casualties or injuries associated with the fire.We shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incidentdid not affect the future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of thisincident on the other parties that were involved in the incident (lessor and others that leased properties near the warehouse).Our business could be negatively impacted by unsolicited takeover proposals, by shareholder activism or by proxy contests relating to the election ofdirectors or other matters.Our business could be negatively affected as a result of an unsolicited takeover proposal, by shareholder activism or a proxy contest. During 2021, anactivist shareholder sought to make changes to our board of directors, among other matters, which ultimately resulted in us entering into a settlement agreementwith the activist shareholder and another shareholder, and for which considerable costs were incurred and absorbed significant time and attention by managementand the board of directors. A future proxy contest, unsolicited takeover proposal, or other shareholder activism relating to the election of directors or other matterswould most likely require us to incur significant legal fees and proxy solicitation expenses and require significant time and attention by management and our Boardof Directors. The potential of a proxy contest, unsolicited takeover proposal, or other shareholder activism could interfere with our ability to execute our strategicplan, give rise to perceived uncertainties as to our future direction, result in the loss of potential business opportunities or make it more difficult to attract and retainqualified personnel, any of which could materially and adversely affect our business and operating results.31Environmental, social and corporate governance (ESG) issues, including those related to climate change and sustainability, may have an adverseeffect on our business, financial condition and results of operations and damage our reputation.There is an increasing focus from certain investors, customers, consumers, employees and other stakeholders concerning ESG matters. Additionally, publicinterest and legislative pressure related to public companies’ ESG practices continue to grow. If our ESG practices fail to meet regulatory requirements or investor,customer, consumer, employee or other shareholders’ evolving expectations and standards for responsible corporate citizenship in areas including environmentalstewardship, support for local communities, Board of Director and employee diversity, human capital management, employee health and safety practices, productquality, supply chain management, corporate governance and transparency, our reputation, brand and employee retention may be negatively impacted, and ourcustomers and suppliers may be unwilling to continue to do business with us.Customers, consumers, investors and other shareholders are increasingly focusing on environmental issues, including climate change, energy and wateruse, plastic waste and other sustainability concerns. Concern over climate change may result in new or increased legal and regulatory requirements to reduce ormitigate impacts to the environment. Changing customer and consumer preferences or increased regulatory requirements may result in increased demands orrequirements. Complying with these demands or requirements could cause us to incur additional manufacturing, operating or product development costs.If we do not adapt to or comply with new regulations, including the SEC’s published proposed rules that would require companies to provide significantlyexpanded climaterelated disclosures in their periodic reporting, which may require us to incur significant additional costs to comply and impose increased oversightobligations on our management and board of directors, or fail to meet evolving investor, industry or stakeholder expectations and concerns regarding ESG issues,investors may reconsider their capital investment in our company, we may become subject to penalties, and customers and consumers may choose to stoppurchasing our products, if approved for commercialization, which could have a material adverse effect on our reputation, business or financial condition.Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions andadverse developments with respect to financial institutions and associated liquidity risk.Our business depends on the economic health of the global economies. If the conditions in the global economies remain uncertain or continue to bevolatile, or if they deteriorate, including as a result of the impact of military conflict, such as the war between Russia and Ukraine, terrorism or other geopoliticalevents, our business, operating results and financial condition may be materially adversely affected. Economic weakness, inflation and increases in interest rates,limited availability of credit, liquidity shortages and constrained capital spending have at times in the past resulted, and may in the future result, in challenging anddelayed sales cycles, slower adoption of new technologies and increased price competition, and could negatively affect our ability to forecast future periods, whichcould result in an inability to satisfy demand for our products and a loss of market share.In addition, increases in inflation raise our costs for commodities, labor, materials and services and other costs required to grow and operate our business,and failure to secure these on reasonable terms may adversely impact our financial condition. Additionally, increases in inflation, along with the uncertaintiessurrounding COVID19, geopolitical developments and global supply chain disruptions, have caused, and may in the future cause, global economic uncertainty anduncertainty about the interest rate environment, which may make it more difficult, costly or dilutive for us to secure additional financing. A failure to adequatelyrespond to these risks could have a material adverse impact on our financial condition, results of operations or cash flows.More recently, the closures of SVB and Signature Bank and their placement into receivership with the FDIC created bankspecific and broader financialinstitution liquidity risk and concerns. Although the Department of the Treasury, the Federal Reserve and the FDIC jointly released a statement that depositors atSVB and Signature Bank would have access to their funds, even those in excess of the standard FDIC insurance limits, under a systemic risk exception, futureadverse developments with respect to specific financial institutions or the broader financial services industry may lead to marketwide liquidity shortages, impair theability of companies to access nearterm working capital needs, and create additional market and economic uncertainty. There can be no assurance that future creditand financial market instability and a deterioration in confidence in economic conditions will not occur. Our general business strategy may be adversely affected byany such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions. If the current equityand credit markets deteriorate, or if adverse developments are experienced by financial institutions, it may cause shortterm liquidity risk and also make anynecessary debt or equity financing more difficult, more costly, more onerous with respect to financial and operating covenants and more dilutive. Failure to secureany necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stockprice and could require us to alter our operating plans. In addition, there is a risk that one or more of our service providers, financial institutions, manufacturers,suppliers and other partners may be adversely affected by the foregoing risks, which could directly affect our ability to attain our operating goals on schedule andon budget.Our business may be adversely affected by the impact of any renewed outbreak of the COVID19 pandemic.Public health epidemics or outbreaks could adversely impact our business. In late 2019, a novel strain of COVID19, also known as coronavirus, wasreported in Wuhan, China. While initially the outbreak was largely concentrated in China, it spread worldwide. Many countries around the world, including in Israel,implemented significant governmental measures to control the spread of the virus, including temporary closure of businesses, severe restrictions on travel and themovement of people, and other material limitations on the conduct of business. These measures haven historically resulted in work stoppages and other disruptions.If there is a resurgence of the COVID19 pandemic, this could adversely impact our operations, including among others, our sales and marketing efforts and ourability to raise additional funds, and accordingly, the impact of COVID19 could have an adverse impact on our business and our financial results.32Risks Related to Our Operations in RussiaRussia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.In addition to our Israel operations, we have operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia and we engage two software developers through a third party who are based in Ukraine. On February 24,2022, Russia invaded Ukraine. The outbreak of hostilities between the two countries could result in more widespread conflict and could have a severe adverse effecton the region.Following Russia’s actions, various countries, including the U.S., Canada, the United Kingdom, Germany and France, as well as the European Union,issued broadranging economic sanctions against Russia. Such sanctions included, among other things, a prohibition on doing business with certain Russiancompanies, officials and oligarchs; a commitment by certain countries and the European Union to remove selected Russian banks from the Society for WorldwideInterbank Financial Telecommunications (SWIFT) electronic banking network that connects banks globally; and restrictive measures to prevent the Russian CentralBank from undermining the impact of the sanctions. In response to sanctions, the Russian Central Bank raised its interest rates and banned sales of local securitiesby foreigners. Russia may take additional counter measures or retaliatory actions in the future. While diplomatic efforts have been ongoing, the conflict betweenRussia and Ukraine is currently unpredictable and has the potential to result in broadened military actions. The duration of ongoing hostilities and such sanctionsand related events cannot be predicted. Uncertainty as to future relations between Russia and the U.S. and other countries in the west, or between Russia and othereastern European countries, may have a negative impact on our operations.Such international sanctions and potential responses to such sanctions, including those that may limit or restrict transfer funds into Russia, may in thefuture significantly affect our ability to conduct our activities in Russia including paying our personnel. To date, the conflict has had minimal impact on operations .Nevertheless, we have no way to predict the progress or outcome of the situation in Ukraine, as the conflict and governmental reactions are rapidly developing andbeyond our control. Prolonged unrest, intensified military activities or more extensive sanctions impacting the region could have a material adverse effect on ouroperations, results of operations, financial condition, liquidity and business outlook.Political, military conditions or other risks in Russia could adversely affect our business.Russia is a federative state consisting of 85 constituent entities, or “subjects.” The Russian Constitution reserves some governmental powers for theRussian Government, some for the subjects and some for areas of joint competence. In addition, eight “federal districts” (“federal’nye okruga”), which are overseenby a plenipotentiary representative of the President, supplement the country’s federal system. The delineation of authority among and within the subjects is, inmany instances, unclear and contested, particularly with respect to the division of tax revenues and authority over regulatory matters. For these reasons, theRussian political system is vulnerable to tension and conflict between federal, subject and local authorities. This tension creates uncertainties in the operatingenvironment in Russia, which may prevent us from carrying out our strategy effectively. The risks associated with these events or potential events could materiallyand adversely affect the investment environment and overall consumer and entrepreneurial confidence in Russia, and our business, prospects, financial condition,hiring ability, and results of operations could be materially and adversely affected.Furthermore, high levels of corruption reportedly exist in Russia, including the bribing of officials for the purpose of initiating investigations bygovernment agencies. Corruption and other illegal activities could disrupt our ability to conduct our business effectively, and claims that the we are involved in suchcorruption or illegal activities could generate negative publicity, of which could harm our development, financial condition, results of operations or prospects.Economic and other risks in Russia could adversely affect our business.Operating a business in an emerging market such as Russia can involve a greater degree of risk than operating a business in more developed markets.Over the last two decades, the Russian economy has experienced or continues to experience at various times:●significant volatility in its GDP;33●the impact of international sanctions;●high levels of inflation;●increases in, or high, interest rates;●sudden price declines in oil and other natural resources;●instability in the local currency market;●budget deficits;●the continued operation of lossmaking enterprises due to the lack of effective bankruptcy proceedings;●capital flight; and●significant increases in poverty rates, unemployment and underemployment.The Russian economy has been subject to abrupt downturns in the past, including as a result of the invasion of Ukraine, global financial crisis, and, as anemerging market, remains particularly vulnerable to further external shocks and any future fluctuations in the global markets. Any further deterioration in the generaleconomic conditions in Russia (whether or not as a result of the events mentioned above) could have a material adverse effect on the Russian economy and mayresult in hiring and operational difficulties, as well as potential flight of human capital, which could have a material adverse effect on our business, productdevelopment and results of operations.Legal risks in Russia could materially adversely affect our operations and Russian tax legislation is subject to frequent change.Among the risks of the Russian legal system are: inconsistencies among laws, presidential decrees, and government and ministerial orders and resolutions;conflicting local, regional and federal laws and regulations; the untested nature of the independence of the judiciary and its sensitivity to economic or politicalinfluences; substantial gaps in the regulatory structure due to the delay or absence of implementing legislation; a high degree of discretion on the part ofgovernmental authorities; reported corruption within governmental entities and other governmental authorities; the relative inexperience of judges and courts ininterpreting laws applicable to complex transactions; and the unpredictability of enforcement of foreign judgments and foreign arbitral awards. Many Russian lawsand regulations are construed in a way that provides for significant administrative discretion in application and enforcement. Unlawful, selective or arbitrary actionsof the Russian Government have reportedly included the denial or withdrawal of licenses, sudden and unexpected tax audits, criminal prosecutions, and civil claims.Any of the above events may have a material adverse effect on our product development and results of operations.Despite certain improvements in the taxation system made by the Russian Government over the past decade, Russian tax legislation is still subject tofrequent change, varying interpretations, and inconsistent and selective enforcement. There are currently no clear rules for distinguishing between lawful taxoptimization and tax evasion. In addition, Russian tax laws do not contain detailed rules on the taxation in Russia of foreign companies. As such, taxpayers oftenhave to resort to court proceedings to defend their position against the Russian tax authorities. However, in the absence of consistent court practice or bindingprecedents, there is inconsistency amongst court decisions. Further, the possibility exists that the Russian Federation would impose arbitrary or onerous taxes andpenalties in the future, which could have a material adverse effect on our product development and results of operations.34Risks Related to Our Operations In IsraelOur headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.Our headquarters and most of our operations are located in central Israel and our key employees, officers and directors are residents of Israel. Accordingly,political, economic and military conditions in Israel and the surrounding region may directly affect our business. Since the establishment of the State of Israel in1948, a number of armed conflicts have taken place between Israel and its Arab neighbors. Any hostilities involving Israel or the interruption or curtailment of tradewithin Israel or between Israel and its trading partners could adversely affect our operations and results of operations and could make it more difficult for us to raisecapital. During the winter of 2008, winter of 2012 and the summer of 2014, Israel was engaged in an armed conflict with Hamas, a militia group and political partyoperating in the Gaza Strip, and during the summer of 2006, Israel was engaged in an armed conflict with Hezbollah, a Lebanese Islamist Shiite militia group andpolitical party. Israel faces political tension with respect to its relationships with Turkey, Iran and certain Arab neighbor countries. In addition, recent conflictsinvolved missile strikes against civilian targets in various parts of Israel, and negatively affected business conditions in Israel. Recent political uprisings and socialunrest in various countries in the Middle East and North Africa are affecting the political stability of those countries. This instability may lead to deterioration of thepolitical relationships that exist between Israel and these countries, and have raised concerns regarding security in the region and the potential for armed conflict.Any armed conflicts, terrorist activities or political instability in the region could adversely affect business conditions and could harm our results of operations. Forexample, any major escalation in hostilities in the region could result in a portion of our employees and service providers being called up to perform military duty foran extended period of time. Parties with whom we do business have sometimes declined to travel to Israel during periods of heightened unrest or tension, forcing usto make alternative arrangements when necessary. In addition, the political and security situation in Israel may result in parties with whom we have agreementsinvolving performance in Israel claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions insuch agreements. Any future deterioration in the political and security situation in Israel will negatively impact our business.Our commercial insurance does not cover losses that may occur as a result of events associated with the security situation in the Middle East. Althoughthe Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that thisgovernment coverage will be maintained. Any losses or damages incurred by us could have a material adverse effect on our business. Any armed conflicts orpolitical instability in the region would likely negatively affect business conditions and could harm our results of operations.Further, in the past, the State of Israel and Israeli companies have been subjected to an economic boycott. Several countries still restrict business with theState of Israel and with Israeli companies. These restrictive laws and policies may have an adverse impact on our operating results, financial condition or theexpansion of our business.The legislative power of the State resides in the Knesset, a unicameral parliament that consists of 120 members elected by nationwide voting under asystem of proportional representation. Israel’s most recent general elections were held on April 9, 2019, September 17, 2019, March 2, 2020 and November 1, 2022.The uncertainty surrounding the results of the recent elections may continue. Actual or perceived political instability in Israel or any negative changes in thepolitical environment, may individually or in the aggregate adversely affect the Israeli economy and, in turn, our business, financial condition, results of operationsand prospects.Some of our employees are obligated to perform military reserve duty in Israel.Many Israeli citizens, including our employees are obligated to perform one month, and in some cases more, of annual military reserve duty until they reachthe age of 40 (or older, for reservists with certain occupations) and, in the event of a military conflict, may be called to active duty. In response to increases interrorist activity, there have been periods of significant callups of military reservists. It is possible that there will be military reserve duty callups in the future. Ouroperations could be disrupted by such callups. Such disruption could materially adversely affect our business, results of operations and financial condition.35It may be difficult to enforce a nonIsraeli judgment against the Company or its officers and directors.The operating subsidiary of ours is incorporated in Israel. All of our executive officers and directors are not residents of the United States, and asubstantial portion of our assets and the assets of our executive officers and directors are located outside the United States. Therefore, a judgment obtained againstus, or any of these persons, including a judgment based on the civil liability provisions of the U.S. federal securities laws, may not be collectible in the United Statesand may not necessarily be enforced by an Israeli court. It also may be difficult to affect service of process on these persons in the United States or to assert U.S.securities law claims in original actions instituted in Israel. Additionally, it may be difficult for an investor, or any other person or entity, to initiate an action withrespect to U.S. securities laws in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of U.S. securities laws reasoning that Israel is not themost appropriate forum in which to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law isapplicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law often involves the testimony of expert witnesses, which can be a timeconsuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel that addresses the mattersdescribed above. As a result of the difficulty associated with enforcing a judgment against us in Israel, it may be impossible to collect any damages awarded byeither a U.S. or foreign court.Our international operations could expose us to additional risks, including exchange rate fluctuations, legal regulations and political or economicinstability that could harm our business and operating results.Our international operations expose us to the following risks which may have a material adverse effect on our business and operating results:●devaluations and fluctuations in currency exchange rates including fluctuations between the U.S. dollar and the NIS and the Russian Ruble;●costs of compliance with local laws, including labor laws and intellectual property laws;●compliance with domestic and foreign government policies, including compliance with Israeli securities laws and TASE;●changes in trade regulations and procedures affecting approval, production, pricing, marketing, reimbursement for and access to, our products;●compliance with applicable foreign anticorruption laws, antitrust/competition laws, antiBoycott Israel law and antimoney laundering laws; and●economic and geopolitical developments and conditions, including ongoing instability in global economies and financial markets, international hostilities,acts of terrorism and governmental reactions, inflation, outbreaks of contagious disease (e.g., the COVID19 pandemic) and military and political alliances.Risks Related to Our Common StockA more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.Although our common stock is listed on the Nasdaq Capital Market, it has only been traded on the Nasdaq Capital Market since July 25, 2016. There hasbeen relatively limited trading volume in the market for our common stock, and a more active, liquid public trading market may not develop or may not be sustained.Limited liquidity in the trading market for our common stock may adversely affect a stockholder’s ability to sell its shares of common stock at the time it wishes tosell them or at a price that it considers acceptable. If a more active, liquid public trading market does not develop, we may be limited in our ability to raise capital byselling shares of common stock and our ability to acquire other companies or assets by using shares of our common stock as consideration. In addition, if there is athin trading market or “float” for our stock, the market price for our common stock may fluctuate significantly more than the stock market as a whole. Without a largefloat, our common stock would be less liquid than the stock of companies with broader public ownership and, as a result, the trading prices of our common stockmay be more volatile and it would be harder for you to liquidate any investment in our common stock. Furthermore, the stock market is subject to significant priceand volume fluctuations, and the price of our common stock could fluctuate widely in response to several factors, including:●our quarterly or annual operating results;●changes in our earnings estimates;●investment recommendations by securities analysts following our business or our industry;●additions or departures of key personnel;●changes in the business, earnings estimates or market perceptions of our competitors;36●our failure to achieve operating results consistent with securities analysts’ projections;●changes in industry, general market or economic conditions;●announcements of legislative or regulatory changes; and●natural disasters (including for example, the recent fire in the Orgad warehouse) and political and economic instability, including wars, terrorism, politicalunrest, results of certain elections and votes, emergence of a pandemic, or other widespread health emergencies (or concerns over the possibility of suchan emergency, including for example, the recent the COVID19 pandemic), boycotts, adoption or expansion of government trade restrictions, and otherbusiness restrictions.The stock market has experienced extreme price and volume fluctuations in recent years that have significantly affected the quoted prices of the securitiesof many companies. The changes often appear to occur without regard to specific operating performance. The price of our common stock could fluctuate basedupon factors that have little or nothing to do with us and these fluctuations could materially reduce our stock price.Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.If any of our shareholders were to decide to sell large amounts of stock over a short period of time (presuming such sales were permitted) such sales couldcause the market price of our common stock to drop significantly, even if our business is doing well. Further, the market price of our common stock could decline as aresult of the perception that such sales could occur. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equitysecurities in the future at a time and price that we deem appropriate.Our securities are traded on more than one market which may result in price variations.Our securities have been trading on the Nasdaq Capital Market since July 2016 and on TASE since September 2005. Trading in our securities on suchexchanges occurs in different currencies (U.S. dollars on the Nasdaq Capital Market and NIS on the TASE), and at different times (due to different time zones,trading days and public holidays in the United States and Israel). The trading prices of our securities on the two exchanges may differ due to the foregoing andother factors. Any decrease in the price of our shares on the TASE could cause a decrease in the trading price of our shares on the Nasdaq Capital Market and viceversa.We are a smaller reporting company and, as a result of the reduced disclosure and governance requirements applicable to such companies, ourcommon stock may be less attractive to investors.We are a smaller reporting company, (i.e. a company with “public float” held by nonaffiliates with a market value of less than $250 million) and we areeligible to take advantage of certain exemptions from various reporting requirements applicable to other public companies. We have elected to adopt these reduceddisclosure requirements. We cannot predict if investors will find our common stock less attractive as a result of our taking advantage of these exemptions. If someinvestors find our common stock less attractive as a result of our choices, there may be a less active trading market for our common stock and our stock price may bemore volatile.We do not expect to pay any cash dividends in the foreseeable future.We have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our board of directors deems relevant. Investors should not purchase our common stock expecting to receive cash dividends. Because we do notpay dividends, and there may be limited trading, investors may not have any manner to liquidate or receive any payment on their investment. Therefore, our failureto pay dividends may cause investors to not see any return on investment even if we are successful in our business operations. In addition, because we do not paydividends we may have trouble raising additional funds, which could affect our ability to expand our business operations.37UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2022☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ________ to _________Commission file number 00137370MY SIZE, INC.(Exact name of registrant as specified in charter)Delaware510394637(State or jurisdiction ofIncorporation or organization)I.R.S EmployerIdentification No.4 Hayarden, POB 1026, Airport City, Israel7010000(Address of principal executive offices)(Zip code)+9723 6009030(Registrant’s telephone number, including area code)Securities registered pursuant to Section 12(b) of the Act:Title of each classTrading Symbol(s)Name of Each Exchange on Which RegisteredCommon Stock, par value $0.001 per shareMYSZThe Nasdaq Capital MarketSecurities registered pursuant to Section 12(g) of the Act: None.Indicate by check mark whether the registrant is a wellknown seasoned issuer as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes☒ No ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer, a smaller reporting company, or an emerginggrowth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 of theExchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☒Smaller Reporting Company☒Emerging Growth Company☐If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revisedfinancial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b2 of the Exchange Act) Yes ☐No☒Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control overfinancial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflectthe correction of an error to previously issued financial statements. ☐Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by anyof the registrant’s executive officers during the relevant recovery period pursuant to §240.10D1(b). ☐The aggregate market value of voting and nonvoting common equity held by nonaffiliates of the registrant as of June 30, 2022, the last business day of theregistrant’s most recently completed second fiscal quarter, was approximately $25,551,906.Number of shares of common stock outstanding as of March 31, 2023 was 2,446,780.Documents Incorporated by Reference: None.Table of ContentsPart IItem 1.Business2Item 1A.Risk Factors18Item 1B.Unresolved Staff Comments41Item 2.Properties41Item 3.Legal Proceedings41Item 4.Mine Safety Disclosures42Part IIItem 5.Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities43Item 6.Selected Financial Data43Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations43Item 7A.Quantitative and Qualitative Disclosures about Market Risk50Item 8.Financial Statements and Supplementary DataF1Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure51Item 9A.Controls and Procedures51Item 9B.Other Information51Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.51Part IIIItem 10.Directors, Executive Officers and Corporate Governance52Item 11.Executive Compensation57Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters60Item 13.Certain Relationships and Related Transactions, and Director Independence62Item 14.Principal Accounting Fees and Services65Part IVItem 15.Exhibits, Financial Statement Schedules66Signatures69iPART IIn this Annual Report on Form 10K, unless the context requires otherwise, the terms “we,” “our,” “us,” or “the Company” refer to MySize, Inc., a Delawarecorporation, and its subsidiaries, including MySize Israel 2014 Ltd. My Size LLC, Orgad International Marketing Ltd., or Orgad, and Naiz Bespoke Technologies, S.L,or Naiz, taken as a whole.References to “U.S. dollars” and “$” are to currency of the United States of America, and references to “NIS” are to New Israeli Shekels. Unless otherwiseindicated, U.S. dollar translations of NIS amounts presented in this Annual Report on Form 10K for the year ended on December 31, 2022 are translated using therate of NIS 3.358 to $1.00.All information in this Annual Report on Form 10K relating to shares or price per share reflects the 1for25 reverse stock split effected by us on December8, 2022.CAUTIONARY NOTE ON FORWARDLOOKING STATEMENTSThis Annual Report on Form 10K contains certain forwardlooking statements within the meaning of Section 27A of the Securities Act and Section 21E ofthe Exchange Act. Any statements in Annual Report on Form 10K about our expectations, beliefs, plans, objectives, assumptions or future events or performanceare not historical facts and are forwardlooking statements. These statements are often, but not always, made through the use of words or phrases such as“believe,” “will,” “expect,” “anticipate,” “estimate,” “intend,” “plan” and “would.” For example, statements concerning financial condition, possible or assumedfuture results of operations, growth opportunities, industry ranking, plans and objectives of management, markets for our common stock and future managementand organizational structure are all forwardlooking statements. Forwardlooking statements are not guarantees of performance. They involve known and unknownrisks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to differ materially from any results, levels ofactivity, performance or achievements expressed or implied by any forwardlooking statement.Any forwardlooking statements are qualified in their entirety by reference to the risk factors discussed throughout this Annual Report on Form 10K. Someof the risks, uncertainties and assumptions that could cause actual results to differ materially from estimates or projections contained in the forwardlookingstatements include but are not limited to:●our history of losses and needs for additional capital to fund our operations and our inability to obtain additional capital on acceptable terms, or at all;●risks related to our ability to continue as a going concern;●the new and unproven nature of the measurement technology markets;●our ability to achieve customer adoption of our products;●our ability to realize the benefits of our acquisitions of Orgad and Naiz;●our dependence on assets we purchased from a related party;●our ability to enhance our brand and increase market awareness;●our ability to introduce new products and continually enhance our product offerings;●the success of our strategic relationships with third parties;●information technology system failures or breaches of our network security;●competition from competitors;●our reliance on key members of our management team;●current or future litigation;●current or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated liquidityrisk; and●the impact of the political and security situation in Israel on our business.1The foregoing list sets forth some, but not all, of the factors that could affect our ability to achieve results described in any forwardlooking statements.You should read this Annual Report on Form 10K and the documents that we reference herein and have filed as exhibits to the Annual Report on Form 10K,completely and with the understanding that our actual future results may be materially different from what we expect. You should assume that the informationappearing in this Annual Report on Form 10K is accurate as of the date hereof. Because the risk factors referred to in this Annual Report on Form 10K, could causeactual results or outcomes to differ materially from those expressed in any forwardlooking statements made by us or on our behalf, you should not place unduereliance on any forwardlooking statements.Further, any forwardlooking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forwardlookingstatement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. New factors emergefrom time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extentto which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements. We qualify all ofthe information presented in this Annual Report on Form 10K, and particularly our forwardlooking statements, by these cautionary statements.ITEM 1. BUSINESSOverviewWe are an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile phone or through MySizeID Widget: a simple questionnaire which uses a database collected over the years.MySizeID syncs the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and only presents itemsfor purchase that match their measurements to ensure a correct fit.We are positioning ourselves as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empower brand design teams, which are designed to increase endconsumer satisfaction, contributing to a sustainable world and reduce operation costs.Recent DevelopmentsOrgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,602 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.2The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz, a limitedliability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.3The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Warehouse FireOn January 2, 2023, Orgad experienced a fire at its warehouse in Israel. we are not aware of any casualties or injuries associated with the fire. We shiftedOrgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incident did not affectthe future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of this incident on the otherparties that were involved in the incident (lessor and others that leased properties near the warehouse).January 2023 FinancingOn January 10, 2023, we entered into a securities purchase agreement, or the RD Purchase Agreement, pursuant to which we agreed to sell and issue in theRD Offering an aggregate of 162,000 of our shares of common stock, or the RD Shares, and prefunded warrants, or the Prefunded Warrants, to purchase up to279,899 shares of common stock and, in a concurrent private placement, unregistered warrants to purchase up to 883,798 shares of common stock, or the RDWarrants, consisting of Series A warrants, or Series A Warrants, to purchase up to 441,899 shares of common stock and Series B warrants, or Series B Warrants, topurchase up to 441,899 shares of common stock, at an offering price of $3.055 per RD Share and associated Series A and Series B Warrants and an offering price of$3.054 per Prefunded Warrant and associated Series A and Series B Warrants.4In addition, we entered into a securities purchase agreement, or the PIPE Purchase Agreement, and together with the RD Purchase Agreement, thePurchase Agreements, pursuant to which we agreed to sell and issue in the PIPE Offering an aggregate of up to 540,098 unregistered Prefunded Warrants andunregistered warrants to purchase up to an aggregate of 1,080,196 shares of common stock, or the PIPE Warrants and together with the RD Warrants, the Warrants,consisting of Series A Warrants to purchase up to 540,098 shares of common stock and Series B Warrants to purchase up to 540,098 shares of common stock at anoffering price of $3.054 per Prefunded Warrant and associated Series A and Series B Warrants.The Prefunded Warrants are immediately exercisable at an exercise price of $0.001 per share and will not expire until exercised in full. The Warrants areimmediately exercisable upon issuance at an exercise price of $2.805 per share, subject to adjustment as set forth therein. The Series A Warrants have a term of fiveand onehalf years from the date of issuance and the Series B Warrants have a term of 28 months from the date of issuance. The Warrants may be exercised on acashless basis if there is no effective registration statement registering the shares underlying the warrants.In connection with the PIPE Purchase Agreement, we entered into a registration rights agreement, or the Registration Rights Agreement. Pursuant to theRegistration Rights Agreement, we are required to file a resale registration statement, or the Registration Statement, with the Securities and Exchange Commission, orthe SEC, to register for resale the shares issuable upon exercise of the unregistered Prefunded Warrants and the Series A and Series B Warrants, within 20 days ofthe signing date of the PIPE Purchase Agreement, or the Signing Date, and to have such Registration Statement declared effective within 60 days after the SigningDate in the event the Registration Statement is not reviewed by the SEC, or 90 days of the Signing Date in the event the Registration Statement is reviewed by theSEC. we will be obligated to pay certain liquidated damages if we fail to maintain the effectiveness of the Registration Statement.The Purchase Agreements and the Registration Rights Agreements also contain representations, warranties, indemnification and other provisionscustomary for transactions of this nature. In addition, subject to limited exceptions, the Purchase Agreements provide that for a period of one year following theclosing of the Offerings, we will not effect or enter into an agreement to effect a “variable rate transaction” as defined in the Purchase Agreements.Aggregate gross proceeds to the Company in respect of the Offerings was approximately $3.0 million, before deducting fees payable to the placement agentand other offering expenses payable by the Company.We also entered into a letter agreement, or the Engagement Agreement, with H.C. Wainwright & Co., LLC, or Wainwright, pursuant to which Wainwrightagreed to serve as the exclusive placement agent for the Company in connection with the Offerings. We paid Wainwright a cash placement fee equal to 7% of theaggregate gross proceeds raised in the Offerings, a management fee of 1% of the aggregate gross proceeds raised in the Offerings, a nonaccountable expenseallowance of $85,000 and clearing fees of $15,950. Wainwright also received placement agent warrants, or the Placement Agent Warrants, with substantially the sameterms as the Series A Warrants issued in the Offering in an amount equal to 7% of the aggregate number of Shares and Prefunded Warrants sold in the Offerings, or68,740 shares, at an exercise price of $3.8188 per share and a term expiring on January 10, 2028.Our SolutionOur cloudbased software platform provides highly accurate sizing and measurement with broad applications including the online fashion/apparel industry,logistics and courier services and home DIY. Currently, we are mainly focusing on the ecommerce fashion/apparel industry. This proprietary technology is driven byseveral patented algorithms which are able to calculate and record measurements in a variety of novel ways. Although specific functionality varies by product, webelieve that our core solutions address the need for highly accurate measurements in a variety of consumer friendly, every day uses.5We have developed three products, MySizeID for the fashion/apparel industry, BoxSize for the logistics and courier services market and SizeUp for thehome DIY market.●MySizeID enables shoppers to generate highly accurate measurements of their body to find proper fitting clothes and accessories, through the use ofour application on their mobile phone or through a simple questionnaire if the user decides not to download the application. MySizeID syncs the user’smeasurement data to a sizing chart and presents items for purchase that match their measurements to ensure a correct fit. MySizeID is available forlicense by retailers and accessable by consumers through a web page.●BoxSize enables customers to quickly and easily measure the size and volume of a parcel to accurately calculate shipping fees. It also offers shippingcompanies a variety of precise logistical data for more efficiently managing their supply chain, providing them with an accurate way to compare thephysical package with what is in the shipping manifest. BoxSize solution is available for license on both iOS and Android operating systems. BoxSizeis available on the Honeywell Marketplace and in August 2019 was approved for Honeywell’s Independent Software Vendor Program, and MySize wasgranted an independent software vendor (ISV) status on the Zebra Technologies and on DataLogic platforms.●SizeUp is a digital tape measure that allows users to measure length, width and height of a surface by moving their smartphone from point to point ofan object or space. SizeUp is a valueadd for DIY and home improvement retailers whose customers struggle to find the appropriately sized items (likeblinds or curtains) for their homes or projects due to inaccurate measurements. SizeUp also is designed to replace rulers, tape measures and othermeasuring tools used for DIY projects. SizeUp is available for consumer download on both iOS and Android operating systems.The following are some select key features of our solutions:●Integration Capability. We design our solutions to be flexible and configurable, allowing our clients to match their use of our algorithms and softwarewith their specific business processes and workflows. Our platform has been organically developed from a common code base, data structure and userinterface, providing a consistent user experience with powerful features that are easily adaptable to our clients’ needs. The MySizeID widget can beintegrated via oneline JavaScript code, or through RESTful API;●Intuitive user experience. Our intuitive, easytouse interface is based on current technology, multiple focus groups and automatically adapts to users’devices, including mobile platforms, thereby significantly increasing accessibility of our solutions;●Big Data Generation. While we supply to the user the information he/she requires, we gather certain vital information such as body measurement andpackage volume which can be used anonymously to help the retailer acquire predictive size information on stocking, operations and consumers thatmay be in between sizes. All the information is being gathered and stored on our servers where it can be used by retailers;●NonInvasive. In taking measurements using our solution, the smartphone camera is not utilized; instead, the measurements are captured by scanningthe smartphone over the consumer’s body or package, thus ensuring greater privacy.Our Growth StrategyWe aim to drive revenue primarily through penetration of the U.S. and Europe markets through a business to business to consumer (B2B2C) model in theverticals we are targeting. We are pursuing the following growth strategies:●Sign Additional Commercial Agreements with U.S. Retailers. During 2022, we expanded our commercial agreements with Levi’s, introducing NorthAmerica (U.S. and Canada) and Latin America regions, and by extension Levis’ native apps in EU and U.S. regions. We also entered into commercialagreements with Baby Fresh, Galax, Punto Blanco, GEF France, Diesel, Gaala, Superdry, Uniontex Industries, and Temperlay London among others. Weare in various stages of discussions with U.S. and foreign retailers for the deployment of our size recommendation and measurement technology with aview to entering into additional commercial agreements.6●Pursue a TwoPronged Commercialization Strategy. We are seeking to accelerate adoption of our solutions both through direct partnerships with ecommerce websites as well as through thirdparty platform websites. While we seek to directly enter into partnerships with companies maintaining ecommerce websites in the apparel, courier and DIY markets, we are also seeking to deploy our solutions on thirdparty platforms. Furthermore, with theexpansion of MySizeID through the release of our FirstLook Smart Mirror, which we are offering to brick and mortar stores to digitize the physicalstores, MySizeID is now available for online retailers utilizing the WooCoomerce, Shopify, Lightspeed, PrestaShop, Bitrix and Wix platforms and tobrick and mortar stores through GK Software POS solution while BoxSize is available on the Honeywell, Zebra Technologies and Datalogic.●Ongoing Investment in our Technology Platform. We continue to invest in building new software capabilities and extending our platform to bring thepower of accurate measurement to a broader range of applications. In particular, we seek not only to deliver size recommendations but to provide arobust, endtoend,artificial intelligence, or AIdriven platform that inspires consumer confidence and drives revenue growth by providing a superiorconsumer journey to both online and the brick and mortar stores.●Grow our database. As the usage of our measurement apps increases, our database of information including user behaviour and body measurementsgenerates valuable statistics. Such data can be used in the big data market for targeted advertising and for blind consumer data mining.●Identify and acquire synergistic businesses. In order to reduce our time to market and obtain complementary technologies, we are seeking to acquiretechnologies and businesses that are synergistic to our product offering. We recently completed an acquisition of Orgad which operates anomnichannel ecommerce platform and Naiz which provides SaaS technology solutions that solve size and fit issues for fashion ecommerce companies.●Partnerships and cooperation. In order to bring a wider solution for the retail market we are working to partner and integrate our technology withpartners that can increase our penetration and offering to the market.Market OpportunityThe global ecommerce market was $5.7 trillion in 2022, and the industry is expected to grow significantly in the coming years with no signs of slowingdown. Market specialists expect a compound annual growth rate of 27.43% from 2023 to 2028: according to data from Statista, the market is expected to reach $6.5trillion in 2023. While many sectors have found ways to increase revenue through ecommerce, ecommerce is still plagued by issues that cut into profits andnegatively impact the bottom line, such as customer returns, low consumer conversion, and associated restocking and shipping costs.Fashion/ApparelSince the onset of the COVID19 pandemic, an immense shift to digital was recorded, with 85.9% growth vs. prepandemic, according to Mastercard, andover 2 billion people worldwide who shop online, according to data from Oberlo. In November 2022, online shoppers broke records with $11.3 billion in spending onCyber Monday, driving 5.8% yearoveryear growth and making the day the biggest online shopping day of all time, according to Adobe Analytics.In 2021, fashion companies invested between 1.6% and 1.8% of their revenues in technology, according to Mckinsey, and are expected to double theinvestment by 2030 in order to keep up with digital natives and keep a competitive edge. Personalization in ecommerce and hybrid connectivity in brickandmortarretail are two key themes in the future of fashtech, according to Mckinsey’s 2022 State of Fashion Technology.7In the upcoming years, inflation is expected to impact the fashion world. As prices for goods increase, the challenge will be to inspire confidence inconsumers, via different smart digital tools. Brands will need to embrace creative digital tools and new channels to deepen customer relationships, and as Mckinseyforecasts in their State of Fashion report for 2023, they will need to execute on priorities such as sustainability and digital acceleration.The global fashion ecommerce market size is expected to grow from $744.4 billion in 2022 to $821.19 billion in 2023 at a compound annual growth rate of10.3%. In 2027, the market size is expected to grow to $1,222.32 billion, at a compound annual growth rate of 10.5%, according to BRC.Based on the importance which shoppers attribute to free shipping 50% of cart abandonment rate is due to extra shipping costs (Baymard Institute) theneed for fashion retailers to substantiate the optimal size for a customer, thus minimizing returns, has never been more crucial.As brands move online or significantly expand their online presence, we believe that developing innovative ways to connect with shoppers, both onlineand offline, has become a top priority.Shipping/ParcelAccording to Pitney Bowes, parcel revenue in 13 major countries around the world increased by 17% year over year from $420 billion in 2020 (reflecting 131billion parcels) to $491 billion in 2021 (reflecting 159 billion parcels). In the shipping/parcel industry, the dimensions of a package are critical. It is not merely themeasurement of a package or box – but rather the amount of space that the package or box will take up on a truck, airplane, or ship that will be transporting thepackage or box. Far too often, retailers use unfit packaging for their items, adding additional costs in materials and shipping fees.DIYSimilar to issues in the apparel and fashion market, big box, hardware, furniture, and DIY stores are plagued by returns due to incorrect fit andmeasurements. In an industry where precise measurement for projects is an absolute necessity, ecommerce has not grown as quickly as in other industries which webelieve is due to lack of consumer confidence in measurements at home and buying the correct item online.MySizeIDWe have released the MySizeID app for both iOS and Android which assists consumers to take highly accurate measurement of their own body in order tosize clothing in the best way possible without the need to try the clothes on before purchasing. MySizeID is designed to simplify the process of purchasing clothesonline and significantly reduce the rate of returns of poorfitting clothing. During 2022, MySizeID delivered over 23.5 million size recommendations.The application is the result of a research and development effort that combines:●anthropometric research – analyses of information pertaining to body measurements derived from a survey and the subsequent determination ofcorrelations between body parts;●body measurement algorithm research – an algorithm created by us to measure body parts; and●retailers size chart analyses – adopting a deep understanding of the size charts of retailers and the corresponding “body to garment size.”MySizeID allows consumers to create a secure, online profile of their personal measurements, which can then be utilized, with partnered online retailers, toensure that no matter the manufacturer or size chart, they will get the right fit. MySizeID operates based on the use of existing sensors in smart phones which enable,through a specific purpose application, the measurement of the body of any consumer by moving the smartphone along his or her body. The MySizeID applicationdoes not rely on user photographs or any additional hardware; all a user needs to do is scan their body with their smartphone and the application records theirmeasurements. The measurements can then be saved in our database in the cloud, enabling the user to search for clothes in various retailer websites withoutworrying about size. When a search is made, the retailer will connect to our cloud database, and then provide results based on the user’s measurements and otherparameters as he or she may have defined. This data is also saved for use when a customer enters a brickandmortar store to help serve the customer moreefficiently and to provide a better shopping experience.8Figure 1: Screenshot of MySizeID on smartphone and ecommerce websiteAs part of the integration process, we offer to the retailer five main components:●Mobile App. MySizeID comes in the form of a native app or website. Our native app can be used “as is” integrated into the retailer’s ecommercewebsite. The website users can build a body profile on the app and receive size recommendations for their profile both in the app and on a widgetintegrated with their website.9●Widget. When a consumer enters into the retailer’s website and looks for a specific item, he or she can click on the MySizeID widget which will informthe consumer of his or her recommended size, based on his or her actual measurements, as measured using the app and the item he or she is looking at.The widget has two features:AI Wizard mode allows the user to obtain size from the following parameters: gender, height, weight, belly shape, hip shape and bra size only. Thegender, height and weight questions are mandatory, while the body shape questions are optional and can be added to increase accuracy for specificapparel categories.Guest mode allows a user that does not wish to sign up to MySizeID as a user to obtain size recommendations as well.●Analytic Pixel. MySizeID analytic pixel allows retailer to track and analyze the widget usage. By adding the pixel to the retailer’s website, MySizeID BIteam can track engagement, order, and return data and provide retailers with tools to understand the advantages and benefits of MySizeID.Use your own device using MySizeID instore solution, shoppers can receive size recommendations for all store items, when shopping in the offlinestores. The shoppers can build their body profile using an easy to use 3 to 6 questions form, scan an item barcode and receive a size recommendationfor the scanned item based on their body profile and the item’s size chart.Another feature we added is the “inbetween sizing” feature. Our system can detect a user that has body dimensions that place the user inbetweenthe clothes sizes being offered and lets the user know that. A user can then choose between the two sizes according to the user’s fit preference(tight/loose/average).In addition, we have recently released our InstantApp feature which allows shoppers to generate their body measurements directly from our widget,without the need to download our mobile app. Using this technology, the shoppers can create their online profile of their personal measurements andcomplete a purchase faster and easier with minimum distractions.The body profile can be created while shoppers are viewing the page from their mobile phone, or by scanning a QR code on desktop that will open thesame page on the mobile phone.Screenshot of InstantApp widget on desktop on yumyumfashion website10●MyDash Platform. The MyDash platform is a smart backoffice system where the retailer enters all the information regarding its size charts thatcorrelates to every product in its ecommerce site, and where the retailer can access the information on its users. This system is customizable based onthe retailer’s needs. In 2021, we changed the MyDash system to increase the system’s accessibility, added walkthroughs, user guides and changed theuser interface and much more for the ease of use. We added the option to use our generic size charts, added the option upload size chart files insteadof typing the size charts values manually, added more widget styling options and changed the pairing mechanism between the size chart and theproducts to be more userfriendly.Figure 3: Screenshot of BackOffice System●FirstLook Smart Mirror. The Smart Mirror provides an interactive, mirrorlike touch display that allows brands to provide instore customers with anenhanced, online shopping experience, contactless checkout and obtains the recommended size. The MySizeIDFirstLook Smart Mirror can be placedin numerous locations throughout a retail store, including the fitting rooms (without cameras) or other hightraffic locations of the store. Highlightcapabilities of the FirstLook Smart Mirror include a 3D “Tryiton” interactive avatar experience, personalized and highly accurate sizerecommendations by MySizeID, thirdparty point of sale systems integration, styling recommendations and contactless “select and collect” at theregister feature.Illustration of MySizeID “first look” smart mirror in a fashion store11We are currently offering MySizeID technology to retailers through either a payperuse model or a monthly subscription model. In our payperusebusiness model, every time the consumer obtains a recommended size, the retailer is charged for the usage.BoxSizeBoxSize is a parcel measurement application that can provide realtime logistic data on package volumes and transportation, resulting in improvedoperational efficiency and reduced operating expenses. In addition, BoxSize allows customers to easily measure the size of their parcel with their smartphone,calculate shipping costs and arrange for a convenient pickup time for the package. BoxSize is available both on iOS and Android.In 2020 we released the “One Click” feature on BoxSize that enables the user to measure a package with just one swipe of the handheld device. Previously,measurements through BoxSize would require three separate swipes.Figure 4: Screenshot of BoxSizeOur BoxSize mobile measurement solution is available on the Honeywell Marketplace. In addition, BoxSize was approved for Honeywell’s Global VendorProgram, and is available to provide highly accurate mobile measurement solutions for thousands of Honeywell clients. We also developed a new dashboard for thecourier companies to have all the required data about each package in one place. It includes package dimensions, pictures, scan geo location and more. Thedashboard also let the courier use Webhooks, which allows him to get the information from his own system.12In 2020, we announced our partnership with Datalogic, a company focused on the automatic data capture and process automation markets. The partnershipmakes our BoxSize measurement solution available to thousands of Datalogic customers in the Transportation and Logistics vertical.Agreement with Delhivery Private Limited, IndiaWe entered into an agreement with Delhivery Private Limited, one of the largest courier pickup, delivery, and online shipping services in India. Delhivery’sreputation as a frontrunner in delivery and logistics tech makes its decision to select Boxsize a particularly strong testament to the value the solution provides.BoxSize provides Delhivery’s employees on the B2B side with critical information that will allow them to effortlessly optimize loading efficiency and add even morerealtime visibility to operations.SizeUpWe are working on additional consumer applications, including a DIY application. Our SizeUp application is a smart tape measure for the business toconsumer market which allows users to utilize their smartphone as a tape measure. The application provides measurements with an accuracy of within twocentimeters. Through the use of SizeUp, users will be able to visualize how an object or a piece of furniture will fit in an existing room in their home or office. It alsoadded Google Vision for image content analysis, object detection, and title suggestions.Currently the SizeUp app for Android and iOS is available for free for the first 30 days, after which a user will be required to register via email and pay aonetime fee of $1.99 to continue using the application. To date, revenues from downloads have been minimal.Research and DevelopmentOur research and development team are responsible for the research, algorithm, design, development, and testing of all aspects of our measurementplatform technology. We invest in these efforts to continuously improve, innovate, and add new features to our solutions.We incurred research and development expenses of approximately $1.7 million in 2022 and $4.25 million in 2021, relating to the development of itsapplications and technologies. The decrease from the corresponding period primarily resulted from share based payment in amount of $2,618,000 attributed to theshare issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021. We intend to continue to invest in our research anddevelopment capabilities to extend our platform and bring our measurement technology to a broader range of applications.13In 2022, the R&D department experienced significant success in their efforts to improve the performance of their size recommendation system. Through acombination of optimized algorithms and the incorporation of cuttingedge technologies, the team was able to achieve a threefold increase in the system’s speed.This breakthrough not only makes the system one of the fastest and most accurate on the market, but also reduced the operation costs, making it more costeffective for businesses to use. Additionally, the solution is now highly scalable, allowing it to easily adapt to the needs of businesses of any size. The R&D team isnow focused on further improving the system and exploring new applications for the technology.Sales and MarketingIn 2019, we launched a commercialization strategy that directs our sales efforts toward both sales to ecommerce players in specific vertical markets such asfashion/apparel and shipping/delivery as well as to ecommerce thirdparty platform providers. As of March 15, 2023, our products are being sold in the followingcountries: US, UK, France, Netherlands, Spain, Portugal Turkey, Germany, Israel and Italy, generating customer leads, building out a sales pipeline, and developingcustomer relationships.We believe an effective method to market our suite of products is for users to actively use and explore its capabilities. We encourage free trials of one ormore of our products in order to successfully convert those accounts to paid subscriptions.Proprietary RightsWe rely on a combination of patent, copyright, trademark and trade secret laws in the United States and other jurisdictions, as well as contractualprotections, to protect our proprietary technology.As of December 31, 2022, we owned 18 issued patents: six in Europe, four in the U.S., three in each of Russia and Japan and one in each of Canada andIsrael which expire between January 20, 2033 and August 18, 2036, and we have two additional patent applications in process. As of such date, we do not have anyregistered trademarks.We cannot provide any assurance that our proprietary rights with respect to our products will be viable or have value in the future since the validity,enforceability and type of protection of proprietary rights in softwarerelated industries are uncertain and still evolving.Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products or to obtain and use informationthat we regard as proprietary. Policing unauthorized use of our products is difficult, and while we are unable to determine the extent to which piracy of our softwareproducts exists, software piracy can be expected to be a persistent problem. In addition, the laws of some foreign countries do not protect proprietary rights to asgreat an extent as do the laws of the United States, and effective copyright, trademark, trade secret and patent protection may not be available in those jurisdictions.Our means of protecting our proprietary rights may not be adequate to protect us from the infringement or misappropriation of such rights by others.Further, in recent years, there has been significant litigation in the United States involving patents and other intellectual property rights, particularly in thesoftware and Internetrelated industries. We can become subject to intellectual property infringement claims as the number of our competitors grows and ourproducts and services overlap with competitive offerings. These claims, even if not meritorious, could be expensive to defend and could divert management’sattention from operating our business. If we become liable to third parties for infringing their intellectual property rights, we could be required to pay a substantialaward of damages and to develop noninfringing technology, obtain a license or cease selling the products that contain the infringing intellectual property. We maybe unable to develop noninfringing technology or obtain a license on commercially reasonable terms, if at all.14Government RegulationWe are subject to a number foreign and domestic laws and regulations that involve matters central to our business. These laws and regulations mayinvolve privacy, data protection, intellectual property, or other subjects. Many of the laws and regulations to which we are subject are still evolving and being testedin courts and could be interpreted in ways that could harm our business. In addition, the application and interpretation of these laws and regulations often areuncertain, particularly in the new and rapidly evolving industry in which we operate. Because global laws and regulations have continued to develop and evolverapidly, it is possible that we, our products, or our platform may not be, or may not have been, compliant with each such applicable law or regulation.In particular, we are subject to a variety of federal, state and international laws and regulations governing the processing of personal data. Many U.S. stateshave passed laws requiring notification to data subjects when there is a security breach of personally identifiable data. There are also a number of legislativeproposals pending before the U.S. Congress, various state legislative bodies and foreign governments concerning data protection. In addition, data protection lawsin Europe and other jurisdictions outside the United States can be more restrictive than those within the United States, and the interpretation and application ofthese laws are still uncertain and in flux.For example, the General Data Protection Regulation, or GDPR, which took effect on May 25, 2018, enhances data protection obligations for entities thatprocess personal data about individuals, including obligations to cooperate with European data protection authorities, implement security measures and keeprecords of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to the greater of €20 million or 4% of global annual revenue. Inaddition, the California Consumer Privacy Act of 2018, or CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and requiredeletion of their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used.The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further,failure to comply with the Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may exposeus to administrative fines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the currentenforcement measures and sanctions. Given the breadth and depth of changes in data protection obligations, meeting the requirements of GDPR and otherapplicable laws and regulations has required significant time and resources, including a review of our technology and systems currently in use against therequirements of GDPR and other applicable laws and regulations. We have taken various steps to prepare for complying with GDPR and other applicable laws andregulations however there can be no assurance that these steps are sufficient to assure compliance. Further, additional EU laws and regulations (and member states’implementations thereof) further govern the protection of individuals and of electronic communications. If our efforts to comply with GDPR or other applicable lawsand regulations are not successful, we may be subject to penalties and fines that would adversely impact our business and results of operations, and our ability touse personal data of individuals could be significantly impaired.CompetitionWe operate in a highly competitive industry that is characterized by constant change and innovation. Changes in the applications and the programinglanguages used to develop applications, devices, operating systems, and technology landscape result in evolving customer requirements. Our competitors includeTrue Fit, Fit analytics and 3DLook.The principal competitive factors in our market include the following:●High Accuracy Size Recommendations: the highest accuracy and the lowest margin of error by combining patented technology including AI and ML,size chart or spec data, and MySizeID property body data measurement;●Integration○Fast 1 week integration including size chart size chart review and product mapping○Easy 1 line of “all included” script implementation●Technical Advantages○Very small library that weighs ±50kb (minimum widget loading time on product page)○UltraFast loading and size recommendation presenting○Restful API option (API integration with any website or app)15●Optimizations○Adjustments of size charts based on performance○Widget usage analysis by FashTech and BI teams○Automatic pairing of size charts with products/collections●User Experience○Easy to use interface (1015 seconds to receive size recommendations)○Option to add/deduct questions to/from widget wizards○Users automatically receive size recommendations on all products after initial sign up●Product and platform features, architecture, reliability, privacy and security, performance, effectiveness, and supported environments;●Product extensibility and ability to integrate with other technology infrastructures;●Digital operations expertise;●Ease of use of products and platform capabilities;●Total cost of ownership;●Adherence to industry standards and certifications;●Strength of sales and marketing efforts;●Brand awareness and reputation; and●Focus on customer successWe believe we generally compete favorably with our competitors on the basis of these factors. We expect competition to increase as other established andemerging companies enter our markets, as customer requirements evolve, and as new products and technologies are introduced. We expect this to be particularlytrue as we offer a smartphonebased offering that does not need to utilize the smartphone’s camera, and our competitors may also seek to repurpose their existingofferings to provide similar solutions. Many of our competitors have substantially greater financial, technical, and other resources, greater name recognition, largersales and marketing budgets, broader distribution, and larger and more mature intellectual property portfolios.Human Capital ManagementAs of March 31, 2023, we had a total of 35 employees, of which 30 were fulltime employees, including 9 in sales and marketing, 12 in technology anddevelopment and 9 in administration and finance.None of our employees are represented by a collective bargaining agreement, nor have we experienced any work stoppage. We consider our relationshipwith our employees to be good. Our future success depends on our continuing ability to attract and retain highly qualified engineers, sales and marketing, accountmanagement, and senior management personnel.We also believe we have built a strong sales team focused on expanding into new markets through the acquisition of Naiz and our current team.We believe that our future success will depend, in part, on our continued ability to attract, hire and retain qualified personnel. In particular, we depend onthe skills, experience and performance of our senior management and research personnel. We compete for qualified personnel with other hitech companies, as wellas universities and nonprofit research institutions.16We provide competitive compensation and benefits programs to help meet the needs of our employees. In addition to salaries, these programs (which varyby country/region and employment classification) include incentive compensation plan, pension, and insurance benefits, paid time off, , among others. We also usetargeted equitybased grants with vesting conditions to facilitate retention of personnel, particularly for our key employees.The success of our business is fundamentally connected to the wellbeing of our people. Accordingly, we implemented an hybrid work policy in which theemployees can work from home twice a week.We consider our employees to be a key factor to our success and we are focused on attracting and retaining the best employees at all levels of ourbusiness. Inclusion and diversity is a strategic, business priority. We employ people based on relevant qualifications, demonstrated skills, performance and otherjobrelated factors. We do not tolerate unlawful discrimination related to employment, and strive to ensure that employment decisions related to recruitment,selection, evaluation, compensation, and development, among others, are not influenced by race, color, religion, gender, age, ethnic origin, nationality, sexualorientation, marital status, or disability. Continuous monitoring to ensure pay equity has been a focus in 2022. We have continued to improve gender balance in 2022with a focus on increasing the representation of women hired as new college graduates. We are committed to creating a trusting environment where all ideas arewelcomed and employees feel comfortable and empowered to draw on their unique experiences and backgrounds.We consider our relations with our employees to be good.Company InformationOur principal executive offices are located at HaYarden 4 St., POB 1026, Airport City, Israel 7010000, and our telephone number is +97236009030. Ourwebsite address is www.mysizeid.com. Any information contained on, or that can be accessed through, our website is not incorporated by reference into, nor is it inany way a part of, this Annual Report on Form 10K.We use our website (www.mysizeid.com) as a channel of distribution of Company information. The information we post through this channel may bedeemed material. Accordingly, investors should monitor our website, in addition to following our press releases, SEC filings and public conference calls andwebcasts. The contents of our website are not, however, a part of this Annual Report on Form 10K.Corporate HistoryWe were incorporated in the State of Delaware on September 20, 1999 under the name Topspin Medical, Inc. In December 2013, we changed our name toKnowledgetree Ventures Inc. Subsequently, in February 2014, we changed our name to MySize, Inc. In 2020, we created a subsidiary in the Russian Federation, MySize LLC.From inception through 2012, we were engaged in research and development of a medical magnetic resonance imaging, or MRI, technology forinterventional cardiology and in the development of MRI technology for use in the diagnosis and treatment of prostate cancer. In January 2012, we acquiredMetamorefix Ltd., or Metamorefix. Metamorefix was incorporated in 2007, and was engaged in the development of innovative solutions for the rehabilitation oftissues, particularly skin tissues. By the end of 2012, we ceased operations and in January 2013, we sold our entire ownership interest in Metamorefix.In September 2013, Ronen Luzon, our Chief Executive Officer, acquired control of the Company from Asher Shmuelevitch, according to which Mr. Luzonpurchased 70,238 shares of common stock from Mr. Shmuelevitch, which shares represented approximately 40% of the issued and outstanding capital stock of theCompany at such time, thus becoming a controlling shareholder of the Company. In connection with the acquisition, Mr. Luzon reached a settlement with our thencreditors pursuant to which the main creditor, Mr. Shmuelevitch, was paid a total sum of approximately $140,000 in consideration for a full and final waiver of any andall his claims that he may have relating to any monetary indebtedness of the Company to the creditors.17In February 2014, My Size Israel, our wholly owned subsidiary, entered into a Purchase Agreement, or the Purchase Agreement, with Shoshana Zigdon,who at the time was a beneficial owner of more than 20% of our outstanding shares, with respect to the acquisition by us of certain rights related to the collection ofdata for measurement purposes including rights in the venture, the method and a patent application that had been filed by the Seller (PCT/IL2013/050056), or theAssets. In consideration for the sale of the Assets, we agreed to pay to Ms. Zigdon, 18% of our operating profit, directly or indirectly connected with the Assetstogether with valueadded tax in accordance with the law for a period of seven years from the end of the development period of the aforementioned venture. Inaddition to the foregoing, the Purchase Agreement provided that all developments, improvements, knowledge and knowhow developed and/or accumulated by usafter the execution of the Purchase Agreement will be owned by us. Further, Ms. Zigdon agreed not to compete, directly or indirectly, with us in any matter relatingto the Assets for a period of seven years from the end of the development period of the venture.On May 26, 2021, we, My Size Israel, and Ms. Zigdon entered into an Amendment to Purchase Agreement, or the Amendment, which made certainamendments to the Purchase Agreement. Pursuant to the Amendment, Ms. Zigdon agreed to irrevocably waive (i) the right to repurchase certain assets related tothe collection of data for measurement purposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which our business issubstantially dependent, or the Assets, and (ii) all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My SizeIsrael under the Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation, reward orany rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights, or the Waiver. Inconsideration of the Waiver, we issued 100,000 shares of common stock to Ms. Zigdon.In September 2005, we commenced trading on the Tel Aviv Stock Exchange, or TASE. Between 2007 and 2012 we reported as a public company with theSEC. In August 2012, we suspended our reporting obligations. In mid2015 we resumed reporting as a public company. On July 25, 2016, our common stock beganpublicly trading on the Nasdaq Capital Market under the symbol “MYSZ”.ITEM 1A. RISK FACTORSAn investment in our common stock involves a high degree of risk. You should carefully consider the following risk factors and the other information inthis Annual Report on Form 10K before investing in our common stock. Our business and results of operations could be seriously harmed by any of the followingrisks. The risks set out below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterialalso may materially adversely affect our business, financial condition and/or operating results. If any of the following events occur, our business, financial conditionand results of operations could be materially adversely affected. In such case, the value and trading price of our common stock could decline, and you may lose allor part of your investment.Summary Risk FactorsThe principal factors and uncertainties that make investing in our ordinary shares risky, include, among others:Risks Related to Our Financial Position and Capital Requirements●We have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.●Our limited operating history makes it difficult to evaluate our business and prospects.●We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive and maycause the market price of our common stock to decline.●The report of our independent registered public accounting firm contains an explanatory paragraph regarding substantial doubt about our ability tocontinue as a going concern.Risks Related to Our Company and Our Business●The market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and online thirdparty resellers adopting our flagship product, MySizeID.18●Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broader marketacceptance of our products.●We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which may makeit difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.●We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increase ourcapital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.●If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations and financialcondition may be adversely affected.●If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operations andfinancial condition could be adversely affected.●The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile device applications andcustom development services.●Our growth depends, in part, on the success of our strategic relationships with third parties.●Changes in economic conditions could materially affect our business, financial condition and results of operations.●We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.●We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significant interruptionin our network or hosting and cloud services could adversely impact our operations and harm our business.●Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.●We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.●A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.●Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, data protectionand information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive and confidentialinformation. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm our business,results of operations and financial condition.●We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect our business.●We may face intense competition and expect competition to increase in the future, which could limit us in developing a customer base and generatingrevenue.●Our business operations and future development could be significantly disrupted if we lose key members of our management team.19●If we are able to expand our operations, we may be unable to successfully manage our future growth.Risks Related to Our Operations in Israel and Russia●Our headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.●Russia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.Risks Related to Our Common Stock●A more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.●Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions and adversedevelopments with respect to financial institutions and associated liquidity risk;●Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.●Our securities are traded on more than one market which may result in price variations.●We are a former “shell company” and as such are subject to certain limitations not generally applicable to other public companies.Risks Related to Our Financial Position and Capital RequirementsWe have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.We realized a net loss of approximately $8.3 million and $10.5 million for the years ended December 31, 2022 and 2021 and had an accumulated deficit of$53.5 million as at December 31, 2022. Because of the numerous risks and uncertainties associated with the development and commercialization of our products andbusiness, we are unable to predict the extent of any future losses or when we will become profitable, if at all. Expected future operating losses will have an adverseeffect on our cash resources, shareholders’ equity and working capital. Our failure to become and remain profitable could depress the value of our stock and impairour ability to raise capital, expand our business, maintain our development efforts, or continue our operations. A decline in our value could also cause you to lose allor part of your investment in us.Our limited operating history makes it difficult to evaluate our business and prospects.We have only been developing our measurement technology since 2014. Since then, our operating history has been primarily limited to research anddevelopment, pilot studies, raising capital, and more recently acquisitions and sales and marketing efforts. Therefore, it may be difficult to evaluate our business andprospects. We have not yet demonstrated an ability to commercialize our products. Consequently, any predictions about our future performance may not beaccurate, and you may not be able to fully assess our ability to complete development and/or commercialize our products, and any future products.We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive andmay cause the market price of our common stock to decline.Based on our projected cash flows and the cash balances as of the date of this Annual Report on Form 10K, our existing cash is insufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. In order to meet ourbusiness objectives in the future, we will need to raise additional capital, which may not be available on reasonable terms or at all. Additional capital would be usedto accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;20●respond to competitive pressure;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, and a number of otherfactors, many of which are outside our control, and on our financial performance. Accordingly, we cannot assure you that we will be able to successfully raiseadditional capital at all or on terms that are acceptable to us. If we cannot raise additional capital when needed, it may have a material adverse effect on our business,results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.Management has concluded that there is substantial doubt about our ability to continue as a going concern which could prevent us from obtainingnew financing on reasonable terms or at all.We have incurred significant losses and negative cash flows from operations and have an accumulated deficit that raises substantial doubt about its abilityto continue as a going concern. Our audited consolidated financial statements for the year ended December 31, 2022 were prepared under the assumption that wewould continue our operations as a going concern. Our independent registered public accounting firm has included a “going concern” explanatory paragraph in itsreport on our financial statements for the year ended December 31, 2022. If we are unable to improve our liquidity position, by, among other things, raising capitalthrough public or private offerings or reducing our expenses, we may exhaust our cash resources and will be unable to continue our operations. If we cannotcontinue as a viable entity, our shareholders would likely lose most or all of their investment in us.Risks Related to Our Company and Our BusinessThe market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and onlinethirdparty resellers adopting our flagship product, MySizeID.The market for our measurement technology is relatively new and unproven and is subject to a number of risks and uncertainties. We believe that ourfuture success will depend in large part on market adoption of our flagship product, MySizeID, by U.S. retailers and online thirdparty resellers. In order to grow ourbusiness, we intend to focus on educating retailers and resellers and other potential customers about the benefits of our measurement technology, expanding thefunctionality of our products and bringing new products to market to increase market acceptance and use of our technology. Our ability to develop and expand themarket that our products address depends upon a number of factors, including the cost savings, performance and perceived value associated with such products.The market for our products could fail to develop or there could be a reduction in interest or demand for our products as a result of a lack of consumer acceptance,technological challenges, competing products and services, weakening economic conditions and other causes. We may never successfully commercialize ourproducts and if our products fail to achieve market acceptance, this would have a material adverse effect on our business, results of operations and financialcondition.21Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broadermarket acceptance of our products.Our ability to achieve customer adoption, especially among U.S. retailers will depend, in part, on our ability to effectively organize, focus and train our salesand marketing personnel. We have limited experience selling to U.S. retailers and only recently established a U.S. sales force. We believe that there is significantcompetition for experienced sales professionals with the skills and industry knowledge that we require. Our ability to achieve significant revenue growth in thefuture will depend, in part, on our ability to recruit, train and retain a sufficient number of experienced sales professionals, particularly those with experience sellingto U.S. retailers. In addition, even if we are successful in hiring qualified sales personnel, new hires require significant training and experience before they achievefull productivity, particularly for sales efforts targeted at U.S. retailers and new markets. Because we only recently started sales efforts, we cannot predict whether, orto what extent, our sales efforts will be successful.We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which maymake it difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.In this market segment, the decision to adopt our products may require the approval of multiple technical and business decision makers, including security,compliance, procurement, operations and IT. In addition, while U.S. retailers may be willing to deploy our products on a limited basis, before they will commit todeploying our products at scale, they often require extensive education about our products and significant customer support time, engage in protracted pricingnegotiations and seek to secure readily available development resources. As a result, it is difficult to predict when we will obtain new customers and begingenerating revenue from these customers. As part of our sales cycle, we may incur significant expenses before executing a definitive agreement with a prospectivecustomer and before we are able to generate any revenue from such agreement. We have no assurance that the substantial time and money spent on our salesefforts will generate significant revenue. If conditions in the marketplace generally or with a specific prospective customer change negatively, it is possible that nodefinitive agreement will be executed, and we will be unable to recover any of these expenses. If we are not successful in targeting, supporting and streamlining oursales processes and if revenue expected to be generated from a prospective customer is not realized in the time period expected or not realized at all, our ability togrow our business, and our operating results and financial condition may be adversely affected. If our sales cycles lengthen, our future revenue could be lower thanexpected, which would have an adverse impact on our operating results and could cause our stock price to decline.22We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increaseour capital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.In order to reduce time to market and obtain complementary technologies, we are seeking to acquire technologies and businesses that are synergistic to ourproduct offering. For example, we recently acquired Orgad which operates an omnichannel ecommerce platform and Naiz which provides SaaS technology solutionsthat solve size and fit issues for fashion ecommerce companies. We evaluate from time to time various acquisitions and collaborations, including licensing oracquiring complementary technologies, intellectual property rights, or businesses. The process for acquiring a company may take from several months up to a yearand costs can vary greatly. We may also compete with others to acquire companies, and such competition may result in decreased availability of, or an increase inprice for, suitable acquisition candidates. In addition, we may not be able to consummate acquisitions or investments that we have identified as crucial to theimplementation of our strategy for other commercial or economic reasons. As a result, it may be more difficult for us to identify suitable acquisition or investmenttargets or to consummate acquisitions or investments on acceptable terms or at all. If we are not able to execute on any acquisition, we may not be able to achieve afuture growth strategy and may lose market share.In addition, the acquisition of Orgad, Naiz and any potential future acquisition, joint venture or collaboration may entail numerous potential risks, including:●increased operating expenses and cash requirements;●the assumption of additional indebtedness or contingent liabilities;●assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel;●the diversion of our management’s attention from our existing programs and initiatives in pursuing such a strategic merger or acquisition;●retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships;●risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing technologies; and●our inability to generate revenue from acquired technologies or products sufficient to meet our objectives in undertaking the acquisition or even to offsetthe associated acquisition and maintenance costs.All of the foregoing risks may be magnified as the cost, size or complexity of an acquisition or acquired company increases, or where the acquiredcompany’s products, market or business are materially different from ours, or where more than one integration is occurring simultaneously or within a concentratedperiod of time. We may not be able to obtain the necessary regulatory approvals, including those of antitrust authorities and foreign investment authorities, incountries where we seek to consummate acquisitions or make investments. For those and other reasons, we may ultimately fail to consummate an acquisition, even ifwe announce the intended acquisition.In addition, we may require significant financing to complete an acquisition or investment, whether through bank loans, raising of equity or debt orotherwise. We cannot assure you that such financing options will be available to us on reasonable terms, or at all. If we are not able to obtain such necessaryfinancing, it could have an impact on our ability to consummate a substantial acquisition or investment and execute a future growth strategy. Alternatively, we mayissue a significant number of shares as consideration for an acquisition, which would have a dilutive effect on our existing shareholders. For example, in partialconsideration for the acquisition of Orgad, we agreed to issue up to 111,602 shares of our common stock and in the Naiz acquisition we issued 240,000 shares of ourcommon stock. Furthermore, if we undertake acquisitions, we may incur large onetime expenses and acquire intangible assets that could result in significant futureamortization expense.23If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations andfinancial condition may be adversely affected.We believe that enhancing the “MySize” brand identity and increasing market awareness of our company and products, particularly among U.S. retailers, iscritical to achieving widespread acceptance of our products. Our ability to successfully develop new retailers may be adversely affected by a lack of awareness oracceptance of our brand. To the extent that we are unable to foster name recognition and affinity for our brand, our growth may be significantly delayed or impaired.The successful promotion of our brand will depend largely on our continued marketing efforts, market adoption of our products, and our ability to successfullydifferentiate our products from competing products and services. Our brand promotion may not be successful or result in revenue generation. Any incident thaterodes consumer affinity for our brand could significantly reduce our brand value and damage our business. If consumers perceive or experience a reduction inquality, or in any way believe we fail to deliver a consistently positive experience, our brand value could suffer and our business may be adversely affected.In particular, adverse weather conditions can impact guest traffic at our retailers, and, in more severe cases, cause temporary retail closures, sometimes forprolonged periods. Our business is subject to seasonal fluctuations, with retail sales typically higher during certain months, such as December. Adverse weatherconditions during our most favorable months or periods may exacerbate the effect of adverse weather on consumer traffic and may cause fluctuations in ouroperating results from quartertoquarter within a fiscal year.If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operationsand financial condition could be adversely affected.Our ability to attract new customers depends in part on our ability to enhance and improve our existing products, increase adoption and usage of ourproducts and introduce new products. The success of any enhancements or new products depends on several factors, including timely completion, adequatequality testing, actual performance quality, and overall market acceptance. Enhancements and new products that we develop may not be introduced in a timely orcosteffective manner, may contain errors or defects, may have interoperability difficulties with our platform or other products or may not achieve the broad marketacceptance necessary to generate significant revenue. Furthermore, our ability to increase the usage of our products depends, in part, on the development of newuse cases for our products and may be outside of our control. If we are unable to successfully enhance our existing products to meet evolving customerrequirements, increase adoption and usage of our products, develop new products, then our business, results of operations and financial condition would beadversely affected.The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile Apps and customdevelopment services.We must continue to enhance and improve the performance, functionality and reliability of our products. The mobile technology industry is characterizedby rapid technological change, changes in user requirements and preferences, frequent new product and services introductions embodying new technologies andthe emergence of new industry standards and practices that could render our products obsolete. Our success will depend, in part, on our ability to both internallydevelop and enhance our existing products, develop new products that address the increasingly sophisticated and varied needs of our customers, and respond totechnological advances and emerging industry standards and practices on a costeffective and timely basis. The development of our technology involvessignificant technical and business risks. We may fail to use new technologies effectively or to adapt our proprietary technology and systems to customerrequirements or emerging industry standards. If we are unable to adapt to changing market conditions, customer requirements or emerging industry standards, wemay not be able to increase our revenue and expand our business.Changes in economic conditions could materially affect our business, financial condition and results of operations.Because our primary target customers include U.S. retailers , we, together with the rest of the fashion/apparel industry, will depend upon consumerdiscretionary spending. Increases in unemployment rates, reductions in home values, increases in home foreclosures, investment losses, personal bankruptcies andreductions in access to credit and reduced consumer confidence, may impact consumers’ ability and willingness to spend discretionary dollars. In addition, volatileeconomic conditions may repress consumer confidence and discretionary spending. Any of the foregoing may have a material adverse effect on our business,financial condition and results of operations.24Our growth depends, in part, on the success of our strategic relationships with third parties.To grow our business, we anticipate that we will continue to depend on relationships with third parties, such as our customers and thirdparty platforms.Identifying partners, and negotiating and documenting relationships with them, requires significant time and resources. If we are unsuccessful in establishing ormaintaining our relationships with third parties, our ability to compete in the marketplace or to grow our revenue could be impaired, and our results of operationsmay suffer. Even if we are successful, we cannot assure you that these relationships will result in increased customer usage of our products or increased revenue.We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.We currently utilize, and plan on continuing to utilize over the current fiscal year, thirdparty networking providers and distribution through companiesincluding, but not limited to, Apple and Google as well as Shopify, WooCommerce and, Datalogic, Honeywell and Zebra to distribute our technologies. If disruptionsor capacity constraints occur, we may have no means of replacing these services, on a timely basis or at all. This could cause a material adverse condition for ouroperations and financial earnings.We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significantinterruption in our network or hosting and cloud services could adversely impact our operations and harm our business.Our technology infrastructure is critical to the performance of our products and customer satisfaction. Our products run on a complex distributed system,or what is commonly known as cloud computing. We own, operate and maintain elements of this system, but significant elements of this system are operated bythirdparties that we do not control and which would require significant time to replace. We expect this dependence on thirdparties to continue. In particular, asignificant portion, if not almost all data storage, data processing and other computing services and systems is hosted by cloud computing providers. Anydisruptions, outages and other performance problems relating to such services, including infrastructure changes, human or software errors and capacity constraints,could adversely impact our business, financial condition or results of operations.Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.We update our products on a frequent basis. Despite efforts to test our updates, errors, failures or bugs may not be found in our products until after theyare deployed to a customer. We have discovered and expect we will continue to discover errors, failures and bugs in our products and anticipate that certain of theseerrors, failures and bugs will only be discovered and remediated after deployment. Real or perceived errors, failures or bugs in our platform could result in negativepublicity, government inquiries, loss of or delay in market acceptance of our products, loss of competitive position, or claims by customers for losses sustained bythem. In such an event, we may be required, or may choose, for customer relations or other reasons, to expend additional resources in order to help correct theproblem.We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.In connection with the operation of our business, we store, process and transmit data, including personal and payment information, about our employeesand customers, a portion of which is confidential and/or personally sensitive. Unauthorized disclosure or loss of sensitive or confidential data may occur through avariety of methods. These include, but are not limited to, systems failure, employee negligence, fraud or misappropriation, or unauthorized access to or through ourinformation systems, whether by our employees or third parties, including a cyberattack by computer programmers, hackers, members of organized crime and/orstatesponsored organizations, who may develop and deploy viruses, worms or other malicious software programs. Such disclosure, loss or breach could harm ourreputation and subject us to government sanctions and liability under our contracts and laws that protect sensitive or personal data and confidential information,resulting in increased costs or loss of revenues. It is possible that security controls over sensitive or confidential data and other practices we and our thirdpartyvendors follow may not prevent the improper access to, disclosure of, or loss of such information. The potential risk of security breaches and cyberattacks mayincrease as we introduce new products and offerings. Further, data privacy is subject to frequently changing rules and regulations, which sometimes conflict amongthe various jurisdictions in which we provide services. Any failure or perceived failure to successfully manage the collection, use, disclosure, or security of personalinformation or other privacy related matters, or any failure to comply with changing regulatory requirements in this area, could result in legal liability or impairment toour reputation in the marketplace.25A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.Information security risks have generally increased in recent years, in part because of the proliferation of new technologies and the use of the Internet, andthe increased sophistication and activity of organized crime, hackers, terrorists, activists, cybercriminals and other external parties, some of which may be linked toterrorist organizations or hostile foreign governments. For example, a cybercriminal could use cybersecurity threats to gain access to sensitive information aboutanother company or to alter or disrupt news or information to be distributed by PR Newswire. Cybersecurity attacks are becoming more sophisticated and includemalicious software, ransomware, attempts to gain unauthorized access to data and other electronic security breaches that could lead to disruptions in criticalsystems, unauthorized release of confidential or otherwise protected information and corruption of data, substantially damaging our reputation. Any person whocircumvents our security measures could steal proprietary or confidential customer information or cause interruptions in our operations. We incur significant coststo protect against security breaches, and may incur significant additional costs to alleviate problems caused by any breaches. Our failure to prevent securitybreaches, or wellpublicized security breaches affecting the Internet in general, could significantly harm our reputation and business and financial results.Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, dataprotection and information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive andconfidential information. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm ourbusiness, results of operations and financial condition.We and our customers that use our products may be subject to privacy and data protectionrelated laws and regulations that impose obligations inconnection with the collection, processing and use of personal data, financial data, health or other similar data. The U.S. federal and various state and foreigngovernments have adopted or proposed limitations on, or requirements regarding, the collection, distribution, use, security and storage of personally identifiableinformation of individuals. The U.S. Federal Trade Commission and numerous state attorneys general are applying federal and state consumer protection laws toimpose standards on the online collection, use and dissemination of data, and to the security measures applied to such data.Similarly, many foreign countries and governmental bodies, including the EU member states, have laws and regulations concerning the collection and useof personally identifiable information obtained from individuals located in the EU or by businesses operating within their jurisdiction, which are often morerestrictive than those in the United States. Laws and regulations in these jurisdictions apply broadly to the collection, use, storage, disclosure and security ofpersonally identifiable information that identifies or may be used to identify an individual, such as names, telephone numbers, email addresses and, in somejurisdictions, IP addresses and other online identifiers.For example, the GDPR, which took full effect on May 25, 2018. The GDPR enhances data protection obligations for businesses and requires serviceproviders (data processors) processing personal data on behalf of customers to cooperate with European data protection authorities, implement security measuresand keep records of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to or greater of €20 million or 4% of global annualrevenues. In addition, the CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and require deletion of their personalinformation, opt out of certain personal information sharing, and receive detailed information about how their personal information is used. The CCPA provides forcivil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further, failure to comply withthe Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may expose us to administrativefines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the current enforcementmeasures and sanctions. There are also additional laws and regulations in additional jurisdictions around the world which govern the protection of consumers andof electronic communications. If our efforts to comply with GDPR, CCPA or other applicable laws and regulations are not successful, we may be subject to penaltiesand fines that would adversely impact our business and results of operations, and our ability to conduct business could be significantly impaired.26Additionally, although we endeavor to have our products comply with applicable laws and regulations, these and other obligations may be modified, theymay be interpreted and applied in an inconsistent manner from one jurisdiction to another, and they may conflict with one another, other regulatory requirements,contractual commitments or our internal practices. We also may be bound by contractual obligations relating to our collection, use and disclosure of personal,financial and other data or may find it necessary or desirable to join industry or other selfregulatory bodies or other privacy or data protectionrelatedorganizations that require compliance with their rules pertaining to privacy and data protection.We expect that there will continue to be new proposed laws, rules of selfregulatory bodies, regulations and industry standards concerning privacy, dataprotection and information security in the United States, the European Union and other jurisdictions, and we cannot yet determine the impact such future laws,rules, regulations and standards may have on our business. Moreover, existing U.S. federal and various state and foreign privacy and data protectionrelated lawsand regulations are evolving and subject to potentially differing interpretations, and various legislative and regulatory bodies may expand current or enact new lawsand regulations regarding privacy and data protectionrelated matters. Because global laws, regulations and industry standards concerning privacy and datasecurity have continued to develop and evolve rapidly, it is possible that we or our products or platform may not be, or may not have been, compliant with eachsuch applicable law, regulation and industry standard and compliance with such new laws or to changes to existing laws may impact our business and practices,require us to expend significant resources to adapt to these changes, or to stop offering our products in certain countries. These developments could adverselyaffect our business, results of operations and financial condition.We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect ourbusiness.Our ability to implement our business plan successfully depends in part on our ability to build brand recognition using our trademarks, service marks andother proprietary intellectual property, including our names and logos. We currently have no registered trademarks. While we plan to register a number of ourtrademarks; however, no assurance can be given that our trademark applications will be approved. As of December 31, 2022, we own 18 issued patents: six in Europe,four in the U.S., three in each of Russia and Japan and one in each of Canada and Israel which expire between January 20, 2033 and August 18, 2036, and we havetwo additional patent applications in process. As of such date, we do not have any registered trademarks., No assurance can be given that our patent applicationswhich are in process will be approved. If our patent applications are not approved, our ability to expand or develop our business may be negatively affected.Third parties may also oppose our trademark or patent applications, or otherwise challenge our use of the trademarks or patents. In the event that ourtrademarks or patents are successfully challenged, we could be forced to rebrand our goods and services or redesign our technology, which could result in loss ofbrand recognition, and could require us to devote resources to advertising and marketing new brands and products.If our efforts to register, maintain and protect our intellectual property are inadequate, or if any thirdparty misappropriates, dilutes or infringes on ourintellectual property, the value of our brands may be harmed, which could have a material adverse effect on our business and might prevent our brands fromachieving or maintaining market acceptance. We may also face the risk of claims that we have infringed third parties’ intellectual property rights. If third parties claimthat we infringe upon their intellectual property rights, our operating profits could be adversely affected. Any claims of intellectual property infringement, eventhose without merit, could be expensive and time consuming to defend, require us to rebrand our services, if feasible, divert management’s attention and resourcesor require us to enter into royalty or licensing agreements in order to obtain the right to use a thirdparty’s intellectual property.Any royalty or licensing agreements, if required, may not be available to us on acceptable terms or at all. A successful claim of infringement against uscould result in our being required to pay significant damages, enter into costly license or royalty agreements, or stop the sale of certain products or services, any ofwhich could have a negative impact on our operating profits and harm our future prospects.We may face intense competition and expect competition to increase in the future, which could prohibit us from developing a customer base andgenerating revenue.We face significant competition in every aspect of our business. Our competitors include True Fit, Virtusize, EasyMeasure, AR MeasureKit, Smart Measureand 3DLook. These companies may already have an established market in our industry. Most of these companies have significantly greater financial and otherresources than us and have been developing their products and services longer than we have been developing ours.27In addition, some of our larger competitors have substantially broader product offerings and leverage their relationships based on other products orincorporate functionality into existing products to gain business in a manner that discourages potential customers from purchasing our products. Potentialcustomers may also prefer to purchase from their existing solution providers rather than a new solution provider regardless of product performance or features.These larger competitors often have broader product lines and market focus and will therefore not be as susceptible to downturns in a particular market. Conditionsin our market could change rapidly and significantly as a result of technological advancements, partnering by our competitors or continuing market consolidation.New startup companies that innovate and large competitors that are making significant investments in research and development may invent similar or superiorproducts and technologies that compete with our products. In addition, some of our competitors may enter into new alliances with each other or may establish orstrengthen cooperative relationships. Any such consolidation, acquisition, alliance or cooperative relationship could lead to pricing pressure and our loss of anyfuture market share and could result in a competitor with greater financial, technical, marketing, service and other resources, all of which could harm our ability tocompete. Furthermore, organizations may be more willing to incrementally add solutions to their existing infrastructure from competitors than to replace their existinginfrastructure with our products. Any failure to meet and address these factors could harm our business, results of operations and financial condition.Our business operations and future development could be significantly disrupted if we lose key members of our management team.The success of our business continues to depend to a significant degree upon the continued contributions of our senior officers and key employees, bothindividually and as a group. Our future performance will be substantially dependent in particular on our ability to retain and motivate Ronen Luzon, our ChiefExecutive Officer, and certain of our other senior executive officers. The loss of the services of our Chief Executive Officer, senior officers or other key employeescould have a material adverse effect on our business and plans for future development. We have no reason to believe that we will lose the services of any of theseindividuals in the foreseeable future; however, we currently have no effective replacement for any of these individuals due to their experience, reputation in theindustry and special role in our operations. We also do not maintain any key man life insurance policies for any of our employees.If we are able to expand our operations, we may be unable to successfully manage our future growth.Our growth may strain our infrastructure and resources. Any such growth could place increased strain on our management, operational, financial and otherresources, and we will need to train, motivate, and manage employees, as well as attract management, sales, finance and accounting, international, technical, andother professionals. Any failure to expand these areas and implement appropriate procedures and controls in an efficient manner and at a pace consistent with ourbusiness objectives could have a material adverse effect on our business, results of operations and financial condition.Our business operations are conducted in multiple languages and could be disrupted due to miscommunications or translation errors.The success of our business continues to depend on our marketing efforts in the United States, Europe and Israel, each of which is conducted in the locallanguage. Miscommunications or inaccurate foreign language translations could have a material adverse effect on our business operations and financial conditions.Additionally, contracts, communications and complex technical information must be accurately translated into foreign languages.We will continue to incur costs and be subject to various obligations as a result of being a public company, listed in the United States and in Israel.We will continue to incur significant legal, accounting and other expenses as a result of being a public company, listed in the United States and in Israel.Although we will incur costs each year associated with being a publiclytraded company, it is possible that our actual costs of being a publiclytraded company willvary from year to year and may be different than our estimates. In estimating these costs, we take into account expenses related to insurance, legal, accounting andcompliance activities.28Furthermore, the need to maintain the corporate infrastructure demanded of a public company may divert management’s attention from implementing ourgrowth strategy, which could prevent us from improving our business, results of operations and financial condition. We have made, and will continue to make,changes to our internal controls and procedures for financial reporting and accounting systems to meet our reporting obligations as a U.S. publicly traded company.However, the measures we take may not be sufficient to satisfy our obligations as a publicly traded company.Any future or current litigation could have a material adverse impact on our results of operations, financial condition and liquidity.From time to time, we may be subject to litigation, including, among others, potential stockholder derivative actions and class actions. Risks associatedwith legal liability are difficult to assess and quantify, and their existence and magnitude can remain unknown for significant periods of time. Subject to certainexceptions, our Amended and Restated Certificate of Incorporation, or Certificate of Incorporation, and Amended and Restated Bylaws, or Bylaws, require us toindemnify and advance expenses to our officers and directors involved in legal proceedings. To date we have obtained directors and officers’ liability, or D&O,insurance to cover some of the risk exposure for our directors and officers. Such insurance generally pays the expenses (including amounts paid to plaintiffs, fines,and expenses including attorneys’ fees) of officers and directors who are the subject of a lawsuit as a result of their service to us. There can be no assurance that wewill be able to continue to maintain this insurance at reasonable rates or at all, or in amounts adequate to cover such expenses should such a lawsuit occur. WithoutD&O insurance, the amounts we would pay to indemnify our officers and directors should they be subject to legal action based on their service to us could have amaterial adverse effect on our financial condition, results of operations and liquidity. Such lawsuits, and any related publicity, may result in substantial costs and,among other things, divert the attention of management and our employees. An unfavorable outcome in any claim or proceeding against us could have a materialadverse impact on our financial position and results of operations for the period in which the unfavorable outcome occurs, and potentially in future periods. Further,any settlement announced by us may expose us to further claims against us by third parties seeking monetary or other damages which, even if unsuccessful, woulddivert management attention from the business and cause us to incur costs, possibly material, to defend such matters, which could have a material adverse impacton our financial position. See “Legal Proceedings” for more information regarding our involvement in ongoing litigation matters.Federal, state and local or Israeli tax rules may adversely impact our results of operations and financial position.We are subject to federal, state and local taxes in the U.S., as well as local taxes in Israel in respect to our operations in Israel. Although we believe our taxestimates are reasonable, if the Internal Revenue Service or other taxing authority disagrees with the positions we have taken on our tax returns, we could faceadditional tax liability, including interest and penalties. If material, payment of such additional amounts upon final adjudication of any disputes could have a materialimpact on our results of operations and financial position. In addition, complying with new tax rules, laws or regulations could impact our financial condition, andincreases to federal or state statutory tax rates and other changes in tax laws, rules or regulations may increase our effective tax rate. Any increase in our effectivetax rate could have a material impact on our financial results.A significant majority of Orgad’s revenue is from sales of products on Amazon’s U.S. Marketplace and any change, limitation or restriction on ourability to operate on Amazon’s platform or any other marketplace could have a material adverse impact to our business, results of operations, financialcondition and prospects.Orgad, our wholly owned subsidiary, operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com, eBay and others. A substantial percentage of Orgad’s revenue is driven by sales on Amazon’s U.S. marketplace and Orgad is subject toterms of service of Amazon and other maketplaces and various other seller policies and services that apply to third parties selling products on Amazon and othermarketplaces. Generally, a marketplace has the right to terminate or suspend its agreement with Orgad at any time and for any reason. Such marketplace may takeother actions against Orgad such as suspending or terminating a seller account or product listing and withholding payments owed to Orgad indefinitely. Forexample, in July 2022, Amazon deactivated Orgad’s Amazon U.S. store as a result of complaints submitted due to an error in the listed manufacturer of certainproducts on Orgad’s store. Although its account was subsequently reinstated in September 2022, if the deactivation were to occur in the future for a prolongedperiod of time, or if Amazon were to terminate Orgad’s account, this would have a material adverse effect on our business, results of operations, financial conditionand prospects. While Orgad endeavors to materially comply with the terms of services of the marketplaces on which it operates, we can provide no assurance thatthese marketplaces will have the same determination with respect to our compliance.29In addition, Amazon and other marketplaces can make changes to its platform that could require Orgad to change the manner in which it operates, limit itsability to successfully launch new products or increase its costs to operate and such changes could have an adverse effect on our business, results of operations,financial condition and prospects. Examples of changes that could impact us relate to platform fee charges (i.e., selling commissions), exclusivity, inventorywarehouse availability, excluded products and limitations on sales and marketing. Any change, limitation or restriction on our ability to sell on Amazon’s platform orany other marketplace, even if temporary, could have a material impact on our business, results of operations, financial condition and prospects.Orgad also relies on services provided by Amazon’s fulfillment platform, including Prime Certification, which provides for expedited shipping to theconsumer, an important aspect in the buying decision for consumers. For products that Orgad fulfills itself, Orgad is qualified to offer our products for sale withPrime Certification delivery. Any inability to market our products for sale with expedited delivery provided under Prime Certification could have a material impact onour business, results of operations, financial condition and prospects. Failure to remain compliant with the best fulfillment practices on Amazon’s platform couldhave a material impact on our business, results of operations, financial condition and prospects. In addition, due to the COVID19 pandemic, Amazon has changedthe amount of inventory it accepts per product for a period of time. If this were to continue it could cause us to miss sales and/or pay additional shipping costswhich would harm our business operations and financial conditions.Orgad’s business depends on its ability to build and maintain strong product listings on ecommerce platforms. Orgad may not be able to maintain andenhance our product listings if it receives unfavorable customer complaints, negative publicity or otherwise fails to live up to consumers’ expectations, whichcould materially adversely affect our business, results of operations and growth prospects.Maintaining and enhancing Orgad’s product listings is critical in expanding and growing its business. However, a significant portion of Orgad’s perceivedperformance to the customer depends on third parties outside of its control, including suppliers and thirdparty delivery agents as well as online retailers such asAmazon and eBay. Because Orgad’s agreements with its online retail partners are generally terminable at will, it may be unable to maintain these relationships, andour results of operations could fluctuate significantly from period to period. Because Orgad relies on third parties to deliver its products, it is subject to shippingdelays or disruptions caused by inclement weather, natural disasters, labor activism, health epidemics or bioterrorism. It may also experience shipping delays ordisruptions due to other carrierrelated issues relating to their own internal operational capabilities. Further, Orgad relies on the business continuity plans of thesethird parties to operate during pandemics, like the COVID19 pandemic, and it has limited ability to influence their plans, prevent delays, and/or cost increases due toreduced availability and capacity and increased required safety measures.Customer complaints or negative publicity about its products, delivery times, or marketing strategies, even if not accurate, especially on blogs, social mediawebsites and thirdparty market sites, could rapidly and severely diminish consumer view of Orgad’s product listings and result in harm to its brand. Customers mayalso make safetyrelated or other types of claims regarding products sold through our online retail partners, such as Amazon, which may result in an online retailpartner removing the product from its marketplace. We also use and rely on other services from third parties, such as our telecommunications services, and thoseservices may be subject to outages and interruptions that are not within our control.Orgad faces risks related to successfully optimizing and operating its fulfillment and customer service operations.Failures to adequately predict customer demand or otherwise optimize and operate its fulfillment and customer service operations successfully from time totime result in excess or insufficient fulfillment or customer service capacity, increased costs, and impairment charges, any of which could materially harm ourbusiness. As Orgad continues to add fulfillment and customer service capability or add new businesses with different requirements, its fulfillment and customerservice operations become increasingly complex and operating them becomes more challenging. There can be no assurance that Orgad will be able to operate ouroperations effectively.30In addition, failure to optimize inventory in our fulfillment operations increases net shipping cost by requiring longzone or partial shipments. Orgad may beunable to adequately staff its fulfillment and customer service operations. Orgad’s failure to properly handle such inventory or to accurately forecast productdemand may result in it being unable to secure sufficient storage space or to optimize its fulfillment operations or cause other unexpected costs and other harm toour business and reputation.Orgad relies on a limited number of shipping companies to deliver inventory to it and completed orders to our customers. The inability to negotiateacceptable terms with these companies or performance problems or other difficulties experienced by these companies could negatively impact our operating resultsand customer experience. In addition, Orgad’s ability to receive inbound inventory efficiently and ship completed orders to customers also may be negativelyaffected by natural or manmade disasters, extreme weather, geopolitical events and security issues, labor or trade disputes, and similar events.The variability in Orgad’s retail business places increased strain on its operations.Demand for Orgad’s product listings can fluctuate significantly for many reasons, including as a result of seasonality, promotions, product launches, orunforeseeable events, such as in response to natural or manmade disasters, extreme weather, or geopolitical events. For example, Orgad expects a disproportionateamount of our retail sales to occur during our fourth quarter. Failure to stock or restock popular products in sufficient amounts such that Orgad fails to meetcustomer demand could significantly affect our revenue and our future growth. If too many customers access the websites on which Orgad engages in onlineretailing within a short period of time due to increased demand, Orgad may experience system interruptions that make the websites unavailable or prevent us fromefficiently fulfilling orders, which may reduce the volume of goods its offers or sell and the attractiveness of its products. In addition, Orgad may be unable toadequately staff for fulfillment of orders and customer service during these peak periods and delivery and other fulfillment companies and customer service cosourcers may be unable to meet the seasonal demand.Our business is subject to the risks of earthquakes, fire, power outages, floods, health risks and other catastrophic events, and to interruption by manmade problems such as terrorism.Natural disasters, such as fire or floods, a significant power outage, telecommunications failure, terrorism, an armed conflict, cyberattacks, epidemics andpandemics such as COVID19, or other geopolitical unrest could affect our supply chain, manufacturers, logistics providers, channel partners, or endcustomers orthe economy as a whole and such disruption could impact us and the shipments and sales. These risks may be further increased if the disaster recovery plans for usand our suppliers prove to be inadequate. To the extent that any of the above should result in delays or cancellations of customer orders, the loss of customers, orthe delay in the deployment or shipment of products, our business, financial condition, and operating results would be adversely affected.For example, on January 2, 2023, Orgad experienced a fire at its warehouse in Israel. We are not aware of any casualties or injuries associated with the fire.We shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incidentdid not affect the future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of thisincident on the other parties that were involved in the incident (lessor and others that leased properties near the warehouse).Our business could be negatively impacted by unsolicited takeover proposals, by shareholder activism or by proxy contests relating to the election ofdirectors or other matters.Our business could be negatively affected as a result of an unsolicited takeover proposal, by shareholder activism or a proxy contest. During 2021, anactivist shareholder sought to make changes to our board of directors, among other matters, which ultimately resulted in us entering into a settlement agreementwith the activist shareholder and another shareholder, and for which considerable costs were incurred and absorbed significant time and attention by managementand the board of directors. A future proxy contest, unsolicited takeover proposal, or other shareholder activism relating to the election of directors or other matterswould most likely require us to incur significant legal fees and proxy solicitation expenses and require significant time and attention by management and our Boardof Directors. The potential of a proxy contest, unsolicited takeover proposal, or other shareholder activism could interfere with our ability to execute our strategicplan, give rise to perceived uncertainties as to our future direction, result in the loss of potential business opportunities or make it more difficult to attract and retainqualified personnel, any of which could materially and adversely affect our business and operating results.31Environmental, social and corporate governance (ESG) issues, including those related to climate change and sustainability, may have an adverseeffect on our business, financial condition and results of operations and damage our reputation.There is an increasing focus from certain investors, customers, consumers, employees and other stakeholders concerning ESG matters. Additionally, publicinterest and legislative pressure related to public companies’ ESG practices continue to grow. If our ESG practices fail to meet regulatory requirements or investor,customer, consumer, employee or other shareholders’ evolving expectations and standards for responsible corporate citizenship in areas including environmentalstewardship, support for local communities, Board of Director and employee diversity, human capital management, employee health and safety practices, productquality, supply chain management, corporate governance and transparency, our reputation, brand and employee retention may be negatively impacted, and ourcustomers and suppliers may be unwilling to continue to do business with us.Customers, consumers, investors and other shareholders are increasingly focusing on environmental issues, including climate change, energy and wateruse, plastic waste and other sustainability concerns. Concern over climate change may result in new or increased legal and regulatory requirements to reduce ormitigate impacts to the environment. Changing customer and consumer preferences or increased regulatory requirements may result in increased demands orrequirements. Complying with these demands or requirements could cause us to incur additional manufacturing, operating or product development costs.If we do not adapt to or comply with new regulations, including the SEC’s published proposed rules that would require companies to provide significantlyexpanded climaterelated disclosures in their periodic reporting, which may require us to incur significant additional costs to comply and impose increased oversightobligations on our management and board of directors, or fail to meet evolving investor, industry or stakeholder expectations and concerns regarding ESG issues,investors may reconsider their capital investment in our company, we may become subject to penalties, and customers and consumers may choose to stoppurchasing our products, if approved for commercialization, which could have a material adverse effect on our reputation, business or financial condition.Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions andadverse developments with respect to financial institutions and associated liquidity risk.Our business depends on the economic health of the global economies. If the conditions in the global economies remain uncertain or continue to bevolatile, or if they deteriorate, including as a result of the impact of military conflict, such as the war between Russia and Ukraine, terrorism or other geopoliticalevents, our business, operating results and financial condition may be materially adversely affected. Economic weakness, inflation and increases in interest rates,limited availability of credit, liquidity shortages and constrained capital spending have at times in the past resulted, and may in the future result, in challenging anddelayed sales cycles, slower adoption of new technologies and increased price competition, and could negatively affect our ability to forecast future periods, whichcould result in an inability to satisfy demand for our products and a loss of market share.In addition, increases in inflation raise our costs for commodities, labor, materials and services and other costs required to grow and operate our business,and failure to secure these on reasonable terms may adversely impact our financial condition. Additionally, increases in inflation, along with the uncertaintiessurrounding COVID19, geopolitical developments and global supply chain disruptions, have caused, and may in the future cause, global economic uncertainty anduncertainty about the interest rate environment, which may make it more difficult, costly or dilutive for us to secure additional financing. A failure to adequatelyrespond to these risks could have a material adverse impact on our financial condition, results of operations or cash flows.More recently, the closures of SVB and Signature Bank and their placement into receivership with the FDIC created bankspecific and broader financialinstitution liquidity risk and concerns. Although the Department of the Treasury, the Federal Reserve and the FDIC jointly released a statement that depositors atSVB and Signature Bank would have access to their funds, even those in excess of the standard FDIC insurance limits, under a systemic risk exception, futureadverse developments with respect to specific financial institutions or the broader financial services industry may lead to marketwide liquidity shortages, impair theability of companies to access nearterm working capital needs, and create additional market and economic uncertainty. There can be no assurance that future creditand financial market instability and a deterioration in confidence in economic conditions will not occur. Our general business strategy may be adversely affected byany such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions. If the current equityand credit markets deteriorate, or if adverse developments are experienced by financial institutions, it may cause shortterm liquidity risk and also make anynecessary debt or equity financing more difficult, more costly, more onerous with respect to financial and operating covenants and more dilutive. Failure to secureany necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stockprice and could require us to alter our operating plans. In addition, there is a risk that one or more of our service providers, financial institutions, manufacturers,suppliers and other partners may be adversely affected by the foregoing risks, which could directly affect our ability to attain our operating goals on schedule andon budget.Our business may be adversely affected by the impact of any renewed outbreak of the COVID19 pandemic.Public health epidemics or outbreaks could adversely impact our business. In late 2019, a novel strain of COVID19, also known as coronavirus, wasreported in Wuhan, China. While initially the outbreak was largely concentrated in China, it spread worldwide. Many countries around the world, including in Israel,implemented significant governmental measures to control the spread of the virus, including temporary closure of businesses, severe restrictions on travel and themovement of people, and other material limitations on the conduct of business. These measures haven historically resulted in work stoppages and other disruptions.If there is a resurgence of the COVID19 pandemic, this could adversely impact our operations, including among others, our sales and marketing efforts and ourability to raise additional funds, and accordingly, the impact of COVID19 could have an adverse impact on our business and our financial results.32Risks Related to Our Operations in RussiaRussia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.In addition to our Israel operations, we have operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia and we engage two software developers through a third party who are based in Ukraine. On February 24,2022, Russia invaded Ukraine. The outbreak of hostilities between the two countries could result in more widespread conflict and could have a severe adverse effecton the region.Following Russia’s actions, various countries, including the U.S., Canada, the United Kingdom, Germany and France, as well as the European Union,issued broadranging economic sanctions against Russia. Such sanctions included, among other things, a prohibition on doing business with certain Russiancompanies, officials and oligarchs; a commitment by certain countries and the European Union to remove selected Russian banks from the Society for WorldwideInterbank Financial Telecommunications (SWIFT) electronic banking network that connects banks globally; and restrictive measures to prevent the Russian CentralBank from undermining the impact of the sanctions. In response to sanctions, the Russian Central Bank raised its interest rates and banned sales of local securitiesby foreigners. Russia may take additional counter measures or retaliatory actions in the future. While diplomatic efforts have been ongoing, the conflict betweenRussia and Ukraine is currently unpredictable and has the potential to result in broadened military actions. The duration of ongoing hostilities and such sanctionsand related events cannot be predicted. Uncertainty as to future relations between Russia and the U.S. and other countries in the west, or between Russia and othereastern European countries, may have a negative impact on our operations.Such international sanctions and potential responses to such sanctions, including those that may limit or restrict transfer funds into Russia, may in thefuture significantly affect our ability to conduct our activities in Russia including paying our personnel. To date, the conflict has had minimal impact on operations .Nevertheless, we have no way to predict the progress or outcome of the situation in Ukraine, as the conflict and governmental reactions are rapidly developing andbeyond our control. Prolonged unrest, intensified military activities or more extensive sanctions impacting the region could have a material adverse effect on ouroperations, results of operations, financial condition, liquidity and business outlook.Political, military conditions or other risks in Russia could adversely affect our business.Russia is a federative state consisting of 85 constituent entities, or “subjects.” The Russian Constitution reserves some governmental powers for theRussian Government, some for the subjects and some for areas of joint competence. In addition, eight “federal districts” (“federal’nye okruga”), which are overseenby a plenipotentiary representative of the President, supplement the country’s federal system. The delineation of authority among and within the subjects is, inmany instances, unclear and contested, particularly with respect to the division of tax revenues and authority over regulatory matters. For these reasons, theRussian political system is vulnerable to tension and conflict between federal, subject and local authorities. This tension creates uncertainties in the operatingenvironment in Russia, which may prevent us from carrying out our strategy effectively. The risks associated with these events or potential events could materiallyand adversely affect the investment environment and overall consumer and entrepreneurial confidence in Russia, and our business, prospects, financial condition,hiring ability, and results of operations could be materially and adversely affected.Furthermore, high levels of corruption reportedly exist in Russia, including the bribing of officials for the purpose of initiating investigations bygovernment agencies. Corruption and other illegal activities could disrupt our ability to conduct our business effectively, and claims that the we are involved in suchcorruption or illegal activities could generate negative publicity, of which could harm our development, financial condition, results of operations or prospects.Economic and other risks in Russia could adversely affect our business.Operating a business in an emerging market such as Russia can involve a greater degree of risk than operating a business in more developed markets.Over the last two decades, the Russian economy has experienced or continues to experience at various times:●significant volatility in its GDP;33●the impact of international sanctions;●high levels of inflation;●increases in, or high, interest rates;●sudden price declines in oil and other natural resources;●instability in the local currency market;●budget deficits;●the continued operation of lossmaking enterprises due to the lack of effective bankruptcy proceedings;●capital flight; and●significant increases in poverty rates, unemployment and underemployment.The Russian economy has been subject to abrupt downturns in the past, including as a result of the invasion of Ukraine, global financial crisis, and, as anemerging market, remains particularly vulnerable to further external shocks and any future fluctuations in the global markets. Any further deterioration in the generaleconomic conditions in Russia (whether or not as a result of the events mentioned above) could have a material adverse effect on the Russian economy and mayresult in hiring and operational difficulties, as well as potential flight of human capital, which could have a material adverse effect on our business, productdevelopment and results of operations.Legal risks in Russia could materially adversely affect our operations and Russian tax legislation is subject to frequent change.Among the risks of the Russian legal system are: inconsistencies among laws, presidential decrees, and government and ministerial orders and resolutions;conflicting local, regional and federal laws and regulations; the untested nature of the independence of the judiciary and its sensitivity to economic or politicalinfluences; substantial gaps in the regulatory structure due to the delay or absence of implementing legislation; a high degree of discretion on the part ofgovernmental authorities; reported corruption within governmental entities and other governmental authorities; the relative inexperience of judges and courts ininterpreting laws applicable to complex transactions; and the unpredictability of enforcement of foreign judgments and foreign arbitral awards. Many Russian lawsand regulations are construed in a way that provides for significant administrative discretion in application and enforcement. Unlawful, selective or arbitrary actionsof the Russian Government have reportedly included the denial or withdrawal of licenses, sudden and unexpected tax audits, criminal prosecutions, and civil claims.Any of the above events may have a material adverse effect on our product development and results of operations.Despite certain improvements in the taxation system made by the Russian Government over the past decade, Russian tax legislation is still subject tofrequent change, varying interpretations, and inconsistent and selective enforcement. There are currently no clear rules for distinguishing between lawful taxoptimization and tax evasion. In addition, Russian tax laws do not contain detailed rules on the taxation in Russia of foreign companies. As such, taxpayers oftenhave to resort to court proceedings to defend their position against the Russian tax authorities. However, in the absence of consistent court practice or bindingprecedents, there is inconsistency amongst court decisions. Further, the possibility exists that the Russian Federation would impose arbitrary or onerous taxes andpenalties in the future, which could have a material adverse effect on our product development and results of operations.34Risks Related to Our Operations In IsraelOur headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.Our headquarters and most of our operations are located in central Israel and our key employees, officers and directors are residents of Israel. Accordingly,political, economic and military conditions in Israel and the surrounding region may directly affect our business. Since the establishment of the State of Israel in1948, a number of armed conflicts have taken place between Israel and its Arab neighbors. Any hostilities involving Israel or the interruption or curtailment of tradewithin Israel or between Israel and its trading partners could adversely affect our operations and results of operations and could make it more difficult for us to raisecapital. During the winter of 2008, winter of 2012 and the summer of 2014, Israel was engaged in an armed conflict with Hamas, a militia group and political partyoperating in the Gaza Strip, and during the summer of 2006, Israel was engaged in an armed conflict with Hezbollah, a Lebanese Islamist Shiite militia group andpolitical party. Israel faces political tension with respect to its relationships with Turkey, Iran and certain Arab neighbor countries. In addition, recent conflictsinvolved missile strikes against civilian targets in various parts of Israel, and negatively affected business conditions in Israel. Recent political uprisings and socialunrest in various countries in the Middle East and North Africa are affecting the political stability of those countries. This instability may lead to deterioration of thepolitical relationships that exist between Israel and these countries, and have raised concerns regarding security in the region and the potential for armed conflict.Any armed conflicts, terrorist activities or political instability in the region could adversely affect business conditions and could harm our results of operations. Forexample, any major escalation in hostilities in the region could result in a portion of our employees and service providers being called up to perform military duty foran extended period of time. Parties with whom we do business have sometimes declined to travel to Israel during periods of heightened unrest or tension, forcing usto make alternative arrangements when necessary. In addition, the political and security situation in Israel may result in parties with whom we have agreementsinvolving performance in Israel claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions insuch agreements. Any future deterioration in the political and security situation in Israel will negatively impact our business.Our commercial insurance does not cover losses that may occur as a result of events associated with the security situation in the Middle East. Althoughthe Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that thisgovernment coverage will be maintained. Any losses or damages incurred by us could have a material adverse effect on our business. Any armed conflicts orpolitical instability in the region would likely negatively affect business conditions and could harm our results of operations.Further, in the past, the State of Israel and Israeli companies have been subjected to an economic boycott. Several countries still restrict business with theState of Israel and with Israeli companies. These restrictive laws and policies may have an adverse impact on our operating results, financial condition or theexpansion of our business.The legislative power of the State resides in the Knesset, a unicameral parliament that consists of 120 members elected by nationwide voting under asystem of proportional representation. Israel’s most recent general elections were held on April 9, 2019, September 17, 2019, March 2, 2020 and November 1, 2022.The uncertainty surrounding the results of the recent elections may continue. Actual or perceived political instability in Israel or any negative changes in thepolitical environment, may individually or in the aggregate adversely affect the Israeli economy and, in turn, our business, financial condition, results of operationsand prospects.Some of our employees are obligated to perform military reserve duty in Israel.Many Israeli citizens, including our employees are obligated to perform one month, and in some cases more, of annual military reserve duty until they reachthe age of 40 (or older, for reservists with certain occupations) and, in the event of a military conflict, may be called to active duty. In response to increases interrorist activity, there have been periods of significant callups of military reservists. It is possible that there will be military reserve duty callups in the future. Ouroperations could be disrupted by such callups. Such disruption could materially adversely affect our business, results of operations and financial condition.35It may be difficult to enforce a nonIsraeli judgment against the Company or its officers and directors.The operating subsidiary of ours is incorporated in Israel. All of our executive officers and directors are not residents of the United States, and asubstantial portion of our assets and the assets of our executive officers and directors are located outside the United States. Therefore, a judgment obtained againstus, or any of these persons, including a judgment based on the civil liability provisions of the U.S. federal securities laws, may not be collectible in the United Statesand may not necessarily be enforced by an Israeli court. It also may be difficult to affect service of process on these persons in the United States or to assert U.S.securities law claims in original actions instituted in Israel. Additionally, it may be difficult for an investor, or any other person or entity, to initiate an action withrespect to U.S. securities laws in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of U.S. securities laws reasoning that Israel is not themost appropriate forum in which to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law isapplicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law often involves the testimony of expert witnesses, which can be a timeconsuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel that addresses the mattersdescribed above. As a result of the difficulty associated with enforcing a judgment against us in Israel, it may be impossible to collect any damages awarded byeither a U.S. or foreign court.Our international operations could expose us to additional risks, including exchange rate fluctuations, legal regulations and political or economicinstability that could harm our business and operating results.Our international operations expose us to the following risks which may have a material adverse effect on our business and operating results:●devaluations and fluctuations in currency exchange rates including fluctuations between the U.S. dollar and the NIS and the Russian Ruble;●costs of compliance with local laws, including labor laws and intellectual property laws;●compliance with domestic and foreign government policies, including compliance with Israeli securities laws and TASE;●changes in trade regulations and procedures affecting approval, production, pricing, marketing, reimbursement for and access to, our products;●compliance with applicable foreign anticorruption laws, antitrust/competition laws, antiBoycott Israel law and antimoney laundering laws; and●economic and geopolitical developments and conditions, including ongoing instability in global economies and financial markets, international hostilities,acts of terrorism and governmental reactions, inflation, outbreaks of contagious disease (e.g., the COVID19 pandemic) and military and political alliances.Risks Related to Our Common StockA more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.Although our common stock is listed on the Nasdaq Capital Market, it has only been traded on the Nasdaq Capital Market since July 25, 2016. There hasbeen relatively limited trading volume in the market for our common stock, and a more active, liquid public trading market may not develop or may not be sustained.Limited liquidity in the trading market for our common stock may adversely affect a stockholder’s ability to sell its shares of common stock at the time it wishes tosell them or at a price that it considers acceptable. If a more active, liquid public trading market does not develop, we may be limited in our ability to raise capital byselling shares of common stock and our ability to acquire other companies or assets by using shares of our common stock as consideration. In addition, if there is athin trading market or “float” for our stock, the market price for our common stock may fluctuate significantly more than the stock market as a whole. Without a largefloat, our common stock would be less liquid than the stock of companies with broader public ownership and, as a result, the trading prices of our common stockmay be more volatile and it would be harder for you to liquidate any investment in our common stock. Furthermore, the stock market is subject to significant priceand volume fluctuations, and the price of our common stock could fluctuate widely in response to several factors, including:●our quarterly or annual operating results;●changes in our earnings estimates;●investment recommendations by securities analysts following our business or our industry;●additions or departures of key personnel;●changes in the business, earnings estimates or market perceptions of our competitors;36●our failure to achieve operating results consistent with securities analysts’ projections;●changes in industry, general market or economic conditions;●announcements of legislative or regulatory changes; and●natural disasters (including for example, the recent fire in the Orgad warehouse) and political and economic instability, including wars, terrorism, politicalunrest, results of certain elections and votes, emergence of a pandemic, or other widespread health emergencies (or concerns over the possibility of suchan emergency, including for example, the recent the COVID19 pandemic), boycotts, adoption or expansion of government trade restrictions, and otherbusiness restrictions.The stock market has experienced extreme price and volume fluctuations in recent years that have significantly affected the quoted prices of the securitiesof many companies. The changes often appear to occur without regard to specific operating performance. The price of our common stock could fluctuate basedupon factors that have little or nothing to do with us and these fluctuations could materially reduce our stock price.Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.If any of our shareholders were to decide to sell large amounts of stock over a short period of time (presuming such sales were permitted) such sales couldcause the market price of our common stock to drop significantly, even if our business is doing well. Further, the market price of our common stock could decline as aresult of the perception that such sales could occur. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equitysecurities in the future at a time and price that we deem appropriate.Our securities are traded on more than one market which may result in price variations.Our securities have been trading on the Nasdaq Capital Market since July 2016 and on TASE since September 2005. Trading in our securities on suchexchanges occurs in different currencies (U.S. dollars on the Nasdaq Capital Market and NIS on the TASE), and at different times (due to different time zones,trading days and public holidays in the United States and Israel). The trading prices of our securities on the two exchanges may differ due to the foregoing andother factors. Any decrease in the price of our shares on the TASE could cause a decrease in the trading price of our shares on the Nasdaq Capital Market and viceversa.We are a smaller reporting company and, as a result of the reduced disclosure and governance requirements applicable to such companies, ourcommon stock may be less attractive to investors.We are a smaller reporting company, (i.e. a company with “public float” held by nonaffiliates with a market value of less than $250 million) and we areeligible to take advantage of certain exemptions from various reporting requirements applicable to other public companies. We have elected to adopt these reduceddisclosure requirements. We cannot predict if investors will find our common stock less attractive as a result of our taking advantage of these exemptions. If someinvestors find our common stock less attractive as a result of our choices, there may be a less active trading market for our common stock and our stock price may bemore volatile.We do not expect to pay any cash dividends in the foreseeable future.We have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our board of directors deems relevant. Investors should not purchase our common stock expecting to receive cash dividends. Because we do notpay dividends, and there may be limited trading, investors may not have any manner to liquidate or receive any payment on their investment. Therefore, our failureto pay dividends may cause investors to not see any return on investment even if we are successful in our business operations. In addition, because we do not paydividends we may have trouble raising additional funds, which could affect our ability to expand our business operations.37UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10K☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2022☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ________ to _________Commission file number 00137370MY SIZE, INC.(Exact name of registrant as specified in charter)Delaware510394637(State or jurisdiction ofIncorporation or organization)I.R.S EmployerIdentification No.4 Hayarden, POB 1026, Airport City, Israel7010000(Address of principal executive offices)(Zip code)+9723 6009030(Registrant’s telephone number, including area code)Securities registered pursuant to Section 12(b) of the Act:Title of each classTrading Symbol(s)Name of Each Exchange on Which RegisteredCommon Stock, par value $0.001 per shareMYSZThe Nasdaq Capital MarketSecurities registered pursuant to Section 12(g) of the Act: None.Indicate by check mark whether the registrant is a wellknown seasoned issuer as defined in Rule 405 of the Securities Act. Yes ☐No☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐No☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. Yes☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation ST (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes☒ No ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer, a smaller reporting company, or an emerginggrowth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 of theExchange Act.Large accelerated filer☐Accelerated filer☐Nonaccelerated filer☒Smaller Reporting Company☒Emerging Growth Company☐If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revisedfinancial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b2 of the Exchange Act) Yes ☐No☒Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control overfinancial reporting under Section 404(b) of the SarbanesOxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☐If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflectthe correction of an error to previously issued financial statements. ☐Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by anyof the registrant’s executive officers during the relevant recovery period pursuant to §240.10D1(b). ☐The aggregate market value of voting and nonvoting common equity held by nonaffiliates of the registrant as of June 30, 2022, the last business day of theregistrant’s most recently completed second fiscal quarter, was approximately $25,551,906.Number of shares of common stock outstanding as of March 31, 2023 was 2,446,780.Documents Incorporated by Reference: None.Table of ContentsPart IItem 1.Business2Item 1A.Risk Factors18Item 1B.Unresolved Staff Comments41Item 2.Properties41Item 3.Legal Proceedings41Item 4.Mine Safety Disclosures42Part IIItem 5.Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities43Item 6.Selected Financial Data43Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations43Item 7A.Quantitative and Qualitative Disclosures about Market Risk50Item 8.Financial Statements and Supplementary DataF1Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure51Item 9A.Controls and Procedures51Item 9B.Other Information51Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.51Part IIIItem 10.Directors, Executive Officers and Corporate Governance52Item 11.Executive Compensation57Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters60Item 13.Certain Relationships and Related Transactions, and Director Independence62Item 14.Principal Accounting Fees and Services65Part IVItem 15.Exhibits, Financial Statement Schedules66Signatures69iPART IIn this Annual Report on Form 10K, unless the context requires otherwise, the terms “we,” “our,” “us,” or “the Company” refer to MySize, Inc., a Delawarecorporation, and its subsidiaries, including MySize Israel 2014 Ltd. My Size LLC, Orgad International Marketing Ltd., or Orgad, and Naiz Bespoke Technologies, S.L,or Naiz, taken as a whole.References to “U.S. dollars” and “$” are to currency of the United States of America, and references to “NIS” are to New Israeli Shekels. Unless otherwiseindicated, U.S. dollar translations of NIS amounts presented in this Annual Report on Form 10K for the year ended on December 31, 2022 are translated using therate of NIS 3.358 to $1.00.All information in this Annual Report on Form 10K relating to shares or price per share reflects the 1for25 reverse stock split effected by us on December8, 2022.CAUTIONARY NOTE ON FORWARDLOOKING STATEMENTSThis Annual Report on Form 10K contains certain forwardlooking statements within the meaning of Section 27A of the Securities Act and Section 21E ofthe Exchange Act. Any statements in Annual Report on Form 10K about our expectations, beliefs, plans, objectives, assumptions or future events or performanceare not historical facts and are forwardlooking statements. These statements are often, but not always, made through the use of words or phrases such as“believe,” “will,” “expect,” “anticipate,” “estimate,” “intend,” “plan” and “would.” For example, statements concerning financial condition, possible or assumedfuture results of operations, growth opportunities, industry ranking, plans and objectives of management, markets for our common stock and future managementand organizational structure are all forwardlooking statements. Forwardlooking statements are not guarantees of performance. They involve known and unknownrisks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to differ materially from any results, levels ofactivity, performance or achievements expressed or implied by any forwardlooking statement.Any forwardlooking statements are qualified in their entirety by reference to the risk factors discussed throughout this Annual Report on Form 10K. Someof the risks, uncertainties and assumptions that could cause actual results to differ materially from estimates or projections contained in the forwardlookingstatements include but are not limited to:●our history of losses and needs for additional capital to fund our operations and our inability to obtain additional capital on acceptable terms, or at all;●risks related to our ability to continue as a going concern;●the new and unproven nature of the measurement technology markets;●our ability to achieve customer adoption of our products;●our ability to realize the benefits of our acquisitions of Orgad and Naiz;●our dependence on assets we purchased from a related party;●our ability to enhance our brand and increase market awareness;●our ability to introduce new products and continually enhance our product offerings;●the success of our strategic relationships with third parties;●information technology system failures or breaches of our network security;●competition from competitors;●our reliance on key members of our management team;●current or future litigation;●current or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated liquidityrisk; and●the impact of the political and security situation in Israel on our business.1The foregoing list sets forth some, but not all, of the factors that could affect our ability to achieve results described in any forwardlooking statements.You should read this Annual Report on Form 10K and the documents that we reference herein and have filed as exhibits to the Annual Report on Form 10K,completely and with the understanding that our actual future results may be materially different from what we expect. You should assume that the informationappearing in this Annual Report on Form 10K is accurate as of the date hereof. Because the risk factors referred to in this Annual Report on Form 10K, could causeactual results or outcomes to differ materially from those expressed in any forwardlooking statements made by us or on our behalf, you should not place unduereliance on any forwardlooking statements.Further, any forwardlooking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forwardlookingstatement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. New factors emergefrom time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extentto which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements. We qualify all ofthe information presented in this Annual Report on Form 10K, and particularly our forwardlooking statements, by these cautionary statements.ITEM 1. BUSINESSOverviewWe are an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile phone or through MySizeID Widget: a simple questionnaire which uses a database collected over the years.MySizeID syncs the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and only presents itemsfor purchase that match their measurements to ensure a correct fit.We are positioning ourselves as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empower brand design teams, which are designed to increase endconsumer satisfaction, contributing to a sustainable world and reduce operation costs.Recent DevelopmentsOrgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,602 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.2The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz, a limitedliability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.3The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Warehouse FireOn January 2, 2023, Orgad experienced a fire at its warehouse in Israel. we are not aware of any casualties or injuries associated with the fire. We shiftedOrgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incident did not affectthe future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of this incident on the otherparties that were involved in the incident (lessor and others that leased properties near the warehouse).January 2023 FinancingOn January 10, 2023, we entered into a securities purchase agreement, or the RD Purchase Agreement, pursuant to which we agreed to sell and issue in theRD Offering an aggregate of 162,000 of our shares of common stock, or the RD Shares, and prefunded warrants, or the Prefunded Warrants, to purchase up to279,899 shares of common stock and, in a concurrent private placement, unregistered warrants to purchase up to 883,798 shares of common stock, or the RDWarrants, consisting of Series A warrants, or Series A Warrants, to purchase up to 441,899 shares of common stock and Series B warrants, or Series B Warrants, topurchase up to 441,899 shares of common stock, at an offering price of $3.055 per RD Share and associated Series A and Series B Warrants and an offering price of$3.054 per Prefunded Warrant and associated Series A and Series B Warrants.4In addition, we entered into a securities purchase agreement, or the PIPE Purchase Agreement, and together with the RD Purchase Agreement, thePurchase Agreements, pursuant to which we agreed to sell and issue in the PIPE Offering an aggregate of up to 540,098 unregistered Prefunded Warrants andunregistered warrants to purchase up to an aggregate of 1,080,196 shares of common stock, or the PIPE Warrants and together with the RD Warrants, the Warrants,consisting of Series A Warrants to purchase up to 540,098 shares of common stock and Series B Warrants to purchase up to 540,098 shares of common stock at anoffering price of $3.054 per Prefunded Warrant and associated Series A and Series B Warrants.The Prefunded Warrants are immediately exercisable at an exercise price of $0.001 per share and will not expire until exercised in full. The Warrants areimmediately exercisable upon issuance at an exercise price of $2.805 per share, subject to adjustment as set forth therein. The Series A Warrants have a term of fiveand onehalf years from the date of issuance and the Series B Warrants have a term of 28 months from the date of issuance. The Warrants may be exercised on acashless basis if there is no effective registration statement registering the shares underlying the warrants.In connection with the PIPE Purchase Agreement, we entered into a registration rights agreement, or the Registration Rights Agreement. Pursuant to theRegistration Rights Agreement, we are required to file a resale registration statement, or the Registration Statement, with the Securities and Exchange Commission, orthe SEC, to register for resale the shares issuable upon exercise of the unregistered Prefunded Warrants and the Series A and Series B Warrants, within 20 days ofthe signing date of the PIPE Purchase Agreement, or the Signing Date, and to have such Registration Statement declared effective within 60 days after the SigningDate in the event the Registration Statement is not reviewed by the SEC, or 90 days of the Signing Date in the event the Registration Statement is reviewed by theSEC. we will be obligated to pay certain liquidated damages if we fail to maintain the effectiveness of the Registration Statement.The Purchase Agreements and the Registration Rights Agreements also contain representations, warranties, indemnification and other provisionscustomary for transactions of this nature. In addition, subject to limited exceptions, the Purchase Agreements provide that for a period of one year following theclosing of the Offerings, we will not effect or enter into an agreement to effect a “variable rate transaction” as defined in the Purchase Agreements.Aggregate gross proceeds to the Company in respect of the Offerings was approximately $3.0 million, before deducting fees payable to the placement agentand other offering expenses payable by the Company.We also entered into a letter agreement, or the Engagement Agreement, with H.C. Wainwright & Co., LLC, or Wainwright, pursuant to which Wainwrightagreed to serve as the exclusive placement agent for the Company in connection with the Offerings. We paid Wainwright a cash placement fee equal to 7% of theaggregate gross proceeds raised in the Offerings, a management fee of 1% of the aggregate gross proceeds raised in the Offerings, a nonaccountable expenseallowance of $85,000 and clearing fees of $15,950. Wainwright also received placement agent warrants, or the Placement Agent Warrants, with substantially the sameterms as the Series A Warrants issued in the Offering in an amount equal to 7% of the aggregate number of Shares and Prefunded Warrants sold in the Offerings, or68,740 shares, at an exercise price of $3.8188 per share and a term expiring on January 10, 2028.Our SolutionOur cloudbased software platform provides highly accurate sizing and measurement with broad applications including the online fashion/apparel industry,logistics and courier services and home DIY. Currently, we are mainly focusing on the ecommerce fashion/apparel industry. This proprietary technology is driven byseveral patented algorithms which are able to calculate and record measurements in a variety of novel ways. Although specific functionality varies by product, webelieve that our core solutions address the need for highly accurate measurements in a variety of consumer friendly, every day uses.5We have developed three products, MySizeID for the fashion/apparel industry, BoxSize for the logistics and courier services market and SizeUp for thehome DIY market.●MySizeID enables shoppers to generate highly accurate measurements of their body to find proper fitting clothes and accessories, through the use ofour application on their mobile phone or through a simple questionnaire if the user decides not to download the application. MySizeID syncs the user’smeasurement data to a sizing chart and presents items for purchase that match their measurements to ensure a correct fit. MySizeID is available forlicense by retailers and accessable by consumers through a web page.●BoxSize enables customers to quickly and easily measure the size and volume of a parcel to accurately calculate shipping fees. It also offers shippingcompanies a variety of precise logistical data for more efficiently managing their supply chain, providing them with an accurate way to compare thephysical package with what is in the shipping manifest. BoxSize solution is available for license on both iOS and Android operating systems. BoxSizeis available on the Honeywell Marketplace and in August 2019 was approved for Honeywell’s Independent Software Vendor Program, and MySize wasgranted an independent software vendor (ISV) status on the Zebra Technologies and on DataLogic platforms.●SizeUp is a digital tape measure that allows users to measure length, width and height of a surface by moving their smartphone from point to point ofan object or space. SizeUp is a valueadd for DIY and home improvement retailers whose customers struggle to find the appropriately sized items (likeblinds or curtains) for their homes or projects due to inaccurate measurements. SizeUp also is designed to replace rulers, tape measures and othermeasuring tools used for DIY projects. SizeUp is available for consumer download on both iOS and Android operating systems.The following are some select key features of our solutions:●Integration Capability. We design our solutions to be flexible and configurable, allowing our clients to match their use of our algorithms and softwarewith their specific business processes and workflows. Our platform has been organically developed from a common code base, data structure and userinterface, providing a consistent user experience with powerful features that are easily adaptable to our clients’ needs. The MySizeID widget can beintegrated via oneline JavaScript code, or through RESTful API;●Intuitive user experience. Our intuitive, easytouse interface is based on current technology, multiple focus groups and automatically adapts to users’devices, including mobile platforms, thereby significantly increasing accessibility of our solutions;●Big Data Generation. While we supply to the user the information he/she requires, we gather certain vital information such as body measurement andpackage volume which can be used anonymously to help the retailer acquire predictive size information on stocking, operations and consumers thatmay be in between sizes. All the information is being gathered and stored on our servers where it can be used by retailers;●NonInvasive. In taking measurements using our solution, the smartphone camera is not utilized; instead, the measurements are captured by scanningthe smartphone over the consumer’s body or package, thus ensuring greater privacy.Our Growth StrategyWe aim to drive revenue primarily through penetration of the U.S. and Europe markets through a business to business to consumer (B2B2C) model in theverticals we are targeting. We are pursuing the following growth strategies:●Sign Additional Commercial Agreements with U.S. Retailers. During 2022, we expanded our commercial agreements with Levi’s, introducing NorthAmerica (U.S. and Canada) and Latin America regions, and by extension Levis’ native apps in EU and U.S. regions. We also entered into commercialagreements with Baby Fresh, Galax, Punto Blanco, GEF France, Diesel, Gaala, Superdry, Uniontex Industries, and Temperlay London among others. Weare in various stages of discussions with U.S. and foreign retailers for the deployment of our size recommendation and measurement technology with aview to entering into additional commercial agreements.6●Pursue a TwoPronged Commercialization Strategy. We are seeking to accelerate adoption of our solutions both through direct partnerships with ecommerce websites as well as through thirdparty platform websites. While we seek to directly enter into partnerships with companies maintaining ecommerce websites in the apparel, courier and DIY markets, we are also seeking to deploy our solutions on thirdparty platforms. Furthermore, with theexpansion of MySizeID through the release of our FirstLook Smart Mirror, which we are offering to brick and mortar stores to digitize the physicalstores, MySizeID is now available for online retailers utilizing the WooCoomerce, Shopify, Lightspeed, PrestaShop, Bitrix and Wix platforms and tobrick and mortar stores through GK Software POS solution while BoxSize is available on the Honeywell, Zebra Technologies and Datalogic.●Ongoing Investment in our Technology Platform. We continue to invest in building new software capabilities and extending our platform to bring thepower of accurate measurement to a broader range of applications. In particular, we seek not only to deliver size recommendations but to provide arobust, endtoend,artificial intelligence, or AIdriven platform that inspires consumer confidence and drives revenue growth by providing a superiorconsumer journey to both online and the brick and mortar stores.●Grow our database. As the usage of our measurement apps increases, our database of information including user behaviour and body measurementsgenerates valuable statistics. Such data can be used in the big data market for targeted advertising and for blind consumer data mining.●Identify and acquire synergistic businesses. In order to reduce our time to market and obtain complementary technologies, we are seeking to acquiretechnologies and businesses that are synergistic to our product offering. We recently completed an acquisition of Orgad which operates anomnichannel ecommerce platform and Naiz which provides SaaS technology solutions that solve size and fit issues for fashion ecommerce companies.●Partnerships and cooperation. In order to bring a wider solution for the retail market we are working to partner and integrate our technology withpartners that can increase our penetration and offering to the market.Market OpportunityThe global ecommerce market was $5.7 trillion in 2022, and the industry is expected to grow significantly in the coming years with no signs of slowingdown. Market specialists expect a compound annual growth rate of 27.43% from 2023 to 2028: according to data from Statista, the market is expected to reach $6.5trillion in 2023. While many sectors have found ways to increase revenue through ecommerce, ecommerce is still plagued by issues that cut into profits andnegatively impact the bottom line, such as customer returns, low consumer conversion, and associated restocking and shipping costs.Fashion/ApparelSince the onset of the COVID19 pandemic, an immense shift to digital was recorded, with 85.9% growth vs. prepandemic, according to Mastercard, andover 2 billion people worldwide who shop online, according to data from Oberlo. In November 2022, online shoppers broke records with $11.3 billion in spending onCyber Monday, driving 5.8% yearoveryear growth and making the day the biggest online shopping day of all time, according to Adobe Analytics.In 2021, fashion companies invested between 1.6% and 1.8% of their revenues in technology, according to Mckinsey, and are expected to double theinvestment by 2030 in order to keep up with digital natives and keep a competitive edge. Personalization in ecommerce and hybrid connectivity in brickandmortarretail are two key themes in the future of fashtech, according to Mckinsey’s 2022 State of Fashion Technology.7In the upcoming years, inflation is expected to impact the fashion world. As prices for goods increase, the challenge will be to inspire confidence inconsumers, via different smart digital tools. Brands will need to embrace creative digital tools and new channels to deepen customer relationships, and as Mckinseyforecasts in their State of Fashion report for 2023, they will need to execute on priorities such as sustainability and digital acceleration.The global fashion ecommerce market size is expected to grow from $744.4 billion in 2022 to $821.19 billion in 2023 at a compound annual growth rate of10.3%. In 2027, the market size is expected to grow to $1,222.32 billion, at a compound annual growth rate of 10.5%, according to BRC.Based on the importance which shoppers attribute to free shipping 50% of cart abandonment rate is due to extra shipping costs (Baymard Institute) theneed for fashion retailers to substantiate the optimal size for a customer, thus minimizing returns, has never been more crucial.As brands move online or significantly expand their online presence, we believe that developing innovative ways to connect with shoppers, both onlineand offline, has become a top priority.Shipping/ParcelAccording to Pitney Bowes, parcel revenue in 13 major countries around the world increased by 17% year over year from $420 billion in 2020 (reflecting 131billion parcels) to $491 billion in 2021 (reflecting 159 billion parcels). In the shipping/parcel industry, the dimensions of a package are critical. It is not merely themeasurement of a package or box – but rather the amount of space that the package or box will take up on a truck, airplane, or ship that will be transporting thepackage or box. Far too often, retailers use unfit packaging for their items, adding additional costs in materials and shipping fees.DIYSimilar to issues in the apparel and fashion market, big box, hardware, furniture, and DIY stores are plagued by returns due to incorrect fit andmeasurements. In an industry where precise measurement for projects is an absolute necessity, ecommerce has not grown as quickly as in other industries which webelieve is due to lack of consumer confidence in measurements at home and buying the correct item online.MySizeIDWe have released the MySizeID app for both iOS and Android which assists consumers to take highly accurate measurement of their own body in order tosize clothing in the best way possible without the need to try the clothes on before purchasing. MySizeID is designed to simplify the process of purchasing clothesonline and significantly reduce the rate of returns of poorfitting clothing. During 2022, MySizeID delivered over 23.5 million size recommendations.The application is the result of a research and development effort that combines:●anthropometric research – analyses of information pertaining to body measurements derived from a survey and the subsequent determination ofcorrelations between body parts;●body measurement algorithm research – an algorithm created by us to measure body parts; and●retailers size chart analyses – adopting a deep understanding of the size charts of retailers and the corresponding “body to garment size.”MySizeID allows consumers to create a secure, online profile of their personal measurements, which can then be utilized, with partnered online retailers, toensure that no matter the manufacturer or size chart, they will get the right fit. MySizeID operates based on the use of existing sensors in smart phones which enable,through a specific purpose application, the measurement of the body of any consumer by moving the smartphone along his or her body. The MySizeID applicationdoes not rely on user photographs or any additional hardware; all a user needs to do is scan their body with their smartphone and the application records theirmeasurements. The measurements can then be saved in our database in the cloud, enabling the user to search for clothes in various retailer websites withoutworrying about size. When a search is made, the retailer will connect to our cloud database, and then provide results based on the user’s measurements and otherparameters as he or she may have defined. This data is also saved for use when a customer enters a brickandmortar store to help serve the customer moreefficiently and to provide a better shopping experience.8Figure 1: Screenshot of MySizeID on smartphone and ecommerce websiteAs part of the integration process, we offer to the retailer five main components:●Mobile App. MySizeID comes in the form of a native app or website. Our native app can be used “as is” integrated into the retailer’s ecommercewebsite. The website users can build a body profile on the app and receive size recommendations for their profile both in the app and on a widgetintegrated with their website.9●Widget. When a consumer enters into the retailer’s website and looks for a specific item, he or she can click on the MySizeID widget which will informthe consumer of his or her recommended size, based on his or her actual measurements, as measured using the app and the item he or she is looking at.The widget has two features:AI Wizard mode allows the user to obtain size from the following parameters: gender, height, weight, belly shape, hip shape and bra size only. Thegender, height and weight questions are mandatory, while the body shape questions are optional and can be added to increase accuracy for specificapparel categories.Guest mode allows a user that does not wish to sign up to MySizeID as a user to obtain size recommendations as well.●Analytic Pixel. MySizeID analytic pixel allows retailer to track and analyze the widget usage. By adding the pixel to the retailer’s website, MySizeID BIteam can track engagement, order, and return data and provide retailers with tools to understand the advantages and benefits of MySizeID.Use your own device using MySizeID instore solution, shoppers can receive size recommendations for all store items, when shopping in the offlinestores. The shoppers can build their body profile using an easy to use 3 to 6 questions form, scan an item barcode and receive a size recommendationfor the scanned item based on their body profile and the item’s size chart.Another feature we added is the “inbetween sizing” feature. Our system can detect a user that has body dimensions that place the user inbetweenthe clothes sizes being offered and lets the user know that. A user can then choose between the two sizes according to the user’s fit preference(tight/loose/average).In addition, we have recently released our InstantApp feature which allows shoppers to generate their body measurements directly from our widget,without the need to download our mobile app. Using this technology, the shoppers can create their online profile of their personal measurements andcomplete a purchase faster and easier with minimum distractions.The body profile can be created while shoppers are viewing the page from their mobile phone, or by scanning a QR code on desktop that will open thesame page on the mobile phone.Screenshot of InstantApp widget on desktop on yumyumfashion website10●MyDash Platform. The MyDash platform is a smart backoffice system where the retailer enters all the information regarding its size charts thatcorrelates to every product in its ecommerce site, and where the retailer can access the information on its users. This system is customizable based onthe retailer’s needs. In 2021, we changed the MyDash system to increase the system’s accessibility, added walkthroughs, user guides and changed theuser interface and much more for the ease of use. We added the option to use our generic size charts, added the option upload size chart files insteadof typing the size charts values manually, added more widget styling options and changed the pairing mechanism between the size chart and theproducts to be more userfriendly.Figure 3: Screenshot of BackOffice System●FirstLook Smart Mirror. The Smart Mirror provides an interactive, mirrorlike touch display that allows brands to provide instore customers with anenhanced, online shopping experience, contactless checkout and obtains the recommended size. The MySizeIDFirstLook Smart Mirror can be placedin numerous locations throughout a retail store, including the fitting rooms (without cameras) or other hightraffic locations of the store. Highlightcapabilities of the FirstLook Smart Mirror include a 3D “Tryiton” interactive avatar experience, personalized and highly accurate sizerecommendations by MySizeID, thirdparty point of sale systems integration, styling recommendations and contactless “select and collect” at theregister feature.Illustration of MySizeID “first look” smart mirror in a fashion store11We are currently offering MySizeID technology to retailers through either a payperuse model or a monthly subscription model. In our payperusebusiness model, every time the consumer obtains a recommended size, the retailer is charged for the usage.BoxSizeBoxSize is a parcel measurement application that can provide realtime logistic data on package volumes and transportation, resulting in improvedoperational efficiency and reduced operating expenses. In addition, BoxSize allows customers to easily measure the size of their parcel with their smartphone,calculate shipping costs and arrange for a convenient pickup time for the package. BoxSize is available both on iOS and Android.In 2020 we released the “One Click” feature on BoxSize that enables the user to measure a package with just one swipe of the handheld device. Previously,measurements through BoxSize would require three separate swipes.Figure 4: Screenshot of BoxSizeOur BoxSize mobile measurement solution is available on the Honeywell Marketplace. In addition, BoxSize was approved for Honeywell’s Global VendorProgram, and is available to provide highly accurate mobile measurement solutions for thousands of Honeywell clients. We also developed a new dashboard for thecourier companies to have all the required data about each package in one place. It includes package dimensions, pictures, scan geo location and more. Thedashboard also let the courier use Webhooks, which allows him to get the information from his own system.12In 2020, we announced our partnership with Datalogic, a company focused on the automatic data capture and process automation markets. The partnershipmakes our BoxSize measurement solution available to thousands of Datalogic customers in the Transportation and Logistics vertical.Agreement with Delhivery Private Limited, IndiaWe entered into an agreement with Delhivery Private Limited, one of the largest courier pickup, delivery, and online shipping services in India. Delhivery’sreputation as a frontrunner in delivery and logistics tech makes its decision to select Boxsize a particularly strong testament to the value the solution provides.BoxSize provides Delhivery’s employees on the B2B side with critical information that will allow them to effortlessly optimize loading efficiency and add even morerealtime visibility to operations.SizeUpWe are working on additional consumer applications, including a DIY application. Our SizeUp application is a smart tape measure for the business toconsumer market which allows users to utilize their smartphone as a tape measure. The application provides measurements with an accuracy of within twocentimeters. Through the use of SizeUp, users will be able to visualize how an object or a piece of furniture will fit in an existing room in their home or office. It alsoadded Google Vision for image content analysis, object detection, and title suggestions.Currently the SizeUp app for Android and iOS is available for free for the first 30 days, after which a user will be required to register via email and pay aonetime fee of $1.99 to continue using the application. To date, revenues from downloads have been minimal.Research and DevelopmentOur research and development team are responsible for the research, algorithm, design, development, and testing of all aspects of our measurementplatform technology. We invest in these efforts to continuously improve, innovate, and add new features to our solutions.We incurred research and development expenses of approximately $1.7 million in 2022 and $4.25 million in 2021, relating to the development of itsapplications and technologies. The decrease from the corresponding period primarily resulted from share based payment in amount of $2,618,000 attributed to theshare issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021. We intend to continue to invest in our research anddevelopment capabilities to extend our platform and bring our measurement technology to a broader range of applications.13In 2022, the R&D department experienced significant success in their efforts to improve the performance of their size recommendation system. Through acombination of optimized algorithms and the incorporation of cuttingedge technologies, the team was able to achieve a threefold increase in the system’s speed.This breakthrough not only makes the system one of the fastest and most accurate on the market, but also reduced the operation costs, making it more costeffective for businesses to use. Additionally, the solution is now highly scalable, allowing it to easily adapt to the needs of businesses of any size. The R&D team isnow focused on further improving the system and exploring new applications for the technology.Sales and MarketingIn 2019, we launched a commercialization strategy that directs our sales efforts toward both sales to ecommerce players in specific vertical markets such asfashion/apparel and shipping/delivery as well as to ecommerce thirdparty platform providers. As of March 15, 2023, our products are being sold in the followingcountries: US, UK, France, Netherlands, Spain, Portugal Turkey, Germany, Israel and Italy, generating customer leads, building out a sales pipeline, and developingcustomer relationships.We believe an effective method to market our suite of products is for users to actively use and explore its capabilities. We encourage free trials of one ormore of our products in order to successfully convert those accounts to paid subscriptions.Proprietary RightsWe rely on a combination of patent, copyright, trademark and trade secret laws in the United States and other jurisdictions, as well as contractualprotections, to protect our proprietary technology.As of December 31, 2022, we owned 18 issued patents: six in Europe, four in the U.S., three in each of Russia and Japan and one in each of Canada andIsrael which expire between January 20, 2033 and August 18, 2036, and we have two additional patent applications in process. As of such date, we do not have anyregistered trademarks.We cannot provide any assurance that our proprietary rights with respect to our products will be viable or have value in the future since the validity,enforceability and type of protection of proprietary rights in softwarerelated industries are uncertain and still evolving.Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products or to obtain and use informationthat we regard as proprietary. Policing unauthorized use of our products is difficult, and while we are unable to determine the extent to which piracy of our softwareproducts exists, software piracy can be expected to be a persistent problem. In addition, the laws of some foreign countries do not protect proprietary rights to asgreat an extent as do the laws of the United States, and effective copyright, trademark, trade secret and patent protection may not be available in those jurisdictions.Our means of protecting our proprietary rights may not be adequate to protect us from the infringement or misappropriation of such rights by others.Further, in recent years, there has been significant litigation in the United States involving patents and other intellectual property rights, particularly in thesoftware and Internetrelated industries. We can become subject to intellectual property infringement claims as the number of our competitors grows and ourproducts and services overlap with competitive offerings. These claims, even if not meritorious, could be expensive to defend and could divert management’sattention from operating our business. If we become liable to third parties for infringing their intellectual property rights, we could be required to pay a substantialaward of damages and to develop noninfringing technology, obtain a license or cease selling the products that contain the infringing intellectual property. We maybe unable to develop noninfringing technology or obtain a license on commercially reasonable terms, if at all.14Government RegulationWe are subject to a number foreign and domestic laws and regulations that involve matters central to our business. These laws and regulations mayinvolve privacy, data protection, intellectual property, or other subjects. Many of the laws and regulations to which we are subject are still evolving and being testedin courts and could be interpreted in ways that could harm our business. In addition, the application and interpretation of these laws and regulations often areuncertain, particularly in the new and rapidly evolving industry in which we operate. Because global laws and regulations have continued to develop and evolverapidly, it is possible that we, our products, or our platform may not be, or may not have been, compliant with each such applicable law or regulation.In particular, we are subject to a variety of federal, state and international laws and regulations governing the processing of personal data. Many U.S. stateshave passed laws requiring notification to data subjects when there is a security breach of personally identifiable data. There are also a number of legislativeproposals pending before the U.S. Congress, various state legislative bodies and foreign governments concerning data protection. In addition, data protection lawsin Europe and other jurisdictions outside the United States can be more restrictive than those within the United States, and the interpretation and application ofthese laws are still uncertain and in flux.For example, the General Data Protection Regulation, or GDPR, which took effect on May 25, 2018, enhances data protection obligations for entities thatprocess personal data about individuals, including obligations to cooperate with European data protection authorities, implement security measures and keeprecords of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to the greater of €20 million or 4% of global annual revenue. Inaddition, the California Consumer Privacy Act of 2018, or CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and requiredeletion of their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used.The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further,failure to comply with the Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may exposeus to administrative fines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the currentenforcement measures and sanctions. Given the breadth and depth of changes in data protection obligations, meeting the requirements of GDPR and otherapplicable laws and regulations has required significant time and resources, including a review of our technology and systems currently in use against therequirements of GDPR and other applicable laws and regulations. We have taken various steps to prepare for complying with GDPR and other applicable laws andregulations however there can be no assurance that these steps are sufficient to assure compliance. Further, additional EU laws and regulations (and member states’implementations thereof) further govern the protection of individuals and of electronic communications. If our efforts to comply with GDPR or other applicable lawsand regulations are not successful, we may be subject to penalties and fines that would adversely impact our business and results of operations, and our ability touse personal data of individuals could be significantly impaired.CompetitionWe operate in a highly competitive industry that is characterized by constant change and innovation. Changes in the applications and the programinglanguages used to develop applications, devices, operating systems, and technology landscape result in evolving customer requirements. Our competitors includeTrue Fit, Fit analytics and 3DLook.The principal competitive factors in our market include the following:●High Accuracy Size Recommendations: the highest accuracy and the lowest margin of error by combining patented technology including AI and ML,size chart or spec data, and MySizeID property body data measurement;●Integration○Fast 1 week integration including size chart size chart review and product mapping○Easy 1 line of “all included” script implementation●Technical Advantages○Very small library that weighs ±50kb (minimum widget loading time on product page)○UltraFast loading and size recommendation presenting○Restful API option (API integration with any website or app)15●Optimizations○Adjustments of size charts based on performance○Widget usage analysis by FashTech and BI teams○Automatic pairing of size charts with products/collections●User Experience○Easy to use interface (1015 seconds to receive size recommendations)○Option to add/deduct questions to/from widget wizards○Users automatically receive size recommendations on all products after initial sign up●Product and platform features, architecture, reliability, privacy and security, performance, effectiveness, and supported environments;●Product extensibility and ability to integrate with other technology infrastructures;●Digital operations expertise;●Ease of use of products and platform capabilities;●Total cost of ownership;●Adherence to industry standards and certifications;●Strength of sales and marketing efforts;●Brand awareness and reputation; and●Focus on customer successWe believe we generally compete favorably with our competitors on the basis of these factors. We expect competition to increase as other established andemerging companies enter our markets, as customer requirements evolve, and as new products and technologies are introduced. We expect this to be particularlytrue as we offer a smartphonebased offering that does not need to utilize the smartphone’s camera, and our competitors may also seek to repurpose their existingofferings to provide similar solutions. Many of our competitors have substantially greater financial, technical, and other resources, greater name recognition, largersales and marketing budgets, broader distribution, and larger and more mature intellectual property portfolios.Human Capital ManagementAs of March 31, 2023, we had a total of 35 employees, of which 30 were fulltime employees, including 9 in sales and marketing, 12 in technology anddevelopment and 9 in administration and finance.None of our employees are represented by a collective bargaining agreement, nor have we experienced any work stoppage. We consider our relationshipwith our employees to be good. Our future success depends on our continuing ability to attract and retain highly qualified engineers, sales and marketing, accountmanagement, and senior management personnel.We also believe we have built a strong sales team focused on expanding into new markets through the acquisition of Naiz and our current team.We believe that our future success will depend, in part, on our continued ability to attract, hire and retain qualified personnel. In particular, we depend onthe skills, experience and performance of our senior management and research personnel. We compete for qualified personnel with other hitech companies, as wellas universities and nonprofit research institutions.16We provide competitive compensation and benefits programs to help meet the needs of our employees. In addition to salaries, these programs (which varyby country/region and employment classification) include incentive compensation plan, pension, and insurance benefits, paid time off, , among others. We also usetargeted equitybased grants with vesting conditions to facilitate retention of personnel, particularly for our key employees.The success of our business is fundamentally connected to the wellbeing of our people. Accordingly, we implemented an hybrid work policy in which theemployees can work from home twice a week.We consider our employees to be a key factor to our success and we are focused on attracting and retaining the best employees at all levels of ourbusiness. Inclusion and diversity is a strategic, business priority. We employ people based on relevant qualifications, demonstrated skills, performance and otherjobrelated factors. We do not tolerate unlawful discrimination related to employment, and strive to ensure that employment decisions related to recruitment,selection, evaluation, compensation, and development, among others, are not influenced by race, color, religion, gender, age, ethnic origin, nationality, sexualorientation, marital status, or disability. Continuous monitoring to ensure pay equity has been a focus in 2022. We have continued to improve gender balance in 2022with a focus on increasing the representation of women hired as new college graduates. We are committed to creating a trusting environment where all ideas arewelcomed and employees feel comfortable and empowered to draw on their unique experiences and backgrounds.We consider our relations with our employees to be good.Company InformationOur principal executive offices are located at HaYarden 4 St., POB 1026, Airport City, Israel 7010000, and our telephone number is +97236009030. Ourwebsite address is www.mysizeid.com. Any information contained on, or that can be accessed through, our website is not incorporated by reference into, nor is it inany way a part of, this Annual Report on Form 10K.We use our website (www.mysizeid.com) as a channel of distribution of Company information. The information we post through this channel may bedeemed material. Accordingly, investors should monitor our website, in addition to following our press releases, SEC filings and public conference calls andwebcasts. The contents of our website are not, however, a part of this Annual Report on Form 10K.Corporate HistoryWe were incorporated in the State of Delaware on September 20, 1999 under the name Topspin Medical, Inc. In December 2013, we changed our name toKnowledgetree Ventures Inc. Subsequently, in February 2014, we changed our name to MySize, Inc. In 2020, we created a subsidiary in the Russian Federation, MySize LLC.From inception through 2012, we were engaged in research and development of a medical magnetic resonance imaging, or MRI, technology forinterventional cardiology and in the development of MRI technology for use in the diagnosis and treatment of prostate cancer. In January 2012, we acquiredMetamorefix Ltd., or Metamorefix. Metamorefix was incorporated in 2007, and was engaged in the development of innovative solutions for the rehabilitation oftissues, particularly skin tissues. By the end of 2012, we ceased operations and in January 2013, we sold our entire ownership interest in Metamorefix.In September 2013, Ronen Luzon, our Chief Executive Officer, acquired control of the Company from Asher Shmuelevitch, according to which Mr. Luzonpurchased 70,238 shares of common stock from Mr. Shmuelevitch, which shares represented approximately 40% of the issued and outstanding capital stock of theCompany at such time, thus becoming a controlling shareholder of the Company. In connection with the acquisition, Mr. Luzon reached a settlement with our thencreditors pursuant to which the main creditor, Mr. Shmuelevitch, was paid a total sum of approximately $140,000 in consideration for a full and final waiver of any andall his claims that he may have relating to any monetary indebtedness of the Company to the creditors.17In February 2014, My Size Israel, our wholly owned subsidiary, entered into a Purchase Agreement, or the Purchase Agreement, with Shoshana Zigdon,who at the time was a beneficial owner of more than 20% of our outstanding shares, with respect to the acquisition by us of certain rights related to the collection ofdata for measurement purposes including rights in the venture, the method and a patent application that had been filed by the Seller (PCT/IL2013/050056), or theAssets. In consideration for the sale of the Assets, we agreed to pay to Ms. Zigdon, 18% of our operating profit, directly or indirectly connected with the Assetstogether with valueadded tax in accordance with the law for a period of seven years from the end of the development period of the aforementioned venture. Inaddition to the foregoing, the Purchase Agreement provided that all developments, improvements, knowledge and knowhow developed and/or accumulated by usafter the execution of the Purchase Agreement will be owned by us. Further, Ms. Zigdon agreed not to compete, directly or indirectly, with us in any matter relatingto the Assets for a period of seven years from the end of the development period of the venture.On May 26, 2021, we, My Size Israel, and Ms. Zigdon entered into an Amendment to Purchase Agreement, or the Amendment, which made certainamendments to the Purchase Agreement. Pursuant to the Amendment, Ms. Zigdon agreed to irrevocably waive (i) the right to repurchase certain assets related tothe collection of data for measurement purposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which our business issubstantially dependent, or the Assets, and (ii) all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My SizeIsrael under the Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation, reward orany rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights, or the Waiver. Inconsideration of the Waiver, we issued 100,000 shares of common stock to Ms. Zigdon.In September 2005, we commenced trading on the Tel Aviv Stock Exchange, or TASE. Between 2007 and 2012 we reported as a public company with theSEC. In August 2012, we suspended our reporting obligations. In mid2015 we resumed reporting as a public company. On July 25, 2016, our common stock beganpublicly trading on the Nasdaq Capital Market under the symbol “MYSZ”.ITEM 1A. RISK FACTORSAn investment in our common stock involves a high degree of risk. You should carefully consider the following risk factors and the other information inthis Annual Report on Form 10K before investing in our common stock. Our business and results of operations could be seriously harmed by any of the followingrisks. The risks set out below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterialalso may materially adversely affect our business, financial condition and/or operating results. If any of the following events occur, our business, financial conditionand results of operations could be materially adversely affected. In such case, the value and trading price of our common stock could decline, and you may lose allor part of your investment.Summary Risk FactorsThe principal factors and uncertainties that make investing in our ordinary shares risky, include, among others:Risks Related to Our Financial Position and Capital Requirements●We have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.●Our limited operating history makes it difficult to evaluate our business and prospects.●We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive and maycause the market price of our common stock to decline.●The report of our independent registered public accounting firm contains an explanatory paragraph regarding substantial doubt about our ability tocontinue as a going concern.Risks Related to Our Company and Our Business●The market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and online thirdparty resellers adopting our flagship product, MySizeID.18●Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broader marketacceptance of our products.●We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which may makeit difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.●We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increase ourcapital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.●If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations and financialcondition may be adversely affected.●If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operations andfinancial condition could be adversely affected.●The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile device applications andcustom development services.●Our growth depends, in part, on the success of our strategic relationships with third parties.●Changes in economic conditions could materially affect our business, financial condition and results of operations.●We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.●We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significant interruptionin our network or hosting and cloud services could adversely impact our operations and harm our business.●Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.●We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.●A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.●Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, data protectionand information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive and confidentialinformation. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm our business,results of operations and financial condition.●We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect our business.●We may face intense competition and expect competition to increase in the future, which could limit us in developing a customer base and generatingrevenue.●Our business operations and future development could be significantly disrupted if we lose key members of our management team.19●If we are able to expand our operations, we may be unable to successfully manage our future growth.Risks Related to Our Operations in Israel and Russia●Our headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.●Russia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.Risks Related to Our Common Stock●A more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.●Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions and adversedevelopments with respect to financial institutions and associated liquidity risk;●Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.●Our securities are traded on more than one market which may result in price variations.●We are a former “shell company” and as such are subject to certain limitations not generally applicable to other public companies.Risks Related to Our Financial Position and Capital RequirementsWe have historically incurred significant losses and there can be no assurance when, or if, we will achieve or maintain profitability.We realized a net loss of approximately $8.3 million and $10.5 million for the years ended December 31, 2022 and 2021 and had an accumulated deficit of$53.5 million as at December 31, 2022. Because of the numerous risks and uncertainties associated with the development and commercialization of our products andbusiness, we are unable to predict the extent of any future losses or when we will become profitable, if at all. Expected future operating losses will have an adverseeffect on our cash resources, shareholders’ equity and working capital. Our failure to become and remain profitable could depress the value of our stock and impairour ability to raise capital, expand our business, maintain our development efforts, or continue our operations. A decline in our value could also cause you to lose allor part of your investment in us.Our limited operating history makes it difficult to evaluate our business and prospects.We have only been developing our measurement technology since 2014. Since then, our operating history has been primarily limited to research anddevelopment, pilot studies, raising capital, and more recently acquisitions and sales and marketing efforts. Therefore, it may be difficult to evaluate our business andprospects. We have not yet demonstrated an ability to commercialize our products. Consequently, any predictions about our future performance may not beaccurate, and you may not be able to fully assess our ability to complete development and/or commercialize our products, and any future products.We will need to raise additional capital to meet our business requirements in the future, which is likely to be challenging, could be highly dilutive andmay cause the market price of our common stock to decline.Based on our projected cash flows and the cash balances as of the date of this Annual Report on Form 10K, our existing cash is insufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. In order to meet ourbusiness objectives in the future, we will need to raise additional capital, which may not be available on reasonable terms or at all. Additional capital would be usedto accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;20●respond to competitive pressure;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, and a number of otherfactors, many of which are outside our control, and on our financial performance. Accordingly, we cannot assure you that we will be able to successfully raiseadditional capital at all or on terms that are acceptable to us. If we cannot raise additional capital when needed, it may have a material adverse effect on our business,results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.Management has concluded that there is substantial doubt about our ability to continue as a going concern which could prevent us from obtainingnew financing on reasonable terms or at all.We have incurred significant losses and negative cash flows from operations and have an accumulated deficit that raises substantial doubt about its abilityto continue as a going concern. Our audited consolidated financial statements for the year ended December 31, 2022 were prepared under the assumption that wewould continue our operations as a going concern. Our independent registered public accounting firm has included a “going concern” explanatory paragraph in itsreport on our financial statements for the year ended December 31, 2022. If we are unable to improve our liquidity position, by, among other things, raising capitalthrough public or private offerings or reducing our expenses, we may exhaust our cash resources and will be unable to continue our operations. If we cannotcontinue as a viable entity, our shareholders would likely lose most or all of their investment in us.Risks Related to Our Company and Our BusinessThe market for our measurement technology is new and unproven, may experience limited growth and is highly dependent on U.S. retailers and onlinethirdparty resellers adopting our flagship product, MySizeID.The market for our measurement technology is relatively new and unproven and is subject to a number of risks and uncertainties. We believe that ourfuture success will depend in large part on market adoption of our flagship product, MySizeID, by U.S. retailers and online thirdparty resellers. In order to grow ourbusiness, we intend to focus on educating retailers and resellers and other potential customers about the benefits of our measurement technology, expanding thefunctionality of our products and bringing new products to market to increase market acceptance and use of our technology. Our ability to develop and expand themarket that our products address depends upon a number of factors, including the cost savings, performance and perceived value associated with such products.The market for our products could fail to develop or there could be a reduction in interest or demand for our products as a result of a lack of consumer acceptance,technological challenges, competing products and services, weakening economic conditions and other causes. We may never successfully commercialize ourproducts and if our products fail to achieve market acceptance, this would have a material adverse effect on our business, results of operations and financialcondition.21Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to grow our business and achieve broadermarket acceptance of our products.Our ability to achieve customer adoption, especially among U.S. retailers will depend, in part, on our ability to effectively organize, focus and train our salesand marketing personnel. We have limited experience selling to U.S. retailers and only recently established a U.S. sales force. We believe that there is significantcompetition for experienced sales professionals with the skills and industry knowledge that we require. Our ability to achieve significant revenue growth in thefuture will depend, in part, on our ability to recruit, train and retain a sufficient number of experienced sales professionals, particularly those with experience sellingto U.S. retailers. In addition, even if we are successful in hiring qualified sales personnel, new hires require significant training and experience before they achievefull productivity, particularly for sales efforts targeted at U.S. retailers and new markets. Because we only recently started sales efforts, we cannot predict whether, orto what extent, our sales efforts will be successful.We expect our sales cycle to be long and unpredictable and require considerable time and expense before executing a customer agreement, which maymake it difficult to project when, if at all, we will obtain new customers and when we will generate revenue from those customers.In this market segment, the decision to adopt our products may require the approval of multiple technical and business decision makers, including security,compliance, procurement, operations and IT. In addition, while U.S. retailers may be willing to deploy our products on a limited basis, before they will commit todeploying our products at scale, they often require extensive education about our products and significant customer support time, engage in protracted pricingnegotiations and seek to secure readily available development resources. As a result, it is difficult to predict when we will obtain new customers and begingenerating revenue from these customers. As part of our sales cycle, we may incur significant expenses before executing a definitive agreement with a prospectivecustomer and before we are able to generate any revenue from such agreement. We have no assurance that the substantial time and money spent on our salesefforts will generate significant revenue. If conditions in the marketplace generally or with a specific prospective customer change negatively, it is possible that nodefinitive agreement will be executed, and we will be unable to recover any of these expenses. If we are not successful in targeting, supporting and streamlining oursales processes and if revenue expected to be generated from a prospective customer is not realized in the time period expected or not realized at all, our ability togrow our business, and our operating results and financial condition may be adversely affected. If our sales cycles lengthen, our future revenue could be lower thanexpected, which would have an adverse impact on our operating results and could cause our stock price to decline.22We recently acquired Orgad and Naiz and may in the future engage in additional acquisitions, joint ventures or collaborations which may increaseour capital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. We may not realize thebenefits of these acquisitions, joint ventures or collaborations.In order to reduce time to market and obtain complementary technologies, we are seeking to acquire technologies and businesses that are synergistic to ourproduct offering. For example, we recently acquired Orgad which operates an omnichannel ecommerce platform and Naiz which provides SaaS technology solutionsthat solve size and fit issues for fashion ecommerce companies. We evaluate from time to time various acquisitions and collaborations, including licensing oracquiring complementary technologies, intellectual property rights, or businesses. The process for acquiring a company may take from several months up to a yearand costs can vary greatly. We may also compete with others to acquire companies, and such competition may result in decreased availability of, or an increase inprice for, suitable acquisition candidates. In addition, we may not be able to consummate acquisitions or investments that we have identified as crucial to theimplementation of our strategy for other commercial or economic reasons. As a result, it may be more difficult for us to identify suitable acquisition or investmenttargets or to consummate acquisitions or investments on acceptable terms or at all. If we are not able to execute on any acquisition, we may not be able to achieve afuture growth strategy and may lose market share.In addition, the acquisition of Orgad, Naiz and any potential future acquisition, joint venture or collaboration may entail numerous potential risks, including:●increased operating expenses and cash requirements;●the assumption of additional indebtedness or contingent liabilities;●assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel;●the diversion of our management’s attention from our existing programs and initiatives in pursuing such a strategic merger or acquisition;●retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships;●risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing technologies; and●our inability to generate revenue from acquired technologies or products sufficient to meet our objectives in undertaking the acquisition or even to offsetthe associated acquisition and maintenance costs.All of the foregoing risks may be magnified as the cost, size or complexity of an acquisition or acquired company increases, or where the acquiredcompany’s products, market or business are materially different from ours, or where more than one integration is occurring simultaneously or within a concentratedperiod of time. We may not be able to obtain the necessary regulatory approvals, including those of antitrust authorities and foreign investment authorities, incountries where we seek to consummate acquisitions or make investments. For those and other reasons, we may ultimately fail to consummate an acquisition, even ifwe announce the intended acquisition.In addition, we may require significant financing to complete an acquisition or investment, whether through bank loans, raising of equity or debt orotherwise. We cannot assure you that such financing options will be available to us on reasonable terms, or at all. If we are not able to obtain such necessaryfinancing, it could have an impact on our ability to consummate a substantial acquisition or investment and execute a future growth strategy. Alternatively, we mayissue a significant number of shares as consideration for an acquisition, which would have a dilutive effect on our existing shareholders. For example, in partialconsideration for the acquisition of Orgad, we agreed to issue up to 111,602 shares of our common stock and in the Naiz acquisition we issued 240,000 shares of ourcommon stock. Furthermore, if we undertake acquisitions, we may incur large onetime expenses and acquire intangible assets that could result in significant futureamortization expense.23If we are not able to enhance our brand and increase market awareness of our company and products, then our business, results of operations andfinancial condition may be adversely affected.We believe that enhancing the “MySize” brand identity and increasing market awareness of our company and products, particularly among U.S. retailers, iscritical to achieving widespread acceptance of our products. Our ability to successfully develop new retailers may be adversely affected by a lack of awareness oracceptance of our brand. To the extent that we are unable to foster name recognition and affinity for our brand, our growth may be significantly delayed or impaired.The successful promotion of our brand will depend largely on our continued marketing efforts, market adoption of our products, and our ability to successfullydifferentiate our products from competing products and services. Our brand promotion may not be successful or result in revenue generation. Any incident thaterodes consumer affinity for our brand could significantly reduce our brand value and damage our business. If consumers perceive or experience a reduction inquality, or in any way believe we fail to deliver a consistently positive experience, our brand value could suffer and our business may be adversely affected.In particular, adverse weather conditions can impact guest traffic at our retailers, and, in more severe cases, cause temporary retail closures, sometimes forprolonged periods. Our business is subject to seasonal fluctuations, with retail sales typically higher during certain months, such as December. Adverse weatherconditions during our most favorable months or periods may exacerbate the effect of adverse weather on consumer traffic and may cause fluctuations in ouroperating results from quartertoquarter within a fiscal year.If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operationsand financial condition could be adversely affected.Our ability to attract new customers depends in part on our ability to enhance and improve our existing products, increase adoption and usage of ourproducts and introduce new products. The success of any enhancements or new products depends on several factors, including timely completion, adequatequality testing, actual performance quality, and overall market acceptance. Enhancements and new products that we develop may not be introduced in a timely orcosteffective manner, may contain errors or defects, may have interoperability difficulties with our platform or other products or may not achieve the broad marketacceptance necessary to generate significant revenue. Furthermore, our ability to increase the usage of our products depends, in part, on the development of newuse cases for our products and may be outside of our control. If we are unable to successfully enhance our existing products to meet evolving customerrequirements, increase adoption and usage of our products, develop new products, then our business, results of operations and financial condition would beadversely affected.The mobile technology industry is subject to rapid technological change and, to compete, we must continually enhance our mobile Apps and customdevelopment services.We must continue to enhance and improve the performance, functionality and reliability of our products. The mobile technology industry is characterizedby rapid technological change, changes in user requirements and preferences, frequent new product and services introductions embodying new technologies andthe emergence of new industry standards and practices that could render our products obsolete. Our success will depend, in part, on our ability to both internallydevelop and enhance our existing products, develop new products that address the increasingly sophisticated and varied needs of our customers, and respond totechnological advances and emerging industry standards and practices on a costeffective and timely basis. The development of our technology involvessignificant technical and business risks. We may fail to use new technologies effectively or to adapt our proprietary technology and systems to customerrequirements or emerging industry standards. If we are unable to adapt to changing market conditions, customer requirements or emerging industry standards, wemay not be able to increase our revenue and expand our business.Changes in economic conditions could materially affect our business, financial condition and results of operations.Because our primary target customers include U.S. retailers , we, together with the rest of the fashion/apparel industry, will depend upon consumerdiscretionary spending. Increases in unemployment rates, reductions in home values, increases in home foreclosures, investment losses, personal bankruptcies andreductions in access to credit and reduced consumer confidence, may impact consumers’ ability and willingness to spend discretionary dollars. In addition, volatileeconomic conditions may repress consumer confidence and discretionary spending. Any of the foregoing may have a material adverse effect on our business,financial condition and results of operations.24Our growth depends, in part, on the success of our strategic relationships with third parties.To grow our business, we anticipate that we will continue to depend on relationships with third parties, such as our customers and thirdparty platforms.Identifying partners, and negotiating and documenting relationships with them, requires significant time and resources. If we are unsuccessful in establishing ormaintaining our relationships with third parties, our ability to compete in the marketplace or to grow our revenue could be impaired, and our results of operationsmay suffer. Even if we are successful, we cannot assure you that these relationships will result in increased customer usage of our products or increased revenue.We rely upon third parties to provide distribution for our applications, and disruption in these services could harm our business.We currently utilize, and plan on continuing to utilize over the current fiscal year, thirdparty networking providers and distribution through companiesincluding, but not limited to, Apple and Google as well as Shopify, WooCommerce and, Datalogic, Honeywell and Zebra to distribute our technologies. If disruptionsor capacity constraints occur, we may have no means of replacing these services, on a timely basis or at all. This could cause a material adverse condition for ouroperations and financial earnings.We rely on thirdparty hosting and cloud computing providers to operate certain aspects of our business. Any failure, disruption or significantinterruption in our network or hosting and cloud services could adversely impact our operations and harm our business.Our technology infrastructure is critical to the performance of our products and customer satisfaction. Our products run on a complex distributed system,or what is commonly known as cloud computing. We own, operate and maintain elements of this system, but significant elements of this system are operated bythirdparties that we do not control and which would require significant time to replace. We expect this dependence on thirdparties to continue. In particular, asignificant portion, if not almost all data storage, data processing and other computing services and systems is hosted by cloud computing providers. Anydisruptions, outages and other performance problems relating to such services, including infrastructure changes, human or software errors and capacity constraints,could adversely impact our business, financial condition or results of operations.Real or perceived errors, failures, or bugs in our products could adversely affect our operating results and growth prospects.We update our products on a frequent basis. Despite efforts to test our updates, errors, failures or bugs may not be found in our products until after theyare deployed to a customer. We have discovered and expect we will continue to discover errors, failures and bugs in our products and anticipate that certain of theseerrors, failures and bugs will only be discovered and remediated after deployment. Real or perceived errors, failures or bugs in our platform could result in negativepublicity, government inquiries, loss of or delay in market acceptance of our products, loss of competitive position, or claims by customers for losses sustained bythem. In such an event, we may be required, or may choose, for customer relations or other reasons, to expend additional resources in order to help correct theproblem.We could be harmed by improper disclosure or loss of sensitive or confidential company, employee, or customer data, including personal data.In connection with the operation of our business, we store, process and transmit data, including personal and payment information, about our employeesand customers, a portion of which is confidential and/or personally sensitive. Unauthorized disclosure or loss of sensitive or confidential data may occur through avariety of methods. These include, but are not limited to, systems failure, employee negligence, fraud or misappropriation, or unauthorized access to or through ourinformation systems, whether by our employees or third parties, including a cyberattack by computer programmers, hackers, members of organized crime and/orstatesponsored organizations, who may develop and deploy viruses, worms or other malicious software programs. Such disclosure, loss or breach could harm ourreputation and subject us to government sanctions and liability under our contracts and laws that protect sensitive or personal data and confidential information,resulting in increased costs or loss of revenues. It is possible that security controls over sensitive or confidential data and other practices we and our thirdpartyvendors follow may not prevent the improper access to, disclosure of, or loss of such information. The potential risk of security breaches and cyberattacks mayincrease as we introduce new products and offerings. Further, data privacy is subject to frequently changing rules and regulations, which sometimes conflict amongthe various jurisdictions in which we provide services. Any failure or perceived failure to successfully manage the collection, use, disclosure, or security of personalinformation or other privacy related matters, or any failure to comply with changing regulatory requirements in this area, could result in legal liability or impairment toour reputation in the marketplace.25A material breach in security relating to our information systems and regulation related to such breaches could adversely affect us.Information security risks have generally increased in recent years, in part because of the proliferation of new technologies and the use of the Internet, andthe increased sophistication and activity of organized crime, hackers, terrorists, activists, cybercriminals and other external parties, some of which may be linked toterrorist organizations or hostile foreign governments. For example, a cybercriminal could use cybersecurity threats to gain access to sensitive information aboutanother company or to alter or disrupt news or information to be distributed by PR Newswire. Cybersecurity attacks are becoming more sophisticated and includemalicious software, ransomware, attempts to gain unauthorized access to data and other electronic security breaches that could lead to disruptions in criticalsystems, unauthorized release of confidential or otherwise protected information and corruption of data, substantially damaging our reputation. Any person whocircumvents our security measures could steal proprietary or confidential customer information or cause interruptions in our operations. We incur significant coststo protect against security breaches, and may incur significant additional costs to alleviate problems caused by any breaches. Our failure to prevent securitybreaches, or wellpublicized security breaches affecting the Internet in general, could significantly harm our reputation and business and financial results.Our products and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, dataprotection and information security, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive andconfidential information. Any failure of our products to comply with or enable our customers to comply with applicable laws and regulations would harm ourbusiness, results of operations and financial condition.We and our customers that use our products may be subject to privacy and data protectionrelated laws and regulations that impose obligations inconnection with the collection, processing and use of personal data, financial data, health or other similar data. The U.S. federal and various state and foreigngovernments have adopted or proposed limitations on, or requirements regarding, the collection, distribution, use, security and storage of personally identifiableinformation of individuals. The U.S. Federal Trade Commission and numerous state attorneys general are applying federal and state consumer protection laws toimpose standards on the online collection, use and dissemination of data, and to the security measures applied to such data.Similarly, many foreign countries and governmental bodies, including the EU member states, have laws and regulations concerning the collection and useof personally identifiable information obtained from individuals located in the EU or by businesses operating within their jurisdiction, which are often morerestrictive than those in the United States. Laws and regulations in these jurisdictions apply broadly to the collection, use, storage, disclosure and security ofpersonally identifiable information that identifies or may be used to identify an individual, such as names, telephone numbers, email addresses and, in somejurisdictions, IP addresses and other online identifiers.For example, the GDPR, which took full effect on May 25, 2018. The GDPR enhances data protection obligations for businesses and requires serviceproviders (data processors) processing personal data on behalf of customers to cooperate with European data protection authorities, implement security measuresand keep records of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to or greater of €20 million or 4% of global annualrevenues. In addition, the CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and require deletion of their personalinformation, opt out of certain personal information sharing, and receive detailed information about how their personal information is used. The CCPA provides forcivil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data breach litigation. Further, failure to comply withthe Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may expose us to administrativefines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the current enforcementmeasures and sanctions. There are also additional laws and regulations in additional jurisdictions around the world which govern the protection of consumers andof electronic communications. If our efforts to comply with GDPR, CCPA or other applicable laws and regulations are not successful, we may be subject to penaltiesand fines that would adversely impact our business and results of operations, and our ability to conduct business could be significantly impaired.26Additionally, although we endeavor to have our products comply with applicable laws and regulations, these and other obligations may be modified, theymay be interpreted and applied in an inconsistent manner from one jurisdiction to another, and they may conflict with one another, other regulatory requirements,contractual commitments or our internal practices. We also may be bound by contractual obligations relating to our collection, use and disclosure of personal,financial and other data or may find it necessary or desirable to join industry or other selfregulatory bodies or other privacy or data protectionrelatedorganizations that require compliance with their rules pertaining to privacy and data protection.We expect that there will continue to be new proposed laws, rules of selfregulatory bodies, regulations and industry standards concerning privacy, dataprotection and information security in the United States, the European Union and other jurisdictions, and we cannot yet determine the impact such future laws,rules, regulations and standards may have on our business. Moreover, existing U.S. federal and various state and foreign privacy and data protectionrelated lawsand regulations are evolving and subject to potentially differing interpretations, and various legislative and regulatory bodies may expand current or enact new lawsand regulations regarding privacy and data protectionrelated matters. Because global laws, regulations and industry standards concerning privacy and datasecurity have continued to develop and evolve rapidly, it is possible that we or our products or platform may not be, or may not have been, compliant with eachsuch applicable law, regulation and industry standard and compliance with such new laws or to changes to existing laws may impact our business and practices,require us to expend significant resources to adapt to these changes, or to stop offering our products in certain countries. These developments could adverselyaffect our business, results of operations and financial condition.We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect ourbusiness.Our ability to implement our business plan successfully depends in part on our ability to build brand recognition using our trademarks, service marks andother proprietary intellectual property, including our names and logos. We currently have no registered trademarks. While we plan to register a number of ourtrademarks; however, no assurance can be given that our trademark applications will be approved. As of December 31, 2022, we own 18 issued patents: six in Europe,four in the U.S., three in each of Russia and Japan and one in each of Canada and Israel which expire between January 20, 2033 and August 18, 2036, and we havetwo additional patent applications in process. As of such date, we do not have any registered trademarks., No assurance can be given that our patent applicationswhich are in process will be approved. If our patent applications are not approved, our ability to expand or develop our business may be negatively affected.Third parties may also oppose our trademark or patent applications, or otherwise challenge our use of the trademarks or patents. In the event that ourtrademarks or patents are successfully challenged, we could be forced to rebrand our goods and services or redesign our technology, which could result in loss ofbrand recognition, and could require us to devote resources to advertising and marketing new brands and products.If our efforts to register, maintain and protect our intellectual property are inadequate, or if any thirdparty misappropriates, dilutes or infringes on ourintellectual property, the value of our brands may be harmed, which could have a material adverse effect on our business and might prevent our brands fromachieving or maintaining market acceptance. We may also face the risk of claims that we have infringed third parties’ intellectual property rights. If third parties claimthat we infringe upon their intellectual property rights, our operating profits could be adversely affected. Any claims of intellectual property infringement, eventhose without merit, could be expensive and time consuming to defend, require us to rebrand our services, if feasible, divert management’s attention and resourcesor require us to enter into royalty or licensing agreements in order to obtain the right to use a thirdparty’s intellectual property.Any royalty or licensing agreements, if required, may not be available to us on acceptable terms or at all. A successful claim of infringement against uscould result in our being required to pay significant damages, enter into costly license or royalty agreements, or stop the sale of certain products or services, any ofwhich could have a negative impact on our operating profits and harm our future prospects.We may face intense competition and expect competition to increase in the future, which could prohibit us from developing a customer base andgenerating revenue.We face significant competition in every aspect of our business. Our competitors include True Fit, Virtusize, EasyMeasure, AR MeasureKit, Smart Measureand 3DLook. These companies may already have an established market in our industry. Most of these companies have significantly greater financial and otherresources than us and have been developing their products and services longer than we have been developing ours.27In addition, some of our larger competitors have substantially broader product offerings and leverage their relationships based on other products orincorporate functionality into existing products to gain business in a manner that discourages potential customers from purchasing our products. Potentialcustomers may also prefer to purchase from their existing solution providers rather than a new solution provider regardless of product performance or features.These larger competitors often have broader product lines and market focus and will therefore not be as susceptible to downturns in a particular market. Conditionsin our market could change rapidly and significantly as a result of technological advancements, partnering by our competitors or continuing market consolidation.New startup companies that innovate and large competitors that are making significant investments in research and development may invent similar or superiorproducts and technologies that compete with our products. In addition, some of our competitors may enter into new alliances with each other or may establish orstrengthen cooperative relationships. Any such consolidation, acquisition, alliance or cooperative relationship could lead to pricing pressure and our loss of anyfuture market share and could result in a competitor with greater financial, technical, marketing, service and other resources, all of which could harm our ability tocompete. Furthermore, organizations may be more willing to incrementally add solutions to their existing infrastructure from competitors than to replace their existinginfrastructure with our products. Any failure to meet and address these factors could harm our business, results of operations and financial condition.Our business operations and future development could be significantly disrupted if we lose key members of our management team.The success of our business continues to depend to a significant degree upon the continued contributions of our senior officers and key employees, bothindividually and as a group. Our future performance will be substantially dependent in particular on our ability to retain and motivate Ronen Luzon, our ChiefExecutive Officer, and certain of our other senior executive officers. The loss of the services of our Chief Executive Officer, senior officers or other key employeescould have a material adverse effect on our business and plans for future development. We have no reason to believe that we will lose the services of any of theseindividuals in the foreseeable future; however, we currently have no effective replacement for any of these individuals due to their experience, reputation in theindustry and special role in our operations. We also do not maintain any key man life insurance policies for any of our employees.If we are able to expand our operations, we may be unable to successfully manage our future growth.Our growth may strain our infrastructure and resources. Any such growth could place increased strain on our management, operational, financial and otherresources, and we will need to train, motivate, and manage employees, as well as attract management, sales, finance and accounting, international, technical, andother professionals. Any failure to expand these areas and implement appropriate procedures and controls in an efficient manner and at a pace consistent with ourbusiness objectives could have a material adverse effect on our business, results of operations and financial condition.Our business operations are conducted in multiple languages and could be disrupted due to miscommunications or translation errors.The success of our business continues to depend on our marketing efforts in the United States, Europe and Israel, each of which is conducted in the locallanguage. Miscommunications or inaccurate foreign language translations could have a material adverse effect on our business operations and financial conditions.Additionally, contracts, communications and complex technical information must be accurately translated into foreign languages.We will continue to incur costs and be subject to various obligations as a result of being a public company, listed in the United States and in Israel.We will continue to incur significant legal, accounting and other expenses as a result of being a public company, listed in the United States and in Israel.Although we will incur costs each year associated with being a publiclytraded company, it is possible that our actual costs of being a publiclytraded company willvary from year to year and may be different than our estimates. In estimating these costs, we take into account expenses related to insurance, legal, accounting andcompliance activities.28Furthermore, the need to maintain the corporate infrastructure demanded of a public company may divert management’s attention from implementing ourgrowth strategy, which could prevent us from improving our business, results of operations and financial condition. We have made, and will continue to make,changes to our internal controls and procedures for financial reporting and accounting systems to meet our reporting obligations as a U.S. publicly traded company.However, the measures we take may not be sufficient to satisfy our obligations as a publicly traded company.Any future or current litigation could have a material adverse impact on our results of operations, financial condition and liquidity.From time to time, we may be subject to litigation, including, among others, potential stockholder derivative actions and class actions. Risks associatedwith legal liability are difficult to assess and quantify, and their existence and magnitude can remain unknown for significant periods of time. Subject to certainexceptions, our Amended and Restated Certificate of Incorporation, or Certificate of Incorporation, and Amended and Restated Bylaws, or Bylaws, require us toindemnify and advance expenses to our officers and directors involved in legal proceedings. To date we have obtained directors and officers’ liability, or D&O,insurance to cover some of the risk exposure for our directors and officers. Such insurance generally pays the expenses (including amounts paid to plaintiffs, fines,and expenses including attorneys’ fees) of officers and directors who are the subject of a lawsuit as a result of their service to us. There can be no assurance that wewill be able to continue to maintain this insurance at reasonable rates or at all, or in amounts adequate to cover such expenses should such a lawsuit occur. WithoutD&O insurance, the amounts we would pay to indemnify our officers and directors should they be subject to legal action based on their service to us could have amaterial adverse effect on our financial condition, results of operations and liquidity. Such lawsuits, and any related publicity, may result in substantial costs and,among other things, divert the attention of management and our employees. An unfavorable outcome in any claim or proceeding against us could have a materialadverse impact on our financial position and results of operations for the period in which the unfavorable outcome occurs, and potentially in future periods. Further,any settlement announced by us may expose us to further claims against us by third parties seeking monetary or other damages which, even if unsuccessful, woulddivert management attention from the business and cause us to incur costs, possibly material, to defend such matters, which could have a material adverse impacton our financial position. See “Legal Proceedings” for more information regarding our involvement in ongoing litigation matters.Federal, state and local or Israeli tax rules may adversely impact our results of operations and financial position.We are subject to federal, state and local taxes in the U.S., as well as local taxes in Israel in respect to our operations in Israel. Although we believe our taxestimates are reasonable, if the Internal Revenue Service or other taxing authority disagrees with the positions we have taken on our tax returns, we could faceadditional tax liability, including interest and penalties. If material, payment of such additional amounts upon final adjudication of any disputes could have a materialimpact on our results of operations and financial position. In addition, complying with new tax rules, laws or regulations could impact our financial condition, andincreases to federal or state statutory tax rates and other changes in tax laws, rules or regulations may increase our effective tax rate. Any increase in our effectivetax rate could have a material impact on our financial results.A significant majority of Orgad’s revenue is from sales of products on Amazon’s U.S. Marketplace and any change, limitation or restriction on ourability to operate on Amazon’s platform or any other marketplace could have a material adverse impact to our business, results of operations, financialcondition and prospects.Orgad, our wholly owned subsidiary, operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com, eBay and others. A substantial percentage of Orgad’s revenue is driven by sales on Amazon’s U.S. marketplace and Orgad is subject toterms of service of Amazon and other maketplaces and various other seller policies and services that apply to third parties selling products on Amazon and othermarketplaces. Generally, a marketplace has the right to terminate or suspend its agreement with Orgad at any time and for any reason. Such marketplace may takeother actions against Orgad such as suspending or terminating a seller account or product listing and withholding payments owed to Orgad indefinitely. Forexample, in July 2022, Amazon deactivated Orgad’s Amazon U.S. store as a result of complaints submitted due to an error in the listed manufacturer of certainproducts on Orgad’s store. Although its account was subsequently reinstated in September 2022, if the deactivation were to occur in the future for a prolongedperiod of time, or if Amazon were to terminate Orgad’s account, this would have a material adverse effect on our business, results of operations, financial conditionand prospects. While Orgad endeavors to materially comply with the terms of services of the marketplaces on which it operates, we can provide no assurance thatthese marketplaces will have the same determination with respect to our compliance.29In addition, Amazon and other marketplaces can make changes to its platform that could require Orgad to change the manner in which it operates, limit itsability to successfully launch new products or increase its costs to operate and such changes could have an adverse effect on our business, results of operations,financial condition and prospects. Examples of changes that could impact us relate to platform fee charges (i.e., selling commissions), exclusivity, inventorywarehouse availability, excluded products and limitations on sales and marketing. Any change, limitation or restriction on our ability to sell on Amazon’s platform orany other marketplace, even if temporary, could have a material impact on our business, results of operations, financial condition and prospects.Orgad also relies on services provided by Amazon’s fulfillment platform, including Prime Certification, which provides for expedited shipping to theconsumer, an important aspect in the buying decision for consumers. For products that Orgad fulfills itself, Orgad is qualified to offer our products for sale withPrime Certification delivery. Any inability to market our products for sale with expedited delivery provided under Prime Certification could have a material impact onour business, results of operations, financial condition and prospects. Failure to remain compliant with the best fulfillment practices on Amazon’s platform couldhave a material impact on our business, results of operations, financial condition and prospects. In addition, due to the COVID19 pandemic, Amazon has changedthe amount of inventory it accepts per product for a period of time. If this were to continue it could cause us to miss sales and/or pay additional shipping costswhich would harm our business operations and financial conditions.Orgad’s business depends on its ability to build and maintain strong product listings on ecommerce platforms. Orgad may not be able to maintain andenhance our product listings if it receives unfavorable customer complaints, negative publicity or otherwise fails to live up to consumers’ expectations, whichcould materially adversely affect our business, results of operations and growth prospects.Maintaining and enhancing Orgad’s product listings is critical in expanding and growing its business. However, a significant portion of Orgad’s perceivedperformance to the customer depends on third parties outside of its control, including suppliers and thirdparty delivery agents as well as online retailers such asAmazon and eBay. Because Orgad’s agreements with its online retail partners are generally terminable at will, it may be unable to maintain these relationships, andour results of operations could fluctuate significantly from period to period. Because Orgad relies on third parties to deliver its products, it is subject to shippingdelays or disruptions caused by inclement weather, natural disasters, labor activism, health epidemics or bioterrorism. It may also experience shipping delays ordisruptions due to other carrierrelated issues relating to their own internal operational capabilities. Further, Orgad relies on the business continuity plans of thesethird parties to operate during pandemics, like the COVID19 pandemic, and it has limited ability to influence their plans, prevent delays, and/or cost increases due toreduced availability and capacity and increased required safety measures.Customer complaints or negative publicity about its products, delivery times, or marketing strategies, even if not accurate, especially on blogs, social mediawebsites and thirdparty market sites, could rapidly and severely diminish consumer view of Orgad’s product listings and result in harm to its brand. Customers mayalso make safetyrelated or other types of claims regarding products sold through our online retail partners, such as Amazon, which may result in an online retailpartner removing the product from its marketplace. We also use and rely on other services from third parties, such as our telecommunications services, and thoseservices may be subject to outages and interruptions that are not within our control.Orgad faces risks related to successfully optimizing and operating its fulfillment and customer service operations.Failures to adequately predict customer demand or otherwise optimize and operate its fulfillment and customer service operations successfully from time totime result in excess or insufficient fulfillment or customer service capacity, increased costs, and impairment charges, any of which could materially harm ourbusiness. As Orgad continues to add fulfillment and customer service capability or add new businesses with different requirements, its fulfillment and customerservice operations become increasingly complex and operating them becomes more challenging. There can be no assurance that Orgad will be able to operate ouroperations effectively.30In addition, failure to optimize inventory in our fulfillment operations increases net shipping cost by requiring longzone or partial shipments. Orgad may beunable to adequately staff its fulfillment and customer service operations. Orgad’s failure to properly handle such inventory or to accurately forecast productdemand may result in it being unable to secure sufficient storage space or to optimize its fulfillment operations or cause other unexpected costs and other harm toour business and reputation.Orgad relies on a limited number of shipping companies to deliver inventory to it and completed orders to our customers. The inability to negotiateacceptable terms with these companies or performance problems or other difficulties experienced by these companies could negatively impact our operating resultsand customer experience. In addition, Orgad’s ability to receive inbound inventory efficiently and ship completed orders to customers also may be negativelyaffected by natural or manmade disasters, extreme weather, geopolitical events and security issues, labor or trade disputes, and similar events.The variability in Orgad’s retail business places increased strain on its operations.Demand for Orgad’s product listings can fluctuate significantly for many reasons, including as a result of seasonality, promotions, product launches, orunforeseeable events, such as in response to natural or manmade disasters, extreme weather, or geopolitical events. For example, Orgad expects a disproportionateamount of our retail sales to occur during our fourth quarter. Failure to stock or restock popular products in sufficient amounts such that Orgad fails to meetcustomer demand could significantly affect our revenue and our future growth. If too many customers access the websites on which Orgad engages in onlineretailing within a short period of time due to increased demand, Orgad may experience system interruptions that make the websites unavailable or prevent us fromefficiently fulfilling orders, which may reduce the volume of goods its offers or sell and the attractiveness of its products. In addition, Orgad may be unable toadequately staff for fulfillment of orders and customer service during these peak periods and delivery and other fulfillment companies and customer service cosourcers may be unable to meet the seasonal demand.Our business is subject to the risks of earthquakes, fire, power outages, floods, health risks and other catastrophic events, and to interruption by manmade problems such as terrorism.Natural disasters, such as fire or floods, a significant power outage, telecommunications failure, terrorism, an armed conflict, cyberattacks, epidemics andpandemics such as COVID19, or other geopolitical unrest could affect our supply chain, manufacturers, logistics providers, channel partners, or endcustomers orthe economy as a whole and such disruption could impact us and the shipments and sales. These risks may be further increased if the disaster recovery plans for usand our suppliers prove to be inadequate. To the extent that any of the above should result in delays or cancellations of customer orders, the loss of customers, orthe delay in the deployment or shipment of products, our business, financial condition, and operating results would be adversely affected.For example, on January 2, 2023, Orgad experienced a fire at its warehouse in Israel. We are not aware of any casualties or injuries associated with the fire.We shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450,000. We believe that this incidentdid not affect the future sales results of Orgad for the year of 2023. The inventory was not insured and it is too early to determine the potential impact of thisincident on the other parties that were involved in the incident (lessor and others that leased properties near the warehouse).Our business could be negatively impacted by unsolicited takeover proposals, by shareholder activism or by proxy contests relating to the election ofdirectors or other matters.Our business could be negatively affected as a result of an unsolicited takeover proposal, by shareholder activism or a proxy contest. During 2021, anactivist shareholder sought to make changes to our board of directors, among other matters, which ultimately resulted in us entering into a settlement agreementwith the activist shareholder and another shareholder, and for which considerable costs were incurred and absorbed significant time and attention by managementand the board of directors. A future proxy contest, unsolicited takeover proposal, or other shareholder activism relating to the election of directors or other matterswould most likely require us to incur significant legal fees and proxy solicitation expenses and require significant time and attention by management and our Boardof Directors. The potential of a proxy contest, unsolicited takeover proposal, or other shareholder activism could interfere with our ability to execute our strategicplan, give rise to perceived uncertainties as to our future direction, result in the loss of potential business opportunities or make it more difficult to attract and retainqualified personnel, any of which could materially and adversely affect our business and operating results.31Environmental, social and corporate governance (ESG) issues, including those related to climate change and sustainability, may have an adverseeffect on our business, financial condition and results of operations and damage our reputation.There is an increasing focus from certain investors, customers, consumers, employees and other stakeholders concerning ESG matters. Additionally, publicinterest and legislative pressure related to public companies’ ESG practices continue to grow. If our ESG practices fail to meet regulatory requirements or investor,customer, consumer, employee or other shareholders’ evolving expectations and standards for responsible corporate citizenship in areas including environmentalstewardship, support for local communities, Board of Director and employee diversity, human capital management, employee health and safety practices, productquality, supply chain management, corporate governance and transparency, our reputation, brand and employee retention may be negatively impacted, and ourcustomers and suppliers may be unwilling to continue to do business with us.Customers, consumers, investors and other shareholders are increasingly focusing on environmental issues, including climate change, energy and wateruse, plastic waste and other sustainability concerns. Concern over climate change may result in new or increased legal and regulatory requirements to reduce ormitigate impacts to the environment. Changing customer and consumer preferences or increased regulatory requirements may result in increased demands orrequirements. Complying with these demands or requirements could cause us to incur additional manufacturing, operating or product development costs.If we do not adapt to or comply with new regulations, including the SEC’s published proposed rules that would require companies to provide significantlyexpanded climaterelated disclosures in their periodic reporting, which may require us to incur significant additional costs to comply and impose increased oversightobligations on our management and board of directors, or fail to meet evolving investor, industry or stakeholder expectations and concerns regarding ESG issues,investors may reconsider their capital investment in our company, we may become subject to penalties, and customers and consumers may choose to stoppurchasing our products, if approved for commercialization, which could have a material adverse effect on our reputation, business or financial condition.Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions andadverse developments with respect to financial institutions and associated liquidity risk.Our business depends on the economic health of the global economies. If the conditions in the global economies remain uncertain or continue to bevolatile, or if they deteriorate, including as a result of the impact of military conflict, such as the war between Russia and Ukraine, terrorism or other geopoliticalevents, our business, operating results and financial condition may be materially adversely affected. Economic weakness, inflation and increases in interest rates,limited availability of credit, liquidity shortages and constrained capital spending have at times in the past resulted, and may in the future result, in challenging anddelayed sales cycles, slower adoption of new technologies and increased price competition, and could negatively affect our ability to forecast future periods, whichcould result in an inability to satisfy demand for our products and a loss of market share.In addition, increases in inflation raise our costs for commodities, labor, materials and services and other costs required to grow and operate our business,and failure to secure these on reasonable terms may adversely impact our financial condition. Additionally, increases in inflation, along with the uncertaintiessurrounding COVID19, geopolitical developments and global supply chain disruptions, have caused, and may in the future cause, global economic uncertainty anduncertainty about the interest rate environment, which may make it more difficult, costly or dilutive for us to secure additional financing. A failure to adequatelyrespond to these risks could have a material adverse impact on our financial condition, results of operations or cash flows.More recently, the closures of SVB and Signature Bank and their placement into receivership with the FDIC created bankspecific and broader financialinstitution liquidity risk and concerns. Although the Department of the Treasury, the Federal Reserve and the FDIC jointly released a statement that depositors atSVB and Signature Bank would have access to their funds, even those in excess of the standard FDIC insurance limits, under a systemic risk exception, futureadverse developments with respect to specific financial institutions or the broader financial services industry may lead to marketwide liquidity shortages, impair theability of companies to access nearterm working capital needs, and create additional market and economic uncertainty. There can be no assurance that future creditand financial market instability and a deterioration in confidence in economic conditions will not occur. Our general business strategy may be adversely affected byany such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions. If the current equityand credit markets deteriorate, or if adverse developments are experienced by financial institutions, it may cause shortterm liquidity risk and also make anynecessary debt or equity financing more difficult, more costly, more onerous with respect to financial and operating covenants and more dilutive. Failure to secureany necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stockprice and could require us to alter our operating plans. In addition, there is a risk that one or more of our service providers, financial institutions, manufacturers,suppliers and other partners may be adversely affected by the foregoing risks, which could directly affect our ability to attain our operating goals on schedule andon budget.Our business may be adversely affected by the impact of any renewed outbreak of the COVID19 pandemic.Public health epidemics or outbreaks could adversely impact our business. In late 2019, a novel strain of COVID19, also known as coronavirus, wasreported in Wuhan, China. While initially the outbreak was largely concentrated in China, it spread worldwide. Many countries around the world, including in Israel,implemented significant governmental measures to control the spread of the virus, including temporary closure of businesses, severe restrictions on travel and themovement of people, and other material limitations on the conduct of business. These measures haven historically resulted in work stoppages and other disruptions.If there is a resurgence of the COVID19 pandemic, this could adversely impact our operations, including among others, our sales and marketing efforts and ourability to raise additional funds, and accordingly, the impact of COVID19 could have an adverse impact on our business and our financial results.32Risks Related to Our Operations in RussiaRussia’s invasion of Ukraine and sanctions brought against Russia could disrupt our operations in Russia.In addition to our Israel operations, we have operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia and we engage two software developers through a third party who are based in Ukraine. On February 24,2022, Russia invaded Ukraine. The outbreak of hostilities between the two countries could result in more widespread conflict and could have a severe adverse effecton the region.Following Russia’s actions, various countries, including the U.S., Canada, the United Kingdom, Germany and France, as well as the European Union,issued broadranging economic sanctions against Russia. Such sanctions included, among other things, a prohibition on doing business with certain Russiancompanies, officials and oligarchs; a commitment by certain countries and the European Union to remove selected Russian banks from the Society for WorldwideInterbank Financial Telecommunications (SWIFT) electronic banking network that connects banks globally; and restrictive measures to prevent the Russian CentralBank from undermining the impact of the sanctions. In response to sanctions, the Russian Central Bank raised its interest rates and banned sales of local securitiesby foreigners. Russia may take additional counter measures or retaliatory actions in the future. While diplomatic efforts have been ongoing, the conflict betweenRussia and Ukraine is currently unpredictable and has the potential to result in broadened military actions. The duration of ongoing hostilities and such sanctionsand related events cannot be predicted. Uncertainty as to future relations between Russia and the U.S. and other countries in the west, or between Russia and othereastern European countries, may have a negative impact on our operations.Such international sanctions and potential responses to such sanctions, including those that may limit or restrict transfer funds into Russia, may in thefuture significantly affect our ability to conduct our activities in Russia including paying our personnel. To date, the conflict has had minimal impact on operations .Nevertheless, we have no way to predict the progress or outcome of the situation in Ukraine, as the conflict and governmental reactions are rapidly developing andbeyond our control. Prolonged unrest, intensified military activities or more extensive sanctions impacting the region could have a material adverse effect on ouroperations, results of operations, financial condition, liquidity and business outlook.Political, military conditions or other risks in Russia could adversely affect our business.Russia is a federative state consisting of 85 constituent entities, or “subjects.” The Russian Constitution reserves some governmental powers for theRussian Government, some for the subjects and some for areas of joint competence. In addition, eight “federal districts” (“federal’nye okruga”), which are overseenby a plenipotentiary representative of the President, supplement the country’s federal system. The delineation of authority among and within the subjects is, inmany instances, unclear and contested, particularly with respect to the division of tax revenues and authority over regulatory matters. For these reasons, theRussian political system is vulnerable to tension and conflict between federal, subject and local authorities. This tension creates uncertainties in the operatingenvironment in Russia, which may prevent us from carrying out our strategy effectively. The risks associated with these events or potential events could materiallyand adversely affect the investment environment and overall consumer and entrepreneurial confidence in Russia, and our business, prospects, financial condition,hiring ability, and results of operations could be materially and adversely affected.Furthermore, high levels of corruption reportedly exist in Russia, including the bribing of officials for the purpose of initiating investigations bygovernment agencies. Corruption and other illegal activities could disrupt our ability to conduct our business effectively, and claims that the we are involved in suchcorruption or illegal activities could generate negative publicity, of which could harm our development, financial condition, results of operations or prospects.Economic and other risks in Russia could adversely affect our business.Operating a business in an emerging market such as Russia can involve a greater degree of risk than operating a business in more developed markets.Over the last two decades, the Russian economy has experienced or continues to experience at various times:●significant volatility in its GDP;33●the impact of international sanctions;●high levels of inflation;●increases in, or high, interest rates;●sudden price declines in oil and other natural resources;●instability in the local currency market;●budget deficits;●the continued operation of lossmaking enterprises due to the lack of effective bankruptcy proceedings;●capital flight; and●significant increases in poverty rates, unemployment and underemployment.The Russian economy has been subject to abrupt downturns in the past, including as a result of the invasion of Ukraine, global financial crisis, and, as anemerging market, remains particularly vulnerable to further external shocks and any future fluctuations in the global markets. Any further deterioration in the generaleconomic conditions in Russia (whether or not as a result of the events mentioned above) could have a material adverse effect on the Russian economy and mayresult in hiring and operational difficulties, as well as potential flight of human capital, which could have a material adverse effect on our business, productdevelopment and results of operations.Legal risks in Russia could materially adversely affect our operations and Russian tax legislation is subject to frequent change.Among the risks of the Russian legal system are: inconsistencies among laws, presidential decrees, and government and ministerial orders and resolutions;conflicting local, regional and federal laws and regulations; the untested nature of the independence of the judiciary and its sensitivity to economic or politicalinfluences; substantial gaps in the regulatory structure due to the delay or absence of implementing legislation; a high degree of discretion on the part ofgovernmental authorities; reported corruption within governmental entities and other governmental authorities; the relative inexperience of judges and courts ininterpreting laws applicable to complex transactions; and the unpredictability of enforcement of foreign judgments and foreign arbitral awards. Many Russian lawsand regulations are construed in a way that provides for significant administrative discretion in application and enforcement. Unlawful, selective or arbitrary actionsof the Russian Government have reportedly included the denial or withdrawal of licenses, sudden and unexpected tax audits, criminal prosecutions, and civil claims.Any of the above events may have a material adverse effect on our product development and results of operations.Despite certain improvements in the taxation system made by the Russian Government over the past decade, Russian tax legislation is still subject tofrequent change, varying interpretations, and inconsistent and selective enforcement. There are currently no clear rules for distinguishing between lawful taxoptimization and tax evasion. In addition, Russian tax laws do not contain detailed rules on the taxation in Russia of foreign companies. As such, taxpayers oftenhave to resort to court proceedings to defend their position against the Russian tax authorities. However, in the absence of consistent court practice or bindingprecedents, there is inconsistency amongst court decisions. Further, the possibility exists that the Russian Federation would impose arbitrary or onerous taxes andpenalties in the future, which could have a material adverse effect on our product development and results of operations.34Risks Related to Our Operations In IsraelOur headquarters and most of our operations are located in Israel, and therefore, political conditions in Israel may affect our operations and results.Our headquarters and most of our operations are located in central Israel and our key employees, officers and directors are residents of Israel. Accordingly,political, economic and military conditions in Israel and the surrounding region may directly affect our business. Since the establishment of the State of Israel in1948, a number of armed conflicts have taken place between Israel and its Arab neighbors. Any hostilities involving Israel or the interruption or curtailment of tradewithin Israel or between Israel and its trading partners could adversely affect our operations and results of operations and could make it more difficult for us to raisecapital. During the winter of 2008, winter of 2012 and the summer of 2014, Israel was engaged in an armed conflict with Hamas, a militia group and political partyoperating in the Gaza Strip, and during the summer of 2006, Israel was engaged in an armed conflict with Hezbollah, a Lebanese Islamist Shiite militia group andpolitical party. Israel faces political tension with respect to its relationships with Turkey, Iran and certain Arab neighbor countries. In addition, recent conflictsinvolved missile strikes against civilian targets in various parts of Israel, and negatively affected business conditions in Israel. Recent political uprisings and socialunrest in various countries in the Middle East and North Africa are affecting the political stability of those countries. This instability may lead to deterioration of thepolitical relationships that exist between Israel and these countries, and have raised concerns regarding security in the region and the potential for armed conflict.Any armed conflicts, terrorist activities or political instability in the region could adversely affect business conditions and could harm our results of operations. Forexample, any major escalation in hostilities in the region could result in a portion of our employees and service providers being called up to perform military duty foran extended period of time. Parties with whom we do business have sometimes declined to travel to Israel during periods of heightened unrest or tension, forcing usto make alternative arrangements when necessary. In addition, the political and security situation in Israel may result in parties with whom we have agreementsinvolving performance in Israel claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions insuch agreements. Any future deterioration in the political and security situation in Israel will negatively impact our business.Our commercial insurance does not cover losses that may occur as a result of events associated with the security situation in the Middle East. Althoughthe Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that thisgovernment coverage will be maintained. Any losses or damages incurred by us could have a material adverse effect on our business. Any armed conflicts orpolitical instability in the region would likely negatively affect business conditions and could harm our results of operations.Further, in the past, the State of Israel and Israeli companies have been subjected to an economic boycott. Several countries still restrict business with theState of Israel and with Israeli companies. These restrictive laws and policies may have an adverse impact on our operating results, financial condition or theexpansion of our business.The legislative power of the State resides in the Knesset, a unicameral parliament that consists of 120 members elected by nationwide voting under asystem of proportional representation. Israel’s most recent general elections were held on April 9, 2019, September 17, 2019, March 2, 2020 and November 1, 2022.The uncertainty surrounding the results of the recent elections may continue. Actual or perceived political instability in Israel or any negative changes in thepolitical environment, may individually or in the aggregate adversely affect the Israeli economy and, in turn, our business, financial condition, results of operationsand prospects.Some of our employees are obligated to perform military reserve duty in Israel.Many Israeli citizens, including our employees are obligated to perform one month, and in some cases more, of annual military reserve duty until they reachthe age of 40 (or older, for reservists with certain occupations) and, in the event of a military conflict, may be called to active duty. In response to increases interrorist activity, there have been periods of significant callups of military reservists. It is possible that there will be military reserve duty callups in the future. Ouroperations could be disrupted by such callups. Such disruption could materially adversely affect our business, results of operations and financial condition.35It may be difficult to enforce a nonIsraeli judgment against the Company or its officers and directors.The operating subsidiary of ours is incorporated in Israel. All of our executive officers and directors are not residents of the United States, and asubstantial portion of our assets and the assets of our executive officers and directors are located outside the United States. Therefore, a judgment obtained againstus, or any of these persons, including a judgment based on the civil liability provisions of the U.S. federal securities laws, may not be collectible in the United Statesand may not necessarily be enforced by an Israeli court. It also may be difficult to affect service of process on these persons in the United States or to assert U.S.securities law claims in original actions instituted in Israel. Additionally, it may be difficult for an investor, or any other person or entity, to initiate an action withrespect to U.S. securities laws in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of U.S. securities laws reasoning that Israel is not themost appropriate forum in which to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law isapplicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law often involves the testimony of expert witnesses, which can be a timeconsuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel that addresses the mattersdescribed above. As a result of the difficulty associated with enforcing a judgment against us in Israel, it may be impossible to collect any damages awarded byeither a U.S. or foreign court.Our international operations could expose us to additional risks, including exchange rate fluctuations, legal regulations and political or economicinstability that could harm our business and operating results.Our international operations expose us to the following risks which may have a material adverse effect on our business and operating results:●devaluations and fluctuations in currency exchange rates including fluctuations between the U.S. dollar and the NIS and the Russian Ruble;●costs of compliance with local laws, including labor laws and intellectual property laws;●compliance with domestic and foreign government policies, including compliance with Israeli securities laws and TASE;●changes in trade regulations and procedures affecting approval, production, pricing, marketing, reimbursement for and access to, our products;●compliance with applicable foreign anticorruption laws, antitrust/competition laws, antiBoycott Israel law and antimoney laundering laws; and●economic and geopolitical developments and conditions, including ongoing instability in global economies and financial markets, international hostilities,acts of terrorism and governmental reactions, inflation, outbreaks of contagious disease (e.g., the COVID19 pandemic) and military and political alliances.Risks Related to Our Common StockA more active, liquid trading market for our common stock may not develop, and the price of our common stock may fluctuate significantly.Although our common stock is listed on the Nasdaq Capital Market, it has only been traded on the Nasdaq Capital Market since July 25, 2016. There hasbeen relatively limited trading volume in the market for our common stock, and a more active, liquid public trading market may not develop or may not be sustained.Limited liquidity in the trading market for our common stock may adversely affect a stockholder’s ability to sell its shares of common stock at the time it wishes tosell them or at a price that it considers acceptable. If a more active, liquid public trading market does not develop, we may be limited in our ability to raise capital byselling shares of common stock and our ability to acquire other companies or assets by using shares of our common stock as consideration. In addition, if there is athin trading market or “float” for our stock, the market price for our common stock may fluctuate significantly more than the stock market as a whole. Without a largefloat, our common stock would be less liquid than the stock of companies with broader public ownership and, as a result, the trading prices of our common stockmay be more volatile and it would be harder for you to liquidate any investment in our common stock. Furthermore, the stock market is subject to significant priceand volume fluctuations, and the price of our common stock could fluctuate widely in response to several factors, including:●our quarterly or annual operating results;●changes in our earnings estimates;●investment recommendations by securities analysts following our business or our industry;●additions or departures of key personnel;●changes in the business, earnings estimates or market perceptions of our competitors;36●our failure to achieve operating results consistent with securities analysts’ projections;●changes in industry, general market or economic conditions;●announcements of legislative or regulatory changes; and●natural disasters (including for example, the recent fire in the Orgad warehouse) and political and economic instability, including wars, terrorism, politicalunrest, results of certain elections and votes, emergence of a pandemic, or other widespread health emergencies (or concerns over the possibility of suchan emergency, including for example, the recent the COVID19 pandemic), boycotts, adoption or expansion of government trade restrictions, and otherbusiness restrictions.The stock market has experienced extreme price and volume fluctuations in recent years that have significantly affected the quoted prices of the securitiesof many companies. The changes often appear to occur without regard to specific operating performance. The price of our common stock could fluctuate basedupon factors that have little or nothing to do with us and these fluctuations could materially reduce our stock price.Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of ourcommon stock.If any of our shareholders were to decide to sell large amounts of stock over a short period of time (presuming such sales were permitted) such sales couldcause the market price of our common stock to drop significantly, even if our business is doing well. Further, the market price of our common stock could decline as aresult of the perception that such sales could occur. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equitysecurities in the future at a time and price that we deem appropriate.Our securities are traded on more than one market which may result in price variations.Our securities have been trading on the Nasdaq Capital Market since July 2016 and on TASE since September 2005. Trading in our securities on suchexchanges occurs in different currencies (U.S. dollars on the Nasdaq Capital Market and NIS on the TASE), and at different times (due to different time zones,trading days and public holidays in the United States and Israel). The trading prices of our securities on the two exchanges may differ due to the foregoing andother factors. Any decrease in the price of our shares on the TASE could cause a decrease in the trading price of our shares on the Nasdaq Capital Market and viceversa.We are a smaller reporting company and, as a result of the reduced disclosure and governance requirements applicable to such companies, ourcommon stock may be less attractive to investors.We are a smaller reporting company, (i.e. a company with “public float” held by nonaffiliates with a market value of less than $250 million) and we areeligible to take advantage of certain exemptions from various reporting requirements applicable to other public companies. We have elected to adopt these reduceddisclosure requirements. We cannot predict if investors will find our common stock less attractive as a result of our taking advantage of these exemptions. If someinvestors find our common stock less attractive as a result of our choices, there may be a less active trading market for our common stock and our stock price may bemore volatile.We do not expect to pay any cash dividends in the foreseeable future.We have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our board of directors deems relevant. Investors should not purchase our common stock expecting to receive cash dividends. Because we do notpay dividends, and there may be limited trading, investors may not have any manner to liquidate or receive any payment on their investment. Therefore, our failureto pay dividends may cause investors to not see any return on investment even if we are successful in our business operations. In addition, because we do not paydividends we may have trouble raising additional funds, which could affect our ability to expand our business operations.37We can sell additional shares of common stock without consulting stockholders and without offering shares to existing stockholders, which wouldresult in dilution of shareholders’ interests in the company and could depress our stock price.Our Certificate of Incorporation currently authorizes 250,000,000 shares of common stock, of which 2,446,780 are currently outstanding as of March 31, 2023and our board of directors is authorized to issue additional shares of our common stock. Although our board of directors intends to utilize its reasonable businessjudgment to fulfil its fiduciary obligations to our then existing stockholders in connection with any future issuance of our capital stock, the future issuance ofadditional shares of our capital stock could cause immediate, and potentially substantial, dilution to our existing stockholders, which could also have a materialeffect on the market value of the shares. Further, other than certain participation rights that we have granted in a past offering, our shares do not have preemptiverights, which means we can sell shares of our capital stock to other persons without offering purchasers in this offering the right to purchase their proportionateshare of such offered shares. Therefore, any additional sales of stock by us could dilute your ownership interest in our Company.Our quarterly operating results may fluctuate significantly.We expect our operating results to be subject to quarterly fluctuations. Our net loss and other operating results will be affected by numerous factors,including:●variations in the level of expenses related to our research and development;●any lawsuits in which we may become involved;●regulatory developments affecting our products; and●our execution of any collaborative, licensing or sales agreements, and the timing of payments under these arrangements.If our quarterly operating results fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially.Furthermore, any quarterly fluctuations in our operating results may, in turn, cause the price of our common stock to fluctuate substantially.If we fail to comply with the rules under the Sarbanes Oxley Act of 2002 related to accounting controls and procedures or if we discover materialweaknesses and deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult.If we fail to comply with the rules under the SarbanesOxley Act of 2002 related to disclosure controls and procedures, or, if we discover materialweaknesses and other deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult. Section 404 of the SarbanesOxley Act requires annual management assessments of the effectiveness of our internal control over financial reporting and, ifwe are no longer a nonaccelerated filer, a report by our independent auditors addressing these assessments. If material weaknesses or significant deficiencies arediscovered or if we otherwise fail to achieve and maintain the adequacy of our internal control, we may not be able to ensure that we can conclude on an ongoingbasis that we have effective internal controls over financial reporting in accordance with Section 404 of the SarbanesOxley Act. Moreover, effective internalcontrols are necessary for us to produce reliable financial reports and are important to helping prevent financial fraud. If we cannot provide reliable financial reportsor prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price ofour common stock could drop significantly.38Our Certificate of Incorporation, Bylaws and Delaware law may have antitakeover effects that could discourage, delay or prevent a change incontrol, which may cause our stock price to decline.Our Certificate of Incorporation, Bylaws and Delaware law could make it more difficult for a thirdparty to acquire us, even if closing such a transactionwould be beneficial to our stockholders. Provisions of our Certificate of Incorporation, Bylaws and Delaware law also could have the effect of discouraging potentialacquisition proposals or making a tender offer or delaying or preventing a change in control, including changes a stockholder might consider favorable. Suchprovisions may also prevent or frustrate attempts by our stockholders to replace or remove our management. In particular, the Certificate of Incorporation, Bylawsand Delaware law, as applicable, among other things:●provide the board of directors with the ability to alter the Bylaws without stockholder approval;●the classification of our board of directors;●place limitations on the removal of directors;●provide that vacancies on the Board of Directors may be filled by a majority of directors in office, although less than a quorum;●require that stockholder actions must be affected at a duly called stockholder meeting and generally prohibiting stockholder actions by written consent;●eliminate the ability of stockholders to call a special meeting of stockholders; and●establish advance notice requirements for nominations for election to the Board of Directors or for proposing matters that can be acted upon at duly calledstockholder meetings.We are subject to Section 203 of the Delaware General Corporation Law which, subject to certain exceptions, prohibits “business combinations” between apubliclyheld Delaware corporation and an “interested stockholder,” which is generally defined as a stockholder who becomes a beneficial owner of 15% or more ofa Delaware corporation’s voting stock for a threeyear period following the date that such stockholder became an interested stockholder. These provisions areexpected to discourage certain types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to firstnegotiate with our board. These provisions may delay or prevent someone from acquiring or merging with us, which may cause the market price of our commonstock and the value of our securities to decline.If we fail to comply with the continued listing requirements of the Nasdaq Capital Market, our common stock may be delisted and the price of ourcommon stock and our ability to access the capital markets could be negatively impacted.Nasdaq has established certain standards for the continued listing of a security on the Nasdaq Capital Market. The standards for continued listing include,among other things, that the minimum bid price for the listed securities not fall below $1.00 per share for a period of 30 consecutive trading days and that wemaintain a minimum of $2,500,000 in shareholders’ equity. We have in the past fallen below the minimum bid price and minimum shareholders’ equity.39No assurance can be given that we will continue to be in compliance with the Rule. Failure to meet applicable Nasdaq continued listing standards couldresult in a delisting of our common stock. A delisting of our common stock from Nasdaq could materially reduce the liquidity of our common stock and result in acorresponding material reduction in the price of our common stock. In addition, delisting could harm our ability to raise capital through alternative financing sourceson terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, employees and fewer business development opportunities.The exercise of outstanding warrants and stock options will have a dilutive effect on the percentage ownership of our capital stock by existingstockholders.As of March 15, 2023, we had outstanding warrants to acquire 2,299,115 shares of our common stock and stock options to purchase 1,659 shares of ourcommon stock, which warrants and options are exercisable for prices ranging between $2.81 and $375. The expiration of the term of such options and warrants rangefrom 0.22 years to 4.83 years. If a significant number of such warrants and stock options are exercised by the holders, the percentage of our common stock ownedby our existing stockholders will be diluted.Were our common stock to become subject to the penny stock rules then this could result in U.S. brokerdealers becoming discouraged from effectingtransactions in shares of our common stock.Rule 15g9 under the Exchange Act establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a marketprice of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. If we do not retain a listing on the NasdaqCapital Market or do not meet certain net tangible asset or average revenue requirements and if the price of our common stock is less than $5.00, our common stockwill be deemed a penny stock. For any transaction involving a penny stock, unless exempt, the rules require: (a) that a broker or dealer approve a person’s accountfor transactions in penny stocks; and (b) the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantityof the penny stock to be purchased.In order to approve a person’s account for transactions in penny stocks, the broker or dealer must: (a) obtain financial information and investmentexperience objectives of the person and (b) make a reasonable determination that the transactions in penny stocks are suitable for that person and the person hassufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver,prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which: (a) sets forth the basis on whichthe broker or dealer made the suitability determination; and (b) confirms that the broker or dealer received a signed, written agreement from the investor prior to thetransaction. Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult forinvestors to dispose of our common stock and cause a decline in the market value of our common stock.Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissionspayable to both the broker or dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor incases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the accountand information on the limited market in penny stocks.Sales of our currently issued and outstanding stock may become freely tradable pursuant to Rule 144 and may dilute the market for your shares andhave a depressive effect on the price of the shares of our common stock.A portion of our outstanding shares of common stock are “restricted securities” within the meaning of Rule 144 under the Securities Act of 1933, asamended, or the Securities Act. As restricted shares, these shares may be resold only pursuant to an effective registration statement or under the requirements ofRule 144 or other applicable exemptions from registration under the Securities Act and as required under applicable state securities laws. Rule 144 provides inessence that an affiliate (as such term is defined in Rule 144(a)(1)) of an issuer who has held restricted securities for a period of at least six months (one year afterfiling Form 10 information with the SEC for shell companies and former shell companies) may, under certain conditions, sell every three months, in brokeragetransactions, a number of shares that does not exceed the greater of 1% of a company’s outstanding shares of common stock or the average weekly trading volumeduring the four calendar weeks prior to the sale (the four calendar week rule does not apply to companies quoted on the OTC Markets). Rule 144 also permits, undercertain circumstances, the sale of securities, without any limitation, by a person who is not an Affiliate of the Company and who has satisfied a oneyear holdingperiod. A sale under Rule 144 or under any other exemption from the Securities Act, if available, or pursuant to subsequent registrations of our shares of commonstock, may have a depressive effect upon the price of our shares of common stock in any active market that may develop.40We are a former “shell company” and as such are subject to certain limitations not applicable to other public companies generally.Prior to our suspension of reporting in 2012, we were a public reporting “shell company,” as defined in Rule 12b2 under the Exchange Act. Although weare no longer a “shell company,” we are subject to certain restrictions under the Securities Act for the resale of securities issued by issuers that have been at anytime previously a shell company. Specifically, the Rule 144 safe harbor available for the resale of our restricted securities is only available to our stockholders if wehave filed all reports and other materials required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934, as amended, or the Exchange Act, asapplicable, during the preceding twelve months, other than current reports on Form 8K, at the time of the proposed sale, regardless of whether the restrictedsecurities were initially issued at the time we were a shell company or subsequent to termination of such status. Accordingly, holders of our “restricted securities”within the meaning of Rule 144 will be subject to the conditions set forth in Rule 144 with respect to our company. Other reporting companies that are not formershell companies and have been reporting for more than twelve months are not subject to this same reporting threshold for nonaffiliate reliance on Rule 144.Accordingly, any restricted securities we have sold or sell in the future or issue to consultants or employees, in consideration for services rendered or for any otherpurpose, may not be resold unless such securities are registered with the SEC or the requirements of Rule 144 have been satisfied. As a result, it may be harder forus to fund our operations and pay our employees and consultants with our securities instead of cash. Furthermore, it may be harder for us to raise funding throughthe sale of debt or equity securities unless we agree to register such securities with the SEC, which could cause us to expend additional resources in the future. Ourprior status as a “shell company” could prevent us in the future from raising additional funds, engaging employees and consultants, and using our securities to payfor any acquisitions, which could cause the value of our securities, if any, to decline in value or become worthless.ITEM 1B. UNRESOLVED STAFF COMMENTSNone.ITEM 2. PROPERTIESWe currently lease 1,660 square feet of office space at 4 HaYarden Street, Airport City, Israel. The lease term is for 36 months beginning on August 20, 2019and ending on August 20, 2022, with an option to extend for an additional 36 months. Monthly rent payments, including utilities, amount to approximately $14,000per month. We extended the lease period until August 20, 2025.ITEM 3. LEGAL PROCEEDINGSFrom time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation issubject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.41North Empire LLCOn August 7, 2018, we commenced an action against North Empire LLC, or North Empire, in the Supreme Court of the State of New York, County of NewYork for breach of a Securities Purchase Agreement or Agreement in which we are seeking damages in an amount to be determined at trial, but in no event less than$616,000. On August 2, 2018, North Empire filed a Summons with Notice against us, also in the same Court, in which they allege damages in an amount of $11.4million arising from an alleged breach of the Agreement. On September 6, 2018, North Empire filed a Notice of Discontinuance of the action it had filed on August 2,2018. On September 27, 2018, North Empire filed an answer and asserted counterclaims in the action commenced by us against them, alleging that we failed to deliverstock certificates to North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against our CEO andnow former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018, we filed a reply to North Empire’scounterclaims. On November 15, 2018, our CEO and now former Chairman of the Board filed a motion to dismiss North Empire’s thirdparty complaint. On January 6,2020, the Court granted the motion and dismissed the thirdparty complaint. Discovery has been completed and both parties have filed motions for summaryjudgment in connection with the claims and counterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summaryjudgment, arguing there were factual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision.On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying the Company’s motion for summary judgment. On or about September 12,2022, the Court issued its Decision and Order denying the Company’s motion to reargue. North Empire filed its opposing brief on December 7, 2022. Both sides weregiven an opportunity to file a reply brief. We filed our reply brief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. Oral argument was heldbefore the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Court filed its Decision and Order, which affirmed the lower court’sdecisions regarding both My Size and North Empire’s motions for summary judgment and sent the case back to the Supreme Court. On or about March 13, 2023, theSupreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date for the mediation has not yet been set. We intend tovigorously defend any claims made by North Empire. We believe it is more likely than not that the counterclaims will be denied.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.42PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur stock currently is listed on the Tel Aviv Stock Exchange and the Nasdaq Capital Market under the symbol “MYSZ”. Our stock has been traded on theNasdaq Capital Market since July 25, 2016.HoldersAs of March 31, 2023, we had 70 shareholders of record. The actual number of stockholders is greater than this number of record holders and includesstockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our Board of Directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our Board of Directors deems relevant.Securities Authorized for Issuance under Equity Compensation PlansInformation about our equity compensation plans is incorporated herein by reference to “Item 12. Security Ownership of Certain Beneficial Owners andManagement and Related Stockholder Matters”, of this Annual Report on Form 10K.Recent Sales of Unregistered SecuritiesNone.ITEM 6. SELECTED FINANCIAL DATAAs a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULT OF OPERATIONSYou should read the following discussion along with our financial statements and the related notes included elsewhere in this Annual Report on Form10K. The following discussion contains forwardlooking statements that are subject to risks, uncertainties and assumptions, including those discussed under“Risk Factors.” Our actual results, performance and achievements may differ materially from those expressed in, or implied by, these forwardlooking statements.OverviewMySize is an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.43Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile device or through MySizeID Widget: a simple questionnaire which was uses a database collected over the years.MySizeID synchronizes the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and onlypresents items available for purchase that match their measurements to ensure a correct fit.MySize is positioning itself as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empowering brand design teams, which are designed to increaseend consumer satisfaction, contributing to a sustainable world and reduce operation costs.Orgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,682 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz BespokeTechnologies, S.L., or Naiz, a limited liability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.44The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 2,365,800 shares of My Size common stock were issuedto Whitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.45Operations in RussiaIn addition to our Israel operations, we had operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia. To date, mainly due to the invasion of Ukraine by Russia and the ongoing sanctions we stopped most ofour efforts in Russia and will probably close the subsidiary in the near future.Results of OperationsThe table below provides our results of operations for the periods indicated.Year ended December 3120222021(dollars in thousands)Revenues4,459131Cost of revenues(3,825)Gross profit634131Research and development expenses$(1,701)$(4,248)Sales and marketing(3,143)(2,336)General and administrative(3,900)(4,124)Operating loss(8,110)(10,577)Financial income (expenses), net(236)57Tax income36Net loss$(8,310)$(10,520)Year Ended December 31, 2022 Compared to Year Ended December 31, 2021RevenuesFrom inception through December 31, 2018, we did not generate any revenue from operations and we continue to expect to incur additional losses toperform further research and development activities. We started to generate revenues only in 2019. Our revenues for the year ended December 31, 2022 amounted to$4,459,000 compared to $131,000 for year ended December 31, 2021. The increase from the corresponding period primarily attributable to $4,132,000 in revenuegenerated from Orgad from February 7, 2022, the date of closing of the Orgad acquisition, or the Acquisition Date and revenue generated from the Naiz Acquisitionfrom October 11, 2022, the date of closing of the Naiz acquisition.In addition, the increase from the corresponding period results from an increase in revenues generated by My Size.Cost Of RevenuesOur cost of revenues expenses for the year ended December 31, 2022 amounted to $3,825,000, compared to none for the year ended December 31, 2021. Thecost of revenues includes cash and equity liabilities expenses in the amount of $194,000. The increase in comparison with the corresponding period was due to thecost of goods of the revenues generated from Orgad’s operations.Research and Development ExpensesOur research and development expenses for the year ended December 31, 2022 amounted to $1,701,000 a decrease of $2,547,000, or approximately 60.0%,compared to $4,248,000 for the year ended December 31, 2021. The decrease from the corresponding period primarily resulted from share based payment in amount of$2,618,000 attributed to the share issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021.Sales and Marketing ExpensesOur sales and marketing expenses for the year ended December 31, 2022 amounted to $3,143,000 an increase of $807,000, or 34.55%, compared to $2,336,000for the year ended December 31, 2021. The increase primarily resulted from an increase in employees expenses mainly due to Orgad and Naiz acquisitions, increase inAmazon fees, increase in cash and equity liabilities expenses attributed to the Orgad acquisition and an increase in share based payments offset by a decrease inpayments to consultants.46General and Administrative ExpensesOur general and administrative expenses for the year ended December 31, 2022 amounted to $3,900,000, a decrease of $224,000, or 5.43%, compared to$4,124,000 for the year ended December 31, 2021. The decrease compared to the corresponding period was mainly due to a decrease in professional expenses, mainlyattributed to shareholder activism including settlement expenses with the Lazar Parties offset by an increase in sharedbased payments and an increase in employeesexpenses mainly due to the Orgad and Naiz acquisitions.Operating LossAs a result of the foregoing, for the year ended December 31, 2022, our operating loss was $8,110,000, a decrease of $2,467,000 or 23.32%, compared to ouroperating loss for the year ended December 31, 2021 of $10,577,000.Financial Income, NetOur financial (expense) income, net for the year ended December 31, 2022 amounted to $236,000 compared to financial income, $57,000 for the year endedDecember 31, 2021. In 2022, we had financial expenses exchange rate differences offset by an income from fair value revaluation of investment in marketablesecurities whereas in 2021 we had financial income from the fair value revaluation of warrants offset by expenses from exchange rate differences and expenses fromfair value revaluation of investment in marketable securities.Net LossAs a result of the foregoing, our net loss for the year ended December 31, 2022 was $8,310,000 compared to net loss of $10,520,000 for the year endedDecember 31, 2021. The decrease in net loss was mainly due increase in sales and marketing expenses and financial expenses as opposed to financial income in thecorresponding period offset by a decrease in research and development expenses in amount of $2,618,000 attributed to the share issuance to Shoshana Zigdonunder the Amendment to Purchase Agreement dated May 26, 2021.Liquidity and Capital ResourcesSince our inception, we have funded our operations primarily through public and private offerings of debt and equity in Israel and in the U.S.As of December 31, 2022, we had cash, cash equivalents and restricted cash of $2,363,000 compared to $10,943,000 cash, cash equivalents, restricted cashas of December 31, 2021. During January 2023, we completed a registered direct and concurrent private placement offering resulting in gross proceeds ofapproximately $3 million. This decrease primarily resulted from our operating activities, the acquisition of Orgad and Naiz Fit, and resources that were deployed togrow of both businesses.Net cash used in operating activities was $7,290,000 for the year ended December 31, 2022 compared to $7,297,000 for the year ended December 31, 2021.The decrease in cash used in operating activity is derived mainly from an increase in share based payments and increase in account receivables mainly from theOrgad and Naiz fit acquisitions offset by a decrease in the net loss.Net cash used in investing activities for the year ended December 31, 2022 was $993,000 as opposed to net cash provided by investing activities of$161,000 for the year ended December 31, 2021. The net cash used in investing activities for the year ended December 31, 2022 was mainly from the acquisition ofOrgad and Naiz as opposed to proceeds from shortterm deposits and restricted deposits during the year ended December 31, 2021.We had a negative cash flow from financing activities of $67,000 for the year ended December 31, 2022 compared to positive cash flow of $16,292,000 for theyear ended December 31, 2021. The negative cash flow from financing activities for the year ended December 31, 2022 was mainly due to repayment of loans andinterest and payments for leases as opposed to proceeds from issuance of shares and from exercise of warrants for the year ended December 31, 2021.47We expect that we will continue to generate losses and negative cash flows from operations for the foreseeable future. Based on the projected cash flowsand cash balances as of December 31, 2022, together with the proceeds from the January 2023 financing, we believe our existing cash will not be sufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. We will need to raiseadditional capital, which may not be available on reasonable terms or at all. Additional capital would be used to accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;●respond to competitive pressures;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, the Russian invasion ofUkraine, the impact of any resurgence of the COVID19 pandemic and a number of other factors, many of which are outside our control, and on our financialperformance. Accordingly, we cannot assure you that we will be able to successfully raise additional capital at all or on terms that are acceptable to us. If we cannotraise additional capital when needed, it may have a material adverse effect on our business, results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.We have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.Recently Issued Accounting PronouncementsCertain recently issued accounting pronouncements are discussed in Note 2, Significant Accounting Policies, to the consolidated financial statementsincluded in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10K.OffBalance Sheet ArrangementsWe have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.48Application of Critical Accounting Policies and EstimatesOur management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we haveprepared in accordance with U.S. generally accepted accounting principles issued by the Financial Accounting Standards Board, or FASB. The preparation of thesefinancial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assetsand liabilities at the date of the financial statements, as well as the reported expenses during the reporting periods. Actual results may differ from these estimatesunder different assumptions or conditions.Our significant accounting policies were revenue from contracts with customers which are more fully described in the notes to our financial statementsincluded herein. We believe these accounting policies discussed below are critical to our financial results and to the understanding of our past and futureperformance, as these policies relate to the more significant areas involving management’s estimates and assumptions. We consider an accounting estimate to becritical if: (1) it requires us to make assumptions because information was not available at the time or it included matters that were highly uncertain at the time wewere making our estimate; and (2) changes in the estimate could have a material impact on our financial condition or results of operations.Accounting for business combinationsWe allocate the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed, based upon their estimated fairvalues at the acquisition date. These fair values are typically estimated with assistance from independent valuation specialists.The purchase price allocation process requires us to make significant estimates and assumptions, especially at the acquisition date with respect tointangible assets, contractual support obligations assumed, contingent consideration arrangements, and preacquisition contingencies.Although we believe the assumptions and estimates we have made in the past have been reasonable and appropriate, they are based in part on historicalexperience and information obtained from the management of the acquired companies and are inherently uncertain.Examples of critical estimates in valuing certain of the intangible assets we have acquired or may acquire in the future include but are not limited to:● future expected cash flows from product sales or other customer contracts;● expected costs of fulfillment including marketing, warehousing and product sales;● the acquired company’s brand and competitive position, as well as assumptions about the period of time the acquired brand will continue to be used inthe combined company’s product portfolio;● cost of capital and discount rates; and● estimating the useful lives of acquired assets as well as the pattern or manner in which the assets will amortize.Refer to Note 16, Business Combination, to the consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” of thisAnnual Report on Form 10K.49Revenue from contracts with customersOur revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled software subscriptions, associatedsoftware maintenance and support.We recognize revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with a customer exists onlywhen: the parties to the contract have approved it and are committed to perform their respective obligations, we can identify each party’s rights regarding thedistinct goods or services to be transferred (“performance obligations”), we can determine the transaction price for the goods or services to be transferred, thecontract has commercial substance and it is probable that we will collect the consideration to which we will be entitled in exchange for the goods or services that willbe transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to a customer.Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted to governmental authorities. Refundsare estimated at contract inception and updated at the end of each reporting period if additional information becomes available. Revenue is recognized when controlof the product is transferred to the customer.We maintain a returns policy that allows our customers to return product within a specified period of time. The estimate of the provision for returns is basedupon historical experience with actual returns.Principal versus Agent ConsiderationsWe follow the guidance provided in ASC 606 for determining whether we are a principal or an agent in arrangements with customers, by assessing whetherthe nature of our promise is a performance obligation to provide the specified goods (principal) or to arrange for those goods to be provided by the other party(agent). With regard to products being sold by Orgad through Amazon, this determination involves judgment. We determine it is the principle when it has controlover the promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).We recognize revenue ratably over the contractual service term for hosted services that are priced based on a committed number of transactions where thedelivery and consumption of the benefit of the services occur evenly over time, beginning on the date the services associated with the committed transactions arefirst made available to the customer and continuing through the end of the contractual service term. Over usage fees and fees based on the actual number oftransactions are billed in accordance with contract terms as these fees are incurred and are included in the transaction price of an arrangement as variableconsideration. Fees based on a number of transactions or impressions per month, are allocated to the period in which the transactions occur. Revenue forsubscriptions sold as a fee per period is recognized ratably over the contractual term as the customer simultaneously receives and consumes the benefit of theunderlying service.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.As a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.50ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAMY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2022U.S. DOLLARS IN THOUSANDSINDEXPageReport of Independent Registered Public Accounting Firm (PCAOB ID: ID 1057)F2Consolidated Balance SheetsF4Consolidated Statements of Comprehensive LossF5Consolidated Statements of Shareholders’ EquityF6Consolidated Statements of Cash FlowsF7Notes to Consolidated Financial StatementsF8 F33F1Report of Independent Registered Public Accounting FirmTo the Shareholders and Board of DirectorsMy Size, Inc.:Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of My Size, Inc. and subsidiaries (the Company) as of December 31, 2022 and 2021, the relatedconsolidated statements of comprehensive loss, shareholders’ equity, and cash flows for each of the years in the twoyear period ended December 31, 2022, and therelated notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, thefinancial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the twoyear periodended December 31, 2022, in conformity with U.S. generally accepted accounting principles.Going ConcernThe accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1d tothe consolidated financial statements, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit thatraises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1d. Theconsolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidatedfinancial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Critical Audit MattersCritical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to becommunicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved ourespecially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidatedfinancial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters oron the accounts or disclosures to which they relate.Acquisitiondate fair value of customer relationshipsAs discussed in Note 16 to the consolidated financial statements, on October 11, 2022, the Company acquired Naiz Bespoke Technologies SL (“Naiz”). As a result ofthe transaction, the Company acquired customer relationships intangible assets (“customer relationships”) representing the generation of future income from Naiz’sexisting customers. The acquisition date fair value of the customer relationships was $726 thousand.F2We identified the evaluation of the acquisitiondate fair value of the Naiz customer relationships as a critical audit matter. A high degree of subjective auditorjudgment was required to evaluate the following internally developed assumptions used to estimate the fair value of such asset, for which there were limitedobservable inputs: (i) forecasted revenues attributable to existing customers, (ii) forecasted earnings before interest, taxes, depreciation, and amortization(“EBITDA”) margins for the acquired business, (iii) estimated annual customer attrition rates and (iv) estimated discount rate. The determined fair value wassensitive to changes in these key assumptions. Additionally, specialized skills and knowledge were needed to evaluate the discount rate used.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s acquisitiondate fair value estimation process, including controls over the development of key assumptions. We performed a sensitivity analysis toassess the impact of reasonably possible changes to forecasted revenues, EBITDA margins, annual customer attrition rates, and the discount rate. We evaluated theforecasted revenue growth rates from existing customers by comparing the growth assumptions to those of the Company’s peers and industry reports. Inconnection with our assessment of the forecasts used in the valuation, we compared (1) forecasted revenue and EBITDA to Naiz’s historical actual results and (2)estimated annual customer attrition rates to historical Naiz customer attrition data. We tested the Company’s determined weighted average cost of capital(“WACC”), which was used to determine the discount rate, by involving valuation professionals with specialized skills and knowledge, who assisted in:Evaluating the selected discount rate by comparing it against a discount rate range that was independently developed using publicly available market datafor comparable companies, and;Assessing the Company’s WACC calculation, by comparing it against an independently estimated WACC range based on inputs obtained throughpublished surveys and studies.Goodwill impairment assessmentAs discussed in Note 16 to the consolidated financial statements, during 2022 the Company recorded goodwill of $1,257 thousand related to the acquisition of NaizBespoke Technologies, S.L. (“Naiz”). The Company performed an annual quantitative impairment test of goodwill at the reporting unit level. Based on this analysis,the Company determined that the fair value of its reporting unit exceeded its carrying value and no impairment charge was required.We identified the evaluation of the goodwill impairment assessment for the Naiz reporting unit as a critical audit matter. A high degree of subjective auditor judgmentwas required to evaluate the following assumptions used to estimate the fair value of the Company’s reporting unit, for which there were limited observable inputs:(i) forecasted reporting unit cash flows, (ii) longterm growth rates, and (iii) discount rates. The fair value was sensitive to changes in these key assumptions.Additionally, specialized skills and knowledge were needed to evaluate the discount rates.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s goodwill impairment evaluation process. We performed sensitivity analyses to assess the impact of reasonably possible changes to forecasted cashflows, longterm growth rates, and discount rates. We evaluated the Company’s forecasted growth rates by comparing the growth assumptions to those of theCompany’s peers and industry reports. We compared the Company’s forecasted revenue, cost of sales, and operating expense margins to historical actual results toassess the reasonableness of the forecasts. In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:– Assessing the Company’s WACC calculation, by comparing it against an estimated WACC range based on inputs obtained through published surveys andstudies– Evaluating the discount rates used by the Company by comparing them against discount rate ranges that were developed using publicly available market data forcomparable companies, and;– Performing an arithmetic recalculation regarding the fair value of the Company’s reporting unit, using the Company’s cash flow forecasts and the independentlydeveloped discount rates, and comparing the results to the Company’s fair value estimates./s/ Somekh ChaikinSomekh ChaikinMember Firm of KPMG InternationalWe have served as the Company’s auditor since 2017.Tel Aviv, IsraelApril 14, 2023F3MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED BALANCE SHEETSU.S. dollars in thousands (except share data)December 31,Note20222021AssetsCurrent assetsCash and cash equivalents32,10010,670Restricted cash263273Inventory997Account receivables1,94040Other receivables and prepaid expenses4758579Total current assets6,05811,562Long term deposits28Property and equipment, net5140112Operating rightofuse asset6583776Intangible assets71,377Goodwill71,395Investment in JV899Investment in marketable securities11471083,669996Total assets9,72712,558Liabilities and shareholders’ equityCurrent liabilitiesOperating lease liability6159138Shortterm loans9155Trade payables2,487635Liabilities to Related parties69863Other payables680392Total current liabilities4,1791,228Longterm loans9376Deferred tax liabilities328Operating lease liability6308473Total noncurrent liabilities1,012473CONTINGENCIES AND COMMITMENTS15Total Liabilities5,1911,701Shareholders’ equity13Stock capital Common stock of $0.001par value Authorized: 250,000,000and 100,000,000shares as of December 31,2022 and 2021; Issued and outstanding: 1,464,117and959,297 as of December 31,2022 and 2021, respectively (*)11Additional paidin capital58,67356,453Accumulated other comprehensive loss(637)(406)Accumulated deficit(53,501)(45,191)Total shareholders’ equity4,53610,857Total liabilities and shareholders’ equity9,72712,558(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F4MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSSU.S. dollars in thousands (except share data and per share data)Year endedDecember 31,Note20222021Revenues4,459131Cost of revenues(3,825)Gross profit634131Operating expensesResearch and development(1,701)(4,248)Sales and marketing18(3,143)(2,336)General and administrative19(3,900)(4,124)Total operating expenses(8,744)(10,708)Operating loss(8,110)(10,577)Financial income (expense), net20(236)57Loss before taxes(8,346)(10,520)Taxes on income36Net loss for the year(8,310)(10,520)Other comprehensive income (loss):Foreign currency translation differences(231)18Total comprehensive loss(8,541)(10,502)Basic and diluted loss per share (*)(7.47)(17.75)Basic and diluted weighted average number of shares outstanding (*)1,111,913420,385(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F5MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITYU.S. dollars in thousands (except share data)Common stockAdditionalpaidinAccumulatedothercomprehensiveAccumulatedTotalstockholders’NumberAmountcapitallossDeficitequityBalance as of January 1, 2021289,314(*)37,171(424)(34,671)2,076Stockbased compensation related to optionsgranted to employees and consultants373373Exercise of options granted to employees178(*)Restricted shares issued to shareholder (***)100,000(*)2,6182,618Issuance of shares, net of issuance cost of$1,160434,700112,58212,583Exercise of warrants135,108(*)3,7093,709Total comprehensive income (loss)18(10,520)(10,502)Balance as of December 31, 2021959,300156,453(406)(45,191)10,857Stockbased compensation related to optionsand restricted shares granted to employeesand consultants176,000(*)455455Issuance of shares in Business Combination(**)295,802(*)1,4461,446Issuance of shares post BusinessCombination (**)20,924(*)319319Effect of reverse stock split (Note 13 g)12,091(*)Total comprehensive income (loss)(231)(8,310)(8,541)Balance as of December 31, 20221,464,117158,673(637)(53,501)4,536(*)Represents an amount of less than $1.(**)See note 16(***)See note 1 bThe accompanying notes are an integral part of the consolidated financial statements.F6MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSU.S. dollars in thousandsYear endedDecember 31,20222021Cash flows from operating activities:Net loss(8,310)(10,520)Adjustments to reconcile net loss to net cash used in operating activities:Depreciation3842Change in operating lease rightofuse asset13543Amortization of intangible assets155foreign exchange differences(23)1Change in liabilities to related parties635Interest on long term liabilities10Interest paid(10)Revaluation of investment in marketable securities62(49)Restricted Shares issued to shareholder2,618Stock based compensation455373Issuance of shares post Business Combination319Change in inventory(219)Change in deferred tax liabilities(36)Change in account receivable(1,863)(12)Changes in operating lease liabilities(142)Change in other receivables and prepaid expenses184(99)Change in trade payables1,315253Change in other payables553Net cash used in operating activities(7,290)(7,297)Cash flows from investing activities:Acquisition of a subsidiary, net of cash acquired(767)Proceeds from restricted deposits, net184investing in other receivable(100)Investment in equity accounted investee(99)Purchase of property and equipment(27)(23)Net cash (used in) provided by investing activities(993)161Cash flows from financing activities:Proceeds from issuance of shares, net of issuance costs12,583Repayment of loans(67)Proceeds from exercise of warrants3,709Net cash (used in) provided by financing activities(67)16,292Effect of exchange rate fluctuations on cash and cash equivalents(230)13Change in cash and cash equivalents and restricted cash(8,580)9,169Cash and cash equivalents and restricted cash at the beginning of the year10,9431,774Cash and cash equivalents and restricted cash at the end of the year2,36310,943B) Aggregate cash flows derived for the Company as a result of the Orgad acquisition (note 16)2022Trade and other receivables364Inventory864Fixed assets55Longterm deposits31Selling Platform378Goodwill152Shortterm credit(181)Trade payables(580)Other payables(88)Longterm loan(138)Longterm provision(13)Deferred Tax Liability(87)Issuance of shares(457)Total acquisition of subsidiary, net of cash300C) Aggregate cash flows derived for the Company as a result of the Naiz acquisition (note 16)2022Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Issuance of shares(1,008)Total acquisition of subsidiary, net of cash467The accompanying notes are an integral part of the consolidated financial statements.F7MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERALa.My Size, Inc. is developing unique measurement technologies based on algorithms with applications in a variety of areas, from the apparel ecommerce market, to the courier services market and to the Do It Yourself (“DIY”) smartphone and tablet apps market. The technology is driven byproprietary algorithms, which are able to calculate and record measurements in a variety of novel ways.Following the acquisition of Naiz Bespoke Technologies, S.L (“Naiz”) in October 2022 (see note 16), the Company expanded its offering outreachand customer base.Following the acquisition of Orgad International Marketing Ltd. (“Orgad”) in February 2022 (see note 16), the Company also operates anomnichannel ecommerce platform.The Company has five subsidiaries, My Size Israel 2014 Ltd (“My Size Israel”), Topspin Medical (Israel) Ltd., and Orgad all of which areincorporated in Israel, and My Size LLC which was incorporated in the Russian Federation and Naiz Bespoke Technologies, S.L., a limited liabilitycompany incorporated under the laws of Spain (see note 16). References to the Company include the subsidiaries unless the context indicatesotherwise.My Size, Inc., was incorporated and commenced operations in September 1999, as Topspin Medical Inc. (“Topspin”), a private company registeredin the State of Delaware. In December 2013, the Company changed its name to Knowledgetree Ventures Inc. Subsequently, in February 2014, theCompany changed its name to My Size, Inc. Topspin was engaged, through its Israeli subsidiary, in research and development in the field ofcardiology and urology.Since September 1, 2005, the Company has traded on the Tel Aviv Stock Exchange (“TASE”).Between 2007 and 2012 the Company reported as a public company with the U.S. Securities and Exchange Commission (the “SEC”). In August2012, the Company suspended its reporting obligations under Section 13(a) and 15(d) of the Securities Exchange Act of 1934. In mid2015, theCompany resumed reporting as a public company.b.On January 9, 2014, at the Company’s general meeting of shareholders, its shareholders approved an engagement with one of the Company’sinvestors (the “Seller”) for the purchase of rights in a Venture (the “Venture”), including the rights to the method and the certain patent applicationthat had been filed by the Seller (the “Assets”). The Venture relates to the development of technologies and applications which will assist theconsumer to take his or her body measurements accurately using a mobile device to ensure the purchase of clothing with the best possible fitwithout the need to try them on.In February 2014, the Company established a wholly owned subsidiary, My Size (Israel) 2014 Ltd., a company registered in Israel, which iscurrently engaged in the development of the Venture described above.In return for purchasing an interest in the Venture, the Company undertook to pay the Seller 18% of the Company’s operating profit, direct orindirect, connected to the Venture for a period of seven years starting from the end of the Venture’s development period.As part of the agreement, the Seller received an option to buy back the Assets for consideration which will reflect the market fair value at that time,on the occurrence of the following events: a) if a motion is filed to liquidate the Company; b) if seven years after signing the agreement, theCompany’s total accumulated revenues, direct or indirect, from the Venture or the commercialization of the patent will be lower than NIS 3.6 million.In such an event, Seller may repurchase the interest in the Venture at a market price to be determined by an independent third party valuationconsultant, who shall be chosen by agreement by the parties, and the audit committee shall conduct the negotiations on behalf of the Company todetermine the identity of the consultant.On May 26, 2021, the Company, My Size Israel and Shoshana Zigdon entered into an Amendment to Purchase Agreement (the “Amendment”)which made certain amendments to a Purchase Agreement between the parties dated February 16, 2014 (the “Purchase Agreement”). Pursuant tothe Amendment, Ms. Zigdon agreed to irrevocably waive the right to repurchase certain assets related to the collection of data for measurementpurposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which the Company’s business is substantiallydependent, and all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My Size Israel underthe Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation,reward or any rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights(the “Waiver”). In consideration of the Waiver, the Company issued 100,000 shares of common stock to Ms. Zigdon in a private placement.F8MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERAL (Cont.)c.On July 25, 2016, the Company’s common stock began publicly trading on the Nasdaq Capital Market under the symbol “MYSZ”. The Company’sshares of common stock are listed both on the Nasdaq Capital Market and TASE.d.Since inception, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit of $53,501.The Company has financed its operations mainly through fundraising from various investors.The Company’s management expects that the Company will continue to generate losses and negative cash flows from operations for theforeseeable future. Based on the projected cash flows and cash balances as of December 31, 2022, management is of the opinion that its existingcash will be sufficient to fund operations for a period less than 12 months. As a result, there is substantial doubt about the Company’s ability tocontinue as a going concern.Management’s plans include the continued commercialization of the Company’s products and securing sufficient financing through the sale ofadditional equity securities, debt or capital inflows from strategic partnerships. Additional funds may not be available when the Company needsthem, on terms that are acceptable to it, or at all. If the Company is unsuccessful in commercializing its products and securing sufficient financing,it may need to cease operations.The financial statements include no adjustments for measurement or presentation of assets and liabilities, which may be required should theCompany fail to operate as a going concern.e.The Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificial intelligencedriven measurement solutions (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions. The fashion and equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. The SaaS based innovativeartificial intelligence driven measurement solutions, or SaaS Solutions operating segment consists of My Size Inc My Size Israel and LLC.NOTE 2 SIGNIFICANT ACCOUNTING POLICIESThe consolidated financial statements are prepared according to United States generally accepted accounting principles (“U.S. GAAP”), applied on aconsistent basis, as followsa.Use of estimates:The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions thataffect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.Information about assumptions made by the Company with respect to the future and other reasons for uncertainty with respect to estimates thathave a significant risk of resulting in a material adjustment to carrying amounts of assets and liabilities in the next financial year are included in thefollowing notes:Acquisitions of subsidiariesThe Company measures the fair value of the consideration transferred (including contingent consideration) and fair value of the assets acquiredand liabilities assumed, in business combination transactions. For information on details on fair value measurement in acquisition of subsidiaries,see Note 16 regarding business combinations.Estimated impairment of nonfinancial assetsThe Company examines on an annual basis whether there is an impairment of goodwill, intangibles and property, plant and equipment that areallocated to cash generating units, in accordance with the accounting policy presented in Note 1(h) below. Recoverable amounts of cashgenerating units are determined on the basis of valueinuse calculations. These calculations require the use of estimates.For information on key assumptions used in calculation of the recoverable amount, see note 7 – Goodwill and other Intangible assets.b.Functional currency:The currency of the primary economic environment in which the operations of the Company is conducted is the United States Dollar and thus it isthe Company’s functional currency. The reporting currency according to which these financial statements are prepared is the U.S. dollar.The currency of the primary economic environment in which the operation of the Subsidiary, My Size Israel and Orgad International MarketingLtd. functional currency is the New Israeli Shekel (“NIS”).The currency of the primary economic environment in which the operation of the Subsidiary, My Size LLC, functional currency is Russian Ruble.The currency of the primary economic environment in which the operation of the Subsidiary, Naiz fit, functional currency is Euro.F9MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)c.Principles of consolidation:The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances andtransactions have been eliminated upon consolidation.d.Cash equivalents:Cash equivalents are shortterm highly liquid investments that are readily convertible to cash with original maturities of three months or less at thedate acquired.e.Restricted cashRestricted cash are deposits for rent, credit card and for hedging activities.f.Inventories:Inventories include finished goods and are measured at the lower of cost or net realizable value. The cost of inventories comprises of the costsincurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary courseof business. At the point of the loss recognition, a new, lowercost basis for that inventory is established, and subsequent changes in facts andcircumstances do not result in the restoration or increase in that newly established cost basis. The costs of purchase of inventories comprise thepurchase price and other costs directly attributable to the acquisition of finished goods. In 2022, the Company recorded an inventory markdownof $48.g.Property and equipment:Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straightline method over theestimated useful lives of the assets, at the following annual rates:%Computers and peripheral equipment33Office furniture and equipment720Leasehold improvementsOver the term of the leaseor the useful life of theimprovements, whicheveris shorterh.Impairment of longlived assets:The Company’s property and equipment are reviewed for impairment in accordance with ASC 360, “Property Plant and Equipment”, wheneverevents or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held andused is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by theassets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount ofthe assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less sellingcosts. During the periods ended December 31, 2022 and 2021, no impairment losses have been recorded.i.Business combinations:The Company applies the provisions of ASC 805, “Business Combination” and allocates the fair value of purchase consideration to the tangibleassets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchaseconsideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assetsacquired and liabilities assumed, the Company estimated the future expected cash flows from acquired platform, customer relationships,Technology and trademark from a market participant perspective, useful lives and discount rates. In addition, management makes significantestimates and assumptions, which are uncertain, but believed to be reasonable.Acquisitionrelated costs are recognized separately from the acquisition and are expensed as incurred.F10MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)j.Goodwill:Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a businesscombination. Under ASC 350, “Intangible Goodwill and Other”, goodwill is not amortized, but rather is subject to an annual impairment test.ASC 350 requires goodwill to be tested for impairment at the reporting unit level at least annually, the fourth quarter, or between annual tests incertain circumstances, and written down when impaired. Goodwill is tested for impairment by comparing the fair value of the reporting unit with itcarrying value. Goodwill from Orgad acquisition was allocated to the fashion and equipment ecommerce platform segment and Goodwill from theNaiz acquisition was allocated to Naiz segment based innovative artificial intelligence driven measurement solutions.Alternatively, ASC 350 permits an entity to bypass the qualitative assessment for any reporting unit and proceed directly to performing the firststep of the goodwill impairment test. There were no impairment charges to goodwill during the period presented.k.Intangible assets:Intangible assets consist of identifiable intangible assets that the Company has acquired from previous business combinations. Intangible assetsare recorded at costs, net of accumulated amortization. The Company amortizes its intangible assets reflecting the pattern in which the economicbenefits of the intangible assets are consumed. When a pattern cannot be reliably determined, the Company uses a straightline amortizationmethod. Amortization is calculated by the straightline method over the estimated useful lives of the following assets.The estimated useful lives of the company’s intangible assets are as follows:yearsCustomer Relationships7Technology5Trademark5Selling Platform3Each period the Company evaluates the estimated remaining useful lives of its intangible assets and whether events or changes in circumstanceswarrant a revision to the remaining period of amortizationl.Severance pay:The Subsidiary’s liability for severance pay is covered by Section 14 of the Israeli Severance Pay Law (“Section 14”). Under Section 14, employeesin Israel are entitled to have monthly deposits, at a rate of 8.33% of their monthly salary, made on their behalf to their insurance funds. Payments inaccordance with Section 14 exempt the Subsidiary from any additional obligation for these employees. As a result, the Subsidiary does notrecognize any liability for severance pay due to these employees and the deposits under Section 14 are not recorded as an asset in theSubsidiary’s balance sheet. These contributions for compensation represent defined contribution plans and expenses are recorded based onactual deposits.Other than the My Size Israel’s liability there are no additional severance pay liabilities.F11MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)m.Research and development costs:Research and development costs are charged to the statement of operations, as incurred. Most of the research and development expenses are forwages, related expenses and subcontractors.n.Income taxes:The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilitiesfor the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Companies’ taxreturns. Deferred taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities using enactedtax rates in effect in the years in which the differences are expected to reverse. The Company assesses the likelihood that its deferred tax assetswill be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely thannot that all or a portion of deferred tax assets will not be realized. The Company establishes a valuation allowance, if necessary, to reduce deferredtax assets to the amount more likely than not to be realized. As of December 31, 2022, and 2021, a full valuation allowance was established by theCompany.The Company implements a twostep approach to recognize and measure the benefit of its tax positions. The first step is to evaluate the taxposition taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that,on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigationprocesses. The second step is to measure the tax benefit as the largest amount that is greater than 50 percent (cumulative basis) likely to berealized upon settlement.The Company believes that its tax positions are all highly certain of being upheld upon examination. As of December 31,2022 and 2021 the Company recorded a liability for unrecognized tax benefits of $328 and none respectively.o.Accounting for stockbased compensation:The Company accounts for its employees’ stockbased compensation as an expense in the financial statements based on ASC 718. All awards areequity classified and therefore such costs are measured at the grant date fair value of the award and graded vesting attribution approach torecognize compensation cost over the vesting period. The Company estimates stock option grant date fair value using the Binomial and BlackScholes option pricingmodel.The Company recorded stock options issued to nonemployees at the grant date fair value, and recognizes expenses over the related serviceperiod by using the straightline attribution approach in accordance with ASU 201807. All awards are equity classified.The expected volatility of the share prices reflects the assumption that the historical volatility of the share prices is reasonably indicative ofexpected future trends.The riskfree interest rate for grants with an exercise price denominated in USD for employees and several consultants is based on the yield fromUS treasury zerocoupon bonds with an equivalent term.The Company has historically not paid dividends and has no foreseeable plans to pay dividends.F12MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)p.Fair value of financial instruments:ASC 820, Fair Value Measurements and Disclosures, relating to fair value measurements, defines fair value and established a framework formeasuring fair value. The ASC 820 fair value hierarchy distinguishes between market participant assumptions developed based on market dataobtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptionsdeveloped based on the best information available in the circumstances. ASC 820 defines fair value as the price that would be received to sell anasset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price. Inaddition, the fair value of assets and liabilities should include consideration of nonperformance risk, which for the liabilities described belowincludes the Company’s own credit risk.As a basis for considering such assumptions, ASC 820 establishes a threetier value hierarchy, which prioritizes the inputs used in the valuationmethodologies in measuring fair value:Level 1 Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access. Valuationadjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readilyand regularly available in an active market, valuation of these products does not entail a significant degree of judgment.Level 2 Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, eitherdirectly or indirectly.Level 3 Valuations based on inputs that are unobservable and significant to the overall fair value measurement.The Company holds share certificates in iMine Corporation (“iMine”) formerly known as Diamante Minerals, Inc., a publiclytraded company onthe OTCQB.Due to sales restrictions on the sale of the iMine shares, the fair value of the shares was measured on the basis of the quoted market price for anotherwise identical unrestricted equity instrument of the same issuer that trades in a public market, adjusted to reflect the effect of the salesrestrictions and is therefore, ranked as Level 2 asset.q.Basic and diluted net loss per share:Basic net loss per share is computed based on the weighted average number of shares of common stock outstanding during each year. Diluted netincome per share is computed based on the weighted average number of shares of common stock outstanding during each year plus dilutivepotential equivalent common stock considered outstanding during the year, in accordance with ASC 260, “Earnings per Share”. For the yearsended December 31, 2022 and 2021, all outstanding options and warrants have been excluded from the calculation of the diluted net loss per sharesince their effect was antidilutive.r.Concentrations of credit risk:Financial instruments that potentially subject the Company and its subsidiaries to concentrations of credit risk consist principally of cash andcash equivalents.Cash and cash equivalents are invested in banks in Israel, Spain and United States. Such deposits in United States may be in excess of insuredlimits and are not insured in other jurisdictions. Management believes that the financial institutions that hold the Company’s investments arefinancially sound and, accordingly, minimal credit risk exists with respect to these investments.The Company and its subsidiaries have no offbalancesheet concentration of credit risk such as foreign exchange contracts, option contracts orother foreign hedging arrangements.F13MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)s.Revenue Recognition:The Company’s revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled softwaresubscriptions, associated software maintenance and support.The Company recognizes revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with acustomer exists only when: the parties to the contract have approved it and are committed to perform their respective obligations, the Companycan identify each party’s rights regarding the distinct goods or services to be transferred (“performance obligations”), the Company can determinethe transaction price for the goods or services to be transferred, the contract has commercial substance and it is probable that the Company willcollect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to acustomer. Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted togovernmental authorities. Refunds are estimated at contract inception and updated at the end of each reporting period if additional informationbecomes available. Revenue is recognized when control of the product is transferred to the customer.The Company maintains a returns policy that allows its customers to return product within a specified period of time. The estimate of the provisionfor returns is based upon historical experience with actual returns.Principal versus Agent ConsiderationsThe Company follows the guidance provided in ASC 606 for determining whether it is a principal or an agent in arrangements with customers, byassessing whether the nature of the Company’s promise is a performance obligation to provide the specified goods (principal) or to arrange forthose goods to be provided by the other party (agent). With regard to products being sold by Orgad through Amazon, this determination involvesjudgment. The Company determines it is the principle when it has control over promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).The Company recognizes revenue ratably over the contractual service term for hosted services that are priced based on a committed number oftransactions where the delivery and consumption of the benefit of the services occur evenly over time, beginning on the date the servicesassociated with the committed transactions are first made available to the customer and continuing through the end of the contractual serviceterm. Over usage fees and fees based on the actual number of transactions are billed in accordance with contract terms as these fees are incurredand are included in the transaction price of an arrangement as variable consideration. Fees based on a number of transactions or impressions permonth, are allocated to the period in which the transactions occur. Revenue for subscriptions sold as a fee per period is recognized ratably overthe contractual term as the customer simultaneously receives and consumes the benefit of the underlying service.F14MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)t.Contingencies and CommitmentsLiabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it isprobable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with losscontingencies are expensed as incurred.u.Derivative instrumentsThe Company accounts for its derivative instruments as either assets or liabilities and measures them at fair value through profit or loss.v.LeasesThe Company leases include an office space lease agreement for 36 months, with an option to extend for an additional 36 months and 36 monthscancelable operating lease agreements on behalf of personnel vehicles. The lease term includes a noncancellable period of the lease plus anyadditional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise,or an option to extend (or not to terminate) the lease controlled by the lessor.ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make leasepayments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value oflease payments over the lease term. The company generally use its incremental borrowing rate based on the estimated rate of interest forcollateralized borrowing over a similar term of the lease payments at commencement date. Lease expense for lease payments is recognized on astraightline basis over the lease term.For the office rent lease, the Company has elected to account for the lease and nonlease maintenance components as a single lease component.Therefore, the lease payments used to measure the lease liability include all of the fixed consideration in the contract, including insubstance fixedpayments, owed over the lease term.w.Impact of recently issued accounting standardIn June 2016, the FASB issued ASU 201613, “Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses on FinancialInstruments”, which requires companies to measure credit losses of financial instruments, including customer accounts receivable, utilizing amethodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information toinform credit loss estimates. Subsequent to the issuance of ASU 201613, the FASB issued several additional Accounting Standard Updates toclarify implementation guidance, provide narrowscope improvements and provide additional disclosure guidance. As an Emerging GrowthCompany, ASU 201613 is effective for fiscal years beginning after December 15, 2022. The Company does not expect this ASU to have a materialimpact on its consolidated financial statements.F15MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 3 CASH AND CASH EQUIVALENTSThe Company’s cash and cash equivalents balance at December 31, 2022 and 2021 is denominated in the following currencies:December 31,20222021US Dollars1,65110,184New Israeli Shekels259433Other190532,10010,670NOTE 4 OTHER RECEIVABLES AND PREPAID EXPENSESDecember 31,20222021Prepaid expenses and other current assets322429Government authorities28317Other153133Total758579NOTE 5 PROPERTY AND EQUIPMENT, NETComputersandperipheralequipmentOfficefurnitureandequipmentLeaseholdimprovementsTotalCostBalance as at January 1, 20211825860300Additions2323Translation adjustments72211Balance as at December 31, 20212126062334Balance as at January 1, 20222126062334Additions161127Business combination401555Translation adjustments(32)(8)(8)(48)Balance as at December 31, 20222367854368Accumulated DepreciationBalance as at January 1, 20211461412172Additions2751042Translation adjustments6118Balance as at December 31, 20211792023222Balance as at January 1, 20221792023222Additions209938Translation adjustments(27)(3)(2)(32)Balance as at December 31, 20221722630228Carrying amountsAs at December 31, 2021334039112As at December 31, 2022645224140F16MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 6 LEASESIn August 2019, The Company entered into an office space lease agreement. The lease term is for 36 months beginning on August 20, 2019 and endingon August 20, 2022, with an option to extend for an additional 36 months. The Company extended the lease period until August 20, 2025. Monthly rentpayments including utilities amounting to approximately USD 14 (NIS 49,500) per month.In addition, The Company entered into a threeyear cancelable operating lease agreement for cars.These operating leases are included in “Right of use asset” on the Company’s December 31, 2022 consolidated balance sheets, and represent theCompany’s right to use the underlying asset for the lease term. The Company’s obligations to make lease payments are included in the currentliabilities as “Operating lease liability” and in the noncurrent liabilities as “Operating lease liability long term” on the Company’s December 31, 2022consolidated balance sheets. As of December 31, 2022, rightofuse of asset was $583. operating lease liabilities were $159 and non current Operatinglease liabilities were $308. Rightofuse asset includes the capitalization of improvements (net of amortization) amounting to $105.Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value ofthe lease payments.The interest rate used to discount future lease payment was 11.95%.Maturities of lease liabilities as of December 31, 2022 were as follows:Year Ending:2023$1912024$1912025$127Thereafter$509Less imputed interest:$(42)Total lease liabilities$467F17MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 7 – Goodwill and other Intangible assetsA.Identified intangible assetsSchedule of Intangible assetsSelling PlatformTechnologyCustomerRelationshipsOtherTotalThousandsUSDThousandsUSDThousandsUSDThousandsUSDThousandsUSDCostAs of January 1, 2022Acquisitions through business combinations378286726771,467Effect of changes in exchange rates(32)2565765As of December 31, 2022346311791841,532AmortizationAs of January 1, 2022Amortization for the year including effect of changes inexchange rates as of December 31, 2022(109)(15)(27)(4)(155)Carrying amountAs of December 31, 2022237296764801,377AmortizationAmortization expenses recorded for identified intangible assets in the Consolidated Statements of Operations for each period and were as follows:Line ItemDecember 31,2022December 31,2021Selling platformCosts of revenues109TrademarkSales and marketing4TechnologyCosts of revenues15Customer relationshipsSales and marketing27Total amortization expenses155Future amortization expenses are expected to be as follows:20232024202520262027ThereafterTotalFuture amortization expenses3033031941771561791,312b.GoodwillThe changes in the carrying amount of goodwill for the years ended December 31, 2022 and 2021 were as follows:Fashion and equipmentecommerce platformNaizTotalBalance as of December 31, 2021Changes during the period:Goodwill acquired1521,1521,304Goodwill impairmentTranslation differences(14)10591Balance as of December 31, 20221381,2571,395The Company operates its business through three reporting segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovativeartificial intelligence driven measurement solutions and (iii) Naiz. See note 17 for additional segments information.The Company determines the fair value of its reporting units using the income approach. According to the income, the Company uses discounted cashflows to estimate the fair value. Cash flow projections are based on the Company’s estimates of revenue growth rates and operating margins, takinginto consideration the industry’s and market’s conditions. The discount rate used is based on the weighted average cost of capital (“WACC”),adjusted for the relevant risk associated with businessspecific characteristics.The Company performed a quantitative assessment as of December, 31 2022 for the reporting units’ fair value. The estimated fair value of the Fashionand equipment ecommerce platform and Naiz reporting units exceeded its estimated carrying amount by 95.9% and 27.7% respectively. This, based thefollowing assumptions:Fashion and equipmentecommerce platformNaizDiscount rate21%23%Terminal growth rate3%3%If business conditions or expectations were to change materially, it may be necessary to record impairment charges to the Company’s reporting units inthe future.F18MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 8 Investment in JVIn August 2022, the Company established a joint venture (“JV”) in Brazil with Santista Têxtil. The Company holds 51% and Santista Têxtil holds 49% of theJV. The purpose of the JV is to serve the Brazilian market according to the business plan that was set. Both parties agree to make an initial investment in theJV of $198that will be made per the holding percentage of each party. As of the reporting date, the JV is in process of establishing its operation.NOTE 9 Financial LiabilitiesThe book value of each of the financial liability categories is an acceptable approximation of fair value.The debt is comprised of four loans that were granted to My Size Israel – in an outstanding amount of approximately $131, bearing interest rangingfrom prime rate to prime+2.8% rate, and four loans that were granted to the Spanish subsidiary– in an outstanding amount of approximately $400,bearing interest ranging from 1% to 3%.The financial liability maturities during the five years following the end of the financial year are shown below:UntilUntilUntilUntilUntilAfterTOTAL311223311224311225311226311227311227311222Debts with credit institutions15513892874712531NOTE 10 RELATED PARTIES TRANSACTIONSA. Balances with related parties:The following related party payables are included in liability to related parties.December 31,20222021Officers (*)4143Liability in respect of business combinations (**)739Other related parties (***)(95)Directors152069863(*)The amount includes the net salaries payables.(**)The amount includes the provision created to former owners of Orgad that are entitled to additional cash and equity consideration and former owners of Naizthat entitled to additional cash consideration, see note 16 business combination.(***)The amount includes an amount receivable from Orgad previous shareholders who currently work in the company.B. Related parties benefits:Year endedDecember 31,20222021Salaries and related expenses1,440852Share based payments39673Cash liability and equity liability expenses related to acquisitions (**)1,058Directors58582,952983(**)The amount includes the expenses for a provision created to former owners of Orgad that are entitled to additional cash and equity consideration and formerowners of Naiz that entitled to additional cash consideration, see note 16 business combination.NOTE 11 FINANCIAL INSTRUMENTSThe following tables presents the Company’s significant assets and liabilities that are measured at fair value on recurring basis and their classificationwithin the fair value hierarchy:December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities47financial assets (*)10December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesDerivatives9December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities108December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesWarrants derivative2(*)the financial asset includes in other receivables.F19MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 11 FINANCIAL INSTRUMENTS (Cont.)The carrying amounts of cash and cash equivalents, restricted cash, short term restricted deposit, accounts receivable, other receivables and prepaidexpenses, trade payable and accounts payable approximate their fair value due to the shortterm maturities of such instruments.At December 31, 2022, the recognized gain and fair value (based on quoted market prices with a discount due to security restrictions on iMine shares)of the marketable securities were $59and $47, respectively (at December 31, 2021 $49and $108, respectively).NOTE 12 TAXES ON INCOMEa.On December 31, 2022, the Company had U.S. federal net operating loss carryforwards of approximately $26 available to reduce future taxableincome. Utilization of the U.S. net operating losses may be subject to substantial limitations due to the change of ownership provisions of theInternal Revenue Code of 1986.The U.S. Company has final tax assessments through 2014.On December 22, 2017, the Tax Reform Act was signed into law. The legislation significantly changes U.S. tax law by, among other things, lowering theU.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. As a result of the decrease in the corporate incometax rate, the Company revalued the ending net deferred tax assets at December 31, 2017, but did not recognize any incremental income tax expense in2017 due to the revaluation of the valuation allowance.b.Foreign tax:1.Tax rates:Presented hereunder are the tax rates relevant to the Company’s Israeli subsidiaries:2022 23%2021 23% Presented hereunder are the tax rates relevant to the Company’s Spanish subsidiary:2022 24%2.The Company’s Israeli subsidiaries have estimated total available carryforward operating tax losses for Israeli income tax purposes ofapproximately $64as of December 31, 2022. Of these losses, a total of $47.5are owned by Topspin Medical (Israel) Ltd. Topspin tax lossesmay be offset only by future income with respect to the same operational activity by which it was incurred for an indefinite period of time. Theother losses are owned by My Size Israel and may be carryforward to offset against future income for an indefinite period of time.3.Topspin Medical (Israel) Ltd. and My Size (Israel) 2014 Ltd. has final tax assessments through 2016.c.U.S. and foreign components of loss from continuing operations, before income taxes consisted of:December 31,20222021U.S(1,180)(3,802)NonU.S. (foreign)(7,130)(6,718)(8,310)(10,520)F20MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 12 TAXES ON INCOME (Cont.)d.Deferred taxes:Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reportingpurposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows:December 31,20222021Deferred tax assets:Operating loss carryforwards20,13120,238Warrants and options145126Marketable securities390377Intangible assets(328)Research and development expenses586341Other temporary differences203Deferred tax assets before valuation allowance21,12721,082Valuation allowance(21,455)(21,082)Net deferred tax liability(328)The following table presents a reconciliation of the beginning and ending valuation allowance:December 31,20222021Balance at beginning of the year21,08218,968Additions in valuation allowance to the income statement1,7581,625Additions in valuation allowance due to exchange rate differences(1,385)489Balance at end of the year21,45521,082In assessing the realization of deferred tax assets, management considers whether it is more likely than not that all or some portion of the deferred taxassets will not be realized.The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporarydifferences are deductible and net operating losses are utilized. Based on consideration of these factors, the Company recorded a full valuationallowance at December 31, 2021 and 2020.e.Theoretical taxThe following presents the adjustment between the theoretical tax amount and the tax amount included in the financial statements:December 31,20222021Loss before income taxes8,34610,520Statutory tax rate21%21%Computed “expected” tax income1,7522,209Foreign tax rate differences and exchange rate differences149131Nondeductible expenses(107)(715)Change in valuation allowance(1,758)(1,625)Taxes on income36F21MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITYa.Common stock confers upon their holders the right to receive notice to participate and vote in general meetings of the Company, and the right toreceive dividends if declared.b.On January 8, 2021, the Company conducted a public offering of its securities pursuant to which it issued 62,768 shares of its common stock forgross proceeds of $2,008. The net proceeds to the Company from the offering were approximately $1,700, after deducting placement agent’s feesand other estimated offering expenses payable by the Company.c.During 2021, a holders of warrants exercised warrants to purchase 135,109 ordinary shares of the Company in exchange for $3,709.d.On March 25, 2021, the Company conducted a public offering of its shares of common stock pursuant to which it issued 104,741 shares of itscommon stock for gross proceeds of $3,300. The net proceeds to the Company from the offering were approximately $2,872, after deductingplacement agent’s fees and other estimated offering expenses payable by the Company.On May 7, 2021, the Company issued an additional 15,711 shares of the Company’s common stock in connection with the full exercise of theunderwriter’s overallotment option granted in the Company’s March 2021 public offering. These additional shares were sold to the underwriter at apublic offering price of $31.5 per share, resulting in additional net proceeds to the Company, net of the underwriting discount, of approximately$463.e.On May 26, 2021, the Company issued 100,000 shares of common stock to Ms. Zigdon in consideration of the Waiver. See note 1(b) above.f.On October 28, 2021, the Company sold in a registered direct offering 100,592 shares of its common stock and, in a concurrent private placement,an aggregate of 75,444 unregistered warrants to purchase shares of common stock, at an offering price of $33.8 per share and associated warrant.In addition, on the same day, the Company sold in a private placement 150,888 unregistered shares of common stock and unregistered warrants topurchase up to an aggregate of 113,166 shares of common stock at the same purchase price as in the registered direct offering. The warrants areimmediately exercisable and will expire five years from issuance at an exercise price of $31.5 per share, subject to adjustment as set forth therein.The gross proceeds from the offerings were $8,500. The net proceeds to the Company from the offerings were approximately $7,560, afterdeducting placement agent’s fees and other estimated offering expenses payable by the Company. In connection with the offerings, the Companyissued to the placement agent warrants to purchase 17,603 shares on substantially the same terms as the purchasers in the offerings at an exerciseprice of $42.25 per share and a term expiring on October 26, 2026.g.On December 7, 2022, the Company’s board of directors approved a 1for25 reverse stock split of the Company’s issued and outstanding sharesof common stock. The reverse stock split became effective on December 8, 2022. In order not to have fractional shares as a result of the reversestock split, the Company issued an additional 12,091 shares of common stock. As a result, all shares of common stock, options for shares ofcommon stock, exercise price and net loss per share amounts were adjusted retroactively for all periods presented in these financial statements.F22MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITY (Cont.)g.A summary of the warrant activity during the years ended December 31, 2022 and 2021 is presented below:Number ofWarrantsWeightedAverageExercisePriceWeightedAverageRemainingLife inYearsOutstanding, December 31, 2020216,85936.754.26Issued206,214Expired or exercised(135,109)Outstanding, December 31, 2021287,96431.004.35IssuedExpired or exercised(17,901)Outstanding, December 31, 2022270,06330.213.36Exercisable, December 31, 2022270,06330.213.36NOTE 14 STOCK BASED COMPENSATIONThe stockbased expense recognized in the financial statements for services received is related to Research and Development, Sales and Marketingand General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense Research and development15195Stockbased compensation expense Sales and marketing126180Stockbased compensation expense General and administrative17898455373The stockbased expense recognized in the financial statements for services received post Acquisition of Orgad (see note 16) is related to Cost OfGoods, Sales and Marketing and General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense – Cost of goods80Stockbased compensation expense Sales and marketing112Stockbased compensation expense General and administrative127319F23MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Options issued to consultantsWe can sell additional shares of common stock without consulting stockholders and without offering shares to existing stockholders, which wouldresult in dilution of shareholders’ interests in the company and could depress our stock price.Our Certificate of Incorporation currently authorizes 250,000,000 shares of common stock, of which 2,446,780 are currently outstanding as of March 31, 2023and our board of directors is authorized to issue additional shares of our common stock. Although our board of directors intends to utilize its reasonable businessjudgment to fulfil its fiduciary obligations to our then existing stockholders in connection with any future issuance of our capital stock, the future issuance ofadditional shares of our capital stock could cause immediate, and potentially substantial, dilution to our existing stockholders, which could also have a materialeffect on the market value of the shares. Further, other than certain participation rights that we have granted in a past offering, our shares do not have preemptiverights, which means we can sell shares of our capital stock to other persons without offering purchasers in this offering the right to purchase their proportionateshare of such offered shares. Therefore, any additional sales of stock by us could dilute your ownership interest in our Company.Our quarterly operating results may fluctuate significantly.We expect our operating results to be subject to quarterly fluctuations. Our net loss and other operating results will be affected by numerous factors,including:●variations in the level of expenses related to our research and development;●any lawsuits in which we may become involved;●regulatory developments affecting our products; and●our execution of any collaborative, licensing or sales agreements, and the timing of payments under these arrangements.If our quarterly operating results fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially.Furthermore, any quarterly fluctuations in our operating results may, in turn, cause the price of our common stock to fluctuate substantially.If we fail to comply with the rules under the Sarbanes Oxley Act of 2002 related to accounting controls and procedures or if we discover materialweaknesses and deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult.If we fail to comply with the rules under the SarbanesOxley Act of 2002 related to disclosure controls and procedures, or, if we discover materialweaknesses and other deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult. Section 404 of the SarbanesOxley Act requires annual management assessments of the effectiveness of our internal control over financial reporting and, ifwe are no longer a nonaccelerated filer, a report by our independent auditors addressing these assessments. If material weaknesses or significant deficiencies arediscovered or if we otherwise fail to achieve and maintain the adequacy of our internal control, we may not be able to ensure that we can conclude on an ongoingbasis that we have effective internal controls over financial reporting in accordance with Section 404 of the SarbanesOxley Act. Moreover, effective internalcontrols are necessary for us to produce reliable financial reports and are important to helping prevent financial fraud. If we cannot provide reliable financial reportsor prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price ofour common stock could drop significantly.38Our Certificate of Incorporation, Bylaws and Delaware law may have antitakeover effects that could discourage, delay or prevent a change incontrol, which may cause our stock price to decline.Our Certificate of Incorporation, Bylaws and Delaware law could make it more difficult for a thirdparty to acquire us, even if closing such a transactionwould be beneficial to our stockholders. Provisions of our Certificate of Incorporation, Bylaws and Delaware law also could have the effect of discouraging potentialacquisition proposals or making a tender offer or delaying or preventing a change in control, including changes a stockholder might consider favorable. Suchprovisions may also prevent or frustrate attempts by our stockholders to replace or remove our management. In particular, the Certificate of Incorporation, Bylawsand Delaware law, as applicable, among other things:●provide the board of directors with the ability to alter the Bylaws without stockholder approval;●the classification of our board of directors;●place limitations on the removal of directors;●provide that vacancies on the Board of Directors may be filled by a majority of directors in office, although less than a quorum;●require that stockholder actions must be affected at a duly called stockholder meeting and generally prohibiting stockholder actions by written consent;●eliminate the ability of stockholders to call a special meeting of stockholders; and●establish advance notice requirements for nominations for election to the Board of Directors or for proposing matters that can be acted upon at duly calledstockholder meetings.We are subject to Section 203 of the Delaware General Corporation Law which, subject to certain exceptions, prohibits “business combinations” between apubliclyheld Delaware corporation and an “interested stockholder,” which is generally defined as a stockholder who becomes a beneficial owner of 15% or more ofa Delaware corporation’s voting stock for a threeyear period following the date that such stockholder became an interested stockholder. These provisions areexpected to discourage certain types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to firstnegotiate with our board. These provisions may delay or prevent someone from acquiring or merging with us, which may cause the market price of our commonstock and the value of our securities to decline.If we fail to comply with the continued listing requirements of the Nasdaq Capital Market, our common stock may be delisted and the price of ourcommon stock and our ability to access the capital markets could be negatively impacted.Nasdaq has established certain standards for the continued listing of a security on the Nasdaq Capital Market. The standards for continued listing include,among other things, that the minimum bid price for the listed securities not fall below $1.00 per share for a period of 30 consecutive trading days and that wemaintain a minimum of $2,500,000 in shareholders’ equity. We have in the past fallen below the minimum bid price and minimum shareholders’ equity.39No assurance can be given that we will continue to be in compliance with the Rule. Failure to meet applicable Nasdaq continued listing standards couldresult in a delisting of our common stock. A delisting of our common stock from Nasdaq could materially reduce the liquidity of our common stock and result in acorresponding material reduction in the price of our common stock. In addition, delisting could harm our ability to raise capital through alternative financing sourceson terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, employees and fewer business development opportunities.The exercise of outstanding warrants and stock options will have a dilutive effect on the percentage ownership of our capital stock by existingstockholders.As of March 15, 2023, we had outstanding warrants to acquire 2,299,115 shares of our common stock and stock options to purchase 1,659 shares of ourcommon stock, which warrants and options are exercisable for prices ranging between $2.81 and $375. The expiration of the term of such options and warrants rangefrom 0.22 years to 4.83 years. If a significant number of such warrants and stock options are exercised by the holders, the percentage of our common stock ownedby our existing stockholders will be diluted.Were our common stock to become subject to the penny stock rules then this could result in U.S. brokerdealers becoming discouraged from effectingtransactions in shares of our common stock.Rule 15g9 under the Exchange Act establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a marketprice of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. If we do not retain a listing on the NasdaqCapital Market or do not meet certain net tangible asset or average revenue requirements and if the price of our common stock is less than $5.00, our common stockwill be deemed a penny stock. For any transaction involving a penny stock, unless exempt, the rules require: (a) that a broker or dealer approve a person’s accountfor transactions in penny stocks; and (b) the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantityof the penny stock to be purchased.In order to approve a person’s account for transactions in penny stocks, the broker or dealer must: (a) obtain financial information and investmentexperience objectives of the person and (b) make a reasonable determination that the transactions in penny stocks are suitable for that person and the person hassufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver,prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which: (a) sets forth the basis on whichthe broker or dealer made the suitability determination; and (b) confirms that the broker or dealer received a signed, written agreement from the investor prior to thetransaction. Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult forinvestors to dispose of our common stock and cause a decline in the market value of our common stock.Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissionspayable to both the broker or dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor incases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the accountand information on the limited market in penny stocks.Sales of our currently issued and outstanding stock may become freely tradable pursuant to Rule 144 and may dilute the market for your shares andhave a depressive effect on the price of the shares of our common stock.A portion of our outstanding shares of common stock are “restricted securities” within the meaning of Rule 144 under the Securities Act of 1933, asamended, or the Securities Act. As restricted shares, these shares may be resold only pursuant to an effective registration statement or under the requirements ofRule 144 or other applicable exemptions from registration under the Securities Act and as required under applicable state securities laws. Rule 144 provides inessence that an affiliate (as such term is defined in Rule 144(a)(1)) of an issuer who has held restricted securities for a period of at least six months (one year afterfiling Form 10 information with the SEC for shell companies and former shell companies) may, under certain conditions, sell every three months, in brokeragetransactions, a number of shares that does not exceed the greater of 1% of a company’s outstanding shares of common stock or the average weekly trading volumeduring the four calendar weeks prior to the sale (the four calendar week rule does not apply to companies quoted on the OTC Markets). Rule 144 also permits, undercertain circumstances, the sale of securities, without any limitation, by a person who is not an Affiliate of the Company and who has satisfied a oneyear holdingperiod. A sale under Rule 144 or under any other exemption from the Securities Act, if available, or pursuant to subsequent registrations of our shares of commonstock, may have a depressive effect upon the price of our shares of common stock in any active market that may develop.40We are a former “shell company” and as such are subject to certain limitations not applicable to other public companies generally.Prior to our suspension of reporting in 2012, we were a public reporting “shell company,” as defined in Rule 12b2 under the Exchange Act. Although weare no longer a “shell company,” we are subject to certain restrictions under the Securities Act for the resale of securities issued by issuers that have been at anytime previously a shell company. Specifically, the Rule 144 safe harbor available for the resale of our restricted securities is only available to our stockholders if wehave filed all reports and other materials required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934, as amended, or the Exchange Act, asapplicable, during the preceding twelve months, other than current reports on Form 8K, at the time of the proposed sale, regardless of whether the restrictedsecurities were initially issued at the time we were a shell company or subsequent to termination of such status. Accordingly, holders of our “restricted securities”within the meaning of Rule 144 will be subject to the conditions set forth in Rule 144 with respect to our company. Other reporting companies that are not formershell companies and have been reporting for more than twelve months are not subject to this same reporting threshold for nonaffiliate reliance on Rule 144.Accordingly, any restricted securities we have sold or sell in the future or issue to consultants or employees, in consideration for services rendered or for any otherpurpose, may not be resold unless such securities are registered with the SEC or the requirements of Rule 144 have been satisfied. As a result, it may be harder forus to fund our operations and pay our employees and consultants with our securities instead of cash. Furthermore, it may be harder for us to raise funding throughthe sale of debt or equity securities unless we agree to register such securities with the SEC, which could cause us to expend additional resources in the future. Ourprior status as a “shell company” could prevent us in the future from raising additional funds, engaging employees and consultants, and using our securities to payfor any acquisitions, which could cause the value of our securities, if any, to decline in value or become worthless.ITEM 1B. UNRESOLVED STAFF COMMENTSNone.ITEM 2. PROPERTIESWe currently lease 1,660 square feet of office space at 4 HaYarden Street, Airport City, Israel. The lease term is for 36 months beginning on August 20, 2019and ending on August 20, 2022, with an option to extend for an additional 36 months. Monthly rent payments, including utilities, amount to approximately $14,000per month. We extended the lease period until August 20, 2025.ITEM 3. LEGAL PROCEEDINGSFrom time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation issubject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.41North Empire LLCOn August 7, 2018, we commenced an action against North Empire LLC, or North Empire, in the Supreme Court of the State of New York, County of NewYork for breach of a Securities Purchase Agreement or Agreement in which we are seeking damages in an amount to be determined at trial, but in no event less than$616,000. On August 2, 2018, North Empire filed a Summons with Notice against us, also in the same Court, in which they allege damages in an amount of $11.4million arising from an alleged breach of the Agreement. On September 6, 2018, North Empire filed a Notice of Discontinuance of the action it had filed on August 2,2018. On September 27, 2018, North Empire filed an answer and asserted counterclaims in the action commenced by us against them, alleging that we failed to deliverstock certificates to North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against our CEO andnow former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018, we filed a reply to North Empire’scounterclaims. On November 15, 2018, our CEO and now former Chairman of the Board filed a motion to dismiss North Empire’s thirdparty complaint. On January 6,2020, the Court granted the motion and dismissed the thirdparty complaint. Discovery has been completed and both parties have filed motions for summaryjudgment in connection with the claims and counterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summaryjudgment, arguing there were factual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision.On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying the Company’s motion for summary judgment. On or about September 12,2022, the Court issued its Decision and Order denying the Company’s motion to reargue. North Empire filed its opposing brief on December 7, 2022. Both sides weregiven an opportunity to file a reply brief. We filed our reply brief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. Oral argument was heldbefore the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Court filed its Decision and Order, which affirmed the lower court’sdecisions regarding both My Size and North Empire’s motions for summary judgment and sent the case back to the Supreme Court. On or about March 13, 2023, theSupreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date for the mediation has not yet been set. We intend tovigorously defend any claims made by North Empire. We believe it is more likely than not that the counterclaims will be denied.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.42PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur stock currently is listed on the Tel Aviv Stock Exchange and the Nasdaq Capital Market under the symbol “MYSZ”. Our stock has been traded on theNasdaq Capital Market since July 25, 2016.HoldersAs of March 31, 2023, we had 70 shareholders of record. The actual number of stockholders is greater than this number of record holders and includesstockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our Board of Directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our Board of Directors deems relevant.Securities Authorized for Issuance under Equity Compensation PlansInformation about our equity compensation plans is incorporated herein by reference to “Item 12. Security Ownership of Certain Beneficial Owners andManagement and Related Stockholder Matters”, of this Annual Report on Form 10K.Recent Sales of Unregistered SecuritiesNone.ITEM 6. SELECTED FINANCIAL DATAAs a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULT OF OPERATIONSYou should read the following discussion along with our financial statements and the related notes included elsewhere in this Annual Report on Form10K. The following discussion contains forwardlooking statements that are subject to risks, uncertainties and assumptions, including those discussed under“Risk Factors.” Our actual results, performance and achievements may differ materially from those expressed in, or implied by, these forwardlooking statements.OverviewMySize is an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.43Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile device or through MySizeID Widget: a simple questionnaire which was uses a database collected over the years.MySizeID synchronizes the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and onlypresents items available for purchase that match their measurements to ensure a correct fit.MySize is positioning itself as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empowering brand design teams, which are designed to increaseend consumer satisfaction, contributing to a sustainable world and reduce operation costs.Orgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,682 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz BespokeTechnologies, S.L., or Naiz, a limited liability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.44The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 2,365,800 shares of My Size common stock were issuedto Whitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.45Operations in RussiaIn addition to our Israel operations, we had operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia. To date, mainly due to the invasion of Ukraine by Russia and the ongoing sanctions we stopped most ofour efforts in Russia and will probably close the subsidiary in the near future.Results of OperationsThe table below provides our results of operations for the periods indicated.Year ended December 3120222021(dollars in thousands)Revenues4,459131Cost of revenues(3,825)Gross profit634131Research and development expenses$(1,701)$(4,248)Sales and marketing(3,143)(2,336)General and administrative(3,900)(4,124)Operating loss(8,110)(10,577)Financial income (expenses), net(236)57Tax income36Net loss$(8,310)$(10,520)Year Ended December 31, 2022 Compared to Year Ended December 31, 2021RevenuesFrom inception through December 31, 2018, we did not generate any revenue from operations and we continue to expect to incur additional losses toperform further research and development activities. We started to generate revenues only in 2019. Our revenues for the year ended December 31, 2022 amounted to$4,459,000 compared to $131,000 for year ended December 31, 2021. The increase from the corresponding period primarily attributable to $4,132,000 in revenuegenerated from Orgad from February 7, 2022, the date of closing of the Orgad acquisition, or the Acquisition Date and revenue generated from the Naiz Acquisitionfrom October 11, 2022, the date of closing of the Naiz acquisition.In addition, the increase from the corresponding period results from an increase in revenues generated by My Size.Cost Of RevenuesOur cost of revenues expenses for the year ended December 31, 2022 amounted to $3,825,000, compared to none for the year ended December 31, 2021. Thecost of revenues includes cash and equity liabilities expenses in the amount of $194,000. The increase in comparison with the corresponding period was due to thecost of goods of the revenues generated from Orgad’s operations.Research and Development ExpensesOur research and development expenses for the year ended December 31, 2022 amounted to $1,701,000 a decrease of $2,547,000, or approximately 60.0%,compared to $4,248,000 for the year ended December 31, 2021. The decrease from the corresponding period primarily resulted from share based payment in amount of$2,618,000 attributed to the share issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021.Sales and Marketing ExpensesOur sales and marketing expenses for the year ended December 31, 2022 amounted to $3,143,000 an increase of $807,000, or 34.55%, compared to $2,336,000for the year ended December 31, 2021. The increase primarily resulted from an increase in employees expenses mainly due to Orgad and Naiz acquisitions, increase inAmazon fees, increase in cash and equity liabilities expenses attributed to the Orgad acquisition and an increase in share based payments offset by a decrease inpayments to consultants.46General and Administrative ExpensesOur general and administrative expenses for the year ended December 31, 2022 amounted to $3,900,000, a decrease of $224,000, or 5.43%, compared to$4,124,000 for the year ended December 31, 2021. The decrease compared to the corresponding period was mainly due to a decrease in professional expenses, mainlyattributed to shareholder activism including settlement expenses with the Lazar Parties offset by an increase in sharedbased payments and an increase in employeesexpenses mainly due to the Orgad and Naiz acquisitions.Operating LossAs a result of the foregoing, for the year ended December 31, 2022, our operating loss was $8,110,000, a decrease of $2,467,000 or 23.32%, compared to ouroperating loss for the year ended December 31, 2021 of $10,577,000.Financial Income, NetOur financial (expense) income, net for the year ended December 31, 2022 amounted to $236,000 compared to financial income, $57,000 for the year endedDecember 31, 2021. In 2022, we had financial expenses exchange rate differences offset by an income from fair value revaluation of investment in marketablesecurities whereas in 2021 we had financial income from the fair value revaluation of warrants offset by expenses from exchange rate differences and expenses fromfair value revaluation of investment in marketable securities.Net LossAs a result of the foregoing, our net loss for the year ended December 31, 2022 was $8,310,000 compared to net loss of $10,520,000 for the year endedDecember 31, 2021. The decrease in net loss was mainly due increase in sales and marketing expenses and financial expenses as opposed to financial income in thecorresponding period offset by a decrease in research and development expenses in amount of $2,618,000 attributed to the share issuance to Shoshana Zigdonunder the Amendment to Purchase Agreement dated May 26, 2021.Liquidity and Capital ResourcesSince our inception, we have funded our operations primarily through public and private offerings of debt and equity in Israel and in the U.S.As of December 31, 2022, we had cash, cash equivalents and restricted cash of $2,363,000 compared to $10,943,000 cash, cash equivalents, restricted cashas of December 31, 2021. During January 2023, we completed a registered direct and concurrent private placement offering resulting in gross proceeds ofapproximately $3 million. This decrease primarily resulted from our operating activities, the acquisition of Orgad and Naiz Fit, and resources that were deployed togrow of both businesses.Net cash used in operating activities was $7,290,000 for the year ended December 31, 2022 compared to $7,297,000 for the year ended December 31, 2021.The decrease in cash used in operating activity is derived mainly from an increase in share based payments and increase in account receivables mainly from theOrgad and Naiz fit acquisitions offset by a decrease in the net loss.Net cash used in investing activities for the year ended December 31, 2022 was $993,000 as opposed to net cash provided by investing activities of$161,000 for the year ended December 31, 2021. The net cash used in investing activities for the year ended December 31, 2022 was mainly from the acquisition ofOrgad and Naiz as opposed to proceeds from shortterm deposits and restricted deposits during the year ended December 31, 2021.We had a negative cash flow from financing activities of $67,000 for the year ended December 31, 2022 compared to positive cash flow of $16,292,000 for theyear ended December 31, 2021. The negative cash flow from financing activities for the year ended December 31, 2022 was mainly due to repayment of loans andinterest and payments for leases as opposed to proceeds from issuance of shares and from exercise of warrants for the year ended December 31, 2021.47We expect that we will continue to generate losses and negative cash flows from operations for the foreseeable future. Based on the projected cash flowsand cash balances as of December 31, 2022, together with the proceeds from the January 2023 financing, we believe our existing cash will not be sufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. We will need to raiseadditional capital, which may not be available on reasonable terms or at all. Additional capital would be used to accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;●respond to competitive pressures;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, the Russian invasion ofUkraine, the impact of any resurgence of the COVID19 pandemic and a number of other factors, many of which are outside our control, and on our financialperformance. Accordingly, we cannot assure you that we will be able to successfully raise additional capital at all or on terms that are acceptable to us. If we cannotraise additional capital when needed, it may have a material adverse effect on our business, results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.We have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.Recently Issued Accounting PronouncementsCertain recently issued accounting pronouncements are discussed in Note 2, Significant Accounting Policies, to the consolidated financial statementsincluded in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10K.OffBalance Sheet ArrangementsWe have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.48Application of Critical Accounting Policies and EstimatesOur management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we haveprepared in accordance with U.S. generally accepted accounting principles issued by the Financial Accounting Standards Board, or FASB. The preparation of thesefinancial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assetsand liabilities at the date of the financial statements, as well as the reported expenses during the reporting periods. Actual results may differ from these estimatesunder different assumptions or conditions.Our significant accounting policies were revenue from contracts with customers which are more fully described in the notes to our financial statementsincluded herein. We believe these accounting policies discussed below are critical to our financial results and to the understanding of our past and futureperformance, as these policies relate to the more significant areas involving management’s estimates and assumptions. We consider an accounting estimate to becritical if: (1) it requires us to make assumptions because information was not available at the time or it included matters that were highly uncertain at the time wewere making our estimate; and (2) changes in the estimate could have a material impact on our financial condition or results of operations.Accounting for business combinationsWe allocate the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed, based upon their estimated fairvalues at the acquisition date. These fair values are typically estimated with assistance from independent valuation specialists.The purchase price allocation process requires us to make significant estimates and assumptions, especially at the acquisition date with respect tointangible assets, contractual support obligations assumed, contingent consideration arrangements, and preacquisition contingencies.Although we believe the assumptions and estimates we have made in the past have been reasonable and appropriate, they are based in part on historicalexperience and information obtained from the management of the acquired companies and are inherently uncertain.Examples of critical estimates in valuing certain of the intangible assets we have acquired or may acquire in the future include but are not limited to:● future expected cash flows from product sales or other customer contracts;● expected costs of fulfillment including marketing, warehousing and product sales;● the acquired company’s brand and competitive position, as well as assumptions about the period of time the acquired brand will continue to be used inthe combined company’s product portfolio;● cost of capital and discount rates; and● estimating the useful lives of acquired assets as well as the pattern or manner in which the assets will amortize.Refer to Note 16, Business Combination, to the consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” of thisAnnual Report on Form 10K.49Revenue from contracts with customersOur revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled software subscriptions, associatedsoftware maintenance and support.We recognize revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with a customer exists onlywhen: the parties to the contract have approved it and are committed to perform their respective obligations, we can identify each party’s rights regarding thedistinct goods or services to be transferred (“performance obligations”), we can determine the transaction price for the goods or services to be transferred, thecontract has commercial substance and it is probable that we will collect the consideration to which we will be entitled in exchange for the goods or services that willbe transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to a customer.Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted to governmental authorities. Refundsare estimated at contract inception and updated at the end of each reporting period if additional information becomes available. Revenue is recognized when controlof the product is transferred to the customer.We maintain a returns policy that allows our customers to return product within a specified period of time. The estimate of the provision for returns is basedupon historical experience with actual returns.Principal versus Agent ConsiderationsWe follow the guidance provided in ASC 606 for determining whether we are a principal or an agent in arrangements with customers, by assessing whetherthe nature of our promise is a performance obligation to provide the specified goods (principal) or to arrange for those goods to be provided by the other party(agent). With regard to products being sold by Orgad through Amazon, this determination involves judgment. We determine it is the principle when it has controlover the promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).We recognize revenue ratably over the contractual service term for hosted services that are priced based on a committed number of transactions where thedelivery and consumption of the benefit of the services occur evenly over time, beginning on the date the services associated with the committed transactions arefirst made available to the customer and continuing through the end of the contractual service term. Over usage fees and fees based on the actual number oftransactions are billed in accordance with contract terms as these fees are incurred and are included in the transaction price of an arrangement as variableconsideration. Fees based on a number of transactions or impressions per month, are allocated to the period in which the transactions occur. Revenue forsubscriptions sold as a fee per period is recognized ratably over the contractual term as the customer simultaneously receives and consumes the benefit of theunderlying service.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.As a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.50ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAMY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2022U.S. DOLLARS IN THOUSANDSINDEXPageReport of Independent Registered Public Accounting Firm (PCAOB ID: ID 1057)F2Consolidated Balance SheetsF4Consolidated Statements of Comprehensive LossF5Consolidated Statements of Shareholders’ EquityF6Consolidated Statements of Cash FlowsF7Notes to Consolidated Financial StatementsF8 F33F1Report of Independent Registered Public Accounting FirmTo the Shareholders and Board of DirectorsMy Size, Inc.:Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of My Size, Inc. and subsidiaries (the Company) as of December 31, 2022 and 2021, the relatedconsolidated statements of comprehensive loss, shareholders’ equity, and cash flows for each of the years in the twoyear period ended December 31, 2022, and therelated notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, thefinancial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the twoyear periodended December 31, 2022, in conformity with U.S. generally accepted accounting principles.Going ConcernThe accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1d tothe consolidated financial statements, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit thatraises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1d. Theconsolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidatedfinancial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Critical Audit MattersCritical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to becommunicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved ourespecially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidatedfinancial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters oron the accounts or disclosures to which they relate.Acquisitiondate fair value of customer relationshipsAs discussed in Note 16 to the consolidated financial statements, on October 11, 2022, the Company acquired Naiz Bespoke Technologies SL (“Naiz”). As a result ofthe transaction, the Company acquired customer relationships intangible assets (“customer relationships”) representing the generation of future income from Naiz’sexisting customers. The acquisition date fair value of the customer relationships was $726 thousand.F2We identified the evaluation of the acquisitiondate fair value of the Naiz customer relationships as a critical audit matter. A high degree of subjective auditorjudgment was required to evaluate the following internally developed assumptions used to estimate the fair value of such asset, for which there were limitedobservable inputs: (i) forecasted revenues attributable to existing customers, (ii) forecasted earnings before interest, taxes, depreciation, and amortization(“EBITDA”) margins for the acquired business, (iii) estimated annual customer attrition rates and (iv) estimated discount rate. The determined fair value wassensitive to changes in these key assumptions. Additionally, specialized skills and knowledge were needed to evaluate the discount rate used.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s acquisitiondate fair value estimation process, including controls over the development of key assumptions. We performed a sensitivity analysis toassess the impact of reasonably possible changes to forecasted revenues, EBITDA margins, annual customer attrition rates, and the discount rate. We evaluated theforecasted revenue growth rates from existing customers by comparing the growth assumptions to those of the Company’s peers and industry reports. Inconnection with our assessment of the forecasts used in the valuation, we compared (1) forecasted revenue and EBITDA to Naiz’s historical actual results and (2)estimated annual customer attrition rates to historical Naiz customer attrition data. We tested the Company’s determined weighted average cost of capital(“WACC”), which was used to determine the discount rate, by involving valuation professionals with specialized skills and knowledge, who assisted in:Evaluating the selected discount rate by comparing it against a discount rate range that was independently developed using publicly available market datafor comparable companies, and;Assessing the Company’s WACC calculation, by comparing it against an independently estimated WACC range based on inputs obtained throughpublished surveys and studies.Goodwill impairment assessmentAs discussed in Note 16 to the consolidated financial statements, during 2022 the Company recorded goodwill of $1,257 thousand related to the acquisition of NaizBespoke Technologies, S.L. (“Naiz”). The Company performed an annual quantitative impairment test of goodwill at the reporting unit level. Based on this analysis,the Company determined that the fair value of its reporting unit exceeded its carrying value and no impairment charge was required.We identified the evaluation of the goodwill impairment assessment for the Naiz reporting unit as a critical audit matter. A high degree of subjective auditor judgmentwas required to evaluate the following assumptions used to estimate the fair value of the Company’s reporting unit, for which there were limited observable inputs:(i) forecasted reporting unit cash flows, (ii) longterm growth rates, and (iii) discount rates. The fair value was sensitive to changes in these key assumptions.Additionally, specialized skills and knowledge were needed to evaluate the discount rates.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s goodwill impairment evaluation process. We performed sensitivity analyses to assess the impact of reasonably possible changes to forecasted cashflows, longterm growth rates, and discount rates. We evaluated the Company’s forecasted growth rates by comparing the growth assumptions to those of theCompany’s peers and industry reports. We compared the Company’s forecasted revenue, cost of sales, and operating expense margins to historical actual results toassess the reasonableness of the forecasts. In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:– Assessing the Company’s WACC calculation, by comparing it against an estimated WACC range based on inputs obtained through published surveys andstudies– Evaluating the discount rates used by the Company by comparing them against discount rate ranges that were developed using publicly available market data forcomparable companies, and;– Performing an arithmetic recalculation regarding the fair value of the Company’s reporting unit, using the Company’s cash flow forecasts and the independentlydeveloped discount rates, and comparing the results to the Company’s fair value estimates./s/ Somekh ChaikinSomekh ChaikinMember Firm of KPMG InternationalWe have served as the Company’s auditor since 2017.Tel Aviv, IsraelApril 14, 2023F3MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED BALANCE SHEETSU.S. dollars in thousands (except share data)December 31,Note20222021AssetsCurrent assetsCash and cash equivalents32,10010,670Restricted cash263273Inventory997Account receivables1,94040Other receivables and prepaid expenses4758579Total current assets6,05811,562Long term deposits28Property and equipment, net5140112Operating rightofuse asset6583776Intangible assets71,377Goodwill71,395Investment in JV899Investment in marketable securities11471083,669996Total assets9,72712,558Liabilities and shareholders’ equityCurrent liabilitiesOperating lease liability6159138Shortterm loans9155Trade payables2,487635Liabilities to Related parties69863Other payables680392Total current liabilities4,1791,228Longterm loans9376Deferred tax liabilities328Operating lease liability6308473Total noncurrent liabilities1,012473CONTINGENCIES AND COMMITMENTS15Total Liabilities5,1911,701Shareholders’ equity13Stock capital Common stock of $0.001par value Authorized: 250,000,000and 100,000,000shares as of December 31,2022 and 2021; Issued and outstanding: 1,464,117and959,297 as of December 31,2022 and 2021, respectively (*)11Additional paidin capital58,67356,453Accumulated other comprehensive loss(637)(406)Accumulated deficit(53,501)(45,191)Total shareholders’ equity4,53610,857Total liabilities and shareholders’ equity9,72712,558(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F4MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSSU.S. dollars in thousands (except share data and per share data)Year endedDecember 31,Note20222021Revenues4,459131Cost of revenues(3,825)Gross profit634131Operating expensesResearch and development(1,701)(4,248)Sales and marketing18(3,143)(2,336)General and administrative19(3,900)(4,124)Total operating expenses(8,744)(10,708)Operating loss(8,110)(10,577)Financial income (expense), net20(236)57Loss before taxes(8,346)(10,520)Taxes on income36Net loss for the year(8,310)(10,520)Other comprehensive income (loss):Foreign currency translation differences(231)18Total comprehensive loss(8,541)(10,502)Basic and diluted loss per share (*)(7.47)(17.75)Basic and diluted weighted average number of shares outstanding (*)1,111,913420,385(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F5MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITYU.S. dollars in thousands (except share data)Common stockAdditionalpaidinAccumulatedothercomprehensiveAccumulatedTotalstockholders’NumberAmountcapitallossDeficitequityBalance as of January 1, 2021289,314(*)37,171(424)(34,671)2,076Stockbased compensation related to optionsgranted to employees and consultants373373Exercise of options granted to employees178(*)Restricted shares issued to shareholder (***)100,000(*)2,6182,618Issuance of shares, net of issuance cost of$1,160434,700112,58212,583Exercise of warrants135,108(*)3,7093,709Total comprehensive income (loss)18(10,520)(10,502)Balance as of December 31, 2021959,300156,453(406)(45,191)10,857Stockbased compensation related to optionsand restricted shares granted to employeesand consultants176,000(*)455455Issuance of shares in Business Combination(**)295,802(*)1,4461,446Issuance of shares post BusinessCombination (**)20,924(*)319319Effect of reverse stock split (Note 13 g)12,091(*)Total comprehensive income (loss)(231)(8,310)(8,541)Balance as of December 31, 20221,464,117158,673(637)(53,501)4,536(*)Represents an amount of less than $1.(**)See note 16(***)See note 1 bThe accompanying notes are an integral part of the consolidated financial statements.F6MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSU.S. dollars in thousandsYear endedDecember 31,20222021Cash flows from operating activities:Net loss(8,310)(10,520)Adjustments to reconcile net loss to net cash used in operating activities:Depreciation3842Change in operating lease rightofuse asset13543Amortization of intangible assets155foreign exchange differences(23)1Change in liabilities to related parties635Interest on long term liabilities10Interest paid(10)Revaluation of investment in marketable securities62(49)Restricted Shares issued to shareholder2,618Stock based compensation455373Issuance of shares post Business Combination319Change in inventory(219)Change in deferred tax liabilities(36)Change in account receivable(1,863)(12)Changes in operating lease liabilities(142)Change in other receivables and prepaid expenses184(99)Change in trade payables1,315253Change in other payables553Net cash used in operating activities(7,290)(7,297)Cash flows from investing activities:Acquisition of a subsidiary, net of cash acquired(767)Proceeds from restricted deposits, net184investing in other receivable(100)Investment in equity accounted investee(99)Purchase of property and equipment(27)(23)Net cash (used in) provided by investing activities(993)161Cash flows from financing activities:Proceeds from issuance of shares, net of issuance costs12,583Repayment of loans(67)Proceeds from exercise of warrants3,709Net cash (used in) provided by financing activities(67)16,292Effect of exchange rate fluctuations on cash and cash equivalents(230)13Change in cash and cash equivalents and restricted cash(8,580)9,169Cash and cash equivalents and restricted cash at the beginning of the year10,9431,774Cash and cash equivalents and restricted cash at the end of the year2,36310,943B) Aggregate cash flows derived for the Company as a result of the Orgad acquisition (note 16)2022Trade and other receivables364Inventory864Fixed assets55Longterm deposits31Selling Platform378Goodwill152Shortterm credit(181)Trade payables(580)Other payables(88)Longterm loan(138)Longterm provision(13)Deferred Tax Liability(87)Issuance of shares(457)Total acquisition of subsidiary, net of cash300C) Aggregate cash flows derived for the Company as a result of the Naiz acquisition (note 16)2022Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Issuance of shares(1,008)Total acquisition of subsidiary, net of cash467The accompanying notes are an integral part of the consolidated financial statements.F7MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERALa.My Size, Inc. is developing unique measurement technologies based on algorithms with applications in a variety of areas, from the apparel ecommerce market, to the courier services market and to the Do It Yourself (“DIY”) smartphone and tablet apps market. The technology is driven byproprietary algorithms, which are able to calculate and record measurements in a variety of novel ways.Following the acquisition of Naiz Bespoke Technologies, S.L (“Naiz”) in October 2022 (see note 16), the Company expanded its offering outreachand customer base.Following the acquisition of Orgad International Marketing Ltd. (“Orgad”) in February 2022 (see note 16), the Company also operates anomnichannel ecommerce platform.The Company has five subsidiaries, My Size Israel 2014 Ltd (“My Size Israel”), Topspin Medical (Israel) Ltd., and Orgad all of which areincorporated in Israel, and My Size LLC which was incorporated in the Russian Federation and Naiz Bespoke Technologies, S.L., a limited liabilitycompany incorporated under the laws of Spain (see note 16). References to the Company include the subsidiaries unless the context indicatesotherwise.My Size, Inc., was incorporated and commenced operations in September 1999, as Topspin Medical Inc. (“Topspin”), a private company registeredin the State of Delaware. In December 2013, the Company changed its name to Knowledgetree Ventures Inc. Subsequently, in February 2014, theCompany changed its name to My Size, Inc. Topspin was engaged, through its Israeli subsidiary, in research and development in the field ofcardiology and urology.Since September 1, 2005, the Company has traded on the Tel Aviv Stock Exchange (“TASE”).Between 2007 and 2012 the Company reported as a public company with the U.S. Securities and Exchange Commission (the “SEC”). In August2012, the Company suspended its reporting obligations under Section 13(a) and 15(d) of the Securities Exchange Act of 1934. In mid2015, theCompany resumed reporting as a public company.b.On January 9, 2014, at the Company’s general meeting of shareholders, its shareholders approved an engagement with one of the Company’sinvestors (the “Seller”) for the purchase of rights in a Venture (the “Venture”), including the rights to the method and the certain patent applicationthat had been filed by the Seller (the “Assets”). The Venture relates to the development of technologies and applications which will assist theconsumer to take his or her body measurements accurately using a mobile device to ensure the purchase of clothing with the best possible fitwithout the need to try them on.In February 2014, the Company established a wholly owned subsidiary, My Size (Israel) 2014 Ltd., a company registered in Israel, which iscurrently engaged in the development of the Venture described above.In return for purchasing an interest in the Venture, the Company undertook to pay the Seller 18% of the Company’s operating profit, direct orindirect, connected to the Venture for a period of seven years starting from the end of the Venture’s development period.As part of the agreement, the Seller received an option to buy back the Assets for consideration which will reflect the market fair value at that time,on the occurrence of the following events: a) if a motion is filed to liquidate the Company; b) if seven years after signing the agreement, theCompany’s total accumulated revenues, direct or indirect, from the Venture or the commercialization of the patent will be lower than NIS 3.6 million.In such an event, Seller may repurchase the interest in the Venture at a market price to be determined by an independent third party valuationconsultant, who shall be chosen by agreement by the parties, and the audit committee shall conduct the negotiations on behalf of the Company todetermine the identity of the consultant.On May 26, 2021, the Company, My Size Israel and Shoshana Zigdon entered into an Amendment to Purchase Agreement (the “Amendment”)which made certain amendments to a Purchase Agreement between the parties dated February 16, 2014 (the “Purchase Agreement”). Pursuant tothe Amendment, Ms. Zigdon agreed to irrevocably waive the right to repurchase certain assets related to the collection of data for measurementpurposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which the Company’s business is substantiallydependent, and all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My Size Israel underthe Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation,reward or any rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights(the “Waiver”). In consideration of the Waiver, the Company issued 100,000 shares of common stock to Ms. Zigdon in a private placement.F8MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERAL (Cont.)c.On July 25, 2016, the Company’s common stock began publicly trading on the Nasdaq Capital Market under the symbol “MYSZ”. The Company’sshares of common stock are listed both on the Nasdaq Capital Market and TASE.d.Since inception, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit of $53,501.The Company has financed its operations mainly through fundraising from various investors.The Company’s management expects that the Company will continue to generate losses and negative cash flows from operations for theforeseeable future. Based on the projected cash flows and cash balances as of December 31, 2022, management is of the opinion that its existingcash will be sufficient to fund operations for a period less than 12 months. As a result, there is substantial doubt about the Company’s ability tocontinue as a going concern.Management’s plans include the continued commercialization of the Company’s products and securing sufficient financing through the sale ofadditional equity securities, debt or capital inflows from strategic partnerships. Additional funds may not be available when the Company needsthem, on terms that are acceptable to it, or at all. If the Company is unsuccessful in commercializing its products and securing sufficient financing,it may need to cease operations.The financial statements include no adjustments for measurement or presentation of assets and liabilities, which may be required should theCompany fail to operate as a going concern.e.The Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificial intelligencedriven measurement solutions (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions. The fashion and equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. The SaaS based innovativeartificial intelligence driven measurement solutions, or SaaS Solutions operating segment consists of My Size Inc My Size Israel and LLC.NOTE 2 SIGNIFICANT ACCOUNTING POLICIESThe consolidated financial statements are prepared according to United States generally accepted accounting principles (“U.S. GAAP”), applied on aconsistent basis, as followsa.Use of estimates:The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions thataffect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.Information about assumptions made by the Company with respect to the future and other reasons for uncertainty with respect to estimates thathave a significant risk of resulting in a material adjustment to carrying amounts of assets and liabilities in the next financial year are included in thefollowing notes:Acquisitions of subsidiariesThe Company measures the fair value of the consideration transferred (including contingent consideration) and fair value of the assets acquiredand liabilities assumed, in business combination transactions. For information on details on fair value measurement in acquisition of subsidiaries,see Note 16 regarding business combinations.Estimated impairment of nonfinancial assetsThe Company examines on an annual basis whether there is an impairment of goodwill, intangibles and property, plant and equipment that areallocated to cash generating units, in accordance with the accounting policy presented in Note 1(h) below. Recoverable amounts of cashgenerating units are determined on the basis of valueinuse calculations. These calculations require the use of estimates.For information on key assumptions used in calculation of the recoverable amount, see note 7 – Goodwill and other Intangible assets.b.Functional currency:The currency of the primary economic environment in which the operations of the Company is conducted is the United States Dollar and thus it isthe Company’s functional currency. The reporting currency according to which these financial statements are prepared is the U.S. dollar.The currency of the primary economic environment in which the operation of the Subsidiary, My Size Israel and Orgad International MarketingLtd. functional currency is the New Israeli Shekel (“NIS”).The currency of the primary economic environment in which the operation of the Subsidiary, My Size LLC, functional currency is Russian Ruble.The currency of the primary economic environment in which the operation of the Subsidiary, Naiz fit, functional currency is Euro.F9MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)c.Principles of consolidation:The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances andtransactions have been eliminated upon consolidation.d.Cash equivalents:Cash equivalents are shortterm highly liquid investments that are readily convertible to cash with original maturities of three months or less at thedate acquired.e.Restricted cashRestricted cash are deposits for rent, credit card and for hedging activities.f.Inventories:Inventories include finished goods and are measured at the lower of cost or net realizable value. The cost of inventories comprises of the costsincurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary courseof business. At the point of the loss recognition, a new, lowercost basis for that inventory is established, and subsequent changes in facts andcircumstances do not result in the restoration or increase in that newly established cost basis. The costs of purchase of inventories comprise thepurchase price and other costs directly attributable to the acquisition of finished goods. In 2022, the Company recorded an inventory markdownof $48.g.Property and equipment:Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straightline method over theestimated useful lives of the assets, at the following annual rates:%Computers and peripheral equipment33Office furniture and equipment720Leasehold improvementsOver the term of the leaseor the useful life of theimprovements, whicheveris shorterh.Impairment of longlived assets:The Company’s property and equipment are reviewed for impairment in accordance with ASC 360, “Property Plant and Equipment”, wheneverevents or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held andused is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by theassets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount ofthe assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less sellingcosts. During the periods ended December 31, 2022 and 2021, no impairment losses have been recorded.i.Business combinations:The Company applies the provisions of ASC 805, “Business Combination” and allocates the fair value of purchase consideration to the tangibleassets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchaseconsideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assetsacquired and liabilities assumed, the Company estimated the future expected cash flows from acquired platform, customer relationships,Technology and trademark from a market participant perspective, useful lives and discount rates. In addition, management makes significantestimates and assumptions, which are uncertain, but believed to be reasonable.Acquisitionrelated costs are recognized separately from the acquisition and are expensed as incurred.F10MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)j.Goodwill:Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a businesscombination. Under ASC 350, “Intangible Goodwill and Other”, goodwill is not amortized, but rather is subject to an annual impairment test.ASC 350 requires goodwill to be tested for impairment at the reporting unit level at least annually, the fourth quarter, or between annual tests incertain circumstances, and written down when impaired. Goodwill is tested for impairment by comparing the fair value of the reporting unit with itcarrying value. Goodwill from Orgad acquisition was allocated to the fashion and equipment ecommerce platform segment and Goodwill from theNaiz acquisition was allocated to Naiz segment based innovative artificial intelligence driven measurement solutions.Alternatively, ASC 350 permits an entity to bypass the qualitative assessment for any reporting unit and proceed directly to performing the firststep of the goodwill impairment test. There were no impairment charges to goodwill during the period presented.k.Intangible assets:Intangible assets consist of identifiable intangible assets that the Company has acquired from previous business combinations. Intangible assetsare recorded at costs, net of accumulated amortization. The Company amortizes its intangible assets reflecting the pattern in which the economicbenefits of the intangible assets are consumed. When a pattern cannot be reliably determined, the Company uses a straightline amortizationmethod. Amortization is calculated by the straightline method over the estimated useful lives of the following assets.The estimated useful lives of the company’s intangible assets are as follows:yearsCustomer Relationships7Technology5Trademark5Selling Platform3Each period the Company evaluates the estimated remaining useful lives of its intangible assets and whether events or changes in circumstanceswarrant a revision to the remaining period of amortizationl.Severance pay:The Subsidiary’s liability for severance pay is covered by Section 14 of the Israeli Severance Pay Law (“Section 14”). Under Section 14, employeesin Israel are entitled to have monthly deposits, at a rate of 8.33% of their monthly salary, made on their behalf to their insurance funds. Payments inaccordance with Section 14 exempt the Subsidiary from any additional obligation for these employees. As a result, the Subsidiary does notrecognize any liability for severance pay due to these employees and the deposits under Section 14 are not recorded as an asset in theSubsidiary’s balance sheet. These contributions for compensation represent defined contribution plans and expenses are recorded based onactual deposits.Other than the My Size Israel’s liability there are no additional severance pay liabilities.F11MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)m.Research and development costs:Research and development costs are charged to the statement of operations, as incurred. Most of the research and development expenses are forwages, related expenses and subcontractors.n.Income taxes:The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilitiesfor the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Companies’ taxreturns. Deferred taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities using enactedtax rates in effect in the years in which the differences are expected to reverse. The Company assesses the likelihood that its deferred tax assetswill be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely thannot that all or a portion of deferred tax assets will not be realized. The Company establishes a valuation allowance, if necessary, to reduce deferredtax assets to the amount more likely than not to be realized. As of December 31, 2022, and 2021, a full valuation allowance was established by theCompany.The Company implements a twostep approach to recognize and measure the benefit of its tax positions. The first step is to evaluate the taxposition taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that,on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigationprocesses. The second step is to measure the tax benefit as the largest amount that is greater than 50 percent (cumulative basis) likely to berealized upon settlement.The Company believes that its tax positions are all highly certain of being upheld upon examination. As of December 31,2022 and 2021 the Company recorded a liability for unrecognized tax benefits of $328 and none respectively.o.Accounting for stockbased compensation:The Company accounts for its employees’ stockbased compensation as an expense in the financial statements based on ASC 718. All awards areequity classified and therefore such costs are measured at the grant date fair value of the award and graded vesting attribution approach torecognize compensation cost over the vesting period. The Company estimates stock option grant date fair value using the Binomial and BlackScholes option pricingmodel.The Company recorded stock options issued to nonemployees at the grant date fair value, and recognizes expenses over the related serviceperiod by using the straightline attribution approach in accordance with ASU 201807. All awards are equity classified.The expected volatility of the share prices reflects the assumption that the historical volatility of the share prices is reasonably indicative ofexpected future trends.The riskfree interest rate for grants with an exercise price denominated in USD for employees and several consultants is based on the yield fromUS treasury zerocoupon bonds with an equivalent term.The Company has historically not paid dividends and has no foreseeable plans to pay dividends.F12MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)p.Fair value of financial instruments:ASC 820, Fair Value Measurements and Disclosures, relating to fair value measurements, defines fair value and established a framework formeasuring fair value. The ASC 820 fair value hierarchy distinguishes between market participant assumptions developed based on market dataobtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptionsdeveloped based on the best information available in the circumstances. ASC 820 defines fair value as the price that would be received to sell anasset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price. Inaddition, the fair value of assets and liabilities should include consideration of nonperformance risk, which for the liabilities described belowincludes the Company’s own credit risk.As a basis for considering such assumptions, ASC 820 establishes a threetier value hierarchy, which prioritizes the inputs used in the valuationmethodologies in measuring fair value:Level 1 Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access. Valuationadjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readilyand regularly available in an active market, valuation of these products does not entail a significant degree of judgment.Level 2 Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, eitherdirectly or indirectly.Level 3 Valuations based on inputs that are unobservable and significant to the overall fair value measurement.The Company holds share certificates in iMine Corporation (“iMine”) formerly known as Diamante Minerals, Inc., a publiclytraded company onthe OTCQB.Due to sales restrictions on the sale of the iMine shares, the fair value of the shares was measured on the basis of the quoted market price for anotherwise identical unrestricted equity instrument of the same issuer that trades in a public market, adjusted to reflect the effect of the salesrestrictions and is therefore, ranked as Level 2 asset.q.Basic and diluted net loss per share:Basic net loss per share is computed based on the weighted average number of shares of common stock outstanding during each year. Diluted netincome per share is computed based on the weighted average number of shares of common stock outstanding during each year plus dilutivepotential equivalent common stock considered outstanding during the year, in accordance with ASC 260, “Earnings per Share”. For the yearsended December 31, 2022 and 2021, all outstanding options and warrants have been excluded from the calculation of the diluted net loss per sharesince their effect was antidilutive.r.Concentrations of credit risk:Financial instruments that potentially subject the Company and its subsidiaries to concentrations of credit risk consist principally of cash andcash equivalents.Cash and cash equivalents are invested in banks in Israel, Spain and United States. Such deposits in United States may be in excess of insuredlimits and are not insured in other jurisdictions. Management believes that the financial institutions that hold the Company’s investments arefinancially sound and, accordingly, minimal credit risk exists with respect to these investments.The Company and its subsidiaries have no offbalancesheet concentration of credit risk such as foreign exchange contracts, option contracts orother foreign hedging arrangements.F13MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)s.Revenue Recognition:The Company’s revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled softwaresubscriptions, associated software maintenance and support.The Company recognizes revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with acustomer exists only when: the parties to the contract have approved it and are committed to perform their respective obligations, the Companycan identify each party’s rights regarding the distinct goods or services to be transferred (“performance obligations”), the Company can determinethe transaction price for the goods or services to be transferred, the contract has commercial substance and it is probable that the Company willcollect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to acustomer. Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted togovernmental authorities. Refunds are estimated at contract inception and updated at the end of each reporting period if additional informationbecomes available. Revenue is recognized when control of the product is transferred to the customer.The Company maintains a returns policy that allows its customers to return product within a specified period of time. The estimate of the provisionfor returns is based upon historical experience with actual returns.Principal versus Agent ConsiderationsThe Company follows the guidance provided in ASC 606 for determining whether it is a principal or an agent in arrangements with customers, byassessing whether the nature of the Company’s promise is a performance obligation to provide the specified goods (principal) or to arrange forthose goods to be provided by the other party (agent). With regard to products being sold by Orgad through Amazon, this determination involvesjudgment. The Company determines it is the principle when it has control over promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).The Company recognizes revenue ratably over the contractual service term for hosted services that are priced based on a committed number oftransactions where the delivery and consumption of the benefit of the services occur evenly over time, beginning on the date the servicesassociated with the committed transactions are first made available to the customer and continuing through the end of the contractual serviceterm. Over usage fees and fees based on the actual number of transactions are billed in accordance with contract terms as these fees are incurredand are included in the transaction price of an arrangement as variable consideration. Fees based on a number of transactions or impressions permonth, are allocated to the period in which the transactions occur. Revenue for subscriptions sold as a fee per period is recognized ratably overthe contractual term as the customer simultaneously receives and consumes the benefit of the underlying service.F14MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)t.Contingencies and CommitmentsLiabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it isprobable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with losscontingencies are expensed as incurred.u.Derivative instrumentsThe Company accounts for its derivative instruments as either assets or liabilities and measures them at fair value through profit or loss.v.LeasesThe Company leases include an office space lease agreement for 36 months, with an option to extend for an additional 36 months and 36 monthscancelable operating lease agreements on behalf of personnel vehicles. The lease term includes a noncancellable period of the lease plus anyadditional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise,or an option to extend (or not to terminate) the lease controlled by the lessor.ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make leasepayments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value oflease payments over the lease term. The company generally use its incremental borrowing rate based on the estimated rate of interest forcollateralized borrowing over a similar term of the lease payments at commencement date. Lease expense for lease payments is recognized on astraightline basis over the lease term.For the office rent lease, the Company has elected to account for the lease and nonlease maintenance components as a single lease component.Therefore, the lease payments used to measure the lease liability include all of the fixed consideration in the contract, including insubstance fixedpayments, owed over the lease term.w.Impact of recently issued accounting standardIn June 2016, the FASB issued ASU 201613, “Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses on FinancialInstruments”, which requires companies to measure credit losses of financial instruments, including customer accounts receivable, utilizing amethodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information toinform credit loss estimates. Subsequent to the issuance of ASU 201613, the FASB issued several additional Accounting Standard Updates toclarify implementation guidance, provide narrowscope improvements and provide additional disclosure guidance. As an Emerging GrowthCompany, ASU 201613 is effective for fiscal years beginning after December 15, 2022. The Company does not expect this ASU to have a materialimpact on its consolidated financial statements.F15MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 3 CASH AND CASH EQUIVALENTSThe Company’s cash and cash equivalents balance at December 31, 2022 and 2021 is denominated in the following currencies:December 31,20222021US Dollars1,65110,184New Israeli Shekels259433Other190532,10010,670NOTE 4 OTHER RECEIVABLES AND PREPAID EXPENSESDecember 31,20222021Prepaid expenses and other current assets322429Government authorities28317Other153133Total758579NOTE 5 PROPERTY AND EQUIPMENT, NETComputersandperipheralequipmentOfficefurnitureandequipmentLeaseholdimprovementsTotalCostBalance as at January 1, 20211825860300Additions2323Translation adjustments72211Balance as at December 31, 20212126062334Balance as at January 1, 20222126062334Additions161127Business combination401555Translation adjustments(32)(8)(8)(48)Balance as at December 31, 20222367854368Accumulated DepreciationBalance as at January 1, 20211461412172Additions2751042Translation adjustments6118Balance as at December 31, 20211792023222Balance as at January 1, 20221792023222Additions209938Translation adjustments(27)(3)(2)(32)Balance as at December 31, 20221722630228Carrying amountsAs at December 31, 2021334039112As at December 31, 2022645224140F16MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 6 LEASESIn August 2019, The Company entered into an office space lease agreement. The lease term is for 36 months beginning on August 20, 2019 and endingon August 20, 2022, with an option to extend for an additional 36 months. The Company extended the lease period until August 20, 2025. Monthly rentpayments including utilities amounting to approximately USD 14 (NIS 49,500) per month.In addition, The Company entered into a threeyear cancelable operating lease agreement for cars.These operating leases are included in “Right of use asset” on the Company’s December 31, 2022 consolidated balance sheets, and represent theCompany’s right to use the underlying asset for the lease term. The Company’s obligations to make lease payments are included in the currentliabilities as “Operating lease liability” and in the noncurrent liabilities as “Operating lease liability long term” on the Company’s December 31, 2022consolidated balance sheets. As of December 31, 2022, rightofuse of asset was $583. operating lease liabilities were $159 and non current Operatinglease liabilities were $308. Rightofuse asset includes the capitalization of improvements (net of amortization) amounting to $105.Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value ofthe lease payments.The interest rate used to discount future lease payment was 11.95%.Maturities of lease liabilities as of December 31, 2022 were as follows:Year Ending:2023$1912024$1912025$127Thereafter$509Less imputed interest:$(42)Total lease liabilities$467F17MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 7 – Goodwill and other Intangible assetsA.Identified intangible assetsSchedule of Intangible assetsSelling PlatformTechnologyCustomerRelationshipsOtherTotalThousandsUSDThousandsUSDThousandsUSDThousandsUSDThousandsUSDCostAs of January 1, 2022Acquisitions through business combinations378286726771,467Effect of changes in exchange rates(32)2565765As of December 31, 2022346311791841,532AmortizationAs of January 1, 2022Amortization for the year including effect of changes inexchange rates as of December 31, 2022(109)(15)(27)(4)(155)Carrying amountAs of December 31, 2022237296764801,377AmortizationAmortization expenses recorded for identified intangible assets in the Consolidated Statements of Operations for each period and were as follows:Line ItemDecember 31,2022December 31,2021Selling platformCosts of revenues109TrademarkSales and marketing4TechnologyCosts of revenues15Customer relationshipsSales and marketing27Total amortization expenses155Future amortization expenses are expected to be as follows:20232024202520262027ThereafterTotalFuture amortization expenses3033031941771561791,312b.GoodwillThe changes in the carrying amount of goodwill for the years ended December 31, 2022 and 2021 were as follows:Fashion and equipmentecommerce platformNaizTotalBalance as of December 31, 2021Changes during the period:Goodwill acquired1521,1521,304Goodwill impairmentTranslation differences(14)10591Balance as of December 31, 20221381,2571,395The Company operates its business through three reporting segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovativeartificial intelligence driven measurement solutions and (iii) Naiz. See note 17 for additional segments information.The Company determines the fair value of its reporting units using the income approach. According to the income, the Company uses discounted cashflows to estimate the fair value. Cash flow projections are based on the Company’s estimates of revenue growth rates and operating margins, takinginto consideration the industry’s and market’s conditions. The discount rate used is based on the weighted average cost of capital (“WACC”),adjusted for the relevant risk associated with businessspecific characteristics.The Company performed a quantitative assessment as of December, 31 2022 for the reporting units’ fair value. The estimated fair value of the Fashionand equipment ecommerce platform and Naiz reporting units exceeded its estimated carrying amount by 95.9% and 27.7% respectively. This, based thefollowing assumptions:Fashion and equipmentecommerce platformNaizDiscount rate21%23%Terminal growth rate3%3%If business conditions or expectations were to change materially, it may be necessary to record impairment charges to the Company’s reporting units inthe future.F18MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 8 Investment in JVIn August 2022, the Company established a joint venture (“JV”) in Brazil with Santista Têxtil. The Company holds 51% and Santista Têxtil holds 49% of theJV. The purpose of the JV is to serve the Brazilian market according to the business plan that was set. Both parties agree to make an initial investment in theJV of $198that will be made per the holding percentage of each party. As of the reporting date, the JV is in process of establishing its operation.NOTE 9 Financial LiabilitiesThe book value of each of the financial liability categories is an acceptable approximation of fair value.The debt is comprised of four loans that were granted to My Size Israel – in an outstanding amount of approximately $131, bearing interest rangingfrom prime rate to prime+2.8% rate, and four loans that were granted to the Spanish subsidiary– in an outstanding amount of approximately $400,bearing interest ranging from 1% to 3%.The financial liability maturities during the five years following the end of the financial year are shown below:UntilUntilUntilUntilUntilAfterTOTAL311223311224311225311226311227311227311222Debts with credit institutions15513892874712531NOTE 10 RELATED PARTIES TRANSACTIONSA. Balances with related parties:The following related party payables are included in liability to related parties.December 31,20222021Officers (*)4143Liability in respect of business combinations (**)739Other related parties (***)(95)Directors152069863(*)The amount includes the net salaries payables.(**)The amount includes the provision created to former owners of Orgad that are entitled to additional cash and equity consideration and former owners of Naizthat entitled to additional cash consideration, see note 16 business combination.(***)The amount includes an amount receivable from Orgad previous shareholders who currently work in the company.B. Related parties benefits:Year endedDecember 31,20222021Salaries and related expenses1,440852Share based payments39673Cash liability and equity liability expenses related to acquisitions (**)1,058Directors58582,952983(**)The amount includes the expenses for a provision created to former owners of Orgad that are entitled to additional cash and equity consideration and formerowners of Naiz that entitled to additional cash consideration, see note 16 business combination.NOTE 11 FINANCIAL INSTRUMENTSThe following tables presents the Company’s significant assets and liabilities that are measured at fair value on recurring basis and their classificationwithin the fair value hierarchy:December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities47financial assets (*)10December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesDerivatives9December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities108December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesWarrants derivative2(*)the financial asset includes in other receivables.F19MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 11 FINANCIAL INSTRUMENTS (Cont.)The carrying amounts of cash and cash equivalents, restricted cash, short term restricted deposit, accounts receivable, other receivables and prepaidexpenses, trade payable and accounts payable approximate their fair value due to the shortterm maturities of such instruments.At December 31, 2022, the recognized gain and fair value (based on quoted market prices with a discount due to security restrictions on iMine shares)of the marketable securities were $59and $47, respectively (at December 31, 2021 $49and $108, respectively).NOTE 12 TAXES ON INCOMEa.On December 31, 2022, the Company had U.S. federal net operating loss carryforwards of approximately $26 available to reduce future taxableincome. Utilization of the U.S. net operating losses may be subject to substantial limitations due to the change of ownership provisions of theInternal Revenue Code of 1986.The U.S. Company has final tax assessments through 2014.On December 22, 2017, the Tax Reform Act was signed into law. The legislation significantly changes U.S. tax law by, among other things, lowering theU.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. As a result of the decrease in the corporate incometax rate, the Company revalued the ending net deferred tax assets at December 31, 2017, but did not recognize any incremental income tax expense in2017 due to the revaluation of the valuation allowance.b.Foreign tax:1.Tax rates:Presented hereunder are the tax rates relevant to the Company’s Israeli subsidiaries:2022 23%2021 23% Presented hereunder are the tax rates relevant to the Company’s Spanish subsidiary:2022 24%2.The Company’s Israeli subsidiaries have estimated total available carryforward operating tax losses for Israeli income tax purposes ofapproximately $64as of December 31, 2022. Of these losses, a total of $47.5are owned by Topspin Medical (Israel) Ltd. Topspin tax lossesmay be offset only by future income with respect to the same operational activity by which it was incurred for an indefinite period of time. Theother losses are owned by My Size Israel and may be carryforward to offset against future income for an indefinite period of time.3.Topspin Medical (Israel) Ltd. and My Size (Israel) 2014 Ltd. has final tax assessments through 2016.c.U.S. and foreign components of loss from continuing operations, before income taxes consisted of:December 31,20222021U.S(1,180)(3,802)NonU.S. (foreign)(7,130)(6,718)(8,310)(10,520)F20MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 12 TAXES ON INCOME (Cont.)d.Deferred taxes:Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reportingpurposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows:December 31,20222021Deferred tax assets:Operating loss carryforwards20,13120,238Warrants and options145126Marketable securities390377Intangible assets(328)Research and development expenses586341Other temporary differences203Deferred tax assets before valuation allowance21,12721,082Valuation allowance(21,455)(21,082)Net deferred tax liability(328)The following table presents a reconciliation of the beginning and ending valuation allowance:December 31,20222021Balance at beginning of the year21,08218,968Additions in valuation allowance to the income statement1,7581,625Additions in valuation allowance due to exchange rate differences(1,385)489Balance at end of the year21,45521,082In assessing the realization of deferred tax assets, management considers whether it is more likely than not that all or some portion of the deferred taxassets will not be realized.The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporarydifferences are deductible and net operating losses are utilized. Based on consideration of these factors, the Company recorded a full valuationallowance at December 31, 2021 and 2020.e.Theoretical taxThe following presents the adjustment between the theoretical tax amount and the tax amount included in the financial statements:December 31,20222021Loss before income taxes8,34610,520Statutory tax rate21%21%Computed “expected” tax income1,7522,209Foreign tax rate differences and exchange rate differences149131Nondeductible expenses(107)(715)Change in valuation allowance(1,758)(1,625)Taxes on income36F21MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITYa.Common stock confers upon their holders the right to receive notice to participate and vote in general meetings of the Company, and the right toreceive dividends if declared.b.On January 8, 2021, the Company conducted a public offering of its securities pursuant to which it issued 62,768 shares of its common stock forgross proceeds of $2,008. The net proceeds to the Company from the offering were approximately $1,700, after deducting placement agent’s feesand other estimated offering expenses payable by the Company.c.During 2021, a holders of warrants exercised warrants to purchase 135,109 ordinary shares of the Company in exchange for $3,709.d.On March 25, 2021, the Company conducted a public offering of its shares of common stock pursuant to which it issued 104,741 shares of itscommon stock for gross proceeds of $3,300. The net proceeds to the Company from the offering were approximately $2,872, after deductingplacement agent’s fees and other estimated offering expenses payable by the Company.On May 7, 2021, the Company issued an additional 15,711 shares of the Company’s common stock in connection with the full exercise of theunderwriter’s overallotment option granted in the Company’s March 2021 public offering. These additional shares were sold to the underwriter at apublic offering price of $31.5 per share, resulting in additional net proceeds to the Company, net of the underwriting discount, of approximately$463.e.On May 26, 2021, the Company issued 100,000 shares of common stock to Ms. Zigdon in consideration of the Waiver. See note 1(b) above.f.On October 28, 2021, the Company sold in a registered direct offering 100,592 shares of its common stock and, in a concurrent private placement,an aggregate of 75,444 unregistered warrants to purchase shares of common stock, at an offering price of $33.8 per share and associated warrant.In addition, on the same day, the Company sold in a private placement 150,888 unregistered shares of common stock and unregistered warrants topurchase up to an aggregate of 113,166 shares of common stock at the same purchase price as in the registered direct offering. The warrants areimmediately exercisable and will expire five years from issuance at an exercise price of $31.5 per share, subject to adjustment as set forth therein.The gross proceeds from the offerings were $8,500. The net proceeds to the Company from the offerings were approximately $7,560, afterdeducting placement agent’s fees and other estimated offering expenses payable by the Company. In connection with the offerings, the Companyissued to the placement agent warrants to purchase 17,603 shares on substantially the same terms as the purchasers in the offerings at an exerciseprice of $42.25 per share and a term expiring on October 26, 2026.g.On December 7, 2022, the Company’s board of directors approved a 1for25 reverse stock split of the Company’s issued and outstanding sharesof common stock. The reverse stock split became effective on December 8, 2022. In order not to have fractional shares as a result of the reversestock split, the Company issued an additional 12,091 shares of common stock. As a result, all shares of common stock, options for shares ofcommon stock, exercise price and net loss per share amounts were adjusted retroactively for all periods presented in these financial statements.F22MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITY (Cont.)g.A summary of the warrant activity during the years ended December 31, 2022 and 2021 is presented below:Number ofWarrantsWeightedAverageExercisePriceWeightedAverageRemainingLife inYearsOutstanding, December 31, 2020216,85936.754.26Issued206,214Expired or exercised(135,109)Outstanding, December 31, 2021287,96431.004.35IssuedExpired or exercised(17,901)Outstanding, December 31, 2022270,06330.213.36Exercisable, December 31, 2022270,06330.213.36NOTE 14 STOCK BASED COMPENSATIONThe stockbased expense recognized in the financial statements for services received is related to Research and Development, Sales and Marketingand General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense Research and development15195Stockbased compensation expense Sales and marketing126180Stockbased compensation expense General and administrative17898455373The stockbased expense recognized in the financial statements for services received post Acquisition of Orgad (see note 16) is related to Cost OfGoods, Sales and Marketing and General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense – Cost of goods80Stockbased compensation expense Sales and marketing112Stockbased compensation expense General and administrative127319F23MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Options issued to consultantsWe can sell additional shares of common stock without consulting stockholders and without offering shares to existing stockholders, which wouldresult in dilution of shareholders’ interests in the company and could depress our stock price.Our Certificate of Incorporation currently authorizes 250,000,000 shares of common stock, of which 2,446,780 are currently outstanding as of March 31, 2023and our board of directors is authorized to issue additional shares of our common stock. Although our board of directors intends to utilize its reasonable businessjudgment to fulfil its fiduciary obligations to our then existing stockholders in connection with any future issuance of our capital stock, the future issuance ofadditional shares of our capital stock could cause immediate, and potentially substantial, dilution to our existing stockholders, which could also have a materialeffect on the market value of the shares. Further, other than certain participation rights that we have granted in a past offering, our shares do not have preemptiverights, which means we can sell shares of our capital stock to other persons without offering purchasers in this offering the right to purchase their proportionateshare of such offered shares. Therefore, any additional sales of stock by us could dilute your ownership interest in our Company.Our quarterly operating results may fluctuate significantly.We expect our operating results to be subject to quarterly fluctuations. Our net loss and other operating results will be affected by numerous factors,including:●variations in the level of expenses related to our research and development;●any lawsuits in which we may become involved;●regulatory developments affecting our products; and●our execution of any collaborative, licensing or sales agreements, and the timing of payments under these arrangements.If our quarterly operating results fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially.Furthermore, any quarterly fluctuations in our operating results may, in turn, cause the price of our common stock to fluctuate substantially.If we fail to comply with the rules under the Sarbanes Oxley Act of 2002 related to accounting controls and procedures or if we discover materialweaknesses and deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult.If we fail to comply with the rules under the SarbanesOxley Act of 2002 related to disclosure controls and procedures, or, if we discover materialweaknesses and other deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult. Section 404 of the SarbanesOxley Act requires annual management assessments of the effectiveness of our internal control over financial reporting and, ifwe are no longer a nonaccelerated filer, a report by our independent auditors addressing these assessments. If material weaknesses or significant deficiencies arediscovered or if we otherwise fail to achieve and maintain the adequacy of our internal control, we may not be able to ensure that we can conclude on an ongoingbasis that we have effective internal controls over financial reporting in accordance with Section 404 of the SarbanesOxley Act. Moreover, effective internalcontrols are necessary for us to produce reliable financial reports and are important to helping prevent financial fraud. If we cannot provide reliable financial reportsor prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price ofour common stock could drop significantly.38Our Certificate of Incorporation, Bylaws and Delaware law may have antitakeover effects that could discourage, delay or prevent a change incontrol, which may cause our stock price to decline.Our Certificate of Incorporation, Bylaws and Delaware law could make it more difficult for a thirdparty to acquire us, even if closing such a transactionwould be beneficial to our stockholders. Provisions of our Certificate of Incorporation, Bylaws and Delaware law also could have the effect of discouraging potentialacquisition proposals or making a tender offer or delaying or preventing a change in control, including changes a stockholder might consider favorable. Suchprovisions may also prevent or frustrate attempts by our stockholders to replace or remove our management. In particular, the Certificate of Incorporation, Bylawsand Delaware law, as applicable, among other things:●provide the board of directors with the ability to alter the Bylaws without stockholder approval;●the classification of our board of directors;●place limitations on the removal of directors;●provide that vacancies on the Board of Directors may be filled by a majority of directors in office, although less than a quorum;●require that stockholder actions must be affected at a duly called stockholder meeting and generally prohibiting stockholder actions by written consent;●eliminate the ability of stockholders to call a special meeting of stockholders; and●establish advance notice requirements for nominations for election to the Board of Directors or for proposing matters that can be acted upon at duly calledstockholder meetings.We are subject to Section 203 of the Delaware General Corporation Law which, subject to certain exceptions, prohibits “business combinations” between apubliclyheld Delaware corporation and an “interested stockholder,” which is generally defined as a stockholder who becomes a beneficial owner of 15% or more ofa Delaware corporation’s voting stock for a threeyear period following the date that such stockholder became an interested stockholder. These provisions areexpected to discourage certain types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to firstnegotiate with our board. These provisions may delay or prevent someone from acquiring or merging with us, which may cause the market price of our commonstock and the value of our securities to decline.If we fail to comply with the continued listing requirements of the Nasdaq Capital Market, our common stock may be delisted and the price of ourcommon stock and our ability to access the capital markets could be negatively impacted.Nasdaq has established certain standards for the continued listing of a security on the Nasdaq Capital Market. The standards for continued listing include,among other things, that the minimum bid price for the listed securities not fall below $1.00 per share for a period of 30 consecutive trading days and that wemaintain a minimum of $2,500,000 in shareholders’ equity. We have in the past fallen below the minimum bid price and minimum shareholders’ equity.39No assurance can be given that we will continue to be in compliance with the Rule. Failure to meet applicable Nasdaq continued listing standards couldresult in a delisting of our common stock. A delisting of our common stock from Nasdaq could materially reduce the liquidity of our common stock and result in acorresponding material reduction in the price of our common stock. In addition, delisting could harm our ability to raise capital through alternative financing sourceson terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, employees and fewer business development opportunities.The exercise of outstanding warrants and stock options will have a dilutive effect on the percentage ownership of our capital stock by existingstockholders.As of March 15, 2023, we had outstanding warrants to acquire 2,299,115 shares of our common stock and stock options to purchase 1,659 shares of ourcommon stock, which warrants and options are exercisable for prices ranging between $2.81 and $375. The expiration of the term of such options and warrants rangefrom 0.22 years to 4.83 years. If a significant number of such warrants and stock options are exercised by the holders, the percentage of our common stock ownedby our existing stockholders will be diluted.Were our common stock to become subject to the penny stock rules then this could result in U.S. brokerdealers becoming discouraged from effectingtransactions in shares of our common stock.Rule 15g9 under the Exchange Act establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a marketprice of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. If we do not retain a listing on the NasdaqCapital Market or do not meet certain net tangible asset or average revenue requirements and if the price of our common stock is less than $5.00, our common stockwill be deemed a penny stock. For any transaction involving a penny stock, unless exempt, the rules require: (a) that a broker or dealer approve a person’s accountfor transactions in penny stocks; and (b) the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantityof the penny stock to be purchased.In order to approve a person’s account for transactions in penny stocks, the broker or dealer must: (a) obtain financial information and investmentexperience objectives of the person and (b) make a reasonable determination that the transactions in penny stocks are suitable for that person and the person hassufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver,prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which: (a) sets forth the basis on whichthe broker or dealer made the suitability determination; and (b) confirms that the broker or dealer received a signed, written agreement from the investor prior to thetransaction. Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult forinvestors to dispose of our common stock and cause a decline in the market value of our common stock.Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissionspayable to both the broker or dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor incases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the accountand information on the limited market in penny stocks.Sales of our currently issued and outstanding stock may become freely tradable pursuant to Rule 144 and may dilute the market for your shares andhave a depressive effect on the price of the shares of our common stock.A portion of our outstanding shares of common stock are “restricted securities” within the meaning of Rule 144 under the Securities Act of 1933, asamended, or the Securities Act. As restricted shares, these shares may be resold only pursuant to an effective registration statement or under the requirements ofRule 144 or other applicable exemptions from registration under the Securities Act and as required under applicable state securities laws. Rule 144 provides inessence that an affiliate (as such term is defined in Rule 144(a)(1)) of an issuer who has held restricted securities for a period of at least six months (one year afterfiling Form 10 information with the SEC for shell companies and former shell companies) may, under certain conditions, sell every three months, in brokeragetransactions, a number of shares that does not exceed the greater of 1% of a company’s outstanding shares of common stock or the average weekly trading volumeduring the four calendar weeks prior to the sale (the four calendar week rule does not apply to companies quoted on the OTC Markets). Rule 144 also permits, undercertain circumstances, the sale of securities, without any limitation, by a person who is not an Affiliate of the Company and who has satisfied a oneyear holdingperiod. A sale under Rule 144 or under any other exemption from the Securities Act, if available, or pursuant to subsequent registrations of our shares of commonstock, may have a depressive effect upon the price of our shares of common stock in any active market that may develop.40We are a former “shell company” and as such are subject to certain limitations not applicable to other public companies generally.Prior to our suspension of reporting in 2012, we were a public reporting “shell company,” as defined in Rule 12b2 under the Exchange Act. Although weare no longer a “shell company,” we are subject to certain restrictions under the Securities Act for the resale of securities issued by issuers that have been at anytime previously a shell company. Specifically, the Rule 144 safe harbor available for the resale of our restricted securities is only available to our stockholders if wehave filed all reports and other materials required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934, as amended, or the Exchange Act, asapplicable, during the preceding twelve months, other than current reports on Form 8K, at the time of the proposed sale, regardless of whether the restrictedsecurities were initially issued at the time we were a shell company or subsequent to termination of such status. Accordingly, holders of our “restricted securities”within the meaning of Rule 144 will be subject to the conditions set forth in Rule 144 with respect to our company. Other reporting companies that are not formershell companies and have been reporting for more than twelve months are not subject to this same reporting threshold for nonaffiliate reliance on Rule 144.Accordingly, any restricted securities we have sold or sell in the future or issue to consultants or employees, in consideration for services rendered or for any otherpurpose, may not be resold unless such securities are registered with the SEC or the requirements of Rule 144 have been satisfied. As a result, it may be harder forus to fund our operations and pay our employees and consultants with our securities instead of cash. Furthermore, it may be harder for us to raise funding throughthe sale of debt or equity securities unless we agree to register such securities with the SEC, which could cause us to expend additional resources in the future. Ourprior status as a “shell company” could prevent us in the future from raising additional funds, engaging employees and consultants, and using our securities to payfor any acquisitions, which could cause the value of our securities, if any, to decline in value or become worthless.ITEM 1B. UNRESOLVED STAFF COMMENTSNone.ITEM 2. PROPERTIESWe currently lease 1,660 square feet of office space at 4 HaYarden Street, Airport City, Israel. The lease term is for 36 months beginning on August 20, 2019and ending on August 20, 2022, with an option to extend for an additional 36 months. Monthly rent payments, including utilities, amount to approximately $14,000per month. We extended the lease period until August 20, 2025.ITEM 3. LEGAL PROCEEDINGSFrom time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation issubject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.41North Empire LLCOn August 7, 2018, we commenced an action against North Empire LLC, or North Empire, in the Supreme Court of the State of New York, County of NewYork for breach of a Securities Purchase Agreement or Agreement in which we are seeking damages in an amount to be determined at trial, but in no event less than$616,000. On August 2, 2018, North Empire filed a Summons with Notice against us, also in the same Court, in which they allege damages in an amount of $11.4million arising from an alleged breach of the Agreement. On September 6, 2018, North Empire filed a Notice of Discontinuance of the action it had filed on August 2,2018. On September 27, 2018, North Empire filed an answer and asserted counterclaims in the action commenced by us against them, alleging that we failed to deliverstock certificates to North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against our CEO andnow former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018, we filed a reply to North Empire’scounterclaims. On November 15, 2018, our CEO and now former Chairman of the Board filed a motion to dismiss North Empire’s thirdparty complaint. On January 6,2020, the Court granted the motion and dismissed the thirdparty complaint. Discovery has been completed and both parties have filed motions for summaryjudgment in connection with the claims and counterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summaryjudgment, arguing there were factual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision.On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying the Company’s motion for summary judgment. On or about September 12,2022, the Court issued its Decision and Order denying the Company’s motion to reargue. North Empire filed its opposing brief on December 7, 2022. Both sides weregiven an opportunity to file a reply brief. We filed our reply brief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. Oral argument was heldbefore the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Court filed its Decision and Order, which affirmed the lower court’sdecisions regarding both My Size and North Empire’s motions for summary judgment and sent the case back to the Supreme Court. On or about March 13, 2023, theSupreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date for the mediation has not yet been set. We intend tovigorously defend any claims made by North Empire. We believe it is more likely than not that the counterclaims will be denied.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.42PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur stock currently is listed on the Tel Aviv Stock Exchange and the Nasdaq Capital Market under the symbol “MYSZ”. Our stock has been traded on theNasdaq Capital Market since July 25, 2016.HoldersAs of March 31, 2023, we had 70 shareholders of record. The actual number of stockholders is greater than this number of record holders and includesstockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our Board of Directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our Board of Directors deems relevant.Securities Authorized for Issuance under Equity Compensation PlansInformation about our equity compensation plans is incorporated herein by reference to “Item 12. Security Ownership of Certain Beneficial Owners andManagement and Related Stockholder Matters”, of this Annual Report on Form 10K.Recent Sales of Unregistered SecuritiesNone.ITEM 6. SELECTED FINANCIAL DATAAs a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULT OF OPERATIONSYou should read the following discussion along with our financial statements and the related notes included elsewhere in this Annual Report on Form10K. The following discussion contains forwardlooking statements that are subject to risks, uncertainties and assumptions, including those discussed under“Risk Factors.” Our actual results, performance and achievements may differ materially from those expressed in, or implied by, these forwardlooking statements.OverviewMySize is an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.43Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile device or through MySizeID Widget: a simple questionnaire which was uses a database collected over the years.MySizeID synchronizes the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and onlypresents items available for purchase that match their measurements to ensure a correct fit.MySize is positioning itself as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empowering brand design teams, which are designed to increaseend consumer satisfaction, contributing to a sustainable world and reduce operation costs.Orgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,682 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz BespokeTechnologies, S.L., or Naiz, a limited liability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.44The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 2,365,800 shares of My Size common stock were issuedto Whitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.45Operations in RussiaIn addition to our Israel operations, we had operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia. To date, mainly due to the invasion of Ukraine by Russia and the ongoing sanctions we stopped most ofour efforts in Russia and will probably close the subsidiary in the near future.Results of OperationsThe table below provides our results of operations for the periods indicated.Year ended December 3120222021(dollars in thousands)Revenues4,459131Cost of revenues(3,825)Gross profit634131Research and development expenses$(1,701)$(4,248)Sales and marketing(3,143)(2,336)General and administrative(3,900)(4,124)Operating loss(8,110)(10,577)Financial income (expenses), net(236)57Tax income36Net loss$(8,310)$(10,520)Year Ended December 31, 2022 Compared to Year Ended December 31, 2021RevenuesFrom inception through December 31, 2018, we did not generate any revenue from operations and we continue to expect to incur additional losses toperform further research and development activities. We started to generate revenues only in 2019. Our revenues for the year ended December 31, 2022 amounted to$4,459,000 compared to $131,000 for year ended December 31, 2021. The increase from the corresponding period primarily attributable to $4,132,000 in revenuegenerated from Orgad from February 7, 2022, the date of closing of the Orgad acquisition, or the Acquisition Date and revenue generated from the Naiz Acquisitionfrom October 11, 2022, the date of closing of the Naiz acquisition.In addition, the increase from the corresponding period results from an increase in revenues generated by My Size.Cost Of RevenuesOur cost of revenues expenses for the year ended December 31, 2022 amounted to $3,825,000, compared to none for the year ended December 31, 2021. Thecost of revenues includes cash and equity liabilities expenses in the amount of $194,000. The increase in comparison with the corresponding period was due to thecost of goods of the revenues generated from Orgad’s operations.Research and Development ExpensesOur research and development expenses for the year ended December 31, 2022 amounted to $1,701,000 a decrease of $2,547,000, or approximately 60.0%,compared to $4,248,000 for the year ended December 31, 2021. The decrease from the corresponding period primarily resulted from share based payment in amount of$2,618,000 attributed to the share issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021.Sales and Marketing ExpensesOur sales and marketing expenses for the year ended December 31, 2022 amounted to $3,143,000 an increase of $807,000, or 34.55%, compared to $2,336,000for the year ended December 31, 2021. The increase primarily resulted from an increase in employees expenses mainly due to Orgad and Naiz acquisitions, increase inAmazon fees, increase in cash and equity liabilities expenses attributed to the Orgad acquisition and an increase in share based payments offset by a decrease inpayments to consultants.46General and Administrative ExpensesOur general and administrative expenses for the year ended December 31, 2022 amounted to $3,900,000, a decrease of $224,000, or 5.43%, compared to$4,124,000 for the year ended December 31, 2021. The decrease compared to the corresponding period was mainly due to a decrease in professional expenses, mainlyattributed to shareholder activism including settlement expenses with the Lazar Parties offset by an increase in sharedbased payments and an increase in employeesexpenses mainly due to the Orgad and Naiz acquisitions.Operating LossAs a result of the foregoing, for the year ended December 31, 2022, our operating loss was $8,110,000, a decrease of $2,467,000 or 23.32%, compared to ouroperating loss for the year ended December 31, 2021 of $10,577,000.Financial Income, NetOur financial (expense) income, net for the year ended December 31, 2022 amounted to $236,000 compared to financial income, $57,000 for the year endedDecember 31, 2021. In 2022, we had financial expenses exchange rate differences offset by an income from fair value revaluation of investment in marketablesecurities whereas in 2021 we had financial income from the fair value revaluation of warrants offset by expenses from exchange rate differences and expenses fromfair value revaluation of investment in marketable securities.Net LossAs a result of the foregoing, our net loss for the year ended December 31, 2022 was $8,310,000 compared to net loss of $10,520,000 for the year endedDecember 31, 2021. The decrease in net loss was mainly due increase in sales and marketing expenses and financial expenses as opposed to financial income in thecorresponding period offset by a decrease in research and development expenses in amount of $2,618,000 attributed to the share issuance to Shoshana Zigdonunder the Amendment to Purchase Agreement dated May 26, 2021.Liquidity and Capital ResourcesSince our inception, we have funded our operations primarily through public and private offerings of debt and equity in Israel and in the U.S.As of December 31, 2022, we had cash, cash equivalents and restricted cash of $2,363,000 compared to $10,943,000 cash, cash equivalents, restricted cashas of December 31, 2021. During January 2023, we completed a registered direct and concurrent private placement offering resulting in gross proceeds ofapproximately $3 million. This decrease primarily resulted from our operating activities, the acquisition of Orgad and Naiz Fit, and resources that were deployed togrow of both businesses.Net cash used in operating activities was $7,290,000 for the year ended December 31, 2022 compared to $7,297,000 for the year ended December 31, 2021.The decrease in cash used in operating activity is derived mainly from an increase in share based payments and increase in account receivables mainly from theOrgad and Naiz fit acquisitions offset by a decrease in the net loss.Net cash used in investing activities for the year ended December 31, 2022 was $993,000 as opposed to net cash provided by investing activities of$161,000 for the year ended December 31, 2021. The net cash used in investing activities for the year ended December 31, 2022 was mainly from the acquisition ofOrgad and Naiz as opposed to proceeds from shortterm deposits and restricted deposits during the year ended December 31, 2021.We had a negative cash flow from financing activities of $67,000 for the year ended December 31, 2022 compared to positive cash flow of $16,292,000 for theyear ended December 31, 2021. The negative cash flow from financing activities for the year ended December 31, 2022 was mainly due to repayment of loans andinterest and payments for leases as opposed to proceeds from issuance of shares and from exercise of warrants for the year ended December 31, 2021.47We expect that we will continue to generate losses and negative cash flows from operations for the foreseeable future. Based on the projected cash flowsand cash balances as of December 31, 2022, together with the proceeds from the January 2023 financing, we believe our existing cash will not be sufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. We will need to raiseadditional capital, which may not be available on reasonable terms or at all. Additional capital would be used to accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;●respond to competitive pressures;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, the Russian invasion ofUkraine, the impact of any resurgence of the COVID19 pandemic and a number of other factors, many of which are outside our control, and on our financialperformance. Accordingly, we cannot assure you that we will be able to successfully raise additional capital at all or on terms that are acceptable to us. If we cannotraise additional capital when needed, it may have a material adverse effect on our business, results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.We have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.Recently Issued Accounting PronouncementsCertain recently issued accounting pronouncements are discussed in Note 2, Significant Accounting Policies, to the consolidated financial statementsincluded in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10K.OffBalance Sheet ArrangementsWe have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.48Application of Critical Accounting Policies and EstimatesOur management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we haveprepared in accordance with U.S. generally accepted accounting principles issued by the Financial Accounting Standards Board, or FASB. The preparation of thesefinancial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assetsand liabilities at the date of the financial statements, as well as the reported expenses during the reporting periods. Actual results may differ from these estimatesunder different assumptions or conditions.Our significant accounting policies were revenue from contracts with customers which are more fully described in the notes to our financial statementsincluded herein. We believe these accounting policies discussed below are critical to our financial results and to the understanding of our past and futureperformance, as these policies relate to the more significant areas involving management’s estimates and assumptions. We consider an accounting estimate to becritical if: (1) it requires us to make assumptions because information was not available at the time or it included matters that were highly uncertain at the time wewere making our estimate; and (2) changes in the estimate could have a material impact on our financial condition or results of operations.Accounting for business combinationsWe allocate the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed, based upon their estimated fairvalues at the acquisition date. These fair values are typically estimated with assistance from independent valuation specialists.The purchase price allocation process requires us to make significant estimates and assumptions, especially at the acquisition date with respect tointangible assets, contractual support obligations assumed, contingent consideration arrangements, and preacquisition contingencies.Although we believe the assumptions and estimates we have made in the past have been reasonable and appropriate, they are based in part on historicalexperience and information obtained from the management of the acquired companies and are inherently uncertain.Examples of critical estimates in valuing certain of the intangible assets we have acquired or may acquire in the future include but are not limited to:● future expected cash flows from product sales or other customer contracts;● expected costs of fulfillment including marketing, warehousing and product sales;● the acquired company’s brand and competitive position, as well as assumptions about the period of time the acquired brand will continue to be used inthe combined company’s product portfolio;● cost of capital and discount rates; and● estimating the useful lives of acquired assets as well as the pattern or manner in which the assets will amortize.Refer to Note 16, Business Combination, to the consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” of thisAnnual Report on Form 10K.49Revenue from contracts with customersOur revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled software subscriptions, associatedsoftware maintenance and support.We recognize revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with a customer exists onlywhen: the parties to the contract have approved it and are committed to perform their respective obligations, we can identify each party’s rights regarding thedistinct goods or services to be transferred (“performance obligations”), we can determine the transaction price for the goods or services to be transferred, thecontract has commercial substance and it is probable that we will collect the consideration to which we will be entitled in exchange for the goods or services that willbe transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to a customer.Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted to governmental authorities. Refundsare estimated at contract inception and updated at the end of each reporting period if additional information becomes available. Revenue is recognized when controlof the product is transferred to the customer.We maintain a returns policy that allows our customers to return product within a specified period of time. The estimate of the provision for returns is basedupon historical experience with actual returns.Principal versus Agent ConsiderationsWe follow the guidance provided in ASC 606 for determining whether we are a principal or an agent in arrangements with customers, by assessing whetherthe nature of our promise is a performance obligation to provide the specified goods (principal) or to arrange for those goods to be provided by the other party(agent). With regard to products being sold by Orgad through Amazon, this determination involves judgment. We determine it is the principle when it has controlover the promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).We recognize revenue ratably over the contractual service term for hosted services that are priced based on a committed number of transactions where thedelivery and consumption of the benefit of the services occur evenly over time, beginning on the date the services associated with the committed transactions arefirst made available to the customer and continuing through the end of the contractual service term. Over usage fees and fees based on the actual number oftransactions are billed in accordance with contract terms as these fees are incurred and are included in the transaction price of an arrangement as variableconsideration. Fees based on a number of transactions or impressions per month, are allocated to the period in which the transactions occur. Revenue forsubscriptions sold as a fee per period is recognized ratably over the contractual term as the customer simultaneously receives and consumes the benefit of theunderlying service.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.As a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.50ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAMY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2022U.S. DOLLARS IN THOUSANDSINDEXPageReport of Independent Registered Public Accounting Firm (PCAOB ID: ID 1057)F2Consolidated Balance SheetsF4Consolidated Statements of Comprehensive LossF5Consolidated Statements of Shareholders’ EquityF6Consolidated Statements of Cash FlowsF7Notes to Consolidated Financial StatementsF8 F33F1Report of Independent Registered Public Accounting FirmTo the Shareholders and Board of DirectorsMy Size, Inc.:Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of My Size, Inc. and subsidiaries (the Company) as of December 31, 2022 and 2021, the relatedconsolidated statements of comprehensive loss, shareholders’ equity, and cash flows for each of the years in the twoyear period ended December 31, 2022, and therelated notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, thefinancial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the twoyear periodended December 31, 2022, in conformity with U.S. generally accepted accounting principles.Going ConcernThe accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1d tothe consolidated financial statements, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit thatraises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1d. Theconsolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidatedfinancial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Critical Audit MattersCritical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to becommunicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved ourespecially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidatedfinancial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters oron the accounts or disclosures to which they relate.Acquisitiondate fair value of customer relationshipsAs discussed in Note 16 to the consolidated financial statements, on October 11, 2022, the Company acquired Naiz Bespoke Technologies SL (“Naiz”). As a result ofthe transaction, the Company acquired customer relationships intangible assets (“customer relationships”) representing the generation of future income from Naiz’sexisting customers. The acquisition date fair value of the customer relationships was $726 thousand.F2We identified the evaluation of the acquisitiondate fair value of the Naiz customer relationships as a critical audit matter. A high degree of subjective auditorjudgment was required to evaluate the following internally developed assumptions used to estimate the fair value of such asset, for which there were limitedobservable inputs: (i) forecasted revenues attributable to existing customers, (ii) forecasted earnings before interest, taxes, depreciation, and amortization(“EBITDA”) margins for the acquired business, (iii) estimated annual customer attrition rates and (iv) estimated discount rate. The determined fair value wassensitive to changes in these key assumptions. Additionally, specialized skills and knowledge were needed to evaluate the discount rate used.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s acquisitiondate fair value estimation process, including controls over the development of key assumptions. We performed a sensitivity analysis toassess the impact of reasonably possible changes to forecasted revenues, EBITDA margins, annual customer attrition rates, and the discount rate. We evaluated theforecasted revenue growth rates from existing customers by comparing the growth assumptions to those of the Company’s peers and industry reports. Inconnection with our assessment of the forecasts used in the valuation, we compared (1) forecasted revenue and EBITDA to Naiz’s historical actual results and (2)estimated annual customer attrition rates to historical Naiz customer attrition data. We tested the Company’s determined weighted average cost of capital(“WACC”), which was used to determine the discount rate, by involving valuation professionals with specialized skills and knowledge, who assisted in:Evaluating the selected discount rate by comparing it against a discount rate range that was independently developed using publicly available market datafor comparable companies, and;Assessing the Company’s WACC calculation, by comparing it against an independently estimated WACC range based on inputs obtained throughpublished surveys and studies.Goodwill impairment assessmentAs discussed in Note 16 to the consolidated financial statements, during 2022 the Company recorded goodwill of $1,257 thousand related to the acquisition of NaizBespoke Technologies, S.L. (“Naiz”). The Company performed an annual quantitative impairment test of goodwill at the reporting unit level. Based on this analysis,the Company determined that the fair value of its reporting unit exceeded its carrying value and no impairment charge was required.We identified the evaluation of the goodwill impairment assessment for the Naiz reporting unit as a critical audit matter. A high degree of subjective auditor judgmentwas required to evaluate the following assumptions used to estimate the fair value of the Company’s reporting unit, for which there were limited observable inputs:(i) forecasted reporting unit cash flows, (ii) longterm growth rates, and (iii) discount rates. The fair value was sensitive to changes in these key assumptions.Additionally, specialized skills and knowledge were needed to evaluate the discount rates.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s goodwill impairment evaluation process. We performed sensitivity analyses to assess the impact of reasonably possible changes to forecasted cashflows, longterm growth rates, and discount rates. We evaluated the Company’s forecasted growth rates by comparing the growth assumptions to those of theCompany’s peers and industry reports. We compared the Company’s forecasted revenue, cost of sales, and operating expense margins to historical actual results toassess the reasonableness of the forecasts. In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:– Assessing the Company’s WACC calculation, by comparing it against an estimated WACC range based on inputs obtained through published surveys andstudies– Evaluating the discount rates used by the Company by comparing them against discount rate ranges that were developed using publicly available market data forcomparable companies, and;– Performing an arithmetic recalculation regarding the fair value of the Company’s reporting unit, using the Company’s cash flow forecasts and the independentlydeveloped discount rates, and comparing the results to the Company’s fair value estimates./s/ Somekh ChaikinSomekh ChaikinMember Firm of KPMG InternationalWe have served as the Company’s auditor since 2017.Tel Aviv, IsraelApril 14, 2023F3MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED BALANCE SHEETSU.S. dollars in thousands (except share data)December 31,Note20222021AssetsCurrent assetsCash and cash equivalents32,10010,670Restricted cash263273Inventory997Account receivables1,94040Other receivables and prepaid expenses4758579Total current assets6,05811,562Long term deposits28Property and equipment, net5140112Operating rightofuse asset6583776Intangible assets71,377Goodwill71,395Investment in JV899Investment in marketable securities11471083,669996Total assets9,72712,558Liabilities and shareholders’ equityCurrent liabilitiesOperating lease liability6159138Shortterm loans9155Trade payables2,487635Liabilities to Related parties69863Other payables680392Total current liabilities4,1791,228Longterm loans9376Deferred tax liabilities328Operating lease liability6308473Total noncurrent liabilities1,012473CONTINGENCIES AND COMMITMENTS15Total Liabilities5,1911,701Shareholders’ equity13Stock capital Common stock of $0.001par value Authorized: 250,000,000and 100,000,000shares as of December 31,2022 and 2021; Issued and outstanding: 1,464,117and959,297 as of December 31,2022 and 2021, respectively (*)11Additional paidin capital58,67356,453Accumulated other comprehensive loss(637)(406)Accumulated deficit(53,501)(45,191)Total shareholders’ equity4,53610,857Total liabilities and shareholders’ equity9,72712,558(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F4MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSSU.S. dollars in thousands (except share data and per share data)Year endedDecember 31,Note20222021Revenues4,459131Cost of revenues(3,825)Gross profit634131Operating expensesResearch and development(1,701)(4,248)Sales and marketing18(3,143)(2,336)General and administrative19(3,900)(4,124)Total operating expenses(8,744)(10,708)Operating loss(8,110)(10,577)Financial income (expense), net20(236)57Loss before taxes(8,346)(10,520)Taxes on income36Net loss for the year(8,310)(10,520)Other comprehensive income (loss):Foreign currency translation differences(231)18Total comprehensive loss(8,541)(10,502)Basic and diluted loss per share (*)(7.47)(17.75)Basic and diluted weighted average number of shares outstanding (*)1,111,913420,385(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F5MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITYU.S. dollars in thousands (except share data)Common stockAdditionalpaidinAccumulatedothercomprehensiveAccumulatedTotalstockholders’NumberAmountcapitallossDeficitequityBalance as of January 1, 2021289,314(*)37,171(424)(34,671)2,076Stockbased compensation related to optionsgranted to employees and consultants373373Exercise of options granted to employees178(*)Restricted shares issued to shareholder (***)100,000(*)2,6182,618Issuance of shares, net of issuance cost of$1,160434,700112,58212,583Exercise of warrants135,108(*)3,7093,709Total comprehensive income (loss)18(10,520)(10,502)Balance as of December 31, 2021959,300156,453(406)(45,191)10,857Stockbased compensation related to optionsand restricted shares granted to employeesand consultants176,000(*)455455Issuance of shares in Business Combination(**)295,802(*)1,4461,446Issuance of shares post BusinessCombination (**)20,924(*)319319Effect of reverse stock split (Note 13 g)12,091(*)Total comprehensive income (loss)(231)(8,310)(8,541)Balance as of December 31, 20221,464,117158,673(637)(53,501)4,536(*)Represents an amount of less than $1.(**)See note 16(***)See note 1 bThe accompanying notes are an integral part of the consolidated financial statements.F6MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSU.S. dollars in thousandsYear endedDecember 31,20222021Cash flows from operating activities:Net loss(8,310)(10,520)Adjustments to reconcile net loss to net cash used in operating activities:Depreciation3842Change in operating lease rightofuse asset13543Amortization of intangible assets155foreign exchange differences(23)1Change in liabilities to related parties635Interest on long term liabilities10Interest paid(10)Revaluation of investment in marketable securities62(49)Restricted Shares issued to shareholder2,618Stock based compensation455373Issuance of shares post Business Combination319Change in inventory(219)Change in deferred tax liabilities(36)Change in account receivable(1,863)(12)Changes in operating lease liabilities(142)Change in other receivables and prepaid expenses184(99)Change in trade payables1,315253Change in other payables553Net cash used in operating activities(7,290)(7,297)Cash flows from investing activities:Acquisition of a subsidiary, net of cash acquired(767)Proceeds from restricted deposits, net184investing in other receivable(100)Investment in equity accounted investee(99)Purchase of property and equipment(27)(23)Net cash (used in) provided by investing activities(993)161Cash flows from financing activities:Proceeds from issuance of shares, net of issuance costs12,583Repayment of loans(67)Proceeds from exercise of warrants3,709Net cash (used in) provided by financing activities(67)16,292Effect of exchange rate fluctuations on cash and cash equivalents(230)13Change in cash and cash equivalents and restricted cash(8,580)9,169Cash and cash equivalents and restricted cash at the beginning of the year10,9431,774Cash and cash equivalents and restricted cash at the end of the year2,36310,943B) Aggregate cash flows derived for the Company as a result of the Orgad acquisition (note 16)2022Trade and other receivables364Inventory864Fixed assets55Longterm deposits31Selling Platform378Goodwill152Shortterm credit(181)Trade payables(580)Other payables(88)Longterm loan(138)Longterm provision(13)Deferred Tax Liability(87)Issuance of shares(457)Total acquisition of subsidiary, net of cash300C) Aggregate cash flows derived for the Company as a result of the Naiz acquisition (note 16)2022Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Issuance of shares(1,008)Total acquisition of subsidiary, net of cash467The accompanying notes are an integral part of the consolidated financial statements.F7MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERALa.My Size, Inc. is developing unique measurement technologies based on algorithms with applications in a variety of areas, from the apparel ecommerce market, to the courier services market and to the Do It Yourself (“DIY”) smartphone and tablet apps market. The technology is driven byproprietary algorithms, which are able to calculate and record measurements in a variety of novel ways.Following the acquisition of Naiz Bespoke Technologies, S.L (“Naiz”) in October 2022 (see note 16), the Company expanded its offering outreachand customer base.Following the acquisition of Orgad International Marketing Ltd. (“Orgad”) in February 2022 (see note 16), the Company also operates anomnichannel ecommerce platform.The Company has five subsidiaries, My Size Israel 2014 Ltd (“My Size Israel”), Topspin Medical (Israel) Ltd., and Orgad all of which areincorporated in Israel, and My Size LLC which was incorporated in the Russian Federation and Naiz Bespoke Technologies, S.L., a limited liabilitycompany incorporated under the laws of Spain (see note 16). References to the Company include the subsidiaries unless the context indicatesotherwise.My Size, Inc., was incorporated and commenced operations in September 1999, as Topspin Medical Inc. (“Topspin”), a private company registeredin the State of Delaware. In December 2013, the Company changed its name to Knowledgetree Ventures Inc. Subsequently, in February 2014, theCompany changed its name to My Size, Inc. Topspin was engaged, through its Israeli subsidiary, in research and development in the field ofcardiology and urology.Since September 1, 2005, the Company has traded on the Tel Aviv Stock Exchange (“TASE”).Between 2007 and 2012 the Company reported as a public company with the U.S. Securities and Exchange Commission (the “SEC”). In August2012, the Company suspended its reporting obligations under Section 13(a) and 15(d) of the Securities Exchange Act of 1934. In mid2015, theCompany resumed reporting as a public company.b.On January 9, 2014, at the Company’s general meeting of shareholders, its shareholders approved an engagement with one of the Company’sinvestors (the “Seller”) for the purchase of rights in a Venture (the “Venture”), including the rights to the method and the certain patent applicationthat had been filed by the Seller (the “Assets”). The Venture relates to the development of technologies and applications which will assist theconsumer to take his or her body measurements accurately using a mobile device to ensure the purchase of clothing with the best possible fitwithout the need to try them on.In February 2014, the Company established a wholly owned subsidiary, My Size (Israel) 2014 Ltd., a company registered in Israel, which iscurrently engaged in the development of the Venture described above.In return for purchasing an interest in the Venture, the Company undertook to pay the Seller 18% of the Company’s operating profit, direct orindirect, connected to the Venture for a period of seven years starting from the end of the Venture’s development period.As part of the agreement, the Seller received an option to buy back the Assets for consideration which will reflect the market fair value at that time,on the occurrence of the following events: a) if a motion is filed to liquidate the Company; b) if seven years after signing the agreement, theCompany’s total accumulated revenues, direct or indirect, from the Venture or the commercialization of the patent will be lower than NIS 3.6 million.In such an event, Seller may repurchase the interest in the Venture at a market price to be determined by an independent third party valuationconsultant, who shall be chosen by agreement by the parties, and the audit committee shall conduct the negotiations on behalf of the Company todetermine the identity of the consultant.On May 26, 2021, the Company, My Size Israel and Shoshana Zigdon entered into an Amendment to Purchase Agreement (the “Amendment”)which made certain amendments to a Purchase Agreement between the parties dated February 16, 2014 (the “Purchase Agreement”). Pursuant tothe Amendment, Ms. Zigdon agreed to irrevocably waive the right to repurchase certain assets related to the collection of data for measurementpurposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which the Company’s business is substantiallydependent, and all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My Size Israel underthe Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation,reward or any rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights(the “Waiver”). In consideration of the Waiver, the Company issued 100,000 shares of common stock to Ms. Zigdon in a private placement.F8MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERAL (Cont.)c.On July 25, 2016, the Company’s common stock began publicly trading on the Nasdaq Capital Market under the symbol “MYSZ”. The Company’sshares of common stock are listed both on the Nasdaq Capital Market and TASE.d.Since inception, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit of $53,501.The Company has financed its operations mainly through fundraising from various investors.The Company’s management expects that the Company will continue to generate losses and negative cash flows from operations for theforeseeable future. Based on the projected cash flows and cash balances as of December 31, 2022, management is of the opinion that its existingcash will be sufficient to fund operations for a period less than 12 months. As a result, there is substantial doubt about the Company’s ability tocontinue as a going concern.Management’s plans include the continued commercialization of the Company’s products and securing sufficient financing through the sale ofadditional equity securities, debt or capital inflows from strategic partnerships. Additional funds may not be available when the Company needsthem, on terms that are acceptable to it, or at all. If the Company is unsuccessful in commercializing its products and securing sufficient financing,it may need to cease operations.The financial statements include no adjustments for measurement or presentation of assets and liabilities, which may be required should theCompany fail to operate as a going concern.e.The Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificial intelligencedriven measurement solutions (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions. The fashion and equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. The SaaS based innovativeartificial intelligence driven measurement solutions, or SaaS Solutions operating segment consists of My Size Inc My Size Israel and LLC.NOTE 2 SIGNIFICANT ACCOUNTING POLICIESThe consolidated financial statements are prepared according to United States generally accepted accounting principles (“U.S. GAAP”), applied on aconsistent basis, as followsa.Use of estimates:The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions thataffect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.Information about assumptions made by the Company with respect to the future and other reasons for uncertainty with respect to estimates thathave a significant risk of resulting in a material adjustment to carrying amounts of assets and liabilities in the next financial year are included in thefollowing notes:Acquisitions of subsidiariesThe Company measures the fair value of the consideration transferred (including contingent consideration) and fair value of the assets acquiredand liabilities assumed, in business combination transactions. For information on details on fair value measurement in acquisition of subsidiaries,see Note 16 regarding business combinations.Estimated impairment of nonfinancial assetsThe Company examines on an annual basis whether there is an impairment of goodwill, intangibles and property, plant and equipment that areallocated to cash generating units, in accordance with the accounting policy presented in Note 1(h) below. Recoverable amounts of cashgenerating units are determined on the basis of valueinuse calculations. These calculations require the use of estimates.For information on key assumptions used in calculation of the recoverable amount, see note 7 – Goodwill and other Intangible assets.b.Functional currency:The currency of the primary economic environment in which the operations of the Company is conducted is the United States Dollar and thus it isthe Company’s functional currency. The reporting currency according to which these financial statements are prepared is the U.S. dollar.The currency of the primary economic environment in which the operation of the Subsidiary, My Size Israel and Orgad International MarketingLtd. functional currency is the New Israeli Shekel (“NIS”).The currency of the primary economic environment in which the operation of the Subsidiary, My Size LLC, functional currency is Russian Ruble.The currency of the primary economic environment in which the operation of the Subsidiary, Naiz fit, functional currency is Euro.F9MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)c.Principles of consolidation:The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances andtransactions have been eliminated upon consolidation.d.Cash equivalents:Cash equivalents are shortterm highly liquid investments that are readily convertible to cash with original maturities of three months or less at thedate acquired.e.Restricted cashRestricted cash are deposits for rent, credit card and for hedging activities.f.Inventories:Inventories include finished goods and are measured at the lower of cost or net realizable value. The cost of inventories comprises of the costsincurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary courseof business. At the point of the loss recognition, a new, lowercost basis for that inventory is established, and subsequent changes in facts andcircumstances do not result in the restoration or increase in that newly established cost basis. The costs of purchase of inventories comprise thepurchase price and other costs directly attributable to the acquisition of finished goods. In 2022, the Company recorded an inventory markdownof $48.g.Property and equipment:Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straightline method over theestimated useful lives of the assets, at the following annual rates:%Computers and peripheral equipment33Office furniture and equipment720Leasehold improvementsOver the term of the leaseor the useful life of theimprovements, whicheveris shorterh.Impairment of longlived assets:The Company’s property and equipment are reviewed for impairment in accordance with ASC 360, “Property Plant and Equipment”, wheneverevents or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held andused is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by theassets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount ofthe assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less sellingcosts. During the periods ended December 31, 2022 and 2021, no impairment losses have been recorded.i.Business combinations:The Company applies the provisions of ASC 805, “Business Combination” and allocates the fair value of purchase consideration to the tangibleassets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchaseconsideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assetsacquired and liabilities assumed, the Company estimated the future expected cash flows from acquired platform, customer relationships,Technology and trademark from a market participant perspective, useful lives and discount rates. In addition, management makes significantestimates and assumptions, which are uncertain, but believed to be reasonable.Acquisitionrelated costs are recognized separately from the acquisition and are expensed as incurred.F10MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)j.Goodwill:Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a businesscombination. Under ASC 350, “Intangible Goodwill and Other”, goodwill is not amortized, but rather is subject to an annual impairment test.ASC 350 requires goodwill to be tested for impairment at the reporting unit level at least annually, the fourth quarter, or between annual tests incertain circumstances, and written down when impaired. Goodwill is tested for impairment by comparing the fair value of the reporting unit with itcarrying value. Goodwill from Orgad acquisition was allocated to the fashion and equipment ecommerce platform segment and Goodwill from theNaiz acquisition was allocated to Naiz segment based innovative artificial intelligence driven measurement solutions.Alternatively, ASC 350 permits an entity to bypass the qualitative assessment for any reporting unit and proceed directly to performing the firststep of the goodwill impairment test. There were no impairment charges to goodwill during the period presented.k.Intangible assets:Intangible assets consist of identifiable intangible assets that the Company has acquired from previous business combinations. Intangible assetsare recorded at costs, net of accumulated amortization. The Company amortizes its intangible assets reflecting the pattern in which the economicbenefits of the intangible assets are consumed. When a pattern cannot be reliably determined, the Company uses a straightline amortizationmethod. Amortization is calculated by the straightline method over the estimated useful lives of the following assets.The estimated useful lives of the company’s intangible assets are as follows:yearsCustomer Relationships7Technology5Trademark5Selling Platform3Each period the Company evaluates the estimated remaining useful lives of its intangible assets and whether events or changes in circumstanceswarrant a revision to the remaining period of amortizationl.Severance pay:The Subsidiary’s liability for severance pay is covered by Section 14 of the Israeli Severance Pay Law (“Section 14”). Under Section 14, employeesin Israel are entitled to have monthly deposits, at a rate of 8.33% of their monthly salary, made on their behalf to their insurance funds. Payments inaccordance with Section 14 exempt the Subsidiary from any additional obligation for these employees. As a result, the Subsidiary does notrecognize any liability for severance pay due to these employees and the deposits under Section 14 are not recorded as an asset in theSubsidiary’s balance sheet. These contributions for compensation represent defined contribution plans and expenses are recorded based onactual deposits.Other than the My Size Israel’s liability there are no additional severance pay liabilities.F11MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)m.Research and development costs:Research and development costs are charged to the statement of operations, as incurred. Most of the research and development expenses are forwages, related expenses and subcontractors.n.Income taxes:The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilitiesfor the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Companies’ taxreturns. Deferred taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities using enactedtax rates in effect in the years in which the differences are expected to reverse. The Company assesses the likelihood that its deferred tax assetswill be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely thannot that all or a portion of deferred tax assets will not be realized. The Company establishes a valuation allowance, if necessary, to reduce deferredtax assets to the amount more likely than not to be realized. As of December 31, 2022, and 2021, a full valuation allowance was established by theCompany.The Company implements a twostep approach to recognize and measure the benefit of its tax positions. The first step is to evaluate the taxposition taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that,on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigationprocesses. The second step is to measure the tax benefit as the largest amount that is greater than 50 percent (cumulative basis) likely to berealized upon settlement.The Company believes that its tax positions are all highly certain of being upheld upon examination. As of December 31,2022 and 2021 the Company recorded a liability for unrecognized tax benefits of $328 and none respectively.o.Accounting for stockbased compensation:The Company accounts for its employees’ stockbased compensation as an expense in the financial statements based on ASC 718. All awards areequity classified and therefore such costs are measured at the grant date fair value of the award and graded vesting attribution approach torecognize compensation cost over the vesting period. The Company estimates stock option grant date fair value using the Binomial and BlackScholes option pricingmodel.The Company recorded stock options issued to nonemployees at the grant date fair value, and recognizes expenses over the related serviceperiod by using the straightline attribution approach in accordance with ASU 201807. All awards are equity classified.The expected volatility of the share prices reflects the assumption that the historical volatility of the share prices is reasonably indicative ofexpected future trends.The riskfree interest rate for grants with an exercise price denominated in USD for employees and several consultants is based on the yield fromUS treasury zerocoupon bonds with an equivalent term.The Company has historically not paid dividends and has no foreseeable plans to pay dividends.F12MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)p.Fair value of financial instruments:ASC 820, Fair Value Measurements and Disclosures, relating to fair value measurements, defines fair value and established a framework formeasuring fair value. The ASC 820 fair value hierarchy distinguishes between market participant assumptions developed based on market dataobtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptionsdeveloped based on the best information available in the circumstances. ASC 820 defines fair value as the price that would be received to sell anasset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price. Inaddition, the fair value of assets and liabilities should include consideration of nonperformance risk, which for the liabilities described belowincludes the Company’s own credit risk.As a basis for considering such assumptions, ASC 820 establishes a threetier value hierarchy, which prioritizes the inputs used in the valuationmethodologies in measuring fair value:Level 1 Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access. Valuationadjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readilyand regularly available in an active market, valuation of these products does not entail a significant degree of judgment.Level 2 Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, eitherdirectly or indirectly.Level 3 Valuations based on inputs that are unobservable and significant to the overall fair value measurement.The Company holds share certificates in iMine Corporation (“iMine”) formerly known as Diamante Minerals, Inc., a publiclytraded company onthe OTCQB.Due to sales restrictions on the sale of the iMine shares, the fair value of the shares was measured on the basis of the quoted market price for anotherwise identical unrestricted equity instrument of the same issuer that trades in a public market, adjusted to reflect the effect of the salesrestrictions and is therefore, ranked as Level 2 asset.q.Basic and diluted net loss per share:Basic net loss per share is computed based on the weighted average number of shares of common stock outstanding during each year. Diluted netincome per share is computed based on the weighted average number of shares of common stock outstanding during each year plus dilutivepotential equivalent common stock considered outstanding during the year, in accordance with ASC 260, “Earnings per Share”. For the yearsended December 31, 2022 and 2021, all outstanding options and warrants have been excluded from the calculation of the diluted net loss per sharesince their effect was antidilutive.r.Concentrations of credit risk:Financial instruments that potentially subject the Company and its subsidiaries to concentrations of credit risk consist principally of cash andcash equivalents.Cash and cash equivalents are invested in banks in Israel, Spain and United States. Such deposits in United States may be in excess of insuredlimits and are not insured in other jurisdictions. Management believes that the financial institutions that hold the Company’s investments arefinancially sound and, accordingly, minimal credit risk exists with respect to these investments.The Company and its subsidiaries have no offbalancesheet concentration of credit risk such as foreign exchange contracts, option contracts orother foreign hedging arrangements.F13MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)s.Revenue Recognition:The Company’s revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled softwaresubscriptions, associated software maintenance and support.The Company recognizes revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with acustomer exists only when: the parties to the contract have approved it and are committed to perform their respective obligations, the Companycan identify each party’s rights regarding the distinct goods or services to be transferred (“performance obligations”), the Company can determinethe transaction price for the goods or services to be transferred, the contract has commercial substance and it is probable that the Company willcollect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to acustomer. Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted togovernmental authorities. Refunds are estimated at contract inception and updated at the end of each reporting period if additional informationbecomes available. Revenue is recognized when control of the product is transferred to the customer.The Company maintains a returns policy that allows its customers to return product within a specified period of time. The estimate of the provisionfor returns is based upon historical experience with actual returns.Principal versus Agent ConsiderationsThe Company follows the guidance provided in ASC 606 for determining whether it is a principal or an agent in arrangements with customers, byassessing whether the nature of the Company’s promise is a performance obligation to provide the specified goods (principal) or to arrange forthose goods to be provided by the other party (agent). With regard to products being sold by Orgad through Amazon, this determination involvesjudgment. The Company determines it is the principle when it has control over promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).The Company recognizes revenue ratably over the contractual service term for hosted services that are priced based on a committed number oftransactions where the delivery and consumption of the benefit of the services occur evenly over time, beginning on the date the servicesassociated with the committed transactions are first made available to the customer and continuing through the end of the contractual serviceterm. Over usage fees and fees based on the actual number of transactions are billed in accordance with contract terms as these fees are incurredand are included in the transaction price of an arrangement as variable consideration. Fees based on a number of transactions or impressions permonth, are allocated to the period in which the transactions occur. Revenue for subscriptions sold as a fee per period is recognized ratably overthe contractual term as the customer simultaneously receives and consumes the benefit of the underlying service.F14MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)t.Contingencies and CommitmentsLiabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it isprobable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with losscontingencies are expensed as incurred.u.Derivative instrumentsThe Company accounts for its derivative instruments as either assets or liabilities and measures them at fair value through profit or loss.v.LeasesThe Company leases include an office space lease agreement for 36 months, with an option to extend for an additional 36 months and 36 monthscancelable operating lease agreements on behalf of personnel vehicles. The lease term includes a noncancellable period of the lease plus anyadditional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise,or an option to extend (or not to terminate) the lease controlled by the lessor.ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make leasepayments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value oflease payments over the lease term. The company generally use its incremental borrowing rate based on the estimated rate of interest forcollateralized borrowing over a similar term of the lease payments at commencement date. Lease expense for lease payments is recognized on astraightline basis over the lease term.For the office rent lease, the Company has elected to account for the lease and nonlease maintenance components as a single lease component.Therefore, the lease payments used to measure the lease liability include all of the fixed consideration in the contract, including insubstance fixedpayments, owed over the lease term.w.Impact of recently issued accounting standardIn June 2016, the FASB issued ASU 201613, “Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses on FinancialInstruments”, which requires companies to measure credit losses of financial instruments, including customer accounts receivable, utilizing amethodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information toinform credit loss estimates. Subsequent to the issuance of ASU 201613, the FASB issued several additional Accounting Standard Updates toclarify implementation guidance, provide narrowscope improvements and provide additional disclosure guidance. As an Emerging GrowthCompany, ASU 201613 is effective for fiscal years beginning after December 15, 2022. The Company does not expect this ASU to have a materialimpact on its consolidated financial statements.F15MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 3 CASH AND CASH EQUIVALENTSThe Company’s cash and cash equivalents balance at December 31, 2022 and 2021 is denominated in the following currencies:December 31,20222021US Dollars1,65110,184New Israeli Shekels259433Other190532,10010,670NOTE 4 OTHER RECEIVABLES AND PREPAID EXPENSESDecember 31,20222021Prepaid expenses and other current assets322429Government authorities28317Other153133Total758579NOTE 5 PROPERTY AND EQUIPMENT, NETComputersandperipheralequipmentOfficefurnitureandequipmentLeaseholdimprovementsTotalCostBalance as at January 1, 20211825860300Additions2323Translation adjustments72211Balance as at December 31, 20212126062334Balance as at January 1, 20222126062334Additions161127Business combination401555Translation adjustments(32)(8)(8)(48)Balance as at December 31, 20222367854368Accumulated DepreciationBalance as at January 1, 20211461412172Additions2751042Translation adjustments6118Balance as at December 31, 20211792023222Balance as at January 1, 20221792023222Additions209938Translation adjustments(27)(3)(2)(32)Balance as at December 31, 20221722630228Carrying amountsAs at December 31, 2021334039112As at December 31, 2022645224140F16MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 6 LEASESIn August 2019, The Company entered into an office space lease agreement. The lease term is for 36 months beginning on August 20, 2019 and endingon August 20, 2022, with an option to extend for an additional 36 months. The Company extended the lease period until August 20, 2025. Monthly rentpayments including utilities amounting to approximately USD 14 (NIS 49,500) per month.In addition, The Company entered into a threeyear cancelable operating lease agreement for cars.These operating leases are included in “Right of use asset” on the Company’s December 31, 2022 consolidated balance sheets, and represent theCompany’s right to use the underlying asset for the lease term. The Company’s obligations to make lease payments are included in the currentliabilities as “Operating lease liability” and in the noncurrent liabilities as “Operating lease liability long term” on the Company’s December 31, 2022consolidated balance sheets. As of December 31, 2022, rightofuse of asset was $583. operating lease liabilities were $159 and non current Operatinglease liabilities were $308. Rightofuse asset includes the capitalization of improvements (net of amortization) amounting to $105.Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value ofthe lease payments.The interest rate used to discount future lease payment was 11.95%.Maturities of lease liabilities as of December 31, 2022 were as follows:Year Ending:2023$1912024$1912025$127Thereafter$509Less imputed interest:$(42)Total lease liabilities$467F17MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 7 – Goodwill and other Intangible assetsA.Identified intangible assetsSchedule of Intangible assetsSelling PlatformTechnologyCustomerRelationshipsOtherTotalThousandsUSDThousandsUSDThousandsUSDThousandsUSDThousandsUSDCostAs of January 1, 2022Acquisitions through business combinations378286726771,467Effect of changes in exchange rates(32)2565765As of December 31, 2022346311791841,532AmortizationAs of January 1, 2022Amortization for the year including effect of changes inexchange rates as of December 31, 2022(109)(15)(27)(4)(155)Carrying amountAs of December 31, 2022237296764801,377AmortizationAmortization expenses recorded for identified intangible assets in the Consolidated Statements of Operations for each period and were as follows:Line ItemDecember 31,2022December 31,2021Selling platformCosts of revenues109TrademarkSales and marketing4TechnologyCosts of revenues15Customer relationshipsSales and marketing27Total amortization expenses155Future amortization expenses are expected to be as follows:20232024202520262027ThereafterTotalFuture amortization expenses3033031941771561791,312b.GoodwillThe changes in the carrying amount of goodwill for the years ended December 31, 2022 and 2021 were as follows:Fashion and equipmentecommerce platformNaizTotalBalance as of December 31, 2021Changes during the period:Goodwill acquired1521,1521,304Goodwill impairmentTranslation differences(14)10591Balance as of December 31, 20221381,2571,395The Company operates its business through three reporting segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovativeartificial intelligence driven measurement solutions and (iii) Naiz. See note 17 for additional segments information.The Company determines the fair value of its reporting units using the income approach. According to the income, the Company uses discounted cashflows to estimate the fair value. Cash flow projections are based on the Company’s estimates of revenue growth rates and operating margins, takinginto consideration the industry’s and market’s conditions. The discount rate used is based on the weighted average cost of capital (“WACC”),adjusted for the relevant risk associated with businessspecific characteristics.The Company performed a quantitative assessment as of December, 31 2022 for the reporting units’ fair value. The estimated fair value of the Fashionand equipment ecommerce platform and Naiz reporting units exceeded its estimated carrying amount by 95.9% and 27.7% respectively. This, based thefollowing assumptions:Fashion and equipmentecommerce platformNaizDiscount rate21%23%Terminal growth rate3%3%If business conditions or expectations were to change materially, it may be necessary to record impairment charges to the Company’s reporting units inthe future.F18MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 8 Investment in JVIn August 2022, the Company established a joint venture (“JV”) in Brazil with Santista Têxtil. The Company holds 51% and Santista Têxtil holds 49% of theJV. The purpose of the JV is to serve the Brazilian market according to the business plan that was set. Both parties agree to make an initial investment in theJV of $198that will be made per the holding percentage of each party. As of the reporting date, the JV is in process of establishing its operation.NOTE 9 Financial LiabilitiesThe book value of each of the financial liability categories is an acceptable approximation of fair value.The debt is comprised of four loans that were granted to My Size Israel – in an outstanding amount of approximately $131, bearing interest rangingfrom prime rate to prime+2.8% rate, and four loans that were granted to the Spanish subsidiary– in an outstanding amount of approximately $400,bearing interest ranging from 1% to 3%.The financial liability maturities during the five years following the end of the financial year are shown below:UntilUntilUntilUntilUntilAfterTOTAL311223311224311225311226311227311227311222Debts with credit institutions15513892874712531NOTE 10 RELATED PARTIES TRANSACTIONSA. Balances with related parties:The following related party payables are included in liability to related parties.December 31,20222021Officers (*)4143Liability in respect of business combinations (**)739Other related parties (***)(95)Directors152069863(*)The amount includes the net salaries payables.(**)The amount includes the provision created to former owners of Orgad that are entitled to additional cash and equity consideration and former owners of Naizthat entitled to additional cash consideration, see note 16 business combination.(***)The amount includes an amount receivable from Orgad previous shareholders who currently work in the company.B. Related parties benefits:Year endedDecember 31,20222021Salaries and related expenses1,440852Share based payments39673Cash liability and equity liability expenses related to acquisitions (**)1,058Directors58582,952983(**)The amount includes the expenses for a provision created to former owners of Orgad that are entitled to additional cash and equity consideration and formerowners of Naiz that entitled to additional cash consideration, see note 16 business combination.NOTE 11 FINANCIAL INSTRUMENTSThe following tables presents the Company’s significant assets and liabilities that are measured at fair value on recurring basis and their classificationwithin the fair value hierarchy:December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities47financial assets (*)10December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesDerivatives9December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities108December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesWarrants derivative2(*)the financial asset includes in other receivables.F19MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 11 FINANCIAL INSTRUMENTS (Cont.)The carrying amounts of cash and cash equivalents, restricted cash, short term restricted deposit, accounts receivable, other receivables and prepaidexpenses, trade payable and accounts payable approximate their fair value due to the shortterm maturities of such instruments.At December 31, 2022, the recognized gain and fair value (based on quoted market prices with a discount due to security restrictions on iMine shares)of the marketable securities were $59and $47, respectively (at December 31, 2021 $49and $108, respectively).NOTE 12 TAXES ON INCOMEa.On December 31, 2022, the Company had U.S. federal net operating loss carryforwards of approximately $26 available to reduce future taxableincome. Utilization of the U.S. net operating losses may be subject to substantial limitations due to the change of ownership provisions of theInternal Revenue Code of 1986.The U.S. Company has final tax assessments through 2014.On December 22, 2017, the Tax Reform Act was signed into law. The legislation significantly changes U.S. tax law by, among other things, lowering theU.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. As a result of the decrease in the corporate incometax rate, the Company revalued the ending net deferred tax assets at December 31, 2017, but did not recognize any incremental income tax expense in2017 due to the revaluation of the valuation allowance.b.Foreign tax:1.Tax rates:Presented hereunder are the tax rates relevant to the Company’s Israeli subsidiaries:2022 23%2021 23% Presented hereunder are the tax rates relevant to the Company’s Spanish subsidiary:2022 24%2.The Company’s Israeli subsidiaries have estimated total available carryforward operating tax losses for Israeli income tax purposes ofapproximately $64as of December 31, 2022. Of these losses, a total of $47.5are owned by Topspin Medical (Israel) Ltd. Topspin tax lossesmay be offset only by future income with respect to the same operational activity by which it was incurred for an indefinite period of time. Theother losses are owned by My Size Israel and may be carryforward to offset against future income for an indefinite period of time.3.Topspin Medical (Israel) Ltd. and My Size (Israel) 2014 Ltd. has final tax assessments through 2016.c.U.S. and foreign components of loss from continuing operations, before income taxes consisted of:December 31,20222021U.S(1,180)(3,802)NonU.S. (foreign)(7,130)(6,718)(8,310)(10,520)F20MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 12 TAXES ON INCOME (Cont.)d.Deferred taxes:Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reportingpurposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows:December 31,20222021Deferred tax assets:Operating loss carryforwards20,13120,238Warrants and options145126Marketable securities390377Intangible assets(328)Research and development expenses586341Other temporary differences203Deferred tax assets before valuation allowance21,12721,082Valuation allowance(21,455)(21,082)Net deferred tax liability(328)The following table presents a reconciliation of the beginning and ending valuation allowance:December 31,20222021Balance at beginning of the year21,08218,968Additions in valuation allowance to the income statement1,7581,625Additions in valuation allowance due to exchange rate differences(1,385)489Balance at end of the year21,45521,082In assessing the realization of deferred tax assets, management considers whether it is more likely than not that all or some portion of the deferred taxassets will not be realized.The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporarydifferences are deductible and net operating losses are utilized. Based on consideration of these factors, the Company recorded a full valuationallowance at December 31, 2021 and 2020.e.Theoretical taxThe following presents the adjustment between the theoretical tax amount and the tax amount included in the financial statements:December 31,20222021Loss before income taxes8,34610,520Statutory tax rate21%21%Computed “expected” tax income1,7522,209Foreign tax rate differences and exchange rate differences149131Nondeductible expenses(107)(715)Change in valuation allowance(1,758)(1,625)Taxes on income36F21MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITYa.Common stock confers upon their holders the right to receive notice to participate and vote in general meetings of the Company, and the right toreceive dividends if declared.b.On January 8, 2021, the Company conducted a public offering of its securities pursuant to which it issued 62,768 shares of its common stock forgross proceeds of $2,008. The net proceeds to the Company from the offering were approximately $1,700, after deducting placement agent’s feesand other estimated offering expenses payable by the Company.c.During 2021, a holders of warrants exercised warrants to purchase 135,109 ordinary shares of the Company in exchange for $3,709.d.On March 25, 2021, the Company conducted a public offering of its shares of common stock pursuant to which it issued 104,741 shares of itscommon stock for gross proceeds of $3,300. The net proceeds to the Company from the offering were approximately $2,872, after deductingplacement agent’s fees and other estimated offering expenses payable by the Company.On May 7, 2021, the Company issued an additional 15,711 shares of the Company’s common stock in connection with the full exercise of theunderwriter’s overallotment option granted in the Company’s March 2021 public offering. These additional shares were sold to the underwriter at apublic offering price of $31.5 per share, resulting in additional net proceeds to the Company, net of the underwriting discount, of approximately$463.e.On May 26, 2021, the Company issued 100,000 shares of common stock to Ms. Zigdon in consideration of the Waiver. See note 1(b) above.f.On October 28, 2021, the Company sold in a registered direct offering 100,592 shares of its common stock and, in a concurrent private placement,an aggregate of 75,444 unregistered warrants to purchase shares of common stock, at an offering price of $33.8 per share and associated warrant.In addition, on the same day, the Company sold in a private placement 150,888 unregistered shares of common stock and unregistered warrants topurchase up to an aggregate of 113,166 shares of common stock at the same purchase price as in the registered direct offering. The warrants areimmediately exercisable and will expire five years from issuance at an exercise price of $31.5 per share, subject to adjustment as set forth therein.The gross proceeds from the offerings were $8,500. The net proceeds to the Company from the offerings were approximately $7,560, afterdeducting placement agent’s fees and other estimated offering expenses payable by the Company. In connection with the offerings, the Companyissued to the placement agent warrants to purchase 17,603 shares on substantially the same terms as the purchasers in the offerings at an exerciseprice of $42.25 per share and a term expiring on October 26, 2026.g.On December 7, 2022, the Company’s board of directors approved a 1for25 reverse stock split of the Company’s issued and outstanding sharesof common stock. The reverse stock split became effective on December 8, 2022. In order not to have fractional shares as a result of the reversestock split, the Company issued an additional 12,091 shares of common stock. As a result, all shares of common stock, options for shares ofcommon stock, exercise price and net loss per share amounts were adjusted retroactively for all periods presented in these financial statements.F22MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITY (Cont.)g.A summary of the warrant activity during the years ended December 31, 2022 and 2021 is presented below:Number ofWarrantsWeightedAverageExercisePriceWeightedAverageRemainingLife inYearsOutstanding, December 31, 2020216,85936.754.26Issued206,214Expired or exercised(135,109)Outstanding, December 31, 2021287,96431.004.35IssuedExpired or exercised(17,901)Outstanding, December 31, 2022270,06330.213.36Exercisable, December 31, 2022270,06330.213.36NOTE 14 STOCK BASED COMPENSATIONThe stockbased expense recognized in the financial statements for services received is related to Research and Development, Sales and Marketingand General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense Research and development15195Stockbased compensation expense Sales and marketing126180Stockbased compensation expense General and administrative17898455373The stockbased expense recognized in the financial statements for services received post Acquisition of Orgad (see note 16) is related to Cost OfGoods, Sales and Marketing and General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense – Cost of goods80Stockbased compensation expense Sales and marketing112Stockbased compensation expense General and administrative127319F23MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Options issued to consultantsWe can sell additional shares of common stock without consulting stockholders and without offering shares to existing stockholders, which wouldresult in dilution of shareholders’ interests in the company and could depress our stock price.Our Certificate of Incorporation currently authorizes 250,000,000 shares of common stock, of which 2,446,780 are currently outstanding as of March 31, 2023and our board of directors is authorized to issue additional shares of our common stock. Although our board of directors intends to utilize its reasonable businessjudgment to fulfil its fiduciary obligations to our then existing stockholders in connection with any future issuance of our capital stock, the future issuance ofadditional shares of our capital stock could cause immediate, and potentially substantial, dilution to our existing stockholders, which could also have a materialeffect on the market value of the shares. Further, other than certain participation rights that we have granted in a past offering, our shares do not have preemptiverights, which means we can sell shares of our capital stock to other persons without offering purchasers in this offering the right to purchase their proportionateshare of such offered shares. Therefore, any additional sales of stock by us could dilute your ownership interest in our Company.Our quarterly operating results may fluctuate significantly.We expect our operating results to be subject to quarterly fluctuations. Our net loss and other operating results will be affected by numerous factors,including:●variations in the level of expenses related to our research and development;●any lawsuits in which we may become involved;●regulatory developments affecting our products; and●our execution of any collaborative, licensing or sales agreements, and the timing of payments under these arrangements.If our quarterly operating results fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially.Furthermore, any quarterly fluctuations in our operating results may, in turn, cause the price of our common stock to fluctuate substantially.If we fail to comply with the rules under the Sarbanes Oxley Act of 2002 related to accounting controls and procedures or if we discover materialweaknesses and deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult.If we fail to comply with the rules under the SarbanesOxley Act of 2002 related to disclosure controls and procedures, or, if we discover materialweaknesses and other deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult. Section 404 of the SarbanesOxley Act requires annual management assessments of the effectiveness of our internal control over financial reporting and, ifwe are no longer a nonaccelerated filer, a report by our independent auditors addressing these assessments. If material weaknesses or significant deficiencies arediscovered or if we otherwise fail to achieve and maintain the adequacy of our internal control, we may not be able to ensure that we can conclude on an ongoingbasis that we have effective internal controls over financial reporting in accordance with Section 404 of the SarbanesOxley Act. Moreover, effective internalcontrols are necessary for us to produce reliable financial reports and are important to helping prevent financial fraud. If we cannot provide reliable financial reportsor prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price ofour common stock could drop significantly.38Our Certificate of Incorporation, Bylaws and Delaware law may have antitakeover effects that could discourage, delay or prevent a change incontrol, which may cause our stock price to decline.Our Certificate of Incorporation, Bylaws and Delaware law could make it more difficult for a thirdparty to acquire us, even if closing such a transactionwould be beneficial to our stockholders. Provisions of our Certificate of Incorporation, Bylaws and Delaware law also could have the effect of discouraging potentialacquisition proposals or making a tender offer or delaying or preventing a change in control, including changes a stockholder might consider favorable. Suchprovisions may also prevent or frustrate attempts by our stockholders to replace or remove our management. In particular, the Certificate of Incorporation, Bylawsand Delaware law, as applicable, among other things:●provide the board of directors with the ability to alter the Bylaws without stockholder approval;●the classification of our board of directors;●place limitations on the removal of directors;●provide that vacancies on the Board of Directors may be filled by a majority of directors in office, although less than a quorum;●require that stockholder actions must be affected at a duly called stockholder meeting and generally prohibiting stockholder actions by written consent;●eliminate the ability of stockholders to call a special meeting of stockholders; and●establish advance notice requirements for nominations for election to the Board of Directors or for proposing matters that can be acted upon at duly calledstockholder meetings.We are subject to Section 203 of the Delaware General Corporation Law which, subject to certain exceptions, prohibits “business combinations” between apubliclyheld Delaware corporation and an “interested stockholder,” which is generally defined as a stockholder who becomes a beneficial owner of 15% or more ofa Delaware corporation’s voting stock for a threeyear period following the date that such stockholder became an interested stockholder. These provisions areexpected to discourage certain types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to firstnegotiate with our board. These provisions may delay or prevent someone from acquiring or merging with us, which may cause the market price of our commonstock and the value of our securities to decline.If we fail to comply with the continued listing requirements of the Nasdaq Capital Market, our common stock may be delisted and the price of ourcommon stock and our ability to access the capital markets could be negatively impacted.Nasdaq has established certain standards for the continued listing of a security on the Nasdaq Capital Market. The standards for continued listing include,among other things, that the minimum bid price for the listed securities not fall below $1.00 per share for a period of 30 consecutive trading days and that wemaintain a minimum of $2,500,000 in shareholders’ equity. We have in the past fallen below the minimum bid price and minimum shareholders’ equity.39No assurance can be given that we will continue to be in compliance with the Rule. Failure to meet applicable Nasdaq continued listing standards couldresult in a delisting of our common stock. A delisting of our common stock from Nasdaq could materially reduce the liquidity of our common stock and result in acorresponding material reduction in the price of our common stock. In addition, delisting could harm our ability to raise capital through alternative financing sourceson terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, employees and fewer business development opportunities.The exercise of outstanding warrants and stock options will have a dilutive effect on the percentage ownership of our capital stock by existingstockholders.As of March 15, 2023, we had outstanding warrants to acquire 2,299,115 shares of our common stock and stock options to purchase 1,659 shares of ourcommon stock, which warrants and options are exercisable for prices ranging between $2.81 and $375. The expiration of the term of such options and warrants rangefrom 0.22 years to 4.83 years. If a significant number of such warrants and stock options are exercised by the holders, the percentage of our common stock ownedby our existing stockholders will be diluted.Were our common stock to become subject to the penny stock rules then this could result in U.S. brokerdealers becoming discouraged from effectingtransactions in shares of our common stock.Rule 15g9 under the Exchange Act establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a marketprice of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. If we do not retain a listing on the NasdaqCapital Market or do not meet certain net tangible asset or average revenue requirements and if the price of our common stock is less than $5.00, our common stockwill be deemed a penny stock. For any transaction involving a penny stock, unless exempt, the rules require: (a) that a broker or dealer approve a person’s accountfor transactions in penny stocks; and (b) the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantityof the penny stock to be purchased.In order to approve a person’s account for transactions in penny stocks, the broker or dealer must: (a) obtain financial information and investmentexperience objectives of the person and (b) make a reasonable determination that the transactions in penny stocks are suitable for that person and the person hassufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver,prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which: (a) sets forth the basis on whichthe broker or dealer made the suitability determination; and (b) confirms that the broker or dealer received a signed, written agreement from the investor prior to thetransaction. Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult forinvestors to dispose of our common stock and cause a decline in the market value of our common stock.Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissionspayable to both the broker or dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor incases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the accountand information on the limited market in penny stocks.Sales of our currently issued and outstanding stock may become freely tradable pursuant to Rule 144 and may dilute the market for your shares andhave a depressive effect on the price of the shares of our common stock.A portion of our outstanding shares of common stock are “restricted securities” within the meaning of Rule 144 under the Securities Act of 1933, asamended, or the Securities Act. As restricted shares, these shares may be resold only pursuant to an effective registration statement or under the requirements ofRule 144 or other applicable exemptions from registration under the Securities Act and as required under applicable state securities laws. Rule 144 provides inessence that an affiliate (as such term is defined in Rule 144(a)(1)) of an issuer who has held restricted securities for a period of at least six months (one year afterfiling Form 10 information with the SEC for shell companies and former shell companies) may, under certain conditions, sell every three months, in brokeragetransactions, a number of shares that does not exceed the greater of 1% of a company’s outstanding shares of common stock or the average weekly trading volumeduring the four calendar weeks prior to the sale (the four calendar week rule does not apply to companies quoted on the OTC Markets). Rule 144 also permits, undercertain circumstances, the sale of securities, without any limitation, by a person who is not an Affiliate of the Company and who has satisfied a oneyear holdingperiod. A sale under Rule 144 or under any other exemption from the Securities Act, if available, or pursuant to subsequent registrations of our shares of commonstock, may have a depressive effect upon the price of our shares of common stock in any active market that may develop.40We are a former “shell company” and as such are subject to certain limitations not applicable to other public companies generally.Prior to our suspension of reporting in 2012, we were a public reporting “shell company,” as defined in Rule 12b2 under the Exchange Act. Although weare no longer a “shell company,” we are subject to certain restrictions under the Securities Act for the resale of securities issued by issuers that have been at anytime previously a shell company. Specifically, the Rule 144 safe harbor available for the resale of our restricted securities is only available to our stockholders if wehave filed all reports and other materials required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934, as amended, or the Exchange Act, asapplicable, during the preceding twelve months, other than current reports on Form 8K, at the time of the proposed sale, regardless of whether the restrictedsecurities were initially issued at the time we were a shell company or subsequent to termination of such status. Accordingly, holders of our “restricted securities”within the meaning of Rule 144 will be subject to the conditions set forth in Rule 144 with respect to our company. Other reporting companies that are not formershell companies and have been reporting for more than twelve months are not subject to this same reporting threshold for nonaffiliate reliance on Rule 144.Accordingly, any restricted securities we have sold or sell in the future or issue to consultants or employees, in consideration for services rendered or for any otherpurpose, may not be resold unless such securities are registered with the SEC or the requirements of Rule 144 have been satisfied. As a result, it may be harder forus to fund our operations and pay our employees and consultants with our securities instead of cash. Furthermore, it may be harder for us to raise funding throughthe sale of debt or equity securities unless we agree to register such securities with the SEC, which could cause us to expend additional resources in the future. Ourprior status as a “shell company” could prevent us in the future from raising additional funds, engaging employees and consultants, and using our securities to payfor any acquisitions, which could cause the value of our securities, if any, to decline in value or become worthless.ITEM 1B. UNRESOLVED STAFF COMMENTSNone.ITEM 2. PROPERTIESWe currently lease 1,660 square feet of office space at 4 HaYarden Street, Airport City, Israel. The lease term is for 36 months beginning on August 20, 2019and ending on August 20, 2022, with an option to extend for an additional 36 months. Monthly rent payments, including utilities, amount to approximately $14,000per month. We extended the lease period until August 20, 2025.ITEM 3. LEGAL PROCEEDINGSFrom time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation issubject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.41North Empire LLCOn August 7, 2018, we commenced an action against North Empire LLC, or North Empire, in the Supreme Court of the State of New York, County of NewYork for breach of a Securities Purchase Agreement or Agreement in which we are seeking damages in an amount to be determined at trial, but in no event less than$616,000. On August 2, 2018, North Empire filed a Summons with Notice against us, also in the same Court, in which they allege damages in an amount of $11.4million arising from an alleged breach of the Agreement. On September 6, 2018, North Empire filed a Notice of Discontinuance of the action it had filed on August 2,2018. On September 27, 2018, North Empire filed an answer and asserted counterclaims in the action commenced by us against them, alleging that we failed to deliverstock certificates to North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against our CEO andnow former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018, we filed a reply to North Empire’scounterclaims. On November 15, 2018, our CEO and now former Chairman of the Board filed a motion to dismiss North Empire’s thirdparty complaint. On January 6,2020, the Court granted the motion and dismissed the thirdparty complaint. Discovery has been completed and both parties have filed motions for summaryjudgment in connection with the claims and counterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summaryjudgment, arguing there were factual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision.On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying the Company’s motion for summary judgment. On or about September 12,2022, the Court issued its Decision and Order denying the Company’s motion to reargue. North Empire filed its opposing brief on December 7, 2022. Both sides weregiven an opportunity to file a reply brief. We filed our reply brief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. Oral argument was heldbefore the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Court filed its Decision and Order, which affirmed the lower court’sdecisions regarding both My Size and North Empire’s motions for summary judgment and sent the case back to the Supreme Court. On or about March 13, 2023, theSupreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date for the mediation has not yet been set. We intend tovigorously defend any claims made by North Empire. We believe it is more likely than not that the counterclaims will be denied.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.42PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur stock currently is listed on the Tel Aviv Stock Exchange and the Nasdaq Capital Market under the symbol “MYSZ”. Our stock has been traded on theNasdaq Capital Market since July 25, 2016.HoldersAs of March 31, 2023, we had 70 shareholders of record. The actual number of stockholders is greater than this number of record holders and includesstockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our Board of Directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our Board of Directors deems relevant.Securities Authorized for Issuance under Equity Compensation PlansInformation about our equity compensation plans is incorporated herein by reference to “Item 12. Security Ownership of Certain Beneficial Owners andManagement and Related Stockholder Matters”, of this Annual Report on Form 10K.Recent Sales of Unregistered SecuritiesNone.ITEM 6. SELECTED FINANCIAL DATAAs a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULT OF OPERATIONSYou should read the following discussion along with our financial statements and the related notes included elsewhere in this Annual Report on Form10K. The following discussion contains forwardlooking statements that are subject to risks, uncertainties and assumptions, including those discussed under“Risk Factors.” Our actual results, performance and achievements may differ materially from those expressed in, or implied by, these forwardlooking statements.OverviewMySize is an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.43Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile device or through MySizeID Widget: a simple questionnaire which was uses a database collected over the years.MySizeID synchronizes the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and onlypresents items available for purchase that match their measurements to ensure a correct fit.MySize is positioning itself as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empowering brand design teams, which are designed to increaseend consumer satisfaction, contributing to a sustainable world and reduce operation costs.Orgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,682 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz BespokeTechnologies, S.L., or Naiz, a limited liability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.44The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 2,365,800 shares of My Size common stock were issuedto Whitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.45Operations in RussiaIn addition to our Israel operations, we had operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia. To date, mainly due to the invasion of Ukraine by Russia and the ongoing sanctions we stopped most ofour efforts in Russia and will probably close the subsidiary in the near future.Results of OperationsThe table below provides our results of operations for the periods indicated.Year ended December 3120222021(dollars in thousands)Revenues4,459131Cost of revenues(3,825)Gross profit634131Research and development expenses$(1,701)$(4,248)Sales and marketing(3,143)(2,336)General and administrative(3,900)(4,124)Operating loss(8,110)(10,577)Financial income (expenses), net(236)57Tax income36Net loss$(8,310)$(10,520)Year Ended December 31, 2022 Compared to Year Ended December 31, 2021RevenuesFrom inception through December 31, 2018, we did not generate any revenue from operations and we continue to expect to incur additional losses toperform further research and development activities. We started to generate revenues only in 2019. Our revenues for the year ended December 31, 2022 amounted to$4,459,000 compared to $131,000 for year ended December 31, 2021. The increase from the corresponding period primarily attributable to $4,132,000 in revenuegenerated from Orgad from February 7, 2022, the date of closing of the Orgad acquisition, or the Acquisition Date and revenue generated from the Naiz Acquisitionfrom October 11, 2022, the date of closing of the Naiz acquisition.In addition, the increase from the corresponding period results from an increase in revenues generated by My Size.Cost Of RevenuesOur cost of revenues expenses for the year ended December 31, 2022 amounted to $3,825,000, compared to none for the year ended December 31, 2021. Thecost of revenues includes cash and equity liabilities expenses in the amount of $194,000. The increase in comparison with the corresponding period was due to thecost of goods of the revenues generated from Orgad’s operations.Research and Development ExpensesOur research and development expenses for the year ended December 31, 2022 amounted to $1,701,000 a decrease of $2,547,000, or approximately 60.0%,compared to $4,248,000 for the year ended December 31, 2021. The decrease from the corresponding period primarily resulted from share based payment in amount of$2,618,000 attributed to the share issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021.Sales and Marketing ExpensesOur sales and marketing expenses for the year ended December 31, 2022 amounted to $3,143,000 an increase of $807,000, or 34.55%, compared to $2,336,000for the year ended December 31, 2021. The increase primarily resulted from an increase in employees expenses mainly due to Orgad and Naiz acquisitions, increase inAmazon fees, increase in cash and equity liabilities expenses attributed to the Orgad acquisition and an increase in share based payments offset by a decrease inpayments to consultants.46General and Administrative ExpensesOur general and administrative expenses for the year ended December 31, 2022 amounted to $3,900,000, a decrease of $224,000, or 5.43%, compared to$4,124,000 for the year ended December 31, 2021. The decrease compared to the corresponding period was mainly due to a decrease in professional expenses, mainlyattributed to shareholder activism including settlement expenses with the Lazar Parties offset by an increase in sharedbased payments and an increase in employeesexpenses mainly due to the Orgad and Naiz acquisitions.Operating LossAs a result of the foregoing, for the year ended December 31, 2022, our operating loss was $8,110,000, a decrease of $2,467,000 or 23.32%, compared to ouroperating loss for the year ended December 31, 2021 of $10,577,000.Financial Income, NetOur financial (expense) income, net for the year ended December 31, 2022 amounted to $236,000 compared to financial income, $57,000 for the year endedDecember 31, 2021. In 2022, we had financial expenses exchange rate differences offset by an income from fair value revaluation of investment in marketablesecurities whereas in 2021 we had financial income from the fair value revaluation of warrants offset by expenses from exchange rate differences and expenses fromfair value revaluation of investment in marketable securities.Net LossAs a result of the foregoing, our net loss for the year ended December 31, 2022 was $8,310,000 compared to net loss of $10,520,000 for the year endedDecember 31, 2021. The decrease in net loss was mainly due increase in sales and marketing expenses and financial expenses as opposed to financial income in thecorresponding period offset by a decrease in research and development expenses in amount of $2,618,000 attributed to the share issuance to Shoshana Zigdonunder the Amendment to Purchase Agreement dated May 26, 2021.Liquidity and Capital ResourcesSince our inception, we have funded our operations primarily through public and private offerings of debt and equity in Israel and in the U.S.As of December 31, 2022, we had cash, cash equivalents and restricted cash of $2,363,000 compared to $10,943,000 cash, cash equivalents, restricted cashas of December 31, 2021. During January 2023, we completed a registered direct and concurrent private placement offering resulting in gross proceeds ofapproximately $3 million. This decrease primarily resulted from our operating activities, the acquisition of Orgad and Naiz Fit, and resources that were deployed togrow of both businesses.Net cash used in operating activities was $7,290,000 for the year ended December 31, 2022 compared to $7,297,000 for the year ended December 31, 2021.The decrease in cash used in operating activity is derived mainly from an increase in share based payments and increase in account receivables mainly from theOrgad and Naiz fit acquisitions offset by a decrease in the net loss.Net cash used in investing activities for the year ended December 31, 2022 was $993,000 as opposed to net cash provided by investing activities of$161,000 for the year ended December 31, 2021. The net cash used in investing activities for the year ended December 31, 2022 was mainly from the acquisition ofOrgad and Naiz as opposed to proceeds from shortterm deposits and restricted deposits during the year ended December 31, 2021.We had a negative cash flow from financing activities of $67,000 for the year ended December 31, 2022 compared to positive cash flow of $16,292,000 for theyear ended December 31, 2021. The negative cash flow from financing activities for the year ended December 31, 2022 was mainly due to repayment of loans andinterest and payments for leases as opposed to proceeds from issuance of shares and from exercise of warrants for the year ended December 31, 2021.47We expect that we will continue to generate losses and negative cash flows from operations for the foreseeable future. Based on the projected cash flowsand cash balances as of December 31, 2022, together with the proceeds from the January 2023 financing, we believe our existing cash will not be sufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. We will need to raiseadditional capital, which may not be available on reasonable terms or at all. Additional capital would be used to accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;●respond to competitive pressures;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, the Russian invasion ofUkraine, the impact of any resurgence of the COVID19 pandemic and a number of other factors, many of which are outside our control, and on our financialperformance. Accordingly, we cannot assure you that we will be able to successfully raise additional capital at all or on terms that are acceptable to us. If we cannotraise additional capital when needed, it may have a material adverse effect on our business, results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.We have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.Recently Issued Accounting PronouncementsCertain recently issued accounting pronouncements are discussed in Note 2, Significant Accounting Policies, to the consolidated financial statementsincluded in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10K.OffBalance Sheet ArrangementsWe have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.48Application of Critical Accounting Policies and EstimatesOur management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we haveprepared in accordance with U.S. generally accepted accounting principles issued by the Financial Accounting Standards Board, or FASB. The preparation of thesefinancial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assetsand liabilities at the date of the financial statements, as well as the reported expenses during the reporting periods. Actual results may differ from these estimatesunder different assumptions or conditions.Our significant accounting policies were revenue from contracts with customers which are more fully described in the notes to our financial statementsincluded herein. We believe these accounting policies discussed below are critical to our financial results and to the understanding of our past and futureperformance, as these policies relate to the more significant areas involving management’s estimates and assumptions. We consider an accounting estimate to becritical if: (1) it requires us to make assumptions because information was not available at the time or it included matters that were highly uncertain at the time wewere making our estimate; and (2) changes in the estimate could have a material impact on our financial condition or results of operations.Accounting for business combinationsWe allocate the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed, based upon their estimated fairvalues at the acquisition date. These fair values are typically estimated with assistance from independent valuation specialists.The purchase price allocation process requires us to make significant estimates and assumptions, especially at the acquisition date with respect tointangible assets, contractual support obligations assumed, contingent consideration arrangements, and preacquisition contingencies.Although we believe the assumptions and estimates we have made in the past have been reasonable and appropriate, they are based in part on historicalexperience and information obtained from the management of the acquired companies and are inherently uncertain.Examples of critical estimates in valuing certain of the intangible assets we have acquired or may acquire in the future include but are not limited to:● future expected cash flows from product sales or other customer contracts;● expected costs of fulfillment including marketing, warehousing and product sales;● the acquired company’s brand and competitive position, as well as assumptions about the period of time the acquired brand will continue to be used inthe combined company’s product portfolio;● cost of capital and discount rates; and● estimating the useful lives of acquired assets as well as the pattern or manner in which the assets will amortize.Refer to Note 16, Business Combination, to the consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” of thisAnnual Report on Form 10K.49Revenue from contracts with customersOur revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled software subscriptions, associatedsoftware maintenance and support.We recognize revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with a customer exists onlywhen: the parties to the contract have approved it and are committed to perform their respective obligations, we can identify each party’s rights regarding thedistinct goods or services to be transferred (“performance obligations”), we can determine the transaction price for the goods or services to be transferred, thecontract has commercial substance and it is probable that we will collect the consideration to which we will be entitled in exchange for the goods or services that willbe transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to a customer.Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted to governmental authorities. Refundsare estimated at contract inception and updated at the end of each reporting period if additional information becomes available. Revenue is recognized when controlof the product is transferred to the customer.We maintain a returns policy that allows our customers to return product within a specified period of time. The estimate of the provision for returns is basedupon historical experience with actual returns.Principal versus Agent ConsiderationsWe follow the guidance provided in ASC 606 for determining whether we are a principal or an agent in arrangements with customers, by assessing whetherthe nature of our promise is a performance obligation to provide the specified goods (principal) or to arrange for those goods to be provided by the other party(agent). With regard to products being sold by Orgad through Amazon, this determination involves judgment. We determine it is the principle when it has controlover the promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).We recognize revenue ratably over the contractual service term for hosted services that are priced based on a committed number of transactions where thedelivery and consumption of the benefit of the services occur evenly over time, beginning on the date the services associated with the committed transactions arefirst made available to the customer and continuing through the end of the contractual service term. Over usage fees and fees based on the actual number oftransactions are billed in accordance with contract terms as these fees are incurred and are included in the transaction price of an arrangement as variableconsideration. Fees based on a number of transactions or impressions per month, are allocated to the period in which the transactions occur. Revenue forsubscriptions sold as a fee per period is recognized ratably over the contractual term as the customer simultaneously receives and consumes the benefit of theunderlying service.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.As a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.50ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAMY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2022U.S. DOLLARS IN THOUSANDSINDEXPageReport of Independent Registered Public Accounting Firm (PCAOB ID: ID 1057)F2Consolidated Balance SheetsF4Consolidated Statements of Comprehensive LossF5Consolidated Statements of Shareholders’ EquityF6Consolidated Statements of Cash FlowsF7Notes to Consolidated Financial StatementsF8 F33F1Report of Independent Registered Public Accounting FirmTo the Shareholders and Board of DirectorsMy Size, Inc.:Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of My Size, Inc. and subsidiaries (the Company) as of December 31, 2022 and 2021, the relatedconsolidated statements of comprehensive loss, shareholders’ equity, and cash flows for each of the years in the twoyear period ended December 31, 2022, and therelated notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, thefinancial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the twoyear periodended December 31, 2022, in conformity with U.S. generally accepted accounting principles.Going ConcernThe accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1d tothe consolidated financial statements, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit thatraises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1d. Theconsolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidatedfinancial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Critical Audit MattersCritical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to becommunicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved ourespecially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidatedfinancial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters oron the accounts or disclosures to which they relate.Acquisitiondate fair value of customer relationshipsAs discussed in Note 16 to the consolidated financial statements, on October 11, 2022, the Company acquired Naiz Bespoke Technologies SL (“Naiz”). As a result ofthe transaction, the Company acquired customer relationships intangible assets (“customer relationships”) representing the generation of future income from Naiz’sexisting customers. The acquisition date fair value of the customer relationships was $726 thousand.F2We identified the evaluation of the acquisitiondate fair value of the Naiz customer relationships as a critical audit matter. A high degree of subjective auditorjudgment was required to evaluate the following internally developed assumptions used to estimate the fair value of such asset, for which there were limitedobservable inputs: (i) forecasted revenues attributable to existing customers, (ii) forecasted earnings before interest, taxes, depreciation, and amortization(“EBITDA”) margins for the acquired business, (iii) estimated annual customer attrition rates and (iv) estimated discount rate. The determined fair value wassensitive to changes in these key assumptions. Additionally, specialized skills and knowledge were needed to evaluate the discount rate used.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s acquisitiondate fair value estimation process, including controls over the development of key assumptions. We performed a sensitivity analysis toassess the impact of reasonably possible changes to forecasted revenues, EBITDA margins, annual customer attrition rates, and the discount rate. We evaluated theforecasted revenue growth rates from existing customers by comparing the growth assumptions to those of the Company’s peers and industry reports. Inconnection with our assessment of the forecasts used in the valuation, we compared (1) forecasted revenue and EBITDA to Naiz’s historical actual results and (2)estimated annual customer attrition rates to historical Naiz customer attrition data. We tested the Company’s determined weighted average cost of capital(“WACC”), which was used to determine the discount rate, by involving valuation professionals with specialized skills and knowledge, who assisted in:Evaluating the selected discount rate by comparing it against a discount rate range that was independently developed using publicly available market datafor comparable companies, and;Assessing the Company’s WACC calculation, by comparing it against an independently estimated WACC range based on inputs obtained throughpublished surveys and studies.Goodwill impairment assessmentAs discussed in Note 16 to the consolidated financial statements, during 2022 the Company recorded goodwill of $1,257 thousand related to the acquisition of NaizBespoke Technologies, S.L. (“Naiz”). The Company performed an annual quantitative impairment test of goodwill at the reporting unit level. Based on this analysis,the Company determined that the fair value of its reporting unit exceeded its carrying value and no impairment charge was required.We identified the evaluation of the goodwill impairment assessment for the Naiz reporting unit as a critical audit matter. A high degree of subjective auditor judgmentwas required to evaluate the following assumptions used to estimate the fair value of the Company’s reporting unit, for which there were limited observable inputs:(i) forecasted reporting unit cash flows, (ii) longterm growth rates, and (iii) discount rates. The fair value was sensitive to changes in these key assumptions.Additionally, specialized skills and knowledge were needed to evaluate the discount rates.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s goodwill impairment evaluation process. We performed sensitivity analyses to assess the impact of reasonably possible changes to forecasted cashflows, longterm growth rates, and discount rates. We evaluated the Company’s forecasted growth rates by comparing the growth assumptions to those of theCompany’s peers and industry reports. We compared the Company’s forecasted revenue, cost of sales, and operating expense margins to historical actual results toassess the reasonableness of the forecasts. In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:– Assessing the Company’s WACC calculation, by comparing it against an estimated WACC range based on inputs obtained through published surveys andstudies– Evaluating the discount rates used by the Company by comparing them against discount rate ranges that were developed using publicly available market data forcomparable companies, and;– Performing an arithmetic recalculation regarding the fair value of the Company’s reporting unit, using the Company’s cash flow forecasts and the independentlydeveloped discount rates, and comparing the results to the Company’s fair value estimates./s/ Somekh ChaikinSomekh ChaikinMember Firm of KPMG InternationalWe have served as the Company’s auditor since 2017.Tel Aviv, IsraelApril 14, 2023F3MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED BALANCE SHEETSU.S. dollars in thousands (except share data)December 31,Note20222021AssetsCurrent assetsCash and cash equivalents32,10010,670Restricted cash263273Inventory997Account receivables1,94040Other receivables and prepaid expenses4758579Total current assets6,05811,562Long term deposits28Property and equipment, net5140112Operating rightofuse asset6583776Intangible assets71,377Goodwill71,395Investment in JV899Investment in marketable securities11471083,669996Total assets9,72712,558Liabilities and shareholders’ equityCurrent liabilitiesOperating lease liability6159138Shortterm loans9155Trade payables2,487635Liabilities to Related parties69863Other payables680392Total current liabilities4,1791,228Longterm loans9376Deferred tax liabilities328Operating lease liability6308473Total noncurrent liabilities1,012473CONTINGENCIES AND COMMITMENTS15Total Liabilities5,1911,701Shareholders’ equity13Stock capital Common stock of $0.001par value Authorized: 250,000,000and 100,000,000shares as of December 31,2022 and 2021; Issued and outstanding: 1,464,117and959,297 as of December 31,2022 and 2021, respectively (*)11Additional paidin capital58,67356,453Accumulated other comprehensive loss(637)(406)Accumulated deficit(53,501)(45,191)Total shareholders’ equity4,53610,857Total liabilities and shareholders’ equity9,72712,558(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F4MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSSU.S. dollars in thousands (except share data and per share data)Year endedDecember 31,Note20222021Revenues4,459131Cost of revenues(3,825)Gross profit634131Operating expensesResearch and development(1,701)(4,248)Sales and marketing18(3,143)(2,336)General and administrative19(3,900)(4,124)Total operating expenses(8,744)(10,708)Operating loss(8,110)(10,577)Financial income (expense), net20(236)57Loss before taxes(8,346)(10,520)Taxes on income36Net loss for the year(8,310)(10,520)Other comprehensive income (loss):Foreign currency translation differences(231)18Total comprehensive loss(8,541)(10,502)Basic and diluted loss per share (*)(7.47)(17.75)Basic and diluted weighted average number of shares outstanding (*)1,111,913420,385(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F5MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITYU.S. dollars in thousands (except share data)Common stockAdditionalpaidinAccumulatedothercomprehensiveAccumulatedTotalstockholders’NumberAmountcapitallossDeficitequityBalance as of January 1, 2021289,314(*)37,171(424)(34,671)2,076Stockbased compensation related to optionsgranted to employees and consultants373373Exercise of options granted to employees178(*)Restricted shares issued to shareholder (***)100,000(*)2,6182,618Issuance of shares, net of issuance cost of$1,160434,700112,58212,583Exercise of warrants135,108(*)3,7093,709Total comprehensive income (loss)18(10,520)(10,502)Balance as of December 31, 2021959,300156,453(406)(45,191)10,857Stockbased compensation related to optionsand restricted shares granted to employeesand consultants176,000(*)455455Issuance of shares in Business Combination(**)295,802(*)1,4461,446Issuance of shares post BusinessCombination (**)20,924(*)319319Effect of reverse stock split (Note 13 g)12,091(*)Total comprehensive income (loss)(231)(8,310)(8,541)Balance as of December 31, 20221,464,117158,673(637)(53,501)4,536(*)Represents an amount of less than $1.(**)See note 16(***)See note 1 bThe accompanying notes are an integral part of the consolidated financial statements.F6MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSU.S. dollars in thousandsYear endedDecember 31,20222021Cash flows from operating activities:Net loss(8,310)(10,520)Adjustments to reconcile net loss to net cash used in operating activities:Depreciation3842Change in operating lease rightofuse asset13543Amortization of intangible assets155foreign exchange differences(23)1Change in liabilities to related parties635Interest on long term liabilities10Interest paid(10)Revaluation of investment in marketable securities62(49)Restricted Shares issued to shareholder2,618Stock based compensation455373Issuance of shares post Business Combination319Change in inventory(219)Change in deferred tax liabilities(36)Change in account receivable(1,863)(12)Changes in operating lease liabilities(142)Change in other receivables and prepaid expenses184(99)Change in trade payables1,315253Change in other payables553Net cash used in operating activities(7,290)(7,297)Cash flows from investing activities:Acquisition of a subsidiary, net of cash acquired(767)Proceeds from restricted deposits, net184investing in other receivable(100)Investment in equity accounted investee(99)Purchase of property and equipment(27)(23)Net cash (used in) provided by investing activities(993)161Cash flows from financing activities:Proceeds from issuance of shares, net of issuance costs12,583Repayment of loans(67)Proceeds from exercise of warrants3,709Net cash (used in) provided by financing activities(67)16,292Effect of exchange rate fluctuations on cash and cash equivalents(230)13Change in cash and cash equivalents and restricted cash(8,580)9,169Cash and cash equivalents and restricted cash at the beginning of the year10,9431,774Cash and cash equivalents and restricted cash at the end of the year2,36310,943B) Aggregate cash flows derived for the Company as a result of the Orgad acquisition (note 16)2022Trade and other receivables364Inventory864Fixed assets55Longterm deposits31Selling Platform378Goodwill152Shortterm credit(181)Trade payables(580)Other payables(88)Longterm loan(138)Longterm provision(13)Deferred Tax Liability(87)Issuance of shares(457)Total acquisition of subsidiary, net of cash300C) Aggregate cash flows derived for the Company as a result of the Naiz acquisition (note 16)2022Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Issuance of shares(1,008)Total acquisition of subsidiary, net of cash467The accompanying notes are an integral part of the consolidated financial statements.F7MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERALa.My Size, Inc. is developing unique measurement technologies based on algorithms with applications in a variety of areas, from the apparel ecommerce market, to the courier services market and to the Do It Yourself (“DIY”) smartphone and tablet apps market. The technology is driven byproprietary algorithms, which are able to calculate and record measurements in a variety of novel ways.Following the acquisition of Naiz Bespoke Technologies, S.L (“Naiz”) in October 2022 (see note 16), the Company expanded its offering outreachand customer base.Following the acquisition of Orgad International Marketing Ltd. (“Orgad”) in February 2022 (see note 16), the Company also operates anomnichannel ecommerce platform.The Company has five subsidiaries, My Size Israel 2014 Ltd (“My Size Israel”), Topspin Medical (Israel) Ltd., and Orgad all of which areincorporated in Israel, and My Size LLC which was incorporated in the Russian Federation and Naiz Bespoke Technologies, S.L., a limited liabilitycompany incorporated under the laws of Spain (see note 16). References to the Company include the subsidiaries unless the context indicatesotherwise.My Size, Inc., was incorporated and commenced operations in September 1999, as Topspin Medical Inc. (“Topspin”), a private company registeredin the State of Delaware. In December 2013, the Company changed its name to Knowledgetree Ventures Inc. Subsequently, in February 2014, theCompany changed its name to My Size, Inc. Topspin was engaged, through its Israeli subsidiary, in research and development in the field ofcardiology and urology.Since September 1, 2005, the Company has traded on the Tel Aviv Stock Exchange (“TASE”).Between 2007 and 2012 the Company reported as a public company with the U.S. Securities and Exchange Commission (the “SEC”). In August2012, the Company suspended its reporting obligations under Section 13(a) and 15(d) of the Securities Exchange Act of 1934. In mid2015, theCompany resumed reporting as a public company.b.On January 9, 2014, at the Company’s general meeting of shareholders, its shareholders approved an engagement with one of the Company’sinvestors (the “Seller”) for the purchase of rights in a Venture (the “Venture”), including the rights to the method and the certain patent applicationthat had been filed by the Seller (the “Assets”). The Venture relates to the development of technologies and applications which will assist theconsumer to take his or her body measurements accurately using a mobile device to ensure the purchase of clothing with the best possible fitwithout the need to try them on.In February 2014, the Company established a wholly owned subsidiary, My Size (Israel) 2014 Ltd., a company registered in Israel, which iscurrently engaged in the development of the Venture described above.In return for purchasing an interest in the Venture, the Company undertook to pay the Seller 18% of the Company’s operating profit, direct orindirect, connected to the Venture for a period of seven years starting from the end of the Venture’s development period.As part of the agreement, the Seller received an option to buy back the Assets for consideration which will reflect the market fair value at that time,on the occurrence of the following events: a) if a motion is filed to liquidate the Company; b) if seven years after signing the agreement, theCompany’s total accumulated revenues, direct or indirect, from the Venture or the commercialization of the patent will be lower than NIS 3.6 million.In such an event, Seller may repurchase the interest in the Venture at a market price to be determined by an independent third party valuationconsultant, who shall be chosen by agreement by the parties, and the audit committee shall conduct the negotiations on behalf of the Company todetermine the identity of the consultant.On May 26, 2021, the Company, My Size Israel and Shoshana Zigdon entered into an Amendment to Purchase Agreement (the “Amendment”)which made certain amendments to a Purchase Agreement between the parties dated February 16, 2014 (the “Purchase Agreement”). Pursuant tothe Amendment, Ms. Zigdon agreed to irrevocably waive the right to repurchase certain assets related to the collection of data for measurementpurposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which the Company’s business is substantiallydependent, and all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My Size Israel underthe Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation,reward or any rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights(the “Waiver”). In consideration of the Waiver, the Company issued 100,000 shares of common stock to Ms. Zigdon in a private placement.F8MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERAL (Cont.)c.On July 25, 2016, the Company’s common stock began publicly trading on the Nasdaq Capital Market under the symbol “MYSZ”. The Company’sshares of common stock are listed both on the Nasdaq Capital Market and TASE.d.Since inception, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit of $53,501.The Company has financed its operations mainly through fundraising from various investors.The Company’s management expects that the Company will continue to generate losses and negative cash flows from operations for theforeseeable future. Based on the projected cash flows and cash balances as of December 31, 2022, management is of the opinion that its existingcash will be sufficient to fund operations for a period less than 12 months. As a result, there is substantial doubt about the Company’s ability tocontinue as a going concern.Management’s plans include the continued commercialization of the Company’s products and securing sufficient financing through the sale ofadditional equity securities, debt or capital inflows from strategic partnerships. Additional funds may not be available when the Company needsthem, on terms that are acceptable to it, or at all. If the Company is unsuccessful in commercializing its products and securing sufficient financing,it may need to cease operations.The financial statements include no adjustments for measurement or presentation of assets and liabilities, which may be required should theCompany fail to operate as a going concern.e.The Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificial intelligencedriven measurement solutions (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions. The fashion and equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. The SaaS based innovativeartificial intelligence driven measurement solutions, or SaaS Solutions operating segment consists of My Size Inc My Size Israel and LLC.NOTE 2 SIGNIFICANT ACCOUNTING POLICIESThe consolidated financial statements are prepared according to United States generally accepted accounting principles (“U.S. GAAP”), applied on aconsistent basis, as followsa.Use of estimates:The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions thataffect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.Information about assumptions made by the Company with respect to the future and other reasons for uncertainty with respect to estimates thathave a significant risk of resulting in a material adjustment to carrying amounts of assets and liabilities in the next financial year are included in thefollowing notes:Acquisitions of subsidiariesThe Company measures the fair value of the consideration transferred (including contingent consideration) and fair value of the assets acquiredand liabilities assumed, in business combination transactions. For information on details on fair value measurement in acquisition of subsidiaries,see Note 16 regarding business combinations.Estimated impairment of nonfinancial assetsThe Company examines on an annual basis whether there is an impairment of goodwill, intangibles and property, plant and equipment that areallocated to cash generating units, in accordance with the accounting policy presented in Note 1(h) below. Recoverable amounts of cashgenerating units are determined on the basis of valueinuse calculations. These calculations require the use of estimates.For information on key assumptions used in calculation of the recoverable amount, see note 7 – Goodwill and other Intangible assets.b.Functional currency:The currency of the primary economic environment in which the operations of the Company is conducted is the United States Dollar and thus it isthe Company’s functional currency. The reporting currency according to which these financial statements are prepared is the U.S. dollar.The currency of the primary economic environment in which the operation of the Subsidiary, My Size Israel and Orgad International MarketingLtd. functional currency is the New Israeli Shekel (“NIS”).The currency of the primary economic environment in which the operation of the Subsidiary, My Size LLC, functional currency is Russian Ruble.The currency of the primary economic environment in which the operation of the Subsidiary, Naiz fit, functional currency is Euro.F9MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)c.Principles of consolidation:The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances andtransactions have been eliminated upon consolidation.d.Cash equivalents:Cash equivalents are shortterm highly liquid investments that are readily convertible to cash with original maturities of three months or less at thedate acquired.e.Restricted cashRestricted cash are deposits for rent, credit card and for hedging activities.f.Inventories:Inventories include finished goods and are measured at the lower of cost or net realizable value. The cost of inventories comprises of the costsincurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary courseof business. At the point of the loss recognition, a new, lowercost basis for that inventory is established, and subsequent changes in facts andcircumstances do not result in the restoration or increase in that newly established cost basis. The costs of purchase of inventories comprise thepurchase price and other costs directly attributable to the acquisition of finished goods. In 2022, the Company recorded an inventory markdownof $48.g.Property and equipment:Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straightline method over theestimated useful lives of the assets, at the following annual rates:%Computers and peripheral equipment33Office furniture and equipment720Leasehold improvementsOver the term of the leaseor the useful life of theimprovements, whicheveris shorterh.Impairment of longlived assets:The Company’s property and equipment are reviewed for impairment in accordance with ASC 360, “Property Plant and Equipment”, wheneverevents or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held andused is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by theassets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount ofthe assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less sellingcosts. During the periods ended December 31, 2022 and 2021, no impairment losses have been recorded.i.Business combinations:The Company applies the provisions of ASC 805, “Business Combination” and allocates the fair value of purchase consideration to the tangibleassets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchaseconsideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assetsacquired and liabilities assumed, the Company estimated the future expected cash flows from acquired platform, customer relationships,Technology and trademark from a market participant perspective, useful lives and discount rates. In addition, management makes significantestimates and assumptions, which are uncertain, but believed to be reasonable.Acquisitionrelated costs are recognized separately from the acquisition and are expensed as incurred.F10MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)j.Goodwill:Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a businesscombination. Under ASC 350, “Intangible Goodwill and Other”, goodwill is not amortized, but rather is subject to an annual impairment test.ASC 350 requires goodwill to be tested for impairment at the reporting unit level at least annually, the fourth quarter, or between annual tests incertain circumstances, and written down when impaired. Goodwill is tested for impairment by comparing the fair value of the reporting unit with itcarrying value. Goodwill from Orgad acquisition was allocated to the fashion and equipment ecommerce platform segment and Goodwill from theNaiz acquisition was allocated to Naiz segment based innovative artificial intelligence driven measurement solutions.Alternatively, ASC 350 permits an entity to bypass the qualitative assessment for any reporting unit and proceed directly to performing the firststep of the goodwill impairment test. There were no impairment charges to goodwill during the period presented.k.Intangible assets:Intangible assets consist of identifiable intangible assets that the Company has acquired from previous business combinations. Intangible assetsare recorded at costs, net of accumulated amortization. The Company amortizes its intangible assets reflecting the pattern in which the economicbenefits of the intangible assets are consumed. When a pattern cannot be reliably determined, the Company uses a straightline amortizationmethod. Amortization is calculated by the straightline method over the estimated useful lives of the following assets.The estimated useful lives of the company’s intangible assets are as follows:yearsCustomer Relationships7Technology5Trademark5Selling Platform3Each period the Company evaluates the estimated remaining useful lives of its intangible assets and whether events or changes in circumstanceswarrant a revision to the remaining period of amortizationl.Severance pay:The Subsidiary’s liability for severance pay is covered by Section 14 of the Israeli Severance Pay Law (“Section 14”). Under Section 14, employeesin Israel are entitled to have monthly deposits, at a rate of 8.33% of their monthly salary, made on their behalf to their insurance funds. Payments inaccordance with Section 14 exempt the Subsidiary from any additional obligation for these employees. As a result, the Subsidiary does notrecognize any liability for severance pay due to these employees and the deposits under Section 14 are not recorded as an asset in theSubsidiary’s balance sheet. These contributions for compensation represent defined contribution plans and expenses are recorded based onactual deposits.Other than the My Size Israel’s liability there are no additional severance pay liabilities.F11MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)m.Research and development costs:Research and development costs are charged to the statement of operations, as incurred. Most of the research and development expenses are forwages, related expenses and subcontractors.n.Income taxes:The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilitiesfor the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Companies’ taxreturns. Deferred taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities using enactedtax rates in effect in the years in which the differences are expected to reverse. The Company assesses the likelihood that its deferred tax assetswill be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely thannot that all or a portion of deferred tax assets will not be realized. The Company establishes a valuation allowance, if necessary, to reduce deferredtax assets to the amount more likely than not to be realized. As of December 31, 2022, and 2021, a full valuation allowance was established by theCompany.The Company implements a twostep approach to recognize and measure the benefit of its tax positions. The first step is to evaluate the taxposition taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that,on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigationprocesses. The second step is to measure the tax benefit as the largest amount that is greater than 50 percent (cumulative basis) likely to berealized upon settlement.The Company believes that its tax positions are all highly certain of being upheld upon examination. As of December 31,2022 and 2021 the Company recorded a liability for unrecognized tax benefits of $328 and none respectively.o.Accounting for stockbased compensation:The Company accounts for its employees’ stockbased compensation as an expense in the financial statements based on ASC 718. All awards areequity classified and therefore such costs are measured at the grant date fair value of the award and graded vesting attribution approach torecognize compensation cost over the vesting period. The Company estimates stock option grant date fair value using the Binomial and BlackScholes option pricingmodel.The Company recorded stock options issued to nonemployees at the grant date fair value, and recognizes expenses over the related serviceperiod by using the straightline attribution approach in accordance with ASU 201807. All awards are equity classified.The expected volatility of the share prices reflects the assumption that the historical volatility of the share prices is reasonably indicative ofexpected future trends.The riskfree interest rate for grants with an exercise price denominated in USD for employees and several consultants is based on the yield fromUS treasury zerocoupon bonds with an equivalent term.The Company has historically not paid dividends and has no foreseeable plans to pay dividends.F12MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)p.Fair value of financial instruments:ASC 820, Fair Value Measurements and Disclosures, relating to fair value measurements, defines fair value and established a framework formeasuring fair value. The ASC 820 fair value hierarchy distinguishes between market participant assumptions developed based on market dataobtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptionsdeveloped based on the best information available in the circumstances. ASC 820 defines fair value as the price that would be received to sell anasset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price. Inaddition, the fair value of assets and liabilities should include consideration of nonperformance risk, which for the liabilities described belowincludes the Company’s own credit risk.As a basis for considering such assumptions, ASC 820 establishes a threetier value hierarchy, which prioritizes the inputs used in the valuationmethodologies in measuring fair value:Level 1 Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access. Valuationadjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readilyand regularly available in an active market, valuation of these products does not entail a significant degree of judgment.Level 2 Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, eitherdirectly or indirectly.Level 3 Valuations based on inputs that are unobservable and significant to the overall fair value measurement.The Company holds share certificates in iMine Corporation (“iMine”) formerly known as Diamante Minerals, Inc., a publiclytraded company onthe OTCQB.Due to sales restrictions on the sale of the iMine shares, the fair value of the shares was measured on the basis of the quoted market price for anotherwise identical unrestricted equity instrument of the same issuer that trades in a public market, adjusted to reflect the effect of the salesrestrictions and is therefore, ranked as Level 2 asset.q.Basic and diluted net loss per share:Basic net loss per share is computed based on the weighted average number of shares of common stock outstanding during each year. Diluted netincome per share is computed based on the weighted average number of shares of common stock outstanding during each year plus dilutivepotential equivalent common stock considered outstanding during the year, in accordance with ASC 260, “Earnings per Share”. For the yearsended December 31, 2022 and 2021, all outstanding options and warrants have been excluded from the calculation of the diluted net loss per sharesince their effect was antidilutive.r.Concentrations of credit risk:Financial instruments that potentially subject the Company and its subsidiaries to concentrations of credit risk consist principally of cash andcash equivalents.Cash and cash equivalents are invested in banks in Israel, Spain and United States. Such deposits in United States may be in excess of insuredlimits and are not insured in other jurisdictions. Management believes that the financial institutions that hold the Company’s investments arefinancially sound and, accordingly, minimal credit risk exists with respect to these investments.The Company and its subsidiaries have no offbalancesheet concentration of credit risk such as foreign exchange contracts, option contracts orother foreign hedging arrangements.F13MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)s.Revenue Recognition:The Company’s revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled softwaresubscriptions, associated software maintenance and support.The Company recognizes revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with acustomer exists only when: the parties to the contract have approved it and are committed to perform their respective obligations, the Companycan identify each party’s rights regarding the distinct goods or services to be transferred (“performance obligations”), the Company can determinethe transaction price for the goods or services to be transferred, the contract has commercial substance and it is probable that the Company willcollect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to acustomer. Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted togovernmental authorities. Refunds are estimated at contract inception and updated at the end of each reporting period if additional informationbecomes available. Revenue is recognized when control of the product is transferred to the customer.The Company maintains a returns policy that allows its customers to return product within a specified period of time. The estimate of the provisionfor returns is based upon historical experience with actual returns.Principal versus Agent ConsiderationsThe Company follows the guidance provided in ASC 606 for determining whether it is a principal or an agent in arrangements with customers, byassessing whether the nature of the Company’s promise is a performance obligation to provide the specified goods (principal) or to arrange forthose goods to be provided by the other party (agent). With regard to products being sold by Orgad through Amazon, this determination involvesjudgment. The Company determines it is the principle when it has control over promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).The Company recognizes revenue ratably over the contractual service term for hosted services that are priced based on a committed number oftransactions where the delivery and consumption of the benefit of the services occur evenly over time, beginning on the date the servicesassociated with the committed transactions are first made available to the customer and continuing through the end of the contractual serviceterm. Over usage fees and fees based on the actual number of transactions are billed in accordance with contract terms as these fees are incurredand are included in the transaction price of an arrangement as variable consideration. Fees based on a number of transactions or impressions permonth, are allocated to the period in which the transactions occur. Revenue for subscriptions sold as a fee per period is recognized ratably overthe contractual term as the customer simultaneously receives and consumes the benefit of the underlying service.F14MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)t.Contingencies and CommitmentsLiabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it isprobable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with losscontingencies are expensed as incurred.u.Derivative instrumentsThe Company accounts for its derivative instruments as either assets or liabilities and measures them at fair value through profit or loss.v.LeasesThe Company leases include an office space lease agreement for 36 months, with an option to extend for an additional 36 months and 36 monthscancelable operating lease agreements on behalf of personnel vehicles. The lease term includes a noncancellable period of the lease plus anyadditional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise,or an option to extend (or not to terminate) the lease controlled by the lessor.ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make leasepayments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value oflease payments over the lease term. The company generally use its incremental borrowing rate based on the estimated rate of interest forcollateralized borrowing over a similar term of the lease payments at commencement date. Lease expense for lease payments is recognized on astraightline basis over the lease term.For the office rent lease, the Company has elected to account for the lease and nonlease maintenance components as a single lease component.Therefore, the lease payments used to measure the lease liability include all of the fixed consideration in the contract, including insubstance fixedpayments, owed over the lease term.w.Impact of recently issued accounting standardIn June 2016, the FASB issued ASU 201613, “Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses on FinancialInstruments”, which requires companies to measure credit losses of financial instruments, including customer accounts receivable, utilizing amethodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information toinform credit loss estimates. Subsequent to the issuance of ASU 201613, the FASB issued several additional Accounting Standard Updates toclarify implementation guidance, provide narrowscope improvements and provide additional disclosure guidance. As an Emerging GrowthCompany, ASU 201613 is effective for fiscal years beginning after December 15, 2022. The Company does not expect this ASU to have a materialimpact on its consolidated financial statements.F15MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 3 CASH AND CASH EQUIVALENTSThe Company’s cash and cash equivalents balance at December 31, 2022 and 2021 is denominated in the following currencies:December 31,20222021US Dollars1,65110,184New Israeli Shekels259433Other190532,10010,670NOTE 4 OTHER RECEIVABLES AND PREPAID EXPENSESDecember 31,20222021Prepaid expenses and other current assets322429Government authorities28317Other153133Total758579NOTE 5 PROPERTY AND EQUIPMENT, NETComputersandperipheralequipmentOfficefurnitureandequipmentLeaseholdimprovementsTotalCostBalance as at January 1, 20211825860300Additions2323Translation adjustments72211Balance as at December 31, 20212126062334Balance as at January 1, 20222126062334Additions161127Business combination401555Translation adjustments(32)(8)(8)(48)Balance as at December 31, 20222367854368Accumulated DepreciationBalance as at January 1, 20211461412172Additions2751042Translation adjustments6118Balance as at December 31, 20211792023222Balance as at January 1, 20221792023222Additions209938Translation adjustments(27)(3)(2)(32)Balance as at December 31, 20221722630228Carrying amountsAs at December 31, 2021334039112As at December 31, 2022645224140F16MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 6 LEASESIn August 2019, The Company entered into an office space lease agreement. The lease term is for 36 months beginning on August 20, 2019 and endingon August 20, 2022, with an option to extend for an additional 36 months. The Company extended the lease period until August 20, 2025. Monthly rentpayments including utilities amounting to approximately USD 14 (NIS 49,500) per month.In addition, The Company entered into a threeyear cancelable operating lease agreement for cars.These operating leases are included in “Right of use asset” on the Company’s December 31, 2022 consolidated balance sheets, and represent theCompany’s right to use the underlying asset for the lease term. The Company’s obligations to make lease payments are included in the currentliabilities as “Operating lease liability” and in the noncurrent liabilities as “Operating lease liability long term” on the Company’s December 31, 2022consolidated balance sheets. As of December 31, 2022, rightofuse of asset was $583. operating lease liabilities were $159 and non current Operatinglease liabilities were $308. Rightofuse asset includes the capitalization of improvements (net of amortization) amounting to $105.Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value ofthe lease payments.The interest rate used to discount future lease payment was 11.95%.Maturities of lease liabilities as of December 31, 2022 were as follows:Year Ending:2023$1912024$1912025$127Thereafter$509Less imputed interest:$(42)Total lease liabilities$467F17MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 7 – Goodwill and other Intangible assetsA.Identified intangible assetsSchedule of Intangible assetsSelling PlatformTechnologyCustomerRelationshipsOtherTotalThousandsUSDThousandsUSDThousandsUSDThousandsUSDThousandsUSDCostAs of January 1, 2022Acquisitions through business combinations378286726771,467Effect of changes in exchange rates(32)2565765As of December 31, 2022346311791841,532AmortizationAs of January 1, 2022Amortization for the year including effect of changes inexchange rates as of December 31, 2022(109)(15)(27)(4)(155)Carrying amountAs of December 31, 2022237296764801,377AmortizationAmortization expenses recorded for identified intangible assets in the Consolidated Statements of Operations for each period and were as follows:Line ItemDecember 31,2022December 31,2021Selling platformCosts of revenues109TrademarkSales and marketing4TechnologyCosts of revenues15Customer relationshipsSales and marketing27Total amortization expenses155Future amortization expenses are expected to be as follows:20232024202520262027ThereafterTotalFuture amortization expenses3033031941771561791,312b.GoodwillThe changes in the carrying amount of goodwill for the years ended December 31, 2022 and 2021 were as follows:Fashion and equipmentecommerce platformNaizTotalBalance as of December 31, 2021Changes during the period:Goodwill acquired1521,1521,304Goodwill impairmentTranslation differences(14)10591Balance as of December 31, 20221381,2571,395The Company operates its business through three reporting segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovativeartificial intelligence driven measurement solutions and (iii) Naiz. See note 17 for additional segments information.The Company determines the fair value of its reporting units using the income approach. According to the income, the Company uses discounted cashflows to estimate the fair value. Cash flow projections are based on the Company’s estimates of revenue growth rates and operating margins, takinginto consideration the industry’s and market’s conditions. The discount rate used is based on the weighted average cost of capital (“WACC”),adjusted for the relevant risk associated with businessspecific characteristics.The Company performed a quantitative assessment as of December, 31 2022 for the reporting units’ fair value. The estimated fair value of the Fashionand equipment ecommerce platform and Naiz reporting units exceeded its estimated carrying amount by 95.9% and 27.7% respectively. This, based thefollowing assumptions:Fashion and equipmentecommerce platformNaizDiscount rate21%23%Terminal growth rate3%3%If business conditions or expectations were to change materially, it may be necessary to record impairment charges to the Company’s reporting units inthe future.F18MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 8 Investment in JVIn August 2022, the Company established a joint venture (“JV”) in Brazil with Santista Têxtil. The Company holds 51% and Santista Têxtil holds 49% of theJV. The purpose of the JV is to serve the Brazilian market according to the business plan that was set. Both parties agree to make an initial investment in theJV of $198that will be made per the holding percentage of each party. As of the reporting date, the JV is in process of establishing its operation.NOTE 9 Financial LiabilitiesThe book value of each of the financial liability categories is an acceptable approximation of fair value.The debt is comprised of four loans that were granted to My Size Israel – in an outstanding amount of approximately $131, bearing interest rangingfrom prime rate to prime+2.8% rate, and four loans that were granted to the Spanish subsidiary– in an outstanding amount of approximately $400,bearing interest ranging from 1% to 3%.The financial liability maturities during the five years following the end of the financial year are shown below:UntilUntilUntilUntilUntilAfterTOTAL311223311224311225311226311227311227311222Debts with credit institutions15513892874712531NOTE 10 RELATED PARTIES TRANSACTIONSA. Balances with related parties:The following related party payables are included in liability to related parties.December 31,20222021Officers (*)4143Liability in respect of business combinations (**)739Other related parties (***)(95)Directors152069863(*)The amount includes the net salaries payables.(**)The amount includes the provision created to former owners of Orgad that are entitled to additional cash and equity consideration and former owners of Naizthat entitled to additional cash consideration, see note 16 business combination.(***)The amount includes an amount receivable from Orgad previous shareholders who currently work in the company.B. Related parties benefits:Year endedDecember 31,20222021Salaries and related expenses1,440852Share based payments39673Cash liability and equity liability expenses related to acquisitions (**)1,058Directors58582,952983(**)The amount includes the expenses for a provision created to former owners of Orgad that are entitled to additional cash and equity consideration and formerowners of Naiz that entitled to additional cash consideration, see note 16 business combination.NOTE 11 FINANCIAL INSTRUMENTSThe following tables presents the Company’s significant assets and liabilities that are measured at fair value on recurring basis and their classificationwithin the fair value hierarchy:December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities47financial assets (*)10December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesDerivatives9December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities108December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesWarrants derivative2(*)the financial asset includes in other receivables.F19MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 11 FINANCIAL INSTRUMENTS (Cont.)The carrying amounts of cash and cash equivalents, restricted cash, short term restricted deposit, accounts receivable, other receivables and prepaidexpenses, trade payable and accounts payable approximate their fair value due to the shortterm maturities of such instruments.At December 31, 2022, the recognized gain and fair value (based on quoted market prices with a discount due to security restrictions on iMine shares)of the marketable securities were $59and $47, respectively (at December 31, 2021 $49and $108, respectively).NOTE 12 TAXES ON INCOMEa.On December 31, 2022, the Company had U.S. federal net operating loss carryforwards of approximately $26 available to reduce future taxableincome. Utilization of the U.S. net operating losses may be subject to substantial limitations due to the change of ownership provisions of theInternal Revenue Code of 1986.The U.S. Company has final tax assessments through 2014.On December 22, 2017, the Tax Reform Act was signed into law. The legislation significantly changes U.S. tax law by, among other things, lowering theU.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. As a result of the decrease in the corporate incometax rate, the Company revalued the ending net deferred tax assets at December 31, 2017, but did not recognize any incremental income tax expense in2017 due to the revaluation of the valuation allowance.b.Foreign tax:1.Tax rates:Presented hereunder are the tax rates relevant to the Company’s Israeli subsidiaries:2022 23%2021 23% Presented hereunder are the tax rates relevant to the Company’s Spanish subsidiary:2022 24%2.The Company’s Israeli subsidiaries have estimated total available carryforward operating tax losses for Israeli income tax purposes ofapproximately $64as of December 31, 2022. Of these losses, a total of $47.5are owned by Topspin Medical (Israel) Ltd. Topspin tax lossesmay be offset only by future income with respect to the same operational activity by which it was incurred for an indefinite period of time. Theother losses are owned by My Size Israel and may be carryforward to offset against future income for an indefinite period of time.3.Topspin Medical (Israel) Ltd. and My Size (Israel) 2014 Ltd. has final tax assessments through 2016.c.U.S. and foreign components of loss from continuing operations, before income taxes consisted of:December 31,20222021U.S(1,180)(3,802)NonU.S. (foreign)(7,130)(6,718)(8,310)(10,520)F20MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 12 TAXES ON INCOME (Cont.)d.Deferred taxes:Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reportingpurposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows:December 31,20222021Deferred tax assets:Operating loss carryforwards20,13120,238Warrants and options145126Marketable securities390377Intangible assets(328)Research and development expenses586341Other temporary differences203Deferred tax assets before valuation allowance21,12721,082Valuation allowance(21,455)(21,082)Net deferred tax liability(328)The following table presents a reconciliation of the beginning and ending valuation allowance:December 31,20222021Balance at beginning of the year21,08218,968Additions in valuation allowance to the income statement1,7581,625Additions in valuation allowance due to exchange rate differences(1,385)489Balance at end of the year21,45521,082In assessing the realization of deferred tax assets, management considers whether it is more likely than not that all or some portion of the deferred taxassets will not be realized.The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporarydifferences are deductible and net operating losses are utilized. Based on consideration of these factors, the Company recorded a full valuationallowance at December 31, 2021 and 2020.e.Theoretical taxThe following presents the adjustment between the theoretical tax amount and the tax amount included in the financial statements:December 31,20222021Loss before income taxes8,34610,520Statutory tax rate21%21%Computed “expected” tax income1,7522,209Foreign tax rate differences and exchange rate differences149131Nondeductible expenses(107)(715)Change in valuation allowance(1,758)(1,625)Taxes on income36F21MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITYa.Common stock confers upon their holders the right to receive notice to participate and vote in general meetings of the Company, and the right toreceive dividends if declared.b.On January 8, 2021, the Company conducted a public offering of its securities pursuant to which it issued 62,768 shares of its common stock forgross proceeds of $2,008. The net proceeds to the Company from the offering were approximately $1,700, after deducting placement agent’s feesand other estimated offering expenses payable by the Company.c.During 2021, a holders of warrants exercised warrants to purchase 135,109 ordinary shares of the Company in exchange for $3,709.d.On March 25, 2021, the Company conducted a public offering of its shares of common stock pursuant to which it issued 104,741 shares of itscommon stock for gross proceeds of $3,300. The net proceeds to the Company from the offering were approximately $2,872, after deductingplacement agent’s fees and other estimated offering expenses payable by the Company.On May 7, 2021, the Company issued an additional 15,711 shares of the Company’s common stock in connection with the full exercise of theunderwriter’s overallotment option granted in the Company’s March 2021 public offering. These additional shares were sold to the underwriter at apublic offering price of $31.5 per share, resulting in additional net proceeds to the Company, net of the underwriting discount, of approximately$463.e.On May 26, 2021, the Company issued 100,000 shares of common stock to Ms. Zigdon in consideration of the Waiver. See note 1(b) above.f.On October 28, 2021, the Company sold in a registered direct offering 100,592 shares of its common stock and, in a concurrent private placement,an aggregate of 75,444 unregistered warrants to purchase shares of common stock, at an offering price of $33.8 per share and associated warrant.In addition, on the same day, the Company sold in a private placement 150,888 unregistered shares of common stock and unregistered warrants topurchase up to an aggregate of 113,166 shares of common stock at the same purchase price as in the registered direct offering. The warrants areimmediately exercisable and will expire five years from issuance at an exercise price of $31.5 per share, subject to adjustment as set forth therein.The gross proceeds from the offerings were $8,500. The net proceeds to the Company from the offerings were approximately $7,560, afterdeducting placement agent’s fees and other estimated offering expenses payable by the Company. In connection with the offerings, the Companyissued to the placement agent warrants to purchase 17,603 shares on substantially the same terms as the purchasers in the offerings at an exerciseprice of $42.25 per share and a term expiring on October 26, 2026.g.On December 7, 2022, the Company’s board of directors approved a 1for25 reverse stock split of the Company’s issued and outstanding sharesof common stock. The reverse stock split became effective on December 8, 2022. In order not to have fractional shares as a result of the reversestock split, the Company issued an additional 12,091 shares of common stock. As a result, all shares of common stock, options for shares ofcommon stock, exercise price and net loss per share amounts were adjusted retroactively for all periods presented in these financial statements.F22MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITY (Cont.)g.A summary of the warrant activity during the years ended December 31, 2022 and 2021 is presented below:Number ofWarrantsWeightedAverageExercisePriceWeightedAverageRemainingLife inYearsOutstanding, December 31, 2020216,85936.754.26Issued206,214Expired or exercised(135,109)Outstanding, December 31, 2021287,96431.004.35IssuedExpired or exercised(17,901)Outstanding, December 31, 2022270,06330.213.36Exercisable, December 31, 2022270,06330.213.36NOTE 14 STOCK BASED COMPENSATIONThe stockbased expense recognized in the financial statements for services received is related to Research and Development, Sales and Marketingand General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense Research and development15195Stockbased compensation expense Sales and marketing126180Stockbased compensation expense General and administrative17898455373The stockbased expense recognized in the financial statements for services received post Acquisition of Orgad (see note 16) is related to Cost OfGoods, Sales and Marketing and General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense – Cost of goods80Stockbased compensation expense Sales and marketing112Stockbased compensation expense General and administrative127319F23MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Options issued to consultantsWe can sell additional shares of common stock without consulting stockholders and without offering shares to existing stockholders, which wouldresult in dilution of shareholders’ interests in the company and could depress our stock price.Our Certificate of Incorporation currently authorizes 250,000,000 shares of common stock, of which 2,446,780 are currently outstanding as of March 31, 2023and our board of directors is authorized to issue additional shares of our common stock. Although our board of directors intends to utilize its reasonable businessjudgment to fulfil its fiduciary obligations to our then existing stockholders in connection with any future issuance of our capital stock, the future issuance ofadditional shares of our capital stock could cause immediate, and potentially substantial, dilution to our existing stockholders, which could also have a materialeffect on the market value of the shares. Further, other than certain participation rights that we have granted in a past offering, our shares do not have preemptiverights, which means we can sell shares of our capital stock to other persons without offering purchasers in this offering the right to purchase their proportionateshare of such offered shares. Therefore, any additional sales of stock by us could dilute your ownership interest in our Company.Our quarterly operating results may fluctuate significantly.We expect our operating results to be subject to quarterly fluctuations. Our net loss and other operating results will be affected by numerous factors,including:●variations in the level of expenses related to our research and development;●any lawsuits in which we may become involved;●regulatory developments affecting our products; and●our execution of any collaborative, licensing or sales agreements, and the timing of payments under these arrangements.If our quarterly operating results fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially.Furthermore, any quarterly fluctuations in our operating results may, in turn, cause the price of our common stock to fluctuate substantially.If we fail to comply with the rules under the Sarbanes Oxley Act of 2002 related to accounting controls and procedures or if we discover materialweaknesses and deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult.If we fail to comply with the rules under the SarbanesOxley Act of 2002 related to disclosure controls and procedures, or, if we discover materialweaknesses and other deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult. Section 404 of the SarbanesOxley Act requires annual management assessments of the effectiveness of our internal control over financial reporting and, ifwe are no longer a nonaccelerated filer, a report by our independent auditors addressing these assessments. If material weaknesses or significant deficiencies arediscovered or if we otherwise fail to achieve and maintain the adequacy of our internal control, we may not be able to ensure that we can conclude on an ongoingbasis that we have effective internal controls over financial reporting in accordance with Section 404 of the SarbanesOxley Act. Moreover, effective internalcontrols are necessary for us to produce reliable financial reports and are important to helping prevent financial fraud. If we cannot provide reliable financial reportsor prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price ofour common stock could drop significantly.38Our Certificate of Incorporation, Bylaws and Delaware law may have antitakeover effects that could discourage, delay or prevent a change incontrol, which may cause our stock price to decline.Our Certificate of Incorporation, Bylaws and Delaware law could make it more difficult for a thirdparty to acquire us, even if closing such a transactionwould be beneficial to our stockholders. Provisions of our Certificate of Incorporation, Bylaws and Delaware law also could have the effect of discouraging potentialacquisition proposals or making a tender offer or delaying or preventing a change in control, including changes a stockholder might consider favorable. Suchprovisions may also prevent or frustrate attempts by our stockholders to replace or remove our management. In particular, the Certificate of Incorporation, Bylawsand Delaware law, as applicable, among other things:●provide the board of directors with the ability to alter the Bylaws without stockholder approval;●the classification of our board of directors;●place limitations on the removal of directors;●provide that vacancies on the Board of Directors may be filled by a majority of directors in office, although less than a quorum;●require that stockholder actions must be affected at a duly called stockholder meeting and generally prohibiting stockholder actions by written consent;●eliminate the ability of stockholders to call a special meeting of stockholders; and●establish advance notice requirements for nominations for election to the Board of Directors or for proposing matters that can be acted upon at duly calledstockholder meetings.We are subject to Section 203 of the Delaware General Corporation Law which, subject to certain exceptions, prohibits “business combinations” between apubliclyheld Delaware corporation and an “interested stockholder,” which is generally defined as a stockholder who becomes a beneficial owner of 15% or more ofa Delaware corporation’s voting stock for a threeyear period following the date that such stockholder became an interested stockholder. These provisions areexpected to discourage certain types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to firstnegotiate with our board. These provisions may delay or prevent someone from acquiring or merging with us, which may cause the market price of our commonstock and the value of our securities to decline.If we fail to comply with the continued listing requirements of the Nasdaq Capital Market, our common stock may be delisted and the price of ourcommon stock and our ability to access the capital markets could be negatively impacted.Nasdaq has established certain standards for the continued listing of a security on the Nasdaq Capital Market. The standards for continued listing include,among other things, that the minimum bid price for the listed securities not fall below $1.00 per share for a period of 30 consecutive trading days and that wemaintain a minimum of $2,500,000 in shareholders’ equity. We have in the past fallen below the minimum bid price and minimum shareholders’ equity.39No assurance can be given that we will continue to be in compliance with the Rule. Failure to meet applicable Nasdaq continued listing standards couldresult in a delisting of our common stock. A delisting of our common stock from Nasdaq could materially reduce the liquidity of our common stock and result in acorresponding material reduction in the price of our common stock. In addition, delisting could harm our ability to raise capital through alternative financing sourceson terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, employees and fewer business development opportunities.The exercise of outstanding warrants and stock options will have a dilutive effect on the percentage ownership of our capital stock by existingstockholders.As of March 15, 2023, we had outstanding warrants to acquire 2,299,115 shares of our common stock and stock options to purchase 1,659 shares of ourcommon stock, which warrants and options are exercisable for prices ranging between $2.81 and $375. The expiration of the term of such options and warrants rangefrom 0.22 years to 4.83 years. If a significant number of such warrants and stock options are exercised by the holders, the percentage of our common stock ownedby our existing stockholders will be diluted.Were our common stock to become subject to the penny stock rules then this could result in U.S. brokerdealers becoming discouraged from effectingtransactions in shares of our common stock.Rule 15g9 under the Exchange Act establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a marketprice of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. If we do not retain a listing on the NasdaqCapital Market or do not meet certain net tangible asset or average revenue requirements and if the price of our common stock is less than $5.00, our common stockwill be deemed a penny stock. For any transaction involving a penny stock, unless exempt, the rules require: (a) that a broker or dealer approve a person’s accountfor transactions in penny stocks; and (b) the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantityof the penny stock to be purchased.In order to approve a person’s account for transactions in penny stocks, the broker or dealer must: (a) obtain financial information and investmentexperience objectives of the person and (b) make a reasonable determination that the transactions in penny stocks are suitable for that person and the person hassufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver,prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which: (a) sets forth the basis on whichthe broker or dealer made the suitability determination; and (b) confirms that the broker or dealer received a signed, written agreement from the investor prior to thetransaction. Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult forinvestors to dispose of our common stock and cause a decline in the market value of our common stock.Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissionspayable to both the broker or dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor incases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the accountand information on the limited market in penny stocks.Sales of our currently issued and outstanding stock may become freely tradable pursuant to Rule 144 and may dilute the market for your shares andhave a depressive effect on the price of the shares of our common stock.A portion of our outstanding shares of common stock are “restricted securities” within the meaning of Rule 144 under the Securities Act of 1933, asamended, or the Securities Act. As restricted shares, these shares may be resold only pursuant to an effective registration statement or under the requirements ofRule 144 or other applicable exemptions from registration under the Securities Act and as required under applicable state securities laws. Rule 144 provides inessence that an affiliate (as such term is defined in Rule 144(a)(1)) of an issuer who has held restricted securities for a period of at least six months (one year afterfiling Form 10 information with the SEC for shell companies and former shell companies) may, under certain conditions, sell every three months, in brokeragetransactions, a number of shares that does not exceed the greater of 1% of a company’s outstanding shares of common stock or the average weekly trading volumeduring the four calendar weeks prior to the sale (the four calendar week rule does not apply to companies quoted on the OTC Markets). Rule 144 also permits, undercertain circumstances, the sale of securities, without any limitation, by a person who is not an Affiliate of the Company and who has satisfied a oneyear holdingperiod. A sale under Rule 144 or under any other exemption from the Securities Act, if available, or pursuant to subsequent registrations of our shares of commonstock, may have a depressive effect upon the price of our shares of common stock in any active market that may develop.40We are a former “shell company” and as such are subject to certain limitations not applicable to other public companies generally.Prior to our suspension of reporting in 2012, we were a public reporting “shell company,” as defined in Rule 12b2 under the Exchange Act. Although weare no longer a “shell company,” we are subject to certain restrictions under the Securities Act for the resale of securities issued by issuers that have been at anytime previously a shell company. Specifically, the Rule 144 safe harbor available for the resale of our restricted securities is only available to our stockholders if wehave filed all reports and other materials required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934, as amended, or the Exchange Act, asapplicable, during the preceding twelve months, other than current reports on Form 8K, at the time of the proposed sale, regardless of whether the restrictedsecurities were initially issued at the time we were a shell company or subsequent to termination of such status. Accordingly, holders of our “restricted securities”within the meaning of Rule 144 will be subject to the conditions set forth in Rule 144 with respect to our company. Other reporting companies that are not formershell companies and have been reporting for more than twelve months are not subject to this same reporting threshold for nonaffiliate reliance on Rule 144.Accordingly, any restricted securities we have sold or sell in the future or issue to consultants or employees, in consideration for services rendered or for any otherpurpose, may not be resold unless such securities are registered with the SEC or the requirements of Rule 144 have been satisfied. As a result, it may be harder forus to fund our operations and pay our employees and consultants with our securities instead of cash. Furthermore, it may be harder for us to raise funding throughthe sale of debt or equity securities unless we agree to register such securities with the SEC, which could cause us to expend additional resources in the future. Ourprior status as a “shell company” could prevent us in the future from raising additional funds, engaging employees and consultants, and using our securities to payfor any acquisitions, which could cause the value of our securities, if any, to decline in value or become worthless.ITEM 1B. UNRESOLVED STAFF COMMENTSNone.ITEM 2. PROPERTIESWe currently lease 1,660 square feet of office space at 4 HaYarden Street, Airport City, Israel. The lease term is for 36 months beginning on August 20, 2019and ending on August 20, 2022, with an option to extend for an additional 36 months. Monthly rent payments, including utilities, amount to approximately $14,000per month. We extended the lease period until August 20, 2025.ITEM 3. LEGAL PROCEEDINGSFrom time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation issubject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.41North Empire LLCOn August 7, 2018, we commenced an action against North Empire LLC, or North Empire, in the Supreme Court of the State of New York, County of NewYork for breach of a Securities Purchase Agreement or Agreement in which we are seeking damages in an amount to be determined at trial, but in no event less than$616,000. On August 2, 2018, North Empire filed a Summons with Notice against us, also in the same Court, in which they allege damages in an amount of $11.4million arising from an alleged breach of the Agreement. On September 6, 2018, North Empire filed a Notice of Discontinuance of the action it had filed on August 2,2018. On September 27, 2018, North Empire filed an answer and asserted counterclaims in the action commenced by us against them, alleging that we failed to deliverstock certificates to North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against our CEO andnow former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018, we filed a reply to North Empire’scounterclaims. On November 15, 2018, our CEO and now former Chairman of the Board filed a motion to dismiss North Empire’s thirdparty complaint. On January 6,2020, the Court granted the motion and dismissed the thirdparty complaint. Discovery has been completed and both parties have filed motions for summaryjudgment in connection with the claims and counterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summaryjudgment, arguing there were factual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision.On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying the Company’s motion for summary judgment. On or about September 12,2022, the Court issued its Decision and Order denying the Company’s motion to reargue. North Empire filed its opposing brief on December 7, 2022. Both sides weregiven an opportunity to file a reply brief. We filed our reply brief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. Oral argument was heldbefore the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Court filed its Decision and Order, which affirmed the lower court’sdecisions regarding both My Size and North Empire’s motions for summary judgment and sent the case back to the Supreme Court. On or about March 13, 2023, theSupreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date for the mediation has not yet been set. We intend tovigorously defend any claims made by North Empire. We believe it is more likely than not that the counterclaims will be denied.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.42PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur stock currently is listed on the Tel Aviv Stock Exchange and the Nasdaq Capital Market under the symbol “MYSZ”. Our stock has been traded on theNasdaq Capital Market since July 25, 2016.HoldersAs of March 31, 2023, we had 70 shareholders of record. The actual number of stockholders is greater than this number of record holders and includesstockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our Board of Directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our Board of Directors deems relevant.Securities Authorized for Issuance under Equity Compensation PlansInformation about our equity compensation plans is incorporated herein by reference to “Item 12. Security Ownership of Certain Beneficial Owners andManagement and Related Stockholder Matters”, of this Annual Report on Form 10K.Recent Sales of Unregistered SecuritiesNone.ITEM 6. SELECTED FINANCIAL DATAAs a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULT OF OPERATIONSYou should read the following discussion along with our financial statements and the related notes included elsewhere in this Annual Report on Form10K. The following discussion contains forwardlooking statements that are subject to risks, uncertainties and assumptions, including those discussed under“Risk Factors.” Our actual results, performance and achievements may differ materially from those expressed in, or implied by, these forwardlooking statements.OverviewMySize is an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.43Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile device or through MySizeID Widget: a simple questionnaire which was uses a database collected over the years.MySizeID synchronizes the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and onlypresents items available for purchase that match their measurements to ensure a correct fit.MySize is positioning itself as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empowering brand design teams, which are designed to increaseend consumer satisfaction, contributing to a sustainable world and reduce operation costs.Orgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,682 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz BespokeTechnologies, S.L., or Naiz, a limited liability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.44The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 2,365,800 shares of My Size common stock were issuedto Whitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.45Operations in RussiaIn addition to our Israel operations, we had operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia. To date, mainly due to the invasion of Ukraine by Russia and the ongoing sanctions we stopped most ofour efforts in Russia and will probably close the subsidiary in the near future.Results of OperationsThe table below provides our results of operations for the periods indicated.Year ended December 3120222021(dollars in thousands)Revenues4,459131Cost of revenues(3,825)Gross profit634131Research and development expenses$(1,701)$(4,248)Sales and marketing(3,143)(2,336)General and administrative(3,900)(4,124)Operating loss(8,110)(10,577)Financial income (expenses), net(236)57Tax income36Net loss$(8,310)$(10,520)Year Ended December 31, 2022 Compared to Year Ended December 31, 2021RevenuesFrom inception through December 31, 2018, we did not generate any revenue from operations and we continue to expect to incur additional losses toperform further research and development activities. We started to generate revenues only in 2019. Our revenues for the year ended December 31, 2022 amounted to$4,459,000 compared to $131,000 for year ended December 31, 2021. The increase from the corresponding period primarily attributable to $4,132,000 in revenuegenerated from Orgad from February 7, 2022, the date of closing of the Orgad acquisition, or the Acquisition Date and revenue generated from the Naiz Acquisitionfrom October 11, 2022, the date of closing of the Naiz acquisition.In addition, the increase from the corresponding period results from an increase in revenues generated by My Size.Cost Of RevenuesOur cost of revenues expenses for the year ended December 31, 2022 amounted to $3,825,000, compared to none for the year ended December 31, 2021. Thecost of revenues includes cash and equity liabilities expenses in the amount of $194,000. The increase in comparison with the corresponding period was due to thecost of goods of the revenues generated from Orgad’s operations.Research and Development ExpensesOur research and development expenses for the year ended December 31, 2022 amounted to $1,701,000 a decrease of $2,547,000, or approximately 60.0%,compared to $4,248,000 for the year ended December 31, 2021. The decrease from the corresponding period primarily resulted from share based payment in amount of$2,618,000 attributed to the share issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021.Sales and Marketing ExpensesOur sales and marketing expenses for the year ended December 31, 2022 amounted to $3,143,000 an increase of $807,000, or 34.55%, compared to $2,336,000for the year ended December 31, 2021. The increase primarily resulted from an increase in employees expenses mainly due to Orgad and Naiz acquisitions, increase inAmazon fees, increase in cash and equity liabilities expenses attributed to the Orgad acquisition and an increase in share based payments offset by a decrease inpayments to consultants.46General and Administrative ExpensesOur general and administrative expenses for the year ended December 31, 2022 amounted to $3,900,000, a decrease of $224,000, or 5.43%, compared to$4,124,000 for the year ended December 31, 2021. The decrease compared to the corresponding period was mainly due to a decrease in professional expenses, mainlyattributed to shareholder activism including settlement expenses with the Lazar Parties offset by an increase in sharedbased payments and an increase in employeesexpenses mainly due to the Orgad and Naiz acquisitions.Operating LossAs a result of the foregoing, for the year ended December 31, 2022, our operating loss was $8,110,000, a decrease of $2,467,000 or 23.32%, compared to ouroperating loss for the year ended December 31, 2021 of $10,577,000.Financial Income, NetOur financial (expense) income, net for the year ended December 31, 2022 amounted to $236,000 compared to financial income, $57,000 for the year endedDecember 31, 2021. In 2022, we had financial expenses exchange rate differences offset by an income from fair value revaluation of investment in marketablesecurities whereas in 2021 we had financial income from the fair value revaluation of warrants offset by expenses from exchange rate differences and expenses fromfair value revaluation of investment in marketable securities.Net LossAs a result of the foregoing, our net loss for the year ended December 31, 2022 was $8,310,000 compared to net loss of $10,520,000 for the year endedDecember 31, 2021. The decrease in net loss was mainly due increase in sales and marketing expenses and financial expenses as opposed to financial income in thecorresponding period offset by a decrease in research and development expenses in amount of $2,618,000 attributed to the share issuance to Shoshana Zigdonunder the Amendment to Purchase Agreement dated May 26, 2021.Liquidity and Capital ResourcesSince our inception, we have funded our operations primarily through public and private offerings of debt and equity in Israel and in the U.S.As of December 31, 2022, we had cash, cash equivalents and restricted cash of $2,363,000 compared to $10,943,000 cash, cash equivalents, restricted cashas of December 31, 2021. During January 2023, we completed a registered direct and concurrent private placement offering resulting in gross proceeds ofapproximately $3 million. This decrease primarily resulted from our operating activities, the acquisition of Orgad and Naiz Fit, and resources that were deployed togrow of both businesses.Net cash used in operating activities was $7,290,000 for the year ended December 31, 2022 compared to $7,297,000 for the year ended December 31, 2021.The decrease in cash used in operating activity is derived mainly from an increase in share based payments and increase in account receivables mainly from theOrgad and Naiz fit acquisitions offset by a decrease in the net loss.Net cash used in investing activities for the year ended December 31, 2022 was $993,000 as opposed to net cash provided by investing activities of$161,000 for the year ended December 31, 2021. The net cash used in investing activities for the year ended December 31, 2022 was mainly from the acquisition ofOrgad and Naiz as opposed to proceeds from shortterm deposits and restricted deposits during the year ended December 31, 2021.We had a negative cash flow from financing activities of $67,000 for the year ended December 31, 2022 compared to positive cash flow of $16,292,000 for theyear ended December 31, 2021. The negative cash flow from financing activities for the year ended December 31, 2022 was mainly due to repayment of loans andinterest and payments for leases as opposed to proceeds from issuance of shares and from exercise of warrants for the year ended December 31, 2021.47We expect that we will continue to generate losses and negative cash flows from operations for the foreseeable future. Based on the projected cash flowsand cash balances as of December 31, 2022, together with the proceeds from the January 2023 financing, we believe our existing cash will not be sufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. We will need to raiseadditional capital, which may not be available on reasonable terms or at all. Additional capital would be used to accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;●respond to competitive pressures;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, the Russian invasion ofUkraine, the impact of any resurgence of the COVID19 pandemic and a number of other factors, many of which are outside our control, and on our financialperformance. Accordingly, we cannot assure you that we will be able to successfully raise additional capital at all or on terms that are acceptable to us. If we cannotraise additional capital when needed, it may have a material adverse effect on our business, results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.We have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.Recently Issued Accounting PronouncementsCertain recently issued accounting pronouncements are discussed in Note 2, Significant Accounting Policies, to the consolidated financial statementsincluded in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10K.OffBalance Sheet ArrangementsWe have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.48Application of Critical Accounting Policies and EstimatesOur management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we haveprepared in accordance with U.S. generally accepted accounting principles issued by the Financial Accounting Standards Board, or FASB. The preparation of thesefinancial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assetsand liabilities at the date of the financial statements, as well as the reported expenses during the reporting periods. Actual results may differ from these estimatesunder different assumptions or conditions.Our significant accounting policies were revenue from contracts with customers which are more fully described in the notes to our financial statementsincluded herein. We believe these accounting policies discussed below are critical to our financial results and to the understanding of our past and futureperformance, as these policies relate to the more significant areas involving management’s estimates and assumptions. We consider an accounting estimate to becritical if: (1) it requires us to make assumptions because information was not available at the time or it included matters that were highly uncertain at the time wewere making our estimate; and (2) changes in the estimate could have a material impact on our financial condition or results of operations.Accounting for business combinationsWe allocate the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed, based upon their estimated fairvalues at the acquisition date. These fair values are typically estimated with assistance from independent valuation specialists.The purchase price allocation process requires us to make significant estimates and assumptions, especially at the acquisition date with respect tointangible assets, contractual support obligations assumed, contingent consideration arrangements, and preacquisition contingencies.Although we believe the assumptions and estimates we have made in the past have been reasonable and appropriate, they are based in part on historicalexperience and information obtained from the management of the acquired companies and are inherently uncertain.Examples of critical estimates in valuing certain of the intangible assets we have acquired or may acquire in the future include but are not limited to:● future expected cash flows from product sales or other customer contracts;● expected costs of fulfillment including marketing, warehousing and product sales;● the acquired company’s brand and competitive position, as well as assumptions about the period of time the acquired brand will continue to be used inthe combined company’s product portfolio;● cost of capital and discount rates; and● estimating the useful lives of acquired assets as well as the pattern or manner in which the assets will amortize.Refer to Note 16, Business Combination, to the consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” of thisAnnual Report on Form 10K.49Revenue from contracts with customersOur revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled software subscriptions, associatedsoftware maintenance and support.We recognize revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with a customer exists onlywhen: the parties to the contract have approved it and are committed to perform their respective obligations, we can identify each party’s rights regarding thedistinct goods or services to be transferred (“performance obligations”), we can determine the transaction price for the goods or services to be transferred, thecontract has commercial substance and it is probable that we will collect the consideration to which we will be entitled in exchange for the goods or services that willbe transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to a customer.Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted to governmental authorities. Refundsare estimated at contract inception and updated at the end of each reporting period if additional information becomes available. Revenue is recognized when controlof the product is transferred to the customer.We maintain a returns policy that allows our customers to return product within a specified period of time. The estimate of the provision for returns is basedupon historical experience with actual returns.Principal versus Agent ConsiderationsWe follow the guidance provided in ASC 606 for determining whether we are a principal or an agent in arrangements with customers, by assessing whetherthe nature of our promise is a performance obligation to provide the specified goods (principal) or to arrange for those goods to be provided by the other party(agent). With regard to products being sold by Orgad through Amazon, this determination involves judgment. We determine it is the principle when it has controlover the promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).We recognize revenue ratably over the contractual service term for hosted services that are priced based on a committed number of transactions where thedelivery and consumption of the benefit of the services occur evenly over time, beginning on the date the services associated with the committed transactions arefirst made available to the customer and continuing through the end of the contractual service term. Over usage fees and fees based on the actual number oftransactions are billed in accordance with contract terms as these fees are incurred and are included in the transaction price of an arrangement as variableconsideration. Fees based on a number of transactions or impressions per month, are allocated to the period in which the transactions occur. Revenue forsubscriptions sold as a fee per period is recognized ratably over the contractual term as the customer simultaneously receives and consumes the benefit of theunderlying service.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.As a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.50ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAMY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2022U.S. DOLLARS IN THOUSANDSINDEXPageReport of Independent Registered Public Accounting Firm (PCAOB ID: ID 1057)F2Consolidated Balance SheetsF4Consolidated Statements of Comprehensive LossF5Consolidated Statements of Shareholders’ EquityF6Consolidated Statements of Cash FlowsF7Notes to Consolidated Financial StatementsF8 F33F1Report of Independent Registered Public Accounting FirmTo the Shareholders and Board of DirectorsMy Size, Inc.:Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of My Size, Inc. and subsidiaries (the Company) as of December 31, 2022 and 2021, the relatedconsolidated statements of comprehensive loss, shareholders’ equity, and cash flows for each of the years in the twoyear period ended December 31, 2022, and therelated notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, thefinancial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the twoyear periodended December 31, 2022, in conformity with U.S. generally accepted accounting principles.Going ConcernThe accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1d tothe consolidated financial statements, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit thatraises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1d. Theconsolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidatedfinancial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Critical Audit MattersCritical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to becommunicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved ourespecially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidatedfinancial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters oron the accounts or disclosures to which they relate.Acquisitiondate fair value of customer relationshipsAs discussed in Note 16 to the consolidated financial statements, on October 11, 2022, the Company acquired Naiz Bespoke Technologies SL (“Naiz”). As a result ofthe transaction, the Company acquired customer relationships intangible assets (“customer relationships”) representing the generation of future income from Naiz’sexisting customers. The acquisition date fair value of the customer relationships was $726 thousand.F2We identified the evaluation of the acquisitiondate fair value of the Naiz customer relationships as a critical audit matter. A high degree of subjective auditorjudgment was required to evaluate the following internally developed assumptions used to estimate the fair value of such asset, for which there were limitedobservable inputs: (i) forecasted revenues attributable to existing customers, (ii) forecasted earnings before interest, taxes, depreciation, and amortization(“EBITDA”) margins for the acquired business, (iii) estimated annual customer attrition rates and (iv) estimated discount rate. The determined fair value wassensitive to changes in these key assumptions. Additionally, specialized skills and knowledge were needed to evaluate the discount rate used.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s acquisitiondate fair value estimation process, including controls over the development of key assumptions. We performed a sensitivity analysis toassess the impact of reasonably possible changes to forecasted revenues, EBITDA margins, annual customer attrition rates, and the discount rate. We evaluated theforecasted revenue growth rates from existing customers by comparing the growth assumptions to those of the Company’s peers and industry reports. Inconnection with our assessment of the forecasts used in the valuation, we compared (1) forecasted revenue and EBITDA to Naiz’s historical actual results and (2)estimated annual customer attrition rates to historical Naiz customer attrition data. We tested the Company’s determined weighted average cost of capital(“WACC”), which was used to determine the discount rate, by involving valuation professionals with specialized skills and knowledge, who assisted in:Evaluating the selected discount rate by comparing it against a discount rate range that was independently developed using publicly available market datafor comparable companies, and;Assessing the Company’s WACC calculation, by comparing it against an independently estimated WACC range based on inputs obtained throughpublished surveys and studies.Goodwill impairment assessmentAs discussed in Note 16 to the consolidated financial statements, during 2022 the Company recorded goodwill of $1,257 thousand related to the acquisition of NaizBespoke Technologies, S.L. (“Naiz”). The Company performed an annual quantitative impairment test of goodwill at the reporting unit level. Based on this analysis,the Company determined that the fair value of its reporting unit exceeded its carrying value and no impairment charge was required.We identified the evaluation of the goodwill impairment assessment for the Naiz reporting unit as a critical audit matter. A high degree of subjective auditor judgmentwas required to evaluate the following assumptions used to estimate the fair value of the Company’s reporting unit, for which there were limited observable inputs:(i) forecasted reporting unit cash flows, (ii) longterm growth rates, and (iii) discount rates. The fair value was sensitive to changes in these key assumptions.Additionally, specialized skills and knowledge were needed to evaluate the discount rates.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s goodwill impairment evaluation process. We performed sensitivity analyses to assess the impact of reasonably possible changes to forecasted cashflows, longterm growth rates, and discount rates. We evaluated the Company’s forecasted growth rates by comparing the growth assumptions to those of theCompany’s peers and industry reports. We compared the Company’s forecasted revenue, cost of sales, and operating expense margins to historical actual results toassess the reasonableness of the forecasts. In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:– Assessing the Company’s WACC calculation, by comparing it against an estimated WACC range based on inputs obtained through published surveys andstudies– Evaluating the discount rates used by the Company by comparing them against discount rate ranges that were developed using publicly available market data forcomparable companies, and;– Performing an arithmetic recalculation regarding the fair value of the Company’s reporting unit, using the Company’s cash flow forecasts and the independentlydeveloped discount rates, and comparing the results to the Company’s fair value estimates./s/ Somekh ChaikinSomekh ChaikinMember Firm of KPMG InternationalWe have served as the Company’s auditor since 2017.Tel Aviv, IsraelApril 14, 2023F3MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED BALANCE SHEETSU.S. dollars in thousands (except share data)December 31,Note20222021AssetsCurrent assetsCash and cash equivalents32,10010,670Restricted cash263273Inventory997Account receivables1,94040Other receivables and prepaid expenses4758579Total current assets6,05811,562Long term deposits28Property and equipment, net5140112Operating rightofuse asset6583776Intangible assets71,377Goodwill71,395Investment in JV899Investment in marketable securities11471083,669996Total assets9,72712,558Liabilities and shareholders’ equityCurrent liabilitiesOperating lease liability6159138Shortterm loans9155Trade payables2,487635Liabilities to Related parties69863Other payables680392Total current liabilities4,1791,228Longterm loans9376Deferred tax liabilities328Operating lease liability6308473Total noncurrent liabilities1,012473CONTINGENCIES AND COMMITMENTS15Total Liabilities5,1911,701Shareholders’ equity13Stock capital Common stock of $0.001par value Authorized: 250,000,000and 100,000,000shares as of December 31,2022 and 2021; Issued and outstanding: 1,464,117and959,297 as of December 31,2022 and 2021, respectively (*)11Additional paidin capital58,67356,453Accumulated other comprehensive loss(637)(406)Accumulated deficit(53,501)(45,191)Total shareholders’ equity4,53610,857Total liabilities and shareholders’ equity9,72712,558(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F4MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSSU.S. dollars in thousands (except share data and per share data)Year endedDecember 31,Note20222021Revenues4,459131Cost of revenues(3,825)Gross profit634131Operating expensesResearch and development(1,701)(4,248)Sales and marketing18(3,143)(2,336)General and administrative19(3,900)(4,124)Total operating expenses(8,744)(10,708)Operating loss(8,110)(10,577)Financial income (expense), net20(236)57Loss before taxes(8,346)(10,520)Taxes on income36Net loss for the year(8,310)(10,520)Other comprehensive income (loss):Foreign currency translation differences(231)18Total comprehensive loss(8,541)(10,502)Basic and diluted loss per share (*)(7.47)(17.75)Basic and diluted weighted average number of shares outstanding (*)1,111,913420,385(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F5MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITYU.S. dollars in thousands (except share data)Common stockAdditionalpaidinAccumulatedothercomprehensiveAccumulatedTotalstockholders’NumberAmountcapitallossDeficitequityBalance as of January 1, 2021289,314(*)37,171(424)(34,671)2,076Stockbased compensation related to optionsgranted to employees and consultants373373Exercise of options granted to employees178(*)Restricted shares issued to shareholder (***)100,000(*)2,6182,618Issuance of shares, net of issuance cost of$1,160434,700112,58212,583Exercise of warrants135,108(*)3,7093,709Total comprehensive income (loss)18(10,520)(10,502)Balance as of December 31, 2021959,300156,453(406)(45,191)10,857Stockbased compensation related to optionsand restricted shares granted to employeesand consultants176,000(*)455455Issuance of shares in Business Combination(**)295,802(*)1,4461,446Issuance of shares post BusinessCombination (**)20,924(*)319319Effect of reverse stock split (Note 13 g)12,091(*)Total comprehensive income (loss)(231)(8,310)(8,541)Balance as of December 31, 20221,464,117158,673(637)(53,501)4,536(*)Represents an amount of less than $1.(**)See note 16(***)See note 1 bThe accompanying notes are an integral part of the consolidated financial statements.F6MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSU.S. dollars in thousandsYear endedDecember 31,20222021Cash flows from operating activities:Net loss(8,310)(10,520)Adjustments to reconcile net loss to net cash used in operating activities:Depreciation3842Change in operating lease rightofuse asset13543Amortization of intangible assets155foreign exchange differences(23)1Change in liabilities to related parties635Interest on long term liabilities10Interest paid(10)Revaluation of investment in marketable securities62(49)Restricted Shares issued to shareholder2,618Stock based compensation455373Issuance of shares post Business Combination319Change in inventory(219)Change in deferred tax liabilities(36)Change in account receivable(1,863)(12)Changes in operating lease liabilities(142)Change in other receivables and prepaid expenses184(99)Change in trade payables1,315253Change in other payables553Net cash used in operating activities(7,290)(7,297)Cash flows from investing activities:Acquisition of a subsidiary, net of cash acquired(767)Proceeds from restricted deposits, net184investing in other receivable(100)Investment in equity accounted investee(99)Purchase of property and equipment(27)(23)Net cash (used in) provided by investing activities(993)161Cash flows from financing activities:Proceeds from issuance of shares, net of issuance costs12,583Repayment of loans(67)Proceeds from exercise of warrants3,709Net cash (used in) provided by financing activities(67)16,292Effect of exchange rate fluctuations on cash and cash equivalents(230)13Change in cash and cash equivalents and restricted cash(8,580)9,169Cash and cash equivalents and restricted cash at the beginning of the year10,9431,774Cash and cash equivalents and restricted cash at the end of the year2,36310,943B) Aggregate cash flows derived for the Company as a result of the Orgad acquisition (note 16)2022Trade and other receivables364Inventory864Fixed assets55Longterm deposits31Selling Platform378Goodwill152Shortterm credit(181)Trade payables(580)Other payables(88)Longterm loan(138)Longterm provision(13)Deferred Tax Liability(87)Issuance of shares(457)Total acquisition of subsidiary, net of cash300C) Aggregate cash flows derived for the Company as a result of the Naiz acquisition (note 16)2022Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Issuance of shares(1,008)Total acquisition of subsidiary, net of cash467The accompanying notes are an integral part of the consolidated financial statements.F7MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERALa.My Size, Inc. is developing unique measurement technologies based on algorithms with applications in a variety of areas, from the apparel ecommerce market, to the courier services market and to the Do It Yourself (“DIY”) smartphone and tablet apps market. The technology is driven byproprietary algorithms, which are able to calculate and record measurements in a variety of novel ways.Following the acquisition of Naiz Bespoke Technologies, S.L (“Naiz”) in October 2022 (see note 16), the Company expanded its offering outreachand customer base.Following the acquisition of Orgad International Marketing Ltd. (“Orgad”) in February 2022 (see note 16), the Company also operates anomnichannel ecommerce platform.The Company has five subsidiaries, My Size Israel 2014 Ltd (“My Size Israel”), Topspin Medical (Israel) Ltd., and Orgad all of which areincorporated in Israel, and My Size LLC which was incorporated in the Russian Federation and Naiz Bespoke Technologies, S.L., a limited liabilitycompany incorporated under the laws of Spain (see note 16). References to the Company include the subsidiaries unless the context indicatesotherwise.My Size, Inc., was incorporated and commenced operations in September 1999, as Topspin Medical Inc. (“Topspin”), a private company registeredin the State of Delaware. In December 2013, the Company changed its name to Knowledgetree Ventures Inc. Subsequently, in February 2014, theCompany changed its name to My Size, Inc. Topspin was engaged, through its Israeli subsidiary, in research and development in the field ofcardiology and urology.Since September 1, 2005, the Company has traded on the Tel Aviv Stock Exchange (“TASE”).Between 2007 and 2012 the Company reported as a public company with the U.S. Securities and Exchange Commission (the “SEC”). In August2012, the Company suspended its reporting obligations under Section 13(a) and 15(d) of the Securities Exchange Act of 1934. In mid2015, theCompany resumed reporting as a public company.b.On January 9, 2014, at the Company’s general meeting of shareholders, its shareholders approved an engagement with one of the Company’sinvestors (the “Seller”) for the purchase of rights in a Venture (the “Venture”), including the rights to the method and the certain patent applicationthat had been filed by the Seller (the “Assets”). The Venture relates to the development of technologies and applications which will assist theconsumer to take his or her body measurements accurately using a mobile device to ensure the purchase of clothing with the best possible fitwithout the need to try them on.In February 2014, the Company established a wholly owned subsidiary, My Size (Israel) 2014 Ltd., a company registered in Israel, which iscurrently engaged in the development of the Venture described above.In return for purchasing an interest in the Venture, the Company undertook to pay the Seller 18% of the Company’s operating profit, direct orindirect, connected to the Venture for a period of seven years starting from the end of the Venture’s development period.As part of the agreement, the Seller received an option to buy back the Assets for consideration which will reflect the market fair value at that time,on the occurrence of the following events: a) if a motion is filed to liquidate the Company; b) if seven years after signing the agreement, theCompany’s total accumulated revenues, direct or indirect, from the Venture or the commercialization of the patent will be lower than NIS 3.6 million.In such an event, Seller may repurchase the interest in the Venture at a market price to be determined by an independent third party valuationconsultant, who shall be chosen by agreement by the parties, and the audit committee shall conduct the negotiations on behalf of the Company todetermine the identity of the consultant.On May 26, 2021, the Company, My Size Israel and Shoshana Zigdon entered into an Amendment to Purchase Agreement (the “Amendment”)which made certain amendments to a Purchase Agreement between the parties dated February 16, 2014 (the “Purchase Agreement”). Pursuant tothe Amendment, Ms. Zigdon agreed to irrevocably waive the right to repurchase certain assets related to the collection of data for measurementpurposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which the Company’s business is substantiallydependent, and all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My Size Israel underthe Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation,reward or any rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights(the “Waiver”). In consideration of the Waiver, the Company issued 100,000 shares of common stock to Ms. Zigdon in a private placement.F8MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERAL (Cont.)c.On July 25, 2016, the Company’s common stock began publicly trading on the Nasdaq Capital Market under the symbol “MYSZ”. The Company’sshares of common stock are listed both on the Nasdaq Capital Market and TASE.d.Since inception, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit of $53,501.The Company has financed its operations mainly through fundraising from various investors.The Company’s management expects that the Company will continue to generate losses and negative cash flows from operations for theforeseeable future. Based on the projected cash flows and cash balances as of December 31, 2022, management is of the opinion that its existingcash will be sufficient to fund operations for a period less than 12 months. As a result, there is substantial doubt about the Company’s ability tocontinue as a going concern.Management’s plans include the continued commercialization of the Company’s products and securing sufficient financing through the sale ofadditional equity securities, debt or capital inflows from strategic partnerships. Additional funds may not be available when the Company needsthem, on terms that are acceptable to it, or at all. If the Company is unsuccessful in commercializing its products and securing sufficient financing,it may need to cease operations.The financial statements include no adjustments for measurement or presentation of assets and liabilities, which may be required should theCompany fail to operate as a going concern.e.The Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificial intelligencedriven measurement solutions (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions. The fashion and equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. The SaaS based innovativeartificial intelligence driven measurement solutions, or SaaS Solutions operating segment consists of My Size Inc My Size Israel and LLC.NOTE 2 SIGNIFICANT ACCOUNTING POLICIESThe consolidated financial statements are prepared according to United States generally accepted accounting principles (“U.S. GAAP”), applied on aconsistent basis, as followsa.Use of estimates:The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions thataffect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.Information about assumptions made by the Company with respect to the future and other reasons for uncertainty with respect to estimates thathave a significant risk of resulting in a material adjustment to carrying amounts of assets and liabilities in the next financial year are included in thefollowing notes:Acquisitions of subsidiariesThe Company measures the fair value of the consideration transferred (including contingent consideration) and fair value of the assets acquiredand liabilities assumed, in business combination transactions. For information on details on fair value measurement in acquisition of subsidiaries,see Note 16 regarding business combinations.Estimated impairment of nonfinancial assetsThe Company examines on an annual basis whether there is an impairment of goodwill, intangibles and property, plant and equipment that areallocated to cash generating units, in accordance with the accounting policy presented in Note 1(h) below. Recoverable amounts of cashgenerating units are determined on the basis of valueinuse calculations. These calculations require the use of estimates.For information on key assumptions used in calculation of the recoverable amount, see note 7 – Goodwill and other Intangible assets.b.Functional currency:The currency of the primary economic environment in which the operations of the Company is conducted is the United States Dollar and thus it isthe Company’s functional currency. The reporting currency according to which these financial statements are prepared is the U.S. dollar.The currency of the primary economic environment in which the operation of the Subsidiary, My Size Israel and Orgad International MarketingLtd. functional currency is the New Israeli Shekel (“NIS”).The currency of the primary economic environment in which the operation of the Subsidiary, My Size LLC, functional currency is Russian Ruble.The currency of the primary economic environment in which the operation of the Subsidiary, Naiz fit, functional currency is Euro.F9MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)c.Principles of consolidation:The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances andtransactions have been eliminated upon consolidation.d.Cash equivalents:Cash equivalents are shortterm highly liquid investments that are readily convertible to cash with original maturities of three months or less at thedate acquired.e.Restricted cashRestricted cash are deposits for rent, credit card and for hedging activities.f.Inventories:Inventories include finished goods and are measured at the lower of cost or net realizable value. The cost of inventories comprises of the costsincurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary courseof business. At the point of the loss recognition, a new, lowercost basis for that inventory is established, and subsequent changes in facts andcircumstances do not result in the restoration or increase in that newly established cost basis. The costs of purchase of inventories comprise thepurchase price and other costs directly attributable to the acquisition of finished goods. In 2022, the Company recorded an inventory markdownof $48.g.Property and equipment:Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straightline method over theestimated useful lives of the assets, at the following annual rates:%Computers and peripheral equipment33Office furniture and equipment720Leasehold improvementsOver the term of the leaseor the useful life of theimprovements, whicheveris shorterh.Impairment of longlived assets:The Company’s property and equipment are reviewed for impairment in accordance with ASC 360, “Property Plant and Equipment”, wheneverevents or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held andused is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by theassets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount ofthe assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less sellingcosts. During the periods ended December 31, 2022 and 2021, no impairment losses have been recorded.i.Business combinations:The Company applies the provisions of ASC 805, “Business Combination” and allocates the fair value of purchase consideration to the tangibleassets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchaseconsideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assetsacquired and liabilities assumed, the Company estimated the future expected cash flows from acquired platform, customer relationships,Technology and trademark from a market participant perspective, useful lives and discount rates. In addition, management makes significantestimates and assumptions, which are uncertain, but believed to be reasonable.Acquisitionrelated costs are recognized separately from the acquisition and are expensed as incurred.F10MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)j.Goodwill:Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a businesscombination. Under ASC 350, “Intangible Goodwill and Other”, goodwill is not amortized, but rather is subject to an annual impairment test.ASC 350 requires goodwill to be tested for impairment at the reporting unit level at least annually, the fourth quarter, or between annual tests incertain circumstances, and written down when impaired. Goodwill is tested for impairment by comparing the fair value of the reporting unit with itcarrying value. Goodwill from Orgad acquisition was allocated to the fashion and equipment ecommerce platform segment and Goodwill from theNaiz acquisition was allocated to Naiz segment based innovative artificial intelligence driven measurement solutions.Alternatively, ASC 350 permits an entity to bypass the qualitative assessment for any reporting unit and proceed directly to performing the firststep of the goodwill impairment test. There were no impairment charges to goodwill during the period presented.k.Intangible assets:Intangible assets consist of identifiable intangible assets that the Company has acquired from previous business combinations. Intangible assetsare recorded at costs, net of accumulated amortization. The Company amortizes its intangible assets reflecting the pattern in which the economicbenefits of the intangible assets are consumed. When a pattern cannot be reliably determined, the Company uses a straightline amortizationmethod. Amortization is calculated by the straightline method over the estimated useful lives of the following assets.The estimated useful lives of the company’s intangible assets are as follows:yearsCustomer Relationships7Technology5Trademark5Selling Platform3Each period the Company evaluates the estimated remaining useful lives of its intangible assets and whether events or changes in circumstanceswarrant a revision to the remaining period of amortizationl.Severance pay:The Subsidiary’s liability for severance pay is covered by Section 14 of the Israeli Severance Pay Law (“Section 14”). Under Section 14, employeesin Israel are entitled to have monthly deposits, at a rate of 8.33% of their monthly salary, made on their behalf to their insurance funds. Payments inaccordance with Section 14 exempt the Subsidiary from any additional obligation for these employees. As a result, the Subsidiary does notrecognize any liability for severance pay due to these employees and the deposits under Section 14 are not recorded as an asset in theSubsidiary’s balance sheet. These contributions for compensation represent defined contribution plans and expenses are recorded based onactual deposits.Other than the My Size Israel’s liability there are no additional severance pay liabilities.F11MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)m.Research and development costs:Research and development costs are charged to the statement of operations, as incurred. Most of the research and development expenses are forwages, related expenses and subcontractors.n.Income taxes:The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilitiesfor the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Companies’ taxreturns. Deferred taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities using enactedtax rates in effect in the years in which the differences are expected to reverse. The Company assesses the likelihood that its deferred tax assetswill be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely thannot that all or a portion of deferred tax assets will not be realized. The Company establishes a valuation allowance, if necessary, to reduce deferredtax assets to the amount more likely than not to be realized. As of December 31, 2022, and 2021, a full valuation allowance was established by theCompany.The Company implements a twostep approach to recognize and measure the benefit of its tax positions. The first step is to evaluate the taxposition taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that,on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigationprocesses. The second step is to measure the tax benefit as the largest amount that is greater than 50 percent (cumulative basis) likely to berealized upon settlement.The Company believes that its tax positions are all highly certain of being upheld upon examination. As of December 31,2022 and 2021 the Company recorded a liability for unrecognized tax benefits of $328 and none respectively.o.Accounting for stockbased compensation:The Company accounts for its employees’ stockbased compensation as an expense in the financial statements based on ASC 718. All awards areequity classified and therefore such costs are measured at the grant date fair value of the award and graded vesting attribution approach torecognize compensation cost over the vesting period. The Company estimates stock option grant date fair value using the Binomial and BlackScholes option pricingmodel.The Company recorded stock options issued to nonemployees at the grant date fair value, and recognizes expenses over the related serviceperiod by using the straightline attribution approach in accordance with ASU 201807. All awards are equity classified.The expected volatility of the share prices reflects the assumption that the historical volatility of the share prices is reasonably indicative ofexpected future trends.The riskfree interest rate for grants with an exercise price denominated in USD for employees and several consultants is based on the yield fromUS treasury zerocoupon bonds with an equivalent term.The Company has historically not paid dividends and has no foreseeable plans to pay dividends.F12MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)p.Fair value of financial instruments:ASC 820, Fair Value Measurements and Disclosures, relating to fair value measurements, defines fair value and established a framework formeasuring fair value. The ASC 820 fair value hierarchy distinguishes between market participant assumptions developed based on market dataobtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptionsdeveloped based on the best information available in the circumstances. ASC 820 defines fair value as the price that would be received to sell anasset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price. Inaddition, the fair value of assets and liabilities should include consideration of nonperformance risk, which for the liabilities described belowincludes the Company’s own credit risk.As a basis for considering such assumptions, ASC 820 establishes a threetier value hierarchy, which prioritizes the inputs used in the valuationmethodologies in measuring fair value:Level 1 Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access. Valuationadjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readilyand regularly available in an active market, valuation of these products does not entail a significant degree of judgment.Level 2 Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, eitherdirectly or indirectly.Level 3 Valuations based on inputs that are unobservable and significant to the overall fair value measurement.The Company holds share certificates in iMine Corporation (“iMine”) formerly known as Diamante Minerals, Inc., a publiclytraded company onthe OTCQB.Due to sales restrictions on the sale of the iMine shares, the fair value of the shares was measured on the basis of the quoted market price for anotherwise identical unrestricted equity instrument of the same issuer that trades in a public market, adjusted to reflect the effect of the salesrestrictions and is therefore, ranked as Level 2 asset.q.Basic and diluted net loss per share:Basic net loss per share is computed based on the weighted average number of shares of common stock outstanding during each year. Diluted netincome per share is computed based on the weighted average number of shares of common stock outstanding during each year plus dilutivepotential equivalent common stock considered outstanding during the year, in accordance with ASC 260, “Earnings per Share”. For the yearsended December 31, 2022 and 2021, all outstanding options and warrants have been excluded from the calculation of the diluted net loss per sharesince their effect was antidilutive.r.Concentrations of credit risk:Financial instruments that potentially subject the Company and its subsidiaries to concentrations of credit risk consist principally of cash andcash equivalents.Cash and cash equivalents are invested in banks in Israel, Spain and United States. Such deposits in United States may be in excess of insuredlimits and are not insured in other jurisdictions. Management believes that the financial institutions that hold the Company’s investments arefinancially sound and, accordingly, minimal credit risk exists with respect to these investments.The Company and its subsidiaries have no offbalancesheet concentration of credit risk such as foreign exchange contracts, option contracts orother foreign hedging arrangements.F13MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)s.Revenue Recognition:The Company’s revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled softwaresubscriptions, associated software maintenance and support.The Company recognizes revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with acustomer exists only when: the parties to the contract have approved it and are committed to perform their respective obligations, the Companycan identify each party’s rights regarding the distinct goods or services to be transferred (“performance obligations”), the Company can determinethe transaction price for the goods or services to be transferred, the contract has commercial substance and it is probable that the Company willcollect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to acustomer. Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted togovernmental authorities. Refunds are estimated at contract inception and updated at the end of each reporting period if additional informationbecomes available. Revenue is recognized when control of the product is transferred to the customer.The Company maintains a returns policy that allows its customers to return product within a specified period of time. The estimate of the provisionfor returns is based upon historical experience with actual returns.Principal versus Agent ConsiderationsThe Company follows the guidance provided in ASC 606 for determining whether it is a principal or an agent in arrangements with customers, byassessing whether the nature of the Company’s promise is a performance obligation to provide the specified goods (principal) or to arrange forthose goods to be provided by the other party (agent). With regard to products being sold by Orgad through Amazon, this determination involvesjudgment. The Company determines it is the principle when it has control over promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).The Company recognizes revenue ratably over the contractual service term for hosted services that are priced based on a committed number oftransactions where the delivery and consumption of the benefit of the services occur evenly over time, beginning on the date the servicesassociated with the committed transactions are first made available to the customer and continuing through the end of the contractual serviceterm. Over usage fees and fees based on the actual number of transactions are billed in accordance with contract terms as these fees are incurredand are included in the transaction price of an arrangement as variable consideration. Fees based on a number of transactions or impressions permonth, are allocated to the period in which the transactions occur. Revenue for subscriptions sold as a fee per period is recognized ratably overthe contractual term as the customer simultaneously receives and consumes the benefit of the underlying service.F14MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)t.Contingencies and CommitmentsLiabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it isprobable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with losscontingencies are expensed as incurred.u.Derivative instrumentsThe Company accounts for its derivative instruments as either assets or liabilities and measures them at fair value through profit or loss.v.LeasesThe Company leases include an office space lease agreement for 36 months, with an option to extend for an additional 36 months and 36 monthscancelable operating lease agreements on behalf of personnel vehicles. The lease term includes a noncancellable period of the lease plus anyadditional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise,or an option to extend (or not to terminate) the lease controlled by the lessor.ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make leasepayments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value oflease payments over the lease term. The company generally use its incremental borrowing rate based on the estimated rate of interest forcollateralized borrowing over a similar term of the lease payments at commencement date. Lease expense for lease payments is recognized on astraightline basis over the lease term.For the office rent lease, the Company has elected to account for the lease and nonlease maintenance components as a single lease component.Therefore, the lease payments used to measure the lease liability include all of the fixed consideration in the contract, including insubstance fixedpayments, owed over the lease term.w.Impact of recently issued accounting standardIn June 2016, the FASB issued ASU 201613, “Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses on FinancialInstruments”, which requires companies to measure credit losses of financial instruments, including customer accounts receivable, utilizing amethodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information toinform credit loss estimates. Subsequent to the issuance of ASU 201613, the FASB issued several additional Accounting Standard Updates toclarify implementation guidance, provide narrowscope improvements and provide additional disclosure guidance. As an Emerging GrowthCompany, ASU 201613 is effective for fiscal years beginning after December 15, 2022. The Company does not expect this ASU to have a materialimpact on its consolidated financial statements.F15MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 3 CASH AND CASH EQUIVALENTSThe Company’s cash and cash equivalents balance at December 31, 2022 and 2021 is denominated in the following currencies:December 31,20222021US Dollars1,65110,184New Israeli Shekels259433Other190532,10010,670NOTE 4 OTHER RECEIVABLES AND PREPAID EXPENSESDecember 31,20222021Prepaid expenses and other current assets322429Government authorities28317Other153133Total758579NOTE 5 PROPERTY AND EQUIPMENT, NETComputersandperipheralequipmentOfficefurnitureandequipmentLeaseholdimprovementsTotalCostBalance as at January 1, 20211825860300Additions2323Translation adjustments72211Balance as at December 31, 20212126062334Balance as at January 1, 20222126062334Additions161127Business combination401555Translation adjustments(32)(8)(8)(48)Balance as at December 31, 20222367854368Accumulated DepreciationBalance as at January 1, 20211461412172Additions2751042Translation adjustments6118Balance as at December 31, 20211792023222Balance as at January 1, 20221792023222Additions209938Translation adjustments(27)(3)(2)(32)Balance as at December 31, 20221722630228Carrying amountsAs at December 31, 2021334039112As at December 31, 2022645224140F16MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 6 LEASESIn August 2019, The Company entered into an office space lease agreement. The lease term is for 36 months beginning on August 20, 2019 and endingon August 20, 2022, with an option to extend for an additional 36 months. The Company extended the lease period until August 20, 2025. Monthly rentpayments including utilities amounting to approximately USD 14 (NIS 49,500) per month.In addition, The Company entered into a threeyear cancelable operating lease agreement for cars.These operating leases are included in “Right of use asset” on the Company’s December 31, 2022 consolidated balance sheets, and represent theCompany’s right to use the underlying asset for the lease term. The Company’s obligations to make lease payments are included in the currentliabilities as “Operating lease liability” and in the noncurrent liabilities as “Operating lease liability long term” on the Company’s December 31, 2022consolidated balance sheets. As of December 31, 2022, rightofuse of asset was $583. operating lease liabilities were $159 and non current Operatinglease liabilities were $308. Rightofuse asset includes the capitalization of improvements (net of amortization) amounting to $105.Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value ofthe lease payments.The interest rate used to discount future lease payment was 11.95%.Maturities of lease liabilities as of December 31, 2022 were as follows:Year Ending:2023$1912024$1912025$127Thereafter$509Less imputed interest:$(42)Total lease liabilities$467F17MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 7 – Goodwill and other Intangible assetsA.Identified intangible assetsSchedule of Intangible assetsSelling PlatformTechnologyCustomerRelationshipsOtherTotalThousandsUSDThousandsUSDThousandsUSDThousandsUSDThousandsUSDCostAs of January 1, 2022Acquisitions through business combinations378286726771,467Effect of changes in exchange rates(32)2565765As of December 31, 2022346311791841,532AmortizationAs of January 1, 2022Amortization for the year including effect of changes inexchange rates as of December 31, 2022(109)(15)(27)(4)(155)Carrying amountAs of December 31, 2022237296764801,377AmortizationAmortization expenses recorded for identified intangible assets in the Consolidated Statements of Operations for each period and were as follows:Line ItemDecember 31,2022December 31,2021Selling platformCosts of revenues109TrademarkSales and marketing4TechnologyCosts of revenues15Customer relationshipsSales and marketing27Total amortization expenses155Future amortization expenses are expected to be as follows:20232024202520262027ThereafterTotalFuture amortization expenses3033031941771561791,312b.GoodwillThe changes in the carrying amount of goodwill for the years ended December 31, 2022 and 2021 were as follows:Fashion and equipmentecommerce platformNaizTotalBalance as of December 31, 2021Changes during the period:Goodwill acquired1521,1521,304Goodwill impairmentTranslation differences(14)10591Balance as of December 31, 20221381,2571,395The Company operates its business through three reporting segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovativeartificial intelligence driven measurement solutions and (iii) Naiz. See note 17 for additional segments information.The Company determines the fair value of its reporting units using the income approach. According to the income, the Company uses discounted cashflows to estimate the fair value. Cash flow projections are based on the Company’s estimates of revenue growth rates and operating margins, takinginto consideration the industry’s and market’s conditions. The discount rate used is based on the weighted average cost of capital (“WACC”),adjusted for the relevant risk associated with businessspecific characteristics.The Company performed a quantitative assessment as of December, 31 2022 for the reporting units’ fair value. The estimated fair value of the Fashionand equipment ecommerce platform and Naiz reporting units exceeded its estimated carrying amount by 95.9% and 27.7% respectively. This, based thefollowing assumptions:Fashion and equipmentecommerce platformNaizDiscount rate21%23%Terminal growth rate3%3%If business conditions or expectations were to change materially, it may be necessary to record impairment charges to the Company’s reporting units inthe future.F18MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 8 Investment in JVIn August 2022, the Company established a joint venture (“JV”) in Brazil with Santista Têxtil. The Company holds 51% and Santista Têxtil holds 49% of theJV. The purpose of the JV is to serve the Brazilian market according to the business plan that was set. Both parties agree to make an initial investment in theJV of $198that will be made per the holding percentage of each party. As of the reporting date, the JV is in process of establishing its operation.NOTE 9 Financial LiabilitiesThe book value of each of the financial liability categories is an acceptable approximation of fair value.The debt is comprised of four loans that were granted to My Size Israel – in an outstanding amount of approximately $131, bearing interest rangingfrom prime rate to prime+2.8% rate, and four loans that were granted to the Spanish subsidiary– in an outstanding amount of approximately $400,bearing interest ranging from 1% to 3%.The financial liability maturities during the five years following the end of the financial year are shown below:UntilUntilUntilUntilUntilAfterTOTAL311223311224311225311226311227311227311222Debts with credit institutions15513892874712531NOTE 10 RELATED PARTIES TRANSACTIONSA. Balances with related parties:The following related party payables are included in liability to related parties.December 31,20222021Officers (*)4143Liability in respect of business combinations (**)739Other related parties (***)(95)Directors152069863(*)The amount includes the net salaries payables.(**)The amount includes the provision created to former owners of Orgad that are entitled to additional cash and equity consideration and former owners of Naizthat entitled to additional cash consideration, see note 16 business combination.(***)The amount includes an amount receivable from Orgad previous shareholders who currently work in the company.B. Related parties benefits:Year endedDecember 31,20222021Salaries and related expenses1,440852Share based payments39673Cash liability and equity liability expenses related to acquisitions (**)1,058Directors58582,952983(**)The amount includes the expenses for a provision created to former owners of Orgad that are entitled to additional cash and equity consideration and formerowners of Naiz that entitled to additional cash consideration, see note 16 business combination.NOTE 11 FINANCIAL INSTRUMENTSThe following tables presents the Company’s significant assets and liabilities that are measured at fair value on recurring basis and their classificationwithin the fair value hierarchy:December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities47financial assets (*)10December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesDerivatives9December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities108December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesWarrants derivative2(*)the financial asset includes in other receivables.F19MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 11 FINANCIAL INSTRUMENTS (Cont.)The carrying amounts of cash and cash equivalents, restricted cash, short term restricted deposit, accounts receivable, other receivables and prepaidexpenses, trade payable and accounts payable approximate their fair value due to the shortterm maturities of such instruments.At December 31, 2022, the recognized gain and fair value (based on quoted market prices with a discount due to security restrictions on iMine shares)of the marketable securities were $59and $47, respectively (at December 31, 2021 $49and $108, respectively).NOTE 12 TAXES ON INCOMEa.On December 31, 2022, the Company had U.S. federal net operating loss carryforwards of approximately $26 available to reduce future taxableincome. Utilization of the U.S. net operating losses may be subject to substantial limitations due to the change of ownership provisions of theInternal Revenue Code of 1986.The U.S. Company has final tax assessments through 2014.On December 22, 2017, the Tax Reform Act was signed into law. The legislation significantly changes U.S. tax law by, among other things, lowering theU.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. As a result of the decrease in the corporate incometax rate, the Company revalued the ending net deferred tax assets at December 31, 2017, but did not recognize any incremental income tax expense in2017 due to the revaluation of the valuation allowance.b.Foreign tax:1.Tax rates:Presented hereunder are the tax rates relevant to the Company’s Israeli subsidiaries:2022 23%2021 23% Presented hereunder are the tax rates relevant to the Company’s Spanish subsidiary:2022 24%2.The Company’s Israeli subsidiaries have estimated total available carryforward operating tax losses for Israeli income tax purposes ofapproximately $64as of December 31, 2022. Of these losses, a total of $47.5are owned by Topspin Medical (Israel) Ltd. Topspin tax lossesmay be offset only by future income with respect to the same operational activity by which it was incurred for an indefinite period of time. Theother losses are owned by My Size Israel and may be carryforward to offset against future income for an indefinite period of time.3.Topspin Medical (Israel) Ltd. and My Size (Israel) 2014 Ltd. has final tax assessments through 2016.c.U.S. and foreign components of loss from continuing operations, before income taxes consisted of:December 31,20222021U.S(1,180)(3,802)NonU.S. (foreign)(7,130)(6,718)(8,310)(10,520)F20MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 12 TAXES ON INCOME (Cont.)d.Deferred taxes:Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reportingpurposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows:December 31,20222021Deferred tax assets:Operating loss carryforwards20,13120,238Warrants and options145126Marketable securities390377Intangible assets(328)Research and development expenses586341Other temporary differences203Deferred tax assets before valuation allowance21,12721,082Valuation allowance(21,455)(21,082)Net deferred tax liability(328)The following table presents a reconciliation of the beginning and ending valuation allowance:December 31,20222021Balance at beginning of the year21,08218,968Additions in valuation allowance to the income statement1,7581,625Additions in valuation allowance due to exchange rate differences(1,385)489Balance at end of the year21,45521,082In assessing the realization of deferred tax assets, management considers whether it is more likely than not that all or some portion of the deferred taxassets will not be realized.The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporarydifferences are deductible and net operating losses are utilized. Based on consideration of these factors, the Company recorded a full valuationallowance at December 31, 2021 and 2020.e.Theoretical taxThe following presents the adjustment between the theoretical tax amount and the tax amount included in the financial statements:December 31,20222021Loss before income taxes8,34610,520Statutory tax rate21%21%Computed “expected” tax income1,7522,209Foreign tax rate differences and exchange rate differences149131Nondeductible expenses(107)(715)Change in valuation allowance(1,758)(1,625)Taxes on income36F21MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITYa.Common stock confers upon their holders the right to receive notice to participate and vote in general meetings of the Company, and the right toreceive dividends if declared.b.On January 8, 2021, the Company conducted a public offering of its securities pursuant to which it issued 62,768 shares of its common stock forgross proceeds of $2,008. The net proceeds to the Company from the offering were approximately $1,700, after deducting placement agent’s feesand other estimated offering expenses payable by the Company.c.During 2021, a holders of warrants exercised warrants to purchase 135,109 ordinary shares of the Company in exchange for $3,709.d.On March 25, 2021, the Company conducted a public offering of its shares of common stock pursuant to which it issued 104,741 shares of itscommon stock for gross proceeds of $3,300. The net proceeds to the Company from the offering were approximately $2,872, after deductingplacement agent’s fees and other estimated offering expenses payable by the Company.On May 7, 2021, the Company issued an additional 15,711 shares of the Company’s common stock in connection with the full exercise of theunderwriter’s overallotment option granted in the Company’s March 2021 public offering. These additional shares were sold to the underwriter at apublic offering price of $31.5 per share, resulting in additional net proceeds to the Company, net of the underwriting discount, of approximately$463.e.On May 26, 2021, the Company issued 100,000 shares of common stock to Ms. Zigdon in consideration of the Waiver. See note 1(b) above.f.On October 28, 2021, the Company sold in a registered direct offering 100,592 shares of its common stock and, in a concurrent private placement,an aggregate of 75,444 unregistered warrants to purchase shares of common stock, at an offering price of $33.8 per share and associated warrant.In addition, on the same day, the Company sold in a private placement 150,888 unregistered shares of common stock and unregistered warrants topurchase up to an aggregate of 113,166 shares of common stock at the same purchase price as in the registered direct offering. The warrants areimmediately exercisable and will expire five years from issuance at an exercise price of $31.5 per share, subject to adjustment as set forth therein.The gross proceeds from the offerings were $8,500. The net proceeds to the Company from the offerings were approximately $7,560, afterdeducting placement agent’s fees and other estimated offering expenses payable by the Company. In connection with the offerings, the Companyissued to the placement agent warrants to purchase 17,603 shares on substantially the same terms as the purchasers in the offerings at an exerciseprice of $42.25 per share and a term expiring on October 26, 2026.g.On December 7, 2022, the Company’s board of directors approved a 1for25 reverse stock split of the Company’s issued and outstanding sharesof common stock. The reverse stock split became effective on December 8, 2022. In order not to have fractional shares as a result of the reversestock split, the Company issued an additional 12,091 shares of common stock. As a result, all shares of common stock, options for shares ofcommon stock, exercise price and net loss per share amounts were adjusted retroactively for all periods presented in these financial statements.F22MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITY (Cont.)g.A summary of the warrant activity during the years ended December 31, 2022 and 2021 is presented below:Number ofWarrantsWeightedAverageExercisePriceWeightedAverageRemainingLife inYearsOutstanding, December 31, 2020216,85936.754.26Issued206,214Expired or exercised(135,109)Outstanding, December 31, 2021287,96431.004.35IssuedExpired or exercised(17,901)Outstanding, December 31, 2022270,06330.213.36Exercisable, December 31, 2022270,06330.213.36NOTE 14 STOCK BASED COMPENSATIONThe stockbased expense recognized in the financial statements for services received is related to Research and Development, Sales and Marketingand General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense Research and development15195Stockbased compensation expense Sales and marketing126180Stockbased compensation expense General and administrative17898455373The stockbased expense recognized in the financial statements for services received post Acquisition of Orgad (see note 16) is related to Cost OfGoods, Sales and Marketing and General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense – Cost of goods80Stockbased compensation expense Sales and marketing112Stockbased compensation expense General and administrative127319F23MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Options issued to consultantsWe can sell additional shares of common stock without consulting stockholders and without offering shares to existing stockholders, which wouldresult in dilution of shareholders’ interests in the company and could depress our stock price.Our Certificate of Incorporation currently authorizes 250,000,000 shares of common stock, of which 2,446,780 are currently outstanding as of March 31, 2023and our board of directors is authorized to issue additional shares of our common stock. Although our board of directors intends to utilize its reasonable businessjudgment to fulfil its fiduciary obligations to our then existing stockholders in connection with any future issuance of our capital stock, the future issuance ofadditional shares of our capital stock could cause immediate, and potentially substantial, dilution to our existing stockholders, which could also have a materialeffect on the market value of the shares. Further, other than certain participation rights that we have granted in a past offering, our shares do not have preemptiverights, which means we can sell shares of our capital stock to other persons without offering purchasers in this offering the right to purchase their proportionateshare of such offered shares. Therefore, any additional sales of stock by us could dilute your ownership interest in our Company.Our quarterly operating results may fluctuate significantly.We expect our operating results to be subject to quarterly fluctuations. Our net loss and other operating results will be affected by numerous factors,including:●variations in the level of expenses related to our research and development;●any lawsuits in which we may become involved;●regulatory developments affecting our products; and●our execution of any collaborative, licensing or sales agreements, and the timing of payments under these arrangements.If our quarterly operating results fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially.Furthermore, any quarterly fluctuations in our operating results may, in turn, cause the price of our common stock to fluctuate substantially.If we fail to comply with the rules under the Sarbanes Oxley Act of 2002 related to accounting controls and procedures or if we discover materialweaknesses and deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult.If we fail to comply with the rules under the SarbanesOxley Act of 2002 related to disclosure controls and procedures, or, if we discover materialweaknesses and other deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult. Section 404 of the SarbanesOxley Act requires annual management assessments of the effectiveness of our internal control over financial reporting and, ifwe are no longer a nonaccelerated filer, a report by our independent auditors addressing these assessments. If material weaknesses or significant deficiencies arediscovered or if we otherwise fail to achieve and maintain the adequacy of our internal control, we may not be able to ensure that we can conclude on an ongoingbasis that we have effective internal controls over financial reporting in accordance with Section 404 of the SarbanesOxley Act. Moreover, effective internalcontrols are necessary for us to produce reliable financial reports and are important to helping prevent financial fraud. If we cannot provide reliable financial reportsor prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price ofour common stock could drop significantly.38Our Certificate of Incorporation, Bylaws and Delaware law may have antitakeover effects that could discourage, delay or prevent a change incontrol, which may cause our stock price to decline.Our Certificate of Incorporation, Bylaws and Delaware law could make it more difficult for a thirdparty to acquire us, even if closing such a transactionwould be beneficial to our stockholders. Provisions of our Certificate of Incorporation, Bylaws and Delaware law also could have the effect of discouraging potentialacquisition proposals or making a tender offer or delaying or preventing a change in control, including changes a stockholder might consider favorable. Suchprovisions may also prevent or frustrate attempts by our stockholders to replace or remove our management. In particular, the Certificate of Incorporation, Bylawsand Delaware law, as applicable, among other things:●provide the board of directors with the ability to alter the Bylaws without stockholder approval;●the classification of our board of directors;●place limitations on the removal of directors;●provide that vacancies on the Board of Directors may be filled by a majority of directors in office, although less than a quorum;●require that stockholder actions must be affected at a duly called stockholder meeting and generally prohibiting stockholder actions by written consent;●eliminate the ability of stockholders to call a special meeting of stockholders; and●establish advance notice requirements for nominations for election to the Board of Directors or for proposing matters that can be acted upon at duly calledstockholder meetings.We are subject to Section 203 of the Delaware General Corporation Law which, subject to certain exceptions, prohibits “business combinations” between apubliclyheld Delaware corporation and an “interested stockholder,” which is generally defined as a stockholder who becomes a beneficial owner of 15% or more ofa Delaware corporation’s voting stock for a threeyear period following the date that such stockholder became an interested stockholder. These provisions areexpected to discourage certain types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to firstnegotiate with our board. These provisions may delay or prevent someone from acquiring or merging with us, which may cause the market price of our commonstock and the value of our securities to decline.If we fail to comply with the continued listing requirements of the Nasdaq Capital Market, our common stock may be delisted and the price of ourcommon stock and our ability to access the capital markets could be negatively impacted.Nasdaq has established certain standards for the continued listing of a security on the Nasdaq Capital Market. The standards for continued listing include,among other things, that the minimum bid price for the listed securities not fall below $1.00 per share for a period of 30 consecutive trading days and that wemaintain a minimum of $2,500,000 in shareholders’ equity. We have in the past fallen below the minimum bid price and minimum shareholders’ equity.39No assurance can be given that we will continue to be in compliance with the Rule. Failure to meet applicable Nasdaq continued listing standards couldresult in a delisting of our common stock. A delisting of our common stock from Nasdaq could materially reduce the liquidity of our common stock and result in acorresponding material reduction in the price of our common stock. In addition, delisting could harm our ability to raise capital through alternative financing sourceson terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, employees and fewer business development opportunities.The exercise of outstanding warrants and stock options will have a dilutive effect on the percentage ownership of our capital stock by existingstockholders.As of March 15, 2023, we had outstanding warrants to acquire 2,299,115 shares of our common stock and stock options to purchase 1,659 shares of ourcommon stock, which warrants and options are exercisable for prices ranging between $2.81 and $375. The expiration of the term of such options and warrants rangefrom 0.22 years to 4.83 years. If a significant number of such warrants and stock options are exercised by the holders, the percentage of our common stock ownedby our existing stockholders will be diluted.Were our common stock to become subject to the penny stock rules then this could result in U.S. brokerdealers becoming discouraged from effectingtransactions in shares of our common stock.Rule 15g9 under the Exchange Act establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a marketprice of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. If we do not retain a listing on the NasdaqCapital Market or do not meet certain net tangible asset or average revenue requirements and if the price of our common stock is less than $5.00, our common stockwill be deemed a penny stock. For any transaction involving a penny stock, unless exempt, the rules require: (a) that a broker or dealer approve a person’s accountfor transactions in penny stocks; and (b) the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantityof the penny stock to be purchased.In order to approve a person’s account for transactions in penny stocks, the broker or dealer must: (a) obtain financial information and investmentexperience objectives of the person and (b) make a reasonable determination that the transactions in penny stocks are suitable for that person and the person hassufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver,prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which: (a) sets forth the basis on whichthe broker or dealer made the suitability determination; and (b) confirms that the broker or dealer received a signed, written agreement from the investor prior to thetransaction. Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult forinvestors to dispose of our common stock and cause a decline in the market value of our common stock.Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissionspayable to both the broker or dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor incases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the accountand information on the limited market in penny stocks.Sales of our currently issued and outstanding stock may become freely tradable pursuant to Rule 144 and may dilute the market for your shares andhave a depressive effect on the price of the shares of our common stock.A portion of our outstanding shares of common stock are “restricted securities” within the meaning of Rule 144 under the Securities Act of 1933, asamended, or the Securities Act. As restricted shares, these shares may be resold only pursuant to an effective registration statement or under the requirements ofRule 144 or other applicable exemptions from registration under the Securities Act and as required under applicable state securities laws. Rule 144 provides inessence that an affiliate (as such term is defined in Rule 144(a)(1)) of an issuer who has held restricted securities for a period of at least six months (one year afterfiling Form 10 information with the SEC for shell companies and former shell companies) may, under certain conditions, sell every three months, in brokeragetransactions, a number of shares that does not exceed the greater of 1% of a company’s outstanding shares of common stock or the average weekly trading volumeduring the four calendar weeks prior to the sale (the four calendar week rule does not apply to companies quoted on the OTC Markets). Rule 144 also permits, undercertain circumstances, the sale of securities, without any limitation, by a person who is not an Affiliate of the Company and who has satisfied a oneyear holdingperiod. A sale under Rule 144 or under any other exemption from the Securities Act, if available, or pursuant to subsequent registrations of our shares of commonstock, may have a depressive effect upon the price of our shares of common stock in any active market that may develop.40We are a former “shell company” and as such are subject to certain limitations not applicable to other public companies generally.Prior to our suspension of reporting in 2012, we were a public reporting “shell company,” as defined in Rule 12b2 under the Exchange Act. Although weare no longer a “shell company,” we are subject to certain restrictions under the Securities Act for the resale of securities issued by issuers that have been at anytime previously a shell company. Specifically, the Rule 144 safe harbor available for the resale of our restricted securities is only available to our stockholders if wehave filed all reports and other materials required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934, as amended, or the Exchange Act, asapplicable, during the preceding twelve months, other than current reports on Form 8K, at the time of the proposed sale, regardless of whether the restrictedsecurities were initially issued at the time we were a shell company or subsequent to termination of such status. Accordingly, holders of our “restricted securities”within the meaning of Rule 144 will be subject to the conditions set forth in Rule 144 with respect to our company. Other reporting companies that are not formershell companies and have been reporting for more than twelve months are not subject to this same reporting threshold for nonaffiliate reliance on Rule 144.Accordingly, any restricted securities we have sold or sell in the future or issue to consultants or employees, in consideration for services rendered or for any otherpurpose, may not be resold unless such securities are registered with the SEC or the requirements of Rule 144 have been satisfied. As a result, it may be harder forus to fund our operations and pay our employees and consultants with our securities instead of cash. Furthermore, it may be harder for us to raise funding throughthe sale of debt or equity securities unless we agree to register such securities with the SEC, which could cause us to expend additional resources in the future. Ourprior status as a “shell company” could prevent us in the future from raising additional funds, engaging employees and consultants, and using our securities to payfor any acquisitions, which could cause the value of our securities, if any, to decline in value or become worthless.ITEM 1B. UNRESOLVED STAFF COMMENTSNone.ITEM 2. PROPERTIESWe currently lease 1,660 square feet of office space at 4 HaYarden Street, Airport City, Israel. The lease term is for 36 months beginning on August 20, 2019and ending on August 20, 2022, with an option to extend for an additional 36 months. Monthly rent payments, including utilities, amount to approximately $14,000per month. We extended the lease period until August 20, 2025.ITEM 3. LEGAL PROCEEDINGSFrom time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation issubject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.41North Empire LLCOn August 7, 2018, we commenced an action against North Empire LLC, or North Empire, in the Supreme Court of the State of New York, County of NewYork for breach of a Securities Purchase Agreement or Agreement in which we are seeking damages in an amount to be determined at trial, but in no event less than$616,000. On August 2, 2018, North Empire filed a Summons with Notice against us, also in the same Court, in which they allege damages in an amount of $11.4million arising from an alleged breach of the Agreement. On September 6, 2018, North Empire filed a Notice of Discontinuance of the action it had filed on August 2,2018. On September 27, 2018, North Empire filed an answer and asserted counterclaims in the action commenced by us against them, alleging that we failed to deliverstock certificates to North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against our CEO andnow former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018, we filed a reply to North Empire’scounterclaims. On November 15, 2018, our CEO and now former Chairman of the Board filed a motion to dismiss North Empire’s thirdparty complaint. On January 6,2020, the Court granted the motion and dismissed the thirdparty complaint. Discovery has been completed and both parties have filed motions for summaryjudgment in connection with the claims and counterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summaryjudgment, arguing there were factual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision.On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying the Company’s motion for summary judgment. On or about September 12,2022, the Court issued its Decision and Order denying the Company’s motion to reargue. North Empire filed its opposing brief on December 7, 2022. Both sides weregiven an opportunity to file a reply brief. We filed our reply brief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. Oral argument was heldbefore the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Court filed its Decision and Order, which affirmed the lower court’sdecisions regarding both My Size and North Empire’s motions for summary judgment and sent the case back to the Supreme Court. On or about March 13, 2023, theSupreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date for the mediation has not yet been set. We intend tovigorously defend any claims made by North Empire. We believe it is more likely than not that the counterclaims will be denied.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.42PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur stock currently is listed on the Tel Aviv Stock Exchange and the Nasdaq Capital Market under the symbol “MYSZ”. Our stock has been traded on theNasdaq Capital Market since July 25, 2016.HoldersAs of March 31, 2023, we had 70 shareholders of record. The actual number of stockholders is greater than this number of record holders and includesstockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our Board of Directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our Board of Directors deems relevant.Securities Authorized for Issuance under Equity Compensation PlansInformation about our equity compensation plans is incorporated herein by reference to “Item 12. Security Ownership of Certain Beneficial Owners andManagement and Related Stockholder Matters”, of this Annual Report on Form 10K.Recent Sales of Unregistered SecuritiesNone.ITEM 6. SELECTED FINANCIAL DATAAs a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULT OF OPERATIONSYou should read the following discussion along with our financial statements and the related notes included elsewhere in this Annual Report on Form10K. The following discussion contains forwardlooking statements that are subject to risks, uncertainties and assumptions, including those discussed under“Risk Factors.” Our actual results, performance and achievements may differ materially from those expressed in, or implied by, these forwardlooking statements.OverviewMySize is an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.43Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile device or through MySizeID Widget: a simple questionnaire which was uses a database collected over the years.MySizeID synchronizes the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and onlypresents items available for purchase that match their measurements to ensure a correct fit.MySize is positioning itself as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empowering brand design teams, which are designed to increaseend consumer satisfaction, contributing to a sustainable world and reduce operation costs.Orgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,682 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz BespokeTechnologies, S.L., or Naiz, a limited liability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.44The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 2,365,800 shares of My Size common stock were issuedto Whitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.45Operations in RussiaIn addition to our Israel operations, we had operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia. To date, mainly due to the invasion of Ukraine by Russia and the ongoing sanctions we stopped most ofour efforts in Russia and will probably close the subsidiary in the near future.Results of OperationsThe table below provides our results of operations for the periods indicated.Year ended December 3120222021(dollars in thousands)Revenues4,459131Cost of revenues(3,825)Gross profit634131Research and development expenses$(1,701)$(4,248)Sales and marketing(3,143)(2,336)General and administrative(3,900)(4,124)Operating loss(8,110)(10,577)Financial income (expenses), net(236)57Tax income36Net loss$(8,310)$(10,520)Year Ended December 31, 2022 Compared to Year Ended December 31, 2021RevenuesFrom inception through December 31, 2018, we did not generate any revenue from operations and we continue to expect to incur additional losses toperform further research and development activities. We started to generate revenues only in 2019. Our revenues for the year ended December 31, 2022 amounted to$4,459,000 compared to $131,000 for year ended December 31, 2021. The increase from the corresponding period primarily attributable to $4,132,000 in revenuegenerated from Orgad from February 7, 2022, the date of closing of the Orgad acquisition, or the Acquisition Date and revenue generated from the Naiz Acquisitionfrom October 11, 2022, the date of closing of the Naiz acquisition.In addition, the increase from the corresponding period results from an increase in revenues generated by My Size.Cost Of RevenuesOur cost of revenues expenses for the year ended December 31, 2022 amounted to $3,825,000, compared to none for the year ended December 31, 2021. Thecost of revenues includes cash and equity liabilities expenses in the amount of $194,000. The increase in comparison with the corresponding period was due to thecost of goods of the revenues generated from Orgad’s operations.Research and Development ExpensesOur research and development expenses for the year ended December 31, 2022 amounted to $1,701,000 a decrease of $2,547,000, or approximately 60.0%,compared to $4,248,000 for the year ended December 31, 2021. The decrease from the corresponding period primarily resulted from share based payment in amount of$2,618,000 attributed to the share issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021.Sales and Marketing ExpensesOur sales and marketing expenses for the year ended December 31, 2022 amounted to $3,143,000 an increase of $807,000, or 34.55%, compared to $2,336,000for the year ended December 31, 2021. The increase primarily resulted from an increase in employees expenses mainly due to Orgad and Naiz acquisitions, increase inAmazon fees, increase in cash and equity liabilities expenses attributed to the Orgad acquisition and an increase in share based payments offset by a decrease inpayments to consultants.46General and Administrative ExpensesOur general and administrative expenses for the year ended December 31, 2022 amounted to $3,900,000, a decrease of $224,000, or 5.43%, compared to$4,124,000 for the year ended December 31, 2021. The decrease compared to the corresponding period was mainly due to a decrease in professional expenses, mainlyattributed to shareholder activism including settlement expenses with the Lazar Parties offset by an increase in sharedbased payments and an increase in employeesexpenses mainly due to the Orgad and Naiz acquisitions.Operating LossAs a result of the foregoing, for the year ended December 31, 2022, our operating loss was $8,110,000, a decrease of $2,467,000 or 23.32%, compared to ouroperating loss for the year ended December 31, 2021 of $10,577,000.Financial Income, NetOur financial (expense) income, net for the year ended December 31, 2022 amounted to $236,000 compared to financial income, $57,000 for the year endedDecember 31, 2021. In 2022, we had financial expenses exchange rate differences offset by an income from fair value revaluation of investment in marketablesecurities whereas in 2021 we had financial income from the fair value revaluation of warrants offset by expenses from exchange rate differences and expenses fromfair value revaluation of investment in marketable securities.Net LossAs a result of the foregoing, our net loss for the year ended December 31, 2022 was $8,310,000 compared to net loss of $10,520,000 for the year endedDecember 31, 2021. The decrease in net loss was mainly due increase in sales and marketing expenses and financial expenses as opposed to financial income in thecorresponding period offset by a decrease in research and development expenses in amount of $2,618,000 attributed to the share issuance to Shoshana Zigdonunder the Amendment to Purchase Agreement dated May 26, 2021.Liquidity and Capital ResourcesSince our inception, we have funded our operations primarily through public and private offerings of debt and equity in Israel and in the U.S.As of December 31, 2022, we had cash, cash equivalents and restricted cash of $2,363,000 compared to $10,943,000 cash, cash equivalents, restricted cashas of December 31, 2021. During January 2023, we completed a registered direct and concurrent private placement offering resulting in gross proceeds ofapproximately $3 million. This decrease primarily resulted from our operating activities, the acquisition of Orgad and Naiz Fit, and resources that were deployed togrow of both businesses.Net cash used in operating activities was $7,290,000 for the year ended December 31, 2022 compared to $7,297,000 for the year ended December 31, 2021.The decrease in cash used in operating activity is derived mainly from an increase in share based payments and increase in account receivables mainly from theOrgad and Naiz fit acquisitions offset by a decrease in the net loss.Net cash used in investing activities for the year ended December 31, 2022 was $993,000 as opposed to net cash provided by investing activities of$161,000 for the year ended December 31, 2021. The net cash used in investing activities for the year ended December 31, 2022 was mainly from the acquisition ofOrgad and Naiz as opposed to proceeds from shortterm deposits and restricted deposits during the year ended December 31, 2021.We had a negative cash flow from financing activities of $67,000 for the year ended December 31, 2022 compared to positive cash flow of $16,292,000 for theyear ended December 31, 2021. The negative cash flow from financing activities for the year ended December 31, 2022 was mainly due to repayment of loans andinterest and payments for leases as opposed to proceeds from issuance of shares and from exercise of warrants for the year ended December 31, 2021.47We expect that we will continue to generate losses and negative cash flows from operations for the foreseeable future. Based on the projected cash flowsand cash balances as of December 31, 2022, together with the proceeds from the January 2023 financing, we believe our existing cash will not be sufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. We will need to raiseadditional capital, which may not be available on reasonable terms or at all. Additional capital would be used to accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;●respond to competitive pressures;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, the Russian invasion ofUkraine, the impact of any resurgence of the COVID19 pandemic and a number of other factors, many of which are outside our control, and on our financialperformance. Accordingly, we cannot assure you that we will be able to successfully raise additional capital at all or on terms that are acceptable to us. If we cannotraise additional capital when needed, it may have a material adverse effect on our business, results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.We have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.Recently Issued Accounting PronouncementsCertain recently issued accounting pronouncements are discussed in Note 2, Significant Accounting Policies, to the consolidated financial statementsincluded in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10K.OffBalance Sheet ArrangementsWe have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.48Application of Critical Accounting Policies and EstimatesOur management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we haveprepared in accordance with U.S. generally accepted accounting principles issued by the Financial Accounting Standards Board, or FASB. The preparation of thesefinancial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assetsand liabilities at the date of the financial statements, as well as the reported expenses during the reporting periods. Actual results may differ from these estimatesunder different assumptions or conditions.Our significant accounting policies were revenue from contracts with customers which are more fully described in the notes to our financial statementsincluded herein. We believe these accounting policies discussed below are critical to our financial results and to the understanding of our past and futureperformance, as these policies relate to the more significant areas involving management’s estimates and assumptions. We consider an accounting estimate to becritical if: (1) it requires us to make assumptions because information was not available at the time or it included matters that were highly uncertain at the time wewere making our estimate; and (2) changes in the estimate could have a material impact on our financial condition or results of operations.Accounting for business combinationsWe allocate the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed, based upon their estimated fairvalues at the acquisition date. These fair values are typically estimated with assistance from independent valuation specialists.The purchase price allocation process requires us to make significant estimates and assumptions, especially at the acquisition date with respect tointangible assets, contractual support obligations assumed, contingent consideration arrangements, and preacquisition contingencies.Although we believe the assumptions and estimates we have made in the past have been reasonable and appropriate, they are based in part on historicalexperience and information obtained from the management of the acquired companies and are inherently uncertain.Examples of critical estimates in valuing certain of the intangible assets we have acquired or may acquire in the future include but are not limited to:● future expected cash flows from product sales or other customer contracts;● expected costs of fulfillment including marketing, warehousing and product sales;● the acquired company’s brand and competitive position, as well as assumptions about the period of time the acquired brand will continue to be used inthe combined company’s product portfolio;● cost of capital and discount rates; and● estimating the useful lives of acquired assets as well as the pattern or manner in which the assets will amortize.Refer to Note 16, Business Combination, to the consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” of thisAnnual Report on Form 10K.49Revenue from contracts with customersOur revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled software subscriptions, associatedsoftware maintenance and support.We recognize revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with a customer exists onlywhen: the parties to the contract have approved it and are committed to perform their respective obligations, we can identify each party’s rights regarding thedistinct goods or services to be transferred (“performance obligations”), we can determine the transaction price for the goods or services to be transferred, thecontract has commercial substance and it is probable that we will collect the consideration to which we will be entitled in exchange for the goods or services that willbe transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to a customer.Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted to governmental authorities. Refundsare estimated at contract inception and updated at the end of each reporting period if additional information becomes available. Revenue is recognized when controlof the product is transferred to the customer.We maintain a returns policy that allows our customers to return product within a specified period of time. The estimate of the provision for returns is basedupon historical experience with actual returns.Principal versus Agent ConsiderationsWe follow the guidance provided in ASC 606 for determining whether we are a principal or an agent in arrangements with customers, by assessing whetherthe nature of our promise is a performance obligation to provide the specified goods (principal) or to arrange for those goods to be provided by the other party(agent). With regard to products being sold by Orgad through Amazon, this determination involves judgment. We determine it is the principle when it has controlover the promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).We recognize revenue ratably over the contractual service term for hosted services that are priced based on a committed number of transactions where thedelivery and consumption of the benefit of the services occur evenly over time, beginning on the date the services associated with the committed transactions arefirst made available to the customer and continuing through the end of the contractual service term. Over usage fees and fees based on the actual number oftransactions are billed in accordance with contract terms as these fees are incurred and are included in the transaction price of an arrangement as variableconsideration. Fees based on a number of transactions or impressions per month, are allocated to the period in which the transactions occur. Revenue forsubscriptions sold as a fee per period is recognized ratably over the contractual term as the customer simultaneously receives and consumes the benefit of theunderlying service.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.As a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.50ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAMY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2022U.S. DOLLARS IN THOUSANDSINDEXPageReport of Independent Registered Public Accounting Firm (PCAOB ID: ID 1057)F2Consolidated Balance SheetsF4Consolidated Statements of Comprehensive LossF5Consolidated Statements of Shareholders’ EquityF6Consolidated Statements of Cash FlowsF7Notes to Consolidated Financial StatementsF8 F33F1Report of Independent Registered Public Accounting FirmTo the Shareholders and Board of DirectorsMy Size, Inc.:Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of My Size, Inc. and subsidiaries (the Company) as of December 31, 2022 and 2021, the relatedconsolidated statements of comprehensive loss, shareholders’ equity, and cash flows for each of the years in the twoyear period ended December 31, 2022, and therelated notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, thefinancial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the twoyear periodended December 31, 2022, in conformity with U.S. generally accepted accounting principles.Going ConcernThe accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1d tothe consolidated financial statements, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit thatraises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1d. Theconsolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidatedfinancial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Critical Audit MattersCritical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to becommunicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved ourespecially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidatedfinancial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters oron the accounts or disclosures to which they relate.Acquisitiondate fair value of customer relationshipsAs discussed in Note 16 to the consolidated financial statements, on October 11, 2022, the Company acquired Naiz Bespoke Technologies SL (“Naiz”). As a result ofthe transaction, the Company acquired customer relationships intangible assets (“customer relationships”) representing the generation of future income from Naiz’sexisting customers. The acquisition date fair value of the customer relationships was $726 thousand.F2We identified the evaluation of the acquisitiondate fair value of the Naiz customer relationships as a critical audit matter. A high degree of subjective auditorjudgment was required to evaluate the following internally developed assumptions used to estimate the fair value of such asset, for which there were limitedobservable inputs: (i) forecasted revenues attributable to existing customers, (ii) forecasted earnings before interest, taxes, depreciation, and amortization(“EBITDA”) margins for the acquired business, (iii) estimated annual customer attrition rates and (iv) estimated discount rate. The determined fair value wassensitive to changes in these key assumptions. Additionally, specialized skills and knowledge were needed to evaluate the discount rate used.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s acquisitiondate fair value estimation process, including controls over the development of key assumptions. We performed a sensitivity analysis toassess the impact of reasonably possible changes to forecasted revenues, EBITDA margins, annual customer attrition rates, and the discount rate. We evaluated theforecasted revenue growth rates from existing customers by comparing the growth assumptions to those of the Company’s peers and industry reports. Inconnection with our assessment of the forecasts used in the valuation, we compared (1) forecasted revenue and EBITDA to Naiz’s historical actual results and (2)estimated annual customer attrition rates to historical Naiz customer attrition data. We tested the Company’s determined weighted average cost of capital(“WACC”), which was used to determine the discount rate, by involving valuation professionals with specialized skills and knowledge, who assisted in:Evaluating the selected discount rate by comparing it against a discount rate range that was independently developed using publicly available market datafor comparable companies, and;Assessing the Company’s WACC calculation, by comparing it against an independently estimated WACC range based on inputs obtained throughpublished surveys and studies.Goodwill impairment assessmentAs discussed in Note 16 to the consolidated financial statements, during 2022 the Company recorded goodwill of $1,257 thousand related to the acquisition of NaizBespoke Technologies, S.L. (“Naiz”). The Company performed an annual quantitative impairment test of goodwill at the reporting unit level. Based on this analysis,the Company determined that the fair value of its reporting unit exceeded its carrying value and no impairment charge was required.We identified the evaluation of the goodwill impairment assessment for the Naiz reporting unit as a critical audit matter. A high degree of subjective auditor judgmentwas required to evaluate the following assumptions used to estimate the fair value of the Company’s reporting unit, for which there were limited observable inputs:(i) forecasted reporting unit cash flows, (ii) longterm growth rates, and (iii) discount rates. The fair value was sensitive to changes in these key assumptions.Additionally, specialized skills and knowledge were needed to evaluate the discount rates.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s goodwill impairment evaluation process. We performed sensitivity analyses to assess the impact of reasonably possible changes to forecasted cashflows, longterm growth rates, and discount rates. We evaluated the Company’s forecasted growth rates by comparing the growth assumptions to those of theCompany’s peers and industry reports. We compared the Company’s forecasted revenue, cost of sales, and operating expense margins to historical actual results toassess the reasonableness of the forecasts. In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:– Assessing the Company’s WACC calculation, by comparing it against an estimated WACC range based on inputs obtained through published surveys andstudies– Evaluating the discount rates used by the Company by comparing them against discount rate ranges that were developed using publicly available market data forcomparable companies, and;– Performing an arithmetic recalculation regarding the fair value of the Company’s reporting unit, using the Company’s cash flow forecasts and the independentlydeveloped discount rates, and comparing the results to the Company’s fair value estimates./s/ Somekh ChaikinSomekh ChaikinMember Firm of KPMG InternationalWe have served as the Company’s auditor since 2017.Tel Aviv, IsraelApril 14, 2023F3MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED BALANCE SHEETSU.S. dollars in thousands (except share data)December 31,Note20222021AssetsCurrent assetsCash and cash equivalents32,10010,670Restricted cash263273Inventory997Account receivables1,94040Other receivables and prepaid expenses4758579Total current assets6,05811,562Long term deposits28Property and equipment, net5140112Operating rightofuse asset6583776Intangible assets71,377Goodwill71,395Investment in JV899Investment in marketable securities11471083,669996Total assets9,72712,558Liabilities and shareholders’ equityCurrent liabilitiesOperating lease liability6159138Shortterm loans9155Trade payables2,487635Liabilities to Related parties69863Other payables680392Total current liabilities4,1791,228Longterm loans9376Deferred tax liabilities328Operating lease liability6308473Total noncurrent liabilities1,012473CONTINGENCIES AND COMMITMENTS15Total Liabilities5,1911,701Shareholders’ equity13Stock capital Common stock of $0.001par value Authorized: 250,000,000and 100,000,000shares as of December 31,2022 and 2021; Issued and outstanding: 1,464,117and959,297 as of December 31,2022 and 2021, respectively (*)11Additional paidin capital58,67356,453Accumulated other comprehensive loss(637)(406)Accumulated deficit(53,501)(45,191)Total shareholders’ equity4,53610,857Total liabilities and shareholders’ equity9,72712,558(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F4MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSSU.S. dollars in thousands (except share data and per share data)Year endedDecember 31,Note20222021Revenues4,459131Cost of revenues(3,825)Gross profit634131Operating expensesResearch and development(1,701)(4,248)Sales and marketing18(3,143)(2,336)General and administrative19(3,900)(4,124)Total operating expenses(8,744)(10,708)Operating loss(8,110)(10,577)Financial income (expense), net20(236)57Loss before taxes(8,346)(10,520)Taxes on income36Net loss for the year(8,310)(10,520)Other comprehensive income (loss):Foreign currency translation differences(231)18Total comprehensive loss(8,541)(10,502)Basic and diluted loss per share (*)(7.47)(17.75)Basic and diluted weighted average number of shares outstanding (*)1,111,913420,385(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F5MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITYU.S. dollars in thousands (except share data)Common stockAdditionalpaidinAccumulatedothercomprehensiveAccumulatedTotalstockholders’NumberAmountcapitallossDeficitequityBalance as of January 1, 2021289,314(*)37,171(424)(34,671)2,076Stockbased compensation related to optionsgranted to employees and consultants373373Exercise of options granted to employees178(*)Restricted shares issued to shareholder (***)100,000(*)2,6182,618Issuance of shares, net of issuance cost of$1,160434,700112,58212,583Exercise of warrants135,108(*)3,7093,709Total comprehensive income (loss)18(10,520)(10,502)Balance as of December 31, 2021959,300156,453(406)(45,191)10,857Stockbased compensation related to optionsand restricted shares granted to employeesand consultants176,000(*)455455Issuance of shares in Business Combination(**)295,802(*)1,4461,446Issuance of shares post BusinessCombination (**)20,924(*)319319Effect of reverse stock split (Note 13 g)12,091(*)Total comprehensive income (loss)(231)(8,310)(8,541)Balance as of December 31, 20221,464,117158,673(637)(53,501)4,536(*)Represents an amount of less than $1.(**)See note 16(***)See note 1 bThe accompanying notes are an integral part of the consolidated financial statements.F6MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSU.S. dollars in thousandsYear endedDecember 31,20222021Cash flows from operating activities:Net loss(8,310)(10,520)Adjustments to reconcile net loss to net cash used in operating activities:Depreciation3842Change in operating lease rightofuse asset13543Amortization of intangible assets155foreign exchange differences(23)1Change in liabilities to related parties635Interest on long term liabilities10Interest paid(10)Revaluation of investment in marketable securities62(49)Restricted Shares issued to shareholder2,618Stock based compensation455373Issuance of shares post Business Combination319Change in inventory(219)Change in deferred tax liabilities(36)Change in account receivable(1,863)(12)Changes in operating lease liabilities(142)Change in other receivables and prepaid expenses184(99)Change in trade payables1,315253Change in other payables553Net cash used in operating activities(7,290)(7,297)Cash flows from investing activities:Acquisition of a subsidiary, net of cash acquired(767)Proceeds from restricted deposits, net184investing in other receivable(100)Investment in equity accounted investee(99)Purchase of property and equipment(27)(23)Net cash (used in) provided by investing activities(993)161Cash flows from financing activities:Proceeds from issuance of shares, net of issuance costs12,583Repayment of loans(67)Proceeds from exercise of warrants3,709Net cash (used in) provided by financing activities(67)16,292Effect of exchange rate fluctuations on cash and cash equivalents(230)13Change in cash and cash equivalents and restricted cash(8,580)9,169Cash and cash equivalents and restricted cash at the beginning of the year10,9431,774Cash and cash equivalents and restricted cash at the end of the year2,36310,943B) Aggregate cash flows derived for the Company as a result of the Orgad acquisition (note 16)2022Trade and other receivables364Inventory864Fixed assets55Longterm deposits31Selling Platform378Goodwill152Shortterm credit(181)Trade payables(580)Other payables(88)Longterm loan(138)Longterm provision(13)Deferred Tax Liability(87)Issuance of shares(457)Total acquisition of subsidiary, net of cash300C) Aggregate cash flows derived for the Company as a result of the Naiz acquisition (note 16)2022Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Issuance of shares(1,008)Total acquisition of subsidiary, net of cash467The accompanying notes are an integral part of the consolidated financial statements.F7MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERALa.My Size, Inc. is developing unique measurement technologies based on algorithms with applications in a variety of areas, from the apparel ecommerce market, to the courier services market and to the Do It Yourself (“DIY”) smartphone and tablet apps market. The technology is driven byproprietary algorithms, which are able to calculate and record measurements in a variety of novel ways.Following the acquisition of Naiz Bespoke Technologies, S.L (“Naiz”) in October 2022 (see note 16), the Company expanded its offering outreachand customer base.Following the acquisition of Orgad International Marketing Ltd. (“Orgad”) in February 2022 (see note 16), the Company also operates anomnichannel ecommerce platform.The Company has five subsidiaries, My Size Israel 2014 Ltd (“My Size Israel”), Topspin Medical (Israel) Ltd., and Orgad all of which areincorporated in Israel, and My Size LLC which was incorporated in the Russian Federation and Naiz Bespoke Technologies, S.L., a limited liabilitycompany incorporated under the laws of Spain (see note 16). References to the Company include the subsidiaries unless the context indicatesotherwise.My Size, Inc., was incorporated and commenced operations in September 1999, as Topspin Medical Inc. (“Topspin”), a private company registeredin the State of Delaware. In December 2013, the Company changed its name to Knowledgetree Ventures Inc. Subsequently, in February 2014, theCompany changed its name to My Size, Inc. Topspin was engaged, through its Israeli subsidiary, in research and development in the field ofcardiology and urology.Since September 1, 2005, the Company has traded on the Tel Aviv Stock Exchange (“TASE”).Between 2007 and 2012 the Company reported as a public company with the U.S. Securities and Exchange Commission (the “SEC”). In August2012, the Company suspended its reporting obligations under Section 13(a) and 15(d) of the Securities Exchange Act of 1934. In mid2015, theCompany resumed reporting as a public company.b.On January 9, 2014, at the Company’s general meeting of shareholders, its shareholders approved an engagement with one of the Company’sinvestors (the “Seller”) for the purchase of rights in a Venture (the “Venture”), including the rights to the method and the certain patent applicationthat had been filed by the Seller (the “Assets”). The Venture relates to the development of technologies and applications which will assist theconsumer to take his or her body measurements accurately using a mobile device to ensure the purchase of clothing with the best possible fitwithout the need to try them on.In February 2014, the Company established a wholly owned subsidiary, My Size (Israel) 2014 Ltd., a company registered in Israel, which iscurrently engaged in the development of the Venture described above.In return for purchasing an interest in the Venture, the Company undertook to pay the Seller 18% of the Company’s operating profit, direct orindirect, connected to the Venture for a period of seven years starting from the end of the Venture’s development period.As part of the agreement, the Seller received an option to buy back the Assets for consideration which will reflect the market fair value at that time,on the occurrence of the following events: a) if a motion is filed to liquidate the Company; b) if seven years after signing the agreement, theCompany’s total accumulated revenues, direct or indirect, from the Venture or the commercialization of the patent will be lower than NIS 3.6 million.In such an event, Seller may repurchase the interest in the Venture at a market price to be determined by an independent third party valuationconsultant, who shall be chosen by agreement by the parties, and the audit committee shall conduct the negotiations on behalf of the Company todetermine the identity of the consultant.On May 26, 2021, the Company, My Size Israel and Shoshana Zigdon entered into an Amendment to Purchase Agreement (the “Amendment”)which made certain amendments to a Purchase Agreement between the parties dated February 16, 2014 (the “Purchase Agreement”). Pursuant tothe Amendment, Ms. Zigdon agreed to irrevocably waive the right to repurchase certain assets related to the collection of data for measurementpurposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which the Company’s business is substantiallydependent, and all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My Size Israel underthe Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation,reward or any rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights(the “Waiver”). In consideration of the Waiver, the Company issued 100,000 shares of common stock to Ms. Zigdon in a private placement.F8MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERAL (Cont.)c.On July 25, 2016, the Company’s common stock began publicly trading on the Nasdaq Capital Market under the symbol “MYSZ”. The Company’sshares of common stock are listed both on the Nasdaq Capital Market and TASE.d.Since inception, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit of $53,501.The Company has financed its operations mainly through fundraising from various investors.The Company’s management expects that the Company will continue to generate losses and negative cash flows from operations for theforeseeable future. Based on the projected cash flows and cash balances as of December 31, 2022, management is of the opinion that its existingcash will be sufficient to fund operations for a period less than 12 months. As a result, there is substantial doubt about the Company’s ability tocontinue as a going concern.Management’s plans include the continued commercialization of the Company’s products and securing sufficient financing through the sale ofadditional equity securities, debt or capital inflows from strategic partnerships. Additional funds may not be available when the Company needsthem, on terms that are acceptable to it, or at all. If the Company is unsuccessful in commercializing its products and securing sufficient financing,it may need to cease operations.The financial statements include no adjustments for measurement or presentation of assets and liabilities, which may be required should theCompany fail to operate as a going concern.e.The Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificial intelligencedriven measurement solutions (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions. The fashion and equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. The SaaS based innovativeartificial intelligence driven measurement solutions, or SaaS Solutions operating segment consists of My Size Inc My Size Israel and LLC.NOTE 2 SIGNIFICANT ACCOUNTING POLICIESThe consolidated financial statements are prepared according to United States generally accepted accounting principles (“U.S. GAAP”), applied on aconsistent basis, as followsa.Use of estimates:The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions thataffect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.Information about assumptions made by the Company with respect to the future and other reasons for uncertainty with respect to estimates thathave a significant risk of resulting in a material adjustment to carrying amounts of assets and liabilities in the next financial year are included in thefollowing notes:Acquisitions of subsidiariesThe Company measures the fair value of the consideration transferred (including contingent consideration) and fair value of the assets acquiredand liabilities assumed, in business combination transactions. For information on details on fair value measurement in acquisition of subsidiaries,see Note 16 regarding business combinations.Estimated impairment of nonfinancial assetsThe Company examines on an annual basis whether there is an impairment of goodwill, intangibles and property, plant and equipment that areallocated to cash generating units, in accordance with the accounting policy presented in Note 1(h) below. Recoverable amounts of cashgenerating units are determined on the basis of valueinuse calculations. These calculations require the use of estimates.For information on key assumptions used in calculation of the recoverable amount, see note 7 – Goodwill and other Intangible assets.b.Functional currency:The currency of the primary economic environment in which the operations of the Company is conducted is the United States Dollar and thus it isthe Company’s functional currency. The reporting currency according to which these financial statements are prepared is the U.S. dollar.The currency of the primary economic environment in which the operation of the Subsidiary, My Size Israel and Orgad International MarketingLtd. functional currency is the New Israeli Shekel (“NIS”).The currency of the primary economic environment in which the operation of the Subsidiary, My Size LLC, functional currency is Russian Ruble.The currency of the primary economic environment in which the operation of the Subsidiary, Naiz fit, functional currency is Euro.F9MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)c.Principles of consolidation:The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances andtransactions have been eliminated upon consolidation.d.Cash equivalents:Cash equivalents are shortterm highly liquid investments that are readily convertible to cash with original maturities of three months or less at thedate acquired.e.Restricted cashRestricted cash are deposits for rent, credit card and for hedging activities.f.Inventories:Inventories include finished goods and are measured at the lower of cost or net realizable value. The cost of inventories comprises of the costsincurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary courseof business. At the point of the loss recognition, a new, lowercost basis for that inventory is established, and subsequent changes in facts andcircumstances do not result in the restoration or increase in that newly established cost basis. The costs of purchase of inventories comprise thepurchase price and other costs directly attributable to the acquisition of finished goods. In 2022, the Company recorded an inventory markdownof $48.g.Property and equipment:Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straightline method over theestimated useful lives of the assets, at the following annual rates:%Computers and peripheral equipment33Office furniture and equipment720Leasehold improvementsOver the term of the leaseor the useful life of theimprovements, whicheveris shorterh.Impairment of longlived assets:The Company’s property and equipment are reviewed for impairment in accordance with ASC 360, “Property Plant and Equipment”, wheneverevents or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held andused is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by theassets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount ofthe assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less sellingcosts. During the periods ended December 31, 2022 and 2021, no impairment losses have been recorded.i.Business combinations:The Company applies the provisions of ASC 805, “Business Combination” and allocates the fair value of purchase consideration to the tangibleassets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchaseconsideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assetsacquired and liabilities assumed, the Company estimated the future expected cash flows from acquired platform, customer relationships,Technology and trademark from a market participant perspective, useful lives and discount rates. In addition, management makes significantestimates and assumptions, which are uncertain, but believed to be reasonable.Acquisitionrelated costs are recognized separately from the acquisition and are expensed as incurred.F10MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)j.Goodwill:Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a businesscombination. Under ASC 350, “Intangible Goodwill and Other”, goodwill is not amortized, but rather is subject to an annual impairment test.ASC 350 requires goodwill to be tested for impairment at the reporting unit level at least annually, the fourth quarter, or between annual tests incertain circumstances, and written down when impaired. Goodwill is tested for impairment by comparing the fair value of the reporting unit with itcarrying value. Goodwill from Orgad acquisition was allocated to the fashion and equipment ecommerce platform segment and Goodwill from theNaiz acquisition was allocated to Naiz segment based innovative artificial intelligence driven measurement solutions.Alternatively, ASC 350 permits an entity to bypass the qualitative assessment for any reporting unit and proceed directly to performing the firststep of the goodwill impairment test. There were no impairment charges to goodwill during the period presented.k.Intangible assets:Intangible assets consist of identifiable intangible assets that the Company has acquired from previous business combinations. Intangible assetsare recorded at costs, net of accumulated amortization. The Company amortizes its intangible assets reflecting the pattern in which the economicbenefits of the intangible assets are consumed. When a pattern cannot be reliably determined, the Company uses a straightline amortizationmethod. Amortization is calculated by the straightline method over the estimated useful lives of the following assets.The estimated useful lives of the company’s intangible assets are as follows:yearsCustomer Relationships7Technology5Trademark5Selling Platform3Each period the Company evaluates the estimated remaining useful lives of its intangible assets and whether events or changes in circumstanceswarrant a revision to the remaining period of amortizationl.Severance pay:The Subsidiary’s liability for severance pay is covered by Section 14 of the Israeli Severance Pay Law (“Section 14”). Under Section 14, employeesin Israel are entitled to have monthly deposits, at a rate of 8.33% of their monthly salary, made on their behalf to their insurance funds. Payments inaccordance with Section 14 exempt the Subsidiary from any additional obligation for these employees. As a result, the Subsidiary does notrecognize any liability for severance pay due to these employees and the deposits under Section 14 are not recorded as an asset in theSubsidiary’s balance sheet. These contributions for compensation represent defined contribution plans and expenses are recorded based onactual deposits.Other than the My Size Israel’s liability there are no additional severance pay liabilities.F11MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)m.Research and development costs:Research and development costs are charged to the statement of operations, as incurred. Most of the research and development expenses are forwages, related expenses and subcontractors.n.Income taxes:The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilitiesfor the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Companies’ taxreturns. Deferred taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities using enactedtax rates in effect in the years in which the differences are expected to reverse. The Company assesses the likelihood that its deferred tax assetswill be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely thannot that all or a portion of deferred tax assets will not be realized. The Company establishes a valuation allowance, if necessary, to reduce deferredtax assets to the amount more likely than not to be realized. As of December 31, 2022, and 2021, a full valuation allowance was established by theCompany.The Company implements a twostep approach to recognize and measure the benefit of its tax positions. The first step is to evaluate the taxposition taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that,on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigationprocesses. The second step is to measure the tax benefit as the largest amount that is greater than 50 percent (cumulative basis) likely to berealized upon settlement.The Company believes that its tax positions are all highly certain of being upheld upon examination. As of December 31,2022 and 2021 the Company recorded a liability for unrecognized tax benefits of $328 and none respectively.o.Accounting for stockbased compensation:The Company accounts for its employees’ stockbased compensation as an expense in the financial statements based on ASC 718. All awards areequity classified and therefore such costs are measured at the grant date fair value of the award and graded vesting attribution approach torecognize compensation cost over the vesting period. The Company estimates stock option grant date fair value using the Binomial and BlackScholes option pricingmodel.The Company recorded stock options issued to nonemployees at the grant date fair value, and recognizes expenses over the related serviceperiod by using the straightline attribution approach in accordance with ASU 201807. All awards are equity classified.The expected volatility of the share prices reflects the assumption that the historical volatility of the share prices is reasonably indicative ofexpected future trends.The riskfree interest rate for grants with an exercise price denominated in USD for employees and several consultants is based on the yield fromUS treasury zerocoupon bonds with an equivalent term.The Company has historically not paid dividends and has no foreseeable plans to pay dividends.F12MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)p.Fair value of financial instruments:ASC 820, Fair Value Measurements and Disclosures, relating to fair value measurements, defines fair value and established a framework formeasuring fair value. The ASC 820 fair value hierarchy distinguishes between market participant assumptions developed based on market dataobtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptionsdeveloped based on the best information available in the circumstances. ASC 820 defines fair value as the price that would be received to sell anasset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price. Inaddition, the fair value of assets and liabilities should include consideration of nonperformance risk, which for the liabilities described belowincludes the Company’s own credit risk.As a basis for considering such assumptions, ASC 820 establishes a threetier value hierarchy, which prioritizes the inputs used in the valuationmethodologies in measuring fair value:Level 1 Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access. Valuationadjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readilyand regularly available in an active market, valuation of these products does not entail a significant degree of judgment.Level 2 Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, eitherdirectly or indirectly.Level 3 Valuations based on inputs that are unobservable and significant to the overall fair value measurement.The Company holds share certificates in iMine Corporation (“iMine”) formerly known as Diamante Minerals, Inc., a publiclytraded company onthe OTCQB.Due to sales restrictions on the sale of the iMine shares, the fair value of the shares was measured on the basis of the quoted market price for anotherwise identical unrestricted equity instrument of the same issuer that trades in a public market, adjusted to reflect the effect of the salesrestrictions and is therefore, ranked as Level 2 asset.q.Basic and diluted net loss per share:Basic net loss per share is computed based on the weighted average number of shares of common stock outstanding during each year. Diluted netincome per share is computed based on the weighted average number of shares of common stock outstanding during each year plus dilutivepotential equivalent common stock considered outstanding during the year, in accordance with ASC 260, “Earnings per Share”. For the yearsended December 31, 2022 and 2021, all outstanding options and warrants have been excluded from the calculation of the diluted net loss per sharesince their effect was antidilutive.r.Concentrations of credit risk:Financial instruments that potentially subject the Company and its subsidiaries to concentrations of credit risk consist principally of cash andcash equivalents.Cash and cash equivalents are invested in banks in Israel, Spain and United States. Such deposits in United States may be in excess of insuredlimits and are not insured in other jurisdictions. Management believes that the financial institutions that hold the Company’s investments arefinancially sound and, accordingly, minimal credit risk exists with respect to these investments.The Company and its subsidiaries have no offbalancesheet concentration of credit risk such as foreign exchange contracts, option contracts orother foreign hedging arrangements.F13MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)s.Revenue Recognition:The Company’s revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled softwaresubscriptions, associated software maintenance and support.The Company recognizes revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with acustomer exists only when: the parties to the contract have approved it and are committed to perform their respective obligations, the Companycan identify each party’s rights regarding the distinct goods or services to be transferred (“performance obligations”), the Company can determinethe transaction price for the goods or services to be transferred, the contract has commercial substance and it is probable that the Company willcollect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to acustomer. Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted togovernmental authorities. Refunds are estimated at contract inception and updated at the end of each reporting period if additional informationbecomes available. Revenue is recognized when control of the product is transferred to the customer.The Company maintains a returns policy that allows its customers to return product within a specified period of time. The estimate of the provisionfor returns is based upon historical experience with actual returns.Principal versus Agent ConsiderationsThe Company follows the guidance provided in ASC 606 for determining whether it is a principal or an agent in arrangements with customers, byassessing whether the nature of the Company’s promise is a performance obligation to provide the specified goods (principal) or to arrange forthose goods to be provided by the other party (agent). With regard to products being sold by Orgad through Amazon, this determination involvesjudgment. The Company determines it is the principle when it has control over promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).The Company recognizes revenue ratably over the contractual service term for hosted services that are priced based on a committed number oftransactions where the delivery and consumption of the benefit of the services occur evenly over time, beginning on the date the servicesassociated with the committed transactions are first made available to the customer and continuing through the end of the contractual serviceterm. Over usage fees and fees based on the actual number of transactions are billed in accordance with contract terms as these fees are incurredand are included in the transaction price of an arrangement as variable consideration. Fees based on a number of transactions or impressions permonth, are allocated to the period in which the transactions occur. Revenue for subscriptions sold as a fee per period is recognized ratably overthe contractual term as the customer simultaneously receives and consumes the benefit of the underlying service.F14MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)t.Contingencies and CommitmentsLiabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it isprobable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with losscontingencies are expensed as incurred.u.Derivative instrumentsThe Company accounts for its derivative instruments as either assets or liabilities and measures them at fair value through profit or loss.v.LeasesThe Company leases include an office space lease agreement for 36 months, with an option to extend for an additional 36 months and 36 monthscancelable operating lease agreements on behalf of personnel vehicles. The lease term includes a noncancellable period of the lease plus anyadditional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise,or an option to extend (or not to terminate) the lease controlled by the lessor.ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make leasepayments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value oflease payments over the lease term. The company generally use its incremental borrowing rate based on the estimated rate of interest forcollateralized borrowing over a similar term of the lease payments at commencement date. Lease expense for lease payments is recognized on astraightline basis over the lease term.For the office rent lease, the Company has elected to account for the lease and nonlease maintenance components as a single lease component.Therefore, the lease payments used to measure the lease liability include all of the fixed consideration in the contract, including insubstance fixedpayments, owed over the lease term.w.Impact of recently issued accounting standardIn June 2016, the FASB issued ASU 201613, “Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses on FinancialInstruments”, which requires companies to measure credit losses of financial instruments, including customer accounts receivable, utilizing amethodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information toinform credit loss estimates. Subsequent to the issuance of ASU 201613, the FASB issued several additional Accounting Standard Updates toclarify implementation guidance, provide narrowscope improvements and provide additional disclosure guidance. As an Emerging GrowthCompany, ASU 201613 is effective for fiscal years beginning after December 15, 2022. The Company does not expect this ASU to have a materialimpact on its consolidated financial statements.F15MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 3 CASH AND CASH EQUIVALENTSThe Company’s cash and cash equivalents balance at December 31, 2022 and 2021 is denominated in the following currencies:December 31,20222021US Dollars1,65110,184New Israeli Shekels259433Other190532,10010,670NOTE 4 OTHER RECEIVABLES AND PREPAID EXPENSESDecember 31,20222021Prepaid expenses and other current assets322429Government authorities28317Other153133Total758579NOTE 5 PROPERTY AND EQUIPMENT, NETComputersandperipheralequipmentOfficefurnitureandequipmentLeaseholdimprovementsTotalCostBalance as at January 1, 20211825860300Additions2323Translation adjustments72211Balance as at December 31, 20212126062334Balance as at January 1, 20222126062334Additions161127Business combination401555Translation adjustments(32)(8)(8)(48)Balance as at December 31, 20222367854368Accumulated DepreciationBalance as at January 1, 20211461412172Additions2751042Translation adjustments6118Balance as at December 31, 20211792023222Balance as at January 1, 20221792023222Additions209938Translation adjustments(27)(3)(2)(32)Balance as at December 31, 20221722630228Carrying amountsAs at December 31, 2021334039112As at December 31, 2022645224140F16MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 6 LEASESIn August 2019, The Company entered into an office space lease agreement. The lease term is for 36 months beginning on August 20, 2019 and endingon August 20, 2022, with an option to extend for an additional 36 months. The Company extended the lease period until August 20, 2025. Monthly rentpayments including utilities amounting to approximately USD 14 (NIS 49,500) per month.In addition, The Company entered into a threeyear cancelable operating lease agreement for cars.These operating leases are included in “Right of use asset” on the Company’s December 31, 2022 consolidated balance sheets, and represent theCompany’s right to use the underlying asset for the lease term. The Company’s obligations to make lease payments are included in the currentliabilities as “Operating lease liability” and in the noncurrent liabilities as “Operating lease liability long term” on the Company’s December 31, 2022consolidated balance sheets. As of December 31, 2022, rightofuse of asset was $583. operating lease liabilities were $159 and non current Operatinglease liabilities were $308. Rightofuse asset includes the capitalization of improvements (net of amortization) amounting to $105.Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value ofthe lease payments.The interest rate used to discount future lease payment was 11.95%.Maturities of lease liabilities as of December 31, 2022 were as follows:Year Ending:2023$1912024$1912025$127Thereafter$509Less imputed interest:$(42)Total lease liabilities$467F17MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 7 – Goodwill and other Intangible assetsA.Identified intangible assetsSchedule of Intangible assetsSelling PlatformTechnologyCustomerRelationshipsOtherTotalThousandsUSDThousandsUSDThousandsUSDThousandsUSDThousandsUSDCostAs of January 1, 2022Acquisitions through business combinations378286726771,467Effect of changes in exchange rates(32)2565765As of December 31, 2022346311791841,532AmortizationAs of January 1, 2022Amortization for the year including effect of changes inexchange rates as of December 31, 2022(109)(15)(27)(4)(155)Carrying amountAs of December 31, 2022237296764801,377AmortizationAmortization expenses recorded for identified intangible assets in the Consolidated Statements of Operations for each period and were as follows:Line ItemDecember 31,2022December 31,2021Selling platformCosts of revenues109TrademarkSales and marketing4TechnologyCosts of revenues15Customer relationshipsSales and marketing27Total amortization expenses155Future amortization expenses are expected to be as follows:20232024202520262027ThereafterTotalFuture amortization expenses3033031941771561791,312b.GoodwillThe changes in the carrying amount of goodwill for the years ended December 31, 2022 and 2021 were as follows:Fashion and equipmentecommerce platformNaizTotalBalance as of December 31, 2021Changes during the period:Goodwill acquired1521,1521,304Goodwill impairmentTranslation differences(14)10591Balance as of December 31, 20221381,2571,395The Company operates its business through three reporting segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovativeartificial intelligence driven measurement solutions and (iii) Naiz. See note 17 for additional segments information.The Company determines the fair value of its reporting units using the income approach. According to the income, the Company uses discounted cashflows to estimate the fair value. Cash flow projections are based on the Company’s estimates of revenue growth rates and operating margins, takinginto consideration the industry’s and market’s conditions. The discount rate used is based on the weighted average cost of capital (“WACC”),adjusted for the relevant risk associated with businessspecific characteristics.The Company performed a quantitative assessment as of December, 31 2022 for the reporting units’ fair value. The estimated fair value of the Fashionand equipment ecommerce platform and Naiz reporting units exceeded its estimated carrying amount by 95.9% and 27.7% respectively. This, based thefollowing assumptions:Fashion and equipmentecommerce platformNaizDiscount rate21%23%Terminal growth rate3%3%If business conditions or expectations were to change materially, it may be necessary to record impairment charges to the Company’s reporting units inthe future.F18MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 8 Investment in JVIn August 2022, the Company established a joint venture (“JV”) in Brazil with Santista Têxtil. The Company holds 51% and Santista Têxtil holds 49% of theJV. The purpose of the JV is to serve the Brazilian market according to the business plan that was set. Both parties agree to make an initial investment in theJV of $198that will be made per the holding percentage of each party. As of the reporting date, the JV is in process of establishing its operation.NOTE 9 Financial LiabilitiesThe book value of each of the financial liability categories is an acceptable approximation of fair value.The debt is comprised of four loans that were granted to My Size Israel – in an outstanding amount of approximately $131, bearing interest rangingfrom prime rate to prime+2.8% rate, and four loans that were granted to the Spanish subsidiary– in an outstanding amount of approximately $400,bearing interest ranging from 1% to 3%.The financial liability maturities during the five years following the end of the financial year are shown below:UntilUntilUntilUntilUntilAfterTOTAL311223311224311225311226311227311227311222Debts with credit institutions15513892874712531NOTE 10 RELATED PARTIES TRANSACTIONSA. Balances with related parties:The following related party payables are included in liability to related parties.December 31,20222021Officers (*)4143Liability in respect of business combinations (**)739Other related parties (***)(95)Directors152069863(*)The amount includes the net salaries payables.(**)The amount includes the provision created to former owners of Orgad that are entitled to additional cash and equity consideration and former owners of Naizthat entitled to additional cash consideration, see note 16 business combination.(***)The amount includes an amount receivable from Orgad previous shareholders who currently work in the company.B. Related parties benefits:Year endedDecember 31,20222021Salaries and related expenses1,440852Share based payments39673Cash liability and equity liability expenses related to acquisitions (**)1,058Directors58582,952983(**)The amount includes the expenses for a provision created to former owners of Orgad that are entitled to additional cash and equity consideration and formerowners of Naiz that entitled to additional cash consideration, see note 16 business combination.NOTE 11 FINANCIAL INSTRUMENTSThe following tables presents the Company’s significant assets and liabilities that are measured at fair value on recurring basis and their classificationwithin the fair value hierarchy:December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities47financial assets (*)10December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesDerivatives9December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities108December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesWarrants derivative2(*)the financial asset includes in other receivables.F19MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 11 FINANCIAL INSTRUMENTS (Cont.)The carrying amounts of cash and cash equivalents, restricted cash, short term restricted deposit, accounts receivable, other receivables and prepaidexpenses, trade payable and accounts payable approximate their fair value due to the shortterm maturities of such instruments.At December 31, 2022, the recognized gain and fair value (based on quoted market prices with a discount due to security restrictions on iMine shares)of the marketable securities were $59and $47, respectively (at December 31, 2021 $49and $108, respectively).NOTE 12 TAXES ON INCOMEa.On December 31, 2022, the Company had U.S. federal net operating loss carryforwards of approximately $26 available to reduce future taxableincome. Utilization of the U.S. net operating losses may be subject to substantial limitations due to the change of ownership provisions of theInternal Revenue Code of 1986.The U.S. Company has final tax assessments through 2014.On December 22, 2017, the Tax Reform Act was signed into law. The legislation significantly changes U.S. tax law by, among other things, lowering theU.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. As a result of the decrease in the corporate incometax rate, the Company revalued the ending net deferred tax assets at December 31, 2017, but did not recognize any incremental income tax expense in2017 due to the revaluation of the valuation allowance.b.Foreign tax:1.Tax rates:Presented hereunder are the tax rates relevant to the Company’s Israeli subsidiaries:2022 23%2021 23% Presented hereunder are the tax rates relevant to the Company’s Spanish subsidiary:2022 24%2.The Company’s Israeli subsidiaries have estimated total available carryforward operating tax losses for Israeli income tax purposes ofapproximately $64as of December 31, 2022. Of these losses, a total of $47.5are owned by Topspin Medical (Israel) Ltd. Topspin tax lossesmay be offset only by future income with respect to the same operational activity by which it was incurred for an indefinite period of time. Theother losses are owned by My Size Israel and may be carryforward to offset against future income for an indefinite period of time.3.Topspin Medical (Israel) Ltd. and My Size (Israel) 2014 Ltd. has final tax assessments through 2016.c.U.S. and foreign components of loss from continuing operations, before income taxes consisted of:December 31,20222021U.S(1,180)(3,802)NonU.S. (foreign)(7,130)(6,718)(8,310)(10,520)F20MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 12 TAXES ON INCOME (Cont.)d.Deferred taxes:Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reportingpurposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows:December 31,20222021Deferred tax assets:Operating loss carryforwards20,13120,238Warrants and options145126Marketable securities390377Intangible assets(328)Research and development expenses586341Other temporary differences203Deferred tax assets before valuation allowance21,12721,082Valuation allowance(21,455)(21,082)Net deferred tax liability(328)The following table presents a reconciliation of the beginning and ending valuation allowance:December 31,20222021Balance at beginning of the year21,08218,968Additions in valuation allowance to the income statement1,7581,625Additions in valuation allowance due to exchange rate differences(1,385)489Balance at end of the year21,45521,082In assessing the realization of deferred tax assets, management considers whether it is more likely than not that all or some portion of the deferred taxassets will not be realized.The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporarydifferences are deductible and net operating losses are utilized. Based on consideration of these factors, the Company recorded a full valuationallowance at December 31, 2021 and 2020.e.Theoretical taxThe following presents the adjustment between the theoretical tax amount and the tax amount included in the financial statements:December 31,20222021Loss before income taxes8,34610,520Statutory tax rate21%21%Computed “expected” tax income1,7522,209Foreign tax rate differences and exchange rate differences149131Nondeductible expenses(107)(715)Change in valuation allowance(1,758)(1,625)Taxes on income36F21MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITYa.Common stock confers upon their holders the right to receive notice to participate and vote in general meetings of the Company, and the right toreceive dividends if declared.b.On January 8, 2021, the Company conducted a public offering of its securities pursuant to which it issued 62,768 shares of its common stock forgross proceeds of $2,008. The net proceeds to the Company from the offering were approximately $1,700, after deducting placement agent’s feesand other estimated offering expenses payable by the Company.c.During 2021, a holders of warrants exercised warrants to purchase 135,109 ordinary shares of the Company in exchange for $3,709.d.On March 25, 2021, the Company conducted a public offering of its shares of common stock pursuant to which it issued 104,741 shares of itscommon stock for gross proceeds of $3,300. The net proceeds to the Company from the offering were approximately $2,872, after deductingplacement agent’s fees and other estimated offering expenses payable by the Company.On May 7, 2021, the Company issued an additional 15,711 shares of the Company’s common stock in connection with the full exercise of theunderwriter’s overallotment option granted in the Company’s March 2021 public offering. These additional shares were sold to the underwriter at apublic offering price of $31.5 per share, resulting in additional net proceeds to the Company, net of the underwriting discount, of approximately$463.e.On May 26, 2021, the Company issued 100,000 shares of common stock to Ms. Zigdon in consideration of the Waiver. See note 1(b) above.f.On October 28, 2021, the Company sold in a registered direct offering 100,592 shares of its common stock and, in a concurrent private placement,an aggregate of 75,444 unregistered warrants to purchase shares of common stock, at an offering price of $33.8 per share and associated warrant.In addition, on the same day, the Company sold in a private placement 150,888 unregistered shares of common stock and unregistered warrants topurchase up to an aggregate of 113,166 shares of common stock at the same purchase price as in the registered direct offering. The warrants areimmediately exercisable and will expire five years from issuance at an exercise price of $31.5 per share, subject to adjustment as set forth therein.The gross proceeds from the offerings were $8,500. The net proceeds to the Company from the offerings were approximately $7,560, afterdeducting placement agent’s fees and other estimated offering expenses payable by the Company. In connection with the offerings, the Companyissued to the placement agent warrants to purchase 17,603 shares on substantially the same terms as the purchasers in the offerings at an exerciseprice of $42.25 per share and a term expiring on October 26, 2026.g.On December 7, 2022, the Company’s board of directors approved a 1for25 reverse stock split of the Company’s issued and outstanding sharesof common stock. The reverse stock split became effective on December 8, 2022. In order not to have fractional shares as a result of the reversestock split, the Company issued an additional 12,091 shares of common stock. As a result, all shares of common stock, options for shares ofcommon stock, exercise price and net loss per share amounts were adjusted retroactively for all periods presented in these financial statements.F22MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITY (Cont.)g.A summary of the warrant activity during the years ended December 31, 2022 and 2021 is presented below:Number ofWarrantsWeightedAverageExercisePriceWeightedAverageRemainingLife inYearsOutstanding, December 31, 2020216,85936.754.26Issued206,214Expired or exercised(135,109)Outstanding, December 31, 2021287,96431.004.35IssuedExpired or exercised(17,901)Outstanding, December 31, 2022270,06330.213.36Exercisable, December 31, 2022270,06330.213.36NOTE 14 STOCK BASED COMPENSATIONThe stockbased expense recognized in the financial statements for services received is related to Research and Development, Sales and Marketingand General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense Research and development15195Stockbased compensation expense Sales and marketing126180Stockbased compensation expense General and administrative17898455373The stockbased expense recognized in the financial statements for services received post Acquisition of Orgad (see note 16) is related to Cost OfGoods, Sales and Marketing and General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense – Cost of goods80Stockbased compensation expense Sales and marketing112Stockbased compensation expense General and administrative127319F23MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Options issued to consultantsWe can sell additional shares of common stock without consulting stockholders and without offering shares to existing stockholders, which wouldresult in dilution of shareholders’ interests in the company and could depress our stock price.Our Certificate of Incorporation currently authorizes 250,000,000 shares of common stock, of which 2,446,780 are currently outstanding as of March 31, 2023and our board of directors is authorized to issue additional shares of our common stock. Although our board of directors intends to utilize its reasonable businessjudgment to fulfil its fiduciary obligations to our then existing stockholders in connection with any future issuance of our capital stock, the future issuance ofadditional shares of our capital stock could cause immediate, and potentially substantial, dilution to our existing stockholders, which could also have a materialeffect on the market value of the shares. Further, other than certain participation rights that we have granted in a past offering, our shares do not have preemptiverights, which means we can sell shares of our capital stock to other persons without offering purchasers in this offering the right to purchase their proportionateshare of such offered shares. Therefore, any additional sales of stock by us could dilute your ownership interest in our Company.Our quarterly operating results may fluctuate significantly.We expect our operating results to be subject to quarterly fluctuations. Our net loss and other operating results will be affected by numerous factors,including:●variations in the level of expenses related to our research and development;●any lawsuits in which we may become involved;●regulatory developments affecting our products; and●our execution of any collaborative, licensing or sales agreements, and the timing of payments under these arrangements.If our quarterly operating results fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially.Furthermore, any quarterly fluctuations in our operating results may, in turn, cause the price of our common stock to fluctuate substantially.If we fail to comply with the rules under the Sarbanes Oxley Act of 2002 related to accounting controls and procedures or if we discover materialweaknesses and deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult.If we fail to comply with the rules under the SarbanesOxley Act of 2002 related to disclosure controls and procedures, or, if we discover materialweaknesses and other deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult. Section 404 of the SarbanesOxley Act requires annual management assessments of the effectiveness of our internal control over financial reporting and, ifwe are no longer a nonaccelerated filer, a report by our independent auditors addressing these assessments. If material weaknesses or significant deficiencies arediscovered or if we otherwise fail to achieve and maintain the adequacy of our internal control, we may not be able to ensure that we can conclude on an ongoingbasis that we have effective internal controls over financial reporting in accordance with Section 404 of the SarbanesOxley Act. Moreover, effective internalcontrols are necessary for us to produce reliable financial reports and are important to helping prevent financial fraud. If we cannot provide reliable financial reportsor prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price ofour common stock could drop significantly.38Our Certificate of Incorporation, Bylaws and Delaware law may have antitakeover effects that could discourage, delay or prevent a change incontrol, which may cause our stock price to decline.Our Certificate of Incorporation, Bylaws and Delaware law could make it more difficult for a thirdparty to acquire us, even if closing such a transactionwould be beneficial to our stockholders. Provisions of our Certificate of Incorporation, Bylaws and Delaware law also could have the effect of discouraging potentialacquisition proposals or making a tender offer or delaying or preventing a change in control, including changes a stockholder might consider favorable. Suchprovisions may also prevent or frustrate attempts by our stockholders to replace or remove our management. In particular, the Certificate of Incorporation, Bylawsand Delaware law, as applicable, among other things:●provide the board of directors with the ability to alter the Bylaws without stockholder approval;●the classification of our board of directors;●place limitations on the removal of directors;●provide that vacancies on the Board of Directors may be filled by a majority of directors in office, although less than a quorum;●require that stockholder actions must be affected at a duly called stockholder meeting and generally prohibiting stockholder actions by written consent;●eliminate the ability of stockholders to call a special meeting of stockholders; and●establish advance notice requirements for nominations for election to the Board of Directors or for proposing matters that can be acted upon at duly calledstockholder meetings.We are subject to Section 203 of the Delaware General Corporation Law which, subject to certain exceptions, prohibits “business combinations” between apubliclyheld Delaware corporation and an “interested stockholder,” which is generally defined as a stockholder who becomes a beneficial owner of 15% or more ofa Delaware corporation’s voting stock for a threeyear period following the date that such stockholder became an interested stockholder. These provisions areexpected to discourage certain types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to firstnegotiate with our board. These provisions may delay or prevent someone from acquiring or merging with us, which may cause the market price of our commonstock and the value of our securities to decline.If we fail to comply with the continued listing requirements of the Nasdaq Capital Market, our common stock may be delisted and the price of ourcommon stock and our ability to access the capital markets could be negatively impacted.Nasdaq has established certain standards for the continued listing of a security on the Nasdaq Capital Market. The standards for continued listing include,among other things, that the minimum bid price for the listed securities not fall below $1.00 per share for a period of 30 consecutive trading days and that wemaintain a minimum of $2,500,000 in shareholders’ equity. We have in the past fallen below the minimum bid price and minimum shareholders’ equity.39No assurance can be given that we will continue to be in compliance with the Rule. Failure to meet applicable Nasdaq continued listing standards couldresult in a delisting of our common stock. A delisting of our common stock from Nasdaq could materially reduce the liquidity of our common stock and result in acorresponding material reduction in the price of our common stock. In addition, delisting could harm our ability to raise capital through alternative financing sourceson terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, employees and fewer business development opportunities.The exercise of outstanding warrants and stock options will have a dilutive effect on the percentage ownership of our capital stock by existingstockholders.As of March 15, 2023, we had outstanding warrants to acquire 2,299,115 shares of our common stock and stock options to purchase 1,659 shares of ourcommon stock, which warrants and options are exercisable for prices ranging between $2.81 and $375. The expiration of the term of such options and warrants rangefrom 0.22 years to 4.83 years. If a significant number of such warrants and stock options are exercised by the holders, the percentage of our common stock ownedby our existing stockholders will be diluted.Were our common stock to become subject to the penny stock rules then this could result in U.S. brokerdealers becoming discouraged from effectingtransactions in shares of our common stock.Rule 15g9 under the Exchange Act establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a marketprice of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. If we do not retain a listing on the NasdaqCapital Market or do not meet certain net tangible asset or average revenue requirements and if the price of our common stock is less than $5.00, our common stockwill be deemed a penny stock. For any transaction involving a penny stock, unless exempt, the rules require: (a) that a broker or dealer approve a person’s accountfor transactions in penny stocks; and (b) the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantityof the penny stock to be purchased.In order to approve a person’s account for transactions in penny stocks, the broker or dealer must: (a) obtain financial information and investmentexperience objectives of the person and (b) make a reasonable determination that the transactions in penny stocks are suitable for that person and the person hassufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver,prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which: (a) sets forth the basis on whichthe broker or dealer made the suitability determination; and (b) confirms that the broker or dealer received a signed, written agreement from the investor prior to thetransaction. Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult forinvestors to dispose of our common stock and cause a decline in the market value of our common stock.Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissionspayable to both the broker or dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor incases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the accountand information on the limited market in penny stocks.Sales of our currently issued and outstanding stock may become freely tradable pursuant to Rule 144 and may dilute the market for your shares andhave a depressive effect on the price of the shares of our common stock.A portion of our outstanding shares of common stock are “restricted securities” within the meaning of Rule 144 under the Securities Act of 1933, asamended, or the Securities Act. As restricted shares, these shares may be resold only pursuant to an effective registration statement or under the requirements ofRule 144 or other applicable exemptions from registration under the Securities Act and as required under applicable state securities laws. Rule 144 provides inessence that an affiliate (as such term is defined in Rule 144(a)(1)) of an issuer who has held restricted securities for a period of at least six months (one year afterfiling Form 10 information with the SEC for shell companies and former shell companies) may, under certain conditions, sell every three months, in brokeragetransactions, a number of shares that does not exceed the greater of 1% of a company’s outstanding shares of common stock or the average weekly trading volumeduring the four calendar weeks prior to the sale (the four calendar week rule does not apply to companies quoted on the OTC Markets). Rule 144 also permits, undercertain circumstances, the sale of securities, without any limitation, by a person who is not an Affiliate of the Company and who has satisfied a oneyear holdingperiod. A sale under Rule 144 or under any other exemption from the Securities Act, if available, or pursuant to subsequent registrations of our shares of commonstock, may have a depressive effect upon the price of our shares of common stock in any active market that may develop.40We are a former “shell company” and as such are subject to certain limitations not applicable to other public companies generally.Prior to our suspension of reporting in 2012, we were a public reporting “shell company,” as defined in Rule 12b2 under the Exchange Act. Although weare no longer a “shell company,” we are subject to certain restrictions under the Securities Act for the resale of securities issued by issuers that have been at anytime previously a shell company. Specifically, the Rule 144 safe harbor available for the resale of our restricted securities is only available to our stockholders if wehave filed all reports and other materials required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934, as amended, or the Exchange Act, asapplicable, during the preceding twelve months, other than current reports on Form 8K, at the time of the proposed sale, regardless of whether the restrictedsecurities were initially issued at the time we were a shell company or subsequent to termination of such status. Accordingly, holders of our “restricted securities”within the meaning of Rule 144 will be subject to the conditions set forth in Rule 144 with respect to our company. Other reporting companies that are not formershell companies and have been reporting for more than twelve months are not subject to this same reporting threshold for nonaffiliate reliance on Rule 144.Accordingly, any restricted securities we have sold or sell in the future or issue to consultants or employees, in consideration for services rendered or for any otherpurpose, may not be resold unless such securities are registered with the SEC or the requirements of Rule 144 have been satisfied. As a result, it may be harder forus to fund our operations and pay our employees and consultants with our securities instead of cash. Furthermore, it may be harder for us to raise funding throughthe sale of debt or equity securities unless we agree to register such securities with the SEC, which could cause us to expend additional resources in the future. Ourprior status as a “shell company” could prevent us in the future from raising additional funds, engaging employees and consultants, and using our securities to payfor any acquisitions, which could cause the value of our securities, if any, to decline in value or become worthless.ITEM 1B. UNRESOLVED STAFF COMMENTSNone.ITEM 2. PROPERTIESWe currently lease 1,660 square feet of office space at 4 HaYarden Street, Airport City, Israel. The lease term is for 36 months beginning on August 20, 2019and ending on August 20, 2022, with an option to extend for an additional 36 months. Monthly rent payments, including utilities, amount to approximately $14,000per month. We extended the lease period until August 20, 2025.ITEM 3. LEGAL PROCEEDINGSFrom time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation issubject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.41North Empire LLCOn August 7, 2018, we commenced an action against North Empire LLC, or North Empire, in the Supreme Court of the State of New York, County of NewYork for breach of a Securities Purchase Agreement or Agreement in which we are seeking damages in an amount to be determined at trial, but in no event less than$616,000. On August 2, 2018, North Empire filed a Summons with Notice against us, also in the same Court, in which they allege damages in an amount of $11.4million arising from an alleged breach of the Agreement. On September 6, 2018, North Empire filed a Notice of Discontinuance of the action it had filed on August 2,2018. On September 27, 2018, North Empire filed an answer and asserted counterclaims in the action commenced by us against them, alleging that we failed to deliverstock certificates to North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against our CEO andnow former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018, we filed a reply to North Empire’scounterclaims. On November 15, 2018, our CEO and now former Chairman of the Board filed a motion to dismiss North Empire’s thirdparty complaint. On January 6,2020, the Court granted the motion and dismissed the thirdparty complaint. Discovery has been completed and both parties have filed motions for summaryjudgment in connection with the claims and counterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summaryjudgment, arguing there were factual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision.On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying the Company’s motion for summary judgment. On or about September 12,2022, the Court issued its Decision and Order denying the Company’s motion to reargue. North Empire filed its opposing brief on December 7, 2022. Both sides weregiven an opportunity to file a reply brief. We filed our reply brief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. Oral argument was heldbefore the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Court filed its Decision and Order, which affirmed the lower court’sdecisions regarding both My Size and North Empire’s motions for summary judgment and sent the case back to the Supreme Court. On or about March 13, 2023, theSupreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date for the mediation has not yet been set. We intend tovigorously defend any claims made by North Empire. We believe it is more likely than not that the counterclaims will be denied.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.42PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur stock currently is listed on the Tel Aviv Stock Exchange and the Nasdaq Capital Market under the symbol “MYSZ”. Our stock has been traded on theNasdaq Capital Market since July 25, 2016.HoldersAs of March 31, 2023, we had 70 shareholders of record. The actual number of stockholders is greater than this number of record holders and includesstockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our Board of Directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our Board of Directors deems relevant.Securities Authorized for Issuance under Equity Compensation PlansInformation about our equity compensation plans is incorporated herein by reference to “Item 12. Security Ownership of Certain Beneficial Owners andManagement and Related Stockholder Matters”, of this Annual Report on Form 10K.Recent Sales of Unregistered SecuritiesNone.ITEM 6. SELECTED FINANCIAL DATAAs a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULT OF OPERATIONSYou should read the following discussion along with our financial statements and the related notes included elsewhere in this Annual Report on Form10K. The following discussion contains forwardlooking statements that are subject to risks, uncertainties and assumptions, including those discussed under“Risk Factors.” Our actual results, performance and achievements may differ materially from those expressed in, or implied by, these forwardlooking statements.OverviewMySize is an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.43Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile device or through MySizeID Widget: a simple questionnaire which was uses a database collected over the years.MySizeID synchronizes the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and onlypresents items available for purchase that match their measurements to ensure a correct fit.MySize is positioning itself as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empowering brand design teams, which are designed to increaseend consumer satisfaction, contributing to a sustainable world and reduce operation costs.Orgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,682 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz BespokeTechnologies, S.L., or Naiz, a limited liability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.44The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 2,365,800 shares of My Size common stock were issuedto Whitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.45Operations in RussiaIn addition to our Israel operations, we had operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia. To date, mainly due to the invasion of Ukraine by Russia and the ongoing sanctions we stopped most ofour efforts in Russia and will probably close the subsidiary in the near future.Results of OperationsThe table below provides our results of operations for the periods indicated.Year ended December 3120222021(dollars in thousands)Revenues4,459131Cost of revenues(3,825)Gross profit634131Research and development expenses$(1,701)$(4,248)Sales and marketing(3,143)(2,336)General and administrative(3,900)(4,124)Operating loss(8,110)(10,577)Financial income (expenses), net(236)57Tax income36Net loss$(8,310)$(10,520)Year Ended December 31, 2022 Compared to Year Ended December 31, 2021RevenuesFrom inception through December 31, 2018, we did not generate any revenue from operations and we continue to expect to incur additional losses toperform further research and development activities. We started to generate revenues only in 2019. Our revenues for the year ended December 31, 2022 amounted to$4,459,000 compared to $131,000 for year ended December 31, 2021. The increase from the corresponding period primarily attributable to $4,132,000 in revenuegenerated from Orgad from February 7, 2022, the date of closing of the Orgad acquisition, or the Acquisition Date and revenue generated from the Naiz Acquisitionfrom October 11, 2022, the date of closing of the Naiz acquisition.In addition, the increase from the corresponding period results from an increase in revenues generated by My Size.Cost Of RevenuesOur cost of revenues expenses for the year ended December 31, 2022 amounted to $3,825,000, compared to none for the year ended December 31, 2021. Thecost of revenues includes cash and equity liabilities expenses in the amount of $194,000. The increase in comparison with the corresponding period was due to thecost of goods of the revenues generated from Orgad’s operations.Research and Development ExpensesOur research and development expenses for the year ended December 31, 2022 amounted to $1,701,000 a decrease of $2,547,000, or approximately 60.0%,compared to $4,248,000 for the year ended December 31, 2021. The decrease from the corresponding period primarily resulted from share based payment in amount of$2,618,000 attributed to the share issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021.Sales and Marketing ExpensesOur sales and marketing expenses for the year ended December 31, 2022 amounted to $3,143,000 an increase of $807,000, or 34.55%, compared to $2,336,000for the year ended December 31, 2021. The increase primarily resulted from an increase in employees expenses mainly due to Orgad and Naiz acquisitions, increase inAmazon fees, increase in cash and equity liabilities expenses attributed to the Orgad acquisition and an increase in share based payments offset by a decrease inpayments to consultants.46General and Administrative ExpensesOur general and administrative expenses for the year ended December 31, 2022 amounted to $3,900,000, a decrease of $224,000, or 5.43%, compared to$4,124,000 for the year ended December 31, 2021. The decrease compared to the corresponding period was mainly due to a decrease in professional expenses, mainlyattributed to shareholder activism including settlement expenses with the Lazar Parties offset by an increase in sharedbased payments and an increase in employeesexpenses mainly due to the Orgad and Naiz acquisitions.Operating LossAs a result of the foregoing, for the year ended December 31, 2022, our operating loss was $8,110,000, a decrease of $2,467,000 or 23.32%, compared to ouroperating loss for the year ended December 31, 2021 of $10,577,000.Financial Income, NetOur financial (expense) income, net for the year ended December 31, 2022 amounted to $236,000 compared to financial income, $57,000 for the year endedDecember 31, 2021. In 2022, we had financial expenses exchange rate differences offset by an income from fair value revaluation of investment in marketablesecurities whereas in 2021 we had financial income from the fair value revaluation of warrants offset by expenses from exchange rate differences and expenses fromfair value revaluation of investment in marketable securities.Net LossAs a result of the foregoing, our net loss for the year ended December 31, 2022 was $8,310,000 compared to net loss of $10,520,000 for the year endedDecember 31, 2021. The decrease in net loss was mainly due increase in sales and marketing expenses and financial expenses as opposed to financial income in thecorresponding period offset by a decrease in research and development expenses in amount of $2,618,000 attributed to the share issuance to Shoshana Zigdonunder the Amendment to Purchase Agreement dated May 26, 2021.Liquidity and Capital ResourcesSince our inception, we have funded our operations primarily through public and private offerings of debt and equity in Israel and in the U.S.As of December 31, 2022, we had cash, cash equivalents and restricted cash of $2,363,000 compared to $10,943,000 cash, cash equivalents, restricted cashas of December 31, 2021. During January 2023, we completed a registered direct and concurrent private placement offering resulting in gross proceeds ofapproximately $3 million. This decrease primarily resulted from our operating activities, the acquisition of Orgad and Naiz Fit, and resources that were deployed togrow of both businesses.Net cash used in operating activities was $7,290,000 for the year ended December 31, 2022 compared to $7,297,000 for the year ended December 31, 2021.The decrease in cash used in operating activity is derived mainly from an increase in share based payments and increase in account receivables mainly from theOrgad and Naiz fit acquisitions offset by a decrease in the net loss.Net cash used in investing activities for the year ended December 31, 2022 was $993,000 as opposed to net cash provided by investing activities of$161,000 for the year ended December 31, 2021. The net cash used in investing activities for the year ended December 31, 2022 was mainly from the acquisition ofOrgad and Naiz as opposed to proceeds from shortterm deposits and restricted deposits during the year ended December 31, 2021.We had a negative cash flow from financing activities of $67,000 for the year ended December 31, 2022 compared to positive cash flow of $16,292,000 for theyear ended December 31, 2021. The negative cash flow from financing activities for the year ended December 31, 2022 was mainly due to repayment of loans andinterest and payments for leases as opposed to proceeds from issuance of shares and from exercise of warrants for the year ended December 31, 2021.47We expect that we will continue to generate losses and negative cash flows from operations for the foreseeable future. Based on the projected cash flowsand cash balances as of December 31, 2022, together with the proceeds from the January 2023 financing, we believe our existing cash will not be sufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. We will need to raiseadditional capital, which may not be available on reasonable terms or at all. Additional capital would be used to accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;●respond to competitive pressures;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, the Russian invasion ofUkraine, the impact of any resurgence of the COVID19 pandemic and a number of other factors, many of which are outside our control, and on our financialperformance. Accordingly, we cannot assure you that we will be able to successfully raise additional capital at all or on terms that are acceptable to us. If we cannotraise additional capital when needed, it may have a material adverse effect on our business, results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.We have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.Recently Issued Accounting PronouncementsCertain recently issued accounting pronouncements are discussed in Note 2, Significant Accounting Policies, to the consolidated financial statementsincluded in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10K.OffBalance Sheet ArrangementsWe have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.48Application of Critical Accounting Policies and EstimatesOur management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we haveprepared in accordance with U.S. generally accepted accounting principles issued by the Financial Accounting Standards Board, or FASB. The preparation of thesefinancial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assetsand liabilities at the date of the financial statements, as well as the reported expenses during the reporting periods. Actual results may differ from these estimatesunder different assumptions or conditions.Our significant accounting policies were revenue from contracts with customers which are more fully described in the notes to our financial statementsincluded herein. We believe these accounting policies discussed below are critical to our financial results and to the understanding of our past and futureperformance, as these policies relate to the more significant areas involving management’s estimates and assumptions. We consider an accounting estimate to becritical if: (1) it requires us to make assumptions because information was not available at the time or it included matters that were highly uncertain at the time wewere making our estimate; and (2) changes in the estimate could have a material impact on our financial condition or results of operations.Accounting for business combinationsWe allocate the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed, based upon their estimated fairvalues at the acquisition date. These fair values are typically estimated with assistance from independent valuation specialists.The purchase price allocation process requires us to make significant estimates and assumptions, especially at the acquisition date with respect tointangible assets, contractual support obligations assumed, contingent consideration arrangements, and preacquisition contingencies.Although we believe the assumptions and estimates we have made in the past have been reasonable and appropriate, they are based in part on historicalexperience and information obtained from the management of the acquired companies and are inherently uncertain.Examples of critical estimates in valuing certain of the intangible assets we have acquired or may acquire in the future include but are not limited to:● future expected cash flows from product sales or other customer contracts;● expected costs of fulfillment including marketing, warehousing and product sales;● the acquired company’s brand and competitive position, as well as assumptions about the period of time the acquired brand will continue to be used inthe combined company’s product portfolio;● cost of capital and discount rates; and● estimating the useful lives of acquired assets as well as the pattern or manner in which the assets will amortize.Refer to Note 16, Business Combination, to the consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” of thisAnnual Report on Form 10K.49Revenue from contracts with customersOur revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled software subscriptions, associatedsoftware maintenance and support.We recognize revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with a customer exists onlywhen: the parties to the contract have approved it and are committed to perform their respective obligations, we can identify each party’s rights regarding thedistinct goods or services to be transferred (“performance obligations”), we can determine the transaction price for the goods or services to be transferred, thecontract has commercial substance and it is probable that we will collect the consideration to which we will be entitled in exchange for the goods or services that willbe transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to a customer.Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted to governmental authorities. Refundsare estimated at contract inception and updated at the end of each reporting period if additional information becomes available. Revenue is recognized when controlof the product is transferred to the customer.We maintain a returns policy that allows our customers to return product within a specified period of time. The estimate of the provision for returns is basedupon historical experience with actual returns.Principal versus Agent ConsiderationsWe follow the guidance provided in ASC 606 for determining whether we are a principal or an agent in arrangements with customers, by assessing whetherthe nature of our promise is a performance obligation to provide the specified goods (principal) or to arrange for those goods to be provided by the other party(agent). With regard to products being sold by Orgad through Amazon, this determination involves judgment. We determine it is the principle when it has controlover the promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).We recognize revenue ratably over the contractual service term for hosted services that are priced based on a committed number of transactions where thedelivery and consumption of the benefit of the services occur evenly over time, beginning on the date the services associated with the committed transactions arefirst made available to the customer and continuing through the end of the contractual service term. Over usage fees and fees based on the actual number oftransactions are billed in accordance with contract terms as these fees are incurred and are included in the transaction price of an arrangement as variableconsideration. Fees based on a number of transactions or impressions per month, are allocated to the period in which the transactions occur. Revenue forsubscriptions sold as a fee per period is recognized ratably over the contractual term as the customer simultaneously receives and consumes the benefit of theunderlying service.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.As a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.50ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAMY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2022U.S. DOLLARS IN THOUSANDSINDEXPageReport of Independent Registered Public Accounting Firm (PCAOB ID: ID 1057)F2Consolidated Balance SheetsF4Consolidated Statements of Comprehensive LossF5Consolidated Statements of Shareholders’ EquityF6Consolidated Statements of Cash FlowsF7Notes to Consolidated Financial StatementsF8 F33F1Report of Independent Registered Public Accounting FirmTo the Shareholders and Board of DirectorsMy Size, Inc.:Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of My Size, Inc. and subsidiaries (the Company) as of December 31, 2022 and 2021, the relatedconsolidated statements of comprehensive loss, shareholders’ equity, and cash flows for each of the years in the twoyear period ended December 31, 2022, and therelated notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, thefinancial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the twoyear periodended December 31, 2022, in conformity with U.S. generally accepted accounting principles.Going ConcernThe accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1d tothe consolidated financial statements, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit thatraises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1d. Theconsolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidatedfinancial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Critical Audit MattersCritical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to becommunicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved ourespecially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidatedfinancial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters oron the accounts or disclosures to which they relate.Acquisitiondate fair value of customer relationshipsAs discussed in Note 16 to the consolidated financial statements, on October 11, 2022, the Company acquired Naiz Bespoke Technologies SL (“Naiz”). As a result ofthe transaction, the Company acquired customer relationships intangible assets (“customer relationships”) representing the generation of future income from Naiz’sexisting customers. The acquisition date fair value of the customer relationships was $726 thousand.F2We identified the evaluation of the acquisitiondate fair value of the Naiz customer relationships as a critical audit matter. A high degree of subjective auditorjudgment was required to evaluate the following internally developed assumptions used to estimate the fair value of such asset, for which there were limitedobservable inputs: (i) forecasted revenues attributable to existing customers, (ii) forecasted earnings before interest, taxes, depreciation, and amortization(“EBITDA”) margins for the acquired business, (iii) estimated annual customer attrition rates and (iv) estimated discount rate. The determined fair value wassensitive to changes in these key assumptions. Additionally, specialized skills and knowledge were needed to evaluate the discount rate used.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s acquisitiondate fair value estimation process, including controls over the development of key assumptions. We performed a sensitivity analysis toassess the impact of reasonably possible changes to forecasted revenues, EBITDA margins, annual customer attrition rates, and the discount rate. We evaluated theforecasted revenue growth rates from existing customers by comparing the growth assumptions to those of the Company’s peers and industry reports. Inconnection with our assessment of the forecasts used in the valuation, we compared (1) forecasted revenue and EBITDA to Naiz’s historical actual results and (2)estimated annual customer attrition rates to historical Naiz customer attrition data. We tested the Company’s determined weighted average cost of capital(“WACC”), which was used to determine the discount rate, by involving valuation professionals with specialized skills and knowledge, who assisted in:Evaluating the selected discount rate by comparing it against a discount rate range that was independently developed using publicly available market datafor comparable companies, and;Assessing the Company’s WACC calculation, by comparing it against an independently estimated WACC range based on inputs obtained throughpublished surveys and studies.Goodwill impairment assessmentAs discussed in Note 16 to the consolidated financial statements, during 2022 the Company recorded goodwill of $1,257 thousand related to the acquisition of NaizBespoke Technologies, S.L. (“Naiz”). The Company performed an annual quantitative impairment test of goodwill at the reporting unit level. Based on this analysis,the Company determined that the fair value of its reporting unit exceeded its carrying value and no impairment charge was required.We identified the evaluation of the goodwill impairment assessment for the Naiz reporting unit as a critical audit matter. A high degree of subjective auditor judgmentwas required to evaluate the following assumptions used to estimate the fair value of the Company’s reporting unit, for which there were limited observable inputs:(i) forecasted reporting unit cash flows, (ii) longterm growth rates, and (iii) discount rates. The fair value was sensitive to changes in these key assumptions.Additionally, specialized skills and knowledge were needed to evaluate the discount rates.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s goodwill impairment evaluation process. We performed sensitivity analyses to assess the impact of reasonably possible changes to forecasted cashflows, longterm growth rates, and discount rates. We evaluated the Company’s forecasted growth rates by comparing the growth assumptions to those of theCompany’s peers and industry reports. We compared the Company’s forecasted revenue, cost of sales, and operating expense margins to historical actual results toassess the reasonableness of the forecasts. In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:– Assessing the Company’s WACC calculation, by comparing it against an estimated WACC range based on inputs obtained through published surveys andstudies– Evaluating the discount rates used by the Company by comparing them against discount rate ranges that were developed using publicly available market data forcomparable companies, and;– Performing an arithmetic recalculation regarding the fair value of the Company’s reporting unit, using the Company’s cash flow forecasts and the independentlydeveloped discount rates, and comparing the results to the Company’s fair value estimates./s/ Somekh ChaikinSomekh ChaikinMember Firm of KPMG InternationalWe have served as the Company’s auditor since 2017.Tel Aviv, IsraelApril 14, 2023F3MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED BALANCE SHEETSU.S. dollars in thousands (except share data)December 31,Note20222021AssetsCurrent assetsCash and cash equivalents32,10010,670Restricted cash263273Inventory997Account receivables1,94040Other receivables and prepaid expenses4758579Total current assets6,05811,562Long term deposits28Property and equipment, net5140112Operating rightofuse asset6583776Intangible assets71,377Goodwill71,395Investment in JV899Investment in marketable securities11471083,669996Total assets9,72712,558Liabilities and shareholders’ equityCurrent liabilitiesOperating lease liability6159138Shortterm loans9155Trade payables2,487635Liabilities to Related parties69863Other payables680392Total current liabilities4,1791,228Longterm loans9376Deferred tax liabilities328Operating lease liability6308473Total noncurrent liabilities1,012473CONTINGENCIES AND COMMITMENTS15Total Liabilities5,1911,701Shareholders’ equity13Stock capital Common stock of $0.001par value Authorized: 250,000,000and 100,000,000shares as of December 31,2022 and 2021; Issued and outstanding: 1,464,117and959,297 as of December 31,2022 and 2021, respectively (*)11Additional paidin capital58,67356,453Accumulated other comprehensive loss(637)(406)Accumulated deficit(53,501)(45,191)Total shareholders’ equity4,53610,857Total liabilities and shareholders’ equity9,72712,558(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F4MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSSU.S. dollars in thousands (except share data and per share data)Year endedDecember 31,Note20222021Revenues4,459131Cost of revenues(3,825)Gross profit634131Operating expensesResearch and development(1,701)(4,248)Sales and marketing18(3,143)(2,336)General and administrative19(3,900)(4,124)Total operating expenses(8,744)(10,708)Operating loss(8,110)(10,577)Financial income (expense), net20(236)57Loss before taxes(8,346)(10,520)Taxes on income36Net loss for the year(8,310)(10,520)Other comprehensive income (loss):Foreign currency translation differences(231)18Total comprehensive loss(8,541)(10,502)Basic and diluted loss per share (*)(7.47)(17.75)Basic and diluted weighted average number of shares outstanding (*)1,111,913420,385(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F5MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITYU.S. dollars in thousands (except share data)Common stockAdditionalpaidinAccumulatedothercomprehensiveAccumulatedTotalstockholders’NumberAmountcapitallossDeficitequityBalance as of January 1, 2021289,314(*)37,171(424)(34,671)2,076Stockbased compensation related to optionsgranted to employees and consultants373373Exercise of options granted to employees178(*)Restricted shares issued to shareholder (***)100,000(*)2,6182,618Issuance of shares, net of issuance cost of$1,160434,700112,58212,583Exercise of warrants135,108(*)3,7093,709Total comprehensive income (loss)18(10,520)(10,502)Balance as of December 31, 2021959,300156,453(406)(45,191)10,857Stockbased compensation related to optionsand restricted shares granted to employeesand consultants176,000(*)455455Issuance of shares in Business Combination(**)295,802(*)1,4461,446Issuance of shares post BusinessCombination (**)20,924(*)319319Effect of reverse stock split (Note 13 g)12,091(*)Total comprehensive income (loss)(231)(8,310)(8,541)Balance as of December 31, 20221,464,117158,673(637)(53,501)4,536(*)Represents an amount of less than $1.(**)See note 16(***)See note 1 bThe accompanying notes are an integral part of the consolidated financial statements.F6MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSU.S. dollars in thousandsYear endedDecember 31,20222021Cash flows from operating activities:Net loss(8,310)(10,520)Adjustments to reconcile net loss to net cash used in operating activities:Depreciation3842Change in operating lease rightofuse asset13543Amortization of intangible assets155foreign exchange differences(23)1Change in liabilities to related parties635Interest on long term liabilities10Interest paid(10)Revaluation of investment in marketable securities62(49)Restricted Shares issued to shareholder2,618Stock based compensation455373Issuance of shares post Business Combination319Change in inventory(219)Change in deferred tax liabilities(36)Change in account receivable(1,863)(12)Changes in operating lease liabilities(142)Change in other receivables and prepaid expenses184(99)Change in trade payables1,315253Change in other payables553Net cash used in operating activities(7,290)(7,297)Cash flows from investing activities:Acquisition of a subsidiary, net of cash acquired(767)Proceeds from restricted deposits, net184investing in other receivable(100)Investment in equity accounted investee(99)Purchase of property and equipment(27)(23)Net cash (used in) provided by investing activities(993)161Cash flows from financing activities:Proceeds from issuance of shares, net of issuance costs12,583Repayment of loans(67)Proceeds from exercise of warrants3,709Net cash (used in) provided by financing activities(67)16,292Effect of exchange rate fluctuations on cash and cash equivalents(230)13Change in cash and cash equivalents and restricted cash(8,580)9,169Cash and cash equivalents and restricted cash at the beginning of the year10,9431,774Cash and cash equivalents and restricted cash at the end of the year2,36310,943B) Aggregate cash flows derived for the Company as a result of the Orgad acquisition (note 16)2022Trade and other receivables364Inventory864Fixed assets55Longterm deposits31Selling Platform378Goodwill152Shortterm credit(181)Trade payables(580)Other payables(88)Longterm loan(138)Longterm provision(13)Deferred Tax Liability(87)Issuance of shares(457)Total acquisition of subsidiary, net of cash300C) Aggregate cash flows derived for the Company as a result of the Naiz acquisition (note 16)2022Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Issuance of shares(1,008)Total acquisition of subsidiary, net of cash467The accompanying notes are an integral part of the consolidated financial statements.F7MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERALa.My Size, Inc. is developing unique measurement technologies based on algorithms with applications in a variety of areas, from the apparel ecommerce market, to the courier services market and to the Do It Yourself (“DIY”) smartphone and tablet apps market. The technology is driven byproprietary algorithms, which are able to calculate and record measurements in a variety of novel ways.Following the acquisition of Naiz Bespoke Technologies, S.L (“Naiz”) in October 2022 (see note 16), the Company expanded its offering outreachand customer base.Following the acquisition of Orgad International Marketing Ltd. (“Orgad”) in February 2022 (see note 16), the Company also operates anomnichannel ecommerce platform.The Company has five subsidiaries, My Size Israel 2014 Ltd (“My Size Israel”), Topspin Medical (Israel) Ltd., and Orgad all of which areincorporated in Israel, and My Size LLC which was incorporated in the Russian Federation and Naiz Bespoke Technologies, S.L., a limited liabilitycompany incorporated under the laws of Spain (see note 16). References to the Company include the subsidiaries unless the context indicatesotherwise.My Size, Inc., was incorporated and commenced operations in September 1999, as Topspin Medical Inc. (“Topspin”), a private company registeredin the State of Delaware. In December 2013, the Company changed its name to Knowledgetree Ventures Inc. Subsequently, in February 2014, theCompany changed its name to My Size, Inc. Topspin was engaged, through its Israeli subsidiary, in research and development in the field ofcardiology and urology.Since September 1, 2005, the Company has traded on the Tel Aviv Stock Exchange (“TASE”).Between 2007 and 2012 the Company reported as a public company with the U.S. Securities and Exchange Commission (the “SEC”). In August2012, the Company suspended its reporting obligations under Section 13(a) and 15(d) of the Securities Exchange Act of 1934. In mid2015, theCompany resumed reporting as a public company.b.On January 9, 2014, at the Company’s general meeting of shareholders, its shareholders approved an engagement with one of the Company’sinvestors (the “Seller”) for the purchase of rights in a Venture (the “Venture”), including the rights to the method and the certain patent applicationthat had been filed by the Seller (the “Assets”). The Venture relates to the development of technologies and applications which will assist theconsumer to take his or her body measurements accurately using a mobile device to ensure the purchase of clothing with the best possible fitwithout the need to try them on.In February 2014, the Company established a wholly owned subsidiary, My Size (Israel) 2014 Ltd., a company registered in Israel, which iscurrently engaged in the development of the Venture described above.In return for purchasing an interest in the Venture, the Company undertook to pay the Seller 18% of the Company’s operating profit, direct orindirect, connected to the Venture for a period of seven years starting from the end of the Venture’s development period.As part of the agreement, the Seller received an option to buy back the Assets for consideration which will reflect the market fair value at that time,on the occurrence of the following events: a) if a motion is filed to liquidate the Company; b) if seven years after signing the agreement, theCompany’s total accumulated revenues, direct or indirect, from the Venture or the commercialization of the patent will be lower than NIS 3.6 million.In such an event, Seller may repurchase the interest in the Venture at a market price to be determined by an independent third party valuationconsultant, who shall be chosen by agreement by the parties, and the audit committee shall conduct the negotiations on behalf of the Company todetermine the identity of the consultant.On May 26, 2021, the Company, My Size Israel and Shoshana Zigdon entered into an Amendment to Purchase Agreement (the “Amendment”)which made certain amendments to a Purchase Agreement between the parties dated February 16, 2014 (the “Purchase Agreement”). Pursuant tothe Amendment, Ms. Zigdon agreed to irrevocably waive the right to repurchase certain assets related to the collection of data for measurementpurposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which the Company’s business is substantiallydependent, and all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My Size Israel underthe Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation,reward or any rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights(the “Waiver”). In consideration of the Waiver, the Company issued 100,000 shares of common stock to Ms. Zigdon in a private placement.F8MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERAL (Cont.)c.On July 25, 2016, the Company’s common stock began publicly trading on the Nasdaq Capital Market under the symbol “MYSZ”. The Company’sshares of common stock are listed both on the Nasdaq Capital Market and TASE.d.Since inception, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit of $53,501.The Company has financed its operations mainly through fundraising from various investors.The Company’s management expects that the Company will continue to generate losses and negative cash flows from operations for theforeseeable future. Based on the projected cash flows and cash balances as of December 31, 2022, management is of the opinion that its existingcash will be sufficient to fund operations for a period less than 12 months. As a result, there is substantial doubt about the Company’s ability tocontinue as a going concern.Management’s plans include the continued commercialization of the Company’s products and securing sufficient financing through the sale ofadditional equity securities, debt or capital inflows from strategic partnerships. Additional funds may not be available when the Company needsthem, on terms that are acceptable to it, or at all. If the Company is unsuccessful in commercializing its products and securing sufficient financing,it may need to cease operations.The financial statements include no adjustments for measurement or presentation of assets and liabilities, which may be required should theCompany fail to operate as a going concern.e.The Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificial intelligencedriven measurement solutions (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions. The fashion and equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. The SaaS based innovativeartificial intelligence driven measurement solutions, or SaaS Solutions operating segment consists of My Size Inc My Size Israel and LLC.NOTE 2 SIGNIFICANT ACCOUNTING POLICIESThe consolidated financial statements are prepared according to United States generally accepted accounting principles (“U.S. GAAP”), applied on aconsistent basis, as followsa.Use of estimates:The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions thataffect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.Information about assumptions made by the Company with respect to the future and other reasons for uncertainty with respect to estimates thathave a significant risk of resulting in a material adjustment to carrying amounts of assets and liabilities in the next financial year are included in thefollowing notes:Acquisitions of subsidiariesThe Company measures the fair value of the consideration transferred (including contingent consideration) and fair value of the assets acquiredand liabilities assumed, in business combination transactions. For information on details on fair value measurement in acquisition of subsidiaries,see Note 16 regarding business combinations.Estimated impairment of nonfinancial assetsThe Company examines on an annual basis whether there is an impairment of goodwill, intangibles and property, plant and equipment that areallocated to cash generating units, in accordance with the accounting policy presented in Note 1(h) below. Recoverable amounts of cashgenerating units are determined on the basis of valueinuse calculations. These calculations require the use of estimates.For information on key assumptions used in calculation of the recoverable amount, see note 7 – Goodwill and other Intangible assets.b.Functional currency:The currency of the primary economic environment in which the operations of the Company is conducted is the United States Dollar and thus it isthe Company’s functional currency. The reporting currency according to which these financial statements are prepared is the U.S. dollar.The currency of the primary economic environment in which the operation of the Subsidiary, My Size Israel and Orgad International MarketingLtd. functional currency is the New Israeli Shekel (“NIS”).The currency of the primary economic environment in which the operation of the Subsidiary, My Size LLC, functional currency is Russian Ruble.The currency of the primary economic environment in which the operation of the Subsidiary, Naiz fit, functional currency is Euro.F9MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)c.Principles of consolidation:The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances andtransactions have been eliminated upon consolidation.d.Cash equivalents:Cash equivalents are shortterm highly liquid investments that are readily convertible to cash with original maturities of three months or less at thedate acquired.e.Restricted cashRestricted cash are deposits for rent, credit card and for hedging activities.f.Inventories:Inventories include finished goods and are measured at the lower of cost or net realizable value. The cost of inventories comprises of the costsincurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary courseof business. At the point of the loss recognition, a new, lowercost basis for that inventory is established, and subsequent changes in facts andcircumstances do not result in the restoration or increase in that newly established cost basis. The costs of purchase of inventories comprise thepurchase price and other costs directly attributable to the acquisition of finished goods. In 2022, the Company recorded an inventory markdownof $48.g.Property and equipment:Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straightline method over theestimated useful lives of the assets, at the following annual rates:%Computers and peripheral equipment33Office furniture and equipment720Leasehold improvementsOver the term of the leaseor the useful life of theimprovements, whicheveris shorterh.Impairment of longlived assets:The Company’s property and equipment are reviewed for impairment in accordance with ASC 360, “Property Plant and Equipment”, wheneverevents or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held andused is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by theassets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount ofthe assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less sellingcosts. During the periods ended December 31, 2022 and 2021, no impairment losses have been recorded.i.Business combinations:The Company applies the provisions of ASC 805, “Business Combination” and allocates the fair value of purchase consideration to the tangibleassets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchaseconsideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assetsacquired and liabilities assumed, the Company estimated the future expected cash flows from acquired platform, customer relationships,Technology and trademark from a market participant perspective, useful lives and discount rates. In addition, management makes significantestimates and assumptions, which are uncertain, but believed to be reasonable.Acquisitionrelated costs are recognized separately from the acquisition and are expensed as incurred.F10MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)j.Goodwill:Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a businesscombination. Under ASC 350, “Intangible Goodwill and Other”, goodwill is not amortized, but rather is subject to an annual impairment test.ASC 350 requires goodwill to be tested for impairment at the reporting unit level at least annually, the fourth quarter, or between annual tests incertain circumstances, and written down when impaired. Goodwill is tested for impairment by comparing the fair value of the reporting unit with itcarrying value. Goodwill from Orgad acquisition was allocated to the fashion and equipment ecommerce platform segment and Goodwill from theNaiz acquisition was allocated to Naiz segment based innovative artificial intelligence driven measurement solutions.Alternatively, ASC 350 permits an entity to bypass the qualitative assessment for any reporting unit and proceed directly to performing the firststep of the goodwill impairment test. There were no impairment charges to goodwill during the period presented.k.Intangible assets:Intangible assets consist of identifiable intangible assets that the Company has acquired from previous business combinations. Intangible assetsare recorded at costs, net of accumulated amortization. The Company amortizes its intangible assets reflecting the pattern in which the economicbenefits of the intangible assets are consumed. When a pattern cannot be reliably determined, the Company uses a straightline amortizationmethod. Amortization is calculated by the straightline method over the estimated useful lives of the following assets.The estimated useful lives of the company’s intangible assets are as follows:yearsCustomer Relationships7Technology5Trademark5Selling Platform3Each period the Company evaluates the estimated remaining useful lives of its intangible assets and whether events or changes in circumstanceswarrant a revision to the remaining period of amortizationl.Severance pay:The Subsidiary’s liability for severance pay is covered by Section 14 of the Israeli Severance Pay Law (“Section 14”). Under Section 14, employeesin Israel are entitled to have monthly deposits, at a rate of 8.33% of their monthly salary, made on their behalf to their insurance funds. Payments inaccordance with Section 14 exempt the Subsidiary from any additional obligation for these employees. As a result, the Subsidiary does notrecognize any liability for severance pay due to these employees and the deposits under Section 14 are not recorded as an asset in theSubsidiary’s balance sheet. These contributions for compensation represent defined contribution plans and expenses are recorded based onactual deposits.Other than the My Size Israel’s liability there are no additional severance pay liabilities.F11MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)m.Research and development costs:Research and development costs are charged to the statement of operations, as incurred. Most of the research and development expenses are forwages, related expenses and subcontractors.n.Income taxes:The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilitiesfor the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Companies’ taxreturns. Deferred taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities using enactedtax rates in effect in the years in which the differences are expected to reverse. The Company assesses the likelihood that its deferred tax assetswill be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely thannot that all or a portion of deferred tax assets will not be realized. The Company establishes a valuation allowance, if necessary, to reduce deferredtax assets to the amount more likely than not to be realized. As of December 31, 2022, and 2021, a full valuation allowance was established by theCompany.The Company implements a twostep approach to recognize and measure the benefit of its tax positions. The first step is to evaluate the taxposition taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that,on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigationprocesses. The second step is to measure the tax benefit as the largest amount that is greater than 50 percent (cumulative basis) likely to berealized upon settlement.The Company believes that its tax positions are all highly certain of being upheld upon examination. As of December 31,2022 and 2021 the Company recorded a liability for unrecognized tax benefits of $328 and none respectively.o.Accounting for stockbased compensation:The Company accounts for its employees’ stockbased compensation as an expense in the financial statements based on ASC 718. All awards areequity classified and therefore such costs are measured at the grant date fair value of the award and graded vesting attribution approach torecognize compensation cost over the vesting period. The Company estimates stock option grant date fair value using the Binomial and BlackScholes option pricingmodel.The Company recorded stock options issued to nonemployees at the grant date fair value, and recognizes expenses over the related serviceperiod by using the straightline attribution approach in accordance with ASU 201807. All awards are equity classified.The expected volatility of the share prices reflects the assumption that the historical volatility of the share prices is reasonably indicative ofexpected future trends.The riskfree interest rate for grants with an exercise price denominated in USD for employees and several consultants is based on the yield fromUS treasury zerocoupon bonds with an equivalent term.The Company has historically not paid dividends and has no foreseeable plans to pay dividends.F12MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)p.Fair value of financial instruments:ASC 820, Fair Value Measurements and Disclosures, relating to fair value measurements, defines fair value and established a framework formeasuring fair value. The ASC 820 fair value hierarchy distinguishes between market participant assumptions developed based on market dataobtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptionsdeveloped based on the best information available in the circumstances. ASC 820 defines fair value as the price that would be received to sell anasset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price. Inaddition, the fair value of assets and liabilities should include consideration of nonperformance risk, which for the liabilities described belowincludes the Company’s own credit risk.As a basis for considering such assumptions, ASC 820 establishes a threetier value hierarchy, which prioritizes the inputs used in the valuationmethodologies in measuring fair value:Level 1 Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access. Valuationadjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readilyand regularly available in an active market, valuation of these products does not entail a significant degree of judgment.Level 2 Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, eitherdirectly or indirectly.Level 3 Valuations based on inputs that are unobservable and significant to the overall fair value measurement.The Company holds share certificates in iMine Corporation (“iMine”) formerly known as Diamante Minerals, Inc., a publiclytraded company onthe OTCQB.Due to sales restrictions on the sale of the iMine shares, the fair value of the shares was measured on the basis of the quoted market price for anotherwise identical unrestricted equity instrument of the same issuer that trades in a public market, adjusted to reflect the effect of the salesrestrictions and is therefore, ranked as Level 2 asset.q.Basic and diluted net loss per share:Basic net loss per share is computed based on the weighted average number of shares of common stock outstanding during each year. Diluted netincome per share is computed based on the weighted average number of shares of common stock outstanding during each year plus dilutivepotential equivalent common stock considered outstanding during the year, in accordance with ASC 260, “Earnings per Share”. For the yearsended December 31, 2022 and 2021, all outstanding options and warrants have been excluded from the calculation of the diluted net loss per sharesince their effect was antidilutive.r.Concentrations of credit risk:Financial instruments that potentially subject the Company and its subsidiaries to concentrations of credit risk consist principally of cash andcash equivalents.Cash and cash equivalents are invested in banks in Israel, Spain and United States. Such deposits in United States may be in excess of insuredlimits and are not insured in other jurisdictions. Management believes that the financial institutions that hold the Company’s investments arefinancially sound and, accordingly, minimal credit risk exists with respect to these investments.The Company and its subsidiaries have no offbalancesheet concentration of credit risk such as foreign exchange contracts, option contracts orother foreign hedging arrangements.F13MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)s.Revenue Recognition:The Company’s revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled softwaresubscriptions, associated software maintenance and support.The Company recognizes revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with acustomer exists only when: the parties to the contract have approved it and are committed to perform their respective obligations, the Companycan identify each party’s rights regarding the distinct goods or services to be transferred (“performance obligations”), the Company can determinethe transaction price for the goods or services to be transferred, the contract has commercial substance and it is probable that the Company willcollect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to acustomer. Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted togovernmental authorities. Refunds are estimated at contract inception and updated at the end of each reporting period if additional informationbecomes available. Revenue is recognized when control of the product is transferred to the customer.The Company maintains a returns policy that allows its customers to return product within a specified period of time. The estimate of the provisionfor returns is based upon historical experience with actual returns.Principal versus Agent ConsiderationsThe Company follows the guidance provided in ASC 606 for determining whether it is a principal or an agent in arrangements with customers, byassessing whether the nature of the Company’s promise is a performance obligation to provide the specified goods (principal) or to arrange forthose goods to be provided by the other party (agent). With regard to products being sold by Orgad through Amazon, this determination involvesjudgment. The Company determines it is the principle when it has control over promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).The Company recognizes revenue ratably over the contractual service term for hosted services that are priced based on a committed number oftransactions where the delivery and consumption of the benefit of the services occur evenly over time, beginning on the date the servicesassociated with the committed transactions are first made available to the customer and continuing through the end of the contractual serviceterm. Over usage fees and fees based on the actual number of transactions are billed in accordance with contract terms as these fees are incurredand are included in the transaction price of an arrangement as variable consideration. Fees based on a number of transactions or impressions permonth, are allocated to the period in which the transactions occur. Revenue for subscriptions sold as a fee per period is recognized ratably overthe contractual term as the customer simultaneously receives and consumes the benefit of the underlying service.F14MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)t.Contingencies and CommitmentsLiabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it isprobable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with losscontingencies are expensed as incurred.u.Derivative instrumentsThe Company accounts for its derivative instruments as either assets or liabilities and measures them at fair value through profit or loss.v.LeasesThe Company leases include an office space lease agreement for 36 months, with an option to extend for an additional 36 months and 36 monthscancelable operating lease agreements on behalf of personnel vehicles. The lease term includes a noncancellable period of the lease plus anyadditional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise,or an option to extend (or not to terminate) the lease controlled by the lessor.ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make leasepayments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value oflease payments over the lease term. The company generally use its incremental borrowing rate based on the estimated rate of interest forcollateralized borrowing over a similar term of the lease payments at commencement date. Lease expense for lease payments is recognized on astraightline basis over the lease term.For the office rent lease, the Company has elected to account for the lease and nonlease maintenance components as a single lease component.Therefore, the lease payments used to measure the lease liability include all of the fixed consideration in the contract, including insubstance fixedpayments, owed over the lease term.w.Impact of recently issued accounting standardIn June 2016, the FASB issued ASU 201613, “Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses on FinancialInstruments”, which requires companies to measure credit losses of financial instruments, including customer accounts receivable, utilizing amethodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information toinform credit loss estimates. Subsequent to the issuance of ASU 201613, the FASB issued several additional Accounting Standard Updates toclarify implementation guidance, provide narrowscope improvements and provide additional disclosure guidance. As an Emerging GrowthCompany, ASU 201613 is effective for fiscal years beginning after December 15, 2022. The Company does not expect this ASU to have a materialimpact on its consolidated financial statements.F15MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 3 CASH AND CASH EQUIVALENTSThe Company’s cash and cash equivalents balance at December 31, 2022 and 2021 is denominated in the following currencies:December 31,20222021US Dollars1,65110,184New Israeli Shekels259433Other190532,10010,670NOTE 4 OTHER RECEIVABLES AND PREPAID EXPENSESDecember 31,20222021Prepaid expenses and other current assets322429Government authorities28317Other153133Total758579NOTE 5 PROPERTY AND EQUIPMENT, NETComputersandperipheralequipmentOfficefurnitureandequipmentLeaseholdimprovementsTotalCostBalance as at January 1, 20211825860300Additions2323Translation adjustments72211Balance as at December 31, 20212126062334Balance as at January 1, 20222126062334Additions161127Business combination401555Translation adjustments(32)(8)(8)(48)Balance as at December 31, 20222367854368Accumulated DepreciationBalance as at January 1, 20211461412172Additions2751042Translation adjustments6118Balance as at December 31, 20211792023222Balance as at January 1, 20221792023222Additions209938Translation adjustments(27)(3)(2)(32)Balance as at December 31, 20221722630228Carrying amountsAs at December 31, 2021334039112As at December 31, 2022645224140F16MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 6 LEASESIn August 2019, The Company entered into an office space lease agreement. The lease term is for 36 months beginning on August 20, 2019 and endingon August 20, 2022, with an option to extend for an additional 36 months. The Company extended the lease period until August 20, 2025. Monthly rentpayments including utilities amounting to approximately USD 14 (NIS 49,500) per month.In addition, The Company entered into a threeyear cancelable operating lease agreement for cars.These operating leases are included in “Right of use asset” on the Company’s December 31, 2022 consolidated balance sheets, and represent theCompany’s right to use the underlying asset for the lease term. The Company’s obligations to make lease payments are included in the currentliabilities as “Operating lease liability” and in the noncurrent liabilities as “Operating lease liability long term” on the Company’s December 31, 2022consolidated balance sheets. As of December 31, 2022, rightofuse of asset was $583. operating lease liabilities were $159 and non current Operatinglease liabilities were $308. Rightofuse asset includes the capitalization of improvements (net of amortization) amounting to $105.Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value ofthe lease payments.The interest rate used to discount future lease payment was 11.95%.Maturities of lease liabilities as of December 31, 2022 were as follows:Year Ending:2023$1912024$1912025$127Thereafter$509Less imputed interest:$(42)Total lease liabilities$467F17MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 7 – Goodwill and other Intangible assetsA.Identified intangible assetsSchedule of Intangible assetsSelling PlatformTechnologyCustomerRelationshipsOtherTotalThousandsUSDThousandsUSDThousandsUSDThousandsUSDThousandsUSDCostAs of January 1, 2022Acquisitions through business combinations378286726771,467Effect of changes in exchange rates(32)2565765As of December 31, 2022346311791841,532AmortizationAs of January 1, 2022Amortization for the year including effect of changes inexchange rates as of December 31, 2022(109)(15)(27)(4)(155)Carrying amountAs of December 31, 2022237296764801,377AmortizationAmortization expenses recorded for identified intangible assets in the Consolidated Statements of Operations for each period and were as follows:Line ItemDecember 31,2022December 31,2021Selling platformCosts of revenues109TrademarkSales and marketing4TechnologyCosts of revenues15Customer relationshipsSales and marketing27Total amortization expenses155Future amortization expenses are expected to be as follows:20232024202520262027ThereafterTotalFuture amortization expenses3033031941771561791,312b.GoodwillThe changes in the carrying amount of goodwill for the years ended December 31, 2022 and 2021 were as follows:Fashion and equipmentecommerce platformNaizTotalBalance as of December 31, 2021Changes during the period:Goodwill acquired1521,1521,304Goodwill impairmentTranslation differences(14)10591Balance as of December 31, 20221381,2571,395The Company operates its business through three reporting segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovativeartificial intelligence driven measurement solutions and (iii) Naiz. See note 17 for additional segments information.The Company determines the fair value of its reporting units using the income approach. According to the income, the Company uses discounted cashflows to estimate the fair value. Cash flow projections are based on the Company’s estimates of revenue growth rates and operating margins, takinginto consideration the industry’s and market’s conditions. The discount rate used is based on the weighted average cost of capital (“WACC”),adjusted for the relevant risk associated with businessspecific characteristics.The Company performed a quantitative assessment as of December, 31 2022 for the reporting units’ fair value. The estimated fair value of the Fashionand equipment ecommerce platform and Naiz reporting units exceeded its estimated carrying amount by 95.9% and 27.7% respectively. This, based thefollowing assumptions:Fashion and equipmentecommerce platformNaizDiscount rate21%23%Terminal growth rate3%3%If business conditions or expectations were to change materially, it may be necessary to record impairment charges to the Company’s reporting units inthe future.F18MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 8 Investment in JVIn August 2022, the Company established a joint venture (“JV”) in Brazil with Santista Têxtil. The Company holds 51% and Santista Têxtil holds 49% of theJV. The purpose of the JV is to serve the Brazilian market according to the business plan that was set. Both parties agree to make an initial investment in theJV of $198that will be made per the holding percentage of each party. As of the reporting date, the JV is in process of establishing its operation.NOTE 9 Financial LiabilitiesThe book value of each of the financial liability categories is an acceptable approximation of fair value.The debt is comprised of four loans that were granted to My Size Israel – in an outstanding amount of approximately $131, bearing interest rangingfrom prime rate to prime+2.8% rate, and four loans that were granted to the Spanish subsidiary– in an outstanding amount of approximately $400,bearing interest ranging from 1% to 3%.The financial liability maturities during the five years following the end of the financial year are shown below:UntilUntilUntilUntilUntilAfterTOTAL311223311224311225311226311227311227311222Debts with credit institutions15513892874712531NOTE 10 RELATED PARTIES TRANSACTIONSA. Balances with related parties:The following related party payables are included in liability to related parties.December 31,20222021Officers (*)4143Liability in respect of business combinations (**)739Other related parties (***)(95)Directors152069863(*)The amount includes the net salaries payables.(**)The amount includes the provision created to former owners of Orgad that are entitled to additional cash and equity consideration and former owners of Naizthat entitled to additional cash consideration, see note 16 business combination.(***)The amount includes an amount receivable from Orgad previous shareholders who currently work in the company.B. Related parties benefits:Year endedDecember 31,20222021Salaries and related expenses1,440852Share based payments39673Cash liability and equity liability expenses related to acquisitions (**)1,058Directors58582,952983(**)The amount includes the expenses for a provision created to former owners of Orgad that are entitled to additional cash and equity consideration and formerowners of Naiz that entitled to additional cash consideration, see note 16 business combination.NOTE 11 FINANCIAL INSTRUMENTSThe following tables presents the Company’s significant assets and liabilities that are measured at fair value on recurring basis and their classificationwithin the fair value hierarchy:December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities47financial assets (*)10December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesDerivatives9December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities108December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesWarrants derivative2(*)the financial asset includes in other receivables.F19MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 11 FINANCIAL INSTRUMENTS (Cont.)The carrying amounts of cash and cash equivalents, restricted cash, short term restricted deposit, accounts receivable, other receivables and prepaidexpenses, trade payable and accounts payable approximate their fair value due to the shortterm maturities of such instruments.At December 31, 2022, the recognized gain and fair value (based on quoted market prices with a discount due to security restrictions on iMine shares)of the marketable securities were $59and $47, respectively (at December 31, 2021 $49and $108, respectively).NOTE 12 TAXES ON INCOMEa.On December 31, 2022, the Company had U.S. federal net operating loss carryforwards of approximately $26 available to reduce future taxableincome. Utilization of the U.S. net operating losses may be subject to substantial limitations due to the change of ownership provisions of theInternal Revenue Code of 1986.The U.S. Company has final tax assessments through 2014.On December 22, 2017, the Tax Reform Act was signed into law. The legislation significantly changes U.S. tax law by, among other things, lowering theU.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. As a result of the decrease in the corporate incometax rate, the Company revalued the ending net deferred tax assets at December 31, 2017, but did not recognize any incremental income tax expense in2017 due to the revaluation of the valuation allowance.b.Foreign tax:1.Tax rates:Presented hereunder are the tax rates relevant to the Company’s Israeli subsidiaries:2022 23%2021 23% Presented hereunder are the tax rates relevant to the Company’s Spanish subsidiary:2022 24%2.The Company’s Israeli subsidiaries have estimated total available carryforward operating tax losses for Israeli income tax purposes ofapproximately $64as of December 31, 2022. Of these losses, a total of $47.5are owned by Topspin Medical (Israel) Ltd. Topspin tax lossesmay be offset only by future income with respect to the same operational activity by which it was incurred for an indefinite period of time. Theother losses are owned by My Size Israel and may be carryforward to offset against future income for an indefinite period of time.3.Topspin Medical (Israel) Ltd. and My Size (Israel) 2014 Ltd. has final tax assessments through 2016.c.U.S. and foreign components of loss from continuing operations, before income taxes consisted of:December 31,20222021U.S(1,180)(3,802)NonU.S. (foreign)(7,130)(6,718)(8,310)(10,520)F20MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 12 TAXES ON INCOME (Cont.)d.Deferred taxes:Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reportingpurposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows:December 31,20222021Deferred tax assets:Operating loss carryforwards20,13120,238Warrants and options145126Marketable securities390377Intangible assets(328)Research and development expenses586341Other temporary differences203Deferred tax assets before valuation allowance21,12721,082Valuation allowance(21,455)(21,082)Net deferred tax liability(328)The following table presents a reconciliation of the beginning and ending valuation allowance:December 31,20222021Balance at beginning of the year21,08218,968Additions in valuation allowance to the income statement1,7581,625Additions in valuation allowance due to exchange rate differences(1,385)489Balance at end of the year21,45521,082In assessing the realization of deferred tax assets, management considers whether it is more likely than not that all or some portion of the deferred taxassets will not be realized.The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporarydifferences are deductible and net operating losses are utilized. Based on consideration of these factors, the Company recorded a full valuationallowance at December 31, 2021 and 2020.e.Theoretical taxThe following presents the adjustment between the theoretical tax amount and the tax amount included in the financial statements:December 31,20222021Loss before income taxes8,34610,520Statutory tax rate21%21%Computed “expected” tax income1,7522,209Foreign tax rate differences and exchange rate differences149131Nondeductible expenses(107)(715)Change in valuation allowance(1,758)(1,625)Taxes on income36F21MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITYa.Common stock confers upon their holders the right to receive notice to participate and vote in general meetings of the Company, and the right toreceive dividends if declared.b.On January 8, 2021, the Company conducted a public offering of its securities pursuant to which it issued 62,768 shares of its common stock forgross proceeds of $2,008. The net proceeds to the Company from the offering were approximately $1,700, after deducting placement agent’s feesand other estimated offering expenses payable by the Company.c.During 2021, a holders of warrants exercised warrants to purchase 135,109 ordinary shares of the Company in exchange for $3,709.d.On March 25, 2021, the Company conducted a public offering of its shares of common stock pursuant to which it issued 104,741 shares of itscommon stock for gross proceeds of $3,300. The net proceeds to the Company from the offering were approximately $2,872, after deductingplacement agent’s fees and other estimated offering expenses payable by the Company.On May 7, 2021, the Company issued an additional 15,711 shares of the Company’s common stock in connection with the full exercise of theunderwriter’s overallotment option granted in the Company’s March 2021 public offering. These additional shares were sold to the underwriter at apublic offering price of $31.5 per share, resulting in additional net proceeds to the Company, net of the underwriting discount, of approximately$463.e.On May 26, 2021, the Company issued 100,000 shares of common stock to Ms. Zigdon in consideration of the Waiver. See note 1(b) above.f.On October 28, 2021, the Company sold in a registered direct offering 100,592 shares of its common stock and, in a concurrent private placement,an aggregate of 75,444 unregistered warrants to purchase shares of common stock, at an offering price of $33.8 per share and associated warrant.In addition, on the same day, the Company sold in a private placement 150,888 unregistered shares of common stock and unregistered warrants topurchase up to an aggregate of 113,166 shares of common stock at the same purchase price as in the registered direct offering. The warrants areimmediately exercisable and will expire five years from issuance at an exercise price of $31.5 per share, subject to adjustment as set forth therein.The gross proceeds from the offerings were $8,500. The net proceeds to the Company from the offerings were approximately $7,560, afterdeducting placement agent’s fees and other estimated offering expenses payable by the Company. In connection with the offerings, the Companyissued to the placement agent warrants to purchase 17,603 shares on substantially the same terms as the purchasers in the offerings at an exerciseprice of $42.25 per share and a term expiring on October 26, 2026.g.On December 7, 2022, the Company’s board of directors approved a 1for25 reverse stock split of the Company’s issued and outstanding sharesof common stock. The reverse stock split became effective on December 8, 2022. In order not to have fractional shares as a result of the reversestock split, the Company issued an additional 12,091 shares of common stock. As a result, all shares of common stock, options for shares ofcommon stock, exercise price and net loss per share amounts were adjusted retroactively for all periods presented in these financial statements.F22MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITY (Cont.)g.A summary of the warrant activity during the years ended December 31, 2022 and 2021 is presented below:Number ofWarrantsWeightedAverageExercisePriceWeightedAverageRemainingLife inYearsOutstanding, December 31, 2020216,85936.754.26Issued206,214Expired or exercised(135,109)Outstanding, December 31, 2021287,96431.004.35IssuedExpired or exercised(17,901)Outstanding, December 31, 2022270,06330.213.36Exercisable, December 31, 2022270,06330.213.36NOTE 14 STOCK BASED COMPENSATIONThe stockbased expense recognized in the financial statements for services received is related to Research and Development, Sales and Marketingand General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense Research and development15195Stockbased compensation expense Sales and marketing126180Stockbased compensation expense General and administrative17898455373The stockbased expense recognized in the financial statements for services received post Acquisition of Orgad (see note 16) is related to Cost OfGoods, Sales and Marketing and General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense – Cost of goods80Stockbased compensation expense Sales and marketing112Stockbased compensation expense General and administrative127319F23MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Options issued to consultantsWe can sell additional shares of common stock without consulting stockholders and without offering shares to existing stockholders, which wouldresult in dilution of shareholders’ interests in the company and could depress our stock price.Our Certificate of Incorporation currently authorizes 250,000,000 shares of common stock, of which 2,446,780 are currently outstanding as of March 31, 2023and our board of directors is authorized to issue additional shares of our common stock. Although our board of directors intends to utilize its reasonable businessjudgment to fulfil its fiduciary obligations to our then existing stockholders in connection with any future issuance of our capital stock, the future issuance ofadditional shares of our capital stock could cause immediate, and potentially substantial, dilution to our existing stockholders, which could also have a materialeffect on the market value of the shares. Further, other than certain participation rights that we have granted in a past offering, our shares do not have preemptiverights, which means we can sell shares of our capital stock to other persons without offering purchasers in this offering the right to purchase their proportionateshare of such offered shares. Therefore, any additional sales of stock by us could dilute your ownership interest in our Company.Our quarterly operating results may fluctuate significantly.We expect our operating results to be subject to quarterly fluctuations. Our net loss and other operating results will be affected by numerous factors,including:●variations in the level of expenses related to our research and development;●any lawsuits in which we may become involved;●regulatory developments affecting our products; and●our execution of any collaborative, licensing or sales agreements, and the timing of payments under these arrangements.If our quarterly operating results fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially.Furthermore, any quarterly fluctuations in our operating results may, in turn, cause the price of our common stock to fluctuate substantially.If we fail to comply with the rules under the Sarbanes Oxley Act of 2002 related to accounting controls and procedures or if we discover materialweaknesses and deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult.If we fail to comply with the rules under the SarbanesOxley Act of 2002 related to disclosure controls and procedures, or, if we discover materialweaknesses and other deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult. Section 404 of the SarbanesOxley Act requires annual management assessments of the effectiveness of our internal control over financial reporting and, ifwe are no longer a nonaccelerated filer, a report by our independent auditors addressing these assessments. If material weaknesses or significant deficiencies arediscovered or if we otherwise fail to achieve and maintain the adequacy of our internal control, we may not be able to ensure that we can conclude on an ongoingbasis that we have effective internal controls over financial reporting in accordance with Section 404 of the SarbanesOxley Act. Moreover, effective internalcontrols are necessary for us to produce reliable financial reports and are important to helping prevent financial fraud. If we cannot provide reliable financial reportsor prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price ofour common stock could drop significantly.38Our Certificate of Incorporation, Bylaws and Delaware law may have antitakeover effects that could discourage, delay or prevent a change incontrol, which may cause our stock price to decline.Our Certificate of Incorporation, Bylaws and Delaware law could make it more difficult for a thirdparty to acquire us, even if closing such a transactionwould be beneficial to our stockholders. Provisions of our Certificate of Incorporation, Bylaws and Delaware law also could have the effect of discouraging potentialacquisition proposals or making a tender offer or delaying or preventing a change in control, including changes a stockholder might consider favorable. Suchprovisions may also prevent or frustrate attempts by our stockholders to replace or remove our management. In particular, the Certificate of Incorporation, Bylawsand Delaware law, as applicable, among other things:●provide the board of directors with the ability to alter the Bylaws without stockholder approval;●the classification of our board of directors;●place limitations on the removal of directors;●provide that vacancies on the Board of Directors may be filled by a majority of directors in office, although less than a quorum;●require that stockholder actions must be affected at a duly called stockholder meeting and generally prohibiting stockholder actions by written consent;●eliminate the ability of stockholders to call a special meeting of stockholders; and●establish advance notice requirements for nominations for election to the Board of Directors or for proposing matters that can be acted upon at duly calledstockholder meetings.We are subject to Section 203 of the Delaware General Corporation Law which, subject to certain exceptions, prohibits “business combinations” between apubliclyheld Delaware corporation and an “interested stockholder,” which is generally defined as a stockholder who becomes a beneficial owner of 15% or more ofa Delaware corporation’s voting stock for a threeyear period following the date that such stockholder became an interested stockholder. These provisions areexpected to discourage certain types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to firstnegotiate with our board. These provisions may delay or prevent someone from acquiring or merging with us, which may cause the market price of our commonstock and the value of our securities to decline.If we fail to comply with the continued listing requirements of the Nasdaq Capital Market, our common stock may be delisted and the price of ourcommon stock and our ability to access the capital markets could be negatively impacted.Nasdaq has established certain standards for the continued listing of a security on the Nasdaq Capital Market. The standards for continued listing include,among other things, that the minimum bid price for the listed securities not fall below $1.00 per share for a period of 30 consecutive trading days and that wemaintain a minimum of $2,500,000 in shareholders’ equity. We have in the past fallen below the minimum bid price and minimum shareholders’ equity.39No assurance can be given that we will continue to be in compliance with the Rule. Failure to meet applicable Nasdaq continued listing standards couldresult in a delisting of our common stock. A delisting of our common stock from Nasdaq could materially reduce the liquidity of our common stock and result in acorresponding material reduction in the price of our common stock. In addition, delisting could harm our ability to raise capital through alternative financing sourceson terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, employees and fewer business development opportunities.The exercise of outstanding warrants and stock options will have a dilutive effect on the percentage ownership of our capital stock by existingstockholders.As of March 15, 2023, we had outstanding warrants to acquire 2,299,115 shares of our common stock and stock options to purchase 1,659 shares of ourcommon stock, which warrants and options are exercisable for prices ranging between $2.81 and $375. The expiration of the term of such options and warrants rangefrom 0.22 years to 4.83 years. If a significant number of such warrants and stock options are exercised by the holders, the percentage of our common stock ownedby our existing stockholders will be diluted.Were our common stock to become subject to the penny stock rules then this could result in U.S. brokerdealers becoming discouraged from effectingtransactions in shares of our common stock.Rule 15g9 under the Exchange Act establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a marketprice of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. If we do not retain a listing on the NasdaqCapital Market or do not meet certain net tangible asset or average revenue requirements and if the price of our common stock is less than $5.00, our common stockwill be deemed a penny stock. For any transaction involving a penny stock, unless exempt, the rules require: (a) that a broker or dealer approve a person’s accountfor transactions in penny stocks; and (b) the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantityof the penny stock to be purchased.In order to approve a person’s account for transactions in penny stocks, the broker or dealer must: (a) obtain financial information and investmentexperience objectives of the person and (b) make a reasonable determination that the transactions in penny stocks are suitable for that person and the person hassufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver,prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which: (a) sets forth the basis on whichthe broker or dealer made the suitability determination; and (b) confirms that the broker or dealer received a signed, written agreement from the investor prior to thetransaction. Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult forinvestors to dispose of our common stock and cause a decline in the market value of our common stock.Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissionspayable to both the broker or dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor incases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the accountand information on the limited market in penny stocks.Sales of our currently issued and outstanding stock may become freely tradable pursuant to Rule 144 and may dilute the market for your shares andhave a depressive effect on the price of the shares of our common stock.A portion of our outstanding shares of common stock are “restricted securities” within the meaning of Rule 144 under the Securities Act of 1933, asamended, or the Securities Act. As restricted shares, these shares may be resold only pursuant to an effective registration statement or under the requirements ofRule 144 or other applicable exemptions from registration under the Securities Act and as required under applicable state securities laws. Rule 144 provides inessence that an affiliate (as such term is defined in Rule 144(a)(1)) of an issuer who has held restricted securities for a period of at least six months (one year afterfiling Form 10 information with the SEC for shell companies and former shell companies) may, under certain conditions, sell every three months, in brokeragetransactions, a number of shares that does not exceed the greater of 1% of a company’s outstanding shares of common stock or the average weekly trading volumeduring the four calendar weeks prior to the sale (the four calendar week rule does not apply to companies quoted on the OTC Markets). Rule 144 also permits, undercertain circumstances, the sale of securities, without any limitation, by a person who is not an Affiliate of the Company and who has satisfied a oneyear holdingperiod. A sale under Rule 144 or under any other exemption from the Securities Act, if available, or pursuant to subsequent registrations of our shares of commonstock, may have a depressive effect upon the price of our shares of common stock in any active market that may develop.40We are a former “shell company” and as such are subject to certain limitations not applicable to other public companies generally.Prior to our suspension of reporting in 2012, we were a public reporting “shell company,” as defined in Rule 12b2 under the Exchange Act. Although weare no longer a “shell company,” we are subject to certain restrictions under the Securities Act for the resale of securities issued by issuers that have been at anytime previously a shell company. Specifically, the Rule 144 safe harbor available for the resale of our restricted securities is only available to our stockholders if wehave filed all reports and other materials required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934, as amended, or the Exchange Act, asapplicable, during the preceding twelve months, other than current reports on Form 8K, at the time of the proposed sale, regardless of whether the restrictedsecurities were initially issued at the time we were a shell company or subsequent to termination of such status. Accordingly, holders of our “restricted securities”within the meaning of Rule 144 will be subject to the conditions set forth in Rule 144 with respect to our company. Other reporting companies that are not formershell companies and have been reporting for more than twelve months are not subject to this same reporting threshold for nonaffiliate reliance on Rule 144.Accordingly, any restricted securities we have sold or sell in the future or issue to consultants or employees, in consideration for services rendered or for any otherpurpose, may not be resold unless such securities are registered with the SEC or the requirements of Rule 144 have been satisfied. As a result, it may be harder forus to fund our operations and pay our employees and consultants with our securities instead of cash. Furthermore, it may be harder for us to raise funding throughthe sale of debt or equity securities unless we agree to register such securities with the SEC, which could cause us to expend additional resources in the future. Ourprior status as a “shell company” could prevent us in the future from raising additional funds, engaging employees and consultants, and using our securities to payfor any acquisitions, which could cause the value of our securities, if any, to decline in value or become worthless.ITEM 1B. UNRESOLVED STAFF COMMENTSNone.ITEM 2. PROPERTIESWe currently lease 1,660 square feet of office space at 4 HaYarden Street, Airport City, Israel. The lease term is for 36 months beginning on August 20, 2019and ending on August 20, 2022, with an option to extend for an additional 36 months. Monthly rent payments, including utilities, amount to approximately $14,000per month. We extended the lease period until August 20, 2025.ITEM 3. LEGAL PROCEEDINGSFrom time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation issubject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.41North Empire LLCOn August 7, 2018, we commenced an action against North Empire LLC, or North Empire, in the Supreme Court of the State of New York, County of NewYork for breach of a Securities Purchase Agreement or Agreement in which we are seeking damages in an amount to be determined at trial, but in no event less than$616,000. On August 2, 2018, North Empire filed a Summons with Notice against us, also in the same Court, in which they allege damages in an amount of $11.4million arising from an alleged breach of the Agreement. On September 6, 2018, North Empire filed a Notice of Discontinuance of the action it had filed on August 2,2018. On September 27, 2018, North Empire filed an answer and asserted counterclaims in the action commenced by us against them, alleging that we failed to deliverstock certificates to North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against our CEO andnow former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018, we filed a reply to North Empire’scounterclaims. On November 15, 2018, our CEO and now former Chairman of the Board filed a motion to dismiss North Empire’s thirdparty complaint. On January 6,2020, the Court granted the motion and dismissed the thirdparty complaint. Discovery has been completed and both parties have filed motions for summaryjudgment in connection with the claims and counterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summaryjudgment, arguing there were factual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision.On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying the Company’s motion for summary judgment. On or about September 12,2022, the Court issued its Decision and Order denying the Company’s motion to reargue. North Empire filed its opposing brief on December 7, 2022. Both sides weregiven an opportunity to file a reply brief. We filed our reply brief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. Oral argument was heldbefore the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Court filed its Decision and Order, which affirmed the lower court’sdecisions regarding both My Size and North Empire’s motions for summary judgment and sent the case back to the Supreme Court. On or about March 13, 2023, theSupreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date for the mediation has not yet been set. We intend tovigorously defend any claims made by North Empire. We believe it is more likely than not that the counterclaims will be denied.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.42PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur stock currently is listed on the Tel Aviv Stock Exchange and the Nasdaq Capital Market under the symbol “MYSZ”. Our stock has been traded on theNasdaq Capital Market since July 25, 2016.HoldersAs of March 31, 2023, we had 70 shareholders of record. The actual number of stockholders is greater than this number of record holders and includesstockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our Board of Directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our Board of Directors deems relevant.Securities Authorized for Issuance under Equity Compensation PlansInformation about our equity compensation plans is incorporated herein by reference to “Item 12. Security Ownership of Certain Beneficial Owners andManagement and Related Stockholder Matters”, of this Annual Report on Form 10K.Recent Sales of Unregistered SecuritiesNone.ITEM 6. SELECTED FINANCIAL DATAAs a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULT OF OPERATIONSYou should read the following discussion along with our financial statements and the related notes included elsewhere in this Annual Report on Form10K. The following discussion contains forwardlooking statements that are subject to risks, uncertainties and assumptions, including those discussed under“Risk Factors.” Our actual results, performance and achievements may differ materially from those expressed in, or implied by, these forwardlooking statements.OverviewMySize is an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.43Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile device or through MySizeID Widget: a simple questionnaire which was uses a database collected over the years.MySizeID synchronizes the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and onlypresents items available for purchase that match their measurements to ensure a correct fit.MySize is positioning itself as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empowering brand design teams, which are designed to increaseend consumer satisfaction, contributing to a sustainable world and reduce operation costs.Orgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,682 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz BespokeTechnologies, S.L., or Naiz, a limited liability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.44The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 2,365,800 shares of My Size common stock were issuedto Whitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.45Operations in RussiaIn addition to our Israel operations, we had operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia. To date, mainly due to the invasion of Ukraine by Russia and the ongoing sanctions we stopped most ofour efforts in Russia and will probably close the subsidiary in the near future.Results of OperationsThe table below provides our results of operations for the periods indicated.Year ended December 3120222021(dollars in thousands)Revenues4,459131Cost of revenues(3,825)Gross profit634131Research and development expenses$(1,701)$(4,248)Sales and marketing(3,143)(2,336)General and administrative(3,900)(4,124)Operating loss(8,110)(10,577)Financial income (expenses), net(236)57Tax income36Net loss$(8,310)$(10,520)Year Ended December 31, 2022 Compared to Year Ended December 31, 2021RevenuesFrom inception through December 31, 2018, we did not generate any revenue from operations and we continue to expect to incur additional losses toperform further research and development activities. We started to generate revenues only in 2019. Our revenues for the year ended December 31, 2022 amounted to$4,459,000 compared to $131,000 for year ended December 31, 2021. The increase from the corresponding period primarily attributable to $4,132,000 in revenuegenerated from Orgad from February 7, 2022, the date of closing of the Orgad acquisition, or the Acquisition Date and revenue generated from the Naiz Acquisitionfrom October 11, 2022, the date of closing of the Naiz acquisition.In addition, the increase from the corresponding period results from an increase in revenues generated by My Size.Cost Of RevenuesOur cost of revenues expenses for the year ended December 31, 2022 amounted to $3,825,000, compared to none for the year ended December 31, 2021. Thecost of revenues includes cash and equity liabilities expenses in the amount of $194,000. The increase in comparison with the corresponding period was due to thecost of goods of the revenues generated from Orgad’s operations.Research and Development ExpensesOur research and development expenses for the year ended December 31, 2022 amounted to $1,701,000 a decrease of $2,547,000, or approximately 60.0%,compared to $4,248,000 for the year ended December 31, 2021. The decrease from the corresponding period primarily resulted from share based payment in amount of$2,618,000 attributed to the share issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021.Sales and Marketing ExpensesOur sales and marketing expenses for the year ended December 31, 2022 amounted to $3,143,000 an increase of $807,000, or 34.55%, compared to $2,336,000for the year ended December 31, 2021. The increase primarily resulted from an increase in employees expenses mainly due to Orgad and Naiz acquisitions, increase inAmazon fees, increase in cash and equity liabilities expenses attributed to the Orgad acquisition and an increase in share based payments offset by a decrease inpayments to consultants.46General and Administrative ExpensesOur general and administrative expenses for the year ended December 31, 2022 amounted to $3,900,000, a decrease of $224,000, or 5.43%, compared to$4,124,000 for the year ended December 31, 2021. The decrease compared to the corresponding period was mainly due to a decrease in professional expenses, mainlyattributed to shareholder activism including settlement expenses with the Lazar Parties offset by an increase in sharedbased payments and an increase in employeesexpenses mainly due to the Orgad and Naiz acquisitions.Operating LossAs a result of the foregoing, for the year ended December 31, 2022, our operating loss was $8,110,000, a decrease of $2,467,000 or 23.32%, compared to ouroperating loss for the year ended December 31, 2021 of $10,577,000.Financial Income, NetOur financial (expense) income, net for the year ended December 31, 2022 amounted to $236,000 compared to financial income, $57,000 for the year endedDecember 31, 2021. In 2022, we had financial expenses exchange rate differences offset by an income from fair value revaluation of investment in marketablesecurities whereas in 2021 we had financial income from the fair value revaluation of warrants offset by expenses from exchange rate differences and expenses fromfair value revaluation of investment in marketable securities.Net LossAs a result of the foregoing, our net loss for the year ended December 31, 2022 was $8,310,000 compared to net loss of $10,520,000 for the year endedDecember 31, 2021. The decrease in net loss was mainly due increase in sales and marketing expenses and financial expenses as opposed to financial income in thecorresponding period offset by a decrease in research and development expenses in amount of $2,618,000 attributed to the share issuance to Shoshana Zigdonunder the Amendment to Purchase Agreement dated May 26, 2021.Liquidity and Capital ResourcesSince our inception, we have funded our operations primarily through public and private offerings of debt and equity in Israel and in the U.S.As of December 31, 2022, we had cash, cash equivalents and restricted cash of $2,363,000 compared to $10,943,000 cash, cash equivalents, restricted cashas of December 31, 2021. During January 2023, we completed a registered direct and concurrent private placement offering resulting in gross proceeds ofapproximately $3 million. This decrease primarily resulted from our operating activities, the acquisition of Orgad and Naiz Fit, and resources that were deployed togrow of both businesses.Net cash used in operating activities was $7,290,000 for the year ended December 31, 2022 compared to $7,297,000 for the year ended December 31, 2021.The decrease in cash used in operating activity is derived mainly from an increase in share based payments and increase in account receivables mainly from theOrgad and Naiz fit acquisitions offset by a decrease in the net loss.Net cash used in investing activities for the year ended December 31, 2022 was $993,000 as opposed to net cash provided by investing activities of$161,000 for the year ended December 31, 2021. The net cash used in investing activities for the year ended December 31, 2022 was mainly from the acquisition ofOrgad and Naiz as opposed to proceeds from shortterm deposits and restricted deposits during the year ended December 31, 2021.We had a negative cash flow from financing activities of $67,000 for the year ended December 31, 2022 compared to positive cash flow of $16,292,000 for theyear ended December 31, 2021. The negative cash flow from financing activities for the year ended December 31, 2022 was mainly due to repayment of loans andinterest and payments for leases as opposed to proceeds from issuance of shares and from exercise of warrants for the year ended December 31, 2021.47We expect that we will continue to generate losses and negative cash flows from operations for the foreseeable future. Based on the projected cash flowsand cash balances as of December 31, 2022, together with the proceeds from the January 2023 financing, we believe our existing cash will not be sufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. We will need to raiseadditional capital, which may not be available on reasonable terms or at all. Additional capital would be used to accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;●respond to competitive pressures;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, the Russian invasion ofUkraine, the impact of any resurgence of the COVID19 pandemic and a number of other factors, many of which are outside our control, and on our financialperformance. Accordingly, we cannot assure you that we will be able to successfully raise additional capital at all or on terms that are acceptable to us. If we cannotraise additional capital when needed, it may have a material adverse effect on our business, results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.We have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.Recently Issued Accounting PronouncementsCertain recently issued accounting pronouncements are discussed in Note 2, Significant Accounting Policies, to the consolidated financial statementsincluded in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10K.OffBalance Sheet ArrangementsWe have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.48Application of Critical Accounting Policies and EstimatesOur management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we haveprepared in accordance with U.S. generally accepted accounting principles issued by the Financial Accounting Standards Board, or FASB. The preparation of thesefinancial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assetsand liabilities at the date of the financial statements, as well as the reported expenses during the reporting periods. Actual results may differ from these estimatesunder different assumptions or conditions.Our significant accounting policies were revenue from contracts with customers which are more fully described in the notes to our financial statementsincluded herein. We believe these accounting policies discussed below are critical to our financial results and to the understanding of our past and futureperformance, as these policies relate to the more significant areas involving management’s estimates and assumptions. We consider an accounting estimate to becritical if: (1) it requires us to make assumptions because information was not available at the time or it included matters that were highly uncertain at the time wewere making our estimate; and (2) changes in the estimate could have a material impact on our financial condition or results of operations.Accounting for business combinationsWe allocate the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed, based upon their estimated fairvalues at the acquisition date. These fair values are typically estimated with assistance from independent valuation specialists.The purchase price allocation process requires us to make significant estimates and assumptions, especially at the acquisition date with respect tointangible assets, contractual support obligations assumed, contingent consideration arrangements, and preacquisition contingencies.Although we believe the assumptions and estimates we have made in the past have been reasonable and appropriate, they are based in part on historicalexperience and information obtained from the management of the acquired companies and are inherently uncertain.Examples of critical estimates in valuing certain of the intangible assets we have acquired or may acquire in the future include but are not limited to:● future expected cash flows from product sales or other customer contracts;● expected costs of fulfillment including marketing, warehousing and product sales;● the acquired company’s brand and competitive position, as well as assumptions about the period of time the acquired brand will continue to be used inthe combined company’s product portfolio;● cost of capital and discount rates; and● estimating the useful lives of acquired assets as well as the pattern or manner in which the assets will amortize.Refer to Note 16, Business Combination, to the consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” of thisAnnual Report on Form 10K.49Revenue from contracts with customersOur revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled software subscriptions, associatedsoftware maintenance and support.We recognize revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with a customer exists onlywhen: the parties to the contract have approved it and are committed to perform their respective obligations, we can identify each party’s rights regarding thedistinct goods or services to be transferred (“performance obligations”), we can determine the transaction price for the goods or services to be transferred, thecontract has commercial substance and it is probable that we will collect the consideration to which we will be entitled in exchange for the goods or services that willbe transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to a customer.Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted to governmental authorities. Refundsare estimated at contract inception and updated at the end of each reporting period if additional information becomes available. Revenue is recognized when controlof the product is transferred to the customer.We maintain a returns policy that allows our customers to return product within a specified period of time. The estimate of the provision for returns is basedupon historical experience with actual returns.Principal versus Agent ConsiderationsWe follow the guidance provided in ASC 606 for determining whether we are a principal or an agent in arrangements with customers, by assessing whetherthe nature of our promise is a performance obligation to provide the specified goods (principal) or to arrange for those goods to be provided by the other party(agent). With regard to products being sold by Orgad through Amazon, this determination involves judgment. We determine it is the principle when it has controlover the promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).We recognize revenue ratably over the contractual service term for hosted services that are priced based on a committed number of transactions where thedelivery and consumption of the benefit of the services occur evenly over time, beginning on the date the services associated with the committed transactions arefirst made available to the customer and continuing through the end of the contractual service term. Over usage fees and fees based on the actual number oftransactions are billed in accordance with contract terms as these fees are incurred and are included in the transaction price of an arrangement as variableconsideration. Fees based on a number of transactions or impressions per month, are allocated to the period in which the transactions occur. Revenue forsubscriptions sold as a fee per period is recognized ratably over the contractual term as the customer simultaneously receives and consumes the benefit of theunderlying service.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.As a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.50ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAMY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2022U.S. DOLLARS IN THOUSANDSINDEXPageReport of Independent Registered Public Accounting Firm (PCAOB ID: ID 1057)F2Consolidated Balance SheetsF4Consolidated Statements of Comprehensive LossF5Consolidated Statements of Shareholders’ EquityF6Consolidated Statements of Cash FlowsF7Notes to Consolidated Financial StatementsF8 F33F1Report of Independent Registered Public Accounting FirmTo the Shareholders and Board of DirectorsMy Size, Inc.:Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of My Size, Inc. and subsidiaries (the Company) as of December 31, 2022 and 2021, the relatedconsolidated statements of comprehensive loss, shareholders’ equity, and cash flows for each of the years in the twoyear period ended December 31, 2022, and therelated notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, thefinancial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the twoyear periodended December 31, 2022, in conformity with U.S. generally accepted accounting principles.Going ConcernThe accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1d tothe consolidated financial statements, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit thatraises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1d. Theconsolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidatedfinancial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Critical Audit MattersCritical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to becommunicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved ourespecially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidatedfinancial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters oron the accounts or disclosures to which they relate.Acquisitiondate fair value of customer relationshipsAs discussed in Note 16 to the consolidated financial statements, on October 11, 2022, the Company acquired Naiz Bespoke Technologies SL (“Naiz”). As a result ofthe transaction, the Company acquired customer relationships intangible assets (“customer relationships”) representing the generation of future income from Naiz’sexisting customers. The acquisition date fair value of the customer relationships was $726 thousand.F2We identified the evaluation of the acquisitiondate fair value of the Naiz customer relationships as a critical audit matter. A high degree of subjective auditorjudgment was required to evaluate the following internally developed assumptions used to estimate the fair value of such asset, for which there were limitedobservable inputs: (i) forecasted revenues attributable to existing customers, (ii) forecasted earnings before interest, taxes, depreciation, and amortization(“EBITDA”) margins for the acquired business, (iii) estimated annual customer attrition rates and (iv) estimated discount rate. The determined fair value wassensitive to changes in these key assumptions. Additionally, specialized skills and knowledge were needed to evaluate the discount rate used.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s acquisitiondate fair value estimation process, including controls over the development of key assumptions. We performed a sensitivity analysis toassess the impact of reasonably possible changes to forecasted revenues, EBITDA margins, annual customer attrition rates, and the discount rate. We evaluated theforecasted revenue growth rates from existing customers by comparing the growth assumptions to those of the Company’s peers and industry reports. Inconnection with our assessment of the forecasts used in the valuation, we compared (1) forecasted revenue and EBITDA to Naiz’s historical actual results and (2)estimated annual customer attrition rates to historical Naiz customer attrition data. We tested the Company’s determined weighted average cost of capital(“WACC”), which was used to determine the discount rate, by involving valuation professionals with specialized skills and knowledge, who assisted in:Evaluating the selected discount rate by comparing it against a discount rate range that was independently developed using publicly available market datafor comparable companies, and;Assessing the Company’s WACC calculation, by comparing it against an independently estimated WACC range based on inputs obtained throughpublished surveys and studies.Goodwill impairment assessmentAs discussed in Note 16 to the consolidated financial statements, during 2022 the Company recorded goodwill of $1,257 thousand related to the acquisition of NaizBespoke Technologies, S.L. (“Naiz”). The Company performed an annual quantitative impairment test of goodwill at the reporting unit level. Based on this analysis,the Company determined that the fair value of its reporting unit exceeded its carrying value and no impairment charge was required.We identified the evaluation of the goodwill impairment assessment for the Naiz reporting unit as a critical audit matter. A high degree of subjective auditor judgmentwas required to evaluate the following assumptions used to estimate the fair value of the Company’s reporting unit, for which there were limited observable inputs:(i) forecasted reporting unit cash flows, (ii) longterm growth rates, and (iii) discount rates. The fair value was sensitive to changes in these key assumptions.Additionally, specialized skills and knowledge were needed to evaluate the discount rates.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s goodwill impairment evaluation process. We performed sensitivity analyses to assess the impact of reasonably possible changes to forecasted cashflows, longterm growth rates, and discount rates. We evaluated the Company’s forecasted growth rates by comparing the growth assumptions to those of theCompany’s peers and industry reports. We compared the Company’s forecasted revenue, cost of sales, and operating expense margins to historical actual results toassess the reasonableness of the forecasts. In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:– Assessing the Company’s WACC calculation, by comparing it against an estimated WACC range based on inputs obtained through published surveys andstudies– Evaluating the discount rates used by the Company by comparing them against discount rate ranges that were developed using publicly available market data forcomparable companies, and;– Performing an arithmetic recalculation regarding the fair value of the Company’s reporting unit, using the Company’s cash flow forecasts and the independentlydeveloped discount rates, and comparing the results to the Company’s fair value estimates./s/ Somekh ChaikinSomekh ChaikinMember Firm of KPMG InternationalWe have served as the Company’s auditor since 2017.Tel Aviv, IsraelApril 14, 2023F3MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED BALANCE SHEETSU.S. dollars in thousands (except share data)December 31,Note20222021AssetsCurrent assetsCash and cash equivalents32,10010,670Restricted cash263273Inventory997Account receivables1,94040Other receivables and prepaid expenses4758579Total current assets6,05811,562Long term deposits28Property and equipment, net5140112Operating rightofuse asset6583776Intangible assets71,377Goodwill71,395Investment in JV899Investment in marketable securities11471083,669996Total assets9,72712,558Liabilities and shareholders’ equityCurrent liabilitiesOperating lease liability6159138Shortterm loans9155Trade payables2,487635Liabilities to Related parties69863Other payables680392Total current liabilities4,1791,228Longterm loans9376Deferred tax liabilities328Operating lease liability6308473Total noncurrent liabilities1,012473CONTINGENCIES AND COMMITMENTS15Total Liabilities5,1911,701Shareholders’ equity13Stock capital Common stock of $0.001par value Authorized: 250,000,000and 100,000,000shares as of December 31,2022 and 2021; Issued and outstanding: 1,464,117and959,297 as of December 31,2022 and 2021, respectively (*)11Additional paidin capital58,67356,453Accumulated other comprehensive loss(637)(406)Accumulated deficit(53,501)(45,191)Total shareholders’ equity4,53610,857Total liabilities and shareholders’ equity9,72712,558(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F4MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSSU.S. dollars in thousands (except share data and per share data)Year endedDecember 31,Note20222021Revenues4,459131Cost of revenues(3,825)Gross profit634131Operating expensesResearch and development(1,701)(4,248)Sales and marketing18(3,143)(2,336)General and administrative19(3,900)(4,124)Total operating expenses(8,744)(10,708)Operating loss(8,110)(10,577)Financial income (expense), net20(236)57Loss before taxes(8,346)(10,520)Taxes on income36Net loss for the year(8,310)(10,520)Other comprehensive income (loss):Foreign currency translation differences(231)18Total comprehensive loss(8,541)(10,502)Basic and diluted loss per share (*)(7.47)(17.75)Basic and diluted weighted average number of shares outstanding (*)1,111,913420,385(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F5MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITYU.S. dollars in thousands (except share data)Common stockAdditionalpaidinAccumulatedothercomprehensiveAccumulatedTotalstockholders’NumberAmountcapitallossDeficitequityBalance as of January 1, 2021289,314(*)37,171(424)(34,671)2,076Stockbased compensation related to optionsgranted to employees and consultants373373Exercise of options granted to employees178(*)Restricted shares issued to shareholder (***)100,000(*)2,6182,618Issuance of shares, net of issuance cost of$1,160434,700112,58212,583Exercise of warrants135,108(*)3,7093,709Total comprehensive income (loss)18(10,520)(10,502)Balance as of December 31, 2021959,300156,453(406)(45,191)10,857Stockbased compensation related to optionsand restricted shares granted to employeesand consultants176,000(*)455455Issuance of shares in Business Combination(**)295,802(*)1,4461,446Issuance of shares post BusinessCombination (**)20,924(*)319319Effect of reverse stock split (Note 13 g)12,091(*)Total comprehensive income (loss)(231)(8,310)(8,541)Balance as of December 31, 20221,464,117158,673(637)(53,501)4,536(*)Represents an amount of less than $1.(**)See note 16(***)See note 1 bThe accompanying notes are an integral part of the consolidated financial statements.F6MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSU.S. dollars in thousandsYear endedDecember 31,20222021Cash flows from operating activities:Net loss(8,310)(10,520)Adjustments to reconcile net loss to net cash used in operating activities:Depreciation3842Change in operating lease rightofuse asset13543Amortization of intangible assets155foreign exchange differences(23)1Change in liabilities to related parties635Interest on long term liabilities10Interest paid(10)Revaluation of investment in marketable securities62(49)Restricted Shares issued to shareholder2,618Stock based compensation455373Issuance of shares post Business Combination319Change in inventory(219)Change in deferred tax liabilities(36)Change in account receivable(1,863)(12)Changes in operating lease liabilities(142)Change in other receivables and prepaid expenses184(99)Change in trade payables1,315253Change in other payables553Net cash used in operating activities(7,290)(7,297)Cash flows from investing activities:Acquisition of a subsidiary, net of cash acquired(767)Proceeds from restricted deposits, net184investing in other receivable(100)Investment in equity accounted investee(99)Purchase of property and equipment(27)(23)Net cash (used in) provided by investing activities(993)161Cash flows from financing activities:Proceeds from issuance of shares, net of issuance costs12,583Repayment of loans(67)Proceeds from exercise of warrants3,709Net cash (used in) provided by financing activities(67)16,292Effect of exchange rate fluctuations on cash and cash equivalents(230)13Change in cash and cash equivalents and restricted cash(8,580)9,169Cash and cash equivalents and restricted cash at the beginning of the year10,9431,774Cash and cash equivalents and restricted cash at the end of the year2,36310,943B) Aggregate cash flows derived for the Company as a result of the Orgad acquisition (note 16)2022Trade and other receivables364Inventory864Fixed assets55Longterm deposits31Selling Platform378Goodwill152Shortterm credit(181)Trade payables(580)Other payables(88)Longterm loan(138)Longterm provision(13)Deferred Tax Liability(87)Issuance of shares(457)Total acquisition of subsidiary, net of cash300C) Aggregate cash flows derived for the Company as a result of the Naiz acquisition (note 16)2022Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Issuance of shares(1,008)Total acquisition of subsidiary, net of cash467The accompanying notes are an integral part of the consolidated financial statements.F7MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERALa.My Size, Inc. is developing unique measurement technologies based on algorithms with applications in a variety of areas, from the apparel ecommerce market, to the courier services market and to the Do It Yourself (“DIY”) smartphone and tablet apps market. The technology is driven byproprietary algorithms, which are able to calculate and record measurements in a variety of novel ways.Following the acquisition of Naiz Bespoke Technologies, S.L (“Naiz”) in October 2022 (see note 16), the Company expanded its offering outreachand customer base.Following the acquisition of Orgad International Marketing Ltd. (“Orgad”) in February 2022 (see note 16), the Company also operates anomnichannel ecommerce platform.The Company has five subsidiaries, My Size Israel 2014 Ltd (“My Size Israel”), Topspin Medical (Israel) Ltd., and Orgad all of which areincorporated in Israel, and My Size LLC which was incorporated in the Russian Federation and Naiz Bespoke Technologies, S.L., a limited liabilitycompany incorporated under the laws of Spain (see note 16). References to the Company include the subsidiaries unless the context indicatesotherwise.My Size, Inc., was incorporated and commenced operations in September 1999, as Topspin Medical Inc. (“Topspin”), a private company registeredin the State of Delaware. In December 2013, the Company changed its name to Knowledgetree Ventures Inc. Subsequently, in February 2014, theCompany changed its name to My Size, Inc. Topspin was engaged, through its Israeli subsidiary, in research and development in the field ofcardiology and urology.Since September 1, 2005, the Company has traded on the Tel Aviv Stock Exchange (“TASE”).Between 2007 and 2012 the Company reported as a public company with the U.S. Securities and Exchange Commission (the “SEC”). In August2012, the Company suspended its reporting obligations under Section 13(a) and 15(d) of the Securities Exchange Act of 1934. In mid2015, theCompany resumed reporting as a public company.b.On January 9, 2014, at the Company’s general meeting of shareholders, its shareholders approved an engagement with one of the Company’sinvestors (the “Seller”) for the purchase of rights in a Venture (the “Venture”), including the rights to the method and the certain patent applicationthat had been filed by the Seller (the “Assets”). The Venture relates to the development of technologies and applications which will assist theconsumer to take his or her body measurements accurately using a mobile device to ensure the purchase of clothing with the best possible fitwithout the need to try them on.In February 2014, the Company established a wholly owned subsidiary, My Size (Israel) 2014 Ltd., a company registered in Israel, which iscurrently engaged in the development of the Venture described above.In return for purchasing an interest in the Venture, the Company undertook to pay the Seller 18% of the Company’s operating profit, direct orindirect, connected to the Venture for a period of seven years starting from the end of the Venture’s development period.As part of the agreement, the Seller received an option to buy back the Assets for consideration which will reflect the market fair value at that time,on the occurrence of the following events: a) if a motion is filed to liquidate the Company; b) if seven years after signing the agreement, theCompany’s total accumulated revenues, direct or indirect, from the Venture or the commercialization of the patent will be lower than NIS 3.6 million.In such an event, Seller may repurchase the interest in the Venture at a market price to be determined by an independent third party valuationconsultant, who shall be chosen by agreement by the parties, and the audit committee shall conduct the negotiations on behalf of the Company todetermine the identity of the consultant.On May 26, 2021, the Company, My Size Israel and Shoshana Zigdon entered into an Amendment to Purchase Agreement (the “Amendment”)which made certain amendments to a Purchase Agreement between the parties dated February 16, 2014 (the “Purchase Agreement”). Pursuant tothe Amendment, Ms. Zigdon agreed to irrevocably waive the right to repurchase certain assets related to the collection of data for measurementpurposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which the Company’s business is substantiallydependent, and all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My Size Israel underthe Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation,reward or any rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights(the “Waiver”). In consideration of the Waiver, the Company issued 100,000 shares of common stock to Ms. Zigdon in a private placement.F8MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERAL (Cont.)c.On July 25, 2016, the Company’s common stock began publicly trading on the Nasdaq Capital Market under the symbol “MYSZ”. The Company’sshares of common stock are listed both on the Nasdaq Capital Market and TASE.d.Since inception, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit of $53,501.The Company has financed its operations mainly through fundraising from various investors.The Company’s management expects that the Company will continue to generate losses and negative cash flows from operations for theforeseeable future. Based on the projected cash flows and cash balances as of December 31, 2022, management is of the opinion that its existingcash will be sufficient to fund operations for a period less than 12 months. As a result, there is substantial doubt about the Company’s ability tocontinue as a going concern.Management’s plans include the continued commercialization of the Company’s products and securing sufficient financing through the sale ofadditional equity securities, debt or capital inflows from strategic partnerships. Additional funds may not be available when the Company needsthem, on terms that are acceptable to it, or at all. If the Company is unsuccessful in commercializing its products and securing sufficient financing,it may need to cease operations.The financial statements include no adjustments for measurement or presentation of assets and liabilities, which may be required should theCompany fail to operate as a going concern.e.The Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificial intelligencedriven measurement solutions (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions. The fashion and equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. The SaaS based innovativeartificial intelligence driven measurement solutions, or SaaS Solutions operating segment consists of My Size Inc My Size Israel and LLC.NOTE 2 SIGNIFICANT ACCOUNTING POLICIESThe consolidated financial statements are prepared according to United States generally accepted accounting principles (“U.S. GAAP”), applied on aconsistent basis, as followsa.Use of estimates:The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions thataffect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.Information about assumptions made by the Company with respect to the future and other reasons for uncertainty with respect to estimates thathave a significant risk of resulting in a material adjustment to carrying amounts of assets and liabilities in the next financial year are included in thefollowing notes:Acquisitions of subsidiariesThe Company measures the fair value of the consideration transferred (including contingent consideration) and fair value of the assets acquiredand liabilities assumed, in business combination transactions. For information on details on fair value measurement in acquisition of subsidiaries,see Note 16 regarding business combinations.Estimated impairment of nonfinancial assetsThe Company examines on an annual basis whether there is an impairment of goodwill, intangibles and property, plant and equipment that areallocated to cash generating units, in accordance with the accounting policy presented in Note 1(h) below. Recoverable amounts of cashgenerating units are determined on the basis of valueinuse calculations. These calculations require the use of estimates.For information on key assumptions used in calculation of the recoverable amount, see note 7 – Goodwill and other Intangible assets.b.Functional currency:The currency of the primary economic environment in which the operations of the Company is conducted is the United States Dollar and thus it isthe Company’s functional currency. The reporting currency according to which these financial statements are prepared is the U.S. dollar.The currency of the primary economic environment in which the operation of the Subsidiary, My Size Israel and Orgad International MarketingLtd. functional currency is the New Israeli Shekel (“NIS”).The currency of the primary economic environment in which the operation of the Subsidiary, My Size LLC, functional currency is Russian Ruble.The currency of the primary economic environment in which the operation of the Subsidiary, Naiz fit, functional currency is Euro.F9MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)c.Principles of consolidation:The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances andtransactions have been eliminated upon consolidation.d.Cash equivalents:Cash equivalents are shortterm highly liquid investments that are readily convertible to cash with original maturities of three months or less at thedate acquired.e.Restricted cashRestricted cash are deposits for rent, credit card and for hedging activities.f.Inventories:Inventories include finished goods and are measured at the lower of cost or net realizable value. The cost of inventories comprises of the costsincurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary courseof business. At the point of the loss recognition, a new, lowercost basis for that inventory is established, and subsequent changes in facts andcircumstances do not result in the restoration or increase in that newly established cost basis. The costs of purchase of inventories comprise thepurchase price and other costs directly attributable to the acquisition of finished goods. In 2022, the Company recorded an inventory markdownof $48.g.Property and equipment:Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straightline method over theestimated useful lives of the assets, at the following annual rates:%Computers and peripheral equipment33Office furniture and equipment720Leasehold improvementsOver the term of the leaseor the useful life of theimprovements, whicheveris shorterh.Impairment of longlived assets:The Company’s property and equipment are reviewed for impairment in accordance with ASC 360, “Property Plant and Equipment”, wheneverevents or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held andused is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by theassets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount ofthe assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less sellingcosts. During the periods ended December 31, 2022 and 2021, no impairment losses have been recorded.i.Business combinations:The Company applies the provisions of ASC 805, “Business Combination” and allocates the fair value of purchase consideration to the tangibleassets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchaseconsideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assetsacquired and liabilities assumed, the Company estimated the future expected cash flows from acquired platform, customer relationships,Technology and trademark from a market participant perspective, useful lives and discount rates. In addition, management makes significantestimates and assumptions, which are uncertain, but believed to be reasonable.Acquisitionrelated costs are recognized separately from the acquisition and are expensed as incurred.F10MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)j.Goodwill:Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a businesscombination. Under ASC 350, “Intangible Goodwill and Other”, goodwill is not amortized, but rather is subject to an annual impairment test.ASC 350 requires goodwill to be tested for impairment at the reporting unit level at least annually, the fourth quarter, or between annual tests incertain circumstances, and written down when impaired. Goodwill is tested for impairment by comparing the fair value of the reporting unit with itcarrying value. Goodwill from Orgad acquisition was allocated to the fashion and equipment ecommerce platform segment and Goodwill from theNaiz acquisition was allocated to Naiz segment based innovative artificial intelligence driven measurement solutions.Alternatively, ASC 350 permits an entity to bypass the qualitative assessment for any reporting unit and proceed directly to performing the firststep of the goodwill impairment test. There were no impairment charges to goodwill during the period presented.k.Intangible assets:Intangible assets consist of identifiable intangible assets that the Company has acquired from previous business combinations. Intangible assetsare recorded at costs, net of accumulated amortization. The Company amortizes its intangible assets reflecting the pattern in which the economicbenefits of the intangible assets are consumed. When a pattern cannot be reliably determined, the Company uses a straightline amortizationmethod. Amortization is calculated by the straightline method over the estimated useful lives of the following assets.The estimated useful lives of the company’s intangible assets are as follows:yearsCustomer Relationships7Technology5Trademark5Selling Platform3Each period the Company evaluates the estimated remaining useful lives of its intangible assets and whether events or changes in circumstanceswarrant a revision to the remaining period of amortizationl.Severance pay:The Subsidiary’s liability for severance pay is covered by Section 14 of the Israeli Severance Pay Law (“Section 14”). Under Section 14, employeesin Israel are entitled to have monthly deposits, at a rate of 8.33% of their monthly salary, made on their behalf to their insurance funds. Payments inaccordance with Section 14 exempt the Subsidiary from any additional obligation for these employees. As a result, the Subsidiary does notrecognize any liability for severance pay due to these employees and the deposits under Section 14 are not recorded as an asset in theSubsidiary’s balance sheet. These contributions for compensation represent defined contribution plans and expenses are recorded based onactual deposits.Other than the My Size Israel’s liability there are no additional severance pay liabilities.F11MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)m.Research and development costs:Research and development costs are charged to the statement of operations, as incurred. Most of the research and development expenses are forwages, related expenses and subcontractors.n.Income taxes:The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilitiesfor the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Companies’ taxreturns. Deferred taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities using enactedtax rates in effect in the years in which the differences are expected to reverse. The Company assesses the likelihood that its deferred tax assetswill be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely thannot that all or a portion of deferred tax assets will not be realized. The Company establishes a valuation allowance, if necessary, to reduce deferredtax assets to the amount more likely than not to be realized. As of December 31, 2022, and 2021, a full valuation allowance was established by theCompany.The Company implements a twostep approach to recognize and measure the benefit of its tax positions. The first step is to evaluate the taxposition taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that,on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigationprocesses. The second step is to measure the tax benefit as the largest amount that is greater than 50 percent (cumulative basis) likely to berealized upon settlement.The Company believes that its tax positions are all highly certain of being upheld upon examination. As of December 31,2022 and 2021 the Company recorded a liability for unrecognized tax benefits of $328 and none respectively.o.Accounting for stockbased compensation:The Company accounts for its employees’ stockbased compensation as an expense in the financial statements based on ASC 718. All awards areequity classified and therefore such costs are measured at the grant date fair value of the award and graded vesting attribution approach torecognize compensation cost over the vesting period. The Company estimates stock option grant date fair value using the Binomial and BlackScholes option pricingmodel.The Company recorded stock options issued to nonemployees at the grant date fair value, and recognizes expenses over the related serviceperiod by using the straightline attribution approach in accordance with ASU 201807. All awards are equity classified.The expected volatility of the share prices reflects the assumption that the historical volatility of the share prices is reasonably indicative ofexpected future trends.The riskfree interest rate for grants with an exercise price denominated in USD for employees and several consultants is based on the yield fromUS treasury zerocoupon bonds with an equivalent term.The Company has historically not paid dividends and has no foreseeable plans to pay dividends.F12MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)p.Fair value of financial instruments:ASC 820, Fair Value Measurements and Disclosures, relating to fair value measurements, defines fair value and established a framework formeasuring fair value. The ASC 820 fair value hierarchy distinguishes between market participant assumptions developed based on market dataobtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptionsdeveloped based on the best information available in the circumstances. ASC 820 defines fair value as the price that would be received to sell anasset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price. Inaddition, the fair value of assets and liabilities should include consideration of nonperformance risk, which for the liabilities described belowincludes the Company’s own credit risk.As a basis for considering such assumptions, ASC 820 establishes a threetier value hierarchy, which prioritizes the inputs used in the valuationmethodologies in measuring fair value:Level 1 Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access. Valuationadjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readilyand regularly available in an active market, valuation of these products does not entail a significant degree of judgment.Level 2 Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, eitherdirectly or indirectly.Level 3 Valuations based on inputs that are unobservable and significant to the overall fair value measurement.The Company holds share certificates in iMine Corporation (“iMine”) formerly known as Diamante Minerals, Inc., a publiclytraded company onthe OTCQB.Due to sales restrictions on the sale of the iMine shares, the fair value of the shares was measured on the basis of the quoted market price for anotherwise identical unrestricted equity instrument of the same issuer that trades in a public market, adjusted to reflect the effect of the salesrestrictions and is therefore, ranked as Level 2 asset.q.Basic and diluted net loss per share:Basic net loss per share is computed based on the weighted average number of shares of common stock outstanding during each year. Diluted netincome per share is computed based on the weighted average number of shares of common stock outstanding during each year plus dilutivepotential equivalent common stock considered outstanding during the year, in accordance with ASC 260, “Earnings per Share”. For the yearsended December 31, 2022 and 2021, all outstanding options and warrants have been excluded from the calculation of the diluted net loss per sharesince their effect was antidilutive.r.Concentrations of credit risk:Financial instruments that potentially subject the Company and its subsidiaries to concentrations of credit risk consist principally of cash andcash equivalents.Cash and cash equivalents are invested in banks in Israel, Spain and United States. Such deposits in United States may be in excess of insuredlimits and are not insured in other jurisdictions. Management believes that the financial institutions that hold the Company’s investments arefinancially sound and, accordingly, minimal credit risk exists with respect to these investments.The Company and its subsidiaries have no offbalancesheet concentration of credit risk such as foreign exchange contracts, option contracts orother foreign hedging arrangements.F13MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)s.Revenue Recognition:The Company’s revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled softwaresubscriptions, associated software maintenance and support.The Company recognizes revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with acustomer exists only when: the parties to the contract have approved it and are committed to perform their respective obligations, the Companycan identify each party’s rights regarding the distinct goods or services to be transferred (“performance obligations”), the Company can determinethe transaction price for the goods or services to be transferred, the contract has commercial substance and it is probable that the Company willcollect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to acustomer. Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted togovernmental authorities. Refunds are estimated at contract inception and updated at the end of each reporting period if additional informationbecomes available. Revenue is recognized when control of the product is transferred to the customer.The Company maintains a returns policy that allows its customers to return product within a specified period of time. The estimate of the provisionfor returns is based upon historical experience with actual returns.Principal versus Agent ConsiderationsThe Company follows the guidance provided in ASC 606 for determining whether it is a principal or an agent in arrangements with customers, byassessing whether the nature of the Company’s promise is a performance obligation to provide the specified goods (principal) or to arrange forthose goods to be provided by the other party (agent). With regard to products being sold by Orgad through Amazon, this determination involvesjudgment. The Company determines it is the principle when it has control over promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).The Company recognizes revenue ratably over the contractual service term for hosted services that are priced based on a committed number oftransactions where the delivery and consumption of the benefit of the services occur evenly over time, beginning on the date the servicesassociated with the committed transactions are first made available to the customer and continuing through the end of the contractual serviceterm. Over usage fees and fees based on the actual number of transactions are billed in accordance with contract terms as these fees are incurredand are included in the transaction price of an arrangement as variable consideration. Fees based on a number of transactions or impressions permonth, are allocated to the period in which the transactions occur. Revenue for subscriptions sold as a fee per period is recognized ratably overthe contractual term as the customer simultaneously receives and consumes the benefit of the underlying service.F14MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)t.Contingencies and CommitmentsLiabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it isprobable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with losscontingencies are expensed as incurred.u.Derivative instrumentsThe Company accounts for its derivative instruments as either assets or liabilities and measures them at fair value through profit or loss.v.LeasesThe Company leases include an office space lease agreement for 36 months, with an option to extend for an additional 36 months and 36 monthscancelable operating lease agreements on behalf of personnel vehicles. The lease term includes a noncancellable period of the lease plus anyadditional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise,or an option to extend (or not to terminate) the lease controlled by the lessor.ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make leasepayments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value oflease payments over the lease term. The company generally use its incremental borrowing rate based on the estimated rate of interest forcollateralized borrowing over a similar term of the lease payments at commencement date. Lease expense for lease payments is recognized on astraightline basis over the lease term.For the office rent lease, the Company has elected to account for the lease and nonlease maintenance components as a single lease component.Therefore, the lease payments used to measure the lease liability include all of the fixed consideration in the contract, including insubstance fixedpayments, owed over the lease term.w.Impact of recently issued accounting standardIn June 2016, the FASB issued ASU 201613, “Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses on FinancialInstruments”, which requires companies to measure credit losses of financial instruments, including customer accounts receivable, utilizing amethodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information toinform credit loss estimates. Subsequent to the issuance of ASU 201613, the FASB issued several additional Accounting Standard Updates toclarify implementation guidance, provide narrowscope improvements and provide additional disclosure guidance. As an Emerging GrowthCompany, ASU 201613 is effective for fiscal years beginning after December 15, 2022. The Company does not expect this ASU to have a materialimpact on its consolidated financial statements.F15MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 3 CASH AND CASH EQUIVALENTSThe Company’s cash and cash equivalents balance at December 31, 2022 and 2021 is denominated in the following currencies:December 31,20222021US Dollars1,65110,184New Israeli Shekels259433Other190532,10010,670NOTE 4 OTHER RECEIVABLES AND PREPAID EXPENSESDecember 31,20222021Prepaid expenses and other current assets322429Government authorities28317Other153133Total758579NOTE 5 PROPERTY AND EQUIPMENT, NETComputersandperipheralequipmentOfficefurnitureandequipmentLeaseholdimprovementsTotalCostBalance as at January 1, 20211825860300Additions2323Translation adjustments72211Balance as at December 31, 20212126062334Balance as at January 1, 20222126062334Additions161127Business combination401555Translation adjustments(32)(8)(8)(48)Balance as at December 31, 20222367854368Accumulated DepreciationBalance as at January 1, 20211461412172Additions2751042Translation adjustments6118Balance as at December 31, 20211792023222Balance as at January 1, 20221792023222Additions209938Translation adjustments(27)(3)(2)(32)Balance as at December 31, 20221722630228Carrying amountsAs at December 31, 2021334039112As at December 31, 2022645224140F16MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 6 LEASESIn August 2019, The Company entered into an office space lease agreement. The lease term is for 36 months beginning on August 20, 2019 and endingon August 20, 2022, with an option to extend for an additional 36 months. The Company extended the lease period until August 20, 2025. Monthly rentpayments including utilities amounting to approximately USD 14 (NIS 49,500) per month.In addition, The Company entered into a threeyear cancelable operating lease agreement for cars.These operating leases are included in “Right of use asset” on the Company’s December 31, 2022 consolidated balance sheets, and represent theCompany’s right to use the underlying asset for the lease term. The Company’s obligations to make lease payments are included in the currentliabilities as “Operating lease liability” and in the noncurrent liabilities as “Operating lease liability long term” on the Company’s December 31, 2022consolidated balance sheets. As of December 31, 2022, rightofuse of asset was $583. operating lease liabilities were $159 and non current Operatinglease liabilities were $308. Rightofuse asset includes the capitalization of improvements (net of amortization) amounting to $105.Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value ofthe lease payments.The interest rate used to discount future lease payment was 11.95%.Maturities of lease liabilities as of December 31, 2022 were as follows:Year Ending:2023$1912024$1912025$127Thereafter$509Less imputed interest:$(42)Total lease liabilities$467F17MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 7 – Goodwill and other Intangible assetsA.Identified intangible assetsSchedule of Intangible assetsSelling PlatformTechnologyCustomerRelationshipsOtherTotalThousandsUSDThousandsUSDThousandsUSDThousandsUSDThousandsUSDCostAs of January 1, 2022Acquisitions through business combinations378286726771,467Effect of changes in exchange rates(32)2565765As of December 31, 2022346311791841,532AmortizationAs of January 1, 2022Amortization for the year including effect of changes inexchange rates as of December 31, 2022(109)(15)(27)(4)(155)Carrying amountAs of December 31, 2022237296764801,377AmortizationAmortization expenses recorded for identified intangible assets in the Consolidated Statements of Operations for each period and were as follows:Line ItemDecember 31,2022December 31,2021Selling platformCosts of revenues109TrademarkSales and marketing4TechnologyCosts of revenues15Customer relationshipsSales and marketing27Total amortization expenses155Future amortization expenses are expected to be as follows:20232024202520262027ThereafterTotalFuture amortization expenses3033031941771561791,312b.GoodwillThe changes in the carrying amount of goodwill for the years ended December 31, 2022 and 2021 were as follows:Fashion and equipmentecommerce platformNaizTotalBalance as of December 31, 2021Changes during the period:Goodwill acquired1521,1521,304Goodwill impairmentTranslation differences(14)10591Balance as of December 31, 20221381,2571,395The Company operates its business through three reporting segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovativeartificial intelligence driven measurement solutions and (iii) Naiz. See note 17 for additional segments information.The Company determines the fair value of its reporting units using the income approach. According to the income, the Company uses discounted cashflows to estimate the fair value. Cash flow projections are based on the Company’s estimates of revenue growth rates and operating margins, takinginto consideration the industry’s and market’s conditions. The discount rate used is based on the weighted average cost of capital (“WACC”),adjusted for the relevant risk associated with businessspecific characteristics.The Company performed a quantitative assessment as of December, 31 2022 for the reporting units’ fair value. The estimated fair value of the Fashionand equipment ecommerce platform and Naiz reporting units exceeded its estimated carrying amount by 95.9% and 27.7% respectively. This, based thefollowing assumptions:Fashion and equipmentecommerce platformNaizDiscount rate21%23%Terminal growth rate3%3%If business conditions or expectations were to change materially, it may be necessary to record impairment charges to the Company’s reporting units inthe future.F18MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 8 Investment in JVIn August 2022, the Company established a joint venture (“JV”) in Brazil with Santista Têxtil. The Company holds 51% and Santista Têxtil holds 49% of theJV. The purpose of the JV is to serve the Brazilian market according to the business plan that was set. Both parties agree to make an initial investment in theJV of $198that will be made per the holding percentage of each party. As of the reporting date, the JV is in process of establishing its operation.NOTE 9 Financial LiabilitiesThe book value of each of the financial liability categories is an acceptable approximation of fair value.The debt is comprised of four loans that were granted to My Size Israel – in an outstanding amount of approximately $131, bearing interest rangingfrom prime rate to prime+2.8% rate, and four loans that were granted to the Spanish subsidiary– in an outstanding amount of approximately $400,bearing interest ranging from 1% to 3%.The financial liability maturities during the five years following the end of the financial year are shown below:UntilUntilUntilUntilUntilAfterTOTAL311223311224311225311226311227311227311222Debts with credit institutions15513892874712531NOTE 10 RELATED PARTIES TRANSACTIONSA. Balances with related parties:The following related party payables are included in liability to related parties.December 31,20222021Officers (*)4143Liability in respect of business combinations (**)739Other related parties (***)(95)Directors152069863(*)The amount includes the net salaries payables.(**)The amount includes the provision created to former owners of Orgad that are entitled to additional cash and equity consideration and former owners of Naizthat entitled to additional cash consideration, see note 16 business combination.(***)The amount includes an amount receivable from Orgad previous shareholders who currently work in the company.B. Related parties benefits:Year endedDecember 31,20222021Salaries and related expenses1,440852Share based payments39673Cash liability and equity liability expenses related to acquisitions (**)1,058Directors58582,952983(**)The amount includes the expenses for a provision created to former owners of Orgad that are entitled to additional cash and equity consideration and formerowners of Naiz that entitled to additional cash consideration, see note 16 business combination.NOTE 11 FINANCIAL INSTRUMENTSThe following tables presents the Company’s significant assets and liabilities that are measured at fair value on recurring basis and their classificationwithin the fair value hierarchy:December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities47financial assets (*)10December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesDerivatives9December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities108December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesWarrants derivative2(*)the financial asset includes in other receivables.F19MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 11 FINANCIAL INSTRUMENTS (Cont.)The carrying amounts of cash and cash equivalents, restricted cash, short term restricted deposit, accounts receivable, other receivables and prepaidexpenses, trade payable and accounts payable approximate their fair value due to the shortterm maturities of such instruments.At December 31, 2022, the recognized gain and fair value (based on quoted market prices with a discount due to security restrictions on iMine shares)of the marketable securities were $59and $47, respectively (at December 31, 2021 $49and $108, respectively).NOTE 12 TAXES ON INCOMEa.On December 31, 2022, the Company had U.S. federal net operating loss carryforwards of approximately $26 available to reduce future taxableincome. Utilization of the U.S. net operating losses may be subject to substantial limitations due to the change of ownership provisions of theInternal Revenue Code of 1986.The U.S. Company has final tax assessments through 2014.On December 22, 2017, the Tax Reform Act was signed into law. The legislation significantly changes U.S. tax law by, among other things, lowering theU.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. As a result of the decrease in the corporate incometax rate, the Company revalued the ending net deferred tax assets at December 31, 2017, but did not recognize any incremental income tax expense in2017 due to the revaluation of the valuation allowance.b.Foreign tax:1.Tax rates:Presented hereunder are the tax rates relevant to the Company’s Israeli subsidiaries:2022 23%2021 23% Presented hereunder are the tax rates relevant to the Company’s Spanish subsidiary:2022 24%2.The Company’s Israeli subsidiaries have estimated total available carryforward operating tax losses for Israeli income tax purposes ofapproximately $64as of December 31, 2022. Of these losses, a total of $47.5are owned by Topspin Medical (Israel) Ltd. Topspin tax lossesmay be offset only by future income with respect to the same operational activity by which it was incurred for an indefinite period of time. Theother losses are owned by My Size Israel and may be carryforward to offset against future income for an indefinite period of time.3.Topspin Medical (Israel) Ltd. and My Size (Israel) 2014 Ltd. has final tax assessments through 2016.c.U.S. and foreign components of loss from continuing operations, before income taxes consisted of:December 31,20222021U.S(1,180)(3,802)NonU.S. (foreign)(7,130)(6,718)(8,310)(10,520)F20MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 12 TAXES ON INCOME (Cont.)d.Deferred taxes:Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reportingpurposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows:December 31,20222021Deferred tax assets:Operating loss carryforwards20,13120,238Warrants and options145126Marketable securities390377Intangible assets(328)Research and development expenses586341Other temporary differences203Deferred tax assets before valuation allowance21,12721,082Valuation allowance(21,455)(21,082)Net deferred tax liability(328)The following table presents a reconciliation of the beginning and ending valuation allowance:December 31,20222021Balance at beginning of the year21,08218,968Additions in valuation allowance to the income statement1,7581,625Additions in valuation allowance due to exchange rate differences(1,385)489Balance at end of the year21,45521,082In assessing the realization of deferred tax assets, management considers whether it is more likely than not that all or some portion of the deferred taxassets will not be realized.The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporarydifferences are deductible and net operating losses are utilized. Based on consideration of these factors, the Company recorded a full valuationallowance at December 31, 2021 and 2020.e.Theoretical taxThe following presents the adjustment between the theoretical tax amount and the tax amount included in the financial statements:December 31,20222021Loss before income taxes8,34610,520Statutory tax rate21%21%Computed “expected” tax income1,7522,209Foreign tax rate differences and exchange rate differences149131Nondeductible expenses(107)(715)Change in valuation allowance(1,758)(1,625)Taxes on income36F21MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITYa.Common stock confers upon their holders the right to receive notice to participate and vote in general meetings of the Company, and the right toreceive dividends if declared.b.On January 8, 2021, the Company conducted a public offering of its securities pursuant to which it issued 62,768 shares of its common stock forgross proceeds of $2,008. The net proceeds to the Company from the offering were approximately $1,700, after deducting placement agent’s feesand other estimated offering expenses payable by the Company.c.During 2021, a holders of warrants exercised warrants to purchase 135,109 ordinary shares of the Company in exchange for $3,709.d.On March 25, 2021, the Company conducted a public offering of its shares of common stock pursuant to which it issued 104,741 shares of itscommon stock for gross proceeds of $3,300. The net proceeds to the Company from the offering were approximately $2,872, after deductingplacement agent’s fees and other estimated offering expenses payable by the Company.On May 7, 2021, the Company issued an additional 15,711 shares of the Company’s common stock in connection with the full exercise of theunderwriter’s overallotment option granted in the Company’s March 2021 public offering. These additional shares were sold to the underwriter at apublic offering price of $31.5 per share, resulting in additional net proceeds to the Company, net of the underwriting discount, of approximately$463.e.On May 26, 2021, the Company issued 100,000 shares of common stock to Ms. Zigdon in consideration of the Waiver. See note 1(b) above.f.On October 28, 2021, the Company sold in a registered direct offering 100,592 shares of its common stock and, in a concurrent private placement,an aggregate of 75,444 unregistered warrants to purchase shares of common stock, at an offering price of $33.8 per share and associated warrant.In addition, on the same day, the Company sold in a private placement 150,888 unregistered shares of common stock and unregistered warrants topurchase up to an aggregate of 113,166 shares of common stock at the same purchase price as in the registered direct offering. The warrants areimmediately exercisable and will expire five years from issuance at an exercise price of $31.5 per share, subject to adjustment as set forth therein.The gross proceeds from the offerings were $8,500. The net proceeds to the Company from the offerings were approximately $7,560, afterdeducting placement agent’s fees and other estimated offering expenses payable by the Company. In connection with the offerings, the Companyissued to the placement agent warrants to purchase 17,603 shares on substantially the same terms as the purchasers in the offerings at an exerciseprice of $42.25 per share and a term expiring on October 26, 2026.g.On December 7, 2022, the Company’s board of directors approved a 1for25 reverse stock split of the Company’s issued and outstanding sharesof common stock. The reverse stock split became effective on December 8, 2022. In order not to have fractional shares as a result of the reversestock split, the Company issued an additional 12,091 shares of common stock. As a result, all shares of common stock, options for shares ofcommon stock, exercise price and net loss per share amounts were adjusted retroactively for all periods presented in these financial statements.F22MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITY (Cont.)g.A summary of the warrant activity during the years ended December 31, 2022 and 2021 is presented below:Number ofWarrantsWeightedAverageExercisePriceWeightedAverageRemainingLife inYearsOutstanding, December 31, 2020216,85936.754.26Issued206,214Expired or exercised(135,109)Outstanding, December 31, 2021287,96431.004.35IssuedExpired or exercised(17,901)Outstanding, December 31, 2022270,06330.213.36Exercisable, December 31, 2022270,06330.213.36NOTE 14 STOCK BASED COMPENSATIONThe stockbased expense recognized in the financial statements for services received is related to Research and Development, Sales and Marketingand General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense Research and development15195Stockbased compensation expense Sales and marketing126180Stockbased compensation expense General and administrative17898455373The stockbased expense recognized in the financial statements for services received post Acquisition of Orgad (see note 16) is related to Cost OfGoods, Sales and Marketing and General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense – Cost of goods80Stockbased compensation expense Sales and marketing112Stockbased compensation expense General and administrative127319F23MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Options issued to consultantsWe can sell additional shares of common stock without consulting stockholders and without offering shares to existing stockholders, which wouldresult in dilution of shareholders’ interests in the company and could depress our stock price.Our Certificate of Incorporation currently authorizes 250,000,000 shares of common stock, of which 2,446,780 are currently outstanding as of March 31, 2023and our board of directors is authorized to issue additional shares of our common stock. Although our board of directors intends to utilize its reasonable businessjudgment to fulfil its fiduciary obligations to our then existing stockholders in connection with any future issuance of our capital stock, the future issuance ofadditional shares of our capital stock could cause immediate, and potentially substantial, dilution to our existing stockholders, which could also have a materialeffect on the market value of the shares. Further, other than certain participation rights that we have granted in a past offering, our shares do not have preemptiverights, which means we can sell shares of our capital stock to other persons without offering purchasers in this offering the right to purchase their proportionateshare of such offered shares. Therefore, any additional sales of stock by us could dilute your ownership interest in our Company.Our quarterly operating results may fluctuate significantly.We expect our operating results to be subject to quarterly fluctuations. Our net loss and other operating results will be affected by numerous factors,including:●variations in the level of expenses related to our research and development;●any lawsuits in which we may become involved;●regulatory developments affecting our products; and●our execution of any collaborative, licensing or sales agreements, and the timing of payments under these arrangements.If our quarterly operating results fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially.Furthermore, any quarterly fluctuations in our operating results may, in turn, cause the price of our common stock to fluctuate substantially.If we fail to comply with the rules under the Sarbanes Oxley Act of 2002 related to accounting controls and procedures or if we discover materialweaknesses and deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult.If we fail to comply with the rules under the SarbanesOxley Act of 2002 related to disclosure controls and procedures, or, if we discover materialweaknesses and other deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult. Section 404 of the SarbanesOxley Act requires annual management assessments of the effectiveness of our internal control over financial reporting and, ifwe are no longer a nonaccelerated filer, a report by our independent auditors addressing these assessments. If material weaknesses or significant deficiencies arediscovered or if we otherwise fail to achieve and maintain the adequacy of our internal control, we may not be able to ensure that we can conclude on an ongoingbasis that we have effective internal controls over financial reporting in accordance with Section 404 of the SarbanesOxley Act. Moreover, effective internalcontrols are necessary for us to produce reliable financial reports and are important to helping prevent financial fraud. If we cannot provide reliable financial reportsor prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price ofour common stock could drop significantly.38Our Certificate of Incorporation, Bylaws and Delaware law may have antitakeover effects that could discourage, delay or prevent a change incontrol, which may cause our stock price to decline.Our Certificate of Incorporation, Bylaws and Delaware law could make it more difficult for a thirdparty to acquire us, even if closing such a transactionwould be beneficial to our stockholders. Provisions of our Certificate of Incorporation, Bylaws and Delaware law also could have the effect of discouraging potentialacquisition proposals or making a tender offer or delaying or preventing a change in control, including changes a stockholder might consider favorable. Suchprovisions may also prevent or frustrate attempts by our stockholders to replace or remove our management. In particular, the Certificate of Incorporation, Bylawsand Delaware law, as applicable, among other things:●provide the board of directors with the ability to alter the Bylaws without stockholder approval;●the classification of our board of directors;●place limitations on the removal of directors;●provide that vacancies on the Board of Directors may be filled by a majority of directors in office, although less than a quorum;●require that stockholder actions must be affected at a duly called stockholder meeting and generally prohibiting stockholder actions by written consent;●eliminate the ability of stockholders to call a special meeting of stockholders; and●establish advance notice requirements for nominations for election to the Board of Directors or for proposing matters that can be acted upon at duly calledstockholder meetings.We are subject to Section 203 of the Delaware General Corporation Law which, subject to certain exceptions, prohibits “business combinations” between apubliclyheld Delaware corporation and an “interested stockholder,” which is generally defined as a stockholder who becomes a beneficial owner of 15% or more ofa Delaware corporation’s voting stock for a threeyear period following the date that such stockholder became an interested stockholder. These provisions areexpected to discourage certain types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to firstnegotiate with our board. These provisions may delay or prevent someone from acquiring or merging with us, which may cause the market price of our commonstock and the value of our securities to decline.If we fail to comply with the continued listing requirements of the Nasdaq Capital Market, our common stock may be delisted and the price of ourcommon stock and our ability to access the capital markets could be negatively impacted.Nasdaq has established certain standards for the continued listing of a security on the Nasdaq Capital Market. The standards for continued listing include,among other things, that the minimum bid price for the listed securities not fall below $1.00 per share for a period of 30 consecutive trading days and that wemaintain a minimum of $2,500,000 in shareholders’ equity. We have in the past fallen below the minimum bid price and minimum shareholders’ equity.39No assurance can be given that we will continue to be in compliance with the Rule. Failure to meet applicable Nasdaq continued listing standards couldresult in a delisting of our common stock. A delisting of our common stock from Nasdaq could materially reduce the liquidity of our common stock and result in acorresponding material reduction in the price of our common stock. In addition, delisting could harm our ability to raise capital through alternative financing sourceson terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, employees and fewer business development opportunities.The exercise of outstanding warrants and stock options will have a dilutive effect on the percentage ownership of our capital stock by existingstockholders.As of March 15, 2023, we had outstanding warrants to acquire 2,299,115 shares of our common stock and stock options to purchase 1,659 shares of ourcommon stock, which warrants and options are exercisable for prices ranging between $2.81 and $375. The expiration of the term of such options and warrants rangefrom 0.22 years to 4.83 years. If a significant number of such warrants and stock options are exercised by the holders, the percentage of our common stock ownedby our existing stockholders will be diluted.Were our common stock to become subject to the penny stock rules then this could result in U.S. brokerdealers becoming discouraged from effectingtransactions in shares of our common stock.Rule 15g9 under the Exchange Act establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a marketprice of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. If we do not retain a listing on the NasdaqCapital Market or do not meet certain net tangible asset or average revenue requirements and if the price of our common stock is less than $5.00, our common stockwill be deemed a penny stock. For any transaction involving a penny stock, unless exempt, the rules require: (a) that a broker or dealer approve a person’s accountfor transactions in penny stocks; and (b) the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantityof the penny stock to be purchased.In order to approve a person’s account for transactions in penny stocks, the broker or dealer must: (a) obtain financial information and investmentexperience objectives of the person and (b) make a reasonable determination that the transactions in penny stocks are suitable for that person and the person hassufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver,prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which: (a) sets forth the basis on whichthe broker or dealer made the suitability determination; and (b) confirms that the broker or dealer received a signed, written agreement from the investor prior to thetransaction. Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult forinvestors to dispose of our common stock and cause a decline in the market value of our common stock.Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissionspayable to both the broker or dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor incases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the accountand information on the limited market in penny stocks.Sales of our currently issued and outstanding stock may become freely tradable pursuant to Rule 144 and may dilute the market for your shares andhave a depressive effect on the price of the shares of our common stock.A portion of our outstanding shares of common stock are “restricted securities” within the meaning of Rule 144 under the Securities Act of 1933, asamended, or the Securities Act. As restricted shares, these shares may be resold only pursuant to an effective registration statement or under the requirements ofRule 144 or other applicable exemptions from registration under the Securities Act and as required under applicable state securities laws. Rule 144 provides inessence that an affiliate (as such term is defined in Rule 144(a)(1)) of an issuer who has held restricted securities for a period of at least six months (one year afterfiling Form 10 information with the SEC for shell companies and former shell companies) may, under certain conditions, sell every three months, in brokeragetransactions, a number of shares that does not exceed the greater of 1% of a company’s outstanding shares of common stock or the average weekly trading volumeduring the four calendar weeks prior to the sale (the four calendar week rule does not apply to companies quoted on the OTC Markets). Rule 144 also permits, undercertain circumstances, the sale of securities, without any limitation, by a person who is not an Affiliate of the Company and who has satisfied a oneyear holdingperiod. A sale under Rule 144 or under any other exemption from the Securities Act, if available, or pursuant to subsequent registrations of our shares of commonstock, may have a depressive effect upon the price of our shares of common stock in any active market that may develop.40We are a former “shell company” and as such are subject to certain limitations not applicable to other public companies generally.Prior to our suspension of reporting in 2012, we were a public reporting “shell company,” as defined in Rule 12b2 under the Exchange Act. Although weare no longer a “shell company,” we are subject to certain restrictions under the Securities Act for the resale of securities issued by issuers that have been at anytime previously a shell company. Specifically, the Rule 144 safe harbor available for the resale of our restricted securities is only available to our stockholders if wehave filed all reports and other materials required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934, as amended, or the Exchange Act, asapplicable, during the preceding twelve months, other than current reports on Form 8K, at the time of the proposed sale, regardless of whether the restrictedsecurities were initially issued at the time we were a shell company or subsequent to termination of such status. Accordingly, holders of our “restricted securities”within the meaning of Rule 144 will be subject to the conditions set forth in Rule 144 with respect to our company. Other reporting companies that are not formershell companies and have been reporting for more than twelve months are not subject to this same reporting threshold for nonaffiliate reliance on Rule 144.Accordingly, any restricted securities we have sold or sell in the future or issue to consultants or employees, in consideration for services rendered or for any otherpurpose, may not be resold unless such securities are registered with the SEC or the requirements of Rule 144 have been satisfied. As a result, it may be harder forus to fund our operations and pay our employees and consultants with our securities instead of cash. Furthermore, it may be harder for us to raise funding throughthe sale of debt or equity securities unless we agree to register such securities with the SEC, which could cause us to expend additional resources in the future. Ourprior status as a “shell company” could prevent us in the future from raising additional funds, engaging employees and consultants, and using our securities to payfor any acquisitions, which could cause the value of our securities, if any, to decline in value or become worthless.ITEM 1B. UNRESOLVED STAFF COMMENTSNone.ITEM 2. PROPERTIESWe currently lease 1,660 square feet of office space at 4 HaYarden Street, Airport City, Israel. The lease term is for 36 months beginning on August 20, 2019and ending on August 20, 2022, with an option to extend for an additional 36 months. Monthly rent payments, including utilities, amount to approximately $14,000per month. We extended the lease period until August 20, 2025.ITEM 3. LEGAL PROCEEDINGSFrom time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation issubject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.41North Empire LLCOn August 7, 2018, we commenced an action against North Empire LLC, or North Empire, in the Supreme Court of the State of New York, County of NewYork for breach of a Securities Purchase Agreement or Agreement in which we are seeking damages in an amount to be determined at trial, but in no event less than$616,000. On August 2, 2018, North Empire filed a Summons with Notice against us, also in the same Court, in which they allege damages in an amount of $11.4million arising from an alleged breach of the Agreement. On September 6, 2018, North Empire filed a Notice of Discontinuance of the action it had filed on August 2,2018. On September 27, 2018, North Empire filed an answer and asserted counterclaims in the action commenced by us against them, alleging that we failed to deliverstock certificates to North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against our CEO andnow former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018, we filed a reply to North Empire’scounterclaims. On November 15, 2018, our CEO and now former Chairman of the Board filed a motion to dismiss North Empire’s thirdparty complaint. On January 6,2020, the Court granted the motion and dismissed the thirdparty complaint. Discovery has been completed and both parties have filed motions for summaryjudgment in connection with the claims and counterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summaryjudgment, arguing there were factual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision.On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying the Company’s motion for summary judgment. On or about September 12,2022, the Court issued its Decision and Order denying the Company’s motion to reargue. North Empire filed its opposing brief on December 7, 2022. Both sides weregiven an opportunity to file a reply brief. We filed our reply brief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. Oral argument was heldbefore the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Court filed its Decision and Order, which affirmed the lower court’sdecisions regarding both My Size and North Empire’s motions for summary judgment and sent the case back to the Supreme Court. On or about March 13, 2023, theSupreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date for the mediation has not yet been set. We intend tovigorously defend any claims made by North Empire. We believe it is more likely than not that the counterclaims will be denied.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.42PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur stock currently is listed on the Tel Aviv Stock Exchange and the Nasdaq Capital Market under the symbol “MYSZ”. Our stock has been traded on theNasdaq Capital Market since July 25, 2016.HoldersAs of March 31, 2023, we had 70 shareholders of record. The actual number of stockholders is greater than this number of record holders and includesstockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our Board of Directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our Board of Directors deems relevant.Securities Authorized for Issuance under Equity Compensation PlansInformation about our equity compensation plans is incorporated herein by reference to “Item 12. Security Ownership of Certain Beneficial Owners andManagement and Related Stockholder Matters”, of this Annual Report on Form 10K.Recent Sales of Unregistered SecuritiesNone.ITEM 6. SELECTED FINANCIAL DATAAs a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULT OF OPERATIONSYou should read the following discussion along with our financial statements and the related notes included elsewhere in this Annual Report on Form10K. The following discussion contains forwardlooking statements that are subject to risks, uncertainties and assumptions, including those discussed under“Risk Factors.” Our actual results, performance and achievements may differ materially from those expressed in, or implied by, these forwardlooking statements.OverviewMySize is an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.43Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile device or through MySizeID Widget: a simple questionnaire which was uses a database collected over the years.MySizeID synchronizes the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and onlypresents items available for purchase that match their measurements to ensure a correct fit.MySize is positioning itself as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empowering brand design teams, which are designed to increaseend consumer satisfaction, contributing to a sustainable world and reduce operation costs.Orgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,682 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz BespokeTechnologies, S.L., or Naiz, a limited liability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.44The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 2,365,800 shares of My Size common stock were issuedto Whitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.45Operations in RussiaIn addition to our Israel operations, we had operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia. To date, mainly due to the invasion of Ukraine by Russia and the ongoing sanctions we stopped most ofour efforts in Russia and will probably close the subsidiary in the near future.Results of OperationsThe table below provides our results of operations for the periods indicated.Year ended December 3120222021(dollars in thousands)Revenues4,459131Cost of revenues(3,825)Gross profit634131Research and development expenses$(1,701)$(4,248)Sales and marketing(3,143)(2,336)General and administrative(3,900)(4,124)Operating loss(8,110)(10,577)Financial income (expenses), net(236)57Tax income36Net loss$(8,310)$(10,520)Year Ended December 31, 2022 Compared to Year Ended December 31, 2021RevenuesFrom inception through December 31, 2018, we did not generate any revenue from operations and we continue to expect to incur additional losses toperform further research and development activities. We started to generate revenues only in 2019. Our revenues for the year ended December 31, 2022 amounted to$4,459,000 compared to $131,000 for year ended December 31, 2021. The increase from the corresponding period primarily attributable to $4,132,000 in revenuegenerated from Orgad from February 7, 2022, the date of closing of the Orgad acquisition, or the Acquisition Date and revenue generated from the Naiz Acquisitionfrom October 11, 2022, the date of closing of the Naiz acquisition.In addition, the increase from the corresponding period results from an increase in revenues generated by My Size.Cost Of RevenuesOur cost of revenues expenses for the year ended December 31, 2022 amounted to $3,825,000, compared to none for the year ended December 31, 2021. Thecost of revenues includes cash and equity liabilities expenses in the amount of $194,000. The increase in comparison with the corresponding period was due to thecost of goods of the revenues generated from Orgad’s operations.Research and Development ExpensesOur research and development expenses for the year ended December 31, 2022 amounted to $1,701,000 a decrease of $2,547,000, or approximately 60.0%,compared to $4,248,000 for the year ended December 31, 2021. The decrease from the corresponding period primarily resulted from share based payment in amount of$2,618,000 attributed to the share issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021.Sales and Marketing ExpensesOur sales and marketing expenses for the year ended December 31, 2022 amounted to $3,143,000 an increase of $807,000, or 34.55%, compared to $2,336,000for the year ended December 31, 2021. The increase primarily resulted from an increase in employees expenses mainly due to Orgad and Naiz acquisitions, increase inAmazon fees, increase in cash and equity liabilities expenses attributed to the Orgad acquisition and an increase in share based payments offset by a decrease inpayments to consultants.46General and Administrative ExpensesOur general and administrative expenses for the year ended December 31, 2022 amounted to $3,900,000, a decrease of $224,000, or 5.43%, compared to$4,124,000 for the year ended December 31, 2021. The decrease compared to the corresponding period was mainly due to a decrease in professional expenses, mainlyattributed to shareholder activism including settlement expenses with the Lazar Parties offset by an increase in sharedbased payments and an increase in employeesexpenses mainly due to the Orgad and Naiz acquisitions.Operating LossAs a result of the foregoing, for the year ended December 31, 2022, our operating loss was $8,110,000, a decrease of $2,467,000 or 23.32%, compared to ouroperating loss for the year ended December 31, 2021 of $10,577,000.Financial Income, NetOur financial (expense) income, net for the year ended December 31, 2022 amounted to $236,000 compared to financial income, $57,000 for the year endedDecember 31, 2021. In 2022, we had financial expenses exchange rate differences offset by an income from fair value revaluation of investment in marketablesecurities whereas in 2021 we had financial income from the fair value revaluation of warrants offset by expenses from exchange rate differences and expenses fromfair value revaluation of investment in marketable securities.Net LossAs a result of the foregoing, our net loss for the year ended December 31, 2022 was $8,310,000 compared to net loss of $10,520,000 for the year endedDecember 31, 2021. The decrease in net loss was mainly due increase in sales and marketing expenses and financial expenses as opposed to financial income in thecorresponding period offset by a decrease in research and development expenses in amount of $2,618,000 attributed to the share issuance to Shoshana Zigdonunder the Amendment to Purchase Agreement dated May 26, 2021.Liquidity and Capital ResourcesSince our inception, we have funded our operations primarily through public and private offerings of debt and equity in Israel and in the U.S.As of December 31, 2022, we had cash, cash equivalents and restricted cash of $2,363,000 compared to $10,943,000 cash, cash equivalents, restricted cashas of December 31, 2021. During January 2023, we completed a registered direct and concurrent private placement offering resulting in gross proceeds ofapproximately $3 million. This decrease primarily resulted from our operating activities, the acquisition of Orgad and Naiz Fit, and resources that were deployed togrow of both businesses.Net cash used in operating activities was $7,290,000 for the year ended December 31, 2022 compared to $7,297,000 for the year ended December 31, 2021.The decrease in cash used in operating activity is derived mainly from an increase in share based payments and increase in account receivables mainly from theOrgad and Naiz fit acquisitions offset by a decrease in the net loss.Net cash used in investing activities for the year ended December 31, 2022 was $993,000 as opposed to net cash provided by investing activities of$161,000 for the year ended December 31, 2021. The net cash used in investing activities for the year ended December 31, 2022 was mainly from the acquisition ofOrgad and Naiz as opposed to proceeds from shortterm deposits and restricted deposits during the year ended December 31, 2021.We had a negative cash flow from financing activities of $67,000 for the year ended December 31, 2022 compared to positive cash flow of $16,292,000 for theyear ended December 31, 2021. The negative cash flow from financing activities for the year ended December 31, 2022 was mainly due to repayment of loans andinterest and payments for leases as opposed to proceeds from issuance of shares and from exercise of warrants for the year ended December 31, 2021.47We expect that we will continue to generate losses and negative cash flows from operations for the foreseeable future. Based on the projected cash flowsand cash balances as of December 31, 2022, together with the proceeds from the January 2023 financing, we believe our existing cash will not be sufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. We will need to raiseadditional capital, which may not be available on reasonable terms or at all. Additional capital would be used to accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;●respond to competitive pressures;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, the Russian invasion ofUkraine, the impact of any resurgence of the COVID19 pandemic and a number of other factors, many of which are outside our control, and on our financialperformance. Accordingly, we cannot assure you that we will be able to successfully raise additional capital at all or on terms that are acceptable to us. If we cannotraise additional capital when needed, it may have a material adverse effect on our business, results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.We have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.Recently Issued Accounting PronouncementsCertain recently issued accounting pronouncements are discussed in Note 2, Significant Accounting Policies, to the consolidated financial statementsincluded in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10K.OffBalance Sheet ArrangementsWe have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.48Application of Critical Accounting Policies and EstimatesOur management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we haveprepared in accordance with U.S. generally accepted accounting principles issued by the Financial Accounting Standards Board, or FASB. The preparation of thesefinancial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assetsand liabilities at the date of the financial statements, as well as the reported expenses during the reporting periods. Actual results may differ from these estimatesunder different assumptions or conditions.Our significant accounting policies were revenue from contracts with customers which are more fully described in the notes to our financial statementsincluded herein. We believe these accounting policies discussed below are critical to our financial results and to the understanding of our past and futureperformance, as these policies relate to the more significant areas involving management’s estimates and assumptions. We consider an accounting estimate to becritical if: (1) it requires us to make assumptions because information was not available at the time or it included matters that were highly uncertain at the time wewere making our estimate; and (2) changes in the estimate could have a material impact on our financial condition or results of operations.Accounting for business combinationsWe allocate the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed, based upon their estimated fairvalues at the acquisition date. These fair values are typically estimated with assistance from independent valuation specialists.The purchase price allocation process requires us to make significant estimates and assumptions, especially at the acquisition date with respect tointangible assets, contractual support obligations assumed, contingent consideration arrangements, and preacquisition contingencies.Although we believe the assumptions and estimates we have made in the past have been reasonable and appropriate, they are based in part on historicalexperience and information obtained from the management of the acquired companies and are inherently uncertain.Examples of critical estimates in valuing certain of the intangible assets we have acquired or may acquire in the future include but are not limited to:● future expected cash flows from product sales or other customer contracts;● expected costs of fulfillment including marketing, warehousing and product sales;● the acquired company’s brand and competitive position, as well as assumptions about the period of time the acquired brand will continue to be used inthe combined company’s product portfolio;● cost of capital and discount rates; and● estimating the useful lives of acquired assets as well as the pattern or manner in which the assets will amortize.Refer to Note 16, Business Combination, to the consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” of thisAnnual Report on Form 10K.49Revenue from contracts with customersOur revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled software subscriptions, associatedsoftware maintenance and support.We recognize revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with a customer exists onlywhen: the parties to the contract have approved it and are committed to perform their respective obligations, we can identify each party’s rights regarding thedistinct goods or services to be transferred (“performance obligations”), we can determine the transaction price for the goods or services to be transferred, thecontract has commercial substance and it is probable that we will collect the consideration to which we will be entitled in exchange for the goods or services that willbe transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to a customer.Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted to governmental authorities. Refundsare estimated at contract inception and updated at the end of each reporting period if additional information becomes available. Revenue is recognized when controlof the product is transferred to the customer.We maintain a returns policy that allows our customers to return product within a specified period of time. The estimate of the provision for returns is basedupon historical experience with actual returns.Principal versus Agent ConsiderationsWe follow the guidance provided in ASC 606 for determining whether we are a principal or an agent in arrangements with customers, by assessing whetherthe nature of our promise is a performance obligation to provide the specified goods (principal) or to arrange for those goods to be provided by the other party(agent). With regard to products being sold by Orgad through Amazon, this determination involves judgment. We determine it is the principle when it has controlover the promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).We recognize revenue ratably over the contractual service term for hosted services that are priced based on a committed number of transactions where thedelivery and consumption of the benefit of the services occur evenly over time, beginning on the date the services associated with the committed transactions arefirst made available to the customer and continuing through the end of the contractual service term. Over usage fees and fees based on the actual number oftransactions are billed in accordance with contract terms as these fees are incurred and are included in the transaction price of an arrangement as variableconsideration. Fees based on a number of transactions or impressions per month, are allocated to the period in which the transactions occur. Revenue forsubscriptions sold as a fee per period is recognized ratably over the contractual term as the customer simultaneously receives and consumes the benefit of theunderlying service.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.As a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.50ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAMY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2022U.S. DOLLARS IN THOUSANDSINDEXPageReport of Independent Registered Public Accounting Firm (PCAOB ID: ID 1057)F2Consolidated Balance SheetsF4Consolidated Statements of Comprehensive LossF5Consolidated Statements of Shareholders’ EquityF6Consolidated Statements of Cash FlowsF7Notes to Consolidated Financial StatementsF8 F33F1Report of Independent Registered Public Accounting FirmTo the Shareholders and Board of DirectorsMy Size, Inc.:Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of My Size, Inc. and subsidiaries (the Company) as of December 31, 2022 and 2021, the relatedconsolidated statements of comprehensive loss, shareholders’ equity, and cash flows for each of the years in the twoyear period ended December 31, 2022, and therelated notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, thefinancial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the twoyear periodended December 31, 2022, in conformity with U.S. generally accepted accounting principles.Going ConcernThe accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1d tothe consolidated financial statements, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit thatraises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1d. Theconsolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidatedfinancial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Critical Audit MattersCritical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to becommunicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved ourespecially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidatedfinancial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters oron the accounts or disclosures to which they relate.Acquisitiondate fair value of customer relationshipsAs discussed in Note 16 to the consolidated financial statements, on October 11, 2022, the Company acquired Naiz Bespoke Technologies SL (“Naiz”). As a result ofthe transaction, the Company acquired customer relationships intangible assets (“customer relationships”) representing the generation of future income from Naiz’sexisting customers. The acquisition date fair value of the customer relationships was $726 thousand.F2We identified the evaluation of the acquisitiondate fair value of the Naiz customer relationships as a critical audit matter. A high degree of subjective auditorjudgment was required to evaluate the following internally developed assumptions used to estimate the fair value of such asset, for which there were limitedobservable inputs: (i) forecasted revenues attributable to existing customers, (ii) forecasted earnings before interest, taxes, depreciation, and amortization(“EBITDA”) margins for the acquired business, (iii) estimated annual customer attrition rates and (iv) estimated discount rate. The determined fair value wassensitive to changes in these key assumptions. Additionally, specialized skills and knowledge were needed to evaluate the discount rate used.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s acquisitiondate fair value estimation process, including controls over the development of key assumptions. We performed a sensitivity analysis toassess the impact of reasonably possible changes to forecasted revenues, EBITDA margins, annual customer attrition rates, and the discount rate. We evaluated theforecasted revenue growth rates from existing customers by comparing the growth assumptions to those of the Company’s peers and industry reports. Inconnection with our assessment of the forecasts used in the valuation, we compared (1) forecasted revenue and EBITDA to Naiz’s historical actual results and (2)estimated annual customer attrition rates to historical Naiz customer attrition data. We tested the Company’s determined weighted average cost of capital(“WACC”), which was used to determine the discount rate, by involving valuation professionals with specialized skills and knowledge, who assisted in:Evaluating the selected discount rate by comparing it against a discount rate range that was independently developed using publicly available market datafor comparable companies, and;Assessing the Company’s WACC calculation, by comparing it against an independently estimated WACC range based on inputs obtained throughpublished surveys and studies.Goodwill impairment assessmentAs discussed in Note 16 to the consolidated financial statements, during 2022 the Company recorded goodwill of $1,257 thousand related to the acquisition of NaizBespoke Technologies, S.L. (“Naiz”). The Company performed an annual quantitative impairment test of goodwill at the reporting unit level. Based on this analysis,the Company determined that the fair value of its reporting unit exceeded its carrying value and no impairment charge was required.We identified the evaluation of the goodwill impairment assessment for the Naiz reporting unit as a critical audit matter. A high degree of subjective auditor judgmentwas required to evaluate the following assumptions used to estimate the fair value of the Company’s reporting unit, for which there were limited observable inputs:(i) forecasted reporting unit cash flows, (ii) longterm growth rates, and (iii) discount rates. The fair value was sensitive to changes in these key assumptions.Additionally, specialized skills and knowledge were needed to evaluate the discount rates.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s goodwill impairment evaluation process. We performed sensitivity analyses to assess the impact of reasonably possible changes to forecasted cashflows, longterm growth rates, and discount rates. We evaluated the Company’s forecasted growth rates by comparing the growth assumptions to those of theCompany’s peers and industry reports. We compared the Company’s forecasted revenue, cost of sales, and operating expense margins to historical actual results toassess the reasonableness of the forecasts. In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:– Assessing the Company’s WACC calculation, by comparing it against an estimated WACC range based on inputs obtained through published surveys andstudies– Evaluating the discount rates used by the Company by comparing them against discount rate ranges that were developed using publicly available market data forcomparable companies, and;– Performing an arithmetic recalculation regarding the fair value of the Company’s reporting unit, using the Company’s cash flow forecasts and the independentlydeveloped discount rates, and comparing the results to the Company’s fair value estimates./s/ Somekh ChaikinSomekh ChaikinMember Firm of KPMG InternationalWe have served as the Company’s auditor since 2017.Tel Aviv, IsraelApril 14, 2023F3MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED BALANCE SHEETSU.S. dollars in thousands (except share data)December 31,Note20222021AssetsCurrent assetsCash and cash equivalents32,10010,670Restricted cash263273Inventory997Account receivables1,94040Other receivables and prepaid expenses4758579Total current assets6,05811,562Long term deposits28Property and equipment, net5140112Operating rightofuse asset6583776Intangible assets71,377Goodwill71,395Investment in JV899Investment in marketable securities11471083,669996Total assets9,72712,558Liabilities and shareholders’ equityCurrent liabilitiesOperating lease liability6159138Shortterm loans9155Trade payables2,487635Liabilities to Related parties69863Other payables680392Total current liabilities4,1791,228Longterm loans9376Deferred tax liabilities328Operating lease liability6308473Total noncurrent liabilities1,012473CONTINGENCIES AND COMMITMENTS15Total Liabilities5,1911,701Shareholders’ equity13Stock capital Common stock of $0.001par value Authorized: 250,000,000and 100,000,000shares as of December 31,2022 and 2021; Issued and outstanding: 1,464,117and959,297 as of December 31,2022 and 2021, respectively (*)11Additional paidin capital58,67356,453Accumulated other comprehensive loss(637)(406)Accumulated deficit(53,501)(45,191)Total shareholders’ equity4,53610,857Total liabilities and shareholders’ equity9,72712,558(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F4MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSSU.S. dollars in thousands (except share data and per share data)Year endedDecember 31,Note20222021Revenues4,459131Cost of revenues(3,825)Gross profit634131Operating expensesResearch and development(1,701)(4,248)Sales and marketing18(3,143)(2,336)General and administrative19(3,900)(4,124)Total operating expenses(8,744)(10,708)Operating loss(8,110)(10,577)Financial income (expense), net20(236)57Loss before taxes(8,346)(10,520)Taxes on income36Net loss for the year(8,310)(10,520)Other comprehensive income (loss):Foreign currency translation differences(231)18Total comprehensive loss(8,541)(10,502)Basic and diluted loss per share (*)(7.47)(17.75)Basic and diluted weighted average number of shares outstanding (*)1,111,913420,385(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F5MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITYU.S. dollars in thousands (except share data)Common stockAdditionalpaidinAccumulatedothercomprehensiveAccumulatedTotalstockholders’NumberAmountcapitallossDeficitequityBalance as of January 1, 2021289,314(*)37,171(424)(34,671)2,076Stockbased compensation related to optionsgranted to employees and consultants373373Exercise of options granted to employees178(*)Restricted shares issued to shareholder (***)100,000(*)2,6182,618Issuance of shares, net of issuance cost of$1,160434,700112,58212,583Exercise of warrants135,108(*)3,7093,709Total comprehensive income (loss)18(10,520)(10,502)Balance as of December 31, 2021959,300156,453(406)(45,191)10,857Stockbased compensation related to optionsand restricted shares granted to employeesand consultants176,000(*)455455Issuance of shares in Business Combination(**)295,802(*)1,4461,446Issuance of shares post BusinessCombination (**)20,924(*)319319Effect of reverse stock split (Note 13 g)12,091(*)Total comprehensive income (loss)(231)(8,310)(8,541)Balance as of December 31, 20221,464,117158,673(637)(53,501)4,536(*)Represents an amount of less than $1.(**)See note 16(***)See note 1 bThe accompanying notes are an integral part of the consolidated financial statements.F6MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSU.S. dollars in thousandsYear endedDecember 31,20222021Cash flows from operating activities:Net loss(8,310)(10,520)Adjustments to reconcile net loss to net cash used in operating activities:Depreciation3842Change in operating lease rightofuse asset13543Amortization of intangible assets155foreign exchange differences(23)1Change in liabilities to related parties635Interest on long term liabilities10Interest paid(10)Revaluation of investment in marketable securities62(49)Restricted Shares issued to shareholder2,618Stock based compensation455373Issuance of shares post Business Combination319Change in inventory(219)Change in deferred tax liabilities(36)Change in account receivable(1,863)(12)Changes in operating lease liabilities(142)Change in other receivables and prepaid expenses184(99)Change in trade payables1,315253Change in other payables553Net cash used in operating activities(7,290)(7,297)Cash flows from investing activities:Acquisition of a subsidiary, net of cash acquired(767)Proceeds from restricted deposits, net184investing in other receivable(100)Investment in equity accounted investee(99)Purchase of property and equipment(27)(23)Net cash (used in) provided by investing activities(993)161Cash flows from financing activities:Proceeds from issuance of shares, net of issuance costs12,583Repayment of loans(67)Proceeds from exercise of warrants3,709Net cash (used in) provided by financing activities(67)16,292Effect of exchange rate fluctuations on cash and cash equivalents(230)13Change in cash and cash equivalents and restricted cash(8,580)9,169Cash and cash equivalents and restricted cash at the beginning of the year10,9431,774Cash and cash equivalents and restricted cash at the end of the year2,36310,943B) Aggregate cash flows derived for the Company as a result of the Orgad acquisition (note 16)2022Trade and other receivables364Inventory864Fixed assets55Longterm deposits31Selling Platform378Goodwill152Shortterm credit(181)Trade payables(580)Other payables(88)Longterm loan(138)Longterm provision(13)Deferred Tax Liability(87)Issuance of shares(457)Total acquisition of subsidiary, net of cash300C) Aggregate cash flows derived for the Company as a result of the Naiz acquisition (note 16)2022Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Issuance of shares(1,008)Total acquisition of subsidiary, net of cash467The accompanying notes are an integral part of the consolidated financial statements.F7MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERALa.My Size, Inc. is developing unique measurement technologies based on algorithms with applications in a variety of areas, from the apparel ecommerce market, to the courier services market and to the Do It Yourself (“DIY”) smartphone and tablet apps market. The technology is driven byproprietary algorithms, which are able to calculate and record measurements in a variety of novel ways.Following the acquisition of Naiz Bespoke Technologies, S.L (“Naiz”) in October 2022 (see note 16), the Company expanded its offering outreachand customer base.Following the acquisition of Orgad International Marketing Ltd. (“Orgad”) in February 2022 (see note 16), the Company also operates anomnichannel ecommerce platform.The Company has five subsidiaries, My Size Israel 2014 Ltd (“My Size Israel”), Topspin Medical (Israel) Ltd., and Orgad all of which areincorporated in Israel, and My Size LLC which was incorporated in the Russian Federation and Naiz Bespoke Technologies, S.L., a limited liabilitycompany incorporated under the laws of Spain (see note 16). References to the Company include the subsidiaries unless the context indicatesotherwise.My Size, Inc., was incorporated and commenced operations in September 1999, as Topspin Medical Inc. (“Topspin”), a private company registeredin the State of Delaware. In December 2013, the Company changed its name to Knowledgetree Ventures Inc. Subsequently, in February 2014, theCompany changed its name to My Size, Inc. Topspin was engaged, through its Israeli subsidiary, in research and development in the field ofcardiology and urology.Since September 1, 2005, the Company has traded on the Tel Aviv Stock Exchange (“TASE”).Between 2007 and 2012 the Company reported as a public company with the U.S. Securities and Exchange Commission (the “SEC”). In August2012, the Company suspended its reporting obligations under Section 13(a) and 15(d) of the Securities Exchange Act of 1934. In mid2015, theCompany resumed reporting as a public company.b.On January 9, 2014, at the Company’s general meeting of shareholders, its shareholders approved an engagement with one of the Company’sinvestors (the “Seller”) for the purchase of rights in a Venture (the “Venture”), including the rights to the method and the certain patent applicationthat had been filed by the Seller (the “Assets”). The Venture relates to the development of technologies and applications which will assist theconsumer to take his or her body measurements accurately using a mobile device to ensure the purchase of clothing with the best possible fitwithout the need to try them on.In February 2014, the Company established a wholly owned subsidiary, My Size (Israel) 2014 Ltd., a company registered in Israel, which iscurrently engaged in the development of the Venture described above.In return for purchasing an interest in the Venture, the Company undertook to pay the Seller 18% of the Company’s operating profit, direct orindirect, connected to the Venture for a period of seven years starting from the end of the Venture’s development period.As part of the agreement, the Seller received an option to buy back the Assets for consideration which will reflect the market fair value at that time,on the occurrence of the following events: a) if a motion is filed to liquidate the Company; b) if seven years after signing the agreement, theCompany’s total accumulated revenues, direct or indirect, from the Venture or the commercialization of the patent will be lower than NIS 3.6 million.In such an event, Seller may repurchase the interest in the Venture at a market price to be determined by an independent third party valuationconsultant, who shall be chosen by agreement by the parties, and the audit committee shall conduct the negotiations on behalf of the Company todetermine the identity of the consultant.On May 26, 2021, the Company, My Size Israel and Shoshana Zigdon entered into an Amendment to Purchase Agreement (the “Amendment”)which made certain amendments to a Purchase Agreement between the parties dated February 16, 2014 (the “Purchase Agreement”). Pursuant tothe Amendment, Ms. Zigdon agreed to irrevocably waive the right to repurchase certain assets related to the collection of data for measurementpurposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which the Company’s business is substantiallydependent, and all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My Size Israel underthe Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation,reward or any rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights(the “Waiver”). In consideration of the Waiver, the Company issued 100,000 shares of common stock to Ms. Zigdon in a private placement.F8MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERAL (Cont.)c.On July 25, 2016, the Company’s common stock began publicly trading on the Nasdaq Capital Market under the symbol “MYSZ”. The Company’sshares of common stock are listed both on the Nasdaq Capital Market and TASE.d.Since inception, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit of $53,501.The Company has financed its operations mainly through fundraising from various investors.The Company’s management expects that the Company will continue to generate losses and negative cash flows from operations for theforeseeable future. Based on the projected cash flows and cash balances as of December 31, 2022, management is of the opinion that its existingcash will be sufficient to fund operations for a period less than 12 months. As a result, there is substantial doubt about the Company’s ability tocontinue as a going concern.Management’s plans include the continued commercialization of the Company’s products and securing sufficient financing through the sale ofadditional equity securities, debt or capital inflows from strategic partnerships. Additional funds may not be available when the Company needsthem, on terms that are acceptable to it, or at all. If the Company is unsuccessful in commercializing its products and securing sufficient financing,it may need to cease operations.The financial statements include no adjustments for measurement or presentation of assets and liabilities, which may be required should theCompany fail to operate as a going concern.e.The Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificial intelligencedriven measurement solutions (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions. The fashion and equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. The SaaS based innovativeartificial intelligence driven measurement solutions, or SaaS Solutions operating segment consists of My Size Inc My Size Israel and LLC.NOTE 2 SIGNIFICANT ACCOUNTING POLICIESThe consolidated financial statements are prepared according to United States generally accepted accounting principles (“U.S. GAAP”), applied on aconsistent basis, as followsa.Use of estimates:The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions thataffect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.Information about assumptions made by the Company with respect to the future and other reasons for uncertainty with respect to estimates thathave a significant risk of resulting in a material adjustment to carrying amounts of assets and liabilities in the next financial year are included in thefollowing notes:Acquisitions of subsidiariesThe Company measures the fair value of the consideration transferred (including contingent consideration) and fair value of the assets acquiredand liabilities assumed, in business combination transactions. For information on details on fair value measurement in acquisition of subsidiaries,see Note 16 regarding business combinations.Estimated impairment of nonfinancial assetsThe Company examines on an annual basis whether there is an impairment of goodwill, intangibles and property, plant and equipment that areallocated to cash generating units, in accordance with the accounting policy presented in Note 1(h) below. Recoverable amounts of cashgenerating units are determined on the basis of valueinuse calculations. These calculations require the use of estimates.For information on key assumptions used in calculation of the recoverable amount, see note 7 – Goodwill and other Intangible assets.b.Functional currency:The currency of the primary economic environment in which the operations of the Company is conducted is the United States Dollar and thus it isthe Company’s functional currency. The reporting currency according to which these financial statements are prepared is the U.S. dollar.The currency of the primary economic environment in which the operation of the Subsidiary, My Size Israel and Orgad International MarketingLtd. functional currency is the New Israeli Shekel (“NIS”).The currency of the primary economic environment in which the operation of the Subsidiary, My Size LLC, functional currency is Russian Ruble.The currency of the primary economic environment in which the operation of the Subsidiary, Naiz fit, functional currency is Euro.F9MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)c.Principles of consolidation:The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances andtransactions have been eliminated upon consolidation.d.Cash equivalents:Cash equivalents are shortterm highly liquid investments that are readily convertible to cash with original maturities of three months or less at thedate acquired.e.Restricted cashRestricted cash are deposits for rent, credit card and for hedging activities.f.Inventories:Inventories include finished goods and are measured at the lower of cost or net realizable value. The cost of inventories comprises of the costsincurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary courseof business. At the point of the loss recognition, a new, lowercost basis for that inventory is established, and subsequent changes in facts andcircumstances do not result in the restoration or increase in that newly established cost basis. The costs of purchase of inventories comprise thepurchase price and other costs directly attributable to the acquisition of finished goods. In 2022, the Company recorded an inventory markdownof $48.g.Property and equipment:Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straightline method over theestimated useful lives of the assets, at the following annual rates:%Computers and peripheral equipment33Office furniture and equipment720Leasehold improvementsOver the term of the leaseor the useful life of theimprovements, whicheveris shorterh.Impairment of longlived assets:The Company’s property and equipment are reviewed for impairment in accordance with ASC 360, “Property Plant and Equipment”, wheneverevents or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held andused is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by theassets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount ofthe assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less sellingcosts. During the periods ended December 31, 2022 and 2021, no impairment losses have been recorded.i.Business combinations:The Company applies the provisions of ASC 805, “Business Combination” and allocates the fair value of purchase consideration to the tangibleassets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchaseconsideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assetsacquired and liabilities assumed, the Company estimated the future expected cash flows from acquired platform, customer relationships,Technology and trademark from a market participant perspective, useful lives and discount rates. In addition, management makes significantestimates and assumptions, which are uncertain, but believed to be reasonable.Acquisitionrelated costs are recognized separately from the acquisition and are expensed as incurred.F10MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)j.Goodwill:Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a businesscombination. Under ASC 350, “Intangible Goodwill and Other”, goodwill is not amortized, but rather is subject to an annual impairment test.ASC 350 requires goodwill to be tested for impairment at the reporting unit level at least annually, the fourth quarter, or between annual tests incertain circumstances, and written down when impaired. Goodwill is tested for impairment by comparing the fair value of the reporting unit with itcarrying value. Goodwill from Orgad acquisition was allocated to the fashion and equipment ecommerce platform segment and Goodwill from theNaiz acquisition was allocated to Naiz segment based innovative artificial intelligence driven measurement solutions.Alternatively, ASC 350 permits an entity to bypass the qualitative assessment for any reporting unit and proceed directly to performing the firststep of the goodwill impairment test. There were no impairment charges to goodwill during the period presented.k.Intangible assets:Intangible assets consist of identifiable intangible assets that the Company has acquired from previous business combinations. Intangible assetsare recorded at costs, net of accumulated amortization. The Company amortizes its intangible assets reflecting the pattern in which the economicbenefits of the intangible assets are consumed. When a pattern cannot be reliably determined, the Company uses a straightline amortizationmethod. Amortization is calculated by the straightline method over the estimated useful lives of the following assets.The estimated useful lives of the company’s intangible assets are as follows:yearsCustomer Relationships7Technology5Trademark5Selling Platform3Each period the Company evaluates the estimated remaining useful lives of its intangible assets and whether events or changes in circumstanceswarrant a revision to the remaining period of amortizationl.Severance pay:The Subsidiary’s liability for severance pay is covered by Section 14 of the Israeli Severance Pay Law (“Section 14”). Under Section 14, employeesin Israel are entitled to have monthly deposits, at a rate of 8.33% of their monthly salary, made on their behalf to their insurance funds. Payments inaccordance with Section 14 exempt the Subsidiary from any additional obligation for these employees. As a result, the Subsidiary does notrecognize any liability for severance pay due to these employees and the deposits under Section 14 are not recorded as an asset in theSubsidiary’s balance sheet. These contributions for compensation represent defined contribution plans and expenses are recorded based onactual deposits.Other than the My Size Israel’s liability there are no additional severance pay liabilities.F11MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)m.Research and development costs:Research and development costs are charged to the statement of operations, as incurred. Most of the research and development expenses are forwages, related expenses and subcontractors.n.Income taxes:The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilitiesfor the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Companies’ taxreturns. Deferred taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities using enactedtax rates in effect in the years in which the differences are expected to reverse. The Company assesses the likelihood that its deferred tax assetswill be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely thannot that all or a portion of deferred tax assets will not be realized. The Company establishes a valuation allowance, if necessary, to reduce deferredtax assets to the amount more likely than not to be realized. As of December 31, 2022, and 2021, a full valuation allowance was established by theCompany.The Company implements a twostep approach to recognize and measure the benefit of its tax positions. The first step is to evaluate the taxposition taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that,on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigationprocesses. The second step is to measure the tax benefit as the largest amount that is greater than 50 percent (cumulative basis) likely to berealized upon settlement.The Company believes that its tax positions are all highly certain of being upheld upon examination. As of December 31,2022 and 2021 the Company recorded a liability for unrecognized tax benefits of $328 and none respectively.o.Accounting for stockbased compensation:The Company accounts for its employees’ stockbased compensation as an expense in the financial statements based on ASC 718. All awards areequity classified and therefore such costs are measured at the grant date fair value of the award and graded vesting attribution approach torecognize compensation cost over the vesting period. The Company estimates stock option grant date fair value using the Binomial and BlackScholes option pricingmodel.The Company recorded stock options issued to nonemployees at the grant date fair value, and recognizes expenses over the related serviceperiod by using the straightline attribution approach in accordance with ASU 201807. All awards are equity classified.The expected volatility of the share prices reflects the assumption that the historical volatility of the share prices is reasonably indicative ofexpected future trends.The riskfree interest rate for grants with an exercise price denominated in USD for employees and several consultants is based on the yield fromUS treasury zerocoupon bonds with an equivalent term.The Company has historically not paid dividends and has no foreseeable plans to pay dividends.F12MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)p.Fair value of financial instruments:ASC 820, Fair Value Measurements and Disclosures, relating to fair value measurements, defines fair value and established a framework formeasuring fair value. The ASC 820 fair value hierarchy distinguishes between market participant assumptions developed based on market dataobtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptionsdeveloped based on the best information available in the circumstances. ASC 820 defines fair value as the price that would be received to sell anasset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price. Inaddition, the fair value of assets and liabilities should include consideration of nonperformance risk, which for the liabilities described belowincludes the Company’s own credit risk.As a basis for considering such assumptions, ASC 820 establishes a threetier value hierarchy, which prioritizes the inputs used in the valuationmethodologies in measuring fair value:Level 1 Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access. Valuationadjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readilyand regularly available in an active market, valuation of these products does not entail a significant degree of judgment.Level 2 Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, eitherdirectly or indirectly.Level 3 Valuations based on inputs that are unobservable and significant to the overall fair value measurement.The Company holds share certificates in iMine Corporation (“iMine”) formerly known as Diamante Minerals, Inc., a publiclytraded company onthe OTCQB.Due to sales restrictions on the sale of the iMine shares, the fair value of the shares was measured on the basis of the quoted market price for anotherwise identical unrestricted equity instrument of the same issuer that trades in a public market, adjusted to reflect the effect of the salesrestrictions and is therefore, ranked as Level 2 asset.q.Basic and diluted net loss per share:Basic net loss per share is computed based on the weighted average number of shares of common stock outstanding during each year. Diluted netincome per share is computed based on the weighted average number of shares of common stock outstanding during each year plus dilutivepotential equivalent common stock considered outstanding during the year, in accordance with ASC 260, “Earnings per Share”. For the yearsended December 31, 2022 and 2021, all outstanding options and warrants have been excluded from the calculation of the diluted net loss per sharesince their effect was antidilutive.r.Concentrations of credit risk:Financial instruments that potentially subject the Company and its subsidiaries to concentrations of credit risk consist principally of cash andcash equivalents.Cash and cash equivalents are invested in banks in Israel, Spain and United States. Such deposits in United States may be in excess of insuredlimits and are not insured in other jurisdictions. Management believes that the financial institutions that hold the Company’s investments arefinancially sound and, accordingly, minimal credit risk exists with respect to these investments.The Company and its subsidiaries have no offbalancesheet concentration of credit risk such as foreign exchange contracts, option contracts orother foreign hedging arrangements.F13MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)s.Revenue Recognition:The Company’s revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled softwaresubscriptions, associated software maintenance and support.The Company recognizes revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with acustomer exists only when: the parties to the contract have approved it and are committed to perform their respective obligations, the Companycan identify each party’s rights regarding the distinct goods or services to be transferred (“performance obligations”), the Company can determinethe transaction price for the goods or services to be transferred, the contract has commercial substance and it is probable that the Company willcollect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to acustomer. Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted togovernmental authorities. Refunds are estimated at contract inception and updated at the end of each reporting period if additional informationbecomes available. Revenue is recognized when control of the product is transferred to the customer.The Company maintains a returns policy that allows its customers to return product within a specified period of time. The estimate of the provisionfor returns is based upon historical experience with actual returns.Principal versus Agent ConsiderationsThe Company follows the guidance provided in ASC 606 for determining whether it is a principal or an agent in arrangements with customers, byassessing whether the nature of the Company’s promise is a performance obligation to provide the specified goods (principal) or to arrange forthose goods to be provided by the other party (agent). With regard to products being sold by Orgad through Amazon, this determination involvesjudgment. The Company determines it is the principle when it has control over promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).The Company recognizes revenue ratably over the contractual service term for hosted services that are priced based on a committed number oftransactions where the delivery and consumption of the benefit of the services occur evenly over time, beginning on the date the servicesassociated with the committed transactions are first made available to the customer and continuing through the end of the contractual serviceterm. Over usage fees and fees based on the actual number of transactions are billed in accordance with contract terms as these fees are incurredand are included in the transaction price of an arrangement as variable consideration. Fees based on a number of transactions or impressions permonth, are allocated to the period in which the transactions occur. Revenue for subscriptions sold as a fee per period is recognized ratably overthe contractual term as the customer simultaneously receives and consumes the benefit of the underlying service.F14MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)t.Contingencies and CommitmentsLiabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it isprobable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with losscontingencies are expensed as incurred.u.Derivative instrumentsThe Company accounts for its derivative instruments as either assets or liabilities and measures them at fair value through profit or loss.v.LeasesThe Company leases include an office space lease agreement for 36 months, with an option to extend for an additional 36 months and 36 monthscancelable operating lease agreements on behalf of personnel vehicles. The lease term includes a noncancellable period of the lease plus anyadditional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise,or an option to extend (or not to terminate) the lease controlled by the lessor.ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make leasepayments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value oflease payments over the lease term. The company generally use its incremental borrowing rate based on the estimated rate of interest forcollateralized borrowing over a similar term of the lease payments at commencement date. Lease expense for lease payments is recognized on astraightline basis over the lease term.For the office rent lease, the Company has elected to account for the lease and nonlease maintenance components as a single lease component.Therefore, the lease payments used to measure the lease liability include all of the fixed consideration in the contract, including insubstance fixedpayments, owed over the lease term.w.Impact of recently issued accounting standardIn June 2016, the FASB issued ASU 201613, “Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses on FinancialInstruments”, which requires companies to measure credit losses of financial instruments, including customer accounts receivable, utilizing amethodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information toinform credit loss estimates. Subsequent to the issuance of ASU 201613, the FASB issued several additional Accounting Standard Updates toclarify implementation guidance, provide narrowscope improvements and provide additional disclosure guidance. As an Emerging GrowthCompany, ASU 201613 is effective for fiscal years beginning after December 15, 2022. The Company does not expect this ASU to have a materialimpact on its consolidated financial statements.F15MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 3 CASH AND CASH EQUIVALENTSThe Company’s cash and cash equivalents balance at December 31, 2022 and 2021 is denominated in the following currencies:December 31,20222021US Dollars1,65110,184New Israeli Shekels259433Other190532,10010,670NOTE 4 OTHER RECEIVABLES AND PREPAID EXPENSESDecember 31,20222021Prepaid expenses and other current assets322429Government authorities28317Other153133Total758579NOTE 5 PROPERTY AND EQUIPMENT, NETComputersandperipheralequipmentOfficefurnitureandequipmentLeaseholdimprovementsTotalCostBalance as at January 1, 20211825860300Additions2323Translation adjustments72211Balance as at December 31, 20212126062334Balance as at January 1, 20222126062334Additions161127Business combination401555Translation adjustments(32)(8)(8)(48)Balance as at December 31, 20222367854368Accumulated DepreciationBalance as at January 1, 20211461412172Additions2751042Translation adjustments6118Balance as at December 31, 20211792023222Balance as at January 1, 20221792023222Additions209938Translation adjustments(27)(3)(2)(32)Balance as at December 31, 20221722630228Carrying amountsAs at December 31, 2021334039112As at December 31, 2022645224140F16MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 6 LEASESIn August 2019, The Company entered into an office space lease agreement. The lease term is for 36 months beginning on August 20, 2019 and endingon August 20, 2022, with an option to extend for an additional 36 months. The Company extended the lease period until August 20, 2025. Monthly rentpayments including utilities amounting to approximately USD 14 (NIS 49,500) per month.In addition, The Company entered into a threeyear cancelable operating lease agreement for cars.These operating leases are included in “Right of use asset” on the Company’s December 31, 2022 consolidated balance sheets, and represent theCompany’s right to use the underlying asset for the lease term. The Company’s obligations to make lease payments are included in the currentliabilities as “Operating lease liability” and in the noncurrent liabilities as “Operating lease liability long term” on the Company’s December 31, 2022consolidated balance sheets. As of December 31, 2022, rightofuse of asset was $583. operating lease liabilities were $159 and non current Operatinglease liabilities were $308. Rightofuse asset includes the capitalization of improvements (net of amortization) amounting to $105.Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value ofthe lease payments.The interest rate used to discount future lease payment was 11.95%.Maturities of lease liabilities as of December 31, 2022 were as follows:Year Ending:2023$1912024$1912025$127Thereafter$509Less imputed interest:$(42)Total lease liabilities$467F17MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 7 – Goodwill and other Intangible assetsA.Identified intangible assetsSchedule of Intangible assetsSelling PlatformTechnologyCustomerRelationshipsOtherTotalThousandsUSDThousandsUSDThousandsUSDThousandsUSDThousandsUSDCostAs of January 1, 2022Acquisitions through business combinations378286726771,467Effect of changes in exchange rates(32)2565765As of December 31, 2022346311791841,532AmortizationAs of January 1, 2022Amortization for the year including effect of changes inexchange rates as of December 31, 2022(109)(15)(27)(4)(155)Carrying amountAs of December 31, 2022237296764801,377AmortizationAmortization expenses recorded for identified intangible assets in the Consolidated Statements of Operations for each period and were as follows:Line ItemDecember 31,2022December 31,2021Selling platformCosts of revenues109TrademarkSales and marketing4TechnologyCosts of revenues15Customer relationshipsSales and marketing27Total amortization expenses155Future amortization expenses are expected to be as follows:20232024202520262027ThereafterTotalFuture amortization expenses3033031941771561791,312b.GoodwillThe changes in the carrying amount of goodwill for the years ended December 31, 2022 and 2021 were as follows:Fashion and equipmentecommerce platformNaizTotalBalance as of December 31, 2021Changes during the period:Goodwill acquired1521,1521,304Goodwill impairmentTranslation differences(14)10591Balance as of December 31, 20221381,2571,395The Company operates its business through three reporting segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovativeartificial intelligence driven measurement solutions and (iii) Naiz. See note 17 for additional segments information.The Company determines the fair value of its reporting units using the income approach. According to the income, the Company uses discounted cashflows to estimate the fair value. Cash flow projections are based on the Company’s estimates of revenue growth rates and operating margins, takinginto consideration the industry’s and market’s conditions. The discount rate used is based on the weighted average cost of capital (“WACC”),adjusted for the relevant risk associated with businessspecific characteristics.The Company performed a quantitative assessment as of December, 31 2022 for the reporting units’ fair value. The estimated fair value of the Fashionand equipment ecommerce platform and Naiz reporting units exceeded its estimated carrying amount by 95.9% and 27.7% respectively. This, based thefollowing assumptions:Fashion and equipmentecommerce platformNaizDiscount rate21%23%Terminal growth rate3%3%If business conditions or expectations were to change materially, it may be necessary to record impairment charges to the Company’s reporting units inthe future.F18MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 8 Investment in JVIn August 2022, the Company established a joint venture (“JV”) in Brazil with Santista Têxtil. The Company holds 51% and Santista Têxtil holds 49% of theJV. The purpose of the JV is to serve the Brazilian market according to the business plan that was set. Both parties agree to make an initial investment in theJV of $198that will be made per the holding percentage of each party. As of the reporting date, the JV is in process of establishing its operation.NOTE 9 Financial LiabilitiesThe book value of each of the financial liability categories is an acceptable approximation of fair value.The debt is comprised of four loans that were granted to My Size Israel – in an outstanding amount of approximately $131, bearing interest rangingfrom prime rate to prime+2.8% rate, and four loans that were granted to the Spanish subsidiary– in an outstanding amount of approximately $400,bearing interest ranging from 1% to 3%.The financial liability maturities during the five years following the end of the financial year are shown below:UntilUntilUntilUntilUntilAfterTOTAL311223311224311225311226311227311227311222Debts with credit institutions15513892874712531NOTE 10 RELATED PARTIES TRANSACTIONSA. Balances with related parties:The following related party payables are included in liability to related parties.December 31,20222021Officers (*)4143Liability in respect of business combinations (**)739Other related parties (***)(95)Directors152069863(*)The amount includes the net salaries payables.(**)The amount includes the provision created to former owners of Orgad that are entitled to additional cash and equity consideration and former owners of Naizthat entitled to additional cash consideration, see note 16 business combination.(***)The amount includes an amount receivable from Orgad previous shareholders who currently work in the company.B. Related parties benefits:Year endedDecember 31,20222021Salaries and related expenses1,440852Share based payments39673Cash liability and equity liability expenses related to acquisitions (**)1,058Directors58582,952983(**)The amount includes the expenses for a provision created to former owners of Orgad that are entitled to additional cash and equity consideration and formerowners of Naiz that entitled to additional cash consideration, see note 16 business combination.NOTE 11 FINANCIAL INSTRUMENTSThe following tables presents the Company’s significant assets and liabilities that are measured at fair value on recurring basis and their classificationwithin the fair value hierarchy:December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities47financial assets (*)10December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesDerivatives9December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities108December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesWarrants derivative2(*)the financial asset includes in other receivables.F19MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 11 FINANCIAL INSTRUMENTS (Cont.)The carrying amounts of cash and cash equivalents, restricted cash, short term restricted deposit, accounts receivable, other receivables and prepaidexpenses, trade payable and accounts payable approximate their fair value due to the shortterm maturities of such instruments.At December 31, 2022, the recognized gain and fair value (based on quoted market prices with a discount due to security restrictions on iMine shares)of the marketable securities were $59and $47, respectively (at December 31, 2021 $49and $108, respectively).NOTE 12 TAXES ON INCOMEa.On December 31, 2022, the Company had U.S. federal net operating loss carryforwards of approximately $26 available to reduce future taxableincome. Utilization of the U.S. net operating losses may be subject to substantial limitations due to the change of ownership provisions of theInternal Revenue Code of 1986.The U.S. Company has final tax assessments through 2014.On December 22, 2017, the Tax Reform Act was signed into law. The legislation significantly changes U.S. tax law by, among other things, lowering theU.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. As a result of the decrease in the corporate incometax rate, the Company revalued the ending net deferred tax assets at December 31, 2017, but did not recognize any incremental income tax expense in2017 due to the revaluation of the valuation allowance.b.Foreign tax:1.Tax rates:Presented hereunder are the tax rates relevant to the Company’s Israeli subsidiaries:2022 23%2021 23% Presented hereunder are the tax rates relevant to the Company’s Spanish subsidiary:2022 24%2.The Company’s Israeli subsidiaries have estimated total available carryforward operating tax losses for Israeli income tax purposes ofapproximately $64as of December 31, 2022. Of these losses, a total of $47.5are owned by Topspin Medical (Israel) Ltd. Topspin tax lossesmay be offset only by future income with respect to the same operational activity by which it was incurred for an indefinite period of time. Theother losses are owned by My Size Israel and may be carryforward to offset against future income for an indefinite period of time.3.Topspin Medical (Israel) Ltd. and My Size (Israel) 2014 Ltd. has final tax assessments through 2016.c.U.S. and foreign components of loss from continuing operations, before income taxes consisted of:December 31,20222021U.S(1,180)(3,802)NonU.S. (foreign)(7,130)(6,718)(8,310)(10,520)F20MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 12 TAXES ON INCOME (Cont.)d.Deferred taxes:Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reportingpurposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows:December 31,20222021Deferred tax assets:Operating loss carryforwards20,13120,238Warrants and options145126Marketable securities390377Intangible assets(328)Research and development expenses586341Other temporary differences203Deferred tax assets before valuation allowance21,12721,082Valuation allowance(21,455)(21,082)Net deferred tax liability(328)The following table presents a reconciliation of the beginning and ending valuation allowance:December 31,20222021Balance at beginning of the year21,08218,968Additions in valuation allowance to the income statement1,7581,625Additions in valuation allowance due to exchange rate differences(1,385)489Balance at end of the year21,45521,082In assessing the realization of deferred tax assets, management considers whether it is more likely than not that all or some portion of the deferred taxassets will not be realized.The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporarydifferences are deductible and net operating losses are utilized. Based on consideration of these factors, the Company recorded a full valuationallowance at December 31, 2021 and 2020.e.Theoretical taxThe following presents the adjustment between the theoretical tax amount and the tax amount included in the financial statements:December 31,20222021Loss before income taxes8,34610,520Statutory tax rate21%21%Computed “expected” tax income1,7522,209Foreign tax rate differences and exchange rate differences149131Nondeductible expenses(107)(715)Change in valuation allowance(1,758)(1,625)Taxes on income36F21MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITYa.Common stock confers upon their holders the right to receive notice to participate and vote in general meetings of the Company, and the right toreceive dividends if declared.b.On January 8, 2021, the Company conducted a public offering of its securities pursuant to which it issued 62,768 shares of its common stock forgross proceeds of $2,008. The net proceeds to the Company from the offering were approximately $1,700, after deducting placement agent’s feesand other estimated offering expenses payable by the Company.c.During 2021, a holders of warrants exercised warrants to purchase 135,109 ordinary shares of the Company in exchange for $3,709.d.On March 25, 2021, the Company conducted a public offering of its shares of common stock pursuant to which it issued 104,741 shares of itscommon stock for gross proceeds of $3,300. The net proceeds to the Company from the offering were approximately $2,872, after deductingplacement agent’s fees and other estimated offering expenses payable by the Company.On May 7, 2021, the Company issued an additional 15,711 shares of the Company’s common stock in connection with the full exercise of theunderwriter’s overallotment option granted in the Company’s March 2021 public offering. These additional shares were sold to the underwriter at apublic offering price of $31.5 per share, resulting in additional net proceeds to the Company, net of the underwriting discount, of approximately$463.e.On May 26, 2021, the Company issued 100,000 shares of common stock to Ms. Zigdon in consideration of the Waiver. See note 1(b) above.f.On October 28, 2021, the Company sold in a registered direct offering 100,592 shares of its common stock and, in a concurrent private placement,an aggregate of 75,444 unregistered warrants to purchase shares of common stock, at an offering price of $33.8 per share and associated warrant.In addition, on the same day, the Company sold in a private placement 150,888 unregistered shares of common stock and unregistered warrants topurchase up to an aggregate of 113,166 shares of common stock at the same purchase price as in the registered direct offering. The warrants areimmediately exercisable and will expire five years from issuance at an exercise price of $31.5 per share, subject to adjustment as set forth therein.The gross proceeds from the offerings were $8,500. The net proceeds to the Company from the offerings were approximately $7,560, afterdeducting placement agent’s fees and other estimated offering expenses payable by the Company. In connection with the offerings, the Companyissued to the placement agent warrants to purchase 17,603 shares on substantially the same terms as the purchasers in the offerings at an exerciseprice of $42.25 per share and a term expiring on October 26, 2026.g.On December 7, 2022, the Company’s board of directors approved a 1for25 reverse stock split of the Company’s issued and outstanding sharesof common stock. The reverse stock split became effective on December 8, 2022. In order not to have fractional shares as a result of the reversestock split, the Company issued an additional 12,091 shares of common stock. As a result, all shares of common stock, options for shares ofcommon stock, exercise price and net loss per share amounts were adjusted retroactively for all periods presented in these financial statements.F22MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITY (Cont.)g.A summary of the warrant activity during the years ended December 31, 2022 and 2021 is presented below:Number ofWarrantsWeightedAverageExercisePriceWeightedAverageRemainingLife inYearsOutstanding, December 31, 2020216,85936.754.26Issued206,214Expired or exercised(135,109)Outstanding, December 31, 2021287,96431.004.35IssuedExpired or exercised(17,901)Outstanding, December 31, 2022270,06330.213.36Exercisable, December 31, 2022270,06330.213.36NOTE 14 STOCK BASED COMPENSATIONThe stockbased expense recognized in the financial statements for services received is related to Research and Development, Sales and Marketingand General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense Research and development15195Stockbased compensation expense Sales and marketing126180Stockbased compensation expense General and administrative17898455373The stockbased expense recognized in the financial statements for services received post Acquisition of Orgad (see note 16) is related to Cost OfGoods, Sales and Marketing and General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense – Cost of goods80Stockbased compensation expense Sales and marketing112Stockbased compensation expense General and administrative127319F23MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Options issued to consultantsWe can sell additional shares of common stock without consulting stockholders and without offering shares to existing stockholders, which wouldresult in dilution of shareholders’ interests in the company and could depress our stock price.Our Certificate of Incorporation currently authorizes 250,000,000 shares of common stock, of which 2,446,780 are currently outstanding as of March 31, 2023and our board of directors is authorized to issue additional shares of our common stock. Although our board of directors intends to utilize its reasonable businessjudgment to fulfil its fiduciary obligations to our then existing stockholders in connection with any future issuance of our capital stock, the future issuance ofadditional shares of our capital stock could cause immediate, and potentially substantial, dilution to our existing stockholders, which could also have a materialeffect on the market value of the shares. Further, other than certain participation rights that we have granted in a past offering, our shares do not have preemptiverights, which means we can sell shares of our capital stock to other persons without offering purchasers in this offering the right to purchase their proportionateshare of such offered shares. Therefore, any additional sales of stock by us could dilute your ownership interest in our Company.Our quarterly operating results may fluctuate significantly.We expect our operating results to be subject to quarterly fluctuations. Our net loss and other operating results will be affected by numerous factors,including:●variations in the level of expenses related to our research and development;●any lawsuits in which we may become involved;●regulatory developments affecting our products; and●our execution of any collaborative, licensing or sales agreements, and the timing of payments under these arrangements.If our quarterly operating results fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially.Furthermore, any quarterly fluctuations in our operating results may, in turn, cause the price of our common stock to fluctuate substantially.If we fail to comply with the rules under the Sarbanes Oxley Act of 2002 related to accounting controls and procedures or if we discover materialweaknesses and deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult.If we fail to comply with the rules under the SarbanesOxley Act of 2002 related to disclosure controls and procedures, or, if we discover materialweaknesses and other deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult. Section 404 of the SarbanesOxley Act requires annual management assessments of the effectiveness of our internal control over financial reporting and, ifwe are no longer a nonaccelerated filer, a report by our independent auditors addressing these assessments. If material weaknesses or significant deficiencies arediscovered or if we otherwise fail to achieve and maintain the adequacy of our internal control, we may not be able to ensure that we can conclude on an ongoingbasis that we have effective internal controls over financial reporting in accordance with Section 404 of the SarbanesOxley Act. Moreover, effective internalcontrols are necessary for us to produce reliable financial reports and are important to helping prevent financial fraud. If we cannot provide reliable financial reportsor prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price ofour common stock could drop significantly.38Our Certificate of Incorporation, Bylaws and Delaware law may have antitakeover effects that could discourage, delay or prevent a change incontrol, which may cause our stock price to decline.Our Certificate of Incorporation, Bylaws and Delaware law could make it more difficult for a thirdparty to acquire us, even if closing such a transactionwould be beneficial to our stockholders. Provisions of our Certificate of Incorporation, Bylaws and Delaware law also could have the effect of discouraging potentialacquisition proposals or making a tender offer or delaying or preventing a change in control, including changes a stockholder might consider favorable. Suchprovisions may also prevent or frustrate attempts by our stockholders to replace or remove our management. In particular, the Certificate of Incorporation, Bylawsand Delaware law, as applicable, among other things:●provide the board of directors with the ability to alter the Bylaws without stockholder approval;●the classification of our board of directors;●place limitations on the removal of directors;●provide that vacancies on the Board of Directors may be filled by a majority of directors in office, although less than a quorum;●require that stockholder actions must be affected at a duly called stockholder meeting and generally prohibiting stockholder actions by written consent;●eliminate the ability of stockholders to call a special meeting of stockholders; and●establish advance notice requirements for nominations for election to the Board of Directors or for proposing matters that can be acted upon at duly calledstockholder meetings.We are subject to Section 203 of the Delaware General Corporation Law which, subject to certain exceptions, prohibits “business combinations” between apubliclyheld Delaware corporation and an “interested stockholder,” which is generally defined as a stockholder who becomes a beneficial owner of 15% or more ofa Delaware corporation’s voting stock for a threeyear period following the date that such stockholder became an interested stockholder. These provisions areexpected to discourage certain types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to firstnegotiate with our board. These provisions may delay or prevent someone from acquiring or merging with us, which may cause the market price of our commonstock and the value of our securities to decline.If we fail to comply with the continued listing requirements of the Nasdaq Capital Market, our common stock may be delisted and the price of ourcommon stock and our ability to access the capital markets could be negatively impacted.Nasdaq has established certain standards for the continued listing of a security on the Nasdaq Capital Market. The standards for continued listing include,among other things, that the minimum bid price for the listed securities not fall below $1.00 per share for a period of 30 consecutive trading days and that wemaintain a minimum of $2,500,000 in shareholders’ equity. We have in the past fallen below the minimum bid price and minimum shareholders’ equity.39No assurance can be given that we will continue to be in compliance with the Rule. Failure to meet applicable Nasdaq continued listing standards couldresult in a delisting of our common stock. A delisting of our common stock from Nasdaq could materially reduce the liquidity of our common stock and result in acorresponding material reduction in the price of our common stock. In addition, delisting could harm our ability to raise capital through alternative financing sourceson terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, employees and fewer business development opportunities.The exercise of outstanding warrants and stock options will have a dilutive effect on the percentage ownership of our capital stock by existingstockholders.As of March 15, 2023, we had outstanding warrants to acquire 2,299,115 shares of our common stock and stock options to purchase 1,659 shares of ourcommon stock, which warrants and options are exercisable for prices ranging between $2.81 and $375. The expiration of the term of such options and warrants rangefrom 0.22 years to 4.83 years. If a significant number of such warrants and stock options are exercised by the holders, the percentage of our common stock ownedby our existing stockholders will be diluted.Were our common stock to become subject to the penny stock rules then this could result in U.S. brokerdealers becoming discouraged from effectingtransactions in shares of our common stock.Rule 15g9 under the Exchange Act establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a marketprice of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. If we do not retain a listing on the NasdaqCapital Market or do not meet certain net tangible asset or average revenue requirements and if the price of our common stock is less than $5.00, our common stockwill be deemed a penny stock. For any transaction involving a penny stock, unless exempt, the rules require: (a) that a broker or dealer approve a person’s accountfor transactions in penny stocks; and (b) the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantityof the penny stock to be purchased.In order to approve a person’s account for transactions in penny stocks, the broker or dealer must: (a) obtain financial information and investmentexperience objectives of the person and (b) make a reasonable determination that the transactions in penny stocks are suitable for that person and the person hassufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver,prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which: (a) sets forth the basis on whichthe broker or dealer made the suitability determination; and (b) confirms that the broker or dealer received a signed, written agreement from the investor prior to thetransaction. Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult forinvestors to dispose of our common stock and cause a decline in the market value of our common stock.Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissionspayable to both the broker or dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor incases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the accountand information on the limited market in penny stocks.Sales of our currently issued and outstanding stock may become freely tradable pursuant to Rule 144 and may dilute the market for your shares andhave a depressive effect on the price of the shares of our common stock.A portion of our outstanding shares of common stock are “restricted securities” within the meaning of Rule 144 under the Securities Act of 1933, asamended, or the Securities Act. As restricted shares, these shares may be resold only pursuant to an effective registration statement or under the requirements ofRule 144 or other applicable exemptions from registration under the Securities Act and as required under applicable state securities laws. Rule 144 provides inessence that an affiliate (as such term is defined in Rule 144(a)(1)) of an issuer who has held restricted securities for a period of at least six months (one year afterfiling Form 10 information with the SEC for shell companies and former shell companies) may, under certain conditions, sell every three months, in brokeragetransactions, a number of shares that does not exceed the greater of 1% of a company’s outstanding shares of common stock or the average weekly trading volumeduring the four calendar weeks prior to the sale (the four calendar week rule does not apply to companies quoted on the OTC Markets). Rule 144 also permits, undercertain circumstances, the sale of securities, without any limitation, by a person who is not an Affiliate of the Company and who has satisfied a oneyear holdingperiod. A sale under Rule 144 or under any other exemption from the Securities Act, if available, or pursuant to subsequent registrations of our shares of commonstock, may have a depressive effect upon the price of our shares of common stock in any active market that may develop.40We are a former “shell company” and as such are subject to certain limitations not applicable to other public companies generally.Prior to our suspension of reporting in 2012, we were a public reporting “shell company,” as defined in Rule 12b2 under the Exchange Act. Although weare no longer a “shell company,” we are subject to certain restrictions under the Securities Act for the resale of securities issued by issuers that have been at anytime previously a shell company. Specifically, the Rule 144 safe harbor available for the resale of our restricted securities is only available to our stockholders if wehave filed all reports and other materials required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934, as amended, or the Exchange Act, asapplicable, during the preceding twelve months, other than current reports on Form 8K, at the time of the proposed sale, regardless of whether the restrictedsecurities were initially issued at the time we were a shell company or subsequent to termination of such status. Accordingly, holders of our “restricted securities”within the meaning of Rule 144 will be subject to the conditions set forth in Rule 144 with respect to our company. Other reporting companies that are not formershell companies and have been reporting for more than twelve months are not subject to this same reporting threshold for nonaffiliate reliance on Rule 144.Accordingly, any restricted securities we have sold or sell in the future or issue to consultants or employees, in consideration for services rendered or for any otherpurpose, may not be resold unless such securities are registered with the SEC or the requirements of Rule 144 have been satisfied. As a result, it may be harder forus to fund our operations and pay our employees and consultants with our securities instead of cash. Furthermore, it may be harder for us to raise funding throughthe sale of debt or equity securities unless we agree to register such securities with the SEC, which could cause us to expend additional resources in the future. Ourprior status as a “shell company” could prevent us in the future from raising additional funds, engaging employees and consultants, and using our securities to payfor any acquisitions, which could cause the value of our securities, if any, to decline in value or become worthless.ITEM 1B. UNRESOLVED STAFF COMMENTSNone.ITEM 2. PROPERTIESWe currently lease 1,660 square feet of office space at 4 HaYarden Street, Airport City, Israel. The lease term is for 36 months beginning on August 20, 2019and ending on August 20, 2022, with an option to extend for an additional 36 months. Monthly rent payments, including utilities, amount to approximately $14,000per month. We extended the lease period until August 20, 2025.ITEM 3. LEGAL PROCEEDINGSFrom time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation issubject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.41North Empire LLCOn August 7, 2018, we commenced an action against North Empire LLC, or North Empire, in the Supreme Court of the State of New York, County of NewYork for breach of a Securities Purchase Agreement or Agreement in which we are seeking damages in an amount to be determined at trial, but in no event less than$616,000. On August 2, 2018, North Empire filed a Summons with Notice against us, also in the same Court, in which they allege damages in an amount of $11.4million arising from an alleged breach of the Agreement. On September 6, 2018, North Empire filed a Notice of Discontinuance of the action it had filed on August 2,2018. On September 27, 2018, North Empire filed an answer and asserted counterclaims in the action commenced by us against them, alleging that we failed to deliverstock certificates to North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against our CEO andnow former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018, we filed a reply to North Empire’scounterclaims. On November 15, 2018, our CEO and now former Chairman of the Board filed a motion to dismiss North Empire’s thirdparty complaint. On January 6,2020, the Court granted the motion and dismissed the thirdparty complaint. Discovery has been completed and both parties have filed motions for summaryjudgment in connection with the claims and counterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summaryjudgment, arguing there were factual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision.On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying the Company’s motion for summary judgment. On or about September 12,2022, the Court issued its Decision and Order denying the Company’s motion to reargue. North Empire filed its opposing brief on December 7, 2022. Both sides weregiven an opportunity to file a reply brief. We filed our reply brief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. Oral argument was heldbefore the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Court filed its Decision and Order, which affirmed the lower court’sdecisions regarding both My Size and North Empire’s motions for summary judgment and sent the case back to the Supreme Court. On or about March 13, 2023, theSupreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date for the mediation has not yet been set. We intend tovigorously defend any claims made by North Empire. We believe it is more likely than not that the counterclaims will be denied.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.42PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur stock currently is listed on the Tel Aviv Stock Exchange and the Nasdaq Capital Market under the symbol “MYSZ”. Our stock has been traded on theNasdaq Capital Market since July 25, 2016.HoldersAs of March 31, 2023, we had 70 shareholders of record. The actual number of stockholders is greater than this number of record holders and includesstockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our Board of Directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our Board of Directors deems relevant.Securities Authorized for Issuance under Equity Compensation PlansInformation about our equity compensation plans is incorporated herein by reference to “Item 12. Security Ownership of Certain Beneficial Owners andManagement and Related Stockholder Matters”, of this Annual Report on Form 10K.Recent Sales of Unregistered SecuritiesNone.ITEM 6. SELECTED FINANCIAL DATAAs a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULT OF OPERATIONSYou should read the following discussion along with our financial statements and the related notes included elsewhere in this Annual Report on Form10K. The following discussion contains forwardlooking statements that are subject to risks, uncertainties and assumptions, including those discussed under“Risk Factors.” Our actual results, performance and achievements may differ materially from those expressed in, or implied by, these forwardlooking statements.OverviewMySize is an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.43Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile device or through MySizeID Widget: a simple questionnaire which was uses a database collected over the years.MySizeID synchronizes the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and onlypresents items available for purchase that match their measurements to ensure a correct fit.MySize is positioning itself as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empowering brand design teams, which are designed to increaseend consumer satisfaction, contributing to a sustainable world and reduce operation costs.Orgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,682 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz BespokeTechnologies, S.L., or Naiz, a limited liability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.44The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 2,365,800 shares of My Size common stock were issuedto Whitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.45Operations in RussiaIn addition to our Israel operations, we had operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia. To date, mainly due to the invasion of Ukraine by Russia and the ongoing sanctions we stopped most ofour efforts in Russia and will probably close the subsidiary in the near future.Results of OperationsThe table below provides our results of operations for the periods indicated.Year ended December 3120222021(dollars in thousands)Revenues4,459131Cost of revenues(3,825)Gross profit634131Research and development expenses$(1,701)$(4,248)Sales and marketing(3,143)(2,336)General and administrative(3,900)(4,124)Operating loss(8,110)(10,577)Financial income (expenses), net(236)57Tax income36Net loss$(8,310)$(10,520)Year Ended December 31, 2022 Compared to Year Ended December 31, 2021RevenuesFrom inception through December 31, 2018, we did not generate any revenue from operations and we continue to expect to incur additional losses toperform further research and development activities. We started to generate revenues only in 2019. Our revenues for the year ended December 31, 2022 amounted to$4,459,000 compared to $131,000 for year ended December 31, 2021. The increase from the corresponding period primarily attributable to $4,132,000 in revenuegenerated from Orgad from February 7, 2022, the date of closing of the Orgad acquisition, or the Acquisition Date and revenue generated from the Naiz Acquisitionfrom October 11, 2022, the date of closing of the Naiz acquisition.In addition, the increase from the corresponding period results from an increase in revenues generated by My Size.Cost Of RevenuesOur cost of revenues expenses for the year ended December 31, 2022 amounted to $3,825,000, compared to none for the year ended December 31, 2021. Thecost of revenues includes cash and equity liabilities expenses in the amount of $194,000. The increase in comparison with the corresponding period was due to thecost of goods of the revenues generated from Orgad’s operations.Research and Development ExpensesOur research and development expenses for the year ended December 31, 2022 amounted to $1,701,000 a decrease of $2,547,000, or approximately 60.0%,compared to $4,248,000 for the year ended December 31, 2021. The decrease from the corresponding period primarily resulted from share based payment in amount of$2,618,000 attributed to the share issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021.Sales and Marketing ExpensesOur sales and marketing expenses for the year ended December 31, 2022 amounted to $3,143,000 an increase of $807,000, or 34.55%, compared to $2,336,000for the year ended December 31, 2021. The increase primarily resulted from an increase in employees expenses mainly due to Orgad and Naiz acquisitions, increase inAmazon fees, increase in cash and equity liabilities expenses attributed to the Orgad acquisition and an increase in share based payments offset by a decrease inpayments to consultants.46General and Administrative ExpensesOur general and administrative expenses for the year ended December 31, 2022 amounted to $3,900,000, a decrease of $224,000, or 5.43%, compared to$4,124,000 for the year ended December 31, 2021. The decrease compared to the corresponding period was mainly due to a decrease in professional expenses, mainlyattributed to shareholder activism including settlement expenses with the Lazar Parties offset by an increase in sharedbased payments and an increase in employeesexpenses mainly due to the Orgad and Naiz acquisitions.Operating LossAs a result of the foregoing, for the year ended December 31, 2022, our operating loss was $8,110,000, a decrease of $2,467,000 or 23.32%, compared to ouroperating loss for the year ended December 31, 2021 of $10,577,000.Financial Income, NetOur financial (expense) income, net for the year ended December 31, 2022 amounted to $236,000 compared to financial income, $57,000 for the year endedDecember 31, 2021. In 2022, we had financial expenses exchange rate differences offset by an income from fair value revaluation of investment in marketablesecurities whereas in 2021 we had financial income from the fair value revaluation of warrants offset by expenses from exchange rate differences and expenses fromfair value revaluation of investment in marketable securities.Net LossAs a result of the foregoing, our net loss for the year ended December 31, 2022 was $8,310,000 compared to net loss of $10,520,000 for the year endedDecember 31, 2021. The decrease in net loss was mainly due increase in sales and marketing expenses and financial expenses as opposed to financial income in thecorresponding period offset by a decrease in research and development expenses in amount of $2,618,000 attributed to the share issuance to Shoshana Zigdonunder the Amendment to Purchase Agreement dated May 26, 2021.Liquidity and Capital ResourcesSince our inception, we have funded our operations primarily through public and private offerings of debt and equity in Israel and in the U.S.As of December 31, 2022, we had cash, cash equivalents and restricted cash of $2,363,000 compared to $10,943,000 cash, cash equivalents, restricted cashas of December 31, 2021. During January 2023, we completed a registered direct and concurrent private placement offering resulting in gross proceeds ofapproximately $3 million. This decrease primarily resulted from our operating activities, the acquisition of Orgad and Naiz Fit, and resources that were deployed togrow of both businesses.Net cash used in operating activities was $7,290,000 for the year ended December 31, 2022 compared to $7,297,000 for the year ended December 31, 2021.The decrease in cash used in operating activity is derived mainly from an increase in share based payments and increase in account receivables mainly from theOrgad and Naiz fit acquisitions offset by a decrease in the net loss.Net cash used in investing activities for the year ended December 31, 2022 was $993,000 as opposed to net cash provided by investing activities of$161,000 for the year ended December 31, 2021. The net cash used in investing activities for the year ended December 31, 2022 was mainly from the acquisition ofOrgad and Naiz as opposed to proceeds from shortterm deposits and restricted deposits during the year ended December 31, 2021.We had a negative cash flow from financing activities of $67,000 for the year ended December 31, 2022 compared to positive cash flow of $16,292,000 for theyear ended December 31, 2021. The negative cash flow from financing activities for the year ended December 31, 2022 was mainly due to repayment of loans andinterest and payments for leases as opposed to proceeds from issuance of shares and from exercise of warrants for the year ended December 31, 2021.47We expect that we will continue to generate losses and negative cash flows from operations for the foreseeable future. Based on the projected cash flowsand cash balances as of December 31, 2022, together with the proceeds from the January 2023 financing, we believe our existing cash will not be sufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. We will need to raiseadditional capital, which may not be available on reasonable terms or at all. Additional capital would be used to accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;●respond to competitive pressures;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, the Russian invasion ofUkraine, the impact of any resurgence of the COVID19 pandemic and a number of other factors, many of which are outside our control, and on our financialperformance. Accordingly, we cannot assure you that we will be able to successfully raise additional capital at all or on terms that are acceptable to us. If we cannotraise additional capital when needed, it may have a material adverse effect on our business, results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.We have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.Recently Issued Accounting PronouncementsCertain recently issued accounting pronouncements are discussed in Note 2, Significant Accounting Policies, to the consolidated financial statementsincluded in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10K.OffBalance Sheet ArrangementsWe have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.48Application of Critical Accounting Policies and EstimatesOur management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we haveprepared in accordance with U.S. generally accepted accounting principles issued by the Financial Accounting Standards Board, or FASB. The preparation of thesefinancial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assetsand liabilities at the date of the financial statements, as well as the reported expenses during the reporting periods. Actual results may differ from these estimatesunder different assumptions or conditions.Our significant accounting policies were revenue from contracts with customers which are more fully described in the notes to our financial statementsincluded herein. We believe these accounting policies discussed below are critical to our financial results and to the understanding of our past and futureperformance, as these policies relate to the more significant areas involving management’s estimates and assumptions. We consider an accounting estimate to becritical if: (1) it requires us to make assumptions because information was not available at the time or it included matters that were highly uncertain at the time wewere making our estimate; and (2) changes in the estimate could have a material impact on our financial condition or results of operations.Accounting for business combinationsWe allocate the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed, based upon their estimated fairvalues at the acquisition date. These fair values are typically estimated with assistance from independent valuation specialists.The purchase price allocation process requires us to make significant estimates and assumptions, especially at the acquisition date with respect tointangible assets, contractual support obligations assumed, contingent consideration arrangements, and preacquisition contingencies.Although we believe the assumptions and estimates we have made in the past have been reasonable and appropriate, they are based in part on historicalexperience and information obtained from the management of the acquired companies and are inherently uncertain.Examples of critical estimates in valuing certain of the intangible assets we have acquired or may acquire in the future include but are not limited to:● future expected cash flows from product sales or other customer contracts;● expected costs of fulfillment including marketing, warehousing and product sales;● the acquired company’s brand and competitive position, as well as assumptions about the period of time the acquired brand will continue to be used inthe combined company’s product portfolio;● cost of capital and discount rates; and● estimating the useful lives of acquired assets as well as the pattern or manner in which the assets will amortize.Refer to Note 16, Business Combination, to the consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” of thisAnnual Report on Form 10K.49Revenue from contracts with customersOur revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled software subscriptions, associatedsoftware maintenance and support.We recognize revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with a customer exists onlywhen: the parties to the contract have approved it and are committed to perform their respective obligations, we can identify each party’s rights regarding thedistinct goods or services to be transferred (“performance obligations”), we can determine the transaction price for the goods or services to be transferred, thecontract has commercial substance and it is probable that we will collect the consideration to which we will be entitled in exchange for the goods or services that willbe transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to a customer.Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted to governmental authorities. Refundsare estimated at contract inception and updated at the end of each reporting period if additional information becomes available. Revenue is recognized when controlof the product is transferred to the customer.We maintain a returns policy that allows our customers to return product within a specified period of time. The estimate of the provision for returns is basedupon historical experience with actual returns.Principal versus Agent ConsiderationsWe follow the guidance provided in ASC 606 for determining whether we are a principal or an agent in arrangements with customers, by assessing whetherthe nature of our promise is a performance obligation to provide the specified goods (principal) or to arrange for those goods to be provided by the other party(agent). With regard to products being sold by Orgad through Amazon, this determination involves judgment. We determine it is the principle when it has controlover the promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).We recognize revenue ratably over the contractual service term for hosted services that are priced based on a committed number of transactions where thedelivery and consumption of the benefit of the services occur evenly over time, beginning on the date the services associated with the committed transactions arefirst made available to the customer and continuing through the end of the contractual service term. Over usage fees and fees based on the actual number oftransactions are billed in accordance with contract terms as these fees are incurred and are included in the transaction price of an arrangement as variableconsideration. Fees based on a number of transactions or impressions per month, are allocated to the period in which the transactions occur. Revenue forsubscriptions sold as a fee per period is recognized ratably over the contractual term as the customer simultaneously receives and consumes the benefit of theunderlying service.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.As a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.50ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAMY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2022U.S. DOLLARS IN THOUSANDSINDEXPageReport of Independent Registered Public Accounting Firm (PCAOB ID: ID 1057)F2Consolidated Balance SheetsF4Consolidated Statements of Comprehensive LossF5Consolidated Statements of Shareholders’ EquityF6Consolidated Statements of Cash FlowsF7Notes to Consolidated Financial StatementsF8 F33F1Report of Independent Registered Public Accounting FirmTo the Shareholders and Board of DirectorsMy Size, Inc.:Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of My Size, Inc. and subsidiaries (the Company) as of December 31, 2022 and 2021, the relatedconsolidated statements of comprehensive loss, shareholders’ equity, and cash flows for each of the years in the twoyear period ended December 31, 2022, and therelated notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, thefinancial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the twoyear periodended December 31, 2022, in conformity with U.S. generally accepted accounting principles.Going ConcernThe accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1d tothe consolidated financial statements, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit thatraises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1d. Theconsolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidatedfinancial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Critical Audit MattersCritical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to becommunicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved ourespecially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidatedfinancial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters oron the accounts or disclosures to which they relate.Acquisitiondate fair value of customer relationshipsAs discussed in Note 16 to the consolidated financial statements, on October 11, 2022, the Company acquired Naiz Bespoke Technologies SL (“Naiz”). As a result ofthe transaction, the Company acquired customer relationships intangible assets (“customer relationships”) representing the generation of future income from Naiz’sexisting customers. The acquisition date fair value of the customer relationships was $726 thousand.F2We identified the evaluation of the acquisitiondate fair value of the Naiz customer relationships as a critical audit matter. A high degree of subjective auditorjudgment was required to evaluate the following internally developed assumptions used to estimate the fair value of such asset, for which there were limitedobservable inputs: (i) forecasted revenues attributable to existing customers, (ii) forecasted earnings before interest, taxes, depreciation, and amortization(“EBITDA”) margins for the acquired business, (iii) estimated annual customer attrition rates and (iv) estimated discount rate. The determined fair value wassensitive to changes in these key assumptions. Additionally, specialized skills and knowledge were needed to evaluate the discount rate used.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s acquisitiondate fair value estimation process, including controls over the development of key assumptions. We performed a sensitivity analysis toassess the impact of reasonably possible changes to forecasted revenues, EBITDA margins, annual customer attrition rates, and the discount rate. We evaluated theforecasted revenue growth rates from existing customers by comparing the growth assumptions to those of the Company’s peers and industry reports. Inconnection with our assessment of the forecasts used in the valuation, we compared (1) forecasted revenue and EBITDA to Naiz’s historical actual results and (2)estimated annual customer attrition rates to historical Naiz customer attrition data. We tested the Company’s determined weighted average cost of capital(“WACC”), which was used to determine the discount rate, by involving valuation professionals with specialized skills and knowledge, who assisted in:Evaluating the selected discount rate by comparing it against a discount rate range that was independently developed using publicly available market datafor comparable companies, and;Assessing the Company’s WACC calculation, by comparing it against an independently estimated WACC range based on inputs obtained throughpublished surveys and studies.Goodwill impairment assessmentAs discussed in Note 16 to the consolidated financial statements, during 2022 the Company recorded goodwill of $1,257 thousand related to the acquisition of NaizBespoke Technologies, S.L. (“Naiz”). The Company performed an annual quantitative impairment test of goodwill at the reporting unit level. Based on this analysis,the Company determined that the fair value of its reporting unit exceeded its carrying value and no impairment charge was required.We identified the evaluation of the goodwill impairment assessment for the Naiz reporting unit as a critical audit matter. A high degree of subjective auditor judgmentwas required to evaluate the following assumptions used to estimate the fair value of the Company’s reporting unit, for which there were limited observable inputs:(i) forecasted reporting unit cash flows, (ii) longterm growth rates, and (iii) discount rates. The fair value was sensitive to changes in these key assumptions.Additionally, specialized skills and knowledge were needed to evaluate the discount rates.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s goodwill impairment evaluation process. We performed sensitivity analyses to assess the impact of reasonably possible changes to forecasted cashflows, longterm growth rates, and discount rates. We evaluated the Company’s forecasted growth rates by comparing the growth assumptions to those of theCompany’s peers and industry reports. We compared the Company’s forecasted revenue, cost of sales, and operating expense margins to historical actual results toassess the reasonableness of the forecasts. In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:– Assessing the Company’s WACC calculation, by comparing it against an estimated WACC range based on inputs obtained through published surveys andstudies– Evaluating the discount rates used by the Company by comparing them against discount rate ranges that were developed using publicly available market data forcomparable companies, and;– Performing an arithmetic recalculation regarding the fair value of the Company’s reporting unit, using the Company’s cash flow forecasts and the independentlydeveloped discount rates, and comparing the results to the Company’s fair value estimates./s/ Somekh ChaikinSomekh ChaikinMember Firm of KPMG InternationalWe have served as the Company’s auditor since 2017.Tel Aviv, IsraelApril 14, 2023F3MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED BALANCE SHEETSU.S. dollars in thousands (except share data)December 31,Note20222021AssetsCurrent assetsCash and cash equivalents32,10010,670Restricted cash263273Inventory997Account receivables1,94040Other receivables and prepaid expenses4758579Total current assets6,05811,562Long term deposits28Property and equipment, net5140112Operating rightofuse asset6583776Intangible assets71,377Goodwill71,395Investment in JV899Investment in marketable securities11471083,669996Total assets9,72712,558Liabilities and shareholders’ equityCurrent liabilitiesOperating lease liability6159138Shortterm loans9155Trade payables2,487635Liabilities to Related parties69863Other payables680392Total current liabilities4,1791,228Longterm loans9376Deferred tax liabilities328Operating lease liability6308473Total noncurrent liabilities1,012473CONTINGENCIES AND COMMITMENTS15Total Liabilities5,1911,701Shareholders’ equity13Stock capital Common stock of $0.001par value Authorized: 250,000,000and 100,000,000shares as of December 31,2022 and 2021; Issued and outstanding: 1,464,117and959,297 as of December 31,2022 and 2021, respectively (*)11Additional paidin capital58,67356,453Accumulated other comprehensive loss(637)(406)Accumulated deficit(53,501)(45,191)Total shareholders’ equity4,53610,857Total liabilities and shareholders’ equity9,72712,558(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F4MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSSU.S. dollars in thousands (except share data and per share data)Year endedDecember 31,Note20222021Revenues4,459131Cost of revenues(3,825)Gross profit634131Operating expensesResearch and development(1,701)(4,248)Sales and marketing18(3,143)(2,336)General and administrative19(3,900)(4,124)Total operating expenses(8,744)(10,708)Operating loss(8,110)(10,577)Financial income (expense), net20(236)57Loss before taxes(8,346)(10,520)Taxes on income36Net loss for the year(8,310)(10,520)Other comprehensive income (loss):Foreign currency translation differences(231)18Total comprehensive loss(8,541)(10,502)Basic and diluted loss per share (*)(7.47)(17.75)Basic and diluted weighted average number of shares outstanding (*)1,111,913420,385(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F5MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITYU.S. dollars in thousands (except share data)Common stockAdditionalpaidinAccumulatedothercomprehensiveAccumulatedTotalstockholders’NumberAmountcapitallossDeficitequityBalance as of January 1, 2021289,314(*)37,171(424)(34,671)2,076Stockbased compensation related to optionsgranted to employees and consultants373373Exercise of options granted to employees178(*)Restricted shares issued to shareholder (***)100,000(*)2,6182,618Issuance of shares, net of issuance cost of$1,160434,700112,58212,583Exercise of warrants135,108(*)3,7093,709Total comprehensive income (loss)18(10,520)(10,502)Balance as of December 31, 2021959,300156,453(406)(45,191)10,857Stockbased compensation related to optionsand restricted shares granted to employeesand consultants176,000(*)455455Issuance of shares in Business Combination(**)295,802(*)1,4461,446Issuance of shares post BusinessCombination (**)20,924(*)319319Effect of reverse stock split (Note 13 g)12,091(*)Total comprehensive income (loss)(231)(8,310)(8,541)Balance as of December 31, 20221,464,117158,673(637)(53,501)4,536(*)Represents an amount of less than $1.(**)See note 16(***)See note 1 bThe accompanying notes are an integral part of the consolidated financial statements.F6MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSU.S. dollars in thousandsYear endedDecember 31,20222021Cash flows from operating activities:Net loss(8,310)(10,520)Adjustments to reconcile net loss to net cash used in operating activities:Depreciation3842Change in operating lease rightofuse asset13543Amortization of intangible assets155foreign exchange differences(23)1Change in liabilities to related parties635Interest on long term liabilities10Interest paid(10)Revaluation of investment in marketable securities62(49)Restricted Shares issued to shareholder2,618Stock based compensation455373Issuance of shares post Business Combination319Change in inventory(219)Change in deferred tax liabilities(36)Change in account receivable(1,863)(12)Changes in operating lease liabilities(142)Change in other receivables and prepaid expenses184(99)Change in trade payables1,315253Change in other payables553Net cash used in operating activities(7,290)(7,297)Cash flows from investing activities:Acquisition of a subsidiary, net of cash acquired(767)Proceeds from restricted deposits, net184investing in other receivable(100)Investment in equity accounted investee(99)Purchase of property and equipment(27)(23)Net cash (used in) provided by investing activities(993)161Cash flows from financing activities:Proceeds from issuance of shares, net of issuance costs12,583Repayment of loans(67)Proceeds from exercise of warrants3,709Net cash (used in) provided by financing activities(67)16,292Effect of exchange rate fluctuations on cash and cash equivalents(230)13Change in cash and cash equivalents and restricted cash(8,580)9,169Cash and cash equivalents and restricted cash at the beginning of the year10,9431,774Cash and cash equivalents and restricted cash at the end of the year2,36310,943B) Aggregate cash flows derived for the Company as a result of the Orgad acquisition (note 16)2022Trade and other receivables364Inventory864Fixed assets55Longterm deposits31Selling Platform378Goodwill152Shortterm credit(181)Trade payables(580)Other payables(88)Longterm loan(138)Longterm provision(13)Deferred Tax Liability(87)Issuance of shares(457)Total acquisition of subsidiary, net of cash300C) Aggregate cash flows derived for the Company as a result of the Naiz acquisition (note 16)2022Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Issuance of shares(1,008)Total acquisition of subsidiary, net of cash467The accompanying notes are an integral part of the consolidated financial statements.F7MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERALa.My Size, Inc. is developing unique measurement technologies based on algorithms with applications in a variety of areas, from the apparel ecommerce market, to the courier services market and to the Do It Yourself (“DIY”) smartphone and tablet apps market. The technology is driven byproprietary algorithms, which are able to calculate and record measurements in a variety of novel ways.Following the acquisition of Naiz Bespoke Technologies, S.L (“Naiz”) in October 2022 (see note 16), the Company expanded its offering outreachand customer base.Following the acquisition of Orgad International Marketing Ltd. (“Orgad”) in February 2022 (see note 16), the Company also operates anomnichannel ecommerce platform.The Company has five subsidiaries, My Size Israel 2014 Ltd (“My Size Israel”), Topspin Medical (Israel) Ltd., and Orgad all of which areincorporated in Israel, and My Size LLC which was incorporated in the Russian Federation and Naiz Bespoke Technologies, S.L., a limited liabilitycompany incorporated under the laws of Spain (see note 16). References to the Company include the subsidiaries unless the context indicatesotherwise.My Size, Inc., was incorporated and commenced operations in September 1999, as Topspin Medical Inc. (“Topspin”), a private company registeredin the State of Delaware. In December 2013, the Company changed its name to Knowledgetree Ventures Inc. Subsequently, in February 2014, theCompany changed its name to My Size, Inc. Topspin was engaged, through its Israeli subsidiary, in research and development in the field ofcardiology and urology.Since September 1, 2005, the Company has traded on the Tel Aviv Stock Exchange (“TASE”).Between 2007 and 2012 the Company reported as a public company with the U.S. Securities and Exchange Commission (the “SEC”). In August2012, the Company suspended its reporting obligations under Section 13(a) and 15(d) of the Securities Exchange Act of 1934. In mid2015, theCompany resumed reporting as a public company.b.On January 9, 2014, at the Company’s general meeting of shareholders, its shareholders approved an engagement with one of the Company’sinvestors (the “Seller”) for the purchase of rights in a Venture (the “Venture”), including the rights to the method and the certain patent applicationthat had been filed by the Seller (the “Assets”). The Venture relates to the development of technologies and applications which will assist theconsumer to take his or her body measurements accurately using a mobile device to ensure the purchase of clothing with the best possible fitwithout the need to try them on.In February 2014, the Company established a wholly owned subsidiary, My Size (Israel) 2014 Ltd., a company registered in Israel, which iscurrently engaged in the development of the Venture described above.In return for purchasing an interest in the Venture, the Company undertook to pay the Seller 18% of the Company’s operating profit, direct orindirect, connected to the Venture for a period of seven years starting from the end of the Venture’s development period.As part of the agreement, the Seller received an option to buy back the Assets for consideration which will reflect the market fair value at that time,on the occurrence of the following events: a) if a motion is filed to liquidate the Company; b) if seven years after signing the agreement, theCompany’s total accumulated revenues, direct or indirect, from the Venture or the commercialization of the patent will be lower than NIS 3.6 million.In such an event, Seller may repurchase the interest in the Venture at a market price to be determined by an independent third party valuationconsultant, who shall be chosen by agreement by the parties, and the audit committee shall conduct the negotiations on behalf of the Company todetermine the identity of the consultant.On May 26, 2021, the Company, My Size Israel and Shoshana Zigdon entered into an Amendment to Purchase Agreement (the “Amendment”)which made certain amendments to a Purchase Agreement between the parties dated February 16, 2014 (the “Purchase Agreement”). Pursuant tothe Amendment, Ms. Zigdon agreed to irrevocably waive the right to repurchase certain assets related to the collection of data for measurementpurposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which the Company’s business is substantiallydependent, and all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My Size Israel underthe Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation,reward or any rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights(the “Waiver”). In consideration of the Waiver, the Company issued 100,000 shares of common stock to Ms. Zigdon in a private placement.F8MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERAL (Cont.)c.On July 25, 2016, the Company’s common stock began publicly trading on the Nasdaq Capital Market under the symbol “MYSZ”. The Company’sshares of common stock are listed both on the Nasdaq Capital Market and TASE.d.Since inception, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit of $53,501.The Company has financed its operations mainly through fundraising from various investors.The Company’s management expects that the Company will continue to generate losses and negative cash flows from operations for theforeseeable future. Based on the projected cash flows and cash balances as of December 31, 2022, management is of the opinion that its existingcash will be sufficient to fund operations for a period less than 12 months. As a result, there is substantial doubt about the Company’s ability tocontinue as a going concern.Management’s plans include the continued commercialization of the Company’s products and securing sufficient financing through the sale ofadditional equity securities, debt or capital inflows from strategic partnerships. Additional funds may not be available when the Company needsthem, on terms that are acceptable to it, or at all. If the Company is unsuccessful in commercializing its products and securing sufficient financing,it may need to cease operations.The financial statements include no adjustments for measurement or presentation of assets and liabilities, which may be required should theCompany fail to operate as a going concern.e.The Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificial intelligencedriven measurement solutions (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions. The fashion and equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. The SaaS based innovativeartificial intelligence driven measurement solutions, or SaaS Solutions operating segment consists of My Size Inc My Size Israel and LLC.NOTE 2 SIGNIFICANT ACCOUNTING POLICIESThe consolidated financial statements are prepared according to United States generally accepted accounting principles (“U.S. GAAP”), applied on aconsistent basis, as followsa.Use of estimates:The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions thataffect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.Information about assumptions made by the Company with respect to the future and other reasons for uncertainty with respect to estimates thathave a significant risk of resulting in a material adjustment to carrying amounts of assets and liabilities in the next financial year are included in thefollowing notes:Acquisitions of subsidiariesThe Company measures the fair value of the consideration transferred (including contingent consideration) and fair value of the assets acquiredand liabilities assumed, in business combination transactions. For information on details on fair value measurement in acquisition of subsidiaries,see Note 16 regarding business combinations.Estimated impairment of nonfinancial assetsThe Company examines on an annual basis whether there is an impairment of goodwill, intangibles and property, plant and equipment that areallocated to cash generating units, in accordance with the accounting policy presented in Note 1(h) below. Recoverable amounts of cashgenerating units are determined on the basis of valueinuse calculations. These calculations require the use of estimates.For information on key assumptions used in calculation of the recoverable amount, see note 7 – Goodwill and other Intangible assets.b.Functional currency:The currency of the primary economic environment in which the operations of the Company is conducted is the United States Dollar and thus it isthe Company’s functional currency. The reporting currency according to which these financial statements are prepared is the U.S. dollar.The currency of the primary economic environment in which the operation of the Subsidiary, My Size Israel and Orgad International MarketingLtd. functional currency is the New Israeli Shekel (“NIS”).The currency of the primary economic environment in which the operation of the Subsidiary, My Size LLC, functional currency is Russian Ruble.The currency of the primary economic environment in which the operation of the Subsidiary, Naiz fit, functional currency is Euro.F9MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)c.Principles of consolidation:The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances andtransactions have been eliminated upon consolidation.d.Cash equivalents:Cash equivalents are shortterm highly liquid investments that are readily convertible to cash with original maturities of three months or less at thedate acquired.e.Restricted cashRestricted cash are deposits for rent, credit card and for hedging activities.f.Inventories:Inventories include finished goods and are measured at the lower of cost or net realizable value. The cost of inventories comprises of the costsincurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary courseof business. At the point of the loss recognition, a new, lowercost basis for that inventory is established, and subsequent changes in facts andcircumstances do not result in the restoration or increase in that newly established cost basis. The costs of purchase of inventories comprise thepurchase price and other costs directly attributable to the acquisition of finished goods. In 2022, the Company recorded an inventory markdownof $48.g.Property and equipment:Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straightline method over theestimated useful lives of the assets, at the following annual rates:%Computers and peripheral equipment33Office furniture and equipment720Leasehold improvementsOver the term of the leaseor the useful life of theimprovements, whicheveris shorterh.Impairment of longlived assets:The Company’s property and equipment are reviewed for impairment in accordance with ASC 360, “Property Plant and Equipment”, wheneverevents or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held andused is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by theassets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount ofthe assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less sellingcosts. During the periods ended December 31, 2022 and 2021, no impairment losses have been recorded.i.Business combinations:The Company applies the provisions of ASC 805, “Business Combination” and allocates the fair value of purchase consideration to the tangibleassets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchaseconsideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assetsacquired and liabilities assumed, the Company estimated the future expected cash flows from acquired platform, customer relationships,Technology and trademark from a market participant perspective, useful lives and discount rates. In addition, management makes significantestimates and assumptions, which are uncertain, but believed to be reasonable.Acquisitionrelated costs are recognized separately from the acquisition and are expensed as incurred.F10MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)j.Goodwill:Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a businesscombination. Under ASC 350, “Intangible Goodwill and Other”, goodwill is not amortized, but rather is subject to an annual impairment test.ASC 350 requires goodwill to be tested for impairment at the reporting unit level at least annually, the fourth quarter, or between annual tests incertain circumstances, and written down when impaired. Goodwill is tested for impairment by comparing the fair value of the reporting unit with itcarrying value. Goodwill from Orgad acquisition was allocated to the fashion and equipment ecommerce platform segment and Goodwill from theNaiz acquisition was allocated to Naiz segment based innovative artificial intelligence driven measurement solutions.Alternatively, ASC 350 permits an entity to bypass the qualitative assessment for any reporting unit and proceed directly to performing the firststep of the goodwill impairment test. There were no impairment charges to goodwill during the period presented.k.Intangible assets:Intangible assets consist of identifiable intangible assets that the Company has acquired from previous business combinations. Intangible assetsare recorded at costs, net of accumulated amortization. The Company amortizes its intangible assets reflecting the pattern in which the economicbenefits of the intangible assets are consumed. When a pattern cannot be reliably determined, the Company uses a straightline amortizationmethod. Amortization is calculated by the straightline method over the estimated useful lives of the following assets.The estimated useful lives of the company’s intangible assets are as follows:yearsCustomer Relationships7Technology5Trademark5Selling Platform3Each period the Company evaluates the estimated remaining useful lives of its intangible assets and whether events or changes in circumstanceswarrant a revision to the remaining period of amortizationl.Severance pay:The Subsidiary’s liability for severance pay is covered by Section 14 of the Israeli Severance Pay Law (“Section 14”). Under Section 14, employeesin Israel are entitled to have monthly deposits, at a rate of 8.33% of their monthly salary, made on their behalf to their insurance funds. Payments inaccordance with Section 14 exempt the Subsidiary from any additional obligation for these employees. As a result, the Subsidiary does notrecognize any liability for severance pay due to these employees and the deposits under Section 14 are not recorded as an asset in theSubsidiary’s balance sheet. These contributions for compensation represent defined contribution plans and expenses are recorded based onactual deposits.Other than the My Size Israel’s liability there are no additional severance pay liabilities.F11MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)m.Research and development costs:Research and development costs are charged to the statement of operations, as incurred. Most of the research and development expenses are forwages, related expenses and subcontractors.n.Income taxes:The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilitiesfor the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Companies’ taxreturns. Deferred taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities using enactedtax rates in effect in the years in which the differences are expected to reverse. The Company assesses the likelihood that its deferred tax assetswill be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely thannot that all or a portion of deferred tax assets will not be realized. The Company establishes a valuation allowance, if necessary, to reduce deferredtax assets to the amount more likely than not to be realized. As of December 31, 2022, and 2021, a full valuation allowance was established by theCompany.The Company implements a twostep approach to recognize and measure the benefit of its tax positions. The first step is to evaluate the taxposition taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that,on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigationprocesses. The second step is to measure the tax benefit as the largest amount that is greater than 50 percent (cumulative basis) likely to berealized upon settlement.The Company believes that its tax positions are all highly certain of being upheld upon examination. As of December 31,2022 and 2021 the Company recorded a liability for unrecognized tax benefits of $328 and none respectively.o.Accounting for stockbased compensation:The Company accounts for its employees’ stockbased compensation as an expense in the financial statements based on ASC 718. All awards areequity classified and therefore such costs are measured at the grant date fair value of the award and graded vesting attribution approach torecognize compensation cost over the vesting period. The Company estimates stock option grant date fair value using the Binomial and BlackScholes option pricingmodel.The Company recorded stock options issued to nonemployees at the grant date fair value, and recognizes expenses over the related serviceperiod by using the straightline attribution approach in accordance with ASU 201807. All awards are equity classified.The expected volatility of the share prices reflects the assumption that the historical volatility of the share prices is reasonably indicative ofexpected future trends.The riskfree interest rate for grants with an exercise price denominated in USD for employees and several consultants is based on the yield fromUS treasury zerocoupon bonds with an equivalent term.The Company has historically not paid dividends and has no foreseeable plans to pay dividends.F12MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)p.Fair value of financial instruments:ASC 820, Fair Value Measurements and Disclosures, relating to fair value measurements, defines fair value and established a framework formeasuring fair value. The ASC 820 fair value hierarchy distinguishes between market participant assumptions developed based on market dataobtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptionsdeveloped based on the best information available in the circumstances. ASC 820 defines fair value as the price that would be received to sell anasset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price. Inaddition, the fair value of assets and liabilities should include consideration of nonperformance risk, which for the liabilities described belowincludes the Company’s own credit risk.As a basis for considering such assumptions, ASC 820 establishes a threetier value hierarchy, which prioritizes the inputs used in the valuationmethodologies in measuring fair value:Level 1 Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access. Valuationadjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readilyand regularly available in an active market, valuation of these products does not entail a significant degree of judgment.Level 2 Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, eitherdirectly or indirectly.Level 3 Valuations based on inputs that are unobservable and significant to the overall fair value measurement.The Company holds share certificates in iMine Corporation (“iMine”) formerly known as Diamante Minerals, Inc., a publiclytraded company onthe OTCQB.Due to sales restrictions on the sale of the iMine shares, the fair value of the shares was measured on the basis of the quoted market price for anotherwise identical unrestricted equity instrument of the same issuer that trades in a public market, adjusted to reflect the effect of the salesrestrictions and is therefore, ranked as Level 2 asset.q.Basic and diluted net loss per share:Basic net loss per share is computed based on the weighted average number of shares of common stock outstanding during each year. Diluted netincome per share is computed based on the weighted average number of shares of common stock outstanding during each year plus dilutivepotential equivalent common stock considered outstanding during the year, in accordance with ASC 260, “Earnings per Share”. For the yearsended December 31, 2022 and 2021, all outstanding options and warrants have been excluded from the calculation of the diluted net loss per sharesince their effect was antidilutive.r.Concentrations of credit risk:Financial instruments that potentially subject the Company and its subsidiaries to concentrations of credit risk consist principally of cash andcash equivalents.Cash and cash equivalents are invested in banks in Israel, Spain and United States. Such deposits in United States may be in excess of insuredlimits and are not insured in other jurisdictions. Management believes that the financial institutions that hold the Company’s investments arefinancially sound and, accordingly, minimal credit risk exists with respect to these investments.The Company and its subsidiaries have no offbalancesheet concentration of credit risk such as foreign exchange contracts, option contracts orother foreign hedging arrangements.F13MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)s.Revenue Recognition:The Company’s revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled softwaresubscriptions, associated software maintenance and support.The Company recognizes revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with acustomer exists only when: the parties to the contract have approved it and are committed to perform their respective obligations, the Companycan identify each party’s rights regarding the distinct goods or services to be transferred (“performance obligations”), the Company can determinethe transaction price for the goods or services to be transferred, the contract has commercial substance and it is probable that the Company willcollect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to acustomer. Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted togovernmental authorities. Refunds are estimated at contract inception and updated at the end of each reporting period if additional informationbecomes available. Revenue is recognized when control of the product is transferred to the customer.The Company maintains a returns policy that allows its customers to return product within a specified period of time. The estimate of the provisionfor returns is based upon historical experience with actual returns.Principal versus Agent ConsiderationsThe Company follows the guidance provided in ASC 606 for determining whether it is a principal or an agent in arrangements with customers, byassessing whether the nature of the Company’s promise is a performance obligation to provide the specified goods (principal) or to arrange forthose goods to be provided by the other party (agent). With regard to products being sold by Orgad through Amazon, this determination involvesjudgment. The Company determines it is the principle when it has control over promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).The Company recognizes revenue ratably over the contractual service term for hosted services that are priced based on a committed number oftransactions where the delivery and consumption of the benefit of the services occur evenly over time, beginning on the date the servicesassociated with the committed transactions are first made available to the customer and continuing through the end of the contractual serviceterm. Over usage fees and fees based on the actual number of transactions are billed in accordance with contract terms as these fees are incurredand are included in the transaction price of an arrangement as variable consideration. Fees based on a number of transactions or impressions permonth, are allocated to the period in which the transactions occur. Revenue for subscriptions sold as a fee per period is recognized ratably overthe contractual term as the customer simultaneously receives and consumes the benefit of the underlying service.F14MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)t.Contingencies and CommitmentsLiabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it isprobable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with losscontingencies are expensed as incurred.u.Derivative instrumentsThe Company accounts for its derivative instruments as either assets or liabilities and measures them at fair value through profit or loss.v.LeasesThe Company leases include an office space lease agreement for 36 months, with an option to extend for an additional 36 months and 36 monthscancelable operating lease agreements on behalf of personnel vehicles. The lease term includes a noncancellable period of the lease plus anyadditional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise,or an option to extend (or not to terminate) the lease controlled by the lessor.ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make leasepayments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value oflease payments over the lease term. The company generally use its incremental borrowing rate based on the estimated rate of interest forcollateralized borrowing over a similar term of the lease payments at commencement date. Lease expense for lease payments is recognized on astraightline basis over the lease term.For the office rent lease, the Company has elected to account for the lease and nonlease maintenance components as a single lease component.Therefore, the lease payments used to measure the lease liability include all of the fixed consideration in the contract, including insubstance fixedpayments, owed over the lease term.w.Impact of recently issued accounting standardIn June 2016, the FASB issued ASU 201613, “Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses on FinancialInstruments”, which requires companies to measure credit losses of financial instruments, including customer accounts receivable, utilizing amethodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information toinform credit loss estimates. Subsequent to the issuance of ASU 201613, the FASB issued several additional Accounting Standard Updates toclarify implementation guidance, provide narrowscope improvements and provide additional disclosure guidance. As an Emerging GrowthCompany, ASU 201613 is effective for fiscal years beginning after December 15, 2022. The Company does not expect this ASU to have a materialimpact on its consolidated financial statements.F15MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 3 CASH AND CASH EQUIVALENTSThe Company’s cash and cash equivalents balance at December 31, 2022 and 2021 is denominated in the following currencies:December 31,20222021US Dollars1,65110,184New Israeli Shekels259433Other190532,10010,670NOTE 4 OTHER RECEIVABLES AND PREPAID EXPENSESDecember 31,20222021Prepaid expenses and other current assets322429Government authorities28317Other153133Total758579NOTE 5 PROPERTY AND EQUIPMENT, NETComputersandperipheralequipmentOfficefurnitureandequipmentLeaseholdimprovementsTotalCostBalance as at January 1, 20211825860300Additions2323Translation adjustments72211Balance as at December 31, 20212126062334Balance as at January 1, 20222126062334Additions161127Business combination401555Translation adjustments(32)(8)(8)(48)Balance as at December 31, 20222367854368Accumulated DepreciationBalance as at January 1, 20211461412172Additions2751042Translation adjustments6118Balance as at December 31, 20211792023222Balance as at January 1, 20221792023222Additions209938Translation adjustments(27)(3)(2)(32)Balance as at December 31, 20221722630228Carrying amountsAs at December 31, 2021334039112As at December 31, 2022645224140F16MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 6 LEASESIn August 2019, The Company entered into an office space lease agreement. The lease term is for 36 months beginning on August 20, 2019 and endingon August 20, 2022, with an option to extend for an additional 36 months. The Company extended the lease period until August 20, 2025. Monthly rentpayments including utilities amounting to approximately USD 14 (NIS 49,500) per month.In addition, The Company entered into a threeyear cancelable operating lease agreement for cars.These operating leases are included in “Right of use asset” on the Company’s December 31, 2022 consolidated balance sheets, and represent theCompany’s right to use the underlying asset for the lease term. The Company’s obligations to make lease payments are included in the currentliabilities as “Operating lease liability” and in the noncurrent liabilities as “Operating lease liability long term” on the Company’s December 31, 2022consolidated balance sheets. As of December 31, 2022, rightofuse of asset was $583. operating lease liabilities were $159 and non current Operatinglease liabilities were $308. Rightofuse asset includes the capitalization of improvements (net of amortization) amounting to $105.Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value ofthe lease payments.The interest rate used to discount future lease payment was 11.95%.Maturities of lease liabilities as of December 31, 2022 were as follows:Year Ending:2023$1912024$1912025$127Thereafter$509Less imputed interest:$(42)Total lease liabilities$467F17MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 7 – Goodwill and other Intangible assetsA.Identified intangible assetsSchedule of Intangible assetsSelling PlatformTechnologyCustomerRelationshipsOtherTotalThousandsUSDThousandsUSDThousandsUSDThousandsUSDThousandsUSDCostAs of January 1, 2022Acquisitions through business combinations378286726771,467Effect of changes in exchange rates(32)2565765As of December 31, 2022346311791841,532AmortizationAs of January 1, 2022Amortization for the year including effect of changes inexchange rates as of December 31, 2022(109)(15)(27)(4)(155)Carrying amountAs of December 31, 2022237296764801,377AmortizationAmortization expenses recorded for identified intangible assets in the Consolidated Statements of Operations for each period and were as follows:Line ItemDecember 31,2022December 31,2021Selling platformCosts of revenues109TrademarkSales and marketing4TechnologyCosts of revenues15Customer relationshipsSales and marketing27Total amortization expenses155Future amortization expenses are expected to be as follows:20232024202520262027ThereafterTotalFuture amortization expenses3033031941771561791,312b.GoodwillThe changes in the carrying amount of goodwill for the years ended December 31, 2022 and 2021 were as follows:Fashion and equipmentecommerce platformNaizTotalBalance as of December 31, 2021Changes during the period:Goodwill acquired1521,1521,304Goodwill impairmentTranslation differences(14)10591Balance as of December 31, 20221381,2571,395The Company operates its business through three reporting segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovativeartificial intelligence driven measurement solutions and (iii) Naiz. See note 17 for additional segments information.The Company determines the fair value of its reporting units using the income approach. According to the income, the Company uses discounted cashflows to estimate the fair value. Cash flow projections are based on the Company’s estimates of revenue growth rates and operating margins, takinginto consideration the industry’s and market’s conditions. The discount rate used is based on the weighted average cost of capital (“WACC”),adjusted for the relevant risk associated with businessspecific characteristics.The Company performed a quantitative assessment as of December, 31 2022 for the reporting units’ fair value. The estimated fair value of the Fashionand equipment ecommerce platform and Naiz reporting units exceeded its estimated carrying amount by 95.9% and 27.7% respectively. This, based thefollowing assumptions:Fashion and equipmentecommerce platformNaizDiscount rate21%23%Terminal growth rate3%3%If business conditions or expectations were to change materially, it may be necessary to record impairment charges to the Company’s reporting units inthe future.F18MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 8 Investment in JVIn August 2022, the Company established a joint venture (“JV”) in Brazil with Santista Têxtil. The Company holds 51% and Santista Têxtil holds 49% of theJV. The purpose of the JV is to serve the Brazilian market according to the business plan that was set. Both parties agree to make an initial investment in theJV of $198that will be made per the holding percentage of each party. As of the reporting date, the JV is in process of establishing its operation.NOTE 9 Financial LiabilitiesThe book value of each of the financial liability categories is an acceptable approximation of fair value.The debt is comprised of four loans that were granted to My Size Israel – in an outstanding amount of approximately $131, bearing interest rangingfrom prime rate to prime+2.8% rate, and four loans that were granted to the Spanish subsidiary– in an outstanding amount of approximately $400,bearing interest ranging from 1% to 3%.The financial liability maturities during the five years following the end of the financial year are shown below:UntilUntilUntilUntilUntilAfterTOTAL311223311224311225311226311227311227311222Debts with credit institutions15513892874712531NOTE 10 RELATED PARTIES TRANSACTIONSA. Balances with related parties:The following related party payables are included in liability to related parties.December 31,20222021Officers (*)4143Liability in respect of business combinations (**)739Other related parties (***)(95)Directors152069863(*)The amount includes the net salaries payables.(**)The amount includes the provision created to former owners of Orgad that are entitled to additional cash and equity consideration and former owners of Naizthat entitled to additional cash consideration, see note 16 business combination.(***)The amount includes an amount receivable from Orgad previous shareholders who currently work in the company.B. Related parties benefits:Year endedDecember 31,20222021Salaries and related expenses1,440852Share based payments39673Cash liability and equity liability expenses related to acquisitions (**)1,058Directors58582,952983(**)The amount includes the expenses for a provision created to former owners of Orgad that are entitled to additional cash and equity consideration and formerowners of Naiz that entitled to additional cash consideration, see note 16 business combination.NOTE 11 FINANCIAL INSTRUMENTSThe following tables presents the Company’s significant assets and liabilities that are measured at fair value on recurring basis and their classificationwithin the fair value hierarchy:December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities47financial assets (*)10December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesDerivatives9December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities108December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesWarrants derivative2(*)the financial asset includes in other receivables.F19MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 11 FINANCIAL INSTRUMENTS (Cont.)The carrying amounts of cash and cash equivalents, restricted cash, short term restricted deposit, accounts receivable, other receivables and prepaidexpenses, trade payable and accounts payable approximate their fair value due to the shortterm maturities of such instruments.At December 31, 2022, the recognized gain and fair value (based on quoted market prices with a discount due to security restrictions on iMine shares)of the marketable securities were $59and $47, respectively (at December 31, 2021 $49and $108, respectively).NOTE 12 TAXES ON INCOMEa.On December 31, 2022, the Company had U.S. federal net operating loss carryforwards of approximately $26 available to reduce future taxableincome. Utilization of the U.S. net operating losses may be subject to substantial limitations due to the change of ownership provisions of theInternal Revenue Code of 1986.The U.S. Company has final tax assessments through 2014.On December 22, 2017, the Tax Reform Act was signed into law. The legislation significantly changes U.S. tax law by, among other things, lowering theU.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. As a result of the decrease in the corporate incometax rate, the Company revalued the ending net deferred tax assets at December 31, 2017, but did not recognize any incremental income tax expense in2017 due to the revaluation of the valuation allowance.b.Foreign tax:1.Tax rates:Presented hereunder are the tax rates relevant to the Company’s Israeli subsidiaries:2022 23%2021 23% Presented hereunder are the tax rates relevant to the Company’s Spanish subsidiary:2022 24%2.The Company’s Israeli subsidiaries have estimated total available carryforward operating tax losses for Israeli income tax purposes ofapproximately $64as of December 31, 2022. Of these losses, a total of $47.5are owned by Topspin Medical (Israel) Ltd. Topspin tax lossesmay be offset only by future income with respect to the same operational activity by which it was incurred for an indefinite period of time. Theother losses are owned by My Size Israel and may be carryforward to offset against future income for an indefinite period of time.3.Topspin Medical (Israel) Ltd. and My Size (Israel) 2014 Ltd. has final tax assessments through 2016.c.U.S. and foreign components of loss from continuing operations, before income taxes consisted of:December 31,20222021U.S(1,180)(3,802)NonU.S. (foreign)(7,130)(6,718)(8,310)(10,520)F20MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 12 TAXES ON INCOME (Cont.)d.Deferred taxes:Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reportingpurposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows:December 31,20222021Deferred tax assets:Operating loss carryforwards20,13120,238Warrants and options145126Marketable securities390377Intangible assets(328)Research and development expenses586341Other temporary differences203Deferred tax assets before valuation allowance21,12721,082Valuation allowance(21,455)(21,082)Net deferred tax liability(328)The following table presents a reconciliation of the beginning and ending valuation allowance:December 31,20222021Balance at beginning of the year21,08218,968Additions in valuation allowance to the income statement1,7581,625Additions in valuation allowance due to exchange rate differences(1,385)489Balance at end of the year21,45521,082In assessing the realization of deferred tax assets, management considers whether it is more likely than not that all or some portion of the deferred taxassets will not be realized.The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporarydifferences are deductible and net operating losses are utilized. Based on consideration of these factors, the Company recorded a full valuationallowance at December 31, 2021 and 2020.e.Theoretical taxThe following presents the adjustment between the theoretical tax amount and the tax amount included in the financial statements:December 31,20222021Loss before income taxes8,34610,520Statutory tax rate21%21%Computed “expected” tax income1,7522,209Foreign tax rate differences and exchange rate differences149131Nondeductible expenses(107)(715)Change in valuation allowance(1,758)(1,625)Taxes on income36F21MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITYa.Common stock confers upon their holders the right to receive notice to participate and vote in general meetings of the Company, and the right toreceive dividends if declared.b.On January 8, 2021, the Company conducted a public offering of its securities pursuant to which it issued 62,768 shares of its common stock forgross proceeds of $2,008. The net proceeds to the Company from the offering were approximately $1,700, after deducting placement agent’s feesand other estimated offering expenses payable by the Company.c.During 2021, a holders of warrants exercised warrants to purchase 135,109 ordinary shares of the Company in exchange for $3,709.d.On March 25, 2021, the Company conducted a public offering of its shares of common stock pursuant to which it issued 104,741 shares of itscommon stock for gross proceeds of $3,300. The net proceeds to the Company from the offering were approximately $2,872, after deductingplacement agent’s fees and other estimated offering expenses payable by the Company.On May 7, 2021, the Company issued an additional 15,711 shares of the Company’s common stock in connection with the full exercise of theunderwriter’s overallotment option granted in the Company’s March 2021 public offering. These additional shares were sold to the underwriter at apublic offering price of $31.5 per share, resulting in additional net proceeds to the Company, net of the underwriting discount, of approximately$463.e.On May 26, 2021, the Company issued 100,000 shares of common stock to Ms. Zigdon in consideration of the Waiver. See note 1(b) above.f.On October 28, 2021, the Company sold in a registered direct offering 100,592 shares of its common stock and, in a concurrent private placement,an aggregate of 75,444 unregistered warrants to purchase shares of common stock, at an offering price of $33.8 per share and associated warrant.In addition, on the same day, the Company sold in a private placement 150,888 unregistered shares of common stock and unregistered warrants topurchase up to an aggregate of 113,166 shares of common stock at the same purchase price as in the registered direct offering. The warrants areimmediately exercisable and will expire five years from issuance at an exercise price of $31.5 per share, subject to adjustment as set forth therein.The gross proceeds from the offerings were $8,500. The net proceeds to the Company from the offerings were approximately $7,560, afterdeducting placement agent’s fees and other estimated offering expenses payable by the Company. In connection with the offerings, the Companyissued to the placement agent warrants to purchase 17,603 shares on substantially the same terms as the purchasers in the offerings at an exerciseprice of $42.25 per share and a term expiring on October 26, 2026.g.On December 7, 2022, the Company’s board of directors approved a 1for25 reverse stock split of the Company’s issued and outstanding sharesof common stock. The reverse stock split became effective on December 8, 2022. In order not to have fractional shares as a result of the reversestock split, the Company issued an additional 12,091 shares of common stock. As a result, all shares of common stock, options for shares ofcommon stock, exercise price and net loss per share amounts were adjusted retroactively for all periods presented in these financial statements.F22MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITY (Cont.)g.A summary of the warrant activity during the years ended December 31, 2022 and 2021 is presented below:Number ofWarrantsWeightedAverageExercisePriceWeightedAverageRemainingLife inYearsOutstanding, December 31, 2020216,85936.754.26Issued206,214Expired or exercised(135,109)Outstanding, December 31, 2021287,96431.004.35IssuedExpired or exercised(17,901)Outstanding, December 31, 2022270,06330.213.36Exercisable, December 31, 2022270,06330.213.36NOTE 14 STOCK BASED COMPENSATIONThe stockbased expense recognized in the financial statements for services received is related to Research and Development, Sales and Marketingand General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense Research and development15195Stockbased compensation expense Sales and marketing126180Stockbased compensation expense General and administrative17898455373The stockbased expense recognized in the financial statements for services received post Acquisition of Orgad (see note 16) is related to Cost OfGoods, Sales and Marketing and General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense – Cost of goods80Stockbased compensation expense Sales and marketing112Stockbased compensation expense General and administrative127319F23MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Options issued to consultantsWe can sell additional shares of common stock without consulting stockholders and without offering shares to existing stockholders, which wouldresult in dilution of shareholders’ interests in the company and could depress our stock price.Our Certificate of Incorporation currently authorizes 250,000,000 shares of common stock, of which 2,446,780 are currently outstanding as of March 31, 2023and our board of directors is authorized to issue additional shares of our common stock. Although our board of directors intends to utilize its reasonable businessjudgment to fulfil its fiduciary obligations to our then existing stockholders in connection with any future issuance of our capital stock, the future issuance ofadditional shares of our capital stock could cause immediate, and potentially substantial, dilution to our existing stockholders, which could also have a materialeffect on the market value of the shares. Further, other than certain participation rights that we have granted in a past offering, our shares do not have preemptiverights, which means we can sell shares of our capital stock to other persons without offering purchasers in this offering the right to purchase their proportionateshare of such offered shares. Therefore, any additional sales of stock by us could dilute your ownership interest in our Company.Our quarterly operating results may fluctuate significantly.We expect our operating results to be subject to quarterly fluctuations. Our net loss and other operating results will be affected by numerous factors,including:●variations in the level of expenses related to our research and development;●any lawsuits in which we may become involved;●regulatory developments affecting our products; and●our execution of any collaborative, licensing or sales agreements, and the timing of payments under these arrangements.If our quarterly operating results fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially.Furthermore, any quarterly fluctuations in our operating results may, in turn, cause the price of our common stock to fluctuate substantially.If we fail to comply with the rules under the Sarbanes Oxley Act of 2002 related to accounting controls and procedures or if we discover materialweaknesses and deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult.If we fail to comply with the rules under the SarbanesOxley Act of 2002 related to disclosure controls and procedures, or, if we discover materialweaknesses and other deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult. Section 404 of the SarbanesOxley Act requires annual management assessments of the effectiveness of our internal control over financial reporting and, ifwe are no longer a nonaccelerated filer, a report by our independent auditors addressing these assessments. If material weaknesses or significant deficiencies arediscovered or if we otherwise fail to achieve and maintain the adequacy of our internal control, we may not be able to ensure that we can conclude on an ongoingbasis that we have effective internal controls over financial reporting in accordance with Section 404 of the SarbanesOxley Act. Moreover, effective internalcontrols are necessary for us to produce reliable financial reports and are important to helping prevent financial fraud. If we cannot provide reliable financial reportsor prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price ofour common stock could drop significantly.38Our Certificate of Incorporation, Bylaws and Delaware law may have antitakeover effects that could discourage, delay or prevent a change incontrol, which may cause our stock price to decline.Our Certificate of Incorporation, Bylaws and Delaware law could make it more difficult for a thirdparty to acquire us, even if closing such a transactionwould be beneficial to our stockholders. Provisions of our Certificate of Incorporation, Bylaws and Delaware law also could have the effect of discouraging potentialacquisition proposals or making a tender offer or delaying or preventing a change in control, including changes a stockholder might consider favorable. Suchprovisions may also prevent or frustrate attempts by our stockholders to replace or remove our management. In particular, the Certificate of Incorporation, Bylawsand Delaware law, as applicable, among other things:●provide the board of directors with the ability to alter the Bylaws without stockholder approval;●the classification of our board of directors;●place limitations on the removal of directors;●provide that vacancies on the Board of Directors may be filled by a majority of directors in office, although less than a quorum;●require that stockholder actions must be affected at a duly called stockholder meeting and generally prohibiting stockholder actions by written consent;●eliminate the ability of stockholders to call a special meeting of stockholders; and●establish advance notice requirements for nominations for election to the Board of Directors or for proposing matters that can be acted upon at duly calledstockholder meetings.We are subject to Section 203 of the Delaware General Corporation Law which, subject to certain exceptions, prohibits “business combinations” between apubliclyheld Delaware corporation and an “interested stockholder,” which is generally defined as a stockholder who becomes a beneficial owner of 15% or more ofa Delaware corporation’s voting stock for a threeyear period following the date that such stockholder became an interested stockholder. These provisions areexpected to discourage certain types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to firstnegotiate with our board. These provisions may delay or prevent someone from acquiring or merging with us, which may cause the market price of our commonstock and the value of our securities to decline.If we fail to comply with the continued listing requirements of the Nasdaq Capital Market, our common stock may be delisted and the price of ourcommon stock and our ability to access the capital markets could be negatively impacted.Nasdaq has established certain standards for the continued listing of a security on the Nasdaq Capital Market. The standards for continued listing include,among other things, that the minimum bid price for the listed securities not fall below $1.00 per share for a period of 30 consecutive trading days and that wemaintain a minimum of $2,500,000 in shareholders’ equity. We have in the past fallen below the minimum bid price and minimum shareholders’ equity.39No assurance can be given that we will continue to be in compliance with the Rule. Failure to meet applicable Nasdaq continued listing standards couldresult in a delisting of our common stock. A delisting of our common stock from Nasdaq could materially reduce the liquidity of our common stock and result in acorresponding material reduction in the price of our common stock. In addition, delisting could harm our ability to raise capital through alternative financing sourceson terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, employees and fewer business development opportunities.The exercise of outstanding warrants and stock options will have a dilutive effect on the percentage ownership of our capital stock by existingstockholders.As of March 15, 2023, we had outstanding warrants to acquire 2,299,115 shares of our common stock and stock options to purchase 1,659 shares of ourcommon stock, which warrants and options are exercisable for prices ranging between $2.81 and $375. The expiration of the term of such options and warrants rangefrom 0.22 years to 4.83 years. If a significant number of such warrants and stock options are exercised by the holders, the percentage of our common stock ownedby our existing stockholders will be diluted.Were our common stock to become subject to the penny stock rules then this could result in U.S. brokerdealers becoming discouraged from effectingtransactions in shares of our common stock.Rule 15g9 under the Exchange Act establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a marketprice of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. If we do not retain a listing on the NasdaqCapital Market or do not meet certain net tangible asset or average revenue requirements and if the price of our common stock is less than $5.00, our common stockwill be deemed a penny stock. For any transaction involving a penny stock, unless exempt, the rules require: (a) that a broker or dealer approve a person’s accountfor transactions in penny stocks; and (b) the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantityof the penny stock to be purchased.In order to approve a person’s account for transactions in penny stocks, the broker or dealer must: (a) obtain financial information and investmentexperience objectives of the person and (b) make a reasonable determination that the transactions in penny stocks are suitable for that person and the person hassufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver,prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which: (a) sets forth the basis on whichthe broker or dealer made the suitability determination; and (b) confirms that the broker or dealer received a signed, written agreement from the investor prior to thetransaction. Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult forinvestors to dispose of our common stock and cause a decline in the market value of our common stock.Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissionspayable to both the broker or dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor incases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the accountand information on the limited market in penny stocks.Sales of our currently issued and outstanding stock may become freely tradable pursuant to Rule 144 and may dilute the market for your shares andhave a depressive effect on the price of the shares of our common stock.A portion of our outstanding shares of common stock are “restricted securities” within the meaning of Rule 144 under the Securities Act of 1933, asamended, or the Securities Act. As restricted shares, these shares may be resold only pursuant to an effective registration statement or under the requirements ofRule 144 or other applicable exemptions from registration under the Securities Act and as required under applicable state securities laws. Rule 144 provides inessence that an affiliate (as such term is defined in Rule 144(a)(1)) of an issuer who has held restricted securities for a period of at least six months (one year afterfiling Form 10 information with the SEC for shell companies and former shell companies) may, under certain conditions, sell every three months, in brokeragetransactions, a number of shares that does not exceed the greater of 1% of a company’s outstanding shares of common stock or the average weekly trading volumeduring the four calendar weeks prior to the sale (the four calendar week rule does not apply to companies quoted on the OTC Markets). Rule 144 also permits, undercertain circumstances, the sale of securities, without any limitation, by a person who is not an Affiliate of the Company and who has satisfied a oneyear holdingperiod. A sale under Rule 144 or under any other exemption from the Securities Act, if available, or pursuant to subsequent registrations of our shares of commonstock, may have a depressive effect upon the price of our shares of common stock in any active market that may develop.40We are a former “shell company” and as such are subject to certain limitations not applicable to other public companies generally.Prior to our suspension of reporting in 2012, we were a public reporting “shell company,” as defined in Rule 12b2 under the Exchange Act. Although weare no longer a “shell company,” we are subject to certain restrictions under the Securities Act for the resale of securities issued by issuers that have been at anytime previously a shell company. Specifically, the Rule 144 safe harbor available for the resale of our restricted securities is only available to our stockholders if wehave filed all reports and other materials required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934, as amended, or the Exchange Act, asapplicable, during the preceding twelve months, other than current reports on Form 8K, at the time of the proposed sale, regardless of whether the restrictedsecurities were initially issued at the time we were a shell company or subsequent to termination of such status. Accordingly, holders of our “restricted securities”within the meaning of Rule 144 will be subject to the conditions set forth in Rule 144 with respect to our company. Other reporting companies that are not formershell companies and have been reporting for more than twelve months are not subject to this same reporting threshold for nonaffiliate reliance on Rule 144.Accordingly, any restricted securities we have sold or sell in the future or issue to consultants or employees, in consideration for services rendered or for any otherpurpose, may not be resold unless such securities are registered with the SEC or the requirements of Rule 144 have been satisfied. As a result, it may be harder forus to fund our operations and pay our employees and consultants with our securities instead of cash. Furthermore, it may be harder for us to raise funding throughthe sale of debt or equity securities unless we agree to register such securities with the SEC, which could cause us to expend additional resources in the future. Ourprior status as a “shell company” could prevent us in the future from raising additional funds, engaging employees and consultants, and using our securities to payfor any acquisitions, which could cause the value of our securities, if any, to decline in value or become worthless.ITEM 1B. UNRESOLVED STAFF COMMENTSNone.ITEM 2. PROPERTIESWe currently lease 1,660 square feet of office space at 4 HaYarden Street, Airport City, Israel. The lease term is for 36 months beginning on August 20, 2019and ending on August 20, 2022, with an option to extend for an additional 36 months. Monthly rent payments, including utilities, amount to approximately $14,000per month. We extended the lease period until August 20, 2025.ITEM 3. LEGAL PROCEEDINGSFrom time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation issubject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.41North Empire LLCOn August 7, 2018, we commenced an action against North Empire LLC, or North Empire, in the Supreme Court of the State of New York, County of NewYork for breach of a Securities Purchase Agreement or Agreement in which we are seeking damages in an amount to be determined at trial, but in no event less than$616,000. On August 2, 2018, North Empire filed a Summons with Notice against us, also in the same Court, in which they allege damages in an amount of $11.4million arising from an alleged breach of the Agreement. On September 6, 2018, North Empire filed a Notice of Discontinuance of the action it had filed on August 2,2018. On September 27, 2018, North Empire filed an answer and asserted counterclaims in the action commenced by us against them, alleging that we failed to deliverstock certificates to North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against our CEO andnow former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018, we filed a reply to North Empire’scounterclaims. On November 15, 2018, our CEO and now former Chairman of the Board filed a motion to dismiss North Empire’s thirdparty complaint. On January 6,2020, the Court granted the motion and dismissed the thirdparty complaint. Discovery has been completed and both parties have filed motions for summaryjudgment in connection with the claims and counterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summaryjudgment, arguing there were factual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision.On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying the Company’s motion for summary judgment. On or about September 12,2022, the Court issued its Decision and Order denying the Company’s motion to reargue. North Empire filed its opposing brief on December 7, 2022. Both sides weregiven an opportunity to file a reply brief. We filed our reply brief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. Oral argument was heldbefore the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Court filed its Decision and Order, which affirmed the lower court’sdecisions regarding both My Size and North Empire’s motions for summary judgment and sent the case back to the Supreme Court. On or about March 13, 2023, theSupreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date for the mediation has not yet been set. We intend tovigorously defend any claims made by North Empire. We believe it is more likely than not that the counterclaims will be denied.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.42PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur stock currently is listed on the Tel Aviv Stock Exchange and the Nasdaq Capital Market under the symbol “MYSZ”. Our stock has been traded on theNasdaq Capital Market since July 25, 2016.HoldersAs of March 31, 2023, we had 70 shareholders of record. The actual number of stockholders is greater than this number of record holders and includesstockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our Board of Directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our Board of Directors deems relevant.Securities Authorized for Issuance under Equity Compensation PlansInformation about our equity compensation plans is incorporated herein by reference to “Item 12. Security Ownership of Certain Beneficial Owners andManagement and Related Stockholder Matters”, of this Annual Report on Form 10K.Recent Sales of Unregistered SecuritiesNone.ITEM 6. SELECTED FINANCIAL DATAAs a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULT OF OPERATIONSYou should read the following discussion along with our financial statements and the related notes included elsewhere in this Annual Report on Form10K. The following discussion contains forwardlooking statements that are subject to risks, uncertainties and assumptions, including those discussed under“Risk Factors.” Our actual results, performance and achievements may differ materially from those expressed in, or implied by, these forwardlooking statements.OverviewMySize is an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.43Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile device or through MySizeID Widget: a simple questionnaire which was uses a database collected over the years.MySizeID synchronizes the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and onlypresents items available for purchase that match their measurements to ensure a correct fit.MySize is positioning itself as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empowering brand design teams, which are designed to increaseend consumer satisfaction, contributing to a sustainable world and reduce operation costs.Orgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,682 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz BespokeTechnologies, S.L., or Naiz, a limited liability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.44The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 2,365,800 shares of My Size common stock were issuedto Whitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.45Operations in RussiaIn addition to our Israel operations, we had operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia. To date, mainly due to the invasion of Ukraine by Russia and the ongoing sanctions we stopped most ofour efforts in Russia and will probably close the subsidiary in the near future.Results of OperationsThe table below provides our results of operations for the periods indicated.Year ended December 3120222021(dollars in thousands)Revenues4,459131Cost of revenues(3,825)Gross profit634131Research and development expenses$(1,701)$(4,248)Sales and marketing(3,143)(2,336)General and administrative(3,900)(4,124)Operating loss(8,110)(10,577)Financial income (expenses), net(236)57Tax income36Net loss$(8,310)$(10,520)Year Ended December 31, 2022 Compared to Year Ended December 31, 2021RevenuesFrom inception through December 31, 2018, we did not generate any revenue from operations and we continue to expect to incur additional losses toperform further research and development activities. We started to generate revenues only in 2019. Our revenues for the year ended December 31, 2022 amounted to$4,459,000 compared to $131,000 for year ended December 31, 2021. The increase from the corresponding period primarily attributable to $4,132,000 in revenuegenerated from Orgad from February 7, 2022, the date of closing of the Orgad acquisition, or the Acquisition Date and revenue generated from the Naiz Acquisitionfrom October 11, 2022, the date of closing of the Naiz acquisition.In addition, the increase from the corresponding period results from an increase in revenues generated by My Size.Cost Of RevenuesOur cost of revenues expenses for the year ended December 31, 2022 amounted to $3,825,000, compared to none for the year ended December 31, 2021. Thecost of revenues includes cash and equity liabilities expenses in the amount of $194,000. The increase in comparison with the corresponding period was due to thecost of goods of the revenues generated from Orgad’s operations.Research and Development ExpensesOur research and development expenses for the year ended December 31, 2022 amounted to $1,701,000 a decrease of $2,547,000, or approximately 60.0%,compared to $4,248,000 for the year ended December 31, 2021. The decrease from the corresponding period primarily resulted from share based payment in amount of$2,618,000 attributed to the share issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021.Sales and Marketing ExpensesOur sales and marketing expenses for the year ended December 31, 2022 amounted to $3,143,000 an increase of $807,000, or 34.55%, compared to $2,336,000for the year ended December 31, 2021. The increase primarily resulted from an increase in employees expenses mainly due to Orgad and Naiz acquisitions, increase inAmazon fees, increase in cash and equity liabilities expenses attributed to the Orgad acquisition and an increase in share based payments offset by a decrease inpayments to consultants.46General and Administrative ExpensesOur general and administrative expenses for the year ended December 31, 2022 amounted to $3,900,000, a decrease of $224,000, or 5.43%, compared to$4,124,000 for the year ended December 31, 2021. The decrease compared to the corresponding period was mainly due to a decrease in professional expenses, mainlyattributed to shareholder activism including settlement expenses with the Lazar Parties offset by an increase in sharedbased payments and an increase in employeesexpenses mainly due to the Orgad and Naiz acquisitions.Operating LossAs a result of the foregoing, for the year ended December 31, 2022, our operating loss was $8,110,000, a decrease of $2,467,000 or 23.32%, compared to ouroperating loss for the year ended December 31, 2021 of $10,577,000.Financial Income, NetOur financial (expense) income, net for the year ended December 31, 2022 amounted to $236,000 compared to financial income, $57,000 for the year endedDecember 31, 2021. In 2022, we had financial expenses exchange rate differences offset by an income from fair value revaluation of investment in marketablesecurities whereas in 2021 we had financial income from the fair value revaluation of warrants offset by expenses from exchange rate differences and expenses fromfair value revaluation of investment in marketable securities.Net LossAs a result of the foregoing, our net loss for the year ended December 31, 2022 was $8,310,000 compared to net loss of $10,520,000 for the year endedDecember 31, 2021. The decrease in net loss was mainly due increase in sales and marketing expenses and financial expenses as opposed to financial income in thecorresponding period offset by a decrease in research and development expenses in amount of $2,618,000 attributed to the share issuance to Shoshana Zigdonunder the Amendment to Purchase Agreement dated May 26, 2021.Liquidity and Capital ResourcesSince our inception, we have funded our operations primarily through public and private offerings of debt and equity in Israel and in the U.S.As of December 31, 2022, we had cash, cash equivalents and restricted cash of $2,363,000 compared to $10,943,000 cash, cash equivalents, restricted cashas of December 31, 2021. During January 2023, we completed a registered direct and concurrent private placement offering resulting in gross proceeds ofapproximately $3 million. This decrease primarily resulted from our operating activities, the acquisition of Orgad and Naiz Fit, and resources that were deployed togrow of both businesses.Net cash used in operating activities was $7,290,000 for the year ended December 31, 2022 compared to $7,297,000 for the year ended December 31, 2021.The decrease in cash used in operating activity is derived mainly from an increase in share based payments and increase in account receivables mainly from theOrgad and Naiz fit acquisitions offset by a decrease in the net loss.Net cash used in investing activities for the year ended December 31, 2022 was $993,000 as opposed to net cash provided by investing activities of$161,000 for the year ended December 31, 2021. The net cash used in investing activities for the year ended December 31, 2022 was mainly from the acquisition ofOrgad and Naiz as opposed to proceeds from shortterm deposits and restricted deposits during the year ended December 31, 2021.We had a negative cash flow from financing activities of $67,000 for the year ended December 31, 2022 compared to positive cash flow of $16,292,000 for theyear ended December 31, 2021. The negative cash flow from financing activities for the year ended December 31, 2022 was mainly due to repayment of loans andinterest and payments for leases as opposed to proceeds from issuance of shares and from exercise of warrants for the year ended December 31, 2021.47We expect that we will continue to generate losses and negative cash flows from operations for the foreseeable future. Based on the projected cash flowsand cash balances as of December 31, 2022, together with the proceeds from the January 2023 financing, we believe our existing cash will not be sufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. We will need to raiseadditional capital, which may not be available on reasonable terms or at all. Additional capital would be used to accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;●respond to competitive pressures;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, the Russian invasion ofUkraine, the impact of any resurgence of the COVID19 pandemic and a number of other factors, many of which are outside our control, and on our financialperformance. Accordingly, we cannot assure you that we will be able to successfully raise additional capital at all or on terms that are acceptable to us. If we cannotraise additional capital when needed, it may have a material adverse effect on our business, results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.We have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.Recently Issued Accounting PronouncementsCertain recently issued accounting pronouncements are discussed in Note 2, Significant Accounting Policies, to the consolidated financial statementsincluded in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10K.OffBalance Sheet ArrangementsWe have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.48Application of Critical Accounting Policies and EstimatesOur management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we haveprepared in accordance with U.S. generally accepted accounting principles issued by the Financial Accounting Standards Board, or FASB. The preparation of thesefinancial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assetsand liabilities at the date of the financial statements, as well as the reported expenses during the reporting periods. Actual results may differ from these estimatesunder different assumptions or conditions.Our significant accounting policies were revenue from contracts with customers which are more fully described in the notes to our financial statementsincluded herein. We believe these accounting policies discussed below are critical to our financial results and to the understanding of our past and futureperformance, as these policies relate to the more significant areas involving management’s estimates and assumptions. We consider an accounting estimate to becritical if: (1) it requires us to make assumptions because information was not available at the time or it included matters that were highly uncertain at the time wewere making our estimate; and (2) changes in the estimate could have a material impact on our financial condition or results of operations.Accounting for business combinationsWe allocate the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed, based upon their estimated fairvalues at the acquisition date. These fair values are typically estimated with assistance from independent valuation specialists.The purchase price allocation process requires us to make significant estimates and assumptions, especially at the acquisition date with respect tointangible assets, contractual support obligations assumed, contingent consideration arrangements, and preacquisition contingencies.Although we believe the assumptions and estimates we have made in the past have been reasonable and appropriate, they are based in part on historicalexperience and information obtained from the management of the acquired companies and are inherently uncertain.Examples of critical estimates in valuing certain of the intangible assets we have acquired or may acquire in the future include but are not limited to:● future expected cash flows from product sales or other customer contracts;● expected costs of fulfillment including marketing, warehousing and product sales;● the acquired company’s brand and competitive position, as well as assumptions about the period of time the acquired brand will continue to be used inthe combined company’s product portfolio;● cost of capital and discount rates; and● estimating the useful lives of acquired assets as well as the pattern or manner in which the assets will amortize.Refer to Note 16, Business Combination, to the consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” of thisAnnual Report on Form 10K.49Revenue from contracts with customersOur revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled software subscriptions, associatedsoftware maintenance and support.We recognize revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with a customer exists onlywhen: the parties to the contract have approved it and are committed to perform their respective obligations, we can identify each party’s rights regarding thedistinct goods or services to be transferred (“performance obligations”), we can determine the transaction price for the goods or services to be transferred, thecontract has commercial substance and it is probable that we will collect the consideration to which we will be entitled in exchange for the goods or services that willbe transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to a customer.Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted to governmental authorities. Refundsare estimated at contract inception and updated at the end of each reporting period if additional information becomes available. Revenue is recognized when controlof the product is transferred to the customer.We maintain a returns policy that allows our customers to return product within a specified period of time. The estimate of the provision for returns is basedupon historical experience with actual returns.Principal versus Agent ConsiderationsWe follow the guidance provided in ASC 606 for determining whether we are a principal or an agent in arrangements with customers, by assessing whetherthe nature of our promise is a performance obligation to provide the specified goods (principal) or to arrange for those goods to be provided by the other party(agent). With regard to products being sold by Orgad through Amazon, this determination involves judgment. We determine it is the principle when it has controlover the promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).We recognize revenue ratably over the contractual service term for hosted services that are priced based on a committed number of transactions where thedelivery and consumption of the benefit of the services occur evenly over time, beginning on the date the services associated with the committed transactions arefirst made available to the customer and continuing through the end of the contractual service term. Over usage fees and fees based on the actual number oftransactions are billed in accordance with contract terms as these fees are incurred and are included in the transaction price of an arrangement as variableconsideration. Fees based on a number of transactions or impressions per month, are allocated to the period in which the transactions occur. Revenue forsubscriptions sold as a fee per period is recognized ratably over the contractual term as the customer simultaneously receives and consumes the benefit of theunderlying service.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.As a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.50ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAMY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2022U.S. DOLLARS IN THOUSANDSINDEXPageReport of Independent Registered Public Accounting Firm (PCAOB ID: ID 1057)F2Consolidated Balance SheetsF4Consolidated Statements of Comprehensive LossF5Consolidated Statements of Shareholders’ EquityF6Consolidated Statements of Cash FlowsF7Notes to Consolidated Financial StatementsF8 F33F1Report of Independent Registered Public Accounting FirmTo the Shareholders and Board of DirectorsMy Size, Inc.:Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of My Size, Inc. and subsidiaries (the Company) as of December 31, 2022 and 2021, the relatedconsolidated statements of comprehensive loss, shareholders’ equity, and cash flows for each of the years in the twoyear period ended December 31, 2022, and therelated notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, thefinancial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the twoyear periodended December 31, 2022, in conformity with U.S. generally accepted accounting principles.Going ConcernThe accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1d tothe consolidated financial statements, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit thatraises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1d. Theconsolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidatedfinancial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Critical Audit MattersCritical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to becommunicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved ourespecially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidatedfinancial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters oron the accounts or disclosures to which they relate.Acquisitiondate fair value of customer relationshipsAs discussed in Note 16 to the consolidated financial statements, on October 11, 2022, the Company acquired Naiz Bespoke Technologies SL (“Naiz”). As a result ofthe transaction, the Company acquired customer relationships intangible assets (“customer relationships”) representing the generation of future income from Naiz’sexisting customers. The acquisition date fair value of the customer relationships was $726 thousand.F2We identified the evaluation of the acquisitiondate fair value of the Naiz customer relationships as a critical audit matter. A high degree of subjective auditorjudgment was required to evaluate the following internally developed assumptions used to estimate the fair value of such asset, for which there were limitedobservable inputs: (i) forecasted revenues attributable to existing customers, (ii) forecasted earnings before interest, taxes, depreciation, and amortization(“EBITDA”) margins for the acquired business, (iii) estimated annual customer attrition rates and (iv) estimated discount rate. The determined fair value wassensitive to changes in these key assumptions. Additionally, specialized skills and knowledge were needed to evaluate the discount rate used.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s acquisitiondate fair value estimation process, including controls over the development of key assumptions. We performed a sensitivity analysis toassess the impact of reasonably possible changes to forecasted revenues, EBITDA margins, annual customer attrition rates, and the discount rate. We evaluated theforecasted revenue growth rates from existing customers by comparing the growth assumptions to those of the Company’s peers and industry reports. Inconnection with our assessment of the forecasts used in the valuation, we compared (1) forecasted revenue and EBITDA to Naiz’s historical actual results and (2)estimated annual customer attrition rates to historical Naiz customer attrition data. We tested the Company’s determined weighted average cost of capital(“WACC”), which was used to determine the discount rate, by involving valuation professionals with specialized skills and knowledge, who assisted in:Evaluating the selected discount rate by comparing it against a discount rate range that was independently developed using publicly available market datafor comparable companies, and;Assessing the Company’s WACC calculation, by comparing it against an independently estimated WACC range based on inputs obtained throughpublished surveys and studies.Goodwill impairment assessmentAs discussed in Note 16 to the consolidated financial statements, during 2022 the Company recorded goodwill of $1,257 thousand related to the acquisition of NaizBespoke Technologies, S.L. (“Naiz”). The Company performed an annual quantitative impairment test of goodwill at the reporting unit level. Based on this analysis,the Company determined that the fair value of its reporting unit exceeded its carrying value and no impairment charge was required.We identified the evaluation of the goodwill impairment assessment for the Naiz reporting unit as a critical audit matter. A high degree of subjective auditor judgmentwas required to evaluate the following assumptions used to estimate the fair value of the Company’s reporting unit, for which there were limited observable inputs:(i) forecasted reporting unit cash flows, (ii) longterm growth rates, and (iii) discount rates. The fair value was sensitive to changes in these key assumptions.Additionally, specialized skills and knowledge were needed to evaluate the discount rates.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s goodwill impairment evaluation process. We performed sensitivity analyses to assess the impact of reasonably possible changes to forecasted cashflows, longterm growth rates, and discount rates. We evaluated the Company’s forecasted growth rates by comparing the growth assumptions to those of theCompany’s peers and industry reports. We compared the Company’s forecasted revenue, cost of sales, and operating expense margins to historical actual results toassess the reasonableness of the forecasts. In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:– Assessing the Company’s WACC calculation, by comparing it against an estimated WACC range based on inputs obtained through published surveys andstudies– Evaluating the discount rates used by the Company by comparing them against discount rate ranges that were developed using publicly available market data forcomparable companies, and;– Performing an arithmetic recalculation regarding the fair value of the Company’s reporting unit, using the Company’s cash flow forecasts and the independentlydeveloped discount rates, and comparing the results to the Company’s fair value estimates./s/ Somekh ChaikinSomekh ChaikinMember Firm of KPMG InternationalWe have served as the Company’s auditor since 2017.Tel Aviv, IsraelApril 14, 2023F3MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED BALANCE SHEETSU.S. dollars in thousands (except share data)December 31,Note20222021AssetsCurrent assetsCash and cash equivalents32,10010,670Restricted cash263273Inventory997Account receivables1,94040Other receivables and prepaid expenses4758579Total current assets6,05811,562Long term deposits28Property and equipment, net5140112Operating rightofuse asset6583776Intangible assets71,377Goodwill71,395Investment in JV899Investment in marketable securities11471083,669996Total assets9,72712,558Liabilities and shareholders’ equityCurrent liabilitiesOperating lease liability6159138Shortterm loans9155Trade payables2,487635Liabilities to Related parties69863Other payables680392Total current liabilities4,1791,228Longterm loans9376Deferred tax liabilities328Operating lease liability6308473Total noncurrent liabilities1,012473CONTINGENCIES AND COMMITMENTS15Total Liabilities5,1911,701Shareholders’ equity13Stock capital Common stock of $0.001par value Authorized: 250,000,000and 100,000,000shares as of December 31,2022 and 2021; Issued and outstanding: 1,464,117and959,297 as of December 31,2022 and 2021, respectively (*)11Additional paidin capital58,67356,453Accumulated other comprehensive loss(637)(406)Accumulated deficit(53,501)(45,191)Total shareholders’ equity4,53610,857Total liabilities and shareholders’ equity9,72712,558(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F4MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSSU.S. dollars in thousands (except share data and per share data)Year endedDecember 31,Note20222021Revenues4,459131Cost of revenues(3,825)Gross profit634131Operating expensesResearch and development(1,701)(4,248)Sales and marketing18(3,143)(2,336)General and administrative19(3,900)(4,124)Total operating expenses(8,744)(10,708)Operating loss(8,110)(10,577)Financial income (expense), net20(236)57Loss before taxes(8,346)(10,520)Taxes on income36Net loss for the year(8,310)(10,520)Other comprehensive income (loss):Foreign currency translation differences(231)18Total comprehensive loss(8,541)(10,502)Basic and diluted loss per share (*)(7.47)(17.75)Basic and diluted weighted average number of shares outstanding (*)1,111,913420,385(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F5MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITYU.S. dollars in thousands (except share data)Common stockAdditionalpaidinAccumulatedothercomprehensiveAccumulatedTotalstockholders’NumberAmountcapitallossDeficitequityBalance as of January 1, 2021289,314(*)37,171(424)(34,671)2,076Stockbased compensation related to optionsgranted to employees and consultants373373Exercise of options granted to employees178(*)Restricted shares issued to shareholder (***)100,000(*)2,6182,618Issuance of shares, net of issuance cost of$1,160434,700112,58212,583Exercise of warrants135,108(*)3,7093,709Total comprehensive income (loss)18(10,520)(10,502)Balance as of December 31, 2021959,300156,453(406)(45,191)10,857Stockbased compensation related to optionsand restricted shares granted to employeesand consultants176,000(*)455455Issuance of shares in Business Combination(**)295,802(*)1,4461,446Issuance of shares post BusinessCombination (**)20,924(*)319319Effect of reverse stock split (Note 13 g)12,091(*)Total comprehensive income (loss)(231)(8,310)(8,541)Balance as of December 31, 20221,464,117158,673(637)(53,501)4,536(*)Represents an amount of less than $1.(**)See note 16(***)See note 1 bThe accompanying notes are an integral part of the consolidated financial statements.F6MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSU.S. dollars in thousandsYear endedDecember 31,20222021Cash flows from operating activities:Net loss(8,310)(10,520)Adjustments to reconcile net loss to net cash used in operating activities:Depreciation3842Change in operating lease rightofuse asset13543Amortization of intangible assets155foreign exchange differences(23)1Change in liabilities to related parties635Interest on long term liabilities10Interest paid(10)Revaluation of investment in marketable securities62(49)Restricted Shares issued to shareholder2,618Stock based compensation455373Issuance of shares post Business Combination319Change in inventory(219)Change in deferred tax liabilities(36)Change in account receivable(1,863)(12)Changes in operating lease liabilities(142)Change in other receivables and prepaid expenses184(99)Change in trade payables1,315253Change in other payables553Net cash used in operating activities(7,290)(7,297)Cash flows from investing activities:Acquisition of a subsidiary, net of cash acquired(767)Proceeds from restricted deposits, net184investing in other receivable(100)Investment in equity accounted investee(99)Purchase of property and equipment(27)(23)Net cash (used in) provided by investing activities(993)161Cash flows from financing activities:Proceeds from issuance of shares, net of issuance costs12,583Repayment of loans(67)Proceeds from exercise of warrants3,709Net cash (used in) provided by financing activities(67)16,292Effect of exchange rate fluctuations on cash and cash equivalents(230)13Change in cash and cash equivalents and restricted cash(8,580)9,169Cash and cash equivalents and restricted cash at the beginning of the year10,9431,774Cash and cash equivalents and restricted cash at the end of the year2,36310,943B) Aggregate cash flows derived for the Company as a result of the Orgad acquisition (note 16)2022Trade and other receivables364Inventory864Fixed assets55Longterm deposits31Selling Platform378Goodwill152Shortterm credit(181)Trade payables(580)Other payables(88)Longterm loan(138)Longterm provision(13)Deferred Tax Liability(87)Issuance of shares(457)Total acquisition of subsidiary, net of cash300C) Aggregate cash flows derived for the Company as a result of the Naiz acquisition (note 16)2022Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Issuance of shares(1,008)Total acquisition of subsidiary, net of cash467The accompanying notes are an integral part of the consolidated financial statements.F7MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERALa.My Size, Inc. is developing unique measurement technologies based on algorithms with applications in a variety of areas, from the apparel ecommerce market, to the courier services market and to the Do It Yourself (“DIY”) smartphone and tablet apps market. The technology is driven byproprietary algorithms, which are able to calculate and record measurements in a variety of novel ways.Following the acquisition of Naiz Bespoke Technologies, S.L (“Naiz”) in October 2022 (see note 16), the Company expanded its offering outreachand customer base.Following the acquisition of Orgad International Marketing Ltd. (“Orgad”) in February 2022 (see note 16), the Company also operates anomnichannel ecommerce platform.The Company has five subsidiaries, My Size Israel 2014 Ltd (“My Size Israel”), Topspin Medical (Israel) Ltd., and Orgad all of which areincorporated in Israel, and My Size LLC which was incorporated in the Russian Federation and Naiz Bespoke Technologies, S.L., a limited liabilitycompany incorporated under the laws of Spain (see note 16). References to the Company include the subsidiaries unless the context indicatesotherwise.My Size, Inc., was incorporated and commenced operations in September 1999, as Topspin Medical Inc. (“Topspin”), a private company registeredin the State of Delaware. In December 2013, the Company changed its name to Knowledgetree Ventures Inc. Subsequently, in February 2014, theCompany changed its name to My Size, Inc. Topspin was engaged, through its Israeli subsidiary, in research and development in the field ofcardiology and urology.Since September 1, 2005, the Company has traded on the Tel Aviv Stock Exchange (“TASE”).Between 2007 and 2012 the Company reported as a public company with the U.S. Securities and Exchange Commission (the “SEC”). In August2012, the Company suspended its reporting obligations under Section 13(a) and 15(d) of the Securities Exchange Act of 1934. In mid2015, theCompany resumed reporting as a public company.b.On January 9, 2014, at the Company’s general meeting of shareholders, its shareholders approved an engagement with one of the Company’sinvestors (the “Seller”) for the purchase of rights in a Venture (the “Venture”), including the rights to the method and the certain patent applicationthat had been filed by the Seller (the “Assets”). The Venture relates to the development of technologies and applications which will assist theconsumer to take his or her body measurements accurately using a mobile device to ensure the purchase of clothing with the best possible fitwithout the need to try them on.In February 2014, the Company established a wholly owned subsidiary, My Size (Israel) 2014 Ltd., a company registered in Israel, which iscurrently engaged in the development of the Venture described above.In return for purchasing an interest in the Venture, the Company undertook to pay the Seller 18% of the Company’s operating profit, direct orindirect, connected to the Venture for a period of seven years starting from the end of the Venture’s development period.As part of the agreement, the Seller received an option to buy back the Assets for consideration which will reflect the market fair value at that time,on the occurrence of the following events: a) if a motion is filed to liquidate the Company; b) if seven years after signing the agreement, theCompany’s total accumulated revenues, direct or indirect, from the Venture or the commercialization of the patent will be lower than NIS 3.6 million.In such an event, Seller may repurchase the interest in the Venture at a market price to be determined by an independent third party valuationconsultant, who shall be chosen by agreement by the parties, and the audit committee shall conduct the negotiations on behalf of the Company todetermine the identity of the consultant.On May 26, 2021, the Company, My Size Israel and Shoshana Zigdon entered into an Amendment to Purchase Agreement (the “Amendment”)which made certain amendments to a Purchase Agreement between the parties dated February 16, 2014 (the “Purchase Agreement”). Pursuant tothe Amendment, Ms. Zigdon agreed to irrevocably waive the right to repurchase certain assets related to the collection of data for measurementpurposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which the Company’s business is substantiallydependent, and all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My Size Israel underthe Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation,reward or any rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights(the “Waiver”). In consideration of the Waiver, the Company issued 100,000 shares of common stock to Ms. Zigdon in a private placement.F8MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERAL (Cont.)c.On July 25, 2016, the Company’s common stock began publicly trading on the Nasdaq Capital Market under the symbol “MYSZ”. The Company’sshares of common stock are listed both on the Nasdaq Capital Market and TASE.d.Since inception, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit of $53,501.The Company has financed its operations mainly through fundraising from various investors.The Company’s management expects that the Company will continue to generate losses and negative cash flows from operations for theforeseeable future. Based on the projected cash flows and cash balances as of December 31, 2022, management is of the opinion that its existingcash will be sufficient to fund operations for a period less than 12 months. As a result, there is substantial doubt about the Company’s ability tocontinue as a going concern.Management’s plans include the continued commercialization of the Company’s products and securing sufficient financing through the sale ofadditional equity securities, debt or capital inflows from strategic partnerships. Additional funds may not be available when the Company needsthem, on terms that are acceptable to it, or at all. If the Company is unsuccessful in commercializing its products and securing sufficient financing,it may need to cease operations.The financial statements include no adjustments for measurement or presentation of assets and liabilities, which may be required should theCompany fail to operate as a going concern.e.The Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificial intelligencedriven measurement solutions (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions. The fashion and equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. The SaaS based innovativeartificial intelligence driven measurement solutions, or SaaS Solutions operating segment consists of My Size Inc My Size Israel and LLC.NOTE 2 SIGNIFICANT ACCOUNTING POLICIESThe consolidated financial statements are prepared according to United States generally accepted accounting principles (“U.S. GAAP”), applied on aconsistent basis, as followsa.Use of estimates:The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions thataffect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.Information about assumptions made by the Company with respect to the future and other reasons for uncertainty with respect to estimates thathave a significant risk of resulting in a material adjustment to carrying amounts of assets and liabilities in the next financial year are included in thefollowing notes:Acquisitions of subsidiariesThe Company measures the fair value of the consideration transferred (including contingent consideration) and fair value of the assets acquiredand liabilities assumed, in business combination transactions. For information on details on fair value measurement in acquisition of subsidiaries,see Note 16 regarding business combinations.Estimated impairment of nonfinancial assetsThe Company examines on an annual basis whether there is an impairment of goodwill, intangibles and property, plant and equipment that areallocated to cash generating units, in accordance with the accounting policy presented in Note 1(h) below. Recoverable amounts of cashgenerating units are determined on the basis of valueinuse calculations. These calculations require the use of estimates.For information on key assumptions used in calculation of the recoverable amount, see note 7 – Goodwill and other Intangible assets.b.Functional currency:The currency of the primary economic environment in which the operations of the Company is conducted is the United States Dollar and thus it isthe Company’s functional currency. The reporting currency according to which these financial statements are prepared is the U.S. dollar.The currency of the primary economic environment in which the operation of the Subsidiary, My Size Israel and Orgad International MarketingLtd. functional currency is the New Israeli Shekel (“NIS”).The currency of the primary economic environment in which the operation of the Subsidiary, My Size LLC, functional currency is Russian Ruble.The currency of the primary economic environment in which the operation of the Subsidiary, Naiz fit, functional currency is Euro.F9MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)c.Principles of consolidation:The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances andtransactions have been eliminated upon consolidation.d.Cash equivalents:Cash equivalents are shortterm highly liquid investments that are readily convertible to cash with original maturities of three months or less at thedate acquired.e.Restricted cashRestricted cash are deposits for rent, credit card and for hedging activities.f.Inventories:Inventories include finished goods and are measured at the lower of cost or net realizable value. The cost of inventories comprises of the costsincurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary courseof business. At the point of the loss recognition, a new, lowercost basis for that inventory is established, and subsequent changes in facts andcircumstances do not result in the restoration or increase in that newly established cost basis. The costs of purchase of inventories comprise thepurchase price and other costs directly attributable to the acquisition of finished goods. In 2022, the Company recorded an inventory markdownof $48.g.Property and equipment:Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straightline method over theestimated useful lives of the assets, at the following annual rates:%Computers and peripheral equipment33Office furniture and equipment720Leasehold improvementsOver the term of the leaseor the useful life of theimprovements, whicheveris shorterh.Impairment of longlived assets:The Company’s property and equipment are reviewed for impairment in accordance with ASC 360, “Property Plant and Equipment”, wheneverevents or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held andused is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by theassets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount ofthe assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less sellingcosts. During the periods ended December 31, 2022 and 2021, no impairment losses have been recorded.i.Business combinations:The Company applies the provisions of ASC 805, “Business Combination” and allocates the fair value of purchase consideration to the tangibleassets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchaseconsideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assetsacquired and liabilities assumed, the Company estimated the future expected cash flows from acquired platform, customer relationships,Technology and trademark from a market participant perspective, useful lives and discount rates. In addition, management makes significantestimates and assumptions, which are uncertain, but believed to be reasonable.Acquisitionrelated costs are recognized separately from the acquisition and are expensed as incurred.F10MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)j.Goodwill:Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a businesscombination. Under ASC 350, “Intangible Goodwill and Other”, goodwill is not amortized, but rather is subject to an annual impairment test.ASC 350 requires goodwill to be tested for impairment at the reporting unit level at least annually, the fourth quarter, or between annual tests incertain circumstances, and written down when impaired. Goodwill is tested for impairment by comparing the fair value of the reporting unit with itcarrying value. Goodwill from Orgad acquisition was allocated to the fashion and equipment ecommerce platform segment and Goodwill from theNaiz acquisition was allocated to Naiz segment based innovative artificial intelligence driven measurement solutions.Alternatively, ASC 350 permits an entity to bypass the qualitative assessment for any reporting unit and proceed directly to performing the firststep of the goodwill impairment test. There were no impairment charges to goodwill during the period presented.k.Intangible assets:Intangible assets consist of identifiable intangible assets that the Company has acquired from previous business combinations. Intangible assetsare recorded at costs, net of accumulated amortization. The Company amortizes its intangible assets reflecting the pattern in which the economicbenefits of the intangible assets are consumed. When a pattern cannot be reliably determined, the Company uses a straightline amortizationmethod. Amortization is calculated by the straightline method over the estimated useful lives of the following assets.The estimated useful lives of the company’s intangible assets are as follows:yearsCustomer Relationships7Technology5Trademark5Selling Platform3Each period the Company evaluates the estimated remaining useful lives of its intangible assets and whether events or changes in circumstanceswarrant a revision to the remaining period of amortizationl.Severance pay:The Subsidiary’s liability for severance pay is covered by Section 14 of the Israeli Severance Pay Law (“Section 14”). Under Section 14, employeesin Israel are entitled to have monthly deposits, at a rate of 8.33% of their monthly salary, made on their behalf to their insurance funds. Payments inaccordance with Section 14 exempt the Subsidiary from any additional obligation for these employees. As a result, the Subsidiary does notrecognize any liability for severance pay due to these employees and the deposits under Section 14 are not recorded as an asset in theSubsidiary’s balance sheet. These contributions for compensation represent defined contribution plans and expenses are recorded based onactual deposits.Other than the My Size Israel’s liability there are no additional severance pay liabilities.F11MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)m.Research and development costs:Research and development costs are charged to the statement of operations, as incurred. Most of the research and development expenses are forwages, related expenses and subcontractors.n.Income taxes:The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilitiesfor the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Companies’ taxreturns. Deferred taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities using enactedtax rates in effect in the years in which the differences are expected to reverse. The Company assesses the likelihood that its deferred tax assetswill be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely thannot that all or a portion of deferred tax assets will not be realized. The Company establishes a valuation allowance, if necessary, to reduce deferredtax assets to the amount more likely than not to be realized. As of December 31, 2022, and 2021, a full valuation allowance was established by theCompany.The Company implements a twostep approach to recognize and measure the benefit of its tax positions. The first step is to evaluate the taxposition taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that,on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigationprocesses. The second step is to measure the tax benefit as the largest amount that is greater than 50 percent (cumulative basis) likely to berealized upon settlement.The Company believes that its tax positions are all highly certain of being upheld upon examination. As of December 31,2022 and 2021 the Company recorded a liability for unrecognized tax benefits of $328 and none respectively.o.Accounting for stockbased compensation:The Company accounts for its employees’ stockbased compensation as an expense in the financial statements based on ASC 718. All awards areequity classified and therefore such costs are measured at the grant date fair value of the award and graded vesting attribution approach torecognize compensation cost over the vesting period. The Company estimates stock option grant date fair value using the Binomial and BlackScholes option pricingmodel.The Company recorded stock options issued to nonemployees at the grant date fair value, and recognizes expenses over the related serviceperiod by using the straightline attribution approach in accordance with ASU 201807. All awards are equity classified.The expected volatility of the share prices reflects the assumption that the historical volatility of the share prices is reasonably indicative ofexpected future trends.The riskfree interest rate for grants with an exercise price denominated in USD for employees and several consultants is based on the yield fromUS treasury zerocoupon bonds with an equivalent term.The Company has historically not paid dividends and has no foreseeable plans to pay dividends.F12MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)p.Fair value of financial instruments:ASC 820, Fair Value Measurements and Disclosures, relating to fair value measurements, defines fair value and established a framework formeasuring fair value. The ASC 820 fair value hierarchy distinguishes between market participant assumptions developed based on market dataobtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptionsdeveloped based on the best information available in the circumstances. ASC 820 defines fair value as the price that would be received to sell anasset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price. Inaddition, the fair value of assets and liabilities should include consideration of nonperformance risk, which for the liabilities described belowincludes the Company’s own credit risk.As a basis for considering such assumptions, ASC 820 establishes a threetier value hierarchy, which prioritizes the inputs used in the valuationmethodologies in measuring fair value:Level 1 Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access. Valuationadjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readilyand regularly available in an active market, valuation of these products does not entail a significant degree of judgment.Level 2 Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, eitherdirectly or indirectly.Level 3 Valuations based on inputs that are unobservable and significant to the overall fair value measurement.The Company holds share certificates in iMine Corporation (“iMine”) formerly known as Diamante Minerals, Inc., a publiclytraded company onthe OTCQB.Due to sales restrictions on the sale of the iMine shares, the fair value of the shares was measured on the basis of the quoted market price for anotherwise identical unrestricted equity instrument of the same issuer that trades in a public market, adjusted to reflect the effect of the salesrestrictions and is therefore, ranked as Level 2 asset.q.Basic and diluted net loss per share:Basic net loss per share is computed based on the weighted average number of shares of common stock outstanding during each year. Diluted netincome per share is computed based on the weighted average number of shares of common stock outstanding during each year plus dilutivepotential equivalent common stock considered outstanding during the year, in accordance with ASC 260, “Earnings per Share”. For the yearsended December 31, 2022 and 2021, all outstanding options and warrants have been excluded from the calculation of the diluted net loss per sharesince their effect was antidilutive.r.Concentrations of credit risk:Financial instruments that potentially subject the Company and its subsidiaries to concentrations of credit risk consist principally of cash andcash equivalents.Cash and cash equivalents are invested in banks in Israel, Spain and United States. Such deposits in United States may be in excess of insuredlimits and are not insured in other jurisdictions. Management believes that the financial institutions that hold the Company’s investments arefinancially sound and, accordingly, minimal credit risk exists with respect to these investments.The Company and its subsidiaries have no offbalancesheet concentration of credit risk such as foreign exchange contracts, option contracts orother foreign hedging arrangements.F13MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)s.Revenue Recognition:The Company’s revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled softwaresubscriptions, associated software maintenance and support.The Company recognizes revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with acustomer exists only when: the parties to the contract have approved it and are committed to perform their respective obligations, the Companycan identify each party’s rights regarding the distinct goods or services to be transferred (“performance obligations”), the Company can determinethe transaction price for the goods or services to be transferred, the contract has commercial substance and it is probable that the Company willcollect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to acustomer. Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted togovernmental authorities. Refunds are estimated at contract inception and updated at the end of each reporting period if additional informationbecomes available. Revenue is recognized when control of the product is transferred to the customer.The Company maintains a returns policy that allows its customers to return product within a specified period of time. The estimate of the provisionfor returns is based upon historical experience with actual returns.Principal versus Agent ConsiderationsThe Company follows the guidance provided in ASC 606 for determining whether it is a principal or an agent in arrangements with customers, byassessing whether the nature of the Company’s promise is a performance obligation to provide the specified goods (principal) or to arrange forthose goods to be provided by the other party (agent). With regard to products being sold by Orgad through Amazon, this determination involvesjudgment. The Company determines it is the principle when it has control over promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).The Company recognizes revenue ratably over the contractual service term for hosted services that are priced based on a committed number oftransactions where the delivery and consumption of the benefit of the services occur evenly over time, beginning on the date the servicesassociated with the committed transactions are first made available to the customer and continuing through the end of the contractual serviceterm. Over usage fees and fees based on the actual number of transactions are billed in accordance with contract terms as these fees are incurredand are included in the transaction price of an arrangement as variable consideration. Fees based on a number of transactions or impressions permonth, are allocated to the period in which the transactions occur. Revenue for subscriptions sold as a fee per period is recognized ratably overthe contractual term as the customer simultaneously receives and consumes the benefit of the underlying service.F14MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)t.Contingencies and CommitmentsLiabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it isprobable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with losscontingencies are expensed as incurred.u.Derivative instrumentsThe Company accounts for its derivative instruments as either assets or liabilities and measures them at fair value through profit or loss.v.LeasesThe Company leases include an office space lease agreement for 36 months, with an option to extend for an additional 36 months and 36 monthscancelable operating lease agreements on behalf of personnel vehicles. The lease term includes a noncancellable period of the lease plus anyadditional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise,or an option to extend (or not to terminate) the lease controlled by the lessor.ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make leasepayments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value oflease payments over the lease term. The company generally use its incremental borrowing rate based on the estimated rate of interest forcollateralized borrowing over a similar term of the lease payments at commencement date. Lease expense for lease payments is recognized on astraightline basis over the lease term.For the office rent lease, the Company has elected to account for the lease and nonlease maintenance components as a single lease component.Therefore, the lease payments used to measure the lease liability include all of the fixed consideration in the contract, including insubstance fixedpayments, owed over the lease term.w.Impact of recently issued accounting standardIn June 2016, the FASB issued ASU 201613, “Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses on FinancialInstruments”, which requires companies to measure credit losses of financial instruments, including customer accounts receivable, utilizing amethodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information toinform credit loss estimates. Subsequent to the issuance of ASU 201613, the FASB issued several additional Accounting Standard Updates toclarify implementation guidance, provide narrowscope improvements and provide additional disclosure guidance. As an Emerging GrowthCompany, ASU 201613 is effective for fiscal years beginning after December 15, 2022. The Company does not expect this ASU to have a materialimpact on its consolidated financial statements.F15MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 3 CASH AND CASH EQUIVALENTSThe Company’s cash and cash equivalents balance at December 31, 2022 and 2021 is denominated in the following currencies:December 31,20222021US Dollars1,65110,184New Israeli Shekels259433Other190532,10010,670NOTE 4 OTHER RECEIVABLES AND PREPAID EXPENSESDecember 31,20222021Prepaid expenses and other current assets322429Government authorities28317Other153133Total758579NOTE 5 PROPERTY AND EQUIPMENT, NETComputersandperipheralequipmentOfficefurnitureandequipmentLeaseholdimprovementsTotalCostBalance as at January 1, 20211825860300Additions2323Translation adjustments72211Balance as at December 31, 20212126062334Balance as at January 1, 20222126062334Additions161127Business combination401555Translation adjustments(32)(8)(8)(48)Balance as at December 31, 20222367854368Accumulated DepreciationBalance as at January 1, 20211461412172Additions2751042Translation adjustments6118Balance as at December 31, 20211792023222Balance as at January 1, 20221792023222Additions209938Translation adjustments(27)(3)(2)(32)Balance as at December 31, 20221722630228Carrying amountsAs at December 31, 2021334039112As at December 31, 2022645224140F16MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 6 LEASESIn August 2019, The Company entered into an office space lease agreement. The lease term is for 36 months beginning on August 20, 2019 and endingon August 20, 2022, with an option to extend for an additional 36 months. The Company extended the lease period until August 20, 2025. Monthly rentpayments including utilities amounting to approximately USD 14 (NIS 49,500) per month.In addition, The Company entered into a threeyear cancelable operating lease agreement for cars.These operating leases are included in “Right of use asset” on the Company’s December 31, 2022 consolidated balance sheets, and represent theCompany’s right to use the underlying asset for the lease term. The Company’s obligations to make lease payments are included in the currentliabilities as “Operating lease liability” and in the noncurrent liabilities as “Operating lease liability long term” on the Company’s December 31, 2022consolidated balance sheets. As of December 31, 2022, rightofuse of asset was $583. operating lease liabilities were $159 and non current Operatinglease liabilities were $308. Rightofuse asset includes the capitalization of improvements (net of amortization) amounting to $105.Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value ofthe lease payments.The interest rate used to discount future lease payment was 11.95%.Maturities of lease liabilities as of December 31, 2022 were as follows:Year Ending:2023$1912024$1912025$127Thereafter$509Less imputed interest:$(42)Total lease liabilities$467F17MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 7 – Goodwill and other Intangible assetsA.Identified intangible assetsSchedule of Intangible assetsSelling PlatformTechnologyCustomerRelationshipsOtherTotalThousandsUSDThousandsUSDThousandsUSDThousandsUSDThousandsUSDCostAs of January 1, 2022Acquisitions through business combinations378286726771,467Effect of changes in exchange rates(32)2565765As of December 31, 2022346311791841,532AmortizationAs of January 1, 2022Amortization for the year including effect of changes inexchange rates as of December 31, 2022(109)(15)(27)(4)(155)Carrying amountAs of December 31, 2022237296764801,377AmortizationAmortization expenses recorded for identified intangible assets in the Consolidated Statements of Operations for each period and were as follows:Line ItemDecember 31,2022December 31,2021Selling platformCosts of revenues109TrademarkSales and marketing4TechnologyCosts of revenues15Customer relationshipsSales and marketing27Total amortization expenses155Future amortization expenses are expected to be as follows:20232024202520262027ThereafterTotalFuture amortization expenses3033031941771561791,312b.GoodwillThe changes in the carrying amount of goodwill for the years ended December 31, 2022 and 2021 were as follows:Fashion and equipmentecommerce platformNaizTotalBalance as of December 31, 2021Changes during the period:Goodwill acquired1521,1521,304Goodwill impairmentTranslation differences(14)10591Balance as of December 31, 20221381,2571,395The Company operates its business through three reporting segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovativeartificial intelligence driven measurement solutions and (iii) Naiz. See note 17 for additional segments information.The Company determines the fair value of its reporting units using the income approach. According to the income, the Company uses discounted cashflows to estimate the fair value. Cash flow projections are based on the Company’s estimates of revenue growth rates and operating margins, takinginto consideration the industry’s and market’s conditions. The discount rate used is based on the weighted average cost of capital (“WACC”),adjusted for the relevant risk associated with businessspecific characteristics.The Company performed a quantitative assessment as of December, 31 2022 for the reporting units’ fair value. The estimated fair value of the Fashionand equipment ecommerce platform and Naiz reporting units exceeded its estimated carrying amount by 95.9% and 27.7% respectively. This, based thefollowing assumptions:Fashion and equipmentecommerce platformNaizDiscount rate21%23%Terminal growth rate3%3%If business conditions or expectations were to change materially, it may be necessary to record impairment charges to the Company’s reporting units inthe future.F18MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 8 Investment in JVIn August 2022, the Company established a joint venture (“JV”) in Brazil with Santista Têxtil. The Company holds 51% and Santista Têxtil holds 49% of theJV. The purpose of the JV is to serve the Brazilian market according to the business plan that was set. Both parties agree to make an initial investment in theJV of $198that will be made per the holding percentage of each party. As of the reporting date, the JV is in process of establishing its operation.NOTE 9 Financial LiabilitiesThe book value of each of the financial liability categories is an acceptable approximation of fair value.The debt is comprised of four loans that were granted to My Size Israel – in an outstanding amount of approximately $131, bearing interest rangingfrom prime rate to prime+2.8% rate, and four loans that were granted to the Spanish subsidiary– in an outstanding amount of approximately $400,bearing interest ranging from 1% to 3%.The financial liability maturities during the five years following the end of the financial year are shown below:UntilUntilUntilUntilUntilAfterTOTAL311223311224311225311226311227311227311222Debts with credit institutions15513892874712531NOTE 10 RELATED PARTIES TRANSACTIONSA. Balances with related parties:The following related party payables are included in liability to related parties.December 31,20222021Officers (*)4143Liability in respect of business combinations (**)739Other related parties (***)(95)Directors152069863(*)The amount includes the net salaries payables.(**)The amount includes the provision created to former owners of Orgad that are entitled to additional cash and equity consideration and former owners of Naizthat entitled to additional cash consideration, see note 16 business combination.(***)The amount includes an amount receivable from Orgad previous shareholders who currently work in the company.B. Related parties benefits:Year endedDecember 31,20222021Salaries and related expenses1,440852Share based payments39673Cash liability and equity liability expenses related to acquisitions (**)1,058Directors58582,952983(**)The amount includes the expenses for a provision created to former owners of Orgad that are entitled to additional cash and equity consideration and formerowners of Naiz that entitled to additional cash consideration, see note 16 business combination.NOTE 11 FINANCIAL INSTRUMENTSThe following tables presents the Company’s significant assets and liabilities that are measured at fair value on recurring basis and their classificationwithin the fair value hierarchy:December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities47financial assets (*)10December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesDerivatives9December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities108December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesWarrants derivative2(*)the financial asset includes in other receivables.F19MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 11 FINANCIAL INSTRUMENTS (Cont.)The carrying amounts of cash and cash equivalents, restricted cash, short term restricted deposit, accounts receivable, other receivables and prepaidexpenses, trade payable and accounts payable approximate their fair value due to the shortterm maturities of such instruments.At December 31, 2022, the recognized gain and fair value (based on quoted market prices with a discount due to security restrictions on iMine shares)of the marketable securities were $59and $47, respectively (at December 31, 2021 $49and $108, respectively).NOTE 12 TAXES ON INCOMEa.On December 31, 2022, the Company had U.S. federal net operating loss carryforwards of approximately $26 available to reduce future taxableincome. Utilization of the U.S. net operating losses may be subject to substantial limitations due to the change of ownership provisions of theInternal Revenue Code of 1986.The U.S. Company has final tax assessments through 2014.On December 22, 2017, the Tax Reform Act was signed into law. The legislation significantly changes U.S. tax law by, among other things, lowering theU.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. As a result of the decrease in the corporate incometax rate, the Company revalued the ending net deferred tax assets at December 31, 2017, but did not recognize any incremental income tax expense in2017 due to the revaluation of the valuation allowance.b.Foreign tax:1.Tax rates:Presented hereunder are the tax rates relevant to the Company’s Israeli subsidiaries:2022 23%2021 23% Presented hereunder are the tax rates relevant to the Company’s Spanish subsidiary:2022 24%2.The Company’s Israeli subsidiaries have estimated total available carryforward operating tax losses for Israeli income tax purposes ofapproximately $64as of December 31, 2022. Of these losses, a total of $47.5are owned by Topspin Medical (Israel) Ltd. Topspin tax lossesmay be offset only by future income with respect to the same operational activity by which it was incurred for an indefinite period of time. Theother losses are owned by My Size Israel and may be carryforward to offset against future income for an indefinite period of time.3.Topspin Medical (Israel) Ltd. and My Size (Israel) 2014 Ltd. has final tax assessments through 2016.c.U.S. and foreign components of loss from continuing operations, before income taxes consisted of:December 31,20222021U.S(1,180)(3,802)NonU.S. (foreign)(7,130)(6,718)(8,310)(10,520)F20MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 12 TAXES ON INCOME (Cont.)d.Deferred taxes:Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reportingpurposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows:December 31,20222021Deferred tax assets:Operating loss carryforwards20,13120,238Warrants and options145126Marketable securities390377Intangible assets(328)Research and development expenses586341Other temporary differences203Deferred tax assets before valuation allowance21,12721,082Valuation allowance(21,455)(21,082)Net deferred tax liability(328)The following table presents a reconciliation of the beginning and ending valuation allowance:December 31,20222021Balance at beginning of the year21,08218,968Additions in valuation allowance to the income statement1,7581,625Additions in valuation allowance due to exchange rate differences(1,385)489Balance at end of the year21,45521,082In assessing the realization of deferred tax assets, management considers whether it is more likely than not that all or some portion of the deferred taxassets will not be realized.The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporarydifferences are deductible and net operating losses are utilized. Based on consideration of these factors, the Company recorded a full valuationallowance at December 31, 2021 and 2020.e.Theoretical taxThe following presents the adjustment between the theoretical tax amount and the tax amount included in the financial statements:December 31,20222021Loss before income taxes8,34610,520Statutory tax rate21%21%Computed “expected” tax income1,7522,209Foreign tax rate differences and exchange rate differences149131Nondeductible expenses(107)(715)Change in valuation allowance(1,758)(1,625)Taxes on income36F21MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITYa.Common stock confers upon their holders the right to receive notice to participate and vote in general meetings of the Company, and the right toreceive dividends if declared.b.On January 8, 2021, the Company conducted a public offering of its securities pursuant to which it issued 62,768 shares of its common stock forgross proceeds of $2,008. The net proceeds to the Company from the offering were approximately $1,700, after deducting placement agent’s feesand other estimated offering expenses payable by the Company.c.During 2021, a holders of warrants exercised warrants to purchase 135,109 ordinary shares of the Company in exchange for $3,709.d.On March 25, 2021, the Company conducted a public offering of its shares of common stock pursuant to which it issued 104,741 shares of itscommon stock for gross proceeds of $3,300. The net proceeds to the Company from the offering were approximately $2,872, after deductingplacement agent’s fees and other estimated offering expenses payable by the Company.On May 7, 2021, the Company issued an additional 15,711 shares of the Company’s common stock in connection with the full exercise of theunderwriter’s overallotment option granted in the Company’s March 2021 public offering. These additional shares were sold to the underwriter at apublic offering price of $31.5 per share, resulting in additional net proceeds to the Company, net of the underwriting discount, of approximately$463.e.On May 26, 2021, the Company issued 100,000 shares of common stock to Ms. Zigdon in consideration of the Waiver. See note 1(b) above.f.On October 28, 2021, the Company sold in a registered direct offering 100,592 shares of its common stock and, in a concurrent private placement,an aggregate of 75,444 unregistered warrants to purchase shares of common stock, at an offering price of $33.8 per share and associated warrant.In addition, on the same day, the Company sold in a private placement 150,888 unregistered shares of common stock and unregistered warrants topurchase up to an aggregate of 113,166 shares of common stock at the same purchase price as in the registered direct offering. The warrants areimmediately exercisable and will expire five years from issuance at an exercise price of $31.5 per share, subject to adjustment as set forth therein.The gross proceeds from the offerings were $8,500. The net proceeds to the Company from the offerings were approximately $7,560, afterdeducting placement agent’s fees and other estimated offering expenses payable by the Company. In connection with the offerings, the Companyissued to the placement agent warrants to purchase 17,603 shares on substantially the same terms as the purchasers in the offerings at an exerciseprice of $42.25 per share and a term expiring on October 26, 2026.g.On December 7, 2022, the Company’s board of directors approved a 1for25 reverse stock split of the Company’s issued and outstanding sharesof common stock. The reverse stock split became effective on December 8, 2022. In order not to have fractional shares as a result of the reversestock split, the Company issued an additional 12,091 shares of common stock. As a result, all shares of common stock, options for shares ofcommon stock, exercise price and net loss per share amounts were adjusted retroactively for all periods presented in these financial statements.F22MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITY (Cont.)g.A summary of the warrant activity during the years ended December 31, 2022 and 2021 is presented below:Number ofWarrantsWeightedAverageExercisePriceWeightedAverageRemainingLife inYearsOutstanding, December 31, 2020216,85936.754.26Issued206,214Expired or exercised(135,109)Outstanding, December 31, 2021287,96431.004.35IssuedExpired or exercised(17,901)Outstanding, December 31, 2022270,06330.213.36Exercisable, December 31, 2022270,06330.213.36NOTE 14 STOCK BASED COMPENSATIONThe stockbased expense recognized in the financial statements for services received is related to Research and Development, Sales and Marketingand General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense Research and development15195Stockbased compensation expense Sales and marketing126180Stockbased compensation expense General and administrative17898455373The stockbased expense recognized in the financial statements for services received post Acquisition of Orgad (see note 16) is related to Cost OfGoods, Sales and Marketing and General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense – Cost of goods80Stockbased compensation expense Sales and marketing112Stockbased compensation expense General and administrative127319F23MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Options issued to consultantsWe can sell additional shares of common stock without consulting stockholders and without offering shares to existing stockholders, which wouldresult in dilution of shareholders’ interests in the company and could depress our stock price.Our Certificate of Incorporation currently authorizes 250,000,000 shares of common stock, of which 2,446,780 are currently outstanding as of March 31, 2023and our board of directors is authorized to issue additional shares of our common stock. Although our board of directors intends to utilize its reasonable businessjudgment to fulfil its fiduciary obligations to our then existing stockholders in connection with any future issuance of our capital stock, the future issuance ofadditional shares of our capital stock could cause immediate, and potentially substantial, dilution to our existing stockholders, which could also have a materialeffect on the market value of the shares. Further, other than certain participation rights that we have granted in a past offering, our shares do not have preemptiverights, which means we can sell shares of our capital stock to other persons without offering purchasers in this offering the right to purchase their proportionateshare of such offered shares. Therefore, any additional sales of stock by us could dilute your ownership interest in our Company.Our quarterly operating results may fluctuate significantly.We expect our operating results to be subject to quarterly fluctuations. Our net loss and other operating results will be affected by numerous factors,including:●variations in the level of expenses related to our research and development;●any lawsuits in which we may become involved;●regulatory developments affecting our products; and●our execution of any collaborative, licensing or sales agreements, and the timing of payments under these arrangements.If our quarterly operating results fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially.Furthermore, any quarterly fluctuations in our operating results may, in turn, cause the price of our common stock to fluctuate substantially.If we fail to comply with the rules under the Sarbanes Oxley Act of 2002 related to accounting controls and procedures or if we discover materialweaknesses and deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult.If we fail to comply with the rules under the SarbanesOxley Act of 2002 related to disclosure controls and procedures, or, if we discover materialweaknesses and other deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult. Section 404 of the SarbanesOxley Act requires annual management assessments of the effectiveness of our internal control over financial reporting and, ifwe are no longer a nonaccelerated filer, a report by our independent auditors addressing these assessments. If material weaknesses or significant deficiencies arediscovered or if we otherwise fail to achieve and maintain the adequacy of our internal control, we may not be able to ensure that we can conclude on an ongoingbasis that we have effective internal controls over financial reporting in accordance with Section 404 of the SarbanesOxley Act. Moreover, effective internalcontrols are necessary for us to produce reliable financial reports and are important to helping prevent financial fraud. If we cannot provide reliable financial reportsor prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price ofour common stock could drop significantly.38Our Certificate of Incorporation, Bylaws and Delaware law may have antitakeover effects that could discourage, delay or prevent a change incontrol, which may cause our stock price to decline.Our Certificate of Incorporation, Bylaws and Delaware law could make it more difficult for a thirdparty to acquire us, even if closing such a transactionwould be beneficial to our stockholders. Provisions of our Certificate of Incorporation, Bylaws and Delaware law also could have the effect of discouraging potentialacquisition proposals or making a tender offer or delaying or preventing a change in control, including changes a stockholder might consider favorable. Suchprovisions may also prevent or frustrate attempts by our stockholders to replace or remove our management. In particular, the Certificate of Incorporation, Bylawsand Delaware law, as applicable, among other things:●provide the board of directors with the ability to alter the Bylaws without stockholder approval;●the classification of our board of directors;●place limitations on the removal of directors;●provide that vacancies on the Board of Directors may be filled by a majority of directors in office, although less than a quorum;●require that stockholder actions must be affected at a duly called stockholder meeting and generally prohibiting stockholder actions by written consent;●eliminate the ability of stockholders to call a special meeting of stockholders; and●establish advance notice requirements for nominations for election to the Board of Directors or for proposing matters that can be acted upon at duly calledstockholder meetings.We are subject to Section 203 of the Delaware General Corporation Law which, subject to certain exceptions, prohibits “business combinations” between apubliclyheld Delaware corporation and an “interested stockholder,” which is generally defined as a stockholder who becomes a beneficial owner of 15% or more ofa Delaware corporation’s voting stock for a threeyear period following the date that such stockholder became an interested stockholder. These provisions areexpected to discourage certain types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to firstnegotiate with our board. These provisions may delay or prevent someone from acquiring or merging with us, which may cause the market price of our commonstock and the value of our securities to decline.If we fail to comply with the continued listing requirements of the Nasdaq Capital Market, our common stock may be delisted and the price of ourcommon stock and our ability to access the capital markets could be negatively impacted.Nasdaq has established certain standards for the continued listing of a security on the Nasdaq Capital Market. The standards for continued listing include,among other things, that the minimum bid price for the listed securities not fall below $1.00 per share for a period of 30 consecutive trading days and that wemaintain a minimum of $2,500,000 in shareholders’ equity. We have in the past fallen below the minimum bid price and minimum shareholders’ equity.39No assurance can be given that we will continue to be in compliance with the Rule. Failure to meet applicable Nasdaq continued listing standards couldresult in a delisting of our common stock. A delisting of our common stock from Nasdaq could materially reduce the liquidity of our common stock and result in acorresponding material reduction in the price of our common stock. In addition, delisting could harm our ability to raise capital through alternative financing sourceson terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, employees and fewer business development opportunities.The exercise of outstanding warrants and stock options will have a dilutive effect on the percentage ownership of our capital stock by existingstockholders.As of March 15, 2023, we had outstanding warrants to acquire 2,299,115 shares of our common stock and stock options to purchase 1,659 shares of ourcommon stock, which warrants and options are exercisable for prices ranging between $2.81 and $375. The expiration of the term of such options and warrants rangefrom 0.22 years to 4.83 years. If a significant number of such warrants and stock options are exercised by the holders, the percentage of our common stock ownedby our existing stockholders will be diluted.Were our common stock to become subject to the penny stock rules then this could result in U.S. brokerdealers becoming discouraged from effectingtransactions in shares of our common stock.Rule 15g9 under the Exchange Act establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a marketprice of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. If we do not retain a listing on the NasdaqCapital Market or do not meet certain net tangible asset or average revenue requirements and if the price of our common stock is less than $5.00, our common stockwill be deemed a penny stock. For any transaction involving a penny stock, unless exempt, the rules require: (a) that a broker or dealer approve a person’s accountfor transactions in penny stocks; and (b) the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantityof the penny stock to be purchased.In order to approve a person’s account for transactions in penny stocks, the broker or dealer must: (a) obtain financial information and investmentexperience objectives of the person and (b) make a reasonable determination that the transactions in penny stocks are suitable for that person and the person hassufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver,prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which: (a) sets forth the basis on whichthe broker or dealer made the suitability determination; and (b) confirms that the broker or dealer received a signed, written agreement from the investor prior to thetransaction. Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult forinvestors to dispose of our common stock and cause a decline in the market value of our common stock.Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissionspayable to both the broker or dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor incases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the accountand information on the limited market in penny stocks.Sales of our currently issued and outstanding stock may become freely tradable pursuant to Rule 144 and may dilute the market for your shares andhave a depressive effect on the price of the shares of our common stock.A portion of our outstanding shares of common stock are “restricted securities” within the meaning of Rule 144 under the Securities Act of 1933, asamended, or the Securities Act. As restricted shares, these shares may be resold only pursuant to an effective registration statement or under the requirements ofRule 144 or other applicable exemptions from registration under the Securities Act and as required under applicable state securities laws. Rule 144 provides inessence that an affiliate (as such term is defined in Rule 144(a)(1)) of an issuer who has held restricted securities for a period of at least six months (one year afterfiling Form 10 information with the SEC for shell companies and former shell companies) may, under certain conditions, sell every three months, in brokeragetransactions, a number of shares that does not exceed the greater of 1% of a company’s outstanding shares of common stock or the average weekly trading volumeduring the four calendar weeks prior to the sale (the four calendar week rule does not apply to companies quoted on the OTC Markets). Rule 144 also permits, undercertain circumstances, the sale of securities, without any limitation, by a person who is not an Affiliate of the Company and who has satisfied a oneyear holdingperiod. A sale under Rule 144 or under any other exemption from the Securities Act, if available, or pursuant to subsequent registrations of our shares of commonstock, may have a depressive effect upon the price of our shares of common stock in any active market that may develop.40We are a former “shell company” and as such are subject to certain limitations not applicable to other public companies generally.Prior to our suspension of reporting in 2012, we were a public reporting “shell company,” as defined in Rule 12b2 under the Exchange Act. Although weare no longer a “shell company,” we are subject to certain restrictions under the Securities Act for the resale of securities issued by issuers that have been at anytime previously a shell company. Specifically, the Rule 144 safe harbor available for the resale of our restricted securities is only available to our stockholders if wehave filed all reports and other materials required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934, as amended, or the Exchange Act, asapplicable, during the preceding twelve months, other than current reports on Form 8K, at the time of the proposed sale, regardless of whether the restrictedsecurities were initially issued at the time we were a shell company or subsequent to termination of such status. Accordingly, holders of our “restricted securities”within the meaning of Rule 144 will be subject to the conditions set forth in Rule 144 with respect to our company. Other reporting companies that are not formershell companies and have been reporting for more than twelve months are not subject to this same reporting threshold for nonaffiliate reliance on Rule 144.Accordingly, any restricted securities we have sold or sell in the future or issue to consultants or employees, in consideration for services rendered or for any otherpurpose, may not be resold unless such securities are registered with the SEC or the requirements of Rule 144 have been satisfied. As a result, it may be harder forus to fund our operations and pay our employees and consultants with our securities instead of cash. Furthermore, it may be harder for us to raise funding throughthe sale of debt or equity securities unless we agree to register such securities with the SEC, which could cause us to expend additional resources in the future. Ourprior status as a “shell company” could prevent us in the future from raising additional funds, engaging employees and consultants, and using our securities to payfor any acquisitions, which could cause the value of our securities, if any, to decline in value or become worthless.ITEM 1B. UNRESOLVED STAFF COMMENTSNone.ITEM 2. PROPERTIESWe currently lease 1,660 square feet of office space at 4 HaYarden Street, Airport City, Israel. The lease term is for 36 months beginning on August 20, 2019and ending on August 20, 2022, with an option to extend for an additional 36 months. Monthly rent payments, including utilities, amount to approximately $14,000per month. We extended the lease period until August 20, 2025.ITEM 3. LEGAL PROCEEDINGSFrom time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation issubject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.41North Empire LLCOn August 7, 2018, we commenced an action against North Empire LLC, or North Empire, in the Supreme Court of the State of New York, County of NewYork for breach of a Securities Purchase Agreement or Agreement in which we are seeking damages in an amount to be determined at trial, but in no event less than$616,000. On August 2, 2018, North Empire filed a Summons with Notice against us, also in the same Court, in which they allege damages in an amount of $11.4million arising from an alleged breach of the Agreement. On September 6, 2018, North Empire filed a Notice of Discontinuance of the action it had filed on August 2,2018. On September 27, 2018, North Empire filed an answer and asserted counterclaims in the action commenced by us against them, alleging that we failed to deliverstock certificates to North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against our CEO andnow former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018, we filed a reply to North Empire’scounterclaims. On November 15, 2018, our CEO and now former Chairman of the Board filed a motion to dismiss North Empire’s thirdparty complaint. On January 6,2020, the Court granted the motion and dismissed the thirdparty complaint. Discovery has been completed and both parties have filed motions for summaryjudgment in connection with the claims and counterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summaryjudgment, arguing there were factual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision.On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying the Company’s motion for summary judgment. On or about September 12,2022, the Court issued its Decision and Order denying the Company’s motion to reargue. North Empire filed its opposing brief on December 7, 2022. Both sides weregiven an opportunity to file a reply brief. We filed our reply brief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. Oral argument was heldbefore the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Court filed its Decision and Order, which affirmed the lower court’sdecisions regarding both My Size and North Empire’s motions for summary judgment and sent the case back to the Supreme Court. On or about March 13, 2023, theSupreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date for the mediation has not yet been set. We intend tovigorously defend any claims made by North Empire. We believe it is more likely than not that the counterclaims will be denied.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.42PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur stock currently is listed on the Tel Aviv Stock Exchange and the Nasdaq Capital Market under the symbol “MYSZ”. Our stock has been traded on theNasdaq Capital Market since July 25, 2016.HoldersAs of March 31, 2023, we had 70 shareholders of record. The actual number of stockholders is greater than this number of record holders and includesstockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our Board of Directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our Board of Directors deems relevant.Securities Authorized for Issuance under Equity Compensation PlansInformation about our equity compensation plans is incorporated herein by reference to “Item 12. Security Ownership of Certain Beneficial Owners andManagement and Related Stockholder Matters”, of this Annual Report on Form 10K.Recent Sales of Unregistered SecuritiesNone.ITEM 6. SELECTED FINANCIAL DATAAs a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULT OF OPERATIONSYou should read the following discussion along with our financial statements and the related notes included elsewhere in this Annual Report on Form10K. The following discussion contains forwardlooking statements that are subject to risks, uncertainties and assumptions, including those discussed under“Risk Factors.” Our actual results, performance and achievements may differ materially from those expressed in, or implied by, these forwardlooking statements.OverviewMySize is an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.43Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile device or through MySizeID Widget: a simple questionnaire which was uses a database collected over the years.MySizeID synchronizes the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and onlypresents items available for purchase that match their measurements to ensure a correct fit.MySize is positioning itself as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empowering brand design teams, which are designed to increaseend consumer satisfaction, contributing to a sustainable world and reduce operation costs.Orgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,682 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz BespokeTechnologies, S.L., or Naiz, a limited liability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.44The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 2,365,800 shares of My Size common stock were issuedto Whitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.45Operations in RussiaIn addition to our Israel operations, we had operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia. To date, mainly due to the invasion of Ukraine by Russia and the ongoing sanctions we stopped most ofour efforts in Russia and will probably close the subsidiary in the near future.Results of OperationsThe table below provides our results of operations for the periods indicated.Year ended December 3120222021(dollars in thousands)Revenues4,459131Cost of revenues(3,825)Gross profit634131Research and development expenses$(1,701)$(4,248)Sales and marketing(3,143)(2,336)General and administrative(3,900)(4,124)Operating loss(8,110)(10,577)Financial income (expenses), net(236)57Tax income36Net loss$(8,310)$(10,520)Year Ended December 31, 2022 Compared to Year Ended December 31, 2021RevenuesFrom inception through December 31, 2018, we did not generate any revenue from operations and we continue to expect to incur additional losses toperform further research and development activities. We started to generate revenues only in 2019. Our revenues for the year ended December 31, 2022 amounted to$4,459,000 compared to $131,000 for year ended December 31, 2021. The increase from the corresponding period primarily attributable to $4,132,000 in revenuegenerated from Orgad from February 7, 2022, the date of closing of the Orgad acquisition, or the Acquisition Date and revenue generated from the Naiz Acquisitionfrom October 11, 2022, the date of closing of the Naiz acquisition.In addition, the increase from the corresponding period results from an increase in revenues generated by My Size.Cost Of RevenuesOur cost of revenues expenses for the year ended December 31, 2022 amounted to $3,825,000, compared to none for the year ended December 31, 2021. Thecost of revenues includes cash and equity liabilities expenses in the amount of $194,000. The increase in comparison with the corresponding period was due to thecost of goods of the revenues generated from Orgad’s operations.Research and Development ExpensesOur research and development expenses for the year ended December 31, 2022 amounted to $1,701,000 a decrease of $2,547,000, or approximately 60.0%,compared to $4,248,000 for the year ended December 31, 2021. The decrease from the corresponding period primarily resulted from share based payment in amount of$2,618,000 attributed to the share issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021.Sales and Marketing ExpensesOur sales and marketing expenses for the year ended December 31, 2022 amounted to $3,143,000 an increase of $807,000, or 34.55%, compared to $2,336,000for the year ended December 31, 2021. The increase primarily resulted from an increase in employees expenses mainly due to Orgad and Naiz acquisitions, increase inAmazon fees, increase in cash and equity liabilities expenses attributed to the Orgad acquisition and an increase in share based payments offset by a decrease inpayments to consultants.46General and Administrative ExpensesOur general and administrative expenses for the year ended December 31, 2022 amounted to $3,900,000, a decrease of $224,000, or 5.43%, compared to$4,124,000 for the year ended December 31, 2021. The decrease compared to the corresponding period was mainly due to a decrease in professional expenses, mainlyattributed to shareholder activism including settlement expenses with the Lazar Parties offset by an increase in sharedbased payments and an increase in employeesexpenses mainly due to the Orgad and Naiz acquisitions.Operating LossAs a result of the foregoing, for the year ended December 31, 2022, our operating loss was $8,110,000, a decrease of $2,467,000 or 23.32%, compared to ouroperating loss for the year ended December 31, 2021 of $10,577,000.Financial Income, NetOur financial (expense) income, net for the year ended December 31, 2022 amounted to $236,000 compared to financial income, $57,000 for the year endedDecember 31, 2021. In 2022, we had financial expenses exchange rate differences offset by an income from fair value revaluation of investment in marketablesecurities whereas in 2021 we had financial income from the fair value revaluation of warrants offset by expenses from exchange rate differences and expenses fromfair value revaluation of investment in marketable securities.Net LossAs a result of the foregoing, our net loss for the year ended December 31, 2022 was $8,310,000 compared to net loss of $10,520,000 for the year endedDecember 31, 2021. The decrease in net loss was mainly due increase in sales and marketing expenses and financial expenses as opposed to financial income in thecorresponding period offset by a decrease in research and development expenses in amount of $2,618,000 attributed to the share issuance to Shoshana Zigdonunder the Amendment to Purchase Agreement dated May 26, 2021.Liquidity and Capital ResourcesSince our inception, we have funded our operations primarily through public and private offerings of debt and equity in Israel and in the U.S.As of December 31, 2022, we had cash, cash equivalents and restricted cash of $2,363,000 compared to $10,943,000 cash, cash equivalents, restricted cashas of December 31, 2021. During January 2023, we completed a registered direct and concurrent private placement offering resulting in gross proceeds ofapproximately $3 million. This decrease primarily resulted from our operating activities, the acquisition of Orgad and Naiz Fit, and resources that were deployed togrow of both businesses.Net cash used in operating activities was $7,290,000 for the year ended December 31, 2022 compared to $7,297,000 for the year ended December 31, 2021.The decrease in cash used in operating activity is derived mainly from an increase in share based payments and increase in account receivables mainly from theOrgad and Naiz fit acquisitions offset by a decrease in the net loss.Net cash used in investing activities for the year ended December 31, 2022 was $993,000 as opposed to net cash provided by investing activities of$161,000 for the year ended December 31, 2021. The net cash used in investing activities for the year ended December 31, 2022 was mainly from the acquisition ofOrgad and Naiz as opposed to proceeds from shortterm deposits and restricted deposits during the year ended December 31, 2021.We had a negative cash flow from financing activities of $67,000 for the year ended December 31, 2022 compared to positive cash flow of $16,292,000 for theyear ended December 31, 2021. The negative cash flow from financing activities for the year ended December 31, 2022 was mainly due to repayment of loans andinterest and payments for leases as opposed to proceeds from issuance of shares and from exercise of warrants for the year ended December 31, 2021.47We expect that we will continue to generate losses and negative cash flows from operations for the foreseeable future. Based on the projected cash flowsand cash balances as of December 31, 2022, together with the proceeds from the January 2023 financing, we believe our existing cash will not be sufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. We will need to raiseadditional capital, which may not be available on reasonable terms or at all. Additional capital would be used to accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;●respond to competitive pressures;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, the Russian invasion ofUkraine, the impact of any resurgence of the COVID19 pandemic and a number of other factors, many of which are outside our control, and on our financialperformance. Accordingly, we cannot assure you that we will be able to successfully raise additional capital at all or on terms that are acceptable to us. If we cannotraise additional capital when needed, it may have a material adverse effect on our business, results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.We have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.Recently Issued Accounting PronouncementsCertain recently issued accounting pronouncements are discussed in Note 2, Significant Accounting Policies, to the consolidated financial statementsincluded in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10K.OffBalance Sheet ArrangementsWe have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.48Application of Critical Accounting Policies and EstimatesOur management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we haveprepared in accordance with U.S. generally accepted accounting principles issued by the Financial Accounting Standards Board, or FASB. The preparation of thesefinancial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assetsand liabilities at the date of the financial statements, as well as the reported expenses during the reporting periods. Actual results may differ from these estimatesunder different assumptions or conditions.Our significant accounting policies were revenue from contracts with customers which are more fully described in the notes to our financial statementsincluded herein. We believe these accounting policies discussed below are critical to our financial results and to the understanding of our past and futureperformance, as these policies relate to the more significant areas involving management’s estimates and assumptions. We consider an accounting estimate to becritical if: (1) it requires us to make assumptions because information was not available at the time or it included matters that were highly uncertain at the time wewere making our estimate; and (2) changes in the estimate could have a material impact on our financial condition or results of operations.Accounting for business combinationsWe allocate the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed, based upon their estimated fairvalues at the acquisition date. These fair values are typically estimated with assistance from independent valuation specialists.The purchase price allocation process requires us to make significant estimates and assumptions, especially at the acquisition date with respect tointangible assets, contractual support obligations assumed, contingent consideration arrangements, and preacquisition contingencies.Although we believe the assumptions and estimates we have made in the past have been reasonable and appropriate, they are based in part on historicalexperience and information obtained from the management of the acquired companies and are inherently uncertain.Examples of critical estimates in valuing certain of the intangible assets we have acquired or may acquire in the future include but are not limited to:● future expected cash flows from product sales or other customer contracts;● expected costs of fulfillment including marketing, warehousing and product sales;● the acquired company’s brand and competitive position, as well as assumptions about the period of time the acquired brand will continue to be used inthe combined company’s product portfolio;● cost of capital and discount rates; and● estimating the useful lives of acquired assets as well as the pattern or manner in which the assets will amortize.Refer to Note 16, Business Combination, to the consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” of thisAnnual Report on Form 10K.49Revenue from contracts with customersOur revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled software subscriptions, associatedsoftware maintenance and support.We recognize revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with a customer exists onlywhen: the parties to the contract have approved it and are committed to perform their respective obligations, we can identify each party’s rights regarding thedistinct goods or services to be transferred (“performance obligations”), we can determine the transaction price for the goods or services to be transferred, thecontract has commercial substance and it is probable that we will collect the consideration to which we will be entitled in exchange for the goods or services that willbe transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to a customer.Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted to governmental authorities. Refundsare estimated at contract inception and updated at the end of each reporting period if additional information becomes available. Revenue is recognized when controlof the product is transferred to the customer.We maintain a returns policy that allows our customers to return product within a specified period of time. The estimate of the provision for returns is basedupon historical experience with actual returns.Principal versus Agent ConsiderationsWe follow the guidance provided in ASC 606 for determining whether we are a principal or an agent in arrangements with customers, by assessing whetherthe nature of our promise is a performance obligation to provide the specified goods (principal) or to arrange for those goods to be provided by the other party(agent). With regard to products being sold by Orgad through Amazon, this determination involves judgment. We determine it is the principle when it has controlover the promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).We recognize revenue ratably over the contractual service term for hosted services that are priced based on a committed number of transactions where thedelivery and consumption of the benefit of the services occur evenly over time, beginning on the date the services associated with the committed transactions arefirst made available to the customer and continuing through the end of the contractual service term. Over usage fees and fees based on the actual number oftransactions are billed in accordance with contract terms as these fees are incurred and are included in the transaction price of an arrangement as variableconsideration. Fees based on a number of transactions or impressions per month, are allocated to the period in which the transactions occur. Revenue forsubscriptions sold as a fee per period is recognized ratably over the contractual term as the customer simultaneously receives and consumes the benefit of theunderlying service.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.As a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.50ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAMY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2022U.S. DOLLARS IN THOUSANDSINDEXPageReport of Independent Registered Public Accounting Firm (PCAOB ID: ID 1057)F2Consolidated Balance SheetsF4Consolidated Statements of Comprehensive LossF5Consolidated Statements of Shareholders’ EquityF6Consolidated Statements of Cash FlowsF7Notes to Consolidated Financial StatementsF8 F33F1Report of Independent Registered Public Accounting FirmTo the Shareholders and Board of DirectorsMy Size, Inc.:Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of My Size, Inc. and subsidiaries (the Company) as of December 31, 2022 and 2021, the relatedconsolidated statements of comprehensive loss, shareholders’ equity, and cash flows for each of the years in the twoyear period ended December 31, 2022, and therelated notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, thefinancial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the twoyear periodended December 31, 2022, in conformity with U.S. generally accepted accounting principles.Going ConcernThe accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1d tothe consolidated financial statements, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit thatraises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1d. Theconsolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidatedfinancial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Critical Audit MattersCritical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to becommunicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved ourespecially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidatedfinancial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters oron the accounts or disclosures to which they relate.Acquisitiondate fair value of customer relationshipsAs discussed in Note 16 to the consolidated financial statements, on October 11, 2022, the Company acquired Naiz Bespoke Technologies SL (“Naiz”). As a result ofthe transaction, the Company acquired customer relationships intangible assets (“customer relationships”) representing the generation of future income from Naiz’sexisting customers. The acquisition date fair value of the customer relationships was $726 thousand.F2We identified the evaluation of the acquisitiondate fair value of the Naiz customer relationships as a critical audit matter. A high degree of subjective auditorjudgment was required to evaluate the following internally developed assumptions used to estimate the fair value of such asset, for which there were limitedobservable inputs: (i) forecasted revenues attributable to existing customers, (ii) forecasted earnings before interest, taxes, depreciation, and amortization(“EBITDA”) margins for the acquired business, (iii) estimated annual customer attrition rates and (iv) estimated discount rate. The determined fair value wassensitive to changes in these key assumptions. Additionally, specialized skills and knowledge were needed to evaluate the discount rate used.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s acquisitiondate fair value estimation process, including controls over the development of key assumptions. We performed a sensitivity analysis toassess the impact of reasonably possible changes to forecasted revenues, EBITDA margins, annual customer attrition rates, and the discount rate. We evaluated theforecasted revenue growth rates from existing customers by comparing the growth assumptions to those of the Company’s peers and industry reports. Inconnection with our assessment of the forecasts used in the valuation, we compared (1) forecasted revenue and EBITDA to Naiz’s historical actual results and (2)estimated annual customer attrition rates to historical Naiz customer attrition data. We tested the Company’s determined weighted average cost of capital(“WACC”), which was used to determine the discount rate, by involving valuation professionals with specialized skills and knowledge, who assisted in:Evaluating the selected discount rate by comparing it against a discount rate range that was independently developed using publicly available market datafor comparable companies, and;Assessing the Company’s WACC calculation, by comparing it against an independently estimated WACC range based on inputs obtained throughpublished surveys and studies.Goodwill impairment assessmentAs discussed in Note 16 to the consolidated financial statements, during 2022 the Company recorded goodwill of $1,257 thousand related to the acquisition of NaizBespoke Technologies, S.L. (“Naiz”). The Company performed an annual quantitative impairment test of goodwill at the reporting unit level. Based on this analysis,the Company determined that the fair value of its reporting unit exceeded its carrying value and no impairment charge was required.We identified the evaluation of the goodwill impairment assessment for the Naiz reporting unit as a critical audit matter. A high degree of subjective auditor judgmentwas required to evaluate the following assumptions used to estimate the fair value of the Company’s reporting unit, for which there were limited observable inputs:(i) forecasted reporting unit cash flows, (ii) longterm growth rates, and (iii) discount rates. The fair value was sensitive to changes in these key assumptions.Additionally, specialized skills and knowledge were needed to evaluate the discount rates.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s goodwill impairment evaluation process. We performed sensitivity analyses to assess the impact of reasonably possible changes to forecasted cashflows, longterm growth rates, and discount rates. We evaluated the Company’s forecasted growth rates by comparing the growth assumptions to those of theCompany’s peers and industry reports. We compared the Company’s forecasted revenue, cost of sales, and operating expense margins to historical actual results toassess the reasonableness of the forecasts. In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:– Assessing the Company’s WACC calculation, by comparing it against an estimated WACC range based on inputs obtained through published surveys andstudies– Evaluating the discount rates used by the Company by comparing them against discount rate ranges that were developed using publicly available market data forcomparable companies, and;– Performing an arithmetic recalculation regarding the fair value of the Company’s reporting unit, using the Company’s cash flow forecasts and the independentlydeveloped discount rates, and comparing the results to the Company’s fair value estimates./s/ Somekh ChaikinSomekh ChaikinMember Firm of KPMG InternationalWe have served as the Company’s auditor since 2017.Tel Aviv, IsraelApril 14, 2023F3MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED BALANCE SHEETSU.S. dollars in thousands (except share data)December 31,Note20222021AssetsCurrent assetsCash and cash equivalents32,10010,670Restricted cash263273Inventory997Account receivables1,94040Other receivables and prepaid expenses4758579Total current assets6,05811,562Long term deposits28Property and equipment, net5140112Operating rightofuse asset6583776Intangible assets71,377Goodwill71,395Investment in JV899Investment in marketable securities11471083,669996Total assets9,72712,558Liabilities and shareholders’ equityCurrent liabilitiesOperating lease liability6159138Shortterm loans9155Trade payables2,487635Liabilities to Related parties69863Other payables680392Total current liabilities4,1791,228Longterm loans9376Deferred tax liabilities328Operating lease liability6308473Total noncurrent liabilities1,012473CONTINGENCIES AND COMMITMENTS15Total Liabilities5,1911,701Shareholders’ equity13Stock capital Common stock of $0.001par value Authorized: 250,000,000and 100,000,000shares as of December 31,2022 and 2021; Issued and outstanding: 1,464,117and959,297 as of December 31,2022 and 2021, respectively (*)11Additional paidin capital58,67356,453Accumulated other comprehensive loss(637)(406)Accumulated deficit(53,501)(45,191)Total shareholders’ equity4,53610,857Total liabilities and shareholders’ equity9,72712,558(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F4MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSSU.S. dollars in thousands (except share data and per share data)Year endedDecember 31,Note20222021Revenues4,459131Cost of revenues(3,825)Gross profit634131Operating expensesResearch and development(1,701)(4,248)Sales and marketing18(3,143)(2,336)General and administrative19(3,900)(4,124)Total operating expenses(8,744)(10,708)Operating loss(8,110)(10,577)Financial income (expense), net20(236)57Loss before taxes(8,346)(10,520)Taxes on income36Net loss for the year(8,310)(10,520)Other comprehensive income (loss):Foreign currency translation differences(231)18Total comprehensive loss(8,541)(10,502)Basic and diluted loss per share (*)(7.47)(17.75)Basic and diluted weighted average number of shares outstanding (*)1,111,913420,385(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F5MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITYU.S. dollars in thousands (except share data)Common stockAdditionalpaidinAccumulatedothercomprehensiveAccumulatedTotalstockholders’NumberAmountcapitallossDeficitequityBalance as of January 1, 2021289,314(*)37,171(424)(34,671)2,076Stockbased compensation related to optionsgranted to employees and consultants373373Exercise of options granted to employees178(*)Restricted shares issued to shareholder (***)100,000(*)2,6182,618Issuance of shares, net of issuance cost of$1,160434,700112,58212,583Exercise of warrants135,108(*)3,7093,709Total comprehensive income (loss)18(10,520)(10,502)Balance as of December 31, 2021959,300156,453(406)(45,191)10,857Stockbased compensation related to optionsand restricted shares granted to employeesand consultants176,000(*)455455Issuance of shares in Business Combination(**)295,802(*)1,4461,446Issuance of shares post BusinessCombination (**)20,924(*)319319Effect of reverse stock split (Note 13 g)12,091(*)Total comprehensive income (loss)(231)(8,310)(8,541)Balance as of December 31, 20221,464,117158,673(637)(53,501)4,536(*)Represents an amount of less than $1.(**)See note 16(***)See note 1 bThe accompanying notes are an integral part of the consolidated financial statements.F6MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSU.S. dollars in thousandsYear endedDecember 31,20222021Cash flows from operating activities:Net loss(8,310)(10,520)Adjustments to reconcile net loss to net cash used in operating activities:Depreciation3842Change in operating lease rightofuse asset13543Amortization of intangible assets155foreign exchange differences(23)1Change in liabilities to related parties635Interest on long term liabilities10Interest paid(10)Revaluation of investment in marketable securities62(49)Restricted Shares issued to shareholder2,618Stock based compensation455373Issuance of shares post Business Combination319Change in inventory(219)Change in deferred tax liabilities(36)Change in account receivable(1,863)(12)Changes in operating lease liabilities(142)Change in other receivables and prepaid expenses184(99)Change in trade payables1,315253Change in other payables553Net cash used in operating activities(7,290)(7,297)Cash flows from investing activities:Acquisition of a subsidiary, net of cash acquired(767)Proceeds from restricted deposits, net184investing in other receivable(100)Investment in equity accounted investee(99)Purchase of property and equipment(27)(23)Net cash (used in) provided by investing activities(993)161Cash flows from financing activities:Proceeds from issuance of shares, net of issuance costs12,583Repayment of loans(67)Proceeds from exercise of warrants3,709Net cash (used in) provided by financing activities(67)16,292Effect of exchange rate fluctuations on cash and cash equivalents(230)13Change in cash and cash equivalents and restricted cash(8,580)9,169Cash and cash equivalents and restricted cash at the beginning of the year10,9431,774Cash and cash equivalents and restricted cash at the end of the year2,36310,943B) Aggregate cash flows derived for the Company as a result of the Orgad acquisition (note 16)2022Trade and other receivables364Inventory864Fixed assets55Longterm deposits31Selling Platform378Goodwill152Shortterm credit(181)Trade payables(580)Other payables(88)Longterm loan(138)Longterm provision(13)Deferred Tax Liability(87)Issuance of shares(457)Total acquisition of subsidiary, net of cash300C) Aggregate cash flows derived for the Company as a result of the Naiz acquisition (note 16)2022Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Issuance of shares(1,008)Total acquisition of subsidiary, net of cash467The accompanying notes are an integral part of the consolidated financial statements.F7MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERALa.My Size, Inc. is developing unique measurement technologies based on algorithms with applications in a variety of areas, from the apparel ecommerce market, to the courier services market and to the Do It Yourself (“DIY”) smartphone and tablet apps market. The technology is driven byproprietary algorithms, which are able to calculate and record measurements in a variety of novel ways.Following the acquisition of Naiz Bespoke Technologies, S.L (“Naiz”) in October 2022 (see note 16), the Company expanded its offering outreachand customer base.Following the acquisition of Orgad International Marketing Ltd. (“Orgad”) in February 2022 (see note 16), the Company also operates anomnichannel ecommerce platform.The Company has five subsidiaries, My Size Israel 2014 Ltd (“My Size Israel”), Topspin Medical (Israel) Ltd., and Orgad all of which areincorporated in Israel, and My Size LLC which was incorporated in the Russian Federation and Naiz Bespoke Technologies, S.L., a limited liabilitycompany incorporated under the laws of Spain (see note 16). References to the Company include the subsidiaries unless the context indicatesotherwise.My Size, Inc., was incorporated and commenced operations in September 1999, as Topspin Medical Inc. (“Topspin”), a private company registeredin the State of Delaware. In December 2013, the Company changed its name to Knowledgetree Ventures Inc. Subsequently, in February 2014, theCompany changed its name to My Size, Inc. Topspin was engaged, through its Israeli subsidiary, in research and development in the field ofcardiology and urology.Since September 1, 2005, the Company has traded on the Tel Aviv Stock Exchange (“TASE”).Between 2007 and 2012 the Company reported as a public company with the U.S. Securities and Exchange Commission (the “SEC”). In August2012, the Company suspended its reporting obligations under Section 13(a) and 15(d) of the Securities Exchange Act of 1934. In mid2015, theCompany resumed reporting as a public company.b.On January 9, 2014, at the Company’s general meeting of shareholders, its shareholders approved an engagement with one of the Company’sinvestors (the “Seller”) for the purchase of rights in a Venture (the “Venture”), including the rights to the method and the certain patent applicationthat had been filed by the Seller (the “Assets”). The Venture relates to the development of technologies and applications which will assist theconsumer to take his or her body measurements accurately using a mobile device to ensure the purchase of clothing with the best possible fitwithout the need to try them on.In February 2014, the Company established a wholly owned subsidiary, My Size (Israel) 2014 Ltd., a company registered in Israel, which iscurrently engaged in the development of the Venture described above.In return for purchasing an interest in the Venture, the Company undertook to pay the Seller 18% of the Company’s operating profit, direct orindirect, connected to the Venture for a period of seven years starting from the end of the Venture’s development period.As part of the agreement, the Seller received an option to buy back the Assets for consideration which will reflect the market fair value at that time,on the occurrence of the following events: a) if a motion is filed to liquidate the Company; b) if seven years after signing the agreement, theCompany’s total accumulated revenues, direct or indirect, from the Venture or the commercialization of the patent will be lower than NIS 3.6 million.In such an event, Seller may repurchase the interest in the Venture at a market price to be determined by an independent third party valuationconsultant, who shall be chosen by agreement by the parties, and the audit committee shall conduct the negotiations on behalf of the Company todetermine the identity of the consultant.On May 26, 2021, the Company, My Size Israel and Shoshana Zigdon entered into an Amendment to Purchase Agreement (the “Amendment”)which made certain amendments to a Purchase Agreement between the parties dated February 16, 2014 (the “Purchase Agreement”). Pursuant tothe Amendment, Ms. Zigdon agreed to irrevocably waive the right to repurchase certain assets related to the collection of data for measurementpurposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which the Company’s business is substantiallydependent, and all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My Size Israel underthe Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation,reward or any rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights(the “Waiver”). In consideration of the Waiver, the Company issued 100,000 shares of common stock to Ms. Zigdon in a private placement.F8MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERAL (Cont.)c.On July 25, 2016, the Company’s common stock began publicly trading on the Nasdaq Capital Market under the symbol “MYSZ”. The Company’sshares of common stock are listed both on the Nasdaq Capital Market and TASE.d.Since inception, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit of $53,501.The Company has financed its operations mainly through fundraising from various investors.The Company’s management expects that the Company will continue to generate losses and negative cash flows from operations for theforeseeable future. Based on the projected cash flows and cash balances as of December 31, 2022, management is of the opinion that its existingcash will be sufficient to fund operations for a period less than 12 months. As a result, there is substantial doubt about the Company’s ability tocontinue as a going concern.Management’s plans include the continued commercialization of the Company’s products and securing sufficient financing through the sale ofadditional equity securities, debt or capital inflows from strategic partnerships. Additional funds may not be available when the Company needsthem, on terms that are acceptable to it, or at all. If the Company is unsuccessful in commercializing its products and securing sufficient financing,it may need to cease operations.The financial statements include no adjustments for measurement or presentation of assets and liabilities, which may be required should theCompany fail to operate as a going concern.e.The Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificial intelligencedriven measurement solutions (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions. The fashion and equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. The SaaS based innovativeartificial intelligence driven measurement solutions, or SaaS Solutions operating segment consists of My Size Inc My Size Israel and LLC.NOTE 2 SIGNIFICANT ACCOUNTING POLICIESThe consolidated financial statements are prepared according to United States generally accepted accounting principles (“U.S. GAAP”), applied on aconsistent basis, as followsa.Use of estimates:The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions thataffect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.Information about assumptions made by the Company with respect to the future and other reasons for uncertainty with respect to estimates thathave a significant risk of resulting in a material adjustment to carrying amounts of assets and liabilities in the next financial year are included in thefollowing notes:Acquisitions of subsidiariesThe Company measures the fair value of the consideration transferred (including contingent consideration) and fair value of the assets acquiredand liabilities assumed, in business combination transactions. For information on details on fair value measurement in acquisition of subsidiaries,see Note 16 regarding business combinations.Estimated impairment of nonfinancial assetsThe Company examines on an annual basis whether there is an impairment of goodwill, intangibles and property, plant and equipment that areallocated to cash generating units, in accordance with the accounting policy presented in Note 1(h) below. Recoverable amounts of cashgenerating units are determined on the basis of valueinuse calculations. These calculations require the use of estimates.For information on key assumptions used in calculation of the recoverable amount, see note 7 – Goodwill and other Intangible assets.b.Functional currency:The currency of the primary economic environment in which the operations of the Company is conducted is the United States Dollar and thus it isthe Company’s functional currency. The reporting currency according to which these financial statements are prepared is the U.S. dollar.The currency of the primary economic environment in which the operation of the Subsidiary, My Size Israel and Orgad International MarketingLtd. functional currency is the New Israeli Shekel (“NIS”).The currency of the primary economic environment in which the operation of the Subsidiary, My Size LLC, functional currency is Russian Ruble.The currency of the primary economic environment in which the operation of the Subsidiary, Naiz fit, functional currency is Euro.F9MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)c.Principles of consolidation:The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances andtransactions have been eliminated upon consolidation.d.Cash equivalents:Cash equivalents are shortterm highly liquid investments that are readily convertible to cash with original maturities of three months or less at thedate acquired.e.Restricted cashRestricted cash are deposits for rent, credit card and for hedging activities.f.Inventories:Inventories include finished goods and are measured at the lower of cost or net realizable value. The cost of inventories comprises of the costsincurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary courseof business. At the point of the loss recognition, a new, lowercost basis for that inventory is established, and subsequent changes in facts andcircumstances do not result in the restoration or increase in that newly established cost basis. The costs of purchase of inventories comprise thepurchase price and other costs directly attributable to the acquisition of finished goods. In 2022, the Company recorded an inventory markdownof $48.g.Property and equipment:Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straightline method over theestimated useful lives of the assets, at the following annual rates:%Computers and peripheral equipment33Office furniture and equipment720Leasehold improvementsOver the term of the leaseor the useful life of theimprovements, whicheveris shorterh.Impairment of longlived assets:The Company’s property and equipment are reviewed for impairment in accordance with ASC 360, “Property Plant and Equipment”, wheneverevents or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held andused is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by theassets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount ofthe assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less sellingcosts. During the periods ended December 31, 2022 and 2021, no impairment losses have been recorded.i.Business combinations:The Company applies the provisions of ASC 805, “Business Combination” and allocates the fair value of purchase consideration to the tangibleassets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchaseconsideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assetsacquired and liabilities assumed, the Company estimated the future expected cash flows from acquired platform, customer relationships,Technology and trademark from a market participant perspective, useful lives and discount rates. In addition, management makes significantestimates and assumptions, which are uncertain, but believed to be reasonable.Acquisitionrelated costs are recognized separately from the acquisition and are expensed as incurred.F10MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)j.Goodwill:Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a businesscombination. Under ASC 350, “Intangible Goodwill and Other”, goodwill is not amortized, but rather is subject to an annual impairment test.ASC 350 requires goodwill to be tested for impairment at the reporting unit level at least annually, the fourth quarter, or between annual tests incertain circumstances, and written down when impaired. Goodwill is tested for impairment by comparing the fair value of the reporting unit with itcarrying value. Goodwill from Orgad acquisition was allocated to the fashion and equipment ecommerce platform segment and Goodwill from theNaiz acquisition was allocated to Naiz segment based innovative artificial intelligence driven measurement solutions.Alternatively, ASC 350 permits an entity to bypass the qualitative assessment for any reporting unit and proceed directly to performing the firststep of the goodwill impairment test. There were no impairment charges to goodwill during the period presented.k.Intangible assets:Intangible assets consist of identifiable intangible assets that the Company has acquired from previous business combinations. Intangible assetsare recorded at costs, net of accumulated amortization. The Company amortizes its intangible assets reflecting the pattern in which the economicbenefits of the intangible assets are consumed. When a pattern cannot be reliably determined, the Company uses a straightline amortizationmethod. Amortization is calculated by the straightline method over the estimated useful lives of the following assets.The estimated useful lives of the company’s intangible assets are as follows:yearsCustomer Relationships7Technology5Trademark5Selling Platform3Each period the Company evaluates the estimated remaining useful lives of its intangible assets and whether events or changes in circumstanceswarrant a revision to the remaining period of amortizationl.Severance pay:The Subsidiary’s liability for severance pay is covered by Section 14 of the Israeli Severance Pay Law (“Section 14”). Under Section 14, employeesin Israel are entitled to have monthly deposits, at a rate of 8.33% of their monthly salary, made on their behalf to their insurance funds. Payments inaccordance with Section 14 exempt the Subsidiary from any additional obligation for these employees. As a result, the Subsidiary does notrecognize any liability for severance pay due to these employees and the deposits under Section 14 are not recorded as an asset in theSubsidiary’s balance sheet. These contributions for compensation represent defined contribution plans and expenses are recorded based onactual deposits.Other than the My Size Israel’s liability there are no additional severance pay liabilities.F11MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)m.Research and development costs:Research and development costs are charged to the statement of operations, as incurred. Most of the research and development expenses are forwages, related expenses and subcontractors.n.Income taxes:The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilitiesfor the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Companies’ taxreturns. Deferred taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities using enactedtax rates in effect in the years in which the differences are expected to reverse. The Company assesses the likelihood that its deferred tax assetswill be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely thannot that all or a portion of deferred tax assets will not be realized. The Company establishes a valuation allowance, if necessary, to reduce deferredtax assets to the amount more likely than not to be realized. As of December 31, 2022, and 2021, a full valuation allowance was established by theCompany.The Company implements a twostep approach to recognize and measure the benefit of its tax positions. The first step is to evaluate the taxposition taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that,on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigationprocesses. The second step is to measure the tax benefit as the largest amount that is greater than 50 percent (cumulative basis) likely to berealized upon settlement.The Company believes that its tax positions are all highly certain of being upheld upon examination. As of December 31,2022 and 2021 the Company recorded a liability for unrecognized tax benefits of $328 and none respectively.o.Accounting for stockbased compensation:The Company accounts for its employees’ stockbased compensation as an expense in the financial statements based on ASC 718. All awards areequity classified and therefore such costs are measured at the grant date fair value of the award and graded vesting attribution approach torecognize compensation cost over the vesting period. The Company estimates stock option grant date fair value using the Binomial and BlackScholes option pricingmodel.The Company recorded stock options issued to nonemployees at the grant date fair value, and recognizes expenses over the related serviceperiod by using the straightline attribution approach in accordance with ASU 201807. All awards are equity classified.The expected volatility of the share prices reflects the assumption that the historical volatility of the share prices is reasonably indicative ofexpected future trends.The riskfree interest rate for grants with an exercise price denominated in USD for employees and several consultants is based on the yield fromUS treasury zerocoupon bonds with an equivalent term.The Company has historically not paid dividends and has no foreseeable plans to pay dividends.F12MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)p.Fair value of financial instruments:ASC 820, Fair Value Measurements and Disclosures, relating to fair value measurements, defines fair value and established a framework formeasuring fair value. The ASC 820 fair value hierarchy distinguishes between market participant assumptions developed based on market dataobtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptionsdeveloped based on the best information available in the circumstances. ASC 820 defines fair value as the price that would be received to sell anasset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price. Inaddition, the fair value of assets and liabilities should include consideration of nonperformance risk, which for the liabilities described belowincludes the Company’s own credit risk.As a basis for considering such assumptions, ASC 820 establishes a threetier value hierarchy, which prioritizes the inputs used in the valuationmethodologies in measuring fair value:Level 1 Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access. Valuationadjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readilyand regularly available in an active market, valuation of these products does not entail a significant degree of judgment.Level 2 Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, eitherdirectly or indirectly.Level 3 Valuations based on inputs that are unobservable and significant to the overall fair value measurement.The Company holds share certificates in iMine Corporation (“iMine”) formerly known as Diamante Minerals, Inc., a publiclytraded company onthe OTCQB.Due to sales restrictions on the sale of the iMine shares, the fair value of the shares was measured on the basis of the quoted market price for anotherwise identical unrestricted equity instrument of the same issuer that trades in a public market, adjusted to reflect the effect of the salesrestrictions and is therefore, ranked as Level 2 asset.q.Basic and diluted net loss per share:Basic net loss per share is computed based on the weighted average number of shares of common stock outstanding during each year. Diluted netincome per share is computed based on the weighted average number of shares of common stock outstanding during each year plus dilutivepotential equivalent common stock considered outstanding during the year, in accordance with ASC 260, “Earnings per Share”. For the yearsended December 31, 2022 and 2021, all outstanding options and warrants have been excluded from the calculation of the diluted net loss per sharesince their effect was antidilutive.r.Concentrations of credit risk:Financial instruments that potentially subject the Company and its subsidiaries to concentrations of credit risk consist principally of cash andcash equivalents.Cash and cash equivalents are invested in banks in Israel, Spain and United States. Such deposits in United States may be in excess of insuredlimits and are not insured in other jurisdictions. Management believes that the financial institutions that hold the Company’s investments arefinancially sound and, accordingly, minimal credit risk exists with respect to these investments.The Company and its subsidiaries have no offbalancesheet concentration of credit risk such as foreign exchange contracts, option contracts orother foreign hedging arrangements.F13MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)s.Revenue Recognition:The Company’s revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled softwaresubscriptions, associated software maintenance and support.The Company recognizes revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with acustomer exists only when: the parties to the contract have approved it and are committed to perform their respective obligations, the Companycan identify each party’s rights regarding the distinct goods or services to be transferred (“performance obligations”), the Company can determinethe transaction price for the goods or services to be transferred, the contract has commercial substance and it is probable that the Company willcollect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to acustomer. Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted togovernmental authorities. Refunds are estimated at contract inception and updated at the end of each reporting period if additional informationbecomes available. Revenue is recognized when control of the product is transferred to the customer.The Company maintains a returns policy that allows its customers to return product within a specified period of time. The estimate of the provisionfor returns is based upon historical experience with actual returns.Principal versus Agent ConsiderationsThe Company follows the guidance provided in ASC 606 for determining whether it is a principal or an agent in arrangements with customers, byassessing whether the nature of the Company’s promise is a performance obligation to provide the specified goods (principal) or to arrange forthose goods to be provided by the other party (agent). With regard to products being sold by Orgad through Amazon, this determination involvesjudgment. The Company determines it is the principle when it has control over promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).The Company recognizes revenue ratably over the contractual service term for hosted services that are priced based on a committed number oftransactions where the delivery and consumption of the benefit of the services occur evenly over time, beginning on the date the servicesassociated with the committed transactions are first made available to the customer and continuing through the end of the contractual serviceterm. Over usage fees and fees based on the actual number of transactions are billed in accordance with contract terms as these fees are incurredand are included in the transaction price of an arrangement as variable consideration. Fees based on a number of transactions or impressions permonth, are allocated to the period in which the transactions occur. Revenue for subscriptions sold as a fee per period is recognized ratably overthe contractual term as the customer simultaneously receives and consumes the benefit of the underlying service.F14MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)t.Contingencies and CommitmentsLiabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it isprobable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with losscontingencies are expensed as incurred.u.Derivative instrumentsThe Company accounts for its derivative instruments as either assets or liabilities and measures them at fair value through profit or loss.v.LeasesThe Company leases include an office space lease agreement for 36 months, with an option to extend for an additional 36 months and 36 monthscancelable operating lease agreements on behalf of personnel vehicles. The lease term includes a noncancellable period of the lease plus anyadditional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise,or an option to extend (or not to terminate) the lease controlled by the lessor.ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make leasepayments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value oflease payments over the lease term. The company generally use its incremental borrowing rate based on the estimated rate of interest forcollateralized borrowing over a similar term of the lease payments at commencement date. Lease expense for lease payments is recognized on astraightline basis over the lease term.For the office rent lease, the Company has elected to account for the lease and nonlease maintenance components as a single lease component.Therefore, the lease payments used to measure the lease liability include all of the fixed consideration in the contract, including insubstance fixedpayments, owed over the lease term.w.Impact of recently issued accounting standardIn June 2016, the FASB issued ASU 201613, “Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses on FinancialInstruments”, which requires companies to measure credit losses of financial instruments, including customer accounts receivable, utilizing amethodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information toinform credit loss estimates. Subsequent to the issuance of ASU 201613, the FASB issued several additional Accounting Standard Updates toclarify implementation guidance, provide narrowscope improvements and provide additional disclosure guidance. As an Emerging GrowthCompany, ASU 201613 is effective for fiscal years beginning after December 15, 2022. The Company does not expect this ASU to have a materialimpact on its consolidated financial statements.F15MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 3 CASH AND CASH EQUIVALENTSThe Company’s cash and cash equivalents balance at December 31, 2022 and 2021 is denominated in the following currencies:December 31,20222021US Dollars1,65110,184New Israeli Shekels259433Other190532,10010,670NOTE 4 OTHER RECEIVABLES AND PREPAID EXPENSESDecember 31,20222021Prepaid expenses and other current assets322429Government authorities28317Other153133Total758579NOTE 5 PROPERTY AND EQUIPMENT, NETComputersandperipheralequipmentOfficefurnitureandequipmentLeaseholdimprovementsTotalCostBalance as at January 1, 20211825860300Additions2323Translation adjustments72211Balance as at December 31, 20212126062334Balance as at January 1, 20222126062334Additions161127Business combination401555Translation adjustments(32)(8)(8)(48)Balance as at December 31, 20222367854368Accumulated DepreciationBalance as at January 1, 20211461412172Additions2751042Translation adjustments6118Balance as at December 31, 20211792023222Balance as at January 1, 20221792023222Additions209938Translation adjustments(27)(3)(2)(32)Balance as at December 31, 20221722630228Carrying amountsAs at December 31, 2021334039112As at December 31, 2022645224140F16MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 6 LEASESIn August 2019, The Company entered into an office space lease agreement. The lease term is for 36 months beginning on August 20, 2019 and endingon August 20, 2022, with an option to extend for an additional 36 months. The Company extended the lease period until August 20, 2025. Monthly rentpayments including utilities amounting to approximately USD 14 (NIS 49,500) per month.In addition, The Company entered into a threeyear cancelable operating lease agreement for cars.These operating leases are included in “Right of use asset” on the Company’s December 31, 2022 consolidated balance sheets, and represent theCompany’s right to use the underlying asset for the lease term. The Company’s obligations to make lease payments are included in the currentliabilities as “Operating lease liability” and in the noncurrent liabilities as “Operating lease liability long term” on the Company’s December 31, 2022consolidated balance sheets. As of December 31, 2022, rightofuse of asset was $583. operating lease liabilities were $159 and non current Operatinglease liabilities were $308. Rightofuse asset includes the capitalization of improvements (net of amortization) amounting to $105.Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value ofthe lease payments.The interest rate used to discount future lease payment was 11.95%.Maturities of lease liabilities as of December 31, 2022 were as follows:Year Ending:2023$1912024$1912025$127Thereafter$509Less imputed interest:$(42)Total lease liabilities$467F17MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 7 – Goodwill and other Intangible assetsA.Identified intangible assetsSchedule of Intangible assetsSelling PlatformTechnologyCustomerRelationshipsOtherTotalThousandsUSDThousandsUSDThousandsUSDThousandsUSDThousandsUSDCostAs of January 1, 2022Acquisitions through business combinations378286726771,467Effect of changes in exchange rates(32)2565765As of December 31, 2022346311791841,532AmortizationAs of January 1, 2022Amortization for the year including effect of changes inexchange rates as of December 31, 2022(109)(15)(27)(4)(155)Carrying amountAs of December 31, 2022237296764801,377AmortizationAmortization expenses recorded for identified intangible assets in the Consolidated Statements of Operations for each period and were as follows:Line ItemDecember 31,2022December 31,2021Selling platformCosts of revenues109TrademarkSales and marketing4TechnologyCosts of revenues15Customer relationshipsSales and marketing27Total amortization expenses155Future amortization expenses are expected to be as follows:20232024202520262027ThereafterTotalFuture amortization expenses3033031941771561791,312b.GoodwillThe changes in the carrying amount of goodwill for the years ended December 31, 2022 and 2021 were as follows:Fashion and equipmentecommerce platformNaizTotalBalance as of December 31, 2021Changes during the period:Goodwill acquired1521,1521,304Goodwill impairmentTranslation differences(14)10591Balance as of December 31, 20221381,2571,395The Company operates its business through three reporting segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovativeartificial intelligence driven measurement solutions and (iii) Naiz. See note 17 for additional segments information.The Company determines the fair value of its reporting units using the income approach. According to the income, the Company uses discounted cashflows to estimate the fair value. Cash flow projections are based on the Company’s estimates of revenue growth rates and operating margins, takinginto consideration the industry’s and market’s conditions. The discount rate used is based on the weighted average cost of capital (“WACC”),adjusted for the relevant risk associated with businessspecific characteristics.The Company performed a quantitative assessment as of December, 31 2022 for the reporting units’ fair value. The estimated fair value of the Fashionand equipment ecommerce platform and Naiz reporting units exceeded its estimated carrying amount by 95.9% and 27.7% respectively. This, based thefollowing assumptions:Fashion and equipmentecommerce platformNaizDiscount rate21%23%Terminal growth rate3%3%If business conditions or expectations were to change materially, it may be necessary to record impairment charges to the Company’s reporting units inthe future.F18MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 8 Investment in JVIn August 2022, the Company established a joint venture (“JV”) in Brazil with Santista Têxtil. The Company holds 51% and Santista Têxtil holds 49% of theJV. The purpose of the JV is to serve the Brazilian market according to the business plan that was set. Both parties agree to make an initial investment in theJV of $198that will be made per the holding percentage of each party. As of the reporting date, the JV is in process of establishing its operation.NOTE 9 Financial LiabilitiesThe book value of each of the financial liability categories is an acceptable approximation of fair value.The debt is comprised of four loans that were granted to My Size Israel – in an outstanding amount of approximately $131, bearing interest rangingfrom prime rate to prime+2.8% rate, and four loans that were granted to the Spanish subsidiary– in an outstanding amount of approximately $400,bearing interest ranging from 1% to 3%.The financial liability maturities during the five years following the end of the financial year are shown below:UntilUntilUntilUntilUntilAfterTOTAL311223311224311225311226311227311227311222Debts with credit institutions15513892874712531NOTE 10 RELATED PARTIES TRANSACTIONSA. Balances with related parties:The following related party payables are included in liability to related parties.December 31,20222021Officers (*)4143Liability in respect of business combinations (**)739Other related parties (***)(95)Directors152069863(*)The amount includes the net salaries payables.(**)The amount includes the provision created to former owners of Orgad that are entitled to additional cash and equity consideration and former owners of Naizthat entitled to additional cash consideration, see note 16 business combination.(***)The amount includes an amount receivable from Orgad previous shareholders who currently work in the company.B. Related parties benefits:Year endedDecember 31,20222021Salaries and related expenses1,440852Share based payments39673Cash liability and equity liability expenses related to acquisitions (**)1,058Directors58582,952983(**)The amount includes the expenses for a provision created to former owners of Orgad that are entitled to additional cash and equity consideration and formerowners of Naiz that entitled to additional cash consideration, see note 16 business combination.NOTE 11 FINANCIAL INSTRUMENTSThe following tables presents the Company’s significant assets and liabilities that are measured at fair value on recurring basis and their classificationwithin the fair value hierarchy:December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities47financial assets (*)10December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesDerivatives9December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities108December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesWarrants derivative2(*)the financial asset includes in other receivables.F19MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 11 FINANCIAL INSTRUMENTS (Cont.)The carrying amounts of cash and cash equivalents, restricted cash, short term restricted deposit, accounts receivable, other receivables and prepaidexpenses, trade payable and accounts payable approximate their fair value due to the shortterm maturities of such instruments.At December 31, 2022, the recognized gain and fair value (based on quoted market prices with a discount due to security restrictions on iMine shares)of the marketable securities were $59and $47, respectively (at December 31, 2021 $49and $108, respectively).NOTE 12 TAXES ON INCOMEa.On December 31, 2022, the Company had U.S. federal net operating loss carryforwards of approximately $26 available to reduce future taxableincome. Utilization of the U.S. net operating losses may be subject to substantial limitations due to the change of ownership provisions of theInternal Revenue Code of 1986.The U.S. Company has final tax assessments through 2014.On December 22, 2017, the Tax Reform Act was signed into law. The legislation significantly changes U.S. tax law by, among other things, lowering theU.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. As a result of the decrease in the corporate incometax rate, the Company revalued the ending net deferred tax assets at December 31, 2017, but did not recognize any incremental income tax expense in2017 due to the revaluation of the valuation allowance.b.Foreign tax:1.Tax rates:Presented hereunder are the tax rates relevant to the Company’s Israeli subsidiaries:2022 23%2021 23% Presented hereunder are the tax rates relevant to the Company’s Spanish subsidiary:2022 24%2.The Company’s Israeli subsidiaries have estimated total available carryforward operating tax losses for Israeli income tax purposes ofapproximately $64as of December 31, 2022. Of these losses, a total of $47.5are owned by Topspin Medical (Israel) Ltd. Topspin tax lossesmay be offset only by future income with respect to the same operational activity by which it was incurred for an indefinite period of time. Theother losses are owned by My Size Israel and may be carryforward to offset against future income for an indefinite period of time.3.Topspin Medical (Israel) Ltd. and My Size (Israel) 2014 Ltd. has final tax assessments through 2016.c.U.S. and foreign components of loss from continuing operations, before income taxes consisted of:December 31,20222021U.S(1,180)(3,802)NonU.S. (foreign)(7,130)(6,718)(8,310)(10,520)F20MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 12 TAXES ON INCOME (Cont.)d.Deferred taxes:Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reportingpurposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows:December 31,20222021Deferred tax assets:Operating loss carryforwards20,13120,238Warrants and options145126Marketable securities390377Intangible assets(328)Research and development expenses586341Other temporary differences203Deferred tax assets before valuation allowance21,12721,082Valuation allowance(21,455)(21,082)Net deferred tax liability(328)The following table presents a reconciliation of the beginning and ending valuation allowance:December 31,20222021Balance at beginning of the year21,08218,968Additions in valuation allowance to the income statement1,7581,625Additions in valuation allowance due to exchange rate differences(1,385)489Balance at end of the year21,45521,082In assessing the realization of deferred tax assets, management considers whether it is more likely than not that all or some portion of the deferred taxassets will not be realized.The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporarydifferences are deductible and net operating losses are utilized. Based on consideration of these factors, the Company recorded a full valuationallowance at December 31, 2021 and 2020.e.Theoretical taxThe following presents the adjustment between the theoretical tax amount and the tax amount included in the financial statements:December 31,20222021Loss before income taxes8,34610,520Statutory tax rate21%21%Computed “expected” tax income1,7522,209Foreign tax rate differences and exchange rate differences149131Nondeductible expenses(107)(715)Change in valuation allowance(1,758)(1,625)Taxes on income36F21MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITYa.Common stock confers upon their holders the right to receive notice to participate and vote in general meetings of the Company, and the right toreceive dividends if declared.b.On January 8, 2021, the Company conducted a public offering of its securities pursuant to which it issued 62,768 shares of its common stock forgross proceeds of $2,008. The net proceeds to the Company from the offering were approximately $1,700, after deducting placement agent’s feesand other estimated offering expenses payable by the Company.c.During 2021, a holders of warrants exercised warrants to purchase 135,109 ordinary shares of the Company in exchange for $3,709.d.On March 25, 2021, the Company conducted a public offering of its shares of common stock pursuant to which it issued 104,741 shares of itscommon stock for gross proceeds of $3,300. The net proceeds to the Company from the offering were approximately $2,872, after deductingplacement agent’s fees and other estimated offering expenses payable by the Company.On May 7, 2021, the Company issued an additional 15,711 shares of the Company’s common stock in connection with the full exercise of theunderwriter’s overallotment option granted in the Company’s March 2021 public offering. These additional shares were sold to the underwriter at apublic offering price of $31.5 per share, resulting in additional net proceeds to the Company, net of the underwriting discount, of approximately$463.e.On May 26, 2021, the Company issued 100,000 shares of common stock to Ms. Zigdon in consideration of the Waiver. See note 1(b) above.f.On October 28, 2021, the Company sold in a registered direct offering 100,592 shares of its common stock and, in a concurrent private placement,an aggregate of 75,444 unregistered warrants to purchase shares of common stock, at an offering price of $33.8 per share and associated warrant.In addition, on the same day, the Company sold in a private placement 150,888 unregistered shares of common stock and unregistered warrants topurchase up to an aggregate of 113,166 shares of common stock at the same purchase price as in the registered direct offering. The warrants areimmediately exercisable and will expire five years from issuance at an exercise price of $31.5 per share, subject to adjustment as set forth therein.The gross proceeds from the offerings were $8,500. The net proceeds to the Company from the offerings were approximately $7,560, afterdeducting placement agent’s fees and other estimated offering expenses payable by the Company. In connection with the offerings, the Companyissued to the placement agent warrants to purchase 17,603 shares on substantially the same terms as the purchasers in the offerings at an exerciseprice of $42.25 per share and a term expiring on October 26, 2026.g.On December 7, 2022, the Company’s board of directors approved a 1for25 reverse stock split of the Company’s issued and outstanding sharesof common stock. The reverse stock split became effective on December 8, 2022. In order not to have fractional shares as a result of the reversestock split, the Company issued an additional 12,091 shares of common stock. As a result, all shares of common stock, options for shares ofcommon stock, exercise price and net loss per share amounts were adjusted retroactively for all periods presented in these financial statements.F22MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITY (Cont.)g.A summary of the warrant activity during the years ended December 31, 2022 and 2021 is presented below:Number ofWarrantsWeightedAverageExercisePriceWeightedAverageRemainingLife inYearsOutstanding, December 31, 2020216,85936.754.26Issued206,214Expired or exercised(135,109)Outstanding, December 31, 2021287,96431.004.35IssuedExpired or exercised(17,901)Outstanding, December 31, 2022270,06330.213.36Exercisable, December 31, 2022270,06330.213.36NOTE 14 STOCK BASED COMPENSATIONThe stockbased expense recognized in the financial statements for services received is related to Research and Development, Sales and Marketingand General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense Research and development15195Stockbased compensation expense Sales and marketing126180Stockbased compensation expense General and administrative17898455373The stockbased expense recognized in the financial statements for services received post Acquisition of Orgad (see note 16) is related to Cost OfGoods, Sales and Marketing and General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense – Cost of goods80Stockbased compensation expense Sales and marketing112Stockbased compensation expense General and administrative127319F23MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Options issued to consultantsWe can sell additional shares of common stock without consulting stockholders and without offering shares to existing stockholders, which wouldresult in dilution of shareholders’ interests in the company and could depress our stock price.Our Certificate of Incorporation currently authorizes 250,000,000 shares of common stock, of which 2,446,780 are currently outstanding as of March 31, 2023and our board of directors is authorized to issue additional shares of our common stock. Although our board of directors intends to utilize its reasonable businessjudgment to fulfil its fiduciary obligations to our then existing stockholders in connection with any future issuance of our capital stock, the future issuance ofadditional shares of our capital stock could cause immediate, and potentially substantial, dilution to our existing stockholders, which could also have a materialeffect on the market value of the shares. Further, other than certain participation rights that we have granted in a past offering, our shares do not have preemptiverights, which means we can sell shares of our capital stock to other persons without offering purchasers in this offering the right to purchase their proportionateshare of such offered shares. Therefore, any additional sales of stock by us could dilute your ownership interest in our Company.Our quarterly operating results may fluctuate significantly.We expect our operating results to be subject to quarterly fluctuations. Our net loss and other operating results will be affected by numerous factors,including:●variations in the level of expenses related to our research and development;●any lawsuits in which we may become involved;●regulatory developments affecting our products; and●our execution of any collaborative, licensing or sales agreements, and the timing of payments under these arrangements.If our quarterly operating results fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially.Furthermore, any quarterly fluctuations in our operating results may, in turn, cause the price of our common stock to fluctuate substantially.If we fail to comply with the rules under the Sarbanes Oxley Act of 2002 related to accounting controls and procedures or if we discover materialweaknesses and deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult.If we fail to comply with the rules under the SarbanesOxley Act of 2002 related to disclosure controls and procedures, or, if we discover materialweaknesses and other deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult. Section 404 of the SarbanesOxley Act requires annual management assessments of the effectiveness of our internal control over financial reporting and, ifwe are no longer a nonaccelerated filer, a report by our independent auditors addressing these assessments. If material weaknesses or significant deficiencies arediscovered or if we otherwise fail to achieve and maintain the adequacy of our internal control, we may not be able to ensure that we can conclude on an ongoingbasis that we have effective internal controls over financial reporting in accordance with Section 404 of the SarbanesOxley Act. Moreover, effective internalcontrols are necessary for us to produce reliable financial reports and are important to helping prevent financial fraud. If we cannot provide reliable financial reportsor prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price ofour common stock could drop significantly.38Our Certificate of Incorporation, Bylaws and Delaware law may have antitakeover effects that could discourage, delay or prevent a change incontrol, which may cause our stock price to decline.Our Certificate of Incorporation, Bylaws and Delaware law could make it more difficult for a thirdparty to acquire us, even if closing such a transactionwould be beneficial to our stockholders. Provisions of our Certificate of Incorporation, Bylaws and Delaware law also could have the effect of discouraging potentialacquisition proposals or making a tender offer or delaying or preventing a change in control, including changes a stockholder might consider favorable. Suchprovisions may also prevent or frustrate attempts by our stockholders to replace or remove our management. In particular, the Certificate of Incorporation, Bylawsand Delaware law, as applicable, among other things:●provide the board of directors with the ability to alter the Bylaws without stockholder approval;●the classification of our board of directors;●place limitations on the removal of directors;●provide that vacancies on the Board of Directors may be filled by a majority of directors in office, although less than a quorum;●require that stockholder actions must be affected at a duly called stockholder meeting and generally prohibiting stockholder actions by written consent;●eliminate the ability of stockholders to call a special meeting of stockholders; and●establish advance notice requirements for nominations for election to the Board of Directors or for proposing matters that can be acted upon at duly calledstockholder meetings.We are subject to Section 203 of the Delaware General Corporation Law which, subject to certain exceptions, prohibits “business combinations” between apubliclyheld Delaware corporation and an “interested stockholder,” which is generally defined as a stockholder who becomes a beneficial owner of 15% or more ofa Delaware corporation’s voting stock for a threeyear period following the date that such stockholder became an interested stockholder. These provisions areexpected to discourage certain types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to firstnegotiate with our board. These provisions may delay or prevent someone from acquiring or merging with us, which may cause the market price of our commonstock and the value of our securities to decline.If we fail to comply with the continued listing requirements of the Nasdaq Capital Market, our common stock may be delisted and the price of ourcommon stock and our ability to access the capital markets could be negatively impacted.Nasdaq has established certain standards for the continued listing of a security on the Nasdaq Capital Market. The standards for continued listing include,among other things, that the minimum bid price for the listed securities not fall below $1.00 per share for a period of 30 consecutive trading days and that wemaintain a minimum of $2,500,000 in shareholders’ equity. We have in the past fallen below the minimum bid price and minimum shareholders’ equity.39No assurance can be given that we will continue to be in compliance with the Rule. Failure to meet applicable Nasdaq continued listing standards couldresult in a delisting of our common stock. A delisting of our common stock from Nasdaq could materially reduce the liquidity of our common stock and result in acorresponding material reduction in the price of our common stock. In addition, delisting could harm our ability to raise capital through alternative financing sourceson terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, employees and fewer business development opportunities.The exercise of outstanding warrants and stock options will have a dilutive effect on the percentage ownership of our capital stock by existingstockholders.As of March 15, 2023, we had outstanding warrants to acquire 2,299,115 shares of our common stock and stock options to purchase 1,659 shares of ourcommon stock, which warrants and options are exercisable for prices ranging between $2.81 and $375. The expiration of the term of such options and warrants rangefrom 0.22 years to 4.83 years. If a significant number of such warrants and stock options are exercised by the holders, the percentage of our common stock ownedby our existing stockholders will be diluted.Were our common stock to become subject to the penny stock rules then this could result in U.S. brokerdealers becoming discouraged from effectingtransactions in shares of our common stock.Rule 15g9 under the Exchange Act establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a marketprice of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. If we do not retain a listing on the NasdaqCapital Market or do not meet certain net tangible asset or average revenue requirements and if the price of our common stock is less than $5.00, our common stockwill be deemed a penny stock. For any transaction involving a penny stock, unless exempt, the rules require: (a) that a broker or dealer approve a person’s accountfor transactions in penny stocks; and (b) the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantityof the penny stock to be purchased.In order to approve a person’s account for transactions in penny stocks, the broker or dealer must: (a) obtain financial information and investmentexperience objectives of the person and (b) make a reasonable determination that the transactions in penny stocks are suitable for that person and the person hassufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver,prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which: (a) sets forth the basis on whichthe broker or dealer made the suitability determination; and (b) confirms that the broker or dealer received a signed, written agreement from the investor prior to thetransaction. Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult forinvestors to dispose of our common stock and cause a decline in the market value of our common stock.Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissionspayable to both the broker or dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor incases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the accountand information on the limited market in penny stocks.Sales of our currently issued and outstanding stock may become freely tradable pursuant to Rule 144 and may dilute the market for your shares andhave a depressive effect on the price of the shares of our common stock.A portion of our outstanding shares of common stock are “restricted securities” within the meaning of Rule 144 under the Securities Act of 1933, asamended, or the Securities Act. As restricted shares, these shares may be resold only pursuant to an effective registration statement or under the requirements ofRule 144 or other applicable exemptions from registration under the Securities Act and as required under applicable state securities laws. Rule 144 provides inessence that an affiliate (as such term is defined in Rule 144(a)(1)) of an issuer who has held restricted securities for a period of at least six months (one year afterfiling Form 10 information with the SEC for shell companies and former shell companies) may, under certain conditions, sell every three months, in brokeragetransactions, a number of shares that does not exceed the greater of 1% of a company’s outstanding shares of common stock or the average weekly trading volumeduring the four calendar weeks prior to the sale (the four calendar week rule does not apply to companies quoted on the OTC Markets). Rule 144 also permits, undercertain circumstances, the sale of securities, without any limitation, by a person who is not an Affiliate of the Company and who has satisfied a oneyear holdingperiod. A sale under Rule 144 or under any other exemption from the Securities Act, if available, or pursuant to subsequent registrations of our shares of commonstock, may have a depressive effect upon the price of our shares of common stock in any active market that may develop.40We are a former “shell company” and as such are subject to certain limitations not applicable to other public companies generally.Prior to our suspension of reporting in 2012, we were a public reporting “shell company,” as defined in Rule 12b2 under the Exchange Act. Although weare no longer a “shell company,” we are subject to certain restrictions under the Securities Act for the resale of securities issued by issuers that have been at anytime previously a shell company. Specifically, the Rule 144 safe harbor available for the resale of our restricted securities is only available to our stockholders if wehave filed all reports and other materials required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934, as amended, or the Exchange Act, asapplicable, during the preceding twelve months, other than current reports on Form 8K, at the time of the proposed sale, regardless of whether the restrictedsecurities were initially issued at the time we were a shell company or subsequent to termination of such status. Accordingly, holders of our “restricted securities”within the meaning of Rule 144 will be subject to the conditions set forth in Rule 144 with respect to our company. Other reporting companies that are not formershell companies and have been reporting for more than twelve months are not subject to this same reporting threshold for nonaffiliate reliance on Rule 144.Accordingly, any restricted securities we have sold or sell in the future or issue to consultants or employees, in consideration for services rendered or for any otherpurpose, may not be resold unless such securities are registered with the SEC or the requirements of Rule 144 have been satisfied. As a result, it may be harder forus to fund our operations and pay our employees and consultants with our securities instead of cash. Furthermore, it may be harder for us to raise funding throughthe sale of debt or equity securities unless we agree to register such securities with the SEC, which could cause us to expend additional resources in the future. Ourprior status as a “shell company” could prevent us in the future from raising additional funds, engaging employees and consultants, and using our securities to payfor any acquisitions, which could cause the value of our securities, if any, to decline in value or become worthless.ITEM 1B. UNRESOLVED STAFF COMMENTSNone.ITEM 2. PROPERTIESWe currently lease 1,660 square feet of office space at 4 HaYarden Street, Airport City, Israel. The lease term is for 36 months beginning on August 20, 2019and ending on August 20, 2022, with an option to extend for an additional 36 months. Monthly rent payments, including utilities, amount to approximately $14,000per month. We extended the lease period until August 20, 2025.ITEM 3. LEGAL PROCEEDINGSFrom time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation issubject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.41North Empire LLCOn August 7, 2018, we commenced an action against North Empire LLC, or North Empire, in the Supreme Court of the State of New York, County of NewYork for breach of a Securities Purchase Agreement or Agreement in which we are seeking damages in an amount to be determined at trial, but in no event less than$616,000. On August 2, 2018, North Empire filed a Summons with Notice against us, also in the same Court, in which they allege damages in an amount of $11.4million arising from an alleged breach of the Agreement. On September 6, 2018, North Empire filed a Notice of Discontinuance of the action it had filed on August 2,2018. On September 27, 2018, North Empire filed an answer and asserted counterclaims in the action commenced by us against them, alleging that we failed to deliverstock certificates to North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against our CEO andnow former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018, we filed a reply to North Empire’scounterclaims. On November 15, 2018, our CEO and now former Chairman of the Board filed a motion to dismiss North Empire’s thirdparty complaint. On January 6,2020, the Court granted the motion and dismissed the thirdparty complaint. Discovery has been completed and both parties have filed motions for summaryjudgment in connection with the claims and counterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summaryjudgment, arguing there were factual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision.On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying the Company’s motion for summary judgment. On or about September 12,2022, the Court issued its Decision and Order denying the Company’s motion to reargue. North Empire filed its opposing brief on December 7, 2022. Both sides weregiven an opportunity to file a reply brief. We filed our reply brief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. Oral argument was heldbefore the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Court filed its Decision and Order, which affirmed the lower court’sdecisions regarding both My Size and North Empire’s motions for summary judgment and sent the case back to the Supreme Court. On or about March 13, 2023, theSupreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date for the mediation has not yet been set. We intend tovigorously defend any claims made by North Empire. We believe it is more likely than not that the counterclaims will be denied.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.42PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur stock currently is listed on the Tel Aviv Stock Exchange and the Nasdaq Capital Market under the symbol “MYSZ”. Our stock has been traded on theNasdaq Capital Market since July 25, 2016.HoldersAs of March 31, 2023, we had 70 shareholders of record. The actual number of stockholders is greater than this number of record holders and includesstockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our Board of Directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our Board of Directors deems relevant.Securities Authorized for Issuance under Equity Compensation PlansInformation about our equity compensation plans is incorporated herein by reference to “Item 12. Security Ownership of Certain Beneficial Owners andManagement and Related Stockholder Matters”, of this Annual Report on Form 10K.Recent Sales of Unregistered SecuritiesNone.ITEM 6. SELECTED FINANCIAL DATAAs a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULT OF OPERATIONSYou should read the following discussion along with our financial statements and the related notes included elsewhere in this Annual Report on Form10K. The following discussion contains forwardlooking statements that are subject to risks, uncertainties and assumptions, including those discussed under“Risk Factors.” Our actual results, performance and achievements may differ materially from those expressed in, or implied by, these forwardlooking statements.OverviewMySize is an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.43Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile device or through MySizeID Widget: a simple questionnaire which was uses a database collected over the years.MySizeID synchronizes the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and onlypresents items available for purchase that match their measurements to ensure a correct fit.MySize is positioning itself as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empowering brand design teams, which are designed to increaseend consumer satisfaction, contributing to a sustainable world and reduce operation costs.Orgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,682 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz BespokeTechnologies, S.L., or Naiz, a limited liability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.44The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 2,365,800 shares of My Size common stock were issuedto Whitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.45Operations in RussiaIn addition to our Israel operations, we had operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia. To date, mainly due to the invasion of Ukraine by Russia and the ongoing sanctions we stopped most ofour efforts in Russia and will probably close the subsidiary in the near future.Results of OperationsThe table below provides our results of operations for the periods indicated.Year ended December 3120222021(dollars in thousands)Revenues4,459131Cost of revenues(3,825)Gross profit634131Research and development expenses$(1,701)$(4,248)Sales and marketing(3,143)(2,336)General and administrative(3,900)(4,124)Operating loss(8,110)(10,577)Financial income (expenses), net(236)57Tax income36Net loss$(8,310)$(10,520)Year Ended December 31, 2022 Compared to Year Ended December 31, 2021RevenuesFrom inception through December 31, 2018, we did not generate any revenue from operations and we continue to expect to incur additional losses toperform further research and development activities. We started to generate revenues only in 2019. Our revenues for the year ended December 31, 2022 amounted to$4,459,000 compared to $131,000 for year ended December 31, 2021. The increase from the corresponding period primarily attributable to $4,132,000 in revenuegenerated from Orgad from February 7, 2022, the date of closing of the Orgad acquisition, or the Acquisition Date and revenue generated from the Naiz Acquisitionfrom October 11, 2022, the date of closing of the Naiz acquisition.In addition, the increase from the corresponding period results from an increase in revenues generated by My Size.Cost Of RevenuesOur cost of revenues expenses for the year ended December 31, 2022 amounted to $3,825,000, compared to none for the year ended December 31, 2021. Thecost of revenues includes cash and equity liabilities expenses in the amount of $194,000. The increase in comparison with the corresponding period was due to thecost of goods of the revenues generated from Orgad’s operations.Research and Development ExpensesOur research and development expenses for the year ended December 31, 2022 amounted to $1,701,000 a decrease of $2,547,000, or approximately 60.0%,compared to $4,248,000 for the year ended December 31, 2021. The decrease from the corresponding period primarily resulted from share based payment in amount of$2,618,000 attributed to the share issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021.Sales and Marketing ExpensesOur sales and marketing expenses for the year ended December 31, 2022 amounted to $3,143,000 an increase of $807,000, or 34.55%, compared to $2,336,000for the year ended December 31, 2021. The increase primarily resulted from an increase in employees expenses mainly due to Orgad and Naiz acquisitions, increase inAmazon fees, increase in cash and equity liabilities expenses attributed to the Orgad acquisition and an increase in share based payments offset by a decrease inpayments to consultants.46General and Administrative ExpensesOur general and administrative expenses for the year ended December 31, 2022 amounted to $3,900,000, a decrease of $224,000, or 5.43%, compared to$4,124,000 for the year ended December 31, 2021. The decrease compared to the corresponding period was mainly due to a decrease in professional expenses, mainlyattributed to shareholder activism including settlement expenses with the Lazar Parties offset by an increase in sharedbased payments and an increase in employeesexpenses mainly due to the Orgad and Naiz acquisitions.Operating LossAs a result of the foregoing, for the year ended December 31, 2022, our operating loss was $8,110,000, a decrease of $2,467,000 or 23.32%, compared to ouroperating loss for the year ended December 31, 2021 of $10,577,000.Financial Income, NetOur financial (expense) income, net for the year ended December 31, 2022 amounted to $236,000 compared to financial income, $57,000 for the year endedDecember 31, 2021. In 2022, we had financial expenses exchange rate differences offset by an income from fair value revaluation of investment in marketablesecurities whereas in 2021 we had financial income from the fair value revaluation of warrants offset by expenses from exchange rate differences and expenses fromfair value revaluation of investment in marketable securities.Net LossAs a result of the foregoing, our net loss for the year ended December 31, 2022 was $8,310,000 compared to net loss of $10,520,000 for the year endedDecember 31, 2021. The decrease in net loss was mainly due increase in sales and marketing expenses and financial expenses as opposed to financial income in thecorresponding period offset by a decrease in research and development expenses in amount of $2,618,000 attributed to the share issuance to Shoshana Zigdonunder the Amendment to Purchase Agreement dated May 26, 2021.Liquidity and Capital ResourcesSince our inception, we have funded our operations primarily through public and private offerings of debt and equity in Israel and in the U.S.As of December 31, 2022, we had cash, cash equivalents and restricted cash of $2,363,000 compared to $10,943,000 cash, cash equivalents, restricted cashas of December 31, 2021. During January 2023, we completed a registered direct and concurrent private placement offering resulting in gross proceeds ofapproximately $3 million. This decrease primarily resulted from our operating activities, the acquisition of Orgad and Naiz Fit, and resources that were deployed togrow of both businesses.Net cash used in operating activities was $7,290,000 for the year ended December 31, 2022 compared to $7,297,000 for the year ended December 31, 2021.The decrease in cash used in operating activity is derived mainly from an increase in share based payments and increase in account receivables mainly from theOrgad and Naiz fit acquisitions offset by a decrease in the net loss.Net cash used in investing activities for the year ended December 31, 2022 was $993,000 as opposed to net cash provided by investing activities of$161,000 for the year ended December 31, 2021. The net cash used in investing activities for the year ended December 31, 2022 was mainly from the acquisition ofOrgad and Naiz as opposed to proceeds from shortterm deposits and restricted deposits during the year ended December 31, 2021.We had a negative cash flow from financing activities of $67,000 for the year ended December 31, 2022 compared to positive cash flow of $16,292,000 for theyear ended December 31, 2021. The negative cash flow from financing activities for the year ended December 31, 2022 was mainly due to repayment of loans andinterest and payments for leases as opposed to proceeds from issuance of shares and from exercise of warrants for the year ended December 31, 2021.47We expect that we will continue to generate losses and negative cash flows from operations for the foreseeable future. Based on the projected cash flowsand cash balances as of December 31, 2022, together with the proceeds from the January 2023 financing, we believe our existing cash will not be sufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. We will need to raiseadditional capital, which may not be available on reasonable terms or at all. Additional capital would be used to accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;●respond to competitive pressures;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, the Russian invasion ofUkraine, the impact of any resurgence of the COVID19 pandemic and a number of other factors, many of which are outside our control, and on our financialperformance. Accordingly, we cannot assure you that we will be able to successfully raise additional capital at all or on terms that are acceptable to us. If we cannotraise additional capital when needed, it may have a material adverse effect on our business, results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.We have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.Recently Issued Accounting PronouncementsCertain recently issued accounting pronouncements are discussed in Note 2, Significant Accounting Policies, to the consolidated financial statementsincluded in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10K.OffBalance Sheet ArrangementsWe have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.48Application of Critical Accounting Policies and EstimatesOur management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we haveprepared in accordance with U.S. generally accepted accounting principles issued by the Financial Accounting Standards Board, or FASB. The preparation of thesefinancial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assetsand liabilities at the date of the financial statements, as well as the reported expenses during the reporting periods. Actual results may differ from these estimatesunder different assumptions or conditions.Our significant accounting policies were revenue from contracts with customers which are more fully described in the notes to our financial statementsincluded herein. We believe these accounting policies discussed below are critical to our financial results and to the understanding of our past and futureperformance, as these policies relate to the more significant areas involving management’s estimates and assumptions. We consider an accounting estimate to becritical if: (1) it requires us to make assumptions because information was not available at the time or it included matters that were highly uncertain at the time wewere making our estimate; and (2) changes in the estimate could have a material impact on our financial condition or results of operations.Accounting for business combinationsWe allocate the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed, based upon their estimated fairvalues at the acquisition date. These fair values are typically estimated with assistance from independent valuation specialists.The purchase price allocation process requires us to make significant estimates and assumptions, especially at the acquisition date with respect tointangible assets, contractual support obligations assumed, contingent consideration arrangements, and preacquisition contingencies.Although we believe the assumptions and estimates we have made in the past have been reasonable and appropriate, they are based in part on historicalexperience and information obtained from the management of the acquired companies and are inherently uncertain.Examples of critical estimates in valuing certain of the intangible assets we have acquired or may acquire in the future include but are not limited to:● future expected cash flows from product sales or other customer contracts;● expected costs of fulfillment including marketing, warehousing and product sales;● the acquired company’s brand and competitive position, as well as assumptions about the period of time the acquired brand will continue to be used inthe combined company’s product portfolio;● cost of capital and discount rates; and● estimating the useful lives of acquired assets as well as the pattern or manner in which the assets will amortize.Refer to Note 16, Business Combination, to the consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” of thisAnnual Report on Form 10K.49Revenue from contracts with customersOur revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled software subscriptions, associatedsoftware maintenance and support.We recognize revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with a customer exists onlywhen: the parties to the contract have approved it and are committed to perform their respective obligations, we can identify each party’s rights regarding thedistinct goods or services to be transferred (“performance obligations”), we can determine the transaction price for the goods or services to be transferred, thecontract has commercial substance and it is probable that we will collect the consideration to which we will be entitled in exchange for the goods or services that willbe transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to a customer.Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted to governmental authorities. Refundsare estimated at contract inception and updated at the end of each reporting period if additional information becomes available. Revenue is recognized when controlof the product is transferred to the customer.We maintain a returns policy that allows our customers to return product within a specified period of time. The estimate of the provision for returns is basedupon historical experience with actual returns.Principal versus Agent ConsiderationsWe follow the guidance provided in ASC 606 for determining whether we are a principal or an agent in arrangements with customers, by assessing whetherthe nature of our promise is a performance obligation to provide the specified goods (principal) or to arrange for those goods to be provided by the other party(agent). With regard to products being sold by Orgad through Amazon, this determination involves judgment. We determine it is the principle when it has controlover the promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).We recognize revenue ratably over the contractual service term for hosted services that are priced based on a committed number of transactions where thedelivery and consumption of the benefit of the services occur evenly over time, beginning on the date the services associated with the committed transactions arefirst made available to the customer and continuing through the end of the contractual service term. Over usage fees and fees based on the actual number oftransactions are billed in accordance with contract terms as these fees are incurred and are included in the transaction price of an arrangement as variableconsideration. Fees based on a number of transactions or impressions per month, are allocated to the period in which the transactions occur. Revenue forsubscriptions sold as a fee per period is recognized ratably over the contractual term as the customer simultaneously receives and consumes the benefit of theunderlying service.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.As a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.50ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAMY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2022U.S. DOLLARS IN THOUSANDSINDEXPageReport of Independent Registered Public Accounting Firm (PCAOB ID: ID 1057)F2Consolidated Balance SheetsF4Consolidated Statements of Comprehensive LossF5Consolidated Statements of Shareholders’ EquityF6Consolidated Statements of Cash FlowsF7Notes to Consolidated Financial StatementsF8 F33F1Report of Independent Registered Public Accounting FirmTo the Shareholders and Board of DirectorsMy Size, Inc.:Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of My Size, Inc. and subsidiaries (the Company) as of December 31, 2022 and 2021, the relatedconsolidated statements of comprehensive loss, shareholders’ equity, and cash flows for each of the years in the twoyear period ended December 31, 2022, and therelated notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, thefinancial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the twoyear periodended December 31, 2022, in conformity with U.S. generally accepted accounting principles.Going ConcernThe accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1d tothe consolidated financial statements, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit thatraises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1d. Theconsolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidatedfinancial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Critical Audit MattersCritical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to becommunicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved ourespecially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidatedfinancial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters oron the accounts or disclosures to which they relate.Acquisitiondate fair value of customer relationshipsAs discussed in Note 16 to the consolidated financial statements, on October 11, 2022, the Company acquired Naiz Bespoke Technologies SL (“Naiz”). As a result ofthe transaction, the Company acquired customer relationships intangible assets (“customer relationships”) representing the generation of future income from Naiz’sexisting customers. The acquisition date fair value of the customer relationships was $726 thousand.F2We identified the evaluation of the acquisitiondate fair value of the Naiz customer relationships as a critical audit matter. A high degree of subjective auditorjudgment was required to evaluate the following internally developed assumptions used to estimate the fair value of such asset, for which there were limitedobservable inputs: (i) forecasted revenues attributable to existing customers, (ii) forecasted earnings before interest, taxes, depreciation, and amortization(“EBITDA”) margins for the acquired business, (iii) estimated annual customer attrition rates and (iv) estimated discount rate. The determined fair value wassensitive to changes in these key assumptions. Additionally, specialized skills and knowledge were needed to evaluate the discount rate used.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s acquisitiondate fair value estimation process, including controls over the development of key assumptions. We performed a sensitivity analysis toassess the impact of reasonably possible changes to forecasted revenues, EBITDA margins, annual customer attrition rates, and the discount rate. We evaluated theforecasted revenue growth rates from existing customers by comparing the growth assumptions to those of the Company’s peers and industry reports. Inconnection with our assessment of the forecasts used in the valuation, we compared (1) forecasted revenue and EBITDA to Naiz’s historical actual results and (2)estimated annual customer attrition rates to historical Naiz customer attrition data. We tested the Company’s determined weighted average cost of capital(“WACC”), which was used to determine the discount rate, by involving valuation professionals with specialized skills and knowledge, who assisted in:Evaluating the selected discount rate by comparing it against a discount rate range that was independently developed using publicly available market datafor comparable companies, and;Assessing the Company’s WACC calculation, by comparing it against an independently estimated WACC range based on inputs obtained throughpublished surveys and studies.Goodwill impairment assessmentAs discussed in Note 16 to the consolidated financial statements, during 2022 the Company recorded goodwill of $1,257 thousand related to the acquisition of NaizBespoke Technologies, S.L. (“Naiz”). The Company performed an annual quantitative impairment test of goodwill at the reporting unit level. Based on this analysis,the Company determined that the fair value of its reporting unit exceeded its carrying value and no impairment charge was required.We identified the evaluation of the goodwill impairment assessment for the Naiz reporting unit as a critical audit matter. A high degree of subjective auditor judgmentwas required to evaluate the following assumptions used to estimate the fair value of the Company’s reporting unit, for which there were limited observable inputs:(i) forecasted reporting unit cash flows, (ii) longterm growth rates, and (iii) discount rates. The fair value was sensitive to changes in these key assumptions.Additionally, specialized skills and knowledge were needed to evaluate the discount rates.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s goodwill impairment evaluation process. We performed sensitivity analyses to assess the impact of reasonably possible changes to forecasted cashflows, longterm growth rates, and discount rates. We evaluated the Company’s forecasted growth rates by comparing the growth assumptions to those of theCompany’s peers and industry reports. We compared the Company’s forecasted revenue, cost of sales, and operating expense margins to historical actual results toassess the reasonableness of the forecasts. In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:– Assessing the Company’s WACC calculation, by comparing it against an estimated WACC range based on inputs obtained through published surveys andstudies– Evaluating the discount rates used by the Company by comparing them against discount rate ranges that were developed using publicly available market data forcomparable companies, and;– Performing an arithmetic recalculation regarding the fair value of the Company’s reporting unit, using the Company’s cash flow forecasts and the independentlydeveloped discount rates, and comparing the results to the Company’s fair value estimates./s/ Somekh ChaikinSomekh ChaikinMember Firm of KPMG InternationalWe have served as the Company’s auditor since 2017.Tel Aviv, IsraelApril 14, 2023F3MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED BALANCE SHEETSU.S. dollars in thousands (except share data)December 31,Note20222021AssetsCurrent assetsCash and cash equivalents32,10010,670Restricted cash263273Inventory997Account receivables1,94040Other receivables and prepaid expenses4758579Total current assets6,05811,562Long term deposits28Property and equipment, net5140112Operating rightofuse asset6583776Intangible assets71,377Goodwill71,395Investment in JV899Investment in marketable securities11471083,669996Total assets9,72712,558Liabilities and shareholders’ equityCurrent liabilitiesOperating lease liability6159138Shortterm loans9155Trade payables2,487635Liabilities to Related parties69863Other payables680392Total current liabilities4,1791,228Longterm loans9376Deferred tax liabilities328Operating lease liability6308473Total noncurrent liabilities1,012473CONTINGENCIES AND COMMITMENTS15Total Liabilities5,1911,701Shareholders’ equity13Stock capital Common stock of $0.001par value Authorized: 250,000,000and 100,000,000shares as of December 31,2022 and 2021; Issued and outstanding: 1,464,117and959,297 as of December 31,2022 and 2021, respectively (*)11Additional paidin capital58,67356,453Accumulated other comprehensive loss(637)(406)Accumulated deficit(53,501)(45,191)Total shareholders’ equity4,53610,857Total liabilities and shareholders’ equity9,72712,558(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F4MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSSU.S. dollars in thousands (except share data and per share data)Year endedDecember 31,Note20222021Revenues4,459131Cost of revenues(3,825)Gross profit634131Operating expensesResearch and development(1,701)(4,248)Sales and marketing18(3,143)(2,336)General and administrative19(3,900)(4,124)Total operating expenses(8,744)(10,708)Operating loss(8,110)(10,577)Financial income (expense), net20(236)57Loss before taxes(8,346)(10,520)Taxes on income36Net loss for the year(8,310)(10,520)Other comprehensive income (loss):Foreign currency translation differences(231)18Total comprehensive loss(8,541)(10,502)Basic and diluted loss per share (*)(7.47)(17.75)Basic and diluted weighted average number of shares outstanding (*)1,111,913420,385(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F5MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITYU.S. dollars in thousands (except share data)Common stockAdditionalpaidinAccumulatedothercomprehensiveAccumulatedTotalstockholders’NumberAmountcapitallossDeficitequityBalance as of January 1, 2021289,314(*)37,171(424)(34,671)2,076Stockbased compensation related to optionsgranted to employees and consultants373373Exercise of options granted to employees178(*)Restricted shares issued to shareholder (***)100,000(*)2,6182,618Issuance of shares, net of issuance cost of$1,160434,700112,58212,583Exercise of warrants135,108(*)3,7093,709Total comprehensive income (loss)18(10,520)(10,502)Balance as of December 31, 2021959,300156,453(406)(45,191)10,857Stockbased compensation related to optionsand restricted shares granted to employeesand consultants176,000(*)455455Issuance of shares in Business Combination(**)295,802(*)1,4461,446Issuance of shares post BusinessCombination (**)20,924(*)319319Effect of reverse stock split (Note 13 g)12,091(*)Total comprehensive income (loss)(231)(8,310)(8,541)Balance as of December 31, 20221,464,117158,673(637)(53,501)4,536(*)Represents an amount of less than $1.(**)See note 16(***)See note 1 bThe accompanying notes are an integral part of the consolidated financial statements.F6MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSU.S. dollars in thousandsYear endedDecember 31,20222021Cash flows from operating activities:Net loss(8,310)(10,520)Adjustments to reconcile net loss to net cash used in operating activities:Depreciation3842Change in operating lease rightofuse asset13543Amortization of intangible assets155foreign exchange differences(23)1Change in liabilities to related parties635Interest on long term liabilities10Interest paid(10)Revaluation of investment in marketable securities62(49)Restricted Shares issued to shareholder2,618Stock based compensation455373Issuance of shares post Business Combination319Change in inventory(219)Change in deferred tax liabilities(36)Change in account receivable(1,863)(12)Changes in operating lease liabilities(142)Change in other receivables and prepaid expenses184(99)Change in trade payables1,315253Change in other payables553Net cash used in operating activities(7,290)(7,297)Cash flows from investing activities:Acquisition of a subsidiary, net of cash acquired(767)Proceeds from restricted deposits, net184investing in other receivable(100)Investment in equity accounted investee(99)Purchase of property and equipment(27)(23)Net cash (used in) provided by investing activities(993)161Cash flows from financing activities:Proceeds from issuance of shares, net of issuance costs12,583Repayment of loans(67)Proceeds from exercise of warrants3,709Net cash (used in) provided by financing activities(67)16,292Effect of exchange rate fluctuations on cash and cash equivalents(230)13Change in cash and cash equivalents and restricted cash(8,580)9,169Cash and cash equivalents and restricted cash at the beginning of the year10,9431,774Cash and cash equivalents and restricted cash at the end of the year2,36310,943B) Aggregate cash flows derived for the Company as a result of the Orgad acquisition (note 16)2022Trade and other receivables364Inventory864Fixed assets55Longterm deposits31Selling Platform378Goodwill152Shortterm credit(181)Trade payables(580)Other payables(88)Longterm loan(138)Longterm provision(13)Deferred Tax Liability(87)Issuance of shares(457)Total acquisition of subsidiary, net of cash300C) Aggregate cash flows derived for the Company as a result of the Naiz acquisition (note 16)2022Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Issuance of shares(1,008)Total acquisition of subsidiary, net of cash467The accompanying notes are an integral part of the consolidated financial statements.F7MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERALa.My Size, Inc. is developing unique measurement technologies based on algorithms with applications in a variety of areas, from the apparel ecommerce market, to the courier services market and to the Do It Yourself (“DIY”) smartphone and tablet apps market. The technology is driven byproprietary algorithms, which are able to calculate and record measurements in a variety of novel ways.Following the acquisition of Naiz Bespoke Technologies, S.L (“Naiz”) in October 2022 (see note 16), the Company expanded its offering outreachand customer base.Following the acquisition of Orgad International Marketing Ltd. (“Orgad”) in February 2022 (see note 16), the Company also operates anomnichannel ecommerce platform.The Company has five subsidiaries, My Size Israel 2014 Ltd (“My Size Israel”), Topspin Medical (Israel) Ltd., and Orgad all of which areincorporated in Israel, and My Size LLC which was incorporated in the Russian Federation and Naiz Bespoke Technologies, S.L., a limited liabilitycompany incorporated under the laws of Spain (see note 16). References to the Company include the subsidiaries unless the context indicatesotherwise.My Size, Inc., was incorporated and commenced operations in September 1999, as Topspin Medical Inc. (“Topspin”), a private company registeredin the State of Delaware. In December 2013, the Company changed its name to Knowledgetree Ventures Inc. Subsequently, in February 2014, theCompany changed its name to My Size, Inc. Topspin was engaged, through its Israeli subsidiary, in research and development in the field ofcardiology and urology.Since September 1, 2005, the Company has traded on the Tel Aviv Stock Exchange (“TASE”).Between 2007 and 2012 the Company reported as a public company with the U.S. Securities and Exchange Commission (the “SEC”). In August2012, the Company suspended its reporting obligations under Section 13(a) and 15(d) of the Securities Exchange Act of 1934. In mid2015, theCompany resumed reporting as a public company.b.On January 9, 2014, at the Company’s general meeting of shareholders, its shareholders approved an engagement with one of the Company’sinvestors (the “Seller”) for the purchase of rights in a Venture (the “Venture”), including the rights to the method and the certain patent applicationthat had been filed by the Seller (the “Assets”). The Venture relates to the development of technologies and applications which will assist theconsumer to take his or her body measurements accurately using a mobile device to ensure the purchase of clothing with the best possible fitwithout the need to try them on.In February 2014, the Company established a wholly owned subsidiary, My Size (Israel) 2014 Ltd., a company registered in Israel, which iscurrently engaged in the development of the Venture described above.In return for purchasing an interest in the Venture, the Company undertook to pay the Seller 18% of the Company’s operating profit, direct orindirect, connected to the Venture for a period of seven years starting from the end of the Venture’s development period.As part of the agreement, the Seller received an option to buy back the Assets for consideration which will reflect the market fair value at that time,on the occurrence of the following events: a) if a motion is filed to liquidate the Company; b) if seven years after signing the agreement, theCompany’s total accumulated revenues, direct or indirect, from the Venture or the commercialization of the patent will be lower than NIS 3.6 million.In such an event, Seller may repurchase the interest in the Venture at a market price to be determined by an independent third party valuationconsultant, who shall be chosen by agreement by the parties, and the audit committee shall conduct the negotiations on behalf of the Company todetermine the identity of the consultant.On May 26, 2021, the Company, My Size Israel and Shoshana Zigdon entered into an Amendment to Purchase Agreement (the “Amendment”)which made certain amendments to a Purchase Agreement between the parties dated February 16, 2014 (the “Purchase Agreement”). Pursuant tothe Amendment, Ms. Zigdon agreed to irrevocably waive the right to repurchase certain assets related to the collection of data for measurementpurposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which the Company’s business is substantiallydependent, and all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My Size Israel underthe Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation,reward or any rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights(the “Waiver”). In consideration of the Waiver, the Company issued 100,000 shares of common stock to Ms. Zigdon in a private placement.F8MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERAL (Cont.)c.On July 25, 2016, the Company’s common stock began publicly trading on the Nasdaq Capital Market under the symbol “MYSZ”. The Company’sshares of common stock are listed both on the Nasdaq Capital Market and TASE.d.Since inception, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit of $53,501.The Company has financed its operations mainly through fundraising from various investors.The Company’s management expects that the Company will continue to generate losses and negative cash flows from operations for theforeseeable future. Based on the projected cash flows and cash balances as of December 31, 2022, management is of the opinion that its existingcash will be sufficient to fund operations for a period less than 12 months. As a result, there is substantial doubt about the Company’s ability tocontinue as a going concern.Management’s plans include the continued commercialization of the Company’s products and securing sufficient financing through the sale ofadditional equity securities, debt or capital inflows from strategic partnerships. Additional funds may not be available when the Company needsthem, on terms that are acceptable to it, or at all. If the Company is unsuccessful in commercializing its products and securing sufficient financing,it may need to cease operations.The financial statements include no adjustments for measurement or presentation of assets and liabilities, which may be required should theCompany fail to operate as a going concern.e.The Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificial intelligencedriven measurement solutions (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions. The fashion and equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. The SaaS based innovativeartificial intelligence driven measurement solutions, or SaaS Solutions operating segment consists of My Size Inc My Size Israel and LLC.NOTE 2 SIGNIFICANT ACCOUNTING POLICIESThe consolidated financial statements are prepared according to United States generally accepted accounting principles (“U.S. GAAP”), applied on aconsistent basis, as followsa.Use of estimates:The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions thataffect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.Information about assumptions made by the Company with respect to the future and other reasons for uncertainty with respect to estimates thathave a significant risk of resulting in a material adjustment to carrying amounts of assets and liabilities in the next financial year are included in thefollowing notes:Acquisitions of subsidiariesThe Company measures the fair value of the consideration transferred (including contingent consideration) and fair value of the assets acquiredand liabilities assumed, in business combination transactions. For information on details on fair value measurement in acquisition of subsidiaries,see Note 16 regarding business combinations.Estimated impairment of nonfinancial assetsThe Company examines on an annual basis whether there is an impairment of goodwill, intangibles and property, plant and equipment that areallocated to cash generating units, in accordance with the accounting policy presented in Note 1(h) below. Recoverable amounts of cashgenerating units are determined on the basis of valueinuse calculations. These calculations require the use of estimates.For information on key assumptions used in calculation of the recoverable amount, see note 7 – Goodwill and other Intangible assets.b.Functional currency:The currency of the primary economic environment in which the operations of the Company is conducted is the United States Dollar and thus it isthe Company’s functional currency. The reporting currency according to which these financial statements are prepared is the U.S. dollar.The currency of the primary economic environment in which the operation of the Subsidiary, My Size Israel and Orgad International MarketingLtd. functional currency is the New Israeli Shekel (“NIS”).The currency of the primary economic environment in which the operation of the Subsidiary, My Size LLC, functional currency is Russian Ruble.The currency of the primary economic environment in which the operation of the Subsidiary, Naiz fit, functional currency is Euro.F9MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)c.Principles of consolidation:The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances andtransactions have been eliminated upon consolidation.d.Cash equivalents:Cash equivalents are shortterm highly liquid investments that are readily convertible to cash with original maturities of three months or less at thedate acquired.e.Restricted cashRestricted cash are deposits for rent, credit card and for hedging activities.f.Inventories:Inventories include finished goods and are measured at the lower of cost or net realizable value. The cost of inventories comprises of the costsincurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary courseof business. At the point of the loss recognition, a new, lowercost basis for that inventory is established, and subsequent changes in facts andcircumstances do not result in the restoration or increase in that newly established cost basis. The costs of purchase of inventories comprise thepurchase price and other costs directly attributable to the acquisition of finished goods. In 2022, the Company recorded an inventory markdownof $48.g.Property and equipment:Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straightline method over theestimated useful lives of the assets, at the following annual rates:%Computers and peripheral equipment33Office furniture and equipment720Leasehold improvementsOver the term of the leaseor the useful life of theimprovements, whicheveris shorterh.Impairment of longlived assets:The Company’s property and equipment are reviewed for impairment in accordance with ASC 360, “Property Plant and Equipment”, wheneverevents or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held andused is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by theassets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount ofthe assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less sellingcosts. During the periods ended December 31, 2022 and 2021, no impairment losses have been recorded.i.Business combinations:The Company applies the provisions of ASC 805, “Business Combination” and allocates the fair value of purchase consideration to the tangibleassets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchaseconsideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assetsacquired and liabilities assumed, the Company estimated the future expected cash flows from acquired platform, customer relationships,Technology and trademark from a market participant perspective, useful lives and discount rates. In addition, management makes significantestimates and assumptions, which are uncertain, but believed to be reasonable.Acquisitionrelated costs are recognized separately from the acquisition and are expensed as incurred.F10MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)j.Goodwill:Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a businesscombination. Under ASC 350, “Intangible Goodwill and Other”, goodwill is not amortized, but rather is subject to an annual impairment test.ASC 350 requires goodwill to be tested for impairment at the reporting unit level at least annually, the fourth quarter, or between annual tests incertain circumstances, and written down when impaired. Goodwill is tested for impairment by comparing the fair value of the reporting unit with itcarrying value. Goodwill from Orgad acquisition was allocated to the fashion and equipment ecommerce platform segment and Goodwill from theNaiz acquisition was allocated to Naiz segment based innovative artificial intelligence driven measurement solutions.Alternatively, ASC 350 permits an entity to bypass the qualitative assessment for any reporting unit and proceed directly to performing the firststep of the goodwill impairment test. There were no impairment charges to goodwill during the period presented.k.Intangible assets:Intangible assets consist of identifiable intangible assets that the Company has acquired from previous business combinations. Intangible assetsare recorded at costs, net of accumulated amortization. The Company amortizes its intangible assets reflecting the pattern in which the economicbenefits of the intangible assets are consumed. When a pattern cannot be reliably determined, the Company uses a straightline amortizationmethod. Amortization is calculated by the straightline method over the estimated useful lives of the following assets.The estimated useful lives of the company’s intangible assets are as follows:yearsCustomer Relationships7Technology5Trademark5Selling Platform3Each period the Company evaluates the estimated remaining useful lives of its intangible assets and whether events or changes in circumstanceswarrant a revision to the remaining period of amortizationl.Severance pay:The Subsidiary’s liability for severance pay is covered by Section 14 of the Israeli Severance Pay Law (“Section 14”). Under Section 14, employeesin Israel are entitled to have monthly deposits, at a rate of 8.33% of their monthly salary, made on their behalf to their insurance funds. Payments inaccordance with Section 14 exempt the Subsidiary from any additional obligation for these employees. As a result, the Subsidiary does notrecognize any liability for severance pay due to these employees and the deposits under Section 14 are not recorded as an asset in theSubsidiary’s balance sheet. These contributions for compensation represent defined contribution plans and expenses are recorded based onactual deposits.Other than the My Size Israel’s liability there are no additional severance pay liabilities.F11MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)m.Research and development costs:Research and development costs are charged to the statement of operations, as incurred. Most of the research and development expenses are forwages, related expenses and subcontractors.n.Income taxes:The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilitiesfor the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Companies’ taxreturns. Deferred taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities using enactedtax rates in effect in the years in which the differences are expected to reverse. The Company assesses the likelihood that its deferred tax assetswill be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely thannot that all or a portion of deferred tax assets will not be realized. The Company establishes a valuation allowance, if necessary, to reduce deferredtax assets to the amount more likely than not to be realized. As of December 31, 2022, and 2021, a full valuation allowance was established by theCompany.The Company implements a twostep approach to recognize and measure the benefit of its tax positions. The first step is to evaluate the taxposition taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that,on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigationprocesses. The second step is to measure the tax benefit as the largest amount that is greater than 50 percent (cumulative basis) likely to berealized upon settlement.The Company believes that its tax positions are all highly certain of being upheld upon examination. As of December 31,2022 and 2021 the Company recorded a liability for unrecognized tax benefits of $328 and none respectively.o.Accounting for stockbased compensation:The Company accounts for its employees’ stockbased compensation as an expense in the financial statements based on ASC 718. All awards areequity classified and therefore such costs are measured at the grant date fair value of the award and graded vesting attribution approach torecognize compensation cost over the vesting period. The Company estimates stock option grant date fair value using the Binomial and BlackScholes option pricingmodel.The Company recorded stock options issued to nonemployees at the grant date fair value, and recognizes expenses over the related serviceperiod by using the straightline attribution approach in accordance with ASU 201807. All awards are equity classified.The expected volatility of the share prices reflects the assumption that the historical volatility of the share prices is reasonably indicative ofexpected future trends.The riskfree interest rate for grants with an exercise price denominated in USD for employees and several consultants is based on the yield fromUS treasury zerocoupon bonds with an equivalent term.The Company has historically not paid dividends and has no foreseeable plans to pay dividends.F12MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)p.Fair value of financial instruments:ASC 820, Fair Value Measurements and Disclosures, relating to fair value measurements, defines fair value and established a framework formeasuring fair value. The ASC 820 fair value hierarchy distinguishes between market participant assumptions developed based on market dataobtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptionsdeveloped based on the best information available in the circumstances. ASC 820 defines fair value as the price that would be received to sell anasset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price. Inaddition, the fair value of assets and liabilities should include consideration of nonperformance risk, which for the liabilities described belowincludes the Company’s own credit risk.As a basis for considering such assumptions, ASC 820 establishes a threetier value hierarchy, which prioritizes the inputs used in the valuationmethodologies in measuring fair value:Level 1 Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access. Valuationadjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readilyand regularly available in an active market, valuation of these products does not entail a significant degree of judgment.Level 2 Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, eitherdirectly or indirectly.Level 3 Valuations based on inputs that are unobservable and significant to the overall fair value measurement.The Company holds share certificates in iMine Corporation (“iMine”) formerly known as Diamante Minerals, Inc., a publiclytraded company onthe OTCQB.Due to sales restrictions on the sale of the iMine shares, the fair value of the shares was measured on the basis of the quoted market price for anotherwise identical unrestricted equity instrument of the same issuer that trades in a public market, adjusted to reflect the effect of the salesrestrictions and is therefore, ranked as Level 2 asset.q.Basic and diluted net loss per share:Basic net loss per share is computed based on the weighted average number of shares of common stock outstanding during each year. Diluted netincome per share is computed based on the weighted average number of shares of common stock outstanding during each year plus dilutivepotential equivalent common stock considered outstanding during the year, in accordance with ASC 260, “Earnings per Share”. For the yearsended December 31, 2022 and 2021, all outstanding options and warrants have been excluded from the calculation of the diluted net loss per sharesince their effect was antidilutive.r.Concentrations of credit risk:Financial instruments that potentially subject the Company and its subsidiaries to concentrations of credit risk consist principally of cash andcash equivalents.Cash and cash equivalents are invested in banks in Israel, Spain and United States. Such deposits in United States may be in excess of insuredlimits and are not insured in other jurisdictions. Management believes that the financial institutions that hold the Company’s investments arefinancially sound and, accordingly, minimal credit risk exists with respect to these investments.The Company and its subsidiaries have no offbalancesheet concentration of credit risk such as foreign exchange contracts, option contracts orother foreign hedging arrangements.F13MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)s.Revenue Recognition:The Company’s revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled softwaresubscriptions, associated software maintenance and support.The Company recognizes revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with acustomer exists only when: the parties to the contract have approved it and are committed to perform their respective obligations, the Companycan identify each party’s rights regarding the distinct goods or services to be transferred (“performance obligations”), the Company can determinethe transaction price for the goods or services to be transferred, the contract has commercial substance and it is probable that the Company willcollect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to acustomer. Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted togovernmental authorities. Refunds are estimated at contract inception and updated at the end of each reporting period if additional informationbecomes available. Revenue is recognized when control of the product is transferred to the customer.The Company maintains a returns policy that allows its customers to return product within a specified period of time. The estimate of the provisionfor returns is based upon historical experience with actual returns.Principal versus Agent ConsiderationsThe Company follows the guidance provided in ASC 606 for determining whether it is a principal or an agent in arrangements with customers, byassessing whether the nature of the Company’s promise is a performance obligation to provide the specified goods (principal) or to arrange forthose goods to be provided by the other party (agent). With regard to products being sold by Orgad through Amazon, this determination involvesjudgment. The Company determines it is the principle when it has control over promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).The Company recognizes revenue ratably over the contractual service term for hosted services that are priced based on a committed number oftransactions where the delivery and consumption of the benefit of the services occur evenly over time, beginning on the date the servicesassociated with the committed transactions are first made available to the customer and continuing through the end of the contractual serviceterm. Over usage fees and fees based on the actual number of transactions are billed in accordance with contract terms as these fees are incurredand are included in the transaction price of an arrangement as variable consideration. Fees based on a number of transactions or impressions permonth, are allocated to the period in which the transactions occur. Revenue for subscriptions sold as a fee per period is recognized ratably overthe contractual term as the customer simultaneously receives and consumes the benefit of the underlying service.F14MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)t.Contingencies and CommitmentsLiabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it isprobable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with losscontingencies are expensed as incurred.u.Derivative instrumentsThe Company accounts for its derivative instruments as either assets or liabilities and measures them at fair value through profit or loss.v.LeasesThe Company leases include an office space lease agreement for 36 months, with an option to extend for an additional 36 months and 36 monthscancelable operating lease agreements on behalf of personnel vehicles. The lease term includes a noncancellable period of the lease plus anyadditional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise,or an option to extend (or not to terminate) the lease controlled by the lessor.ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make leasepayments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value oflease payments over the lease term. The company generally use its incremental borrowing rate based on the estimated rate of interest forcollateralized borrowing over a similar term of the lease payments at commencement date. Lease expense for lease payments is recognized on astraightline basis over the lease term.For the office rent lease, the Company has elected to account for the lease and nonlease maintenance components as a single lease component.Therefore, the lease payments used to measure the lease liability include all of the fixed consideration in the contract, including insubstance fixedpayments, owed over the lease term.w.Impact of recently issued accounting standardIn June 2016, the FASB issued ASU 201613, “Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses on FinancialInstruments”, which requires companies to measure credit losses of financial instruments, including customer accounts receivable, utilizing amethodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information toinform credit loss estimates. Subsequent to the issuance of ASU 201613, the FASB issued several additional Accounting Standard Updates toclarify implementation guidance, provide narrowscope improvements and provide additional disclosure guidance. As an Emerging GrowthCompany, ASU 201613 is effective for fiscal years beginning after December 15, 2022. The Company does not expect this ASU to have a materialimpact on its consolidated financial statements.F15MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 3 CASH AND CASH EQUIVALENTSThe Company’s cash and cash equivalents balance at December 31, 2022 and 2021 is denominated in the following currencies:December 31,20222021US Dollars1,65110,184New Israeli Shekels259433Other190532,10010,670NOTE 4 OTHER RECEIVABLES AND PREPAID EXPENSESDecember 31,20222021Prepaid expenses and other current assets322429Government authorities28317Other153133Total758579NOTE 5 PROPERTY AND EQUIPMENT, NETComputersandperipheralequipmentOfficefurnitureandequipmentLeaseholdimprovementsTotalCostBalance as at January 1, 20211825860300Additions2323Translation adjustments72211Balance as at December 31, 20212126062334Balance as at January 1, 20222126062334Additions161127Business combination401555Translation adjustments(32)(8)(8)(48)Balance as at December 31, 20222367854368Accumulated DepreciationBalance as at January 1, 20211461412172Additions2751042Translation adjustments6118Balance as at December 31, 20211792023222Balance as at January 1, 20221792023222Additions209938Translation adjustments(27)(3)(2)(32)Balance as at December 31, 20221722630228Carrying amountsAs at December 31, 2021334039112As at December 31, 2022645224140F16MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 6 LEASESIn August 2019, The Company entered into an office space lease agreement. The lease term is for 36 months beginning on August 20, 2019 and endingon August 20, 2022, with an option to extend for an additional 36 months. The Company extended the lease period until August 20, 2025. Monthly rentpayments including utilities amounting to approximately USD 14 (NIS 49,500) per month.In addition, The Company entered into a threeyear cancelable operating lease agreement for cars.These operating leases are included in “Right of use asset” on the Company’s December 31, 2022 consolidated balance sheets, and represent theCompany’s right to use the underlying asset for the lease term. The Company’s obligations to make lease payments are included in the currentliabilities as “Operating lease liability” and in the noncurrent liabilities as “Operating lease liability long term” on the Company’s December 31, 2022consolidated balance sheets. As of December 31, 2022, rightofuse of asset was $583. operating lease liabilities were $159 and non current Operatinglease liabilities were $308. Rightofuse asset includes the capitalization of improvements (net of amortization) amounting to $105.Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value ofthe lease payments.The interest rate used to discount future lease payment was 11.95%.Maturities of lease liabilities as of December 31, 2022 were as follows:Year Ending:2023$1912024$1912025$127Thereafter$509Less imputed interest:$(42)Total lease liabilities$467F17MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 7 – Goodwill and other Intangible assetsA.Identified intangible assetsSchedule of Intangible assetsSelling PlatformTechnologyCustomerRelationshipsOtherTotalThousandsUSDThousandsUSDThousandsUSDThousandsUSDThousandsUSDCostAs of January 1, 2022Acquisitions through business combinations378286726771,467Effect of changes in exchange rates(32)2565765As of December 31, 2022346311791841,532AmortizationAs of January 1, 2022Amortization for the year including effect of changes inexchange rates as of December 31, 2022(109)(15)(27)(4)(155)Carrying amountAs of December 31, 2022237296764801,377AmortizationAmortization expenses recorded for identified intangible assets in the Consolidated Statements of Operations for each period and were as follows:Line ItemDecember 31,2022December 31,2021Selling platformCosts of revenues109TrademarkSales and marketing4TechnologyCosts of revenues15Customer relationshipsSales and marketing27Total amortization expenses155Future amortization expenses are expected to be as follows:20232024202520262027ThereafterTotalFuture amortization expenses3033031941771561791,312b.GoodwillThe changes in the carrying amount of goodwill for the years ended December 31, 2022 and 2021 were as follows:Fashion and equipmentecommerce platformNaizTotalBalance as of December 31, 2021Changes during the period:Goodwill acquired1521,1521,304Goodwill impairmentTranslation differences(14)10591Balance as of December 31, 20221381,2571,395The Company operates its business through three reporting segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovativeartificial intelligence driven measurement solutions and (iii) Naiz. See note 17 for additional segments information.The Company determines the fair value of its reporting units using the income approach. According to the income, the Company uses discounted cashflows to estimate the fair value. Cash flow projections are based on the Company’s estimates of revenue growth rates and operating margins, takinginto consideration the industry’s and market’s conditions. The discount rate used is based on the weighted average cost of capital (“WACC”),adjusted for the relevant risk associated with businessspecific characteristics.The Company performed a quantitative assessment as of December, 31 2022 for the reporting units’ fair value. The estimated fair value of the Fashionand equipment ecommerce platform and Naiz reporting units exceeded its estimated carrying amount by 95.9% and 27.7% respectively. This, based thefollowing assumptions:Fashion and equipmentecommerce platformNaizDiscount rate21%23%Terminal growth rate3%3%If business conditions or expectations were to change materially, it may be necessary to record impairment charges to the Company’s reporting units inthe future.F18MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 8 Investment in JVIn August 2022, the Company established a joint venture (“JV”) in Brazil with Santista Têxtil. The Company holds 51% and Santista Têxtil holds 49% of theJV. The purpose of the JV is to serve the Brazilian market according to the business plan that was set. Both parties agree to make an initial investment in theJV of $198that will be made per the holding percentage of each party. As of the reporting date, the JV is in process of establishing its operation.NOTE 9 Financial LiabilitiesThe book value of each of the financial liability categories is an acceptable approximation of fair value.The debt is comprised of four loans that were granted to My Size Israel – in an outstanding amount of approximately $131, bearing interest rangingfrom prime rate to prime+2.8% rate, and four loans that were granted to the Spanish subsidiary– in an outstanding amount of approximately $400,bearing interest ranging from 1% to 3%.The financial liability maturities during the five years following the end of the financial year are shown below:UntilUntilUntilUntilUntilAfterTOTAL311223311224311225311226311227311227311222Debts with credit institutions15513892874712531NOTE 10 RELATED PARTIES TRANSACTIONSA. Balances with related parties:The following related party payables are included in liability to related parties.December 31,20222021Officers (*)4143Liability in respect of business combinations (**)739Other related parties (***)(95)Directors152069863(*)The amount includes the net salaries payables.(**)The amount includes the provision created to former owners of Orgad that are entitled to additional cash and equity consideration and former owners of Naizthat entitled to additional cash consideration, see note 16 business combination.(***)The amount includes an amount receivable from Orgad previous shareholders who currently work in the company.B. Related parties benefits:Year endedDecember 31,20222021Salaries and related expenses1,440852Share based payments39673Cash liability and equity liability expenses related to acquisitions (**)1,058Directors58582,952983(**)The amount includes the expenses for a provision created to former owners of Orgad that are entitled to additional cash and equity consideration and formerowners of Naiz that entitled to additional cash consideration, see note 16 business combination.NOTE 11 FINANCIAL INSTRUMENTSThe following tables presents the Company’s significant assets and liabilities that are measured at fair value on recurring basis and their classificationwithin the fair value hierarchy:December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities47financial assets (*)10December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesDerivatives9December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities108December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesWarrants derivative2(*)the financial asset includes in other receivables.F19MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 11 FINANCIAL INSTRUMENTS (Cont.)The carrying amounts of cash and cash equivalents, restricted cash, short term restricted deposit, accounts receivable, other receivables and prepaidexpenses, trade payable and accounts payable approximate their fair value due to the shortterm maturities of such instruments.At December 31, 2022, the recognized gain and fair value (based on quoted market prices with a discount due to security restrictions on iMine shares)of the marketable securities were $59and $47, respectively (at December 31, 2021 $49and $108, respectively).NOTE 12 TAXES ON INCOMEa.On December 31, 2022, the Company had U.S. federal net operating loss carryforwards of approximately $26 available to reduce future taxableincome. Utilization of the U.S. net operating losses may be subject to substantial limitations due to the change of ownership provisions of theInternal Revenue Code of 1986.The U.S. Company has final tax assessments through 2014.On December 22, 2017, the Tax Reform Act was signed into law. The legislation significantly changes U.S. tax law by, among other things, lowering theU.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. As a result of the decrease in the corporate incometax rate, the Company revalued the ending net deferred tax assets at December 31, 2017, but did not recognize any incremental income tax expense in2017 due to the revaluation of the valuation allowance.b.Foreign tax:1.Tax rates:Presented hereunder are the tax rates relevant to the Company’s Israeli subsidiaries:2022 23%2021 23% Presented hereunder are the tax rates relevant to the Company’s Spanish subsidiary:2022 24%2.The Company’s Israeli subsidiaries have estimated total available carryforward operating tax losses for Israeli income tax purposes ofapproximately $64as of December 31, 2022. Of these losses, a total of $47.5are owned by Topspin Medical (Israel) Ltd. Topspin tax lossesmay be offset only by future income with respect to the same operational activity by which it was incurred for an indefinite period of time. Theother losses are owned by My Size Israel and may be carryforward to offset against future income for an indefinite period of time.3.Topspin Medical (Israel) Ltd. and My Size (Israel) 2014 Ltd. has final tax assessments through 2016.c.U.S. and foreign components of loss from continuing operations, before income taxes consisted of:December 31,20222021U.S(1,180)(3,802)NonU.S. (foreign)(7,130)(6,718)(8,310)(10,520)F20MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 12 TAXES ON INCOME (Cont.)d.Deferred taxes:Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reportingpurposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows:December 31,20222021Deferred tax assets:Operating loss carryforwards20,13120,238Warrants and options145126Marketable securities390377Intangible assets(328)Research and development expenses586341Other temporary differences203Deferred tax assets before valuation allowance21,12721,082Valuation allowance(21,455)(21,082)Net deferred tax liability(328)The following table presents a reconciliation of the beginning and ending valuation allowance:December 31,20222021Balance at beginning of the year21,08218,968Additions in valuation allowance to the income statement1,7581,625Additions in valuation allowance due to exchange rate differences(1,385)489Balance at end of the year21,45521,082In assessing the realization of deferred tax assets, management considers whether it is more likely than not that all or some portion of the deferred taxassets will not be realized.The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporarydifferences are deductible and net operating losses are utilized. Based on consideration of these factors, the Company recorded a full valuationallowance at December 31, 2021 and 2020.e.Theoretical taxThe following presents the adjustment between the theoretical tax amount and the tax amount included in the financial statements:December 31,20222021Loss before income taxes8,34610,520Statutory tax rate21%21%Computed “expected” tax income1,7522,209Foreign tax rate differences and exchange rate differences149131Nondeductible expenses(107)(715)Change in valuation allowance(1,758)(1,625)Taxes on income36F21MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITYa.Common stock confers upon their holders the right to receive notice to participate and vote in general meetings of the Company, and the right toreceive dividends if declared.b.On January 8, 2021, the Company conducted a public offering of its securities pursuant to which it issued 62,768 shares of its common stock forgross proceeds of $2,008. The net proceeds to the Company from the offering were approximately $1,700, after deducting placement agent’s feesand other estimated offering expenses payable by the Company.c.During 2021, a holders of warrants exercised warrants to purchase 135,109 ordinary shares of the Company in exchange for $3,709.d.On March 25, 2021, the Company conducted a public offering of its shares of common stock pursuant to which it issued 104,741 shares of itscommon stock for gross proceeds of $3,300. The net proceeds to the Company from the offering were approximately $2,872, after deductingplacement agent’s fees and other estimated offering expenses payable by the Company.On May 7, 2021, the Company issued an additional 15,711 shares of the Company’s common stock in connection with the full exercise of theunderwriter’s overallotment option granted in the Company’s March 2021 public offering. These additional shares were sold to the underwriter at apublic offering price of $31.5 per share, resulting in additional net proceeds to the Company, net of the underwriting discount, of approximately$463.e.On May 26, 2021, the Company issued 100,000 shares of common stock to Ms. Zigdon in consideration of the Waiver. See note 1(b) above.f.On October 28, 2021, the Company sold in a registered direct offering 100,592 shares of its common stock and, in a concurrent private placement,an aggregate of 75,444 unregistered warrants to purchase shares of common stock, at an offering price of $33.8 per share and associated warrant.In addition, on the same day, the Company sold in a private placement 150,888 unregistered shares of common stock and unregistered warrants topurchase up to an aggregate of 113,166 shares of common stock at the same purchase price as in the registered direct offering. The warrants areimmediately exercisable and will expire five years from issuance at an exercise price of $31.5 per share, subject to adjustment as set forth therein.The gross proceeds from the offerings were $8,500. The net proceeds to the Company from the offerings were approximately $7,560, afterdeducting placement agent’s fees and other estimated offering expenses payable by the Company. In connection with the offerings, the Companyissued to the placement agent warrants to purchase 17,603 shares on substantially the same terms as the purchasers in the offerings at an exerciseprice of $42.25 per share and a term expiring on October 26, 2026.g.On December 7, 2022, the Company’s board of directors approved a 1for25 reverse stock split of the Company’s issued and outstanding sharesof common stock. The reverse stock split became effective on December 8, 2022. In order not to have fractional shares as a result of the reversestock split, the Company issued an additional 12,091 shares of common stock. As a result, all shares of common stock, options for shares ofcommon stock, exercise price and net loss per share amounts were adjusted retroactively for all periods presented in these financial statements.F22MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITY (Cont.)g.A summary of the warrant activity during the years ended December 31, 2022 and 2021 is presented below:Number ofWarrantsWeightedAverageExercisePriceWeightedAverageRemainingLife inYearsOutstanding, December 31, 2020216,85936.754.26Issued206,214Expired or exercised(135,109)Outstanding, December 31, 2021287,96431.004.35IssuedExpired or exercised(17,901)Outstanding, December 31, 2022270,06330.213.36Exercisable, December 31, 2022270,06330.213.36NOTE 14 STOCK BASED COMPENSATIONThe stockbased expense recognized in the financial statements for services received is related to Research and Development, Sales and Marketingand General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense Research and development15195Stockbased compensation expense Sales and marketing126180Stockbased compensation expense General and administrative17898455373The stockbased expense recognized in the financial statements for services received post Acquisition of Orgad (see note 16) is related to Cost OfGoods, Sales and Marketing and General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense – Cost of goods80Stockbased compensation expense Sales and marketing112Stockbased compensation expense General and administrative127319F23MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Options issued to consultantsWe can sell additional shares of common stock without consulting stockholders and without offering shares to existing stockholders, which wouldresult in dilution of shareholders’ interests in the company and could depress our stock price.Our Certificate of Incorporation currently authorizes 250,000,000 shares of common stock, of which 2,446,780 are currently outstanding as of March 31, 2023and our board of directors is authorized to issue additional shares of our common stock. Although our board of directors intends to utilize its reasonable businessjudgment to fulfil its fiduciary obligations to our then existing stockholders in connection with any future issuance of our capital stock, the future issuance ofadditional shares of our capital stock could cause immediate, and potentially substantial, dilution to our existing stockholders, which could also have a materialeffect on the market value of the shares. Further, other than certain participation rights that we have granted in a past offering, our shares do not have preemptiverights, which means we can sell shares of our capital stock to other persons without offering purchasers in this offering the right to purchase their proportionateshare of such offered shares. Therefore, any additional sales of stock by us could dilute your ownership interest in our Company.Our quarterly operating results may fluctuate significantly.We expect our operating results to be subject to quarterly fluctuations. Our net loss and other operating results will be affected by numerous factors,including:●variations in the level of expenses related to our research and development;●any lawsuits in which we may become involved;●regulatory developments affecting our products; and●our execution of any collaborative, licensing or sales agreements, and the timing of payments under these arrangements.If our quarterly operating results fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially.Furthermore, any quarterly fluctuations in our operating results may, in turn, cause the price of our common stock to fluctuate substantially.If we fail to comply with the rules under the Sarbanes Oxley Act of 2002 related to accounting controls and procedures or if we discover materialweaknesses and deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult.If we fail to comply with the rules under the SarbanesOxley Act of 2002 related to disclosure controls and procedures, or, if we discover materialweaknesses and other deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult. Section 404 of the SarbanesOxley Act requires annual management assessments of the effectiveness of our internal control over financial reporting and, ifwe are no longer a nonaccelerated filer, a report by our independent auditors addressing these assessments. If material weaknesses or significant deficiencies arediscovered or if we otherwise fail to achieve and maintain the adequacy of our internal control, we may not be able to ensure that we can conclude on an ongoingbasis that we have effective internal controls over financial reporting in accordance with Section 404 of the SarbanesOxley Act. Moreover, effective internalcontrols are necessary for us to produce reliable financial reports and are important to helping prevent financial fraud. If we cannot provide reliable financial reportsor prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price ofour common stock could drop significantly.38Our Certificate of Incorporation, Bylaws and Delaware law may have antitakeover effects that could discourage, delay or prevent a change incontrol, which may cause our stock price to decline.Our Certificate of Incorporation, Bylaws and Delaware law could make it more difficult for a thirdparty to acquire us, even if closing such a transactionwould be beneficial to our stockholders. Provisions of our Certificate of Incorporation, Bylaws and Delaware law also could have the effect of discouraging potentialacquisition proposals or making a tender offer or delaying or preventing a change in control, including changes a stockholder might consider favorable. Suchprovisions may also prevent or frustrate attempts by our stockholders to replace or remove our management. In particular, the Certificate of Incorporation, Bylawsand Delaware law, as applicable, among other things:●provide the board of directors with the ability to alter the Bylaws without stockholder approval;●the classification of our board of directors;●place limitations on the removal of directors;●provide that vacancies on the Board of Directors may be filled by a majority of directors in office, although less than a quorum;●require that stockholder actions must be affected at a duly called stockholder meeting and generally prohibiting stockholder actions by written consent;●eliminate the ability of stockholders to call a special meeting of stockholders; and●establish advance notice requirements for nominations for election to the Board of Directors or for proposing matters that can be acted upon at duly calledstockholder meetings.We are subject to Section 203 of the Delaware General Corporation Law which, subject to certain exceptions, prohibits “business combinations” between apubliclyheld Delaware corporation and an “interested stockholder,” which is generally defined as a stockholder who becomes a beneficial owner of 15% or more ofa Delaware corporation’s voting stock for a threeyear period following the date that such stockholder became an interested stockholder. These provisions areexpected to discourage certain types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to firstnegotiate with our board. These provisions may delay or prevent someone from acquiring or merging with us, which may cause the market price of our commonstock and the value of our securities to decline.If we fail to comply with the continued listing requirements of the Nasdaq Capital Market, our common stock may be delisted and the price of ourcommon stock and our ability to access the capital markets could be negatively impacted.Nasdaq has established certain standards for the continued listing of a security on the Nasdaq Capital Market. The standards for continued listing include,among other things, that the minimum bid price for the listed securities not fall below $1.00 per share for a period of 30 consecutive trading days and that wemaintain a minimum of $2,500,000 in shareholders’ equity. We have in the past fallen below the minimum bid price and minimum shareholders’ equity.39No assurance can be given that we will continue to be in compliance with the Rule. Failure to meet applicable Nasdaq continued listing standards couldresult in a delisting of our common stock. A delisting of our common stock from Nasdaq could materially reduce the liquidity of our common stock and result in acorresponding material reduction in the price of our common stock. In addition, delisting could harm our ability to raise capital through alternative financing sourceson terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, employees and fewer business development opportunities.The exercise of outstanding warrants and stock options will have a dilutive effect on the percentage ownership of our capital stock by existingstockholders.As of March 15, 2023, we had outstanding warrants to acquire 2,299,115 shares of our common stock and stock options to purchase 1,659 shares of ourcommon stock, which warrants and options are exercisable for prices ranging between $2.81 and $375. The expiration of the term of such options and warrants rangefrom 0.22 years to 4.83 years. If a significant number of such warrants and stock options are exercised by the holders, the percentage of our common stock ownedby our existing stockholders will be diluted.Were our common stock to become subject to the penny stock rules then this could result in U.S. brokerdealers becoming discouraged from effectingtransactions in shares of our common stock.Rule 15g9 under the Exchange Act establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a marketprice of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. If we do not retain a listing on the NasdaqCapital Market or do not meet certain net tangible asset or average revenue requirements and if the price of our common stock is less than $5.00, our common stockwill be deemed a penny stock. For any transaction involving a penny stock, unless exempt, the rules require: (a) that a broker or dealer approve a person’s accountfor transactions in penny stocks; and (b) the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantityof the penny stock to be purchased.In order to approve a person’s account for transactions in penny stocks, the broker or dealer must: (a) obtain financial information and investmentexperience objectives of the person and (b) make a reasonable determination that the transactions in penny stocks are suitable for that person and the person hassufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver,prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which: (a) sets forth the basis on whichthe broker or dealer made the suitability determination; and (b) confirms that the broker or dealer received a signed, written agreement from the investor prior to thetransaction. Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult forinvestors to dispose of our common stock and cause a decline in the market value of our common stock.Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissionspayable to both the broker or dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor incases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the accountand information on the limited market in penny stocks.Sales of our currently issued and outstanding stock may become freely tradable pursuant to Rule 144 and may dilute the market for your shares andhave a depressive effect on the price of the shares of our common stock.A portion of our outstanding shares of common stock are “restricted securities” within the meaning of Rule 144 under the Securities Act of 1933, asamended, or the Securities Act. As restricted shares, these shares may be resold only pursuant to an effective registration statement or under the requirements ofRule 144 or other applicable exemptions from registration under the Securities Act and as required under applicable state securities laws. Rule 144 provides inessence that an affiliate (as such term is defined in Rule 144(a)(1)) of an issuer who has held restricted securities for a period of at least six months (one year afterfiling Form 10 information with the SEC for shell companies and former shell companies) may, under certain conditions, sell every three months, in brokeragetransactions, a number of shares that does not exceed the greater of 1% of a company’s outstanding shares of common stock or the average weekly trading volumeduring the four calendar weeks prior to the sale (the four calendar week rule does not apply to companies quoted on the OTC Markets). Rule 144 also permits, undercertain circumstances, the sale of securities, without any limitation, by a person who is not an Affiliate of the Company and who has satisfied a oneyear holdingperiod. A sale under Rule 144 or under any other exemption from the Securities Act, if available, or pursuant to subsequent registrations of our shares of commonstock, may have a depressive effect upon the price of our shares of common stock in any active market that may develop.40We are a former “shell company” and as such are subject to certain limitations not applicable to other public companies generally.Prior to our suspension of reporting in 2012, we were a public reporting “shell company,” as defined in Rule 12b2 under the Exchange Act. Although weare no longer a “shell company,” we are subject to certain restrictions under the Securities Act for the resale of securities issued by issuers that have been at anytime previously a shell company. Specifically, the Rule 144 safe harbor available for the resale of our restricted securities is only available to our stockholders if wehave filed all reports and other materials required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934, as amended, or the Exchange Act, asapplicable, during the preceding twelve months, other than current reports on Form 8K, at the time of the proposed sale, regardless of whether the restrictedsecurities were initially issued at the time we were a shell company or subsequent to termination of such status. Accordingly, holders of our “restricted securities”within the meaning of Rule 144 will be subject to the conditions set forth in Rule 144 with respect to our company. Other reporting companies that are not formershell companies and have been reporting for more than twelve months are not subject to this same reporting threshold for nonaffiliate reliance on Rule 144.Accordingly, any restricted securities we have sold or sell in the future or issue to consultants or employees, in consideration for services rendered or for any otherpurpose, may not be resold unless such securities are registered with the SEC or the requirements of Rule 144 have been satisfied. As a result, it may be harder forus to fund our operations and pay our employees and consultants with our securities instead of cash. Furthermore, it may be harder for us to raise funding throughthe sale of debt or equity securities unless we agree to register such securities with the SEC, which could cause us to expend additional resources in the future. Ourprior status as a “shell company” could prevent us in the future from raising additional funds, engaging employees and consultants, and using our securities to payfor any acquisitions, which could cause the value of our securities, if any, to decline in value or become worthless.ITEM 1B. UNRESOLVED STAFF COMMENTSNone.ITEM 2. PROPERTIESWe currently lease 1,660 square feet of office space at 4 HaYarden Street, Airport City, Israel. The lease term is for 36 months beginning on August 20, 2019and ending on August 20, 2022, with an option to extend for an additional 36 months. Monthly rent payments, including utilities, amount to approximately $14,000per month. We extended the lease period until August 20, 2025.ITEM 3. LEGAL PROCEEDINGSFrom time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation issubject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.41North Empire LLCOn August 7, 2018, we commenced an action against North Empire LLC, or North Empire, in the Supreme Court of the State of New York, County of NewYork for breach of a Securities Purchase Agreement or Agreement in which we are seeking damages in an amount to be determined at trial, but in no event less than$616,000. On August 2, 2018, North Empire filed a Summons with Notice against us, also in the same Court, in which they allege damages in an amount of $11.4million arising from an alleged breach of the Agreement. On September 6, 2018, North Empire filed a Notice of Discontinuance of the action it had filed on August 2,2018. On September 27, 2018, North Empire filed an answer and asserted counterclaims in the action commenced by us against them, alleging that we failed to deliverstock certificates to North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against our CEO andnow former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018, we filed a reply to North Empire’scounterclaims. On November 15, 2018, our CEO and now former Chairman of the Board filed a motion to dismiss North Empire’s thirdparty complaint. On January 6,2020, the Court granted the motion and dismissed the thirdparty complaint. Discovery has been completed and both parties have filed motions for summaryjudgment in connection with the claims and counterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summaryjudgment, arguing there were factual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision.On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying the Company’s motion for summary judgment. On or about September 12,2022, the Court issued its Decision and Order denying the Company’s motion to reargue. North Empire filed its opposing brief on December 7, 2022. Both sides weregiven an opportunity to file a reply brief. We filed our reply brief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. Oral argument was heldbefore the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Court filed its Decision and Order, which affirmed the lower court’sdecisions regarding both My Size and North Empire’s motions for summary judgment and sent the case back to the Supreme Court. On or about March 13, 2023, theSupreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date for the mediation has not yet been set. We intend tovigorously defend any claims made by North Empire. We believe it is more likely than not that the counterclaims will be denied.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.42PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur stock currently is listed on the Tel Aviv Stock Exchange and the Nasdaq Capital Market under the symbol “MYSZ”. Our stock has been traded on theNasdaq Capital Market since July 25, 2016.HoldersAs of March 31, 2023, we had 70 shareholders of record. The actual number of stockholders is greater than this number of record holders and includesstockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our Board of Directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our Board of Directors deems relevant.Securities Authorized for Issuance under Equity Compensation PlansInformation about our equity compensation plans is incorporated herein by reference to “Item 12. Security Ownership of Certain Beneficial Owners andManagement and Related Stockholder Matters”, of this Annual Report on Form 10K.Recent Sales of Unregistered SecuritiesNone.ITEM 6. SELECTED FINANCIAL DATAAs a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULT OF OPERATIONSYou should read the following discussion along with our financial statements and the related notes included elsewhere in this Annual Report on Form10K. The following discussion contains forwardlooking statements that are subject to risks, uncertainties and assumptions, including those discussed under“Risk Factors.” Our actual results, performance and achievements may differ materially from those expressed in, or implied by, these forwardlooking statements.OverviewMySize is an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.43Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile device or through MySizeID Widget: a simple questionnaire which was uses a database collected over the years.MySizeID synchronizes the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and onlypresents items available for purchase that match their measurements to ensure a correct fit.MySize is positioning itself as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empowering brand design teams, which are designed to increaseend consumer satisfaction, contributing to a sustainable world and reduce operation costs.Orgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,682 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz BespokeTechnologies, S.L., or Naiz, a limited liability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.44The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 2,365,800 shares of My Size common stock were issuedto Whitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.45Operations in RussiaIn addition to our Israel operations, we had operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia. To date, mainly due to the invasion of Ukraine by Russia and the ongoing sanctions we stopped most ofour efforts in Russia and will probably close the subsidiary in the near future.Results of OperationsThe table below provides our results of operations for the periods indicated.Year ended December 3120222021(dollars in thousands)Revenues4,459131Cost of revenues(3,825)Gross profit634131Research and development expenses$(1,701)$(4,248)Sales and marketing(3,143)(2,336)General and administrative(3,900)(4,124)Operating loss(8,110)(10,577)Financial income (expenses), net(236)57Tax income36Net loss$(8,310)$(10,520)Year Ended December 31, 2022 Compared to Year Ended December 31, 2021RevenuesFrom inception through December 31, 2018, we did not generate any revenue from operations and we continue to expect to incur additional losses toperform further research and development activities. We started to generate revenues only in 2019. Our revenues for the year ended December 31, 2022 amounted to$4,459,000 compared to $131,000 for year ended December 31, 2021. The increase from the corresponding period primarily attributable to $4,132,000 in revenuegenerated from Orgad from February 7, 2022, the date of closing of the Orgad acquisition, or the Acquisition Date and revenue generated from the Naiz Acquisitionfrom October 11, 2022, the date of closing of the Naiz acquisition.In addition, the increase from the corresponding period results from an increase in revenues generated by My Size.Cost Of RevenuesOur cost of revenues expenses for the year ended December 31, 2022 amounted to $3,825,000, compared to none for the year ended December 31, 2021. Thecost of revenues includes cash and equity liabilities expenses in the amount of $194,000. The increase in comparison with the corresponding period was due to thecost of goods of the revenues generated from Orgad’s operations.Research and Development ExpensesOur research and development expenses for the year ended December 31, 2022 amounted to $1,701,000 a decrease of $2,547,000, or approximately 60.0%,compared to $4,248,000 for the year ended December 31, 2021. The decrease from the corresponding period primarily resulted from share based payment in amount of$2,618,000 attributed to the share issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021.Sales and Marketing ExpensesOur sales and marketing expenses for the year ended December 31, 2022 amounted to $3,143,000 an increase of $807,000, or 34.55%, compared to $2,336,000for the year ended December 31, 2021. The increase primarily resulted from an increase in employees expenses mainly due to Orgad and Naiz acquisitions, increase inAmazon fees, increase in cash and equity liabilities expenses attributed to the Orgad acquisition and an increase in share based payments offset by a decrease inpayments to consultants.46General and Administrative ExpensesOur general and administrative expenses for the year ended December 31, 2022 amounted to $3,900,000, a decrease of $224,000, or 5.43%, compared to$4,124,000 for the year ended December 31, 2021. The decrease compared to the corresponding period was mainly due to a decrease in professional expenses, mainlyattributed to shareholder activism including settlement expenses with the Lazar Parties offset by an increase in sharedbased payments and an increase in employeesexpenses mainly due to the Orgad and Naiz acquisitions.Operating LossAs a result of the foregoing, for the year ended December 31, 2022, our operating loss was $8,110,000, a decrease of $2,467,000 or 23.32%, compared to ouroperating loss for the year ended December 31, 2021 of $10,577,000.Financial Income, NetOur financial (expense) income, net for the year ended December 31, 2022 amounted to $236,000 compared to financial income, $57,000 for the year endedDecember 31, 2021. In 2022, we had financial expenses exchange rate differences offset by an income from fair value revaluation of investment in marketablesecurities whereas in 2021 we had financial income from the fair value revaluation of warrants offset by expenses from exchange rate differences and expenses fromfair value revaluation of investment in marketable securities.Net LossAs a result of the foregoing, our net loss for the year ended December 31, 2022 was $8,310,000 compared to net loss of $10,520,000 for the year endedDecember 31, 2021. The decrease in net loss was mainly due increase in sales and marketing expenses and financial expenses as opposed to financial income in thecorresponding period offset by a decrease in research and development expenses in amount of $2,618,000 attributed to the share issuance to Shoshana Zigdonunder the Amendment to Purchase Agreement dated May 26, 2021.Liquidity and Capital ResourcesSince our inception, we have funded our operations primarily through public and private offerings of debt and equity in Israel and in the U.S.As of December 31, 2022, we had cash, cash equivalents and restricted cash of $2,363,000 compared to $10,943,000 cash, cash equivalents, restricted cashas of December 31, 2021. During January 2023, we completed a registered direct and concurrent private placement offering resulting in gross proceeds ofapproximately $3 million. This decrease primarily resulted from our operating activities, the acquisition of Orgad and Naiz Fit, and resources that were deployed togrow of both businesses.Net cash used in operating activities was $7,290,000 for the year ended December 31, 2022 compared to $7,297,000 for the year ended December 31, 2021.The decrease in cash used in operating activity is derived mainly from an increase in share based payments and increase in account receivables mainly from theOrgad and Naiz fit acquisitions offset by a decrease in the net loss.Net cash used in investing activities for the year ended December 31, 2022 was $993,000 as opposed to net cash provided by investing activities of$161,000 for the year ended December 31, 2021. The net cash used in investing activities for the year ended December 31, 2022 was mainly from the acquisition ofOrgad and Naiz as opposed to proceeds from shortterm deposits and restricted deposits during the year ended December 31, 2021.We had a negative cash flow from financing activities of $67,000 for the year ended December 31, 2022 compared to positive cash flow of $16,292,000 for theyear ended December 31, 2021. The negative cash flow from financing activities for the year ended December 31, 2022 was mainly due to repayment of loans andinterest and payments for leases as opposed to proceeds from issuance of shares and from exercise of warrants for the year ended December 31, 2021.47We expect that we will continue to generate losses and negative cash flows from operations for the foreseeable future. Based on the projected cash flowsand cash balances as of December 31, 2022, together with the proceeds from the January 2023 financing, we believe our existing cash will not be sufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. We will need to raiseadditional capital, which may not be available on reasonable terms or at all. Additional capital would be used to accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;●respond to competitive pressures;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, the Russian invasion ofUkraine, the impact of any resurgence of the COVID19 pandemic and a number of other factors, many of which are outside our control, and on our financialperformance. Accordingly, we cannot assure you that we will be able to successfully raise additional capital at all or on terms that are acceptable to us. If we cannotraise additional capital when needed, it may have a material adverse effect on our business, results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.We have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.Recently Issued Accounting PronouncementsCertain recently issued accounting pronouncements are discussed in Note 2, Significant Accounting Policies, to the consolidated financial statementsincluded in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10K.OffBalance Sheet ArrangementsWe have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.48Application of Critical Accounting Policies and EstimatesOur management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we haveprepared in accordance with U.S. generally accepted accounting principles issued by the Financial Accounting Standards Board, or FASB. The preparation of thesefinancial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assetsand liabilities at the date of the financial statements, as well as the reported expenses during the reporting periods. Actual results may differ from these estimatesunder different assumptions or conditions.Our significant accounting policies were revenue from contracts with customers which are more fully described in the notes to our financial statementsincluded herein. We believe these accounting policies discussed below are critical to our financial results and to the understanding of our past and futureperformance, as these policies relate to the more significant areas involving management’s estimates and assumptions. We consider an accounting estimate to becritical if: (1) it requires us to make assumptions because information was not available at the time or it included matters that were highly uncertain at the time wewere making our estimate; and (2) changes in the estimate could have a material impact on our financial condition or results of operations.Accounting for business combinationsWe allocate the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed, based upon their estimated fairvalues at the acquisition date. These fair values are typically estimated with assistance from independent valuation specialists.The purchase price allocation process requires us to make significant estimates and assumptions, especially at the acquisition date with respect tointangible assets, contractual support obligations assumed, contingent consideration arrangements, and preacquisition contingencies.Although we believe the assumptions and estimates we have made in the past have been reasonable and appropriate, they are based in part on historicalexperience and information obtained from the management of the acquired companies and are inherently uncertain.Examples of critical estimates in valuing certain of the intangible assets we have acquired or may acquire in the future include but are not limited to:● future expected cash flows from product sales or other customer contracts;● expected costs of fulfillment including marketing, warehousing and product sales;● the acquired company’s brand and competitive position, as well as assumptions about the period of time the acquired brand will continue to be used inthe combined company’s product portfolio;● cost of capital and discount rates; and● estimating the useful lives of acquired assets as well as the pattern or manner in which the assets will amortize.Refer to Note 16, Business Combination, to the consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” of thisAnnual Report on Form 10K.49Revenue from contracts with customersOur revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled software subscriptions, associatedsoftware maintenance and support.We recognize revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with a customer exists onlywhen: the parties to the contract have approved it and are committed to perform their respective obligations, we can identify each party’s rights regarding thedistinct goods or services to be transferred (“performance obligations”), we can determine the transaction price for the goods or services to be transferred, thecontract has commercial substance and it is probable that we will collect the consideration to which we will be entitled in exchange for the goods or services that willbe transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to a customer.Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted to governmental authorities. Refundsare estimated at contract inception and updated at the end of each reporting period if additional information becomes available. Revenue is recognized when controlof the product is transferred to the customer.We maintain a returns policy that allows our customers to return product within a specified period of time. The estimate of the provision for returns is basedupon historical experience with actual returns.Principal versus Agent ConsiderationsWe follow the guidance provided in ASC 606 for determining whether we are a principal or an agent in arrangements with customers, by assessing whetherthe nature of our promise is a performance obligation to provide the specified goods (principal) or to arrange for those goods to be provided by the other party(agent). With regard to products being sold by Orgad through Amazon, this determination involves judgment. We determine it is the principle when it has controlover the promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).We recognize revenue ratably over the contractual service term for hosted services that are priced based on a committed number of transactions where thedelivery and consumption of the benefit of the services occur evenly over time, beginning on the date the services associated with the committed transactions arefirst made available to the customer and continuing through the end of the contractual service term. Over usage fees and fees based on the actual number oftransactions are billed in accordance with contract terms as these fees are incurred and are included in the transaction price of an arrangement as variableconsideration. Fees based on a number of transactions or impressions per month, are allocated to the period in which the transactions occur. Revenue forsubscriptions sold as a fee per period is recognized ratably over the contractual term as the customer simultaneously receives and consumes the benefit of theunderlying service.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.As a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.50ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAMY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2022U.S. DOLLARS IN THOUSANDSINDEXPageReport of Independent Registered Public Accounting Firm (PCAOB ID: ID 1057)F2Consolidated Balance SheetsF4Consolidated Statements of Comprehensive LossF5Consolidated Statements of Shareholders’ EquityF6Consolidated Statements of Cash FlowsF7Notes to Consolidated Financial StatementsF8 F33F1Report of Independent Registered Public Accounting FirmTo the Shareholders and Board of DirectorsMy Size, Inc.:Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of My Size, Inc. and subsidiaries (the Company) as of December 31, 2022 and 2021, the relatedconsolidated statements of comprehensive loss, shareholders’ equity, and cash flows for each of the years in the twoyear period ended December 31, 2022, and therelated notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, thefinancial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the twoyear periodended December 31, 2022, in conformity with U.S. generally accepted accounting principles.Going ConcernThe accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1d tothe consolidated financial statements, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit thatraises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1d. Theconsolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidatedfinancial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Critical Audit MattersCritical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to becommunicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved ourespecially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidatedfinancial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters oron the accounts or disclosures to which they relate.Acquisitiondate fair value of customer relationshipsAs discussed in Note 16 to the consolidated financial statements, on October 11, 2022, the Company acquired Naiz Bespoke Technologies SL (“Naiz”). As a result ofthe transaction, the Company acquired customer relationships intangible assets (“customer relationships”) representing the generation of future income from Naiz’sexisting customers. The acquisition date fair value of the customer relationships was $726 thousand.F2We identified the evaluation of the acquisitiondate fair value of the Naiz customer relationships as a critical audit matter. A high degree of subjective auditorjudgment was required to evaluate the following internally developed assumptions used to estimate the fair value of such asset, for which there were limitedobservable inputs: (i) forecasted revenues attributable to existing customers, (ii) forecasted earnings before interest, taxes, depreciation, and amortization(“EBITDA”) margins for the acquired business, (iii) estimated annual customer attrition rates and (iv) estimated discount rate. The determined fair value wassensitive to changes in these key assumptions. Additionally, specialized skills and knowledge were needed to evaluate the discount rate used.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s acquisitiondate fair value estimation process, including controls over the development of key assumptions. We performed a sensitivity analysis toassess the impact of reasonably possible changes to forecasted revenues, EBITDA margins, annual customer attrition rates, and the discount rate. We evaluated theforecasted revenue growth rates from existing customers by comparing the growth assumptions to those of the Company’s peers and industry reports. Inconnection with our assessment of the forecasts used in the valuation, we compared (1) forecasted revenue and EBITDA to Naiz’s historical actual results and (2)estimated annual customer attrition rates to historical Naiz customer attrition data. We tested the Company’s determined weighted average cost of capital(“WACC”), which was used to determine the discount rate, by involving valuation professionals with specialized skills and knowledge, who assisted in:Evaluating the selected discount rate by comparing it against a discount rate range that was independently developed using publicly available market datafor comparable companies, and;Assessing the Company’s WACC calculation, by comparing it against an independently estimated WACC range based on inputs obtained throughpublished surveys and studies.Goodwill impairment assessmentAs discussed in Note 16 to the consolidated financial statements, during 2022 the Company recorded goodwill of $1,257 thousand related to the acquisition of NaizBespoke Technologies, S.L. (“Naiz”). The Company performed an annual quantitative impairment test of goodwill at the reporting unit level. Based on this analysis,the Company determined that the fair value of its reporting unit exceeded its carrying value and no impairment charge was required.We identified the evaluation of the goodwill impairment assessment for the Naiz reporting unit as a critical audit matter. A high degree of subjective auditor judgmentwas required to evaluate the following assumptions used to estimate the fair value of the Company’s reporting unit, for which there were limited observable inputs:(i) forecasted reporting unit cash flows, (ii) longterm growth rates, and (iii) discount rates. The fair value was sensitive to changes in these key assumptions.Additionally, specialized skills and knowledge were needed to evaluate the discount rates.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s goodwill impairment evaluation process. We performed sensitivity analyses to assess the impact of reasonably possible changes to forecasted cashflows, longterm growth rates, and discount rates. We evaluated the Company’s forecasted growth rates by comparing the growth assumptions to those of theCompany’s peers and industry reports. We compared the Company’s forecasted revenue, cost of sales, and operating expense margins to historical actual results toassess the reasonableness of the forecasts. In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:– Assessing the Company’s WACC calculation, by comparing it against an estimated WACC range based on inputs obtained through published surveys andstudies– Evaluating the discount rates used by the Company by comparing them against discount rate ranges that were developed using publicly available market data forcomparable companies, and;– Performing an arithmetic recalculation regarding the fair value of the Company’s reporting unit, using the Company’s cash flow forecasts and the independentlydeveloped discount rates, and comparing the results to the Company’s fair value estimates./s/ Somekh ChaikinSomekh ChaikinMember Firm of KPMG InternationalWe have served as the Company’s auditor since 2017.Tel Aviv, IsraelApril 14, 2023F3MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED BALANCE SHEETSU.S. dollars in thousands (except share data)December 31,Note20222021AssetsCurrent assetsCash and cash equivalents32,10010,670Restricted cash263273Inventory997Account receivables1,94040Other receivables and prepaid expenses4758579Total current assets6,05811,562Long term deposits28Property and equipment, net5140112Operating rightofuse asset6583776Intangible assets71,377Goodwill71,395Investment in JV899Investment in marketable securities11471083,669996Total assets9,72712,558Liabilities and shareholders’ equityCurrent liabilitiesOperating lease liability6159138Shortterm loans9155Trade payables2,487635Liabilities to Related parties69863Other payables680392Total current liabilities4,1791,228Longterm loans9376Deferred tax liabilities328Operating lease liability6308473Total noncurrent liabilities1,012473CONTINGENCIES AND COMMITMENTS15Total Liabilities5,1911,701Shareholders’ equity13Stock capital Common stock of $0.001par value Authorized: 250,000,000and 100,000,000shares as of December 31,2022 and 2021; Issued and outstanding: 1,464,117and959,297 as of December 31,2022 and 2021, respectively (*)11Additional paidin capital58,67356,453Accumulated other comprehensive loss(637)(406)Accumulated deficit(53,501)(45,191)Total shareholders’ equity4,53610,857Total liabilities and shareholders’ equity9,72712,558(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F4MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSSU.S. dollars in thousands (except share data and per share data)Year endedDecember 31,Note20222021Revenues4,459131Cost of revenues(3,825)Gross profit634131Operating expensesResearch and development(1,701)(4,248)Sales and marketing18(3,143)(2,336)General and administrative19(3,900)(4,124)Total operating expenses(8,744)(10,708)Operating loss(8,110)(10,577)Financial income (expense), net20(236)57Loss before taxes(8,346)(10,520)Taxes on income36Net loss for the year(8,310)(10,520)Other comprehensive income (loss):Foreign currency translation differences(231)18Total comprehensive loss(8,541)(10,502)Basic and diluted loss per share (*)(7.47)(17.75)Basic and diluted weighted average number of shares outstanding (*)1,111,913420,385(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F5MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITYU.S. dollars in thousands (except share data)Common stockAdditionalpaidinAccumulatedothercomprehensiveAccumulatedTotalstockholders’NumberAmountcapitallossDeficitequityBalance as of January 1, 2021289,314(*)37,171(424)(34,671)2,076Stockbased compensation related to optionsgranted to employees and consultants373373Exercise of options granted to employees178(*)Restricted shares issued to shareholder (***)100,000(*)2,6182,618Issuance of shares, net of issuance cost of$1,160434,700112,58212,583Exercise of warrants135,108(*)3,7093,709Total comprehensive income (loss)18(10,520)(10,502)Balance as of December 31, 2021959,300156,453(406)(45,191)10,857Stockbased compensation related to optionsand restricted shares granted to employeesand consultants176,000(*)455455Issuance of shares in Business Combination(**)295,802(*)1,4461,446Issuance of shares post BusinessCombination (**)20,924(*)319319Effect of reverse stock split (Note 13 g)12,091(*)Total comprehensive income (loss)(231)(8,310)(8,541)Balance as of December 31, 20221,464,117158,673(637)(53,501)4,536(*)Represents an amount of less than $1.(**)See note 16(***)See note 1 bThe accompanying notes are an integral part of the consolidated financial statements.F6MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSU.S. dollars in thousandsYear endedDecember 31,20222021Cash flows from operating activities:Net loss(8,310)(10,520)Adjustments to reconcile net loss to net cash used in operating activities:Depreciation3842Change in operating lease rightofuse asset13543Amortization of intangible assets155foreign exchange differences(23)1Change in liabilities to related parties635Interest on long term liabilities10Interest paid(10)Revaluation of investment in marketable securities62(49)Restricted Shares issued to shareholder2,618Stock based compensation455373Issuance of shares post Business Combination319Change in inventory(219)Change in deferred tax liabilities(36)Change in account receivable(1,863)(12)Changes in operating lease liabilities(142)Change in other receivables and prepaid expenses184(99)Change in trade payables1,315253Change in other payables553Net cash used in operating activities(7,290)(7,297)Cash flows from investing activities:Acquisition of a subsidiary, net of cash acquired(767)Proceeds from restricted deposits, net184investing in other receivable(100)Investment in equity accounted investee(99)Purchase of property and equipment(27)(23)Net cash (used in) provided by investing activities(993)161Cash flows from financing activities:Proceeds from issuance of shares, net of issuance costs12,583Repayment of loans(67)Proceeds from exercise of warrants3,709Net cash (used in) provided by financing activities(67)16,292Effect of exchange rate fluctuations on cash and cash equivalents(230)13Change in cash and cash equivalents and restricted cash(8,580)9,169Cash and cash equivalents and restricted cash at the beginning of the year10,9431,774Cash and cash equivalents and restricted cash at the end of the year2,36310,943B) Aggregate cash flows derived for the Company as a result of the Orgad acquisition (note 16)2022Trade and other receivables364Inventory864Fixed assets55Longterm deposits31Selling Platform378Goodwill152Shortterm credit(181)Trade payables(580)Other payables(88)Longterm loan(138)Longterm provision(13)Deferred Tax Liability(87)Issuance of shares(457)Total acquisition of subsidiary, net of cash300C) Aggregate cash flows derived for the Company as a result of the Naiz acquisition (note 16)2022Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Issuance of shares(1,008)Total acquisition of subsidiary, net of cash467The accompanying notes are an integral part of the consolidated financial statements.F7MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERALa.My Size, Inc. is developing unique measurement technologies based on algorithms with applications in a variety of areas, from the apparel ecommerce market, to the courier services market and to the Do It Yourself (“DIY”) smartphone and tablet apps market. The technology is driven byproprietary algorithms, which are able to calculate and record measurements in a variety of novel ways.Following the acquisition of Naiz Bespoke Technologies, S.L (“Naiz”) in October 2022 (see note 16), the Company expanded its offering outreachand customer base.Following the acquisition of Orgad International Marketing Ltd. (“Orgad”) in February 2022 (see note 16), the Company also operates anomnichannel ecommerce platform.The Company has five subsidiaries, My Size Israel 2014 Ltd (“My Size Israel”), Topspin Medical (Israel) Ltd., and Orgad all of which areincorporated in Israel, and My Size LLC which was incorporated in the Russian Federation and Naiz Bespoke Technologies, S.L., a limited liabilitycompany incorporated under the laws of Spain (see note 16). References to the Company include the subsidiaries unless the context indicatesotherwise.My Size, Inc., was incorporated and commenced operations in September 1999, as Topspin Medical Inc. (“Topspin”), a private company registeredin the State of Delaware. In December 2013, the Company changed its name to Knowledgetree Ventures Inc. Subsequently, in February 2014, theCompany changed its name to My Size, Inc. Topspin was engaged, through its Israeli subsidiary, in research and development in the field ofcardiology and urology.Since September 1, 2005, the Company has traded on the Tel Aviv Stock Exchange (“TASE”).Between 2007 and 2012 the Company reported as a public company with the U.S. Securities and Exchange Commission (the “SEC”). In August2012, the Company suspended its reporting obligations under Section 13(a) and 15(d) of the Securities Exchange Act of 1934. In mid2015, theCompany resumed reporting as a public company.b.On January 9, 2014, at the Company’s general meeting of shareholders, its shareholders approved an engagement with one of the Company’sinvestors (the “Seller”) for the purchase of rights in a Venture (the “Venture”), including the rights to the method and the certain patent applicationthat had been filed by the Seller (the “Assets”). The Venture relates to the development of technologies and applications which will assist theconsumer to take his or her body measurements accurately using a mobile device to ensure the purchase of clothing with the best possible fitwithout the need to try them on.In February 2014, the Company established a wholly owned subsidiary, My Size (Israel) 2014 Ltd., a company registered in Israel, which iscurrently engaged in the development of the Venture described above.In return for purchasing an interest in the Venture, the Company undertook to pay the Seller 18% of the Company’s operating profit, direct orindirect, connected to the Venture for a period of seven years starting from the end of the Venture’s development period.As part of the agreement, the Seller received an option to buy back the Assets for consideration which will reflect the market fair value at that time,on the occurrence of the following events: a) if a motion is filed to liquidate the Company; b) if seven years after signing the agreement, theCompany’s total accumulated revenues, direct or indirect, from the Venture or the commercialization of the patent will be lower than NIS 3.6 million.In such an event, Seller may repurchase the interest in the Venture at a market price to be determined by an independent third party valuationconsultant, who shall be chosen by agreement by the parties, and the audit committee shall conduct the negotiations on behalf of the Company todetermine the identity of the consultant.On May 26, 2021, the Company, My Size Israel and Shoshana Zigdon entered into an Amendment to Purchase Agreement (the “Amendment”)which made certain amendments to a Purchase Agreement between the parties dated February 16, 2014 (the “Purchase Agreement”). Pursuant tothe Amendment, Ms. Zigdon agreed to irrevocably waive the right to repurchase certain assets related to the collection of data for measurementpurposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which the Company’s business is substantiallydependent, and all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My Size Israel underthe Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation,reward or any rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights(the “Waiver”). In consideration of the Waiver, the Company issued 100,000 shares of common stock to Ms. Zigdon in a private placement.F8MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERAL (Cont.)c.On July 25, 2016, the Company’s common stock began publicly trading on the Nasdaq Capital Market under the symbol “MYSZ”. The Company’sshares of common stock are listed both on the Nasdaq Capital Market and TASE.d.Since inception, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit of $53,501.The Company has financed its operations mainly through fundraising from various investors.The Company’s management expects that the Company will continue to generate losses and negative cash flows from operations for theforeseeable future. Based on the projected cash flows and cash balances as of December 31, 2022, management is of the opinion that its existingcash will be sufficient to fund operations for a period less than 12 months. As a result, there is substantial doubt about the Company’s ability tocontinue as a going concern.Management’s plans include the continued commercialization of the Company’s products and securing sufficient financing through the sale ofadditional equity securities, debt or capital inflows from strategic partnerships. Additional funds may not be available when the Company needsthem, on terms that are acceptable to it, or at all. If the Company is unsuccessful in commercializing its products and securing sufficient financing,it may need to cease operations.The financial statements include no adjustments for measurement or presentation of assets and liabilities, which may be required should theCompany fail to operate as a going concern.e.The Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificial intelligencedriven measurement solutions (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions. The fashion and equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. The SaaS based innovativeartificial intelligence driven measurement solutions, or SaaS Solutions operating segment consists of My Size Inc My Size Israel and LLC.NOTE 2 SIGNIFICANT ACCOUNTING POLICIESThe consolidated financial statements are prepared according to United States generally accepted accounting principles (“U.S. GAAP”), applied on aconsistent basis, as followsa.Use of estimates:The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions thataffect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.Information about assumptions made by the Company with respect to the future and other reasons for uncertainty with respect to estimates thathave a significant risk of resulting in a material adjustment to carrying amounts of assets and liabilities in the next financial year are included in thefollowing notes:Acquisitions of subsidiariesThe Company measures the fair value of the consideration transferred (including contingent consideration) and fair value of the assets acquiredand liabilities assumed, in business combination transactions. For information on details on fair value measurement in acquisition of subsidiaries,see Note 16 regarding business combinations.Estimated impairment of nonfinancial assetsThe Company examines on an annual basis whether there is an impairment of goodwill, intangibles and property, plant and equipment that areallocated to cash generating units, in accordance with the accounting policy presented in Note 1(h) below. Recoverable amounts of cashgenerating units are determined on the basis of valueinuse calculations. These calculations require the use of estimates.For information on key assumptions used in calculation of the recoverable amount, see note 7 – Goodwill and other Intangible assets.b.Functional currency:The currency of the primary economic environment in which the operations of the Company is conducted is the United States Dollar and thus it isthe Company’s functional currency. The reporting currency according to which these financial statements are prepared is the U.S. dollar.The currency of the primary economic environment in which the operation of the Subsidiary, My Size Israel and Orgad International MarketingLtd. functional currency is the New Israeli Shekel (“NIS”).The currency of the primary economic environment in which the operation of the Subsidiary, My Size LLC, functional currency is Russian Ruble.The currency of the primary economic environment in which the operation of the Subsidiary, Naiz fit, functional currency is Euro.F9MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)c.Principles of consolidation:The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances andtransactions have been eliminated upon consolidation.d.Cash equivalents:Cash equivalents are shortterm highly liquid investments that are readily convertible to cash with original maturities of three months or less at thedate acquired.e.Restricted cashRestricted cash are deposits for rent, credit card and for hedging activities.f.Inventories:Inventories include finished goods and are measured at the lower of cost or net realizable value. The cost of inventories comprises of the costsincurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary courseof business. At the point of the loss recognition, a new, lowercost basis for that inventory is established, and subsequent changes in facts andcircumstances do not result in the restoration or increase in that newly established cost basis. The costs of purchase of inventories comprise thepurchase price and other costs directly attributable to the acquisition of finished goods. In 2022, the Company recorded an inventory markdownof $48.g.Property and equipment:Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straightline method over theestimated useful lives of the assets, at the following annual rates:%Computers and peripheral equipment33Office furniture and equipment720Leasehold improvementsOver the term of the leaseor the useful life of theimprovements, whicheveris shorterh.Impairment of longlived assets:The Company’s property and equipment are reviewed for impairment in accordance with ASC 360, “Property Plant and Equipment”, wheneverevents or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held andused is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by theassets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount ofthe assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less sellingcosts. During the periods ended December 31, 2022 and 2021, no impairment losses have been recorded.i.Business combinations:The Company applies the provisions of ASC 805, “Business Combination” and allocates the fair value of purchase consideration to the tangibleassets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchaseconsideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assetsacquired and liabilities assumed, the Company estimated the future expected cash flows from acquired platform, customer relationships,Technology and trademark from a market participant perspective, useful lives and discount rates. In addition, management makes significantestimates and assumptions, which are uncertain, but believed to be reasonable.Acquisitionrelated costs are recognized separately from the acquisition and are expensed as incurred.F10MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)j.Goodwill:Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a businesscombination. Under ASC 350, “Intangible Goodwill and Other”, goodwill is not amortized, but rather is subject to an annual impairment test.ASC 350 requires goodwill to be tested for impairment at the reporting unit level at least annually, the fourth quarter, or between annual tests incertain circumstances, and written down when impaired. Goodwill is tested for impairment by comparing the fair value of the reporting unit with itcarrying value. Goodwill from Orgad acquisition was allocated to the fashion and equipment ecommerce platform segment and Goodwill from theNaiz acquisition was allocated to Naiz segment based innovative artificial intelligence driven measurement solutions.Alternatively, ASC 350 permits an entity to bypass the qualitative assessment for any reporting unit and proceed directly to performing the firststep of the goodwill impairment test. There were no impairment charges to goodwill during the period presented.k.Intangible assets:Intangible assets consist of identifiable intangible assets that the Company has acquired from previous business combinations. Intangible assetsare recorded at costs, net of accumulated amortization. The Company amortizes its intangible assets reflecting the pattern in which the economicbenefits of the intangible assets are consumed. When a pattern cannot be reliably determined, the Company uses a straightline amortizationmethod. Amortization is calculated by the straightline method over the estimated useful lives of the following assets.The estimated useful lives of the company’s intangible assets are as follows:yearsCustomer Relationships7Technology5Trademark5Selling Platform3Each period the Company evaluates the estimated remaining useful lives of its intangible assets and whether events or changes in circumstanceswarrant a revision to the remaining period of amortizationl.Severance pay:The Subsidiary’s liability for severance pay is covered by Section 14 of the Israeli Severance Pay Law (“Section 14”). Under Section 14, employeesin Israel are entitled to have monthly deposits, at a rate of 8.33% of their monthly salary, made on their behalf to their insurance funds. Payments inaccordance with Section 14 exempt the Subsidiary from any additional obligation for these employees. As a result, the Subsidiary does notrecognize any liability for severance pay due to these employees and the deposits under Section 14 are not recorded as an asset in theSubsidiary’s balance sheet. These contributions for compensation represent defined contribution plans and expenses are recorded based onactual deposits.Other than the My Size Israel’s liability there are no additional severance pay liabilities.F11MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)m.Research and development costs:Research and development costs are charged to the statement of operations, as incurred. Most of the research and development expenses are forwages, related expenses and subcontractors.n.Income taxes:The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilitiesfor the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Companies’ taxreturns. Deferred taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities using enactedtax rates in effect in the years in which the differences are expected to reverse. The Company assesses the likelihood that its deferred tax assetswill be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely thannot that all or a portion of deferred tax assets will not be realized. The Company establishes a valuation allowance, if necessary, to reduce deferredtax assets to the amount more likely than not to be realized. As of December 31, 2022, and 2021, a full valuation allowance was established by theCompany.The Company implements a twostep approach to recognize and measure the benefit of its tax positions. The first step is to evaluate the taxposition taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that,on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigationprocesses. The second step is to measure the tax benefit as the largest amount that is greater than 50 percent (cumulative basis) likely to berealized upon settlement.The Company believes that its tax positions are all highly certain of being upheld upon examination. As of December 31,2022 and 2021 the Company recorded a liability for unrecognized tax benefits of $328 and none respectively.o.Accounting for stockbased compensation:The Company accounts for its employees’ stockbased compensation as an expense in the financial statements based on ASC 718. All awards areequity classified and therefore such costs are measured at the grant date fair value of the award and graded vesting attribution approach torecognize compensation cost over the vesting period. The Company estimates stock option grant date fair value using the Binomial and BlackScholes option pricingmodel.The Company recorded stock options issued to nonemployees at the grant date fair value, and recognizes expenses over the related serviceperiod by using the straightline attribution approach in accordance with ASU 201807. All awards are equity classified.The expected volatility of the share prices reflects the assumption that the historical volatility of the share prices is reasonably indicative ofexpected future trends.The riskfree interest rate for grants with an exercise price denominated in USD for employees and several consultants is based on the yield fromUS treasury zerocoupon bonds with an equivalent term.The Company has historically not paid dividends and has no foreseeable plans to pay dividends.F12MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)p.Fair value of financial instruments:ASC 820, Fair Value Measurements and Disclosures, relating to fair value measurements, defines fair value and established a framework formeasuring fair value. The ASC 820 fair value hierarchy distinguishes between market participant assumptions developed based on market dataobtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptionsdeveloped based on the best information available in the circumstances. ASC 820 defines fair value as the price that would be received to sell anasset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price. Inaddition, the fair value of assets and liabilities should include consideration of nonperformance risk, which for the liabilities described belowincludes the Company’s own credit risk.As a basis for considering such assumptions, ASC 820 establishes a threetier value hierarchy, which prioritizes the inputs used in the valuationmethodologies in measuring fair value:Level 1 Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access. Valuationadjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readilyand regularly available in an active market, valuation of these products does not entail a significant degree of judgment.Level 2 Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, eitherdirectly or indirectly.Level 3 Valuations based on inputs that are unobservable and significant to the overall fair value measurement.The Company holds share certificates in iMine Corporation (“iMine”) formerly known as Diamante Minerals, Inc., a publiclytraded company onthe OTCQB.Due to sales restrictions on the sale of the iMine shares, the fair value of the shares was measured on the basis of the quoted market price for anotherwise identical unrestricted equity instrument of the same issuer that trades in a public market, adjusted to reflect the effect of the salesrestrictions and is therefore, ranked as Level 2 asset.q.Basic and diluted net loss per share:Basic net loss per share is computed based on the weighted average number of shares of common stock outstanding during each year. Diluted netincome per share is computed based on the weighted average number of shares of common stock outstanding during each year plus dilutivepotential equivalent common stock considered outstanding during the year, in accordance with ASC 260, “Earnings per Share”. For the yearsended December 31, 2022 and 2021, all outstanding options and warrants have been excluded from the calculation of the diluted net loss per sharesince their effect was antidilutive.r.Concentrations of credit risk:Financial instruments that potentially subject the Company and its subsidiaries to concentrations of credit risk consist principally of cash andcash equivalents.Cash and cash equivalents are invested in banks in Israel, Spain and United States. Such deposits in United States may be in excess of insuredlimits and are not insured in other jurisdictions. Management believes that the financial institutions that hold the Company’s investments arefinancially sound and, accordingly, minimal credit risk exists with respect to these investments.The Company and its subsidiaries have no offbalancesheet concentration of credit risk such as foreign exchange contracts, option contracts orother foreign hedging arrangements.F13MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)s.Revenue Recognition:The Company’s revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled softwaresubscriptions, associated software maintenance and support.The Company recognizes revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with acustomer exists only when: the parties to the contract have approved it and are committed to perform their respective obligations, the Companycan identify each party’s rights regarding the distinct goods or services to be transferred (“performance obligations”), the Company can determinethe transaction price for the goods or services to be transferred, the contract has commercial substance and it is probable that the Company willcollect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to acustomer. Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted togovernmental authorities. Refunds are estimated at contract inception and updated at the end of each reporting period if additional informationbecomes available. Revenue is recognized when control of the product is transferred to the customer.The Company maintains a returns policy that allows its customers to return product within a specified period of time. The estimate of the provisionfor returns is based upon historical experience with actual returns.Principal versus Agent ConsiderationsThe Company follows the guidance provided in ASC 606 for determining whether it is a principal or an agent in arrangements with customers, byassessing whether the nature of the Company’s promise is a performance obligation to provide the specified goods (principal) or to arrange forthose goods to be provided by the other party (agent). With regard to products being sold by Orgad through Amazon, this determination involvesjudgment. The Company determines it is the principle when it has control over promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).The Company recognizes revenue ratably over the contractual service term for hosted services that are priced based on a committed number oftransactions where the delivery and consumption of the benefit of the services occur evenly over time, beginning on the date the servicesassociated with the committed transactions are first made available to the customer and continuing through the end of the contractual serviceterm. Over usage fees and fees based on the actual number of transactions are billed in accordance with contract terms as these fees are incurredand are included in the transaction price of an arrangement as variable consideration. Fees based on a number of transactions or impressions permonth, are allocated to the period in which the transactions occur. Revenue for subscriptions sold as a fee per period is recognized ratably overthe contractual term as the customer simultaneously receives and consumes the benefit of the underlying service.F14MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)t.Contingencies and CommitmentsLiabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it isprobable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with losscontingencies are expensed as incurred.u.Derivative instrumentsThe Company accounts for its derivative instruments as either assets or liabilities and measures them at fair value through profit or loss.v.LeasesThe Company leases include an office space lease agreement for 36 months, with an option to extend for an additional 36 months and 36 monthscancelable operating lease agreements on behalf of personnel vehicles. The lease term includes a noncancellable period of the lease plus anyadditional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise,or an option to extend (or not to terminate) the lease controlled by the lessor.ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make leasepayments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value oflease payments over the lease term. The company generally use its incremental borrowing rate based on the estimated rate of interest forcollateralized borrowing over a similar term of the lease payments at commencement date. Lease expense for lease payments is recognized on astraightline basis over the lease term.For the office rent lease, the Company has elected to account for the lease and nonlease maintenance components as a single lease component.Therefore, the lease payments used to measure the lease liability include all of the fixed consideration in the contract, including insubstance fixedpayments, owed over the lease term.w.Impact of recently issued accounting standardIn June 2016, the FASB issued ASU 201613, “Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses on FinancialInstruments”, which requires companies to measure credit losses of financial instruments, including customer accounts receivable, utilizing amethodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information toinform credit loss estimates. Subsequent to the issuance of ASU 201613, the FASB issued several additional Accounting Standard Updates toclarify implementation guidance, provide narrowscope improvements and provide additional disclosure guidance. As an Emerging GrowthCompany, ASU 201613 is effective for fiscal years beginning after December 15, 2022. The Company does not expect this ASU to have a materialimpact on its consolidated financial statements.F15MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 3 CASH AND CASH EQUIVALENTSThe Company’s cash and cash equivalents balance at December 31, 2022 and 2021 is denominated in the following currencies:December 31,20222021US Dollars1,65110,184New Israeli Shekels259433Other190532,10010,670NOTE 4 OTHER RECEIVABLES AND PREPAID EXPENSESDecember 31,20222021Prepaid expenses and other current assets322429Government authorities28317Other153133Total758579NOTE 5 PROPERTY AND EQUIPMENT, NETComputersandperipheralequipmentOfficefurnitureandequipmentLeaseholdimprovementsTotalCostBalance as at January 1, 20211825860300Additions2323Translation adjustments72211Balance as at December 31, 20212126062334Balance as at January 1, 20222126062334Additions161127Business combination401555Translation adjustments(32)(8)(8)(48)Balance as at December 31, 20222367854368Accumulated DepreciationBalance as at January 1, 20211461412172Additions2751042Translation adjustments6118Balance as at December 31, 20211792023222Balance as at January 1, 20221792023222Additions209938Translation adjustments(27)(3)(2)(32)Balance as at December 31, 20221722630228Carrying amountsAs at December 31, 2021334039112As at December 31, 2022645224140F16MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 6 LEASESIn August 2019, The Company entered into an office space lease agreement. The lease term is for 36 months beginning on August 20, 2019 and endingon August 20, 2022, with an option to extend for an additional 36 months. The Company extended the lease period until August 20, 2025. Monthly rentpayments including utilities amounting to approximately USD 14 (NIS 49,500) per month.In addition, The Company entered into a threeyear cancelable operating lease agreement for cars.These operating leases are included in “Right of use asset” on the Company’s December 31, 2022 consolidated balance sheets, and represent theCompany’s right to use the underlying asset for the lease term. The Company’s obligations to make lease payments are included in the currentliabilities as “Operating lease liability” and in the noncurrent liabilities as “Operating lease liability long term” on the Company’s December 31, 2022consolidated balance sheets. As of December 31, 2022, rightofuse of asset was $583. operating lease liabilities were $159 and non current Operatinglease liabilities were $308. Rightofuse asset includes the capitalization of improvements (net of amortization) amounting to $105.Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value ofthe lease payments.The interest rate used to discount future lease payment was 11.95%.Maturities of lease liabilities as of December 31, 2022 were as follows:Year Ending:2023$1912024$1912025$127Thereafter$509Less imputed interest:$(42)Total lease liabilities$467F17MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 7 – Goodwill and other Intangible assetsA.Identified intangible assetsSchedule of Intangible assetsSelling PlatformTechnologyCustomerRelationshipsOtherTotalThousandsUSDThousandsUSDThousandsUSDThousandsUSDThousandsUSDCostAs of January 1, 2022Acquisitions through business combinations378286726771,467Effect of changes in exchange rates(32)2565765As of December 31, 2022346311791841,532AmortizationAs of January 1, 2022Amortization for the year including effect of changes inexchange rates as of December 31, 2022(109)(15)(27)(4)(155)Carrying amountAs of December 31, 2022237296764801,377AmortizationAmortization expenses recorded for identified intangible assets in the Consolidated Statements of Operations for each period and were as follows:Line ItemDecember 31,2022December 31,2021Selling platformCosts of revenues109TrademarkSales and marketing4TechnologyCosts of revenues15Customer relationshipsSales and marketing27Total amortization expenses155Future amortization expenses are expected to be as follows:20232024202520262027ThereafterTotalFuture amortization expenses3033031941771561791,312b.GoodwillThe changes in the carrying amount of goodwill for the years ended December 31, 2022 and 2021 were as follows:Fashion and equipmentecommerce platformNaizTotalBalance as of December 31, 2021Changes during the period:Goodwill acquired1521,1521,304Goodwill impairmentTranslation differences(14)10591Balance as of December 31, 20221381,2571,395The Company operates its business through three reporting segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovativeartificial intelligence driven measurement solutions and (iii) Naiz. See note 17 for additional segments information.The Company determines the fair value of its reporting units using the income approach. According to the income, the Company uses discounted cashflows to estimate the fair value. Cash flow projections are based on the Company’s estimates of revenue growth rates and operating margins, takinginto consideration the industry’s and market’s conditions. The discount rate used is based on the weighted average cost of capital (“WACC”),adjusted for the relevant risk associated with businessspecific characteristics.The Company performed a quantitative assessment as of December, 31 2022 for the reporting units’ fair value. The estimated fair value of the Fashionand equipment ecommerce platform and Naiz reporting units exceeded its estimated carrying amount by 95.9% and 27.7% respectively. This, based thefollowing assumptions:Fashion and equipmentecommerce platformNaizDiscount rate21%23%Terminal growth rate3%3%If business conditions or expectations were to change materially, it may be necessary to record impairment charges to the Company’s reporting units inthe future.F18MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 8 Investment in JVIn August 2022, the Company established a joint venture (“JV”) in Brazil with Santista Têxtil. The Company holds 51% and Santista Têxtil holds 49% of theJV. The purpose of the JV is to serve the Brazilian market according to the business plan that was set. Both parties agree to make an initial investment in theJV of $198that will be made per the holding percentage of each party. As of the reporting date, the JV is in process of establishing its operation.NOTE 9 Financial LiabilitiesThe book value of each of the financial liability categories is an acceptable approximation of fair value.The debt is comprised of four loans that were granted to My Size Israel – in an outstanding amount of approximately $131, bearing interest rangingfrom prime rate to prime+2.8% rate, and four loans that were granted to the Spanish subsidiary– in an outstanding amount of approximately $400,bearing interest ranging from 1% to 3%.The financial liability maturities during the five years following the end of the financial year are shown below:UntilUntilUntilUntilUntilAfterTOTAL311223311224311225311226311227311227311222Debts with credit institutions15513892874712531NOTE 10 RELATED PARTIES TRANSACTIONSA. Balances with related parties:The following related party payables are included in liability to related parties.December 31,20222021Officers (*)4143Liability in respect of business combinations (**)739Other related parties (***)(95)Directors152069863(*)The amount includes the net salaries payables.(**)The amount includes the provision created to former owners of Orgad that are entitled to additional cash and equity consideration and former owners of Naizthat entitled to additional cash consideration, see note 16 business combination.(***)The amount includes an amount receivable from Orgad previous shareholders who currently work in the company.B. Related parties benefits:Year endedDecember 31,20222021Salaries and related expenses1,440852Share based payments39673Cash liability and equity liability expenses related to acquisitions (**)1,058Directors58582,952983(**)The amount includes the expenses for a provision created to former owners of Orgad that are entitled to additional cash and equity consideration and formerowners of Naiz that entitled to additional cash consideration, see note 16 business combination.NOTE 11 FINANCIAL INSTRUMENTSThe following tables presents the Company’s significant assets and liabilities that are measured at fair value on recurring basis and their classificationwithin the fair value hierarchy:December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities47financial assets (*)10December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesDerivatives9December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities108December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesWarrants derivative2(*)the financial asset includes in other receivables.F19MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 11 FINANCIAL INSTRUMENTS (Cont.)The carrying amounts of cash and cash equivalents, restricted cash, short term restricted deposit, accounts receivable, other receivables and prepaidexpenses, trade payable and accounts payable approximate their fair value due to the shortterm maturities of such instruments.At December 31, 2022, the recognized gain and fair value (based on quoted market prices with a discount due to security restrictions on iMine shares)of the marketable securities were $59and $47, respectively (at December 31, 2021 $49and $108, respectively).NOTE 12 TAXES ON INCOMEa.On December 31, 2022, the Company had U.S. federal net operating loss carryforwards of approximately $26 available to reduce future taxableincome. Utilization of the U.S. net operating losses may be subject to substantial limitations due to the change of ownership provisions of theInternal Revenue Code of 1986.The U.S. Company has final tax assessments through 2014.On December 22, 2017, the Tax Reform Act was signed into law. The legislation significantly changes U.S. tax law by, among other things, lowering theU.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. As a result of the decrease in the corporate incometax rate, the Company revalued the ending net deferred tax assets at December 31, 2017, but did not recognize any incremental income tax expense in2017 due to the revaluation of the valuation allowance.b.Foreign tax:1.Tax rates:Presented hereunder are the tax rates relevant to the Company’s Israeli subsidiaries:2022 23%2021 23% Presented hereunder are the tax rates relevant to the Company’s Spanish subsidiary:2022 24%2.The Company’s Israeli subsidiaries have estimated total available carryforward operating tax losses for Israeli income tax purposes ofapproximately $64as of December 31, 2022. Of these losses, a total of $47.5are owned by Topspin Medical (Israel) Ltd. Topspin tax lossesmay be offset only by future income with respect to the same operational activity by which it was incurred for an indefinite period of time. Theother losses are owned by My Size Israel and may be carryforward to offset against future income for an indefinite period of time.3.Topspin Medical (Israel) Ltd. and My Size (Israel) 2014 Ltd. has final tax assessments through 2016.c.U.S. and foreign components of loss from continuing operations, before income taxes consisted of:December 31,20222021U.S(1,180)(3,802)NonU.S. (foreign)(7,130)(6,718)(8,310)(10,520)F20MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 12 TAXES ON INCOME (Cont.)d.Deferred taxes:Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reportingpurposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows:December 31,20222021Deferred tax assets:Operating loss carryforwards20,13120,238Warrants and options145126Marketable securities390377Intangible assets(328)Research and development expenses586341Other temporary differences203Deferred tax assets before valuation allowance21,12721,082Valuation allowance(21,455)(21,082)Net deferred tax liability(328)The following table presents a reconciliation of the beginning and ending valuation allowance:December 31,20222021Balance at beginning of the year21,08218,968Additions in valuation allowance to the income statement1,7581,625Additions in valuation allowance due to exchange rate differences(1,385)489Balance at end of the year21,45521,082In assessing the realization of deferred tax assets, management considers whether it is more likely than not that all or some portion of the deferred taxassets will not be realized.The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporarydifferences are deductible and net operating losses are utilized. Based on consideration of these factors, the Company recorded a full valuationallowance at December 31, 2021 and 2020.e.Theoretical taxThe following presents the adjustment between the theoretical tax amount and the tax amount included in the financial statements:December 31,20222021Loss before income taxes8,34610,520Statutory tax rate21%21%Computed “expected” tax income1,7522,209Foreign tax rate differences and exchange rate differences149131Nondeductible expenses(107)(715)Change in valuation allowance(1,758)(1,625)Taxes on income36F21MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITYa.Common stock confers upon their holders the right to receive notice to participate and vote in general meetings of the Company, and the right toreceive dividends if declared.b.On January 8, 2021, the Company conducted a public offering of its securities pursuant to which it issued 62,768 shares of its common stock forgross proceeds of $2,008. The net proceeds to the Company from the offering were approximately $1,700, after deducting placement agent’s feesand other estimated offering expenses payable by the Company.c.During 2021, a holders of warrants exercised warrants to purchase 135,109 ordinary shares of the Company in exchange for $3,709.d.On March 25, 2021, the Company conducted a public offering of its shares of common stock pursuant to which it issued 104,741 shares of itscommon stock for gross proceeds of $3,300. The net proceeds to the Company from the offering were approximately $2,872, after deductingplacement agent’s fees and other estimated offering expenses payable by the Company.On May 7, 2021, the Company issued an additional 15,711 shares of the Company’s common stock in connection with the full exercise of theunderwriter’s overallotment option granted in the Company’s March 2021 public offering. These additional shares were sold to the underwriter at apublic offering price of $31.5 per share, resulting in additional net proceeds to the Company, net of the underwriting discount, of approximately$463.e.On May 26, 2021, the Company issued 100,000 shares of common stock to Ms. Zigdon in consideration of the Waiver. See note 1(b) above.f.On October 28, 2021, the Company sold in a registered direct offering 100,592 shares of its common stock and, in a concurrent private placement,an aggregate of 75,444 unregistered warrants to purchase shares of common stock, at an offering price of $33.8 per share and associated warrant.In addition, on the same day, the Company sold in a private placement 150,888 unregistered shares of common stock and unregistered warrants topurchase up to an aggregate of 113,166 shares of common stock at the same purchase price as in the registered direct offering. The warrants areimmediately exercisable and will expire five years from issuance at an exercise price of $31.5 per share, subject to adjustment as set forth therein.The gross proceeds from the offerings were $8,500. The net proceeds to the Company from the offerings were approximately $7,560, afterdeducting placement agent’s fees and other estimated offering expenses payable by the Company. In connection with the offerings, the Companyissued to the placement agent warrants to purchase 17,603 shares on substantially the same terms as the purchasers in the offerings at an exerciseprice of $42.25 per share and a term expiring on October 26, 2026.g.On December 7, 2022, the Company’s board of directors approved a 1for25 reverse stock split of the Company’s issued and outstanding sharesof common stock. The reverse stock split became effective on December 8, 2022. In order not to have fractional shares as a result of the reversestock split, the Company issued an additional 12,091 shares of common stock. As a result, all shares of common stock, options for shares ofcommon stock, exercise price and net loss per share amounts were adjusted retroactively for all periods presented in these financial statements.F22MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITY (Cont.)g.A summary of the warrant activity during the years ended December 31, 2022 and 2021 is presented below:Number ofWarrantsWeightedAverageExercisePriceWeightedAverageRemainingLife inYearsOutstanding, December 31, 2020216,85936.754.26Issued206,214Expired or exercised(135,109)Outstanding, December 31, 2021287,96431.004.35IssuedExpired or exercised(17,901)Outstanding, December 31, 2022270,06330.213.36Exercisable, December 31, 2022270,06330.213.36NOTE 14 STOCK BASED COMPENSATIONThe stockbased expense recognized in the financial statements for services received is related to Research and Development, Sales and Marketingand General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense Research and development15195Stockbased compensation expense Sales and marketing126180Stockbased compensation expense General and administrative17898455373The stockbased expense recognized in the financial statements for services received post Acquisition of Orgad (see note 16) is related to Cost OfGoods, Sales and Marketing and General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense – Cost of goods80Stockbased compensation expense Sales and marketing112Stockbased compensation expense General and administrative127319F23MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Options issued to consultantsWe can sell additional shares of common stock without consulting stockholders and without offering shares to existing stockholders, which wouldresult in dilution of shareholders’ interests in the company and could depress our stock price.Our Certificate of Incorporation currently authorizes 250,000,000 shares of common stock, of which 2,446,780 are currently outstanding as of March 31, 2023and our board of directors is authorized to issue additional shares of our common stock. Although our board of directors intends to utilize its reasonable businessjudgment to fulfil its fiduciary obligations to our then existing stockholders in connection with any future issuance of our capital stock, the future issuance ofadditional shares of our capital stock could cause immediate, and potentially substantial, dilution to our existing stockholders, which could also have a materialeffect on the market value of the shares. Further, other than certain participation rights that we have granted in a past offering, our shares do not have preemptiverights, which means we can sell shares of our capital stock to other persons without offering purchasers in this offering the right to purchase their proportionateshare of such offered shares. Therefore, any additional sales of stock by us could dilute your ownership interest in our Company.Our quarterly operating results may fluctuate significantly.We expect our operating results to be subject to quarterly fluctuations. Our net loss and other operating results will be affected by numerous factors,including:●variations in the level of expenses related to our research and development;●any lawsuits in which we may become involved;●regulatory developments affecting our products; and●our execution of any collaborative, licensing or sales agreements, and the timing of payments under these arrangements.If our quarterly operating results fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially.Furthermore, any quarterly fluctuations in our operating results may, in turn, cause the price of our common stock to fluctuate substantially.If we fail to comply with the rules under the Sarbanes Oxley Act of 2002 related to accounting controls and procedures or if we discover materialweaknesses and deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult.If we fail to comply with the rules under the SarbanesOxley Act of 2002 related to disclosure controls and procedures, or, if we discover materialweaknesses and other deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult. Section 404 of the SarbanesOxley Act requires annual management assessments of the effectiveness of our internal control over financial reporting and, ifwe are no longer a nonaccelerated filer, a report by our independent auditors addressing these assessments. If material weaknesses or significant deficiencies arediscovered or if we otherwise fail to achieve and maintain the adequacy of our internal control, we may not be able to ensure that we can conclude on an ongoingbasis that we have effective internal controls over financial reporting in accordance with Section 404 of the SarbanesOxley Act. Moreover, effective internalcontrols are necessary for us to produce reliable financial reports and are important to helping prevent financial fraud. If we cannot provide reliable financial reportsor prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price ofour common stock could drop significantly.38Our Certificate of Incorporation, Bylaws and Delaware law may have antitakeover effects that could discourage, delay or prevent a change incontrol, which may cause our stock price to decline.Our Certificate of Incorporation, Bylaws and Delaware law could make it more difficult for a thirdparty to acquire us, even if closing such a transactionwould be beneficial to our stockholders. Provisions of our Certificate of Incorporation, Bylaws and Delaware law also could have the effect of discouraging potentialacquisition proposals or making a tender offer or delaying or preventing a change in control, including changes a stockholder might consider favorable. Suchprovisions may also prevent or frustrate attempts by our stockholders to replace or remove our management. In particular, the Certificate of Incorporation, Bylawsand Delaware law, as applicable, among other things:●provide the board of directors with the ability to alter the Bylaws without stockholder approval;●the classification of our board of directors;●place limitations on the removal of directors;●provide that vacancies on the Board of Directors may be filled by a majority of directors in office, although less than a quorum;●require that stockholder actions must be affected at a duly called stockholder meeting and generally prohibiting stockholder actions by written consent;●eliminate the ability of stockholders to call a special meeting of stockholders; and●establish advance notice requirements for nominations for election to the Board of Directors or for proposing matters that can be acted upon at duly calledstockholder meetings.We are subject to Section 203 of the Delaware General Corporation Law which, subject to certain exceptions, prohibits “business combinations” between apubliclyheld Delaware corporation and an “interested stockholder,” which is generally defined as a stockholder who becomes a beneficial owner of 15% or more ofa Delaware corporation’s voting stock for a threeyear period following the date that such stockholder became an interested stockholder. These provisions areexpected to discourage certain types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to firstnegotiate with our board. These provisions may delay or prevent someone from acquiring or merging with us, which may cause the market price of our commonstock and the value of our securities to decline.If we fail to comply with the continued listing requirements of the Nasdaq Capital Market, our common stock may be delisted and the price of ourcommon stock and our ability to access the capital markets could be negatively impacted.Nasdaq has established certain standards for the continued listing of a security on the Nasdaq Capital Market. The standards for continued listing include,among other things, that the minimum bid price for the listed securities not fall below $1.00 per share for a period of 30 consecutive trading days and that wemaintain a minimum of $2,500,000 in shareholders’ equity. We have in the past fallen below the minimum bid price and minimum shareholders’ equity.39No assurance can be given that we will continue to be in compliance with the Rule. Failure to meet applicable Nasdaq continued listing standards couldresult in a delisting of our common stock. A delisting of our common stock from Nasdaq could materially reduce the liquidity of our common stock and result in acorresponding material reduction in the price of our common stock. In addition, delisting could harm our ability to raise capital through alternative financing sourceson terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, employees and fewer business development opportunities.The exercise of outstanding warrants and stock options will have a dilutive effect on the percentage ownership of our capital stock by existingstockholders.As of March 15, 2023, we had outstanding warrants to acquire 2,299,115 shares of our common stock and stock options to purchase 1,659 shares of ourcommon stock, which warrants and options are exercisable for prices ranging between $2.81 and $375. The expiration of the term of such options and warrants rangefrom 0.22 years to 4.83 years. If a significant number of such warrants and stock options are exercised by the holders, the percentage of our common stock ownedby our existing stockholders will be diluted.Were our common stock to become subject to the penny stock rules then this could result in U.S. brokerdealers becoming discouraged from effectingtransactions in shares of our common stock.Rule 15g9 under the Exchange Act establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a marketprice of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. If we do not retain a listing on the NasdaqCapital Market or do not meet certain net tangible asset or average revenue requirements and if the price of our common stock is less than $5.00, our common stockwill be deemed a penny stock. For any transaction involving a penny stock, unless exempt, the rules require: (a) that a broker or dealer approve a person’s accountfor transactions in penny stocks; and (b) the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantityof the penny stock to be purchased.In order to approve a person’s account for transactions in penny stocks, the broker or dealer must: (a) obtain financial information and investmentexperience objectives of the person and (b) make a reasonable determination that the transactions in penny stocks are suitable for that person and the person hassufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver,prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which: (a) sets forth the basis on whichthe broker or dealer made the suitability determination; and (b) confirms that the broker or dealer received a signed, written agreement from the investor prior to thetransaction. Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult forinvestors to dispose of our common stock and cause a decline in the market value of our common stock.Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissionspayable to both the broker or dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor incases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the accountand information on the limited market in penny stocks.Sales of our currently issued and outstanding stock may become freely tradable pursuant to Rule 144 and may dilute the market for your shares andhave a depressive effect on the price of the shares of our common stock.A portion of our outstanding shares of common stock are “restricted securities” within the meaning of Rule 144 under the Securities Act of 1933, asamended, or the Securities Act. As restricted shares, these shares may be resold only pursuant to an effective registration statement or under the requirements ofRule 144 or other applicable exemptions from registration under the Securities Act and as required under applicable state securities laws. Rule 144 provides inessence that an affiliate (as such term is defined in Rule 144(a)(1)) of an issuer who has held restricted securities for a period of at least six months (one year afterfiling Form 10 information with the SEC for shell companies and former shell companies) may, under certain conditions, sell every three months, in brokeragetransactions, a number of shares that does not exceed the greater of 1% of a company’s outstanding shares of common stock or the average weekly trading volumeduring the four calendar weeks prior to the sale (the four calendar week rule does not apply to companies quoted on the OTC Markets). Rule 144 also permits, undercertain circumstances, the sale of securities, without any limitation, by a person who is not an Affiliate of the Company and who has satisfied a oneyear holdingperiod. A sale under Rule 144 or under any other exemption from the Securities Act, if available, or pursuant to subsequent registrations of our shares of commonstock, may have a depressive effect upon the price of our shares of common stock in any active market that may develop.40We are a former “shell company” and as such are subject to certain limitations not applicable to other public companies generally.Prior to our suspension of reporting in 2012, we were a public reporting “shell company,” as defined in Rule 12b2 under the Exchange Act. Although weare no longer a “shell company,” we are subject to certain restrictions under the Securities Act for the resale of securities issued by issuers that have been at anytime previously a shell company. Specifically, the Rule 144 safe harbor available for the resale of our restricted securities is only available to our stockholders if wehave filed all reports and other materials required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934, as amended, or the Exchange Act, asapplicable, during the preceding twelve months, other than current reports on Form 8K, at the time of the proposed sale, regardless of whether the restrictedsecurities were initially issued at the time we were a shell company or subsequent to termination of such status. Accordingly, holders of our “restricted securities”within the meaning of Rule 144 will be subject to the conditions set forth in Rule 144 with respect to our company. Other reporting companies that are not formershell companies and have been reporting for more than twelve months are not subject to this same reporting threshold for nonaffiliate reliance on Rule 144.Accordingly, any restricted securities we have sold or sell in the future or issue to consultants or employees, in consideration for services rendered or for any otherpurpose, may not be resold unless such securities are registered with the SEC or the requirements of Rule 144 have been satisfied. As a result, it may be harder forus to fund our operations and pay our employees and consultants with our securities instead of cash. Furthermore, it may be harder for us to raise funding throughthe sale of debt or equity securities unless we agree to register such securities with the SEC, which could cause us to expend additional resources in the future. Ourprior status as a “shell company” could prevent us in the future from raising additional funds, engaging employees and consultants, and using our securities to payfor any acquisitions, which could cause the value of our securities, if any, to decline in value or become worthless.ITEM 1B. UNRESOLVED STAFF COMMENTSNone.ITEM 2. PROPERTIESWe currently lease 1,660 square feet of office space at 4 HaYarden Street, Airport City, Israel. The lease term is for 36 months beginning on August 20, 2019and ending on August 20, 2022, with an option to extend for an additional 36 months. Monthly rent payments, including utilities, amount to approximately $14,000per month. We extended the lease period until August 20, 2025.ITEM 3. LEGAL PROCEEDINGSFrom time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation issubject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.41North Empire LLCOn August 7, 2018, we commenced an action against North Empire LLC, or North Empire, in the Supreme Court of the State of New York, County of NewYork for breach of a Securities Purchase Agreement or Agreement in which we are seeking damages in an amount to be determined at trial, but in no event less than$616,000. On August 2, 2018, North Empire filed a Summons with Notice against us, also in the same Court, in which they allege damages in an amount of $11.4million arising from an alleged breach of the Agreement. On September 6, 2018, North Empire filed a Notice of Discontinuance of the action it had filed on August 2,2018. On September 27, 2018, North Empire filed an answer and asserted counterclaims in the action commenced by us against them, alleging that we failed to deliverstock certificates to North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against our CEO andnow former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018, we filed a reply to North Empire’scounterclaims. On November 15, 2018, our CEO and now former Chairman of the Board filed a motion to dismiss North Empire’s thirdparty complaint. On January 6,2020, the Court granted the motion and dismissed the thirdparty complaint. Discovery has been completed and both parties have filed motions for summaryjudgment in connection with the claims and counterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summaryjudgment, arguing there were factual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision.On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying the Company’s motion for summary judgment. On or about September 12,2022, the Court issued its Decision and Order denying the Company’s motion to reargue. North Empire filed its opposing brief on December 7, 2022. Both sides weregiven an opportunity to file a reply brief. We filed our reply brief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. Oral argument was heldbefore the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Court filed its Decision and Order, which affirmed the lower court’sdecisions regarding both My Size and North Empire’s motions for summary judgment and sent the case back to the Supreme Court. On or about March 13, 2023, theSupreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date for the mediation has not yet been set. We intend tovigorously defend any claims made by North Empire. We believe it is more likely than not that the counterclaims will be denied.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.42PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur stock currently is listed on the Tel Aviv Stock Exchange and the Nasdaq Capital Market under the symbol “MYSZ”. Our stock has been traded on theNasdaq Capital Market since July 25, 2016.HoldersAs of March 31, 2023, we had 70 shareholders of record. The actual number of stockholders is greater than this number of record holders and includesstockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our Board of Directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our Board of Directors deems relevant.Securities Authorized for Issuance under Equity Compensation PlansInformation about our equity compensation plans is incorporated herein by reference to “Item 12. Security Ownership of Certain Beneficial Owners andManagement and Related Stockholder Matters”, of this Annual Report on Form 10K.Recent Sales of Unregistered SecuritiesNone.ITEM 6. SELECTED FINANCIAL DATAAs a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULT OF OPERATIONSYou should read the following discussion along with our financial statements and the related notes included elsewhere in this Annual Report on Form10K. The following discussion contains forwardlooking statements that are subject to risks, uncertainties and assumptions, including those discussed under“Risk Factors.” Our actual results, performance and achievements may differ materially from those expressed in, or implied by, these forwardlooking statements.OverviewMySize is an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.43Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile device or through MySizeID Widget: a simple questionnaire which was uses a database collected over the years.MySizeID synchronizes the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and onlypresents items available for purchase that match their measurements to ensure a correct fit.MySize is positioning itself as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empowering brand design teams, which are designed to increaseend consumer satisfaction, contributing to a sustainable world and reduce operation costs.Orgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,682 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz BespokeTechnologies, S.L., or Naiz, a limited liability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.44The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 2,365,800 shares of My Size common stock were issuedto Whitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.45Operations in RussiaIn addition to our Israel operations, we had operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia. To date, mainly due to the invasion of Ukraine by Russia and the ongoing sanctions we stopped most ofour efforts in Russia and will probably close the subsidiary in the near future.Results of OperationsThe table below provides our results of operations for the periods indicated.Year ended December 3120222021(dollars in thousands)Revenues4,459131Cost of revenues(3,825)Gross profit634131Research and development expenses$(1,701)$(4,248)Sales and marketing(3,143)(2,336)General and administrative(3,900)(4,124)Operating loss(8,110)(10,577)Financial income (expenses), net(236)57Tax income36Net loss$(8,310)$(10,520)Year Ended December 31, 2022 Compared to Year Ended December 31, 2021RevenuesFrom inception through December 31, 2018, we did not generate any revenue from operations and we continue to expect to incur additional losses toperform further research and development activities. We started to generate revenues only in 2019. Our revenues for the year ended December 31, 2022 amounted to$4,459,000 compared to $131,000 for year ended December 31, 2021. The increase from the corresponding period primarily attributable to $4,132,000 in revenuegenerated from Orgad from February 7, 2022, the date of closing of the Orgad acquisition, or the Acquisition Date and revenue generated from the Naiz Acquisitionfrom October 11, 2022, the date of closing of the Naiz acquisition.In addition, the increase from the corresponding period results from an increase in revenues generated by My Size.Cost Of RevenuesOur cost of revenues expenses for the year ended December 31, 2022 amounted to $3,825,000, compared to none for the year ended December 31, 2021. Thecost of revenues includes cash and equity liabilities expenses in the amount of $194,000. The increase in comparison with the corresponding period was due to thecost of goods of the revenues generated from Orgad’s operations.Research and Development ExpensesOur research and development expenses for the year ended December 31, 2022 amounted to $1,701,000 a decrease of $2,547,000, or approximately 60.0%,compared to $4,248,000 for the year ended December 31, 2021. The decrease from the corresponding period primarily resulted from share based payment in amount of$2,618,000 attributed to the share issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021.Sales and Marketing ExpensesOur sales and marketing expenses for the year ended December 31, 2022 amounted to $3,143,000 an increase of $807,000, or 34.55%, compared to $2,336,000for the year ended December 31, 2021. The increase primarily resulted from an increase in employees expenses mainly due to Orgad and Naiz acquisitions, increase inAmazon fees, increase in cash and equity liabilities expenses attributed to the Orgad acquisition and an increase in share based payments offset by a decrease inpayments to consultants.46General and Administrative ExpensesOur general and administrative expenses for the year ended December 31, 2022 amounted to $3,900,000, a decrease of $224,000, or 5.43%, compared to$4,124,000 for the year ended December 31, 2021. The decrease compared to the corresponding period was mainly due to a decrease in professional expenses, mainlyattributed to shareholder activism including settlement expenses with the Lazar Parties offset by an increase in sharedbased payments and an increase in employeesexpenses mainly due to the Orgad and Naiz acquisitions.Operating LossAs a result of the foregoing, for the year ended December 31, 2022, our operating loss was $8,110,000, a decrease of $2,467,000 or 23.32%, compared to ouroperating loss for the year ended December 31, 2021 of $10,577,000.Financial Income, NetOur financial (expense) income, net for the year ended December 31, 2022 amounted to $236,000 compared to financial income, $57,000 for the year endedDecember 31, 2021. In 2022, we had financial expenses exchange rate differences offset by an income from fair value revaluation of investment in marketablesecurities whereas in 2021 we had financial income from the fair value revaluation of warrants offset by expenses from exchange rate differences and expenses fromfair value revaluation of investment in marketable securities.Net LossAs a result of the foregoing, our net loss for the year ended December 31, 2022 was $8,310,000 compared to net loss of $10,520,000 for the year endedDecember 31, 2021. The decrease in net loss was mainly due increase in sales and marketing expenses and financial expenses as opposed to financial income in thecorresponding period offset by a decrease in research and development expenses in amount of $2,618,000 attributed to the share issuance to Shoshana Zigdonunder the Amendment to Purchase Agreement dated May 26, 2021.Liquidity and Capital ResourcesSince our inception, we have funded our operations primarily through public and private offerings of debt and equity in Israel and in the U.S.As of December 31, 2022, we had cash, cash equivalents and restricted cash of $2,363,000 compared to $10,943,000 cash, cash equivalents, restricted cashas of December 31, 2021. During January 2023, we completed a registered direct and concurrent private placement offering resulting in gross proceeds ofapproximately $3 million. This decrease primarily resulted from our operating activities, the acquisition of Orgad and Naiz Fit, and resources that were deployed togrow of both businesses.Net cash used in operating activities was $7,290,000 for the year ended December 31, 2022 compared to $7,297,000 for the year ended December 31, 2021.The decrease in cash used in operating activity is derived mainly from an increase in share based payments and increase in account receivables mainly from theOrgad and Naiz fit acquisitions offset by a decrease in the net loss.Net cash used in investing activities for the year ended December 31, 2022 was $993,000 as opposed to net cash provided by investing activities of$161,000 for the year ended December 31, 2021. The net cash used in investing activities for the year ended December 31, 2022 was mainly from the acquisition ofOrgad and Naiz as opposed to proceeds from shortterm deposits and restricted deposits during the year ended December 31, 2021.We had a negative cash flow from financing activities of $67,000 for the year ended December 31, 2022 compared to positive cash flow of $16,292,000 for theyear ended December 31, 2021. The negative cash flow from financing activities for the year ended December 31, 2022 was mainly due to repayment of loans andinterest and payments for leases as opposed to proceeds from issuance of shares and from exercise of warrants for the year ended December 31, 2021.47We expect that we will continue to generate losses and negative cash flows from operations for the foreseeable future. Based on the projected cash flowsand cash balances as of December 31, 2022, together with the proceeds from the January 2023 financing, we believe our existing cash will not be sufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. We will need to raiseadditional capital, which may not be available on reasonable terms or at all. Additional capital would be used to accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;●respond to competitive pressures;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, the Russian invasion ofUkraine, the impact of any resurgence of the COVID19 pandemic and a number of other factors, many of which are outside our control, and on our financialperformance. Accordingly, we cannot assure you that we will be able to successfully raise additional capital at all or on terms that are acceptable to us. If we cannotraise additional capital when needed, it may have a material adverse effect on our business, results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.We have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.Recently Issued Accounting PronouncementsCertain recently issued accounting pronouncements are discussed in Note 2, Significant Accounting Policies, to the consolidated financial statementsincluded in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10K.OffBalance Sheet ArrangementsWe have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.48Application of Critical Accounting Policies and EstimatesOur management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we haveprepared in accordance with U.S. generally accepted accounting principles issued by the Financial Accounting Standards Board, or FASB. The preparation of thesefinancial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assetsand liabilities at the date of the financial statements, as well as the reported expenses during the reporting periods. Actual results may differ from these estimatesunder different assumptions or conditions.Our significant accounting policies were revenue from contracts with customers which are more fully described in the notes to our financial statementsincluded herein. We believe these accounting policies discussed below are critical to our financial results and to the understanding of our past and futureperformance, as these policies relate to the more significant areas involving management’s estimates and assumptions. We consider an accounting estimate to becritical if: (1) it requires us to make assumptions because information was not available at the time or it included matters that were highly uncertain at the time wewere making our estimate; and (2) changes in the estimate could have a material impact on our financial condition or results of operations.Accounting for business combinationsWe allocate the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed, based upon their estimated fairvalues at the acquisition date. These fair values are typically estimated with assistance from independent valuation specialists.The purchase price allocation process requires us to make significant estimates and assumptions, especially at the acquisition date with respect tointangible assets, contractual support obligations assumed, contingent consideration arrangements, and preacquisition contingencies.Although we believe the assumptions and estimates we have made in the past have been reasonable and appropriate, they are based in part on historicalexperience and information obtained from the management of the acquired companies and are inherently uncertain.Examples of critical estimates in valuing certain of the intangible assets we have acquired or may acquire in the future include but are not limited to:● future expected cash flows from product sales or other customer contracts;● expected costs of fulfillment including marketing, warehousing and product sales;● the acquired company’s brand and competitive position, as well as assumptions about the period of time the acquired brand will continue to be used inthe combined company’s product portfolio;● cost of capital and discount rates; and● estimating the useful lives of acquired assets as well as the pattern or manner in which the assets will amortize.Refer to Note 16, Business Combination, to the consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” of thisAnnual Report on Form 10K.49Revenue from contracts with customersOur revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled software subscriptions, associatedsoftware maintenance and support.We recognize revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with a customer exists onlywhen: the parties to the contract have approved it and are committed to perform their respective obligations, we can identify each party’s rights regarding thedistinct goods or services to be transferred (“performance obligations”), we can determine the transaction price for the goods or services to be transferred, thecontract has commercial substance and it is probable that we will collect the consideration to which we will be entitled in exchange for the goods or services that willbe transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to a customer.Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted to governmental authorities. Refundsare estimated at contract inception and updated at the end of each reporting period if additional information becomes available. Revenue is recognized when controlof the product is transferred to the customer.We maintain a returns policy that allows our customers to return product within a specified period of time. The estimate of the provision for returns is basedupon historical experience with actual returns.Principal versus Agent ConsiderationsWe follow the guidance provided in ASC 606 for determining whether we are a principal or an agent in arrangements with customers, by assessing whetherthe nature of our promise is a performance obligation to provide the specified goods (principal) or to arrange for those goods to be provided by the other party(agent). With regard to products being sold by Orgad through Amazon, this determination involves judgment. We determine it is the principle when it has controlover the promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).We recognize revenue ratably over the contractual service term for hosted services that are priced based on a committed number of transactions where thedelivery and consumption of the benefit of the services occur evenly over time, beginning on the date the services associated with the committed transactions arefirst made available to the customer and continuing through the end of the contractual service term. Over usage fees and fees based on the actual number oftransactions are billed in accordance with contract terms as these fees are incurred and are included in the transaction price of an arrangement as variableconsideration. Fees based on a number of transactions or impressions per month, are allocated to the period in which the transactions occur. Revenue forsubscriptions sold as a fee per period is recognized ratably over the contractual term as the customer simultaneously receives and consumes the benefit of theunderlying service.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.As a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.50ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAMY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2022U.S. DOLLARS IN THOUSANDSINDEXPageReport of Independent Registered Public Accounting Firm (PCAOB ID: ID 1057)F2Consolidated Balance SheetsF4Consolidated Statements of Comprehensive LossF5Consolidated Statements of Shareholders’ EquityF6Consolidated Statements of Cash FlowsF7Notes to Consolidated Financial StatementsF8 F33F1Report of Independent Registered Public Accounting FirmTo the Shareholders and Board of DirectorsMy Size, Inc.:Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of My Size, Inc. and subsidiaries (the Company) as of December 31, 2022 and 2021, the relatedconsolidated statements of comprehensive loss, shareholders’ equity, and cash flows for each of the years in the twoyear period ended December 31, 2022, and therelated notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, thefinancial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the twoyear periodended December 31, 2022, in conformity with U.S. generally accepted accounting principles.Going ConcernThe accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1d tothe consolidated financial statements, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit thatraises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1d. Theconsolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidatedfinancial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Critical Audit MattersCritical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to becommunicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved ourespecially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidatedfinancial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters oron the accounts or disclosures to which they relate.Acquisitiondate fair value of customer relationshipsAs discussed in Note 16 to the consolidated financial statements, on October 11, 2022, the Company acquired Naiz Bespoke Technologies SL (“Naiz”). As a result ofthe transaction, the Company acquired customer relationships intangible assets (“customer relationships”) representing the generation of future income from Naiz’sexisting customers. The acquisition date fair value of the customer relationships was $726 thousand.F2We identified the evaluation of the acquisitiondate fair value of the Naiz customer relationships as a critical audit matter. A high degree of subjective auditorjudgment was required to evaluate the following internally developed assumptions used to estimate the fair value of such asset, for which there were limitedobservable inputs: (i) forecasted revenues attributable to existing customers, (ii) forecasted earnings before interest, taxes, depreciation, and amortization(“EBITDA”) margins for the acquired business, (iii) estimated annual customer attrition rates and (iv) estimated discount rate. The determined fair value wassensitive to changes in these key assumptions. Additionally, specialized skills and knowledge were needed to evaluate the discount rate used.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s acquisitiondate fair value estimation process, including controls over the development of key assumptions. We performed a sensitivity analysis toassess the impact of reasonably possible changes to forecasted revenues, EBITDA margins, annual customer attrition rates, and the discount rate. We evaluated theforecasted revenue growth rates from existing customers by comparing the growth assumptions to those of the Company’s peers and industry reports. Inconnection with our assessment of the forecasts used in the valuation, we compared (1) forecasted revenue and EBITDA to Naiz’s historical actual results and (2)estimated annual customer attrition rates to historical Naiz customer attrition data. We tested the Company’s determined weighted average cost of capital(“WACC”), which was used to determine the discount rate, by involving valuation professionals with specialized skills and knowledge, who assisted in:Evaluating the selected discount rate by comparing it against a discount rate range that was independently developed using publicly available market datafor comparable companies, and;Assessing the Company’s WACC calculation, by comparing it against an independently estimated WACC range based on inputs obtained throughpublished surveys and studies.Goodwill impairment assessmentAs discussed in Note 16 to the consolidated financial statements, during 2022 the Company recorded goodwill of $1,257 thousand related to the acquisition of NaizBespoke Technologies, S.L. (“Naiz”). The Company performed an annual quantitative impairment test of goodwill at the reporting unit level. Based on this analysis,the Company determined that the fair value of its reporting unit exceeded its carrying value and no impairment charge was required.We identified the evaluation of the goodwill impairment assessment for the Naiz reporting unit as a critical audit matter. A high degree of subjective auditor judgmentwas required to evaluate the following assumptions used to estimate the fair value of the Company’s reporting unit, for which there were limited observable inputs:(i) forecasted reporting unit cash flows, (ii) longterm growth rates, and (iii) discount rates. The fair value was sensitive to changes in these key assumptions.Additionally, specialized skills and knowledge were needed to evaluate the discount rates.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s goodwill impairment evaluation process. We performed sensitivity analyses to assess the impact of reasonably possible changes to forecasted cashflows, longterm growth rates, and discount rates. We evaluated the Company’s forecasted growth rates by comparing the growth assumptions to those of theCompany’s peers and industry reports. We compared the Company’s forecasted revenue, cost of sales, and operating expense margins to historical actual results toassess the reasonableness of the forecasts. In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:– Assessing the Company’s WACC calculation, by comparing it against an estimated WACC range based on inputs obtained through published surveys andstudies– Evaluating the discount rates used by the Company by comparing them against discount rate ranges that were developed using publicly available market data forcomparable companies, and;– Performing an arithmetic recalculation regarding the fair value of the Company’s reporting unit, using the Company’s cash flow forecasts and the independentlydeveloped discount rates, and comparing the results to the Company’s fair value estimates./s/ Somekh ChaikinSomekh ChaikinMember Firm of KPMG InternationalWe have served as the Company’s auditor since 2017.Tel Aviv, IsraelApril 14, 2023F3MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED BALANCE SHEETSU.S. dollars in thousands (except share data)December 31,Note20222021AssetsCurrent assetsCash and cash equivalents32,10010,670Restricted cash263273Inventory997Account receivables1,94040Other receivables and prepaid expenses4758579Total current assets6,05811,562Long term deposits28Property and equipment, net5140112Operating rightofuse asset6583776Intangible assets71,377Goodwill71,395Investment in JV899Investment in marketable securities11471083,669996Total assets9,72712,558Liabilities and shareholders’ equityCurrent liabilitiesOperating lease liability6159138Shortterm loans9155Trade payables2,487635Liabilities to Related parties69863Other payables680392Total current liabilities4,1791,228Longterm loans9376Deferred tax liabilities328Operating lease liability6308473Total noncurrent liabilities1,012473CONTINGENCIES AND COMMITMENTS15Total Liabilities5,1911,701Shareholders’ equity13Stock capital Common stock of $0.001par value Authorized: 250,000,000and 100,000,000shares as of December 31,2022 and 2021; Issued and outstanding: 1,464,117and959,297 as of December 31,2022 and 2021, respectively (*)11Additional paidin capital58,67356,453Accumulated other comprehensive loss(637)(406)Accumulated deficit(53,501)(45,191)Total shareholders’ equity4,53610,857Total liabilities and shareholders’ equity9,72712,558(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F4MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSSU.S. dollars in thousands (except share data and per share data)Year endedDecember 31,Note20222021Revenues4,459131Cost of revenues(3,825)Gross profit634131Operating expensesResearch and development(1,701)(4,248)Sales and marketing18(3,143)(2,336)General and administrative19(3,900)(4,124)Total operating expenses(8,744)(10,708)Operating loss(8,110)(10,577)Financial income (expense), net20(236)57Loss before taxes(8,346)(10,520)Taxes on income36Net loss for the year(8,310)(10,520)Other comprehensive income (loss):Foreign currency translation differences(231)18Total comprehensive loss(8,541)(10,502)Basic and diluted loss per share (*)(7.47)(17.75)Basic and diluted weighted average number of shares outstanding (*)1,111,913420,385(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F5MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITYU.S. dollars in thousands (except share data)Common stockAdditionalpaidinAccumulatedothercomprehensiveAccumulatedTotalstockholders’NumberAmountcapitallossDeficitequityBalance as of January 1, 2021289,314(*)37,171(424)(34,671)2,076Stockbased compensation related to optionsgranted to employees and consultants373373Exercise of options granted to employees178(*)Restricted shares issued to shareholder (***)100,000(*)2,6182,618Issuance of shares, net of issuance cost of$1,160434,700112,58212,583Exercise of warrants135,108(*)3,7093,709Total comprehensive income (loss)18(10,520)(10,502)Balance as of December 31, 2021959,300156,453(406)(45,191)10,857Stockbased compensation related to optionsand restricted shares granted to employeesand consultants176,000(*)455455Issuance of shares in Business Combination(**)295,802(*)1,4461,446Issuance of shares post BusinessCombination (**)20,924(*)319319Effect of reverse stock split (Note 13 g)12,091(*)Total comprehensive income (loss)(231)(8,310)(8,541)Balance as of December 31, 20221,464,117158,673(637)(53,501)4,536(*)Represents an amount of less than $1.(**)See note 16(***)See note 1 bThe accompanying notes are an integral part of the consolidated financial statements.F6MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSU.S. dollars in thousandsYear endedDecember 31,20222021Cash flows from operating activities:Net loss(8,310)(10,520)Adjustments to reconcile net loss to net cash used in operating activities:Depreciation3842Change in operating lease rightofuse asset13543Amortization of intangible assets155foreign exchange differences(23)1Change in liabilities to related parties635Interest on long term liabilities10Interest paid(10)Revaluation of investment in marketable securities62(49)Restricted Shares issued to shareholder2,618Stock based compensation455373Issuance of shares post Business Combination319Change in inventory(219)Change in deferred tax liabilities(36)Change in account receivable(1,863)(12)Changes in operating lease liabilities(142)Change in other receivables and prepaid expenses184(99)Change in trade payables1,315253Change in other payables553Net cash used in operating activities(7,290)(7,297)Cash flows from investing activities:Acquisition of a subsidiary, net of cash acquired(767)Proceeds from restricted deposits, net184investing in other receivable(100)Investment in equity accounted investee(99)Purchase of property and equipment(27)(23)Net cash (used in) provided by investing activities(993)161Cash flows from financing activities:Proceeds from issuance of shares, net of issuance costs12,583Repayment of loans(67)Proceeds from exercise of warrants3,709Net cash (used in) provided by financing activities(67)16,292Effect of exchange rate fluctuations on cash and cash equivalents(230)13Change in cash and cash equivalents and restricted cash(8,580)9,169Cash and cash equivalents and restricted cash at the beginning of the year10,9431,774Cash and cash equivalents and restricted cash at the end of the year2,36310,943B) Aggregate cash flows derived for the Company as a result of the Orgad acquisition (note 16)2022Trade and other receivables364Inventory864Fixed assets55Longterm deposits31Selling Platform378Goodwill152Shortterm credit(181)Trade payables(580)Other payables(88)Longterm loan(138)Longterm provision(13)Deferred Tax Liability(87)Issuance of shares(457)Total acquisition of subsidiary, net of cash300C) Aggregate cash flows derived for the Company as a result of the Naiz acquisition (note 16)2022Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Issuance of shares(1,008)Total acquisition of subsidiary, net of cash467The accompanying notes are an integral part of the consolidated financial statements.F7MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERALa.My Size, Inc. is developing unique measurement technologies based on algorithms with applications in a variety of areas, from the apparel ecommerce market, to the courier services market and to the Do It Yourself (“DIY”) smartphone and tablet apps market. The technology is driven byproprietary algorithms, which are able to calculate and record measurements in a variety of novel ways.Following the acquisition of Naiz Bespoke Technologies, S.L (“Naiz”) in October 2022 (see note 16), the Company expanded its offering outreachand customer base.Following the acquisition of Orgad International Marketing Ltd. (“Orgad”) in February 2022 (see note 16), the Company also operates anomnichannel ecommerce platform.The Company has five subsidiaries, My Size Israel 2014 Ltd (“My Size Israel”), Topspin Medical (Israel) Ltd., and Orgad all of which areincorporated in Israel, and My Size LLC which was incorporated in the Russian Federation and Naiz Bespoke Technologies, S.L., a limited liabilitycompany incorporated under the laws of Spain (see note 16). References to the Company include the subsidiaries unless the context indicatesotherwise.My Size, Inc., was incorporated and commenced operations in September 1999, as Topspin Medical Inc. (“Topspin”), a private company registeredin the State of Delaware. In December 2013, the Company changed its name to Knowledgetree Ventures Inc. Subsequently, in February 2014, theCompany changed its name to My Size, Inc. Topspin was engaged, through its Israeli subsidiary, in research and development in the field ofcardiology and urology.Since September 1, 2005, the Company has traded on the Tel Aviv Stock Exchange (“TASE”).Between 2007 and 2012 the Company reported as a public company with the U.S. Securities and Exchange Commission (the “SEC”). In August2012, the Company suspended its reporting obligations under Section 13(a) and 15(d) of the Securities Exchange Act of 1934. In mid2015, theCompany resumed reporting as a public company.b.On January 9, 2014, at the Company’s general meeting of shareholders, its shareholders approved an engagement with one of the Company’sinvestors (the “Seller”) for the purchase of rights in a Venture (the “Venture”), including the rights to the method and the certain patent applicationthat had been filed by the Seller (the “Assets”). The Venture relates to the development of technologies and applications which will assist theconsumer to take his or her body measurements accurately using a mobile device to ensure the purchase of clothing with the best possible fitwithout the need to try them on.In February 2014, the Company established a wholly owned subsidiary, My Size (Israel) 2014 Ltd., a company registered in Israel, which iscurrently engaged in the development of the Venture described above.In return for purchasing an interest in the Venture, the Company undertook to pay the Seller 18% of the Company’s operating profit, direct orindirect, connected to the Venture for a period of seven years starting from the end of the Venture’s development period.As part of the agreement, the Seller received an option to buy back the Assets for consideration which will reflect the market fair value at that time,on the occurrence of the following events: a) if a motion is filed to liquidate the Company; b) if seven years after signing the agreement, theCompany’s total accumulated revenues, direct or indirect, from the Venture or the commercialization of the patent will be lower than NIS 3.6 million.In such an event, Seller may repurchase the interest in the Venture at a market price to be determined by an independent third party valuationconsultant, who shall be chosen by agreement by the parties, and the audit committee shall conduct the negotiations on behalf of the Company todetermine the identity of the consultant.On May 26, 2021, the Company, My Size Israel and Shoshana Zigdon entered into an Amendment to Purchase Agreement (the “Amendment”)which made certain amendments to a Purchase Agreement between the parties dated February 16, 2014 (the “Purchase Agreement”). Pursuant tothe Amendment, Ms. Zigdon agreed to irrevocably waive the right to repurchase certain assets related to the collection of data for measurementpurposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which the Company’s business is substantiallydependent, and all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My Size Israel underthe Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation,reward or any rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights(the “Waiver”). In consideration of the Waiver, the Company issued 100,000 shares of common stock to Ms. Zigdon in a private placement.F8MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERAL (Cont.)c.On July 25, 2016, the Company’s common stock began publicly trading on the Nasdaq Capital Market under the symbol “MYSZ”. The Company’sshares of common stock are listed both on the Nasdaq Capital Market and TASE.d.Since inception, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit of $53,501.The Company has financed its operations mainly through fundraising from various investors.The Company’s management expects that the Company will continue to generate losses and negative cash flows from operations for theforeseeable future. Based on the projected cash flows and cash balances as of December 31, 2022, management is of the opinion that its existingcash will be sufficient to fund operations for a period less than 12 months. As a result, there is substantial doubt about the Company’s ability tocontinue as a going concern.Management’s plans include the continued commercialization of the Company’s products and securing sufficient financing through the sale ofadditional equity securities, debt or capital inflows from strategic partnerships. Additional funds may not be available when the Company needsthem, on terms that are acceptable to it, or at all. If the Company is unsuccessful in commercializing its products and securing sufficient financing,it may need to cease operations.The financial statements include no adjustments for measurement or presentation of assets and liabilities, which may be required should theCompany fail to operate as a going concern.e.The Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificial intelligencedriven measurement solutions (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions. The fashion and equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. The SaaS based innovativeartificial intelligence driven measurement solutions, or SaaS Solutions operating segment consists of My Size Inc My Size Israel and LLC.NOTE 2 SIGNIFICANT ACCOUNTING POLICIESThe consolidated financial statements are prepared according to United States generally accepted accounting principles (“U.S. GAAP”), applied on aconsistent basis, as followsa.Use of estimates:The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions thataffect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.Information about assumptions made by the Company with respect to the future and other reasons for uncertainty with respect to estimates thathave a significant risk of resulting in a material adjustment to carrying amounts of assets and liabilities in the next financial year are included in thefollowing notes:Acquisitions of subsidiariesThe Company measures the fair value of the consideration transferred (including contingent consideration) and fair value of the assets acquiredand liabilities assumed, in business combination transactions. For information on details on fair value measurement in acquisition of subsidiaries,see Note 16 regarding business combinations.Estimated impairment of nonfinancial assetsThe Company examines on an annual basis whether there is an impairment of goodwill, intangibles and property, plant and equipment that areallocated to cash generating units, in accordance with the accounting policy presented in Note 1(h) below. Recoverable amounts of cashgenerating units are determined on the basis of valueinuse calculations. These calculations require the use of estimates.For information on key assumptions used in calculation of the recoverable amount, see note 7 – Goodwill and other Intangible assets.b.Functional currency:The currency of the primary economic environment in which the operations of the Company is conducted is the United States Dollar and thus it isthe Company’s functional currency. The reporting currency according to which these financial statements are prepared is the U.S. dollar.The currency of the primary economic environment in which the operation of the Subsidiary, My Size Israel and Orgad International MarketingLtd. functional currency is the New Israeli Shekel (“NIS”).The currency of the primary economic environment in which the operation of the Subsidiary, My Size LLC, functional currency is Russian Ruble.The currency of the primary economic environment in which the operation of the Subsidiary, Naiz fit, functional currency is Euro.F9MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)c.Principles of consolidation:The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances andtransactions have been eliminated upon consolidation.d.Cash equivalents:Cash equivalents are shortterm highly liquid investments that are readily convertible to cash with original maturities of three months or less at thedate acquired.e.Restricted cashRestricted cash are deposits for rent, credit card and for hedging activities.f.Inventories:Inventories include finished goods and are measured at the lower of cost or net realizable value. The cost of inventories comprises of the costsincurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary courseof business. At the point of the loss recognition, a new, lowercost basis for that inventory is established, and subsequent changes in facts andcircumstances do not result in the restoration or increase in that newly established cost basis. The costs of purchase of inventories comprise thepurchase price and other costs directly attributable to the acquisition of finished goods. In 2022, the Company recorded an inventory markdownof $48.g.Property and equipment:Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straightline method over theestimated useful lives of the assets, at the following annual rates:%Computers and peripheral equipment33Office furniture and equipment720Leasehold improvementsOver the term of the leaseor the useful life of theimprovements, whicheveris shorterh.Impairment of longlived assets:The Company’s property and equipment are reviewed for impairment in accordance with ASC 360, “Property Plant and Equipment”, wheneverevents or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held andused is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by theassets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount ofthe assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less sellingcosts. During the periods ended December 31, 2022 and 2021, no impairment losses have been recorded.i.Business combinations:The Company applies the provisions of ASC 805, “Business Combination” and allocates the fair value of purchase consideration to the tangibleassets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchaseconsideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assetsacquired and liabilities assumed, the Company estimated the future expected cash flows from acquired platform, customer relationships,Technology and trademark from a market participant perspective, useful lives and discount rates. In addition, management makes significantestimates and assumptions, which are uncertain, but believed to be reasonable.Acquisitionrelated costs are recognized separately from the acquisition and are expensed as incurred.F10MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)j.Goodwill:Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a businesscombination. Under ASC 350, “Intangible Goodwill and Other”, goodwill is not amortized, but rather is subject to an annual impairment test.ASC 350 requires goodwill to be tested for impairment at the reporting unit level at least annually, the fourth quarter, or between annual tests incertain circumstances, and written down when impaired. Goodwill is tested for impairment by comparing the fair value of the reporting unit with itcarrying value. Goodwill from Orgad acquisition was allocated to the fashion and equipment ecommerce platform segment and Goodwill from theNaiz acquisition was allocated to Naiz segment based innovative artificial intelligence driven measurement solutions.Alternatively, ASC 350 permits an entity to bypass the qualitative assessment for any reporting unit and proceed directly to performing the firststep of the goodwill impairment test. There were no impairment charges to goodwill during the period presented.k.Intangible assets:Intangible assets consist of identifiable intangible assets that the Company has acquired from previous business combinations. Intangible assetsare recorded at costs, net of accumulated amortization. The Company amortizes its intangible assets reflecting the pattern in which the economicbenefits of the intangible assets are consumed. When a pattern cannot be reliably determined, the Company uses a straightline amortizationmethod. Amortization is calculated by the straightline method over the estimated useful lives of the following assets.The estimated useful lives of the company’s intangible assets are as follows:yearsCustomer Relationships7Technology5Trademark5Selling Platform3Each period the Company evaluates the estimated remaining useful lives of its intangible assets and whether events or changes in circumstanceswarrant a revision to the remaining period of amortizationl.Severance pay:The Subsidiary’s liability for severance pay is covered by Section 14 of the Israeli Severance Pay Law (“Section 14”). Under Section 14, employeesin Israel are entitled to have monthly deposits, at a rate of 8.33% of their monthly salary, made on their behalf to their insurance funds. Payments inaccordance with Section 14 exempt the Subsidiary from any additional obligation for these employees. As a result, the Subsidiary does notrecognize any liability for severance pay due to these employees and the deposits under Section 14 are not recorded as an asset in theSubsidiary’s balance sheet. These contributions for compensation represent defined contribution plans and expenses are recorded based onactual deposits.Other than the My Size Israel’s liability there are no additional severance pay liabilities.F11MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)m.Research and development costs:Research and development costs are charged to the statement of operations, as incurred. Most of the research and development expenses are forwages, related expenses and subcontractors.n.Income taxes:The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilitiesfor the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Companies’ taxreturns. Deferred taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities using enactedtax rates in effect in the years in which the differences are expected to reverse. The Company assesses the likelihood that its deferred tax assetswill be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely thannot that all or a portion of deferred tax assets will not be realized. The Company establishes a valuation allowance, if necessary, to reduce deferredtax assets to the amount more likely than not to be realized. As of December 31, 2022, and 2021, a full valuation allowance was established by theCompany.The Company implements a twostep approach to recognize and measure the benefit of its tax positions. The first step is to evaluate the taxposition taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that,on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigationprocesses. The second step is to measure the tax benefit as the largest amount that is greater than 50 percent (cumulative basis) likely to berealized upon settlement.The Company believes that its tax positions are all highly certain of being upheld upon examination. As of December 31,2022 and 2021 the Company recorded a liability for unrecognized tax benefits of $328 and none respectively.o.Accounting for stockbased compensation:The Company accounts for its employees’ stockbased compensation as an expense in the financial statements based on ASC 718. All awards areequity classified and therefore such costs are measured at the grant date fair value of the award and graded vesting attribution approach torecognize compensation cost over the vesting period. The Company estimates stock option grant date fair value using the Binomial and BlackScholes option pricingmodel.The Company recorded stock options issued to nonemployees at the grant date fair value, and recognizes expenses over the related serviceperiod by using the straightline attribution approach in accordance with ASU 201807. All awards are equity classified.The expected volatility of the share prices reflects the assumption that the historical volatility of the share prices is reasonably indicative ofexpected future trends.The riskfree interest rate for grants with an exercise price denominated in USD for employees and several consultants is based on the yield fromUS treasury zerocoupon bonds with an equivalent term.The Company has historically not paid dividends and has no foreseeable plans to pay dividends.F12MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)p.Fair value of financial instruments:ASC 820, Fair Value Measurements and Disclosures, relating to fair value measurements, defines fair value and established a framework formeasuring fair value. The ASC 820 fair value hierarchy distinguishes between market participant assumptions developed based on market dataobtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptionsdeveloped based on the best information available in the circumstances. ASC 820 defines fair value as the price that would be received to sell anasset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price. Inaddition, the fair value of assets and liabilities should include consideration of nonperformance risk, which for the liabilities described belowincludes the Company’s own credit risk.As a basis for considering such assumptions, ASC 820 establishes a threetier value hierarchy, which prioritizes the inputs used in the valuationmethodologies in measuring fair value:Level 1 Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access. Valuationadjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readilyand regularly available in an active market, valuation of these products does not entail a significant degree of judgment.Level 2 Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, eitherdirectly or indirectly.Level 3 Valuations based on inputs that are unobservable and significant to the overall fair value measurement.The Company holds share certificates in iMine Corporation (“iMine”) formerly known as Diamante Minerals, Inc., a publiclytraded company onthe OTCQB.Due to sales restrictions on the sale of the iMine shares, the fair value of the shares was measured on the basis of the quoted market price for anotherwise identical unrestricted equity instrument of the same issuer that trades in a public market, adjusted to reflect the effect of the salesrestrictions and is therefore, ranked as Level 2 asset.q.Basic and diluted net loss per share:Basic net loss per share is computed based on the weighted average number of shares of common stock outstanding during each year. Diluted netincome per share is computed based on the weighted average number of shares of common stock outstanding during each year plus dilutivepotential equivalent common stock considered outstanding during the year, in accordance with ASC 260, “Earnings per Share”. For the yearsended December 31, 2022 and 2021, all outstanding options and warrants have been excluded from the calculation of the diluted net loss per sharesince their effect was antidilutive.r.Concentrations of credit risk:Financial instruments that potentially subject the Company and its subsidiaries to concentrations of credit risk consist principally of cash andcash equivalents.Cash and cash equivalents are invested in banks in Israel, Spain and United States. Such deposits in United States may be in excess of insuredlimits and are not insured in other jurisdictions. Management believes that the financial institutions that hold the Company’s investments arefinancially sound and, accordingly, minimal credit risk exists with respect to these investments.The Company and its subsidiaries have no offbalancesheet concentration of credit risk such as foreign exchange contracts, option contracts orother foreign hedging arrangements.F13MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)s.Revenue Recognition:The Company’s revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled softwaresubscriptions, associated software maintenance and support.The Company recognizes revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with acustomer exists only when: the parties to the contract have approved it and are committed to perform their respective obligations, the Companycan identify each party’s rights regarding the distinct goods or services to be transferred (“performance obligations”), the Company can determinethe transaction price for the goods or services to be transferred, the contract has commercial substance and it is probable that the Company willcollect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to acustomer. Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted togovernmental authorities. Refunds are estimated at contract inception and updated at the end of each reporting period if additional informationbecomes available. Revenue is recognized when control of the product is transferred to the customer.The Company maintains a returns policy that allows its customers to return product within a specified period of time. The estimate of the provisionfor returns is based upon historical experience with actual returns.Principal versus Agent ConsiderationsThe Company follows the guidance provided in ASC 606 for determining whether it is a principal or an agent in arrangements with customers, byassessing whether the nature of the Company’s promise is a performance obligation to provide the specified goods (principal) or to arrange forthose goods to be provided by the other party (agent). With regard to products being sold by Orgad through Amazon, this determination involvesjudgment. The Company determines it is the principle when it has control over promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).The Company recognizes revenue ratably over the contractual service term for hosted services that are priced based on a committed number oftransactions where the delivery and consumption of the benefit of the services occur evenly over time, beginning on the date the servicesassociated with the committed transactions are first made available to the customer and continuing through the end of the contractual serviceterm. Over usage fees and fees based on the actual number of transactions are billed in accordance with contract terms as these fees are incurredand are included in the transaction price of an arrangement as variable consideration. Fees based on a number of transactions or impressions permonth, are allocated to the period in which the transactions occur. Revenue for subscriptions sold as a fee per period is recognized ratably overthe contractual term as the customer simultaneously receives and consumes the benefit of the underlying service.F14MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)t.Contingencies and CommitmentsLiabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it isprobable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with losscontingencies are expensed as incurred.u.Derivative instrumentsThe Company accounts for its derivative instruments as either assets or liabilities and measures them at fair value through profit or loss.v.LeasesThe Company leases include an office space lease agreement for 36 months, with an option to extend for an additional 36 months and 36 monthscancelable operating lease agreements on behalf of personnel vehicles. The lease term includes a noncancellable period of the lease plus anyadditional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise,or an option to extend (or not to terminate) the lease controlled by the lessor.ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make leasepayments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value oflease payments over the lease term. The company generally use its incremental borrowing rate based on the estimated rate of interest forcollateralized borrowing over a similar term of the lease payments at commencement date. Lease expense for lease payments is recognized on astraightline basis over the lease term.For the office rent lease, the Company has elected to account for the lease and nonlease maintenance components as a single lease component.Therefore, the lease payments used to measure the lease liability include all of the fixed consideration in the contract, including insubstance fixedpayments, owed over the lease term.w.Impact of recently issued accounting standardIn June 2016, the FASB issued ASU 201613, “Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses on FinancialInstruments”, which requires companies to measure credit losses of financial instruments, including customer accounts receivable, utilizing amethodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information toinform credit loss estimates. Subsequent to the issuance of ASU 201613, the FASB issued several additional Accounting Standard Updates toclarify implementation guidance, provide narrowscope improvements and provide additional disclosure guidance. As an Emerging GrowthCompany, ASU 201613 is effective for fiscal years beginning after December 15, 2022. The Company does not expect this ASU to have a materialimpact on its consolidated financial statements.F15MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 3 CASH AND CASH EQUIVALENTSThe Company’s cash and cash equivalents balance at December 31, 2022 and 2021 is denominated in the following currencies:December 31,20222021US Dollars1,65110,184New Israeli Shekels259433Other190532,10010,670NOTE 4 OTHER RECEIVABLES AND PREPAID EXPENSESDecember 31,20222021Prepaid expenses and other current assets322429Government authorities28317Other153133Total758579NOTE 5 PROPERTY AND EQUIPMENT, NETComputersandperipheralequipmentOfficefurnitureandequipmentLeaseholdimprovementsTotalCostBalance as at January 1, 20211825860300Additions2323Translation adjustments72211Balance as at December 31, 20212126062334Balance as at January 1, 20222126062334Additions161127Business combination401555Translation adjustments(32)(8)(8)(48)Balance as at December 31, 20222367854368Accumulated DepreciationBalance as at January 1, 20211461412172Additions2751042Translation adjustments6118Balance as at December 31, 20211792023222Balance as at January 1, 20221792023222Additions209938Translation adjustments(27)(3)(2)(32)Balance as at December 31, 20221722630228Carrying amountsAs at December 31, 2021334039112As at December 31, 2022645224140F16MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 6 LEASESIn August 2019, The Company entered into an office space lease agreement. The lease term is for 36 months beginning on August 20, 2019 and endingon August 20, 2022, with an option to extend for an additional 36 months. The Company extended the lease period until August 20, 2025. Monthly rentpayments including utilities amounting to approximately USD 14 (NIS 49,500) per month.In addition, The Company entered into a threeyear cancelable operating lease agreement for cars.These operating leases are included in “Right of use asset” on the Company’s December 31, 2022 consolidated balance sheets, and represent theCompany’s right to use the underlying asset for the lease term. The Company’s obligations to make lease payments are included in the currentliabilities as “Operating lease liability” and in the noncurrent liabilities as “Operating lease liability long term” on the Company’s December 31, 2022consolidated balance sheets. As of December 31, 2022, rightofuse of asset was $583. operating lease liabilities were $159 and non current Operatinglease liabilities were $308. Rightofuse asset includes the capitalization of improvements (net of amortization) amounting to $105.Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value ofthe lease payments.The interest rate used to discount future lease payment was 11.95%.Maturities of lease liabilities as of December 31, 2022 were as follows:Year Ending:2023$1912024$1912025$127Thereafter$509Less imputed interest:$(42)Total lease liabilities$467F17MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 7 – Goodwill and other Intangible assetsA.Identified intangible assetsSchedule of Intangible assetsSelling PlatformTechnologyCustomerRelationshipsOtherTotalThousandsUSDThousandsUSDThousandsUSDThousandsUSDThousandsUSDCostAs of January 1, 2022Acquisitions through business combinations378286726771,467Effect of changes in exchange rates(32)2565765As of December 31, 2022346311791841,532AmortizationAs of January 1, 2022Amortization for the year including effect of changes inexchange rates as of December 31, 2022(109)(15)(27)(4)(155)Carrying amountAs of December 31, 2022237296764801,377AmortizationAmortization expenses recorded for identified intangible assets in the Consolidated Statements of Operations for each period and were as follows:Line ItemDecember 31,2022December 31,2021Selling platformCosts of revenues109TrademarkSales and marketing4TechnologyCosts of revenues15Customer relationshipsSales and marketing27Total amortization expenses155Future amortization expenses are expected to be as follows:20232024202520262027ThereafterTotalFuture amortization expenses3033031941771561791,312b.GoodwillThe changes in the carrying amount of goodwill for the years ended December 31, 2022 and 2021 were as follows:Fashion and equipmentecommerce platformNaizTotalBalance as of December 31, 2021Changes during the period:Goodwill acquired1521,1521,304Goodwill impairmentTranslation differences(14)10591Balance as of December 31, 20221381,2571,395The Company operates its business through three reporting segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovativeartificial intelligence driven measurement solutions and (iii) Naiz. See note 17 for additional segments information.The Company determines the fair value of its reporting units using the income approach. According to the income, the Company uses discounted cashflows to estimate the fair value. Cash flow projections are based on the Company’s estimates of revenue growth rates and operating margins, takinginto consideration the industry’s and market’s conditions. The discount rate used is based on the weighted average cost of capital (“WACC”),adjusted for the relevant risk associated with businessspecific characteristics.The Company performed a quantitative assessment as of December, 31 2022 for the reporting units’ fair value. The estimated fair value of the Fashionand equipment ecommerce platform and Naiz reporting units exceeded its estimated carrying amount by 95.9% and 27.7% respectively. This, based thefollowing assumptions:Fashion and equipmentecommerce platformNaizDiscount rate21%23%Terminal growth rate3%3%If business conditions or expectations were to change materially, it may be necessary to record impairment charges to the Company’s reporting units inthe future.F18MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 8 Investment in JVIn August 2022, the Company established a joint venture (“JV”) in Brazil with Santista Têxtil. The Company holds 51% and Santista Têxtil holds 49% of theJV. The purpose of the JV is to serve the Brazilian market according to the business plan that was set. Both parties agree to make an initial investment in theJV of $198that will be made per the holding percentage of each party. As of the reporting date, the JV is in process of establishing its operation.NOTE 9 Financial LiabilitiesThe book value of each of the financial liability categories is an acceptable approximation of fair value.The debt is comprised of four loans that were granted to My Size Israel – in an outstanding amount of approximately $131, bearing interest rangingfrom prime rate to prime+2.8% rate, and four loans that were granted to the Spanish subsidiary– in an outstanding amount of approximately $400,bearing interest ranging from 1% to 3%.The financial liability maturities during the five years following the end of the financial year are shown below:UntilUntilUntilUntilUntilAfterTOTAL311223311224311225311226311227311227311222Debts with credit institutions15513892874712531NOTE 10 RELATED PARTIES TRANSACTIONSA. Balances with related parties:The following related party payables are included in liability to related parties.December 31,20222021Officers (*)4143Liability in respect of business combinations (**)739Other related parties (***)(95)Directors152069863(*)The amount includes the net salaries payables.(**)The amount includes the provision created to former owners of Orgad that are entitled to additional cash and equity consideration and former owners of Naizthat entitled to additional cash consideration, see note 16 business combination.(***)The amount includes an amount receivable from Orgad previous shareholders who currently work in the company.B. Related parties benefits:Year endedDecember 31,20222021Salaries and related expenses1,440852Share based payments39673Cash liability and equity liability expenses related to acquisitions (**)1,058Directors58582,952983(**)The amount includes the expenses for a provision created to former owners of Orgad that are entitled to additional cash and equity consideration and formerowners of Naiz that entitled to additional cash consideration, see note 16 business combination.NOTE 11 FINANCIAL INSTRUMENTSThe following tables presents the Company’s significant assets and liabilities that are measured at fair value on recurring basis and their classificationwithin the fair value hierarchy:December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities47financial assets (*)10December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesDerivatives9December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities108December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesWarrants derivative2(*)the financial asset includes in other receivables.F19MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 11 FINANCIAL INSTRUMENTS (Cont.)The carrying amounts of cash and cash equivalents, restricted cash, short term restricted deposit, accounts receivable, other receivables and prepaidexpenses, trade payable and accounts payable approximate their fair value due to the shortterm maturities of such instruments.At December 31, 2022, the recognized gain and fair value (based on quoted market prices with a discount due to security restrictions on iMine shares)of the marketable securities were $59and $47, respectively (at December 31, 2021 $49and $108, respectively).NOTE 12 TAXES ON INCOMEa.On December 31, 2022, the Company had U.S. federal net operating loss carryforwards of approximately $26 available to reduce future taxableincome. Utilization of the U.S. net operating losses may be subject to substantial limitations due to the change of ownership provisions of theInternal Revenue Code of 1986.The U.S. Company has final tax assessments through 2014.On December 22, 2017, the Tax Reform Act was signed into law. The legislation significantly changes U.S. tax law by, among other things, lowering theU.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. As a result of the decrease in the corporate incometax rate, the Company revalued the ending net deferred tax assets at December 31, 2017, but did not recognize any incremental income tax expense in2017 due to the revaluation of the valuation allowance.b.Foreign tax:1.Tax rates:Presented hereunder are the tax rates relevant to the Company’s Israeli subsidiaries:2022 23%2021 23% Presented hereunder are the tax rates relevant to the Company’s Spanish subsidiary:2022 24%2.The Company’s Israeli subsidiaries have estimated total available carryforward operating tax losses for Israeli income tax purposes ofapproximately $64as of December 31, 2022. Of these losses, a total of $47.5are owned by Topspin Medical (Israel) Ltd. Topspin tax lossesmay be offset only by future income with respect to the same operational activity by which it was incurred for an indefinite period of time. Theother losses are owned by My Size Israel and may be carryforward to offset against future income for an indefinite period of time.3.Topspin Medical (Israel) Ltd. and My Size (Israel) 2014 Ltd. has final tax assessments through 2016.c.U.S. and foreign components of loss from continuing operations, before income taxes consisted of:December 31,20222021U.S(1,180)(3,802)NonU.S. (foreign)(7,130)(6,718)(8,310)(10,520)F20MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 12 TAXES ON INCOME (Cont.)d.Deferred taxes:Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reportingpurposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows:December 31,20222021Deferred tax assets:Operating loss carryforwards20,13120,238Warrants and options145126Marketable securities390377Intangible assets(328)Research and development expenses586341Other temporary differences203Deferred tax assets before valuation allowance21,12721,082Valuation allowance(21,455)(21,082)Net deferred tax liability(328)The following table presents a reconciliation of the beginning and ending valuation allowance:December 31,20222021Balance at beginning of the year21,08218,968Additions in valuation allowance to the income statement1,7581,625Additions in valuation allowance due to exchange rate differences(1,385)489Balance at end of the year21,45521,082In assessing the realization of deferred tax assets, management considers whether it is more likely than not that all or some portion of the deferred taxassets will not be realized.The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporarydifferences are deductible and net operating losses are utilized. Based on consideration of these factors, the Company recorded a full valuationallowance at December 31, 2021 and 2020.e.Theoretical taxThe following presents the adjustment between the theoretical tax amount and the tax amount included in the financial statements:December 31,20222021Loss before income taxes8,34610,520Statutory tax rate21%21%Computed “expected” tax income1,7522,209Foreign tax rate differences and exchange rate differences149131Nondeductible expenses(107)(715)Change in valuation allowance(1,758)(1,625)Taxes on income36F21MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITYa.Common stock confers upon their holders the right to receive notice to participate and vote in general meetings of the Company, and the right toreceive dividends if declared.b.On January 8, 2021, the Company conducted a public offering of its securities pursuant to which it issued 62,768 shares of its common stock forgross proceeds of $2,008. The net proceeds to the Company from the offering were approximately $1,700, after deducting placement agent’s feesand other estimated offering expenses payable by the Company.c.During 2021, a holders of warrants exercised warrants to purchase 135,109 ordinary shares of the Company in exchange for $3,709.d.On March 25, 2021, the Company conducted a public offering of its shares of common stock pursuant to which it issued 104,741 shares of itscommon stock for gross proceeds of $3,300. The net proceeds to the Company from the offering were approximately $2,872, after deductingplacement agent’s fees and other estimated offering expenses payable by the Company.On May 7, 2021, the Company issued an additional 15,711 shares of the Company’s common stock in connection with the full exercise of theunderwriter’s overallotment option granted in the Company’s March 2021 public offering. These additional shares were sold to the underwriter at apublic offering price of $31.5 per share, resulting in additional net proceeds to the Company, net of the underwriting discount, of approximately$463.e.On May 26, 2021, the Company issued 100,000 shares of common stock to Ms. Zigdon in consideration of the Waiver. See note 1(b) above.f.On October 28, 2021, the Company sold in a registered direct offering 100,592 shares of its common stock and, in a concurrent private placement,an aggregate of 75,444 unregistered warrants to purchase shares of common stock, at an offering price of $33.8 per share and associated warrant.In addition, on the same day, the Company sold in a private placement 150,888 unregistered shares of common stock and unregistered warrants topurchase up to an aggregate of 113,166 shares of common stock at the same purchase price as in the registered direct offering. The warrants areimmediately exercisable and will expire five years from issuance at an exercise price of $31.5 per share, subject to adjustment as set forth therein.The gross proceeds from the offerings were $8,500. The net proceeds to the Company from the offerings were approximately $7,560, afterdeducting placement agent’s fees and other estimated offering expenses payable by the Company. In connection with the offerings, the Companyissued to the placement agent warrants to purchase 17,603 shares on substantially the same terms as the purchasers in the offerings at an exerciseprice of $42.25 per share and a term expiring on October 26, 2026.g.On December 7, 2022, the Company’s board of directors approved a 1for25 reverse stock split of the Company’s issued and outstanding sharesof common stock. The reverse stock split became effective on December 8, 2022. In order not to have fractional shares as a result of the reversestock split, the Company issued an additional 12,091 shares of common stock. As a result, all shares of common stock, options for shares ofcommon stock, exercise price and net loss per share amounts were adjusted retroactively for all periods presented in these financial statements.F22MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITY (Cont.)g.A summary of the warrant activity during the years ended December 31, 2022 and 2021 is presented below:Number ofWarrantsWeightedAverageExercisePriceWeightedAverageRemainingLife inYearsOutstanding, December 31, 2020216,85936.754.26Issued206,214Expired or exercised(135,109)Outstanding, December 31, 2021287,96431.004.35IssuedExpired or exercised(17,901)Outstanding, December 31, 2022270,06330.213.36Exercisable, December 31, 2022270,06330.213.36NOTE 14 STOCK BASED COMPENSATIONThe stockbased expense recognized in the financial statements for services received is related to Research and Development, Sales and Marketingand General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense Research and development15195Stockbased compensation expense Sales and marketing126180Stockbased compensation expense General and administrative17898455373The stockbased expense recognized in the financial statements for services received post Acquisition of Orgad (see note 16) is related to Cost OfGoods, Sales and Marketing and General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense – Cost of goods80Stockbased compensation expense Sales and marketing112Stockbased compensation expense General and administrative127319F23MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Options issued to consultantsWe can sell additional shares of common stock without consulting stockholders and without offering shares to existing stockholders, which wouldresult in dilution of shareholders’ interests in the company and could depress our stock price.Our Certificate of Incorporation currently authorizes 250,000,000 shares of common stock, of which 2,446,780 are currently outstanding as of March 31, 2023and our board of directors is authorized to issue additional shares of our common stock. Although our board of directors intends to utilize its reasonable businessjudgment to fulfil its fiduciary obligations to our then existing stockholders in connection with any future issuance of our capital stock, the future issuance ofadditional shares of our capital stock could cause immediate, and potentially substantial, dilution to our existing stockholders, which could also have a materialeffect on the market value of the shares. Further, other than certain participation rights that we have granted in a past offering, our shares do not have preemptiverights, which means we can sell shares of our capital stock to other persons without offering purchasers in this offering the right to purchase their proportionateshare of such offered shares. Therefore, any additional sales of stock by us could dilute your ownership interest in our Company.Our quarterly operating results may fluctuate significantly.We expect our operating results to be subject to quarterly fluctuations. Our net loss and other operating results will be affected by numerous factors,including:●variations in the level of expenses related to our research and development;●any lawsuits in which we may become involved;●regulatory developments affecting our products; and●our execution of any collaborative, licensing or sales agreements, and the timing of payments under these arrangements.If our quarterly operating results fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially.Furthermore, any quarterly fluctuations in our operating results may, in turn, cause the price of our common stock to fluctuate substantially.If we fail to comply with the rules under the Sarbanes Oxley Act of 2002 related to accounting controls and procedures or if we discover materialweaknesses and deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult.If we fail to comply with the rules under the SarbanesOxley Act of 2002 related to disclosure controls and procedures, or, if we discover materialweaknesses and other deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult. Section 404 of the SarbanesOxley Act requires annual management assessments of the effectiveness of our internal control over financial reporting and, ifwe are no longer a nonaccelerated filer, a report by our independent auditors addressing these assessments. If material weaknesses or significant deficiencies arediscovered or if we otherwise fail to achieve and maintain the adequacy of our internal control, we may not be able to ensure that we can conclude on an ongoingbasis that we have effective internal controls over financial reporting in accordance with Section 404 of the SarbanesOxley Act. Moreover, effective internalcontrols are necessary for us to produce reliable financial reports and are important to helping prevent financial fraud. If we cannot provide reliable financial reportsor prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price ofour common stock could drop significantly.38Our Certificate of Incorporation, Bylaws and Delaware law may have antitakeover effects that could discourage, delay or prevent a change incontrol, which may cause our stock price to decline.Our Certificate of Incorporation, Bylaws and Delaware law could make it more difficult for a thirdparty to acquire us, even if closing such a transactionwould be beneficial to our stockholders. Provisions of our Certificate of Incorporation, Bylaws and Delaware law also could have the effect of discouraging potentialacquisition proposals or making a tender offer or delaying or preventing a change in control, including changes a stockholder might consider favorable. Suchprovisions may also prevent or frustrate attempts by our stockholders to replace or remove our management. In particular, the Certificate of Incorporation, Bylawsand Delaware law, as applicable, among other things:●provide the board of directors with the ability to alter the Bylaws without stockholder approval;●the classification of our board of directors;●place limitations on the removal of directors;●provide that vacancies on the Board of Directors may be filled by a majority of directors in office, although less than a quorum;●require that stockholder actions must be affected at a duly called stockholder meeting and generally prohibiting stockholder actions by written consent;●eliminate the ability of stockholders to call a special meeting of stockholders; and●establish advance notice requirements for nominations for election to the Board of Directors or for proposing matters that can be acted upon at duly calledstockholder meetings.We are subject to Section 203 of the Delaware General Corporation Law which, subject to certain exceptions, prohibits “business combinations” between apubliclyheld Delaware corporation and an “interested stockholder,” which is generally defined as a stockholder who becomes a beneficial owner of 15% or more ofa Delaware corporation’s voting stock for a threeyear period following the date that such stockholder became an interested stockholder. These provisions areexpected to discourage certain types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to firstnegotiate with our board. These provisions may delay or prevent someone from acquiring or merging with us, which may cause the market price of our commonstock and the value of our securities to decline.If we fail to comply with the continued listing requirements of the Nasdaq Capital Market, our common stock may be delisted and the price of ourcommon stock and our ability to access the capital markets could be negatively impacted.Nasdaq has established certain standards for the continued listing of a security on the Nasdaq Capital Market. The standards for continued listing include,among other things, that the minimum bid price for the listed securities not fall below $1.00 per share for a period of 30 consecutive trading days and that wemaintain a minimum of $2,500,000 in shareholders’ equity. We have in the past fallen below the minimum bid price and minimum shareholders’ equity.39No assurance can be given that we will continue to be in compliance with the Rule. Failure to meet applicable Nasdaq continued listing standards couldresult in a delisting of our common stock. A delisting of our common stock from Nasdaq could materially reduce the liquidity of our common stock and result in acorresponding material reduction in the price of our common stock. In addition, delisting could harm our ability to raise capital through alternative financing sourceson terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, employees and fewer business development opportunities.The exercise of outstanding warrants and stock options will have a dilutive effect on the percentage ownership of our capital stock by existingstockholders.As of March 15, 2023, we had outstanding warrants to acquire 2,299,115 shares of our common stock and stock options to purchase 1,659 shares of ourcommon stock, which warrants and options are exercisable for prices ranging between $2.81 and $375. The expiration of the term of such options and warrants rangefrom 0.22 years to 4.83 years. If a significant number of such warrants and stock options are exercised by the holders, the percentage of our common stock ownedby our existing stockholders will be diluted.Were our common stock to become subject to the penny stock rules then this could result in U.S. brokerdealers becoming discouraged from effectingtransactions in shares of our common stock.Rule 15g9 under the Exchange Act establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a marketprice of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. If we do not retain a listing on the NasdaqCapital Market or do not meet certain net tangible asset or average revenue requirements and if the price of our common stock is less than $5.00, our common stockwill be deemed a penny stock. For any transaction involving a penny stock, unless exempt, the rules require: (a) that a broker or dealer approve a person’s accountfor transactions in penny stocks; and (b) the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantityof the penny stock to be purchased.In order to approve a person’s account for transactions in penny stocks, the broker or dealer must: (a) obtain financial information and investmentexperience objectives of the person and (b) make a reasonable determination that the transactions in penny stocks are suitable for that person and the person hassufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver,prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which: (a) sets forth the basis on whichthe broker or dealer made the suitability determination; and (b) confirms that the broker or dealer received a signed, written agreement from the investor prior to thetransaction. Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult forinvestors to dispose of our common stock and cause a decline in the market value of our common stock.Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissionspayable to both the broker or dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor incases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the accountand information on the limited market in penny stocks.Sales of our currently issued and outstanding stock may become freely tradable pursuant to Rule 144 and may dilute the market for your shares andhave a depressive effect on the price of the shares of our common stock.A portion of our outstanding shares of common stock are “restricted securities” within the meaning of Rule 144 under the Securities Act of 1933, asamended, or the Securities Act. As restricted shares, these shares may be resold only pursuant to an effective registration statement or under the requirements ofRule 144 or other applicable exemptions from registration under the Securities Act and as required under applicable state securities laws. Rule 144 provides inessence that an affiliate (as such term is defined in Rule 144(a)(1)) of an issuer who has held restricted securities for a period of at least six months (one year afterfiling Form 10 information with the SEC for shell companies and former shell companies) may, under certain conditions, sell every three months, in brokeragetransactions, a number of shares that does not exceed the greater of 1% of a company’s outstanding shares of common stock or the average weekly trading volumeduring the four calendar weeks prior to the sale (the four calendar week rule does not apply to companies quoted on the OTC Markets). Rule 144 also permits, undercertain circumstances, the sale of securities, without any limitation, by a person who is not an Affiliate of the Company and who has satisfied a oneyear holdingperiod. A sale under Rule 144 or under any other exemption from the Securities Act, if available, or pursuant to subsequent registrations of our shares of commonstock, may have a depressive effect upon the price of our shares of common stock in any active market that may develop.40We are a former “shell company” and as such are subject to certain limitations not applicable to other public companies generally.Prior to our suspension of reporting in 2012, we were a public reporting “shell company,” as defined in Rule 12b2 under the Exchange Act. Although weare no longer a “shell company,” we are subject to certain restrictions under the Securities Act for the resale of securities issued by issuers that have been at anytime previously a shell company. Specifically, the Rule 144 safe harbor available for the resale of our restricted securities is only available to our stockholders if wehave filed all reports and other materials required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934, as amended, or the Exchange Act, asapplicable, during the preceding twelve months, other than current reports on Form 8K, at the time of the proposed sale, regardless of whether the restrictedsecurities were initially issued at the time we were a shell company or subsequent to termination of such status. Accordingly, holders of our “restricted securities”within the meaning of Rule 144 will be subject to the conditions set forth in Rule 144 with respect to our company. Other reporting companies that are not formershell companies and have been reporting for more than twelve months are not subject to this same reporting threshold for nonaffiliate reliance on Rule 144.Accordingly, any restricted securities we have sold or sell in the future or issue to consultants or employees, in consideration for services rendered or for any otherpurpose, may not be resold unless such securities are registered with the SEC or the requirements of Rule 144 have been satisfied. As a result, it may be harder forus to fund our operations and pay our employees and consultants with our securities instead of cash. Furthermore, it may be harder for us to raise funding throughthe sale of debt or equity securities unless we agree to register such securities with the SEC, which could cause us to expend additional resources in the future. Ourprior status as a “shell company” could prevent us in the future from raising additional funds, engaging employees and consultants, and using our securities to payfor any acquisitions, which could cause the value of our securities, if any, to decline in value or become worthless.ITEM 1B. UNRESOLVED STAFF COMMENTSNone.ITEM 2. PROPERTIESWe currently lease 1,660 square feet of office space at 4 HaYarden Street, Airport City, Israel. The lease term is for 36 months beginning on August 20, 2019and ending on August 20, 2022, with an option to extend for an additional 36 months. Monthly rent payments, including utilities, amount to approximately $14,000per month. We extended the lease period until August 20, 2025.ITEM 3. LEGAL PROCEEDINGSFrom time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation issubject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.41North Empire LLCOn August 7, 2018, we commenced an action against North Empire LLC, or North Empire, in the Supreme Court of the State of New York, County of NewYork for breach of a Securities Purchase Agreement or Agreement in which we are seeking damages in an amount to be determined at trial, but in no event less than$616,000. On August 2, 2018, North Empire filed a Summons with Notice against us, also in the same Court, in which they allege damages in an amount of $11.4million arising from an alleged breach of the Agreement. On September 6, 2018, North Empire filed a Notice of Discontinuance of the action it had filed on August 2,2018. On September 27, 2018, North Empire filed an answer and asserted counterclaims in the action commenced by us against them, alleging that we failed to deliverstock certificates to North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against our CEO andnow former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018, we filed a reply to North Empire’scounterclaims. On November 15, 2018, our CEO and now former Chairman of the Board filed a motion to dismiss North Empire’s thirdparty complaint. On January 6,2020, the Court granted the motion and dismissed the thirdparty complaint. Discovery has been completed and both parties have filed motions for summaryjudgment in connection with the claims and counterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summaryjudgment, arguing there were factual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision.On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying the Company’s motion for summary judgment. On or about September 12,2022, the Court issued its Decision and Order denying the Company’s motion to reargue. North Empire filed its opposing brief on December 7, 2022. Both sides weregiven an opportunity to file a reply brief. We filed our reply brief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. Oral argument was heldbefore the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Court filed its Decision and Order, which affirmed the lower court’sdecisions regarding both My Size and North Empire’s motions for summary judgment and sent the case back to the Supreme Court. On or about March 13, 2023, theSupreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date for the mediation has not yet been set. We intend tovigorously defend any claims made by North Empire. We believe it is more likely than not that the counterclaims will be denied.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.42PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur stock currently is listed on the Tel Aviv Stock Exchange and the Nasdaq Capital Market under the symbol “MYSZ”. Our stock has been traded on theNasdaq Capital Market since July 25, 2016.HoldersAs of March 31, 2023, we had 70 shareholders of record. The actual number of stockholders is greater than this number of record holders and includesstockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our Board of Directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our Board of Directors deems relevant.Securities Authorized for Issuance under Equity Compensation PlansInformation about our equity compensation plans is incorporated herein by reference to “Item 12. Security Ownership of Certain Beneficial Owners andManagement and Related Stockholder Matters”, of this Annual Report on Form 10K.Recent Sales of Unregistered SecuritiesNone.ITEM 6. SELECTED FINANCIAL DATAAs a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULT OF OPERATIONSYou should read the following discussion along with our financial statements and the related notes included elsewhere in this Annual Report on Form10K. The following discussion contains forwardlooking statements that are subject to risks, uncertainties and assumptions, including those discussed under“Risk Factors.” Our actual results, performance and achievements may differ materially from those expressed in, or implied by, these forwardlooking statements.OverviewMySize is an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.43Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile device or through MySizeID Widget: a simple questionnaire which was uses a database collected over the years.MySizeID synchronizes the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and onlypresents items available for purchase that match their measurements to ensure a correct fit.MySize is positioning itself as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empowering brand design teams, which are designed to increaseend consumer satisfaction, contributing to a sustainable world and reduce operation costs.Orgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,682 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz BespokeTechnologies, S.L., or Naiz, a limited liability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.44The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 2,365,800 shares of My Size common stock were issuedto Whitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.45Operations in RussiaIn addition to our Israel operations, we had operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia. To date, mainly due to the invasion of Ukraine by Russia and the ongoing sanctions we stopped most ofour efforts in Russia and will probably close the subsidiary in the near future.Results of OperationsThe table below provides our results of operations for the periods indicated.Year ended December 3120222021(dollars in thousands)Revenues4,459131Cost of revenues(3,825)Gross profit634131Research and development expenses$(1,701)$(4,248)Sales and marketing(3,143)(2,336)General and administrative(3,900)(4,124)Operating loss(8,110)(10,577)Financial income (expenses), net(236)57Tax income36Net loss$(8,310)$(10,520)Year Ended December 31, 2022 Compared to Year Ended December 31, 2021RevenuesFrom inception through December 31, 2018, we did not generate any revenue from operations and we continue to expect to incur additional losses toperform further research and development activities. We started to generate revenues only in 2019. Our revenues for the year ended December 31, 2022 amounted to$4,459,000 compared to $131,000 for year ended December 31, 2021. The increase from the corresponding period primarily attributable to $4,132,000 in revenuegenerated from Orgad from February 7, 2022, the date of closing of the Orgad acquisition, or the Acquisition Date and revenue generated from the Naiz Acquisitionfrom October 11, 2022, the date of closing of the Naiz acquisition.In addition, the increase from the corresponding period results from an increase in revenues generated by My Size.Cost Of RevenuesOur cost of revenues expenses for the year ended December 31, 2022 amounted to $3,825,000, compared to none for the year ended December 31, 2021. Thecost of revenues includes cash and equity liabilities expenses in the amount of $194,000. The increase in comparison with the corresponding period was due to thecost of goods of the revenues generated from Orgad’s operations.Research and Development ExpensesOur research and development expenses for the year ended December 31, 2022 amounted to $1,701,000 a decrease of $2,547,000, or approximately 60.0%,compared to $4,248,000 for the year ended December 31, 2021. The decrease from the corresponding period primarily resulted from share based payment in amount of$2,618,000 attributed to the share issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021.Sales and Marketing ExpensesOur sales and marketing expenses for the year ended December 31, 2022 amounted to $3,143,000 an increase of $807,000, or 34.55%, compared to $2,336,000for the year ended December 31, 2021. The increase primarily resulted from an increase in employees expenses mainly due to Orgad and Naiz acquisitions, increase inAmazon fees, increase in cash and equity liabilities expenses attributed to the Orgad acquisition and an increase in share based payments offset by a decrease inpayments to consultants.46General and Administrative ExpensesOur general and administrative expenses for the year ended December 31, 2022 amounted to $3,900,000, a decrease of $224,000, or 5.43%, compared to$4,124,000 for the year ended December 31, 2021. The decrease compared to the corresponding period was mainly due to a decrease in professional expenses, mainlyattributed to shareholder activism including settlement expenses with the Lazar Parties offset by an increase in sharedbased payments and an increase in employeesexpenses mainly due to the Orgad and Naiz acquisitions.Operating LossAs a result of the foregoing, for the year ended December 31, 2022, our operating loss was $8,110,000, a decrease of $2,467,000 or 23.32%, compared to ouroperating loss for the year ended December 31, 2021 of $10,577,000.Financial Income, NetOur financial (expense) income, net for the year ended December 31, 2022 amounted to $236,000 compared to financial income, $57,000 for the year endedDecember 31, 2021. In 2022, we had financial expenses exchange rate differences offset by an income from fair value revaluation of investment in marketablesecurities whereas in 2021 we had financial income from the fair value revaluation of warrants offset by expenses from exchange rate differences and expenses fromfair value revaluation of investment in marketable securities.Net LossAs a result of the foregoing, our net loss for the year ended December 31, 2022 was $8,310,000 compared to net loss of $10,520,000 for the year endedDecember 31, 2021. The decrease in net loss was mainly due increase in sales and marketing expenses and financial expenses as opposed to financial income in thecorresponding period offset by a decrease in research and development expenses in amount of $2,618,000 attributed to the share issuance to Shoshana Zigdonunder the Amendment to Purchase Agreement dated May 26, 2021.Liquidity and Capital ResourcesSince our inception, we have funded our operations primarily through public and private offerings of debt and equity in Israel and in the U.S.As of December 31, 2022, we had cash, cash equivalents and restricted cash of $2,363,000 compared to $10,943,000 cash, cash equivalents, restricted cashas of December 31, 2021. During January 2023, we completed a registered direct and concurrent private placement offering resulting in gross proceeds ofapproximately $3 million. This decrease primarily resulted from our operating activities, the acquisition of Orgad and Naiz Fit, and resources that were deployed togrow of both businesses.Net cash used in operating activities was $7,290,000 for the year ended December 31, 2022 compared to $7,297,000 for the year ended December 31, 2021.The decrease in cash used in operating activity is derived mainly from an increase in share based payments and increase in account receivables mainly from theOrgad and Naiz fit acquisitions offset by a decrease in the net loss.Net cash used in investing activities for the year ended December 31, 2022 was $993,000 as opposed to net cash provided by investing activities of$161,000 for the year ended December 31, 2021. The net cash used in investing activities for the year ended December 31, 2022 was mainly from the acquisition ofOrgad and Naiz as opposed to proceeds from shortterm deposits and restricted deposits during the year ended December 31, 2021.We had a negative cash flow from financing activities of $67,000 for the year ended December 31, 2022 compared to positive cash flow of $16,292,000 for theyear ended December 31, 2021. The negative cash flow from financing activities for the year ended December 31, 2022 was mainly due to repayment of loans andinterest and payments for leases as opposed to proceeds from issuance of shares and from exercise of warrants for the year ended December 31, 2021.47We expect that we will continue to generate losses and negative cash flows from operations for the foreseeable future. Based on the projected cash flowsand cash balances as of December 31, 2022, together with the proceeds from the January 2023 financing, we believe our existing cash will not be sufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. We will need to raiseadditional capital, which may not be available on reasonable terms or at all. Additional capital would be used to accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;●respond to competitive pressures;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, the Russian invasion ofUkraine, the impact of any resurgence of the COVID19 pandemic and a number of other factors, many of which are outside our control, and on our financialperformance. Accordingly, we cannot assure you that we will be able to successfully raise additional capital at all or on terms that are acceptable to us. If we cannotraise additional capital when needed, it may have a material adverse effect on our business, results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.We have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.Recently Issued Accounting PronouncementsCertain recently issued accounting pronouncements are discussed in Note 2, Significant Accounting Policies, to the consolidated financial statementsincluded in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10K.OffBalance Sheet ArrangementsWe have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.48Application of Critical Accounting Policies and EstimatesOur management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we haveprepared in accordance with U.S. generally accepted accounting principles issued by the Financial Accounting Standards Board, or FASB. The preparation of thesefinancial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assetsand liabilities at the date of the financial statements, as well as the reported expenses during the reporting periods. Actual results may differ from these estimatesunder different assumptions or conditions.Our significant accounting policies were revenue from contracts with customers which are more fully described in the notes to our financial statementsincluded herein. We believe these accounting policies discussed below are critical to our financial results and to the understanding of our past and futureperformance, as these policies relate to the more significant areas involving management’s estimates and assumptions. We consider an accounting estimate to becritical if: (1) it requires us to make assumptions because information was not available at the time or it included matters that were highly uncertain at the time wewere making our estimate; and (2) changes in the estimate could have a material impact on our financial condition or results of operations.Accounting for business combinationsWe allocate the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed, based upon their estimated fairvalues at the acquisition date. These fair values are typically estimated with assistance from independent valuation specialists.The purchase price allocation process requires us to make significant estimates and assumptions, especially at the acquisition date with respect tointangible assets, contractual support obligations assumed, contingent consideration arrangements, and preacquisition contingencies.Although we believe the assumptions and estimates we have made in the past have been reasonable and appropriate, they are based in part on historicalexperience and information obtained from the management of the acquired companies and are inherently uncertain.Examples of critical estimates in valuing certain of the intangible assets we have acquired or may acquire in the future include but are not limited to:● future expected cash flows from product sales or other customer contracts;● expected costs of fulfillment including marketing, warehousing and product sales;● the acquired company’s brand and competitive position, as well as assumptions about the period of time the acquired brand will continue to be used inthe combined company’s product portfolio;● cost of capital and discount rates; and● estimating the useful lives of acquired assets as well as the pattern or manner in which the assets will amortize.Refer to Note 16, Business Combination, to the consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” of thisAnnual Report on Form 10K.49Revenue from contracts with customersOur revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled software subscriptions, associatedsoftware maintenance and support.We recognize revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with a customer exists onlywhen: the parties to the contract have approved it and are committed to perform their respective obligations, we can identify each party’s rights regarding thedistinct goods or services to be transferred (“performance obligations”), we can determine the transaction price for the goods or services to be transferred, thecontract has commercial substance and it is probable that we will collect the consideration to which we will be entitled in exchange for the goods or services that willbe transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to a customer.Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted to governmental authorities. Refundsare estimated at contract inception and updated at the end of each reporting period if additional information becomes available. Revenue is recognized when controlof the product is transferred to the customer.We maintain a returns policy that allows our customers to return product within a specified period of time. The estimate of the provision for returns is basedupon historical experience with actual returns.Principal versus Agent ConsiderationsWe follow the guidance provided in ASC 606 for determining whether we are a principal or an agent in arrangements with customers, by assessing whetherthe nature of our promise is a performance obligation to provide the specified goods (principal) or to arrange for those goods to be provided by the other party(agent). With regard to products being sold by Orgad through Amazon, this determination involves judgment. We determine it is the principle when it has controlover the promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).We recognize revenue ratably over the contractual service term for hosted services that are priced based on a committed number of transactions where thedelivery and consumption of the benefit of the services occur evenly over time, beginning on the date the services associated with the committed transactions arefirst made available to the customer and continuing through the end of the contractual service term. Over usage fees and fees based on the actual number oftransactions are billed in accordance with contract terms as these fees are incurred and are included in the transaction price of an arrangement as variableconsideration. Fees based on a number of transactions or impressions per month, are allocated to the period in which the transactions occur. Revenue forsubscriptions sold as a fee per period is recognized ratably over the contractual term as the customer simultaneously receives and consumes the benefit of theunderlying service.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.As a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.50ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAMY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2022U.S. DOLLARS IN THOUSANDSINDEXPageReport of Independent Registered Public Accounting Firm (PCAOB ID: ID 1057)F2Consolidated Balance SheetsF4Consolidated Statements of Comprehensive LossF5Consolidated Statements of Shareholders’ EquityF6Consolidated Statements of Cash FlowsF7Notes to Consolidated Financial StatementsF8 F33F1Report of Independent Registered Public Accounting FirmTo the Shareholders and Board of DirectorsMy Size, Inc.:Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of My Size, Inc. and subsidiaries (the Company) as of December 31, 2022 and 2021, the relatedconsolidated statements of comprehensive loss, shareholders’ equity, and cash flows for each of the years in the twoyear period ended December 31, 2022, and therelated notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, thefinancial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the twoyear periodended December 31, 2022, in conformity with U.S. generally accepted accounting principles.Going ConcernThe accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1d tothe consolidated financial statements, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit thatraises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1d. Theconsolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidatedfinancial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Critical Audit MattersCritical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to becommunicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved ourespecially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidatedfinancial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters oron the accounts or disclosures to which they relate.Acquisitiondate fair value of customer relationshipsAs discussed in Note 16 to the consolidated financial statements, on October 11, 2022, the Company acquired Naiz Bespoke Technologies SL (“Naiz”). As a result ofthe transaction, the Company acquired customer relationships intangible assets (“customer relationships”) representing the generation of future income from Naiz’sexisting customers. The acquisition date fair value of the customer relationships was $726 thousand.F2We identified the evaluation of the acquisitiondate fair value of the Naiz customer relationships as a critical audit matter. A high degree of subjective auditorjudgment was required to evaluate the following internally developed assumptions used to estimate the fair value of such asset, for which there were limitedobservable inputs: (i) forecasted revenues attributable to existing customers, (ii) forecasted earnings before interest, taxes, depreciation, and amortization(“EBITDA”) margins for the acquired business, (iii) estimated annual customer attrition rates and (iv) estimated discount rate. The determined fair value wassensitive to changes in these key assumptions. Additionally, specialized skills and knowledge were needed to evaluate the discount rate used.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s acquisitiondate fair value estimation process, including controls over the development of key assumptions. We performed a sensitivity analysis toassess the impact of reasonably possible changes to forecasted revenues, EBITDA margins, annual customer attrition rates, and the discount rate. We evaluated theforecasted revenue growth rates from existing customers by comparing the growth assumptions to those of the Company’s peers and industry reports. Inconnection with our assessment of the forecasts used in the valuation, we compared (1) forecasted revenue and EBITDA to Naiz’s historical actual results and (2)estimated annual customer attrition rates to historical Naiz customer attrition data. We tested the Company’s determined weighted average cost of capital(“WACC”), which was used to determine the discount rate, by involving valuation professionals with specialized skills and knowledge, who assisted in:Evaluating the selected discount rate by comparing it against a discount rate range that was independently developed using publicly available market datafor comparable companies, and;Assessing the Company’s WACC calculation, by comparing it against an independently estimated WACC range based on inputs obtained throughpublished surveys and studies.Goodwill impairment assessmentAs discussed in Note 16 to the consolidated financial statements, during 2022 the Company recorded goodwill of $1,257 thousand related to the acquisition of NaizBespoke Technologies, S.L. (“Naiz”). The Company performed an annual quantitative impairment test of goodwill at the reporting unit level. Based on this analysis,the Company determined that the fair value of its reporting unit exceeded its carrying value and no impairment charge was required.We identified the evaluation of the goodwill impairment assessment for the Naiz reporting unit as a critical audit matter. A high degree of subjective auditor judgmentwas required to evaluate the following assumptions used to estimate the fair value of the Company’s reporting unit, for which there were limited observable inputs:(i) forecasted reporting unit cash flows, (ii) longterm growth rates, and (iii) discount rates. The fair value was sensitive to changes in these key assumptions.Additionally, specialized skills and knowledge were needed to evaluate the discount rates.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s goodwill impairment evaluation process. We performed sensitivity analyses to assess the impact of reasonably possible changes to forecasted cashflows, longterm growth rates, and discount rates. We evaluated the Company’s forecasted growth rates by comparing the growth assumptions to those of theCompany’s peers and industry reports. We compared the Company’s forecasted revenue, cost of sales, and operating expense margins to historical actual results toassess the reasonableness of the forecasts. In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:– Assessing the Company’s WACC calculation, by comparing it against an estimated WACC range based on inputs obtained through published surveys andstudies– Evaluating the discount rates used by the Company by comparing them against discount rate ranges that were developed using publicly available market data forcomparable companies, and;– Performing an arithmetic recalculation regarding the fair value of the Company’s reporting unit, using the Company’s cash flow forecasts and the independentlydeveloped discount rates, and comparing the results to the Company’s fair value estimates./s/ Somekh ChaikinSomekh ChaikinMember Firm of KPMG InternationalWe have served as the Company’s auditor since 2017.Tel Aviv, IsraelApril 14, 2023F3MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED BALANCE SHEETSU.S. dollars in thousands (except share data)December 31,Note20222021AssetsCurrent assetsCash and cash equivalents32,10010,670Restricted cash263273Inventory997Account receivables1,94040Other receivables and prepaid expenses4758579Total current assets6,05811,562Long term deposits28Property and equipment, net5140112Operating rightofuse asset6583776Intangible assets71,377Goodwill71,395Investment in JV899Investment in marketable securities11471083,669996Total assets9,72712,558Liabilities and shareholders’ equityCurrent liabilitiesOperating lease liability6159138Shortterm loans9155Trade payables2,487635Liabilities to Related parties69863Other payables680392Total current liabilities4,1791,228Longterm loans9376Deferred tax liabilities328Operating lease liability6308473Total noncurrent liabilities1,012473CONTINGENCIES AND COMMITMENTS15Total Liabilities5,1911,701Shareholders’ equity13Stock capital Common stock of $0.001par value Authorized: 250,000,000and 100,000,000shares as of December 31,2022 and 2021; Issued and outstanding: 1,464,117and959,297 as of December 31,2022 and 2021, respectively (*)11Additional paidin capital58,67356,453Accumulated other comprehensive loss(637)(406)Accumulated deficit(53,501)(45,191)Total shareholders’ equity4,53610,857Total liabilities and shareholders’ equity9,72712,558(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F4MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSSU.S. dollars in thousands (except share data and per share data)Year endedDecember 31,Note20222021Revenues4,459131Cost of revenues(3,825)Gross profit634131Operating expensesResearch and development(1,701)(4,248)Sales and marketing18(3,143)(2,336)General and administrative19(3,900)(4,124)Total operating expenses(8,744)(10,708)Operating loss(8,110)(10,577)Financial income (expense), net20(236)57Loss before taxes(8,346)(10,520)Taxes on income36Net loss for the year(8,310)(10,520)Other comprehensive income (loss):Foreign currency translation differences(231)18Total comprehensive loss(8,541)(10,502)Basic and diluted loss per share (*)(7.47)(17.75)Basic and diluted weighted average number of shares outstanding (*)1,111,913420,385(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F5MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITYU.S. dollars in thousands (except share data)Common stockAdditionalpaidinAccumulatedothercomprehensiveAccumulatedTotalstockholders’NumberAmountcapitallossDeficitequityBalance as of January 1, 2021289,314(*)37,171(424)(34,671)2,076Stockbased compensation related to optionsgranted to employees and consultants373373Exercise of options granted to employees178(*)Restricted shares issued to shareholder (***)100,000(*)2,6182,618Issuance of shares, net of issuance cost of$1,160434,700112,58212,583Exercise of warrants135,108(*)3,7093,709Total comprehensive income (loss)18(10,520)(10,502)Balance as of December 31, 2021959,300156,453(406)(45,191)10,857Stockbased compensation related to optionsand restricted shares granted to employeesand consultants176,000(*)455455Issuance of shares in Business Combination(**)295,802(*)1,4461,446Issuance of shares post BusinessCombination (**)20,924(*)319319Effect of reverse stock split (Note 13 g)12,091(*)Total comprehensive income (loss)(231)(8,310)(8,541)Balance as of December 31, 20221,464,117158,673(637)(53,501)4,536(*)Represents an amount of less than $1.(**)See note 16(***)See note 1 bThe accompanying notes are an integral part of the consolidated financial statements.F6MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSU.S. dollars in thousandsYear endedDecember 31,20222021Cash flows from operating activities:Net loss(8,310)(10,520)Adjustments to reconcile net loss to net cash used in operating activities:Depreciation3842Change in operating lease rightofuse asset13543Amortization of intangible assets155foreign exchange differences(23)1Change in liabilities to related parties635Interest on long term liabilities10Interest paid(10)Revaluation of investment in marketable securities62(49)Restricted Shares issued to shareholder2,618Stock based compensation455373Issuance of shares post Business Combination319Change in inventory(219)Change in deferred tax liabilities(36)Change in account receivable(1,863)(12)Changes in operating lease liabilities(142)Change in other receivables and prepaid expenses184(99)Change in trade payables1,315253Change in other payables553Net cash used in operating activities(7,290)(7,297)Cash flows from investing activities:Acquisition of a subsidiary, net of cash acquired(767)Proceeds from restricted deposits, net184investing in other receivable(100)Investment in equity accounted investee(99)Purchase of property and equipment(27)(23)Net cash (used in) provided by investing activities(993)161Cash flows from financing activities:Proceeds from issuance of shares, net of issuance costs12,583Repayment of loans(67)Proceeds from exercise of warrants3,709Net cash (used in) provided by financing activities(67)16,292Effect of exchange rate fluctuations on cash and cash equivalents(230)13Change in cash and cash equivalents and restricted cash(8,580)9,169Cash and cash equivalents and restricted cash at the beginning of the year10,9431,774Cash and cash equivalents and restricted cash at the end of the year2,36310,943B) Aggregate cash flows derived for the Company as a result of the Orgad acquisition (note 16)2022Trade and other receivables364Inventory864Fixed assets55Longterm deposits31Selling Platform378Goodwill152Shortterm credit(181)Trade payables(580)Other payables(88)Longterm loan(138)Longterm provision(13)Deferred Tax Liability(87)Issuance of shares(457)Total acquisition of subsidiary, net of cash300C) Aggregate cash flows derived for the Company as a result of the Naiz acquisition (note 16)2022Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Issuance of shares(1,008)Total acquisition of subsidiary, net of cash467The accompanying notes are an integral part of the consolidated financial statements.F7MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERALa.My Size, Inc. is developing unique measurement technologies based on algorithms with applications in a variety of areas, from the apparel ecommerce market, to the courier services market and to the Do It Yourself (“DIY”) smartphone and tablet apps market. The technology is driven byproprietary algorithms, which are able to calculate and record measurements in a variety of novel ways.Following the acquisition of Naiz Bespoke Technologies, S.L (“Naiz”) in October 2022 (see note 16), the Company expanded its offering outreachand customer base.Following the acquisition of Orgad International Marketing Ltd. (“Orgad”) in February 2022 (see note 16), the Company also operates anomnichannel ecommerce platform.The Company has five subsidiaries, My Size Israel 2014 Ltd (“My Size Israel”), Topspin Medical (Israel) Ltd., and Orgad all of which areincorporated in Israel, and My Size LLC which was incorporated in the Russian Federation and Naiz Bespoke Technologies, S.L., a limited liabilitycompany incorporated under the laws of Spain (see note 16). References to the Company include the subsidiaries unless the context indicatesotherwise.My Size, Inc., was incorporated and commenced operations in September 1999, as Topspin Medical Inc. (“Topspin”), a private company registeredin the State of Delaware. In December 2013, the Company changed its name to Knowledgetree Ventures Inc. Subsequently, in February 2014, theCompany changed its name to My Size, Inc. Topspin was engaged, through its Israeli subsidiary, in research and development in the field ofcardiology and urology.Since September 1, 2005, the Company has traded on the Tel Aviv Stock Exchange (“TASE”).Between 2007 and 2012 the Company reported as a public company with the U.S. Securities and Exchange Commission (the “SEC”). In August2012, the Company suspended its reporting obligations under Section 13(a) and 15(d) of the Securities Exchange Act of 1934. In mid2015, theCompany resumed reporting as a public company.b.On January 9, 2014, at the Company’s general meeting of shareholders, its shareholders approved an engagement with one of the Company’sinvestors (the “Seller”) for the purchase of rights in a Venture (the “Venture”), including the rights to the method and the certain patent applicationthat had been filed by the Seller (the “Assets”). The Venture relates to the development of technologies and applications which will assist theconsumer to take his or her body measurements accurately using a mobile device to ensure the purchase of clothing with the best possible fitwithout the need to try them on.In February 2014, the Company established a wholly owned subsidiary, My Size (Israel) 2014 Ltd., a company registered in Israel, which iscurrently engaged in the development of the Venture described above.In return for purchasing an interest in the Venture, the Company undertook to pay the Seller 18% of the Company’s operating profit, direct orindirect, connected to the Venture for a period of seven years starting from the end of the Venture’s development period.As part of the agreement, the Seller received an option to buy back the Assets for consideration which will reflect the market fair value at that time,on the occurrence of the following events: a) if a motion is filed to liquidate the Company; b) if seven years after signing the agreement, theCompany’s total accumulated revenues, direct or indirect, from the Venture or the commercialization of the patent will be lower than NIS 3.6 million.In such an event, Seller may repurchase the interest in the Venture at a market price to be determined by an independent third party valuationconsultant, who shall be chosen by agreement by the parties, and the audit committee shall conduct the negotiations on behalf of the Company todetermine the identity of the consultant.On May 26, 2021, the Company, My Size Israel and Shoshana Zigdon entered into an Amendment to Purchase Agreement (the “Amendment”)which made certain amendments to a Purchase Agreement between the parties dated February 16, 2014 (the “Purchase Agreement”). Pursuant tothe Amendment, Ms. Zigdon agreed to irrevocably waive the right to repurchase certain assets related to the collection of data for measurementpurposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which the Company’s business is substantiallydependent, and all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My Size Israel underthe Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation,reward or any rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights(the “Waiver”). In consideration of the Waiver, the Company issued 100,000 shares of common stock to Ms. Zigdon in a private placement.F8MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERAL (Cont.)c.On July 25, 2016, the Company’s common stock began publicly trading on the Nasdaq Capital Market under the symbol “MYSZ”. The Company’sshares of common stock are listed both on the Nasdaq Capital Market and TASE.d.Since inception, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit of $53,501.The Company has financed its operations mainly through fundraising from various investors.The Company’s management expects that the Company will continue to generate losses and negative cash flows from operations for theforeseeable future. Based on the projected cash flows and cash balances as of December 31, 2022, management is of the opinion that its existingcash will be sufficient to fund operations for a period less than 12 months. As a result, there is substantial doubt about the Company’s ability tocontinue as a going concern.Management’s plans include the continued commercialization of the Company’s products and securing sufficient financing through the sale ofadditional equity securities, debt or capital inflows from strategic partnerships. Additional funds may not be available when the Company needsthem, on terms that are acceptable to it, or at all. If the Company is unsuccessful in commercializing its products and securing sufficient financing,it may need to cease operations.The financial statements include no adjustments for measurement or presentation of assets and liabilities, which may be required should theCompany fail to operate as a going concern.e.The Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificial intelligencedriven measurement solutions (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions. The fashion and equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. The SaaS based innovativeartificial intelligence driven measurement solutions, or SaaS Solutions operating segment consists of My Size Inc My Size Israel and LLC.NOTE 2 SIGNIFICANT ACCOUNTING POLICIESThe consolidated financial statements are prepared according to United States generally accepted accounting principles (“U.S. GAAP”), applied on aconsistent basis, as followsa.Use of estimates:The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions thataffect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.Information about assumptions made by the Company with respect to the future and other reasons for uncertainty with respect to estimates thathave a significant risk of resulting in a material adjustment to carrying amounts of assets and liabilities in the next financial year are included in thefollowing notes:Acquisitions of subsidiariesThe Company measures the fair value of the consideration transferred (including contingent consideration) and fair value of the assets acquiredand liabilities assumed, in business combination transactions. For information on details on fair value measurement in acquisition of subsidiaries,see Note 16 regarding business combinations.Estimated impairment of nonfinancial assetsThe Company examines on an annual basis whether there is an impairment of goodwill, intangibles and property, plant and equipment that areallocated to cash generating units, in accordance with the accounting policy presented in Note 1(h) below. Recoverable amounts of cashgenerating units are determined on the basis of valueinuse calculations. These calculations require the use of estimates.For information on key assumptions used in calculation of the recoverable amount, see note 7 – Goodwill and other Intangible assets.b.Functional currency:The currency of the primary economic environment in which the operations of the Company is conducted is the United States Dollar and thus it isthe Company’s functional currency. The reporting currency according to which these financial statements are prepared is the U.S. dollar.The currency of the primary economic environment in which the operation of the Subsidiary, My Size Israel and Orgad International MarketingLtd. functional currency is the New Israeli Shekel (“NIS”).The currency of the primary economic environment in which the operation of the Subsidiary, My Size LLC, functional currency is Russian Ruble.The currency of the primary economic environment in which the operation of the Subsidiary, Naiz fit, functional currency is Euro.F9MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)c.Principles of consolidation:The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances andtransactions have been eliminated upon consolidation.d.Cash equivalents:Cash equivalents are shortterm highly liquid investments that are readily convertible to cash with original maturities of three months or less at thedate acquired.e.Restricted cashRestricted cash are deposits for rent, credit card and for hedging activities.f.Inventories:Inventories include finished goods and are measured at the lower of cost or net realizable value. The cost of inventories comprises of the costsincurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary courseof business. At the point of the loss recognition, a new, lowercost basis for that inventory is established, and subsequent changes in facts andcircumstances do not result in the restoration or increase in that newly established cost basis. The costs of purchase of inventories comprise thepurchase price and other costs directly attributable to the acquisition of finished goods. In 2022, the Company recorded an inventory markdownof $48.g.Property and equipment:Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straightline method over theestimated useful lives of the assets, at the following annual rates:%Computers and peripheral equipment33Office furniture and equipment720Leasehold improvementsOver the term of the leaseor the useful life of theimprovements, whicheveris shorterh.Impairment of longlived assets:The Company’s property and equipment are reviewed for impairment in accordance with ASC 360, “Property Plant and Equipment”, wheneverevents or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held andused is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by theassets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount ofthe assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less sellingcosts. During the periods ended December 31, 2022 and 2021, no impairment losses have been recorded.i.Business combinations:The Company applies the provisions of ASC 805, “Business Combination” and allocates the fair value of purchase consideration to the tangibleassets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchaseconsideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assetsacquired and liabilities assumed, the Company estimated the future expected cash flows from acquired platform, customer relationships,Technology and trademark from a market participant perspective, useful lives and discount rates. In addition, management makes significantestimates and assumptions, which are uncertain, but believed to be reasonable.Acquisitionrelated costs are recognized separately from the acquisition and are expensed as incurred.F10MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)j.Goodwill:Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a businesscombination. Under ASC 350, “Intangible Goodwill and Other”, goodwill is not amortized, but rather is subject to an annual impairment test.ASC 350 requires goodwill to be tested for impairment at the reporting unit level at least annually, the fourth quarter, or between annual tests incertain circumstances, and written down when impaired. Goodwill is tested for impairment by comparing the fair value of the reporting unit with itcarrying value. Goodwill from Orgad acquisition was allocated to the fashion and equipment ecommerce platform segment and Goodwill from theNaiz acquisition was allocated to Naiz segment based innovative artificial intelligence driven measurement solutions.Alternatively, ASC 350 permits an entity to bypass the qualitative assessment for any reporting unit and proceed directly to performing the firststep of the goodwill impairment test. There were no impairment charges to goodwill during the period presented.k.Intangible assets:Intangible assets consist of identifiable intangible assets that the Company has acquired from previous business combinations. Intangible assetsare recorded at costs, net of accumulated amortization. The Company amortizes its intangible assets reflecting the pattern in which the economicbenefits of the intangible assets are consumed. When a pattern cannot be reliably determined, the Company uses a straightline amortizationmethod. Amortization is calculated by the straightline method over the estimated useful lives of the following assets.The estimated useful lives of the company’s intangible assets are as follows:yearsCustomer Relationships7Technology5Trademark5Selling Platform3Each period the Company evaluates the estimated remaining useful lives of its intangible assets and whether events or changes in circumstanceswarrant a revision to the remaining period of amortizationl.Severance pay:The Subsidiary’s liability for severance pay is covered by Section 14 of the Israeli Severance Pay Law (“Section 14”). Under Section 14, employeesin Israel are entitled to have monthly deposits, at a rate of 8.33% of their monthly salary, made on their behalf to their insurance funds. Payments inaccordance with Section 14 exempt the Subsidiary from any additional obligation for these employees. As a result, the Subsidiary does notrecognize any liability for severance pay due to these employees and the deposits under Section 14 are not recorded as an asset in theSubsidiary’s balance sheet. These contributions for compensation represent defined contribution plans and expenses are recorded based onactual deposits.Other than the My Size Israel’s liability there are no additional severance pay liabilities.F11MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)m.Research and development costs:Research and development costs are charged to the statement of operations, as incurred. Most of the research and development expenses are forwages, related expenses and subcontractors.n.Income taxes:The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilitiesfor the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Companies’ taxreturns. Deferred taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities using enactedtax rates in effect in the years in which the differences are expected to reverse. The Company assesses the likelihood that its deferred tax assetswill be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely thannot that all or a portion of deferred tax assets will not be realized. The Company establishes a valuation allowance, if necessary, to reduce deferredtax assets to the amount more likely than not to be realized. As of December 31, 2022, and 2021, a full valuation allowance was established by theCompany.The Company implements a twostep approach to recognize and measure the benefit of its tax positions. The first step is to evaluate the taxposition taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that,on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigationprocesses. The second step is to measure the tax benefit as the largest amount that is greater than 50 percent (cumulative basis) likely to berealized upon settlement.The Company believes that its tax positions are all highly certain of being upheld upon examination. As of December 31,2022 and 2021 the Company recorded a liability for unrecognized tax benefits of $328 and none respectively.o.Accounting for stockbased compensation:The Company accounts for its employees’ stockbased compensation as an expense in the financial statements based on ASC 718. All awards areequity classified and therefore such costs are measured at the grant date fair value of the award and graded vesting attribution approach torecognize compensation cost over the vesting period. The Company estimates stock option grant date fair value using the Binomial and BlackScholes option pricingmodel.The Company recorded stock options issued to nonemployees at the grant date fair value, and recognizes expenses over the related serviceperiod by using the straightline attribution approach in accordance with ASU 201807. All awards are equity classified.The expected volatility of the share prices reflects the assumption that the historical volatility of the share prices is reasonably indicative ofexpected future trends.The riskfree interest rate for grants with an exercise price denominated in USD for employees and several consultants is based on the yield fromUS treasury zerocoupon bonds with an equivalent term.The Company has historically not paid dividends and has no foreseeable plans to pay dividends.F12MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)p.Fair value of financial instruments:ASC 820, Fair Value Measurements and Disclosures, relating to fair value measurements, defines fair value and established a framework formeasuring fair value. The ASC 820 fair value hierarchy distinguishes between market participant assumptions developed based on market dataobtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptionsdeveloped based on the best information available in the circumstances. ASC 820 defines fair value as the price that would be received to sell anasset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price. Inaddition, the fair value of assets and liabilities should include consideration of nonperformance risk, which for the liabilities described belowincludes the Company’s own credit risk.As a basis for considering such assumptions, ASC 820 establishes a threetier value hierarchy, which prioritizes the inputs used in the valuationmethodologies in measuring fair value:Level 1 Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access. Valuationadjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readilyand regularly available in an active market, valuation of these products does not entail a significant degree of judgment.Level 2 Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, eitherdirectly or indirectly.Level 3 Valuations based on inputs that are unobservable and significant to the overall fair value measurement.The Company holds share certificates in iMine Corporation (“iMine”) formerly known as Diamante Minerals, Inc., a publiclytraded company onthe OTCQB.Due to sales restrictions on the sale of the iMine shares, the fair value of the shares was measured on the basis of the quoted market price for anotherwise identical unrestricted equity instrument of the same issuer that trades in a public market, adjusted to reflect the effect of the salesrestrictions and is therefore, ranked as Level 2 asset.q.Basic and diluted net loss per share:Basic net loss per share is computed based on the weighted average number of shares of common stock outstanding during each year. Diluted netincome per share is computed based on the weighted average number of shares of common stock outstanding during each year plus dilutivepotential equivalent common stock considered outstanding during the year, in accordance with ASC 260, “Earnings per Share”. For the yearsended December 31, 2022 and 2021, all outstanding options and warrants have been excluded from the calculation of the diluted net loss per sharesince their effect was antidilutive.r.Concentrations of credit risk:Financial instruments that potentially subject the Company and its subsidiaries to concentrations of credit risk consist principally of cash andcash equivalents.Cash and cash equivalents are invested in banks in Israel, Spain and United States. Such deposits in United States may be in excess of insuredlimits and are not insured in other jurisdictions. Management believes that the financial institutions that hold the Company’s investments arefinancially sound and, accordingly, minimal credit risk exists with respect to these investments.The Company and its subsidiaries have no offbalancesheet concentration of credit risk such as foreign exchange contracts, option contracts orother foreign hedging arrangements.F13MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)s.Revenue Recognition:The Company’s revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled softwaresubscriptions, associated software maintenance and support.The Company recognizes revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with acustomer exists only when: the parties to the contract have approved it and are committed to perform their respective obligations, the Companycan identify each party’s rights regarding the distinct goods or services to be transferred (“performance obligations”), the Company can determinethe transaction price for the goods or services to be transferred, the contract has commercial substance and it is probable that the Company willcollect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to acustomer. Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted togovernmental authorities. Refunds are estimated at contract inception and updated at the end of each reporting period if additional informationbecomes available. Revenue is recognized when control of the product is transferred to the customer.The Company maintains a returns policy that allows its customers to return product within a specified period of time. The estimate of the provisionfor returns is based upon historical experience with actual returns.Principal versus Agent ConsiderationsThe Company follows the guidance provided in ASC 606 for determining whether it is a principal or an agent in arrangements with customers, byassessing whether the nature of the Company’s promise is a performance obligation to provide the specified goods (principal) or to arrange forthose goods to be provided by the other party (agent). With regard to products being sold by Orgad through Amazon, this determination involvesjudgment. The Company determines it is the principle when it has control over promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).The Company recognizes revenue ratably over the contractual service term for hosted services that are priced based on a committed number oftransactions where the delivery and consumption of the benefit of the services occur evenly over time, beginning on the date the servicesassociated with the committed transactions are first made available to the customer and continuing through the end of the contractual serviceterm. Over usage fees and fees based on the actual number of transactions are billed in accordance with contract terms as these fees are incurredand are included in the transaction price of an arrangement as variable consideration. Fees based on a number of transactions or impressions permonth, are allocated to the period in which the transactions occur. Revenue for subscriptions sold as a fee per period is recognized ratably overthe contractual term as the customer simultaneously receives and consumes the benefit of the underlying service.F14MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)t.Contingencies and CommitmentsLiabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it isprobable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with losscontingencies are expensed as incurred.u.Derivative instrumentsThe Company accounts for its derivative instruments as either assets or liabilities and measures them at fair value through profit or loss.v.LeasesThe Company leases include an office space lease agreement for 36 months, with an option to extend for an additional 36 months and 36 monthscancelable operating lease agreements on behalf of personnel vehicles. The lease term includes a noncancellable period of the lease plus anyadditional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise,or an option to extend (or not to terminate) the lease controlled by the lessor.ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make leasepayments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value oflease payments over the lease term. The company generally use its incremental borrowing rate based on the estimated rate of interest forcollateralized borrowing over a similar term of the lease payments at commencement date. Lease expense for lease payments is recognized on astraightline basis over the lease term.For the office rent lease, the Company has elected to account for the lease and nonlease maintenance components as a single lease component.Therefore, the lease payments used to measure the lease liability include all of the fixed consideration in the contract, including insubstance fixedpayments, owed over the lease term.w.Impact of recently issued accounting standardIn June 2016, the FASB issued ASU 201613, “Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses on FinancialInstruments”, which requires companies to measure credit losses of financial instruments, including customer accounts receivable, utilizing amethodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information toinform credit loss estimates. Subsequent to the issuance of ASU 201613, the FASB issued several additional Accounting Standard Updates toclarify implementation guidance, provide narrowscope improvements and provide additional disclosure guidance. As an Emerging GrowthCompany, ASU 201613 is effective for fiscal years beginning after December 15, 2022. The Company does not expect this ASU to have a materialimpact on its consolidated financial statements.F15MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 3 CASH AND CASH EQUIVALENTSThe Company’s cash and cash equivalents balance at December 31, 2022 and 2021 is denominated in the following currencies:December 31,20222021US Dollars1,65110,184New Israeli Shekels259433Other190532,10010,670NOTE 4 OTHER RECEIVABLES AND PREPAID EXPENSESDecember 31,20222021Prepaid expenses and other current assets322429Government authorities28317Other153133Total758579NOTE 5 PROPERTY AND EQUIPMENT, NETComputersandperipheralequipmentOfficefurnitureandequipmentLeaseholdimprovementsTotalCostBalance as at January 1, 20211825860300Additions2323Translation adjustments72211Balance as at December 31, 20212126062334Balance as at January 1, 20222126062334Additions161127Business combination401555Translation adjustments(32)(8)(8)(48)Balance as at December 31, 20222367854368Accumulated DepreciationBalance as at January 1, 20211461412172Additions2751042Translation adjustments6118Balance as at December 31, 20211792023222Balance as at January 1, 20221792023222Additions209938Translation adjustments(27)(3)(2)(32)Balance as at December 31, 20221722630228Carrying amountsAs at December 31, 2021334039112As at December 31, 2022645224140F16MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 6 LEASESIn August 2019, The Company entered into an office space lease agreement. The lease term is for 36 months beginning on August 20, 2019 and endingon August 20, 2022, with an option to extend for an additional 36 months. The Company extended the lease period until August 20, 2025. Monthly rentpayments including utilities amounting to approximately USD 14 (NIS 49,500) per month.In addition, The Company entered into a threeyear cancelable operating lease agreement for cars.These operating leases are included in “Right of use asset” on the Company’s December 31, 2022 consolidated balance sheets, and represent theCompany’s right to use the underlying asset for the lease term. The Company’s obligations to make lease payments are included in the currentliabilities as “Operating lease liability” and in the noncurrent liabilities as “Operating lease liability long term” on the Company’s December 31, 2022consolidated balance sheets. As of December 31, 2022, rightofuse of asset was $583. operating lease liabilities were $159 and non current Operatinglease liabilities were $308. Rightofuse asset includes the capitalization of improvements (net of amortization) amounting to $105.Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value ofthe lease payments.The interest rate used to discount future lease payment was 11.95%.Maturities of lease liabilities as of December 31, 2022 were as follows:Year Ending:2023$1912024$1912025$127Thereafter$509Less imputed interest:$(42)Total lease liabilities$467F17MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 7 – Goodwill and other Intangible assetsA.Identified intangible assetsSchedule of Intangible assetsSelling PlatformTechnologyCustomerRelationshipsOtherTotalThousandsUSDThousandsUSDThousandsUSDThousandsUSDThousandsUSDCostAs of January 1, 2022Acquisitions through business combinations378286726771,467Effect of changes in exchange rates(32)2565765As of December 31, 2022346311791841,532AmortizationAs of January 1, 2022Amortization for the year including effect of changes inexchange rates as of December 31, 2022(109)(15)(27)(4)(155)Carrying amountAs of December 31, 2022237296764801,377AmortizationAmortization expenses recorded for identified intangible assets in the Consolidated Statements of Operations for each period and were as follows:Line ItemDecember 31,2022December 31,2021Selling platformCosts of revenues109TrademarkSales and marketing4TechnologyCosts of revenues15Customer relationshipsSales and marketing27Total amortization expenses155Future amortization expenses are expected to be as follows:20232024202520262027ThereafterTotalFuture amortization expenses3033031941771561791,312b.GoodwillThe changes in the carrying amount of goodwill for the years ended December 31, 2022 and 2021 were as follows:Fashion and equipmentecommerce platformNaizTotalBalance as of December 31, 2021Changes during the period:Goodwill acquired1521,1521,304Goodwill impairmentTranslation differences(14)10591Balance as of December 31, 20221381,2571,395The Company operates its business through three reporting segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovativeartificial intelligence driven measurement solutions and (iii) Naiz. See note 17 for additional segments information.The Company determines the fair value of its reporting units using the income approach. According to the income, the Company uses discounted cashflows to estimate the fair value. Cash flow projections are based on the Company’s estimates of revenue growth rates and operating margins, takinginto consideration the industry’s and market’s conditions. The discount rate used is based on the weighted average cost of capital (“WACC”),adjusted for the relevant risk associated with businessspecific characteristics.The Company performed a quantitative assessment as of December, 31 2022 for the reporting units’ fair value. The estimated fair value of the Fashionand equipment ecommerce platform and Naiz reporting units exceeded its estimated carrying amount by 95.9% and 27.7% respectively. This, based thefollowing assumptions:Fashion and equipmentecommerce platformNaizDiscount rate21%23%Terminal growth rate3%3%If business conditions or expectations were to change materially, it may be necessary to record impairment charges to the Company’s reporting units inthe future.F18MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 8 Investment in JVIn August 2022, the Company established a joint venture (“JV”) in Brazil with Santista Têxtil. The Company holds 51% and Santista Têxtil holds 49% of theJV. The purpose of the JV is to serve the Brazilian market according to the business plan that was set. Both parties agree to make an initial investment in theJV of $198that will be made per the holding percentage of each party. As of the reporting date, the JV is in process of establishing its operation.NOTE 9 Financial LiabilitiesThe book value of each of the financial liability categories is an acceptable approximation of fair value.The debt is comprised of four loans that were granted to My Size Israel – in an outstanding amount of approximately $131, bearing interest rangingfrom prime rate to prime+2.8% rate, and four loans that were granted to the Spanish subsidiary– in an outstanding amount of approximately $400,bearing interest ranging from 1% to 3%.The financial liability maturities during the five years following the end of the financial year are shown below:UntilUntilUntilUntilUntilAfterTOTAL311223311224311225311226311227311227311222Debts with credit institutions15513892874712531NOTE 10 RELATED PARTIES TRANSACTIONSA. Balances with related parties:The following related party payables are included in liability to related parties.December 31,20222021Officers (*)4143Liability in respect of business combinations (**)739Other related parties (***)(95)Directors152069863(*)The amount includes the net salaries payables.(**)The amount includes the provision created to former owners of Orgad that are entitled to additional cash and equity consideration and former owners of Naizthat entitled to additional cash consideration, see note 16 business combination.(***)The amount includes an amount receivable from Orgad previous shareholders who currently work in the company.B. Related parties benefits:Year endedDecember 31,20222021Salaries and related expenses1,440852Share based payments39673Cash liability and equity liability expenses related to acquisitions (**)1,058Directors58582,952983(**)The amount includes the expenses for a provision created to former owners of Orgad that are entitled to additional cash and equity consideration and formerowners of Naiz that entitled to additional cash consideration, see note 16 business combination.NOTE 11 FINANCIAL INSTRUMENTSThe following tables presents the Company’s significant assets and liabilities that are measured at fair value on recurring basis and their classificationwithin the fair value hierarchy:December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities47financial assets (*)10December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesDerivatives9December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities108December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesWarrants derivative2(*)the financial asset includes in other receivables.F19MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 11 FINANCIAL INSTRUMENTS (Cont.)The carrying amounts of cash and cash equivalents, restricted cash, short term restricted deposit, accounts receivable, other receivables and prepaidexpenses, trade payable and accounts payable approximate their fair value due to the shortterm maturities of such instruments.At December 31, 2022, the recognized gain and fair value (based on quoted market prices with a discount due to security restrictions on iMine shares)of the marketable securities were $59and $47, respectively (at December 31, 2021 $49and $108, respectively).NOTE 12 TAXES ON INCOMEa.On December 31, 2022, the Company had U.S. federal net operating loss carryforwards of approximately $26 available to reduce future taxableincome. Utilization of the U.S. net operating losses may be subject to substantial limitations due to the change of ownership provisions of theInternal Revenue Code of 1986.The U.S. Company has final tax assessments through 2014.On December 22, 2017, the Tax Reform Act was signed into law. The legislation significantly changes U.S. tax law by, among other things, lowering theU.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. As a result of the decrease in the corporate incometax rate, the Company revalued the ending net deferred tax assets at December 31, 2017, but did not recognize any incremental income tax expense in2017 due to the revaluation of the valuation allowance.b.Foreign tax:1.Tax rates:Presented hereunder are the tax rates relevant to the Company’s Israeli subsidiaries:2022 23%2021 23% Presented hereunder are the tax rates relevant to the Company’s Spanish subsidiary:2022 24%2.The Company’s Israeli subsidiaries have estimated total available carryforward operating tax losses for Israeli income tax purposes ofapproximately $64as of December 31, 2022. Of these losses, a total of $47.5are owned by Topspin Medical (Israel) Ltd. Topspin tax lossesmay be offset only by future income with respect to the same operational activity by which it was incurred for an indefinite period of time. Theother losses are owned by My Size Israel and may be carryforward to offset against future income for an indefinite period of time.3.Topspin Medical (Israel) Ltd. and My Size (Israel) 2014 Ltd. has final tax assessments through 2016.c.U.S. and foreign components of loss from continuing operations, before income taxes consisted of:December 31,20222021U.S(1,180)(3,802)NonU.S. (foreign)(7,130)(6,718)(8,310)(10,520)F20MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 12 TAXES ON INCOME (Cont.)d.Deferred taxes:Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reportingpurposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows:December 31,20222021Deferred tax assets:Operating loss carryforwards20,13120,238Warrants and options145126Marketable securities390377Intangible assets(328)Research and development expenses586341Other temporary differences203Deferred tax assets before valuation allowance21,12721,082Valuation allowance(21,455)(21,082)Net deferred tax liability(328)The following table presents a reconciliation of the beginning and ending valuation allowance:December 31,20222021Balance at beginning of the year21,08218,968Additions in valuation allowance to the income statement1,7581,625Additions in valuation allowance due to exchange rate differences(1,385)489Balance at end of the year21,45521,082In assessing the realization of deferred tax assets, management considers whether it is more likely than not that all or some portion of the deferred taxassets will not be realized.The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporarydifferences are deductible and net operating losses are utilized. Based on consideration of these factors, the Company recorded a full valuationallowance at December 31, 2021 and 2020.e.Theoretical taxThe following presents the adjustment between the theoretical tax amount and the tax amount included in the financial statements:December 31,20222021Loss before income taxes8,34610,520Statutory tax rate21%21%Computed “expected” tax income1,7522,209Foreign tax rate differences and exchange rate differences149131Nondeductible expenses(107)(715)Change in valuation allowance(1,758)(1,625)Taxes on income36F21MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITYa.Common stock confers upon their holders the right to receive notice to participate and vote in general meetings of the Company, and the right toreceive dividends if declared.b.On January 8, 2021, the Company conducted a public offering of its securities pursuant to which it issued 62,768 shares of its common stock forgross proceeds of $2,008. The net proceeds to the Company from the offering were approximately $1,700, after deducting placement agent’s feesand other estimated offering expenses payable by the Company.c.During 2021, a holders of warrants exercised warrants to purchase 135,109 ordinary shares of the Company in exchange for $3,709.d.On March 25, 2021, the Company conducted a public offering of its shares of common stock pursuant to which it issued 104,741 shares of itscommon stock for gross proceeds of $3,300. The net proceeds to the Company from the offering were approximately $2,872, after deductingplacement agent’s fees and other estimated offering expenses payable by the Company.On May 7, 2021, the Company issued an additional 15,711 shares of the Company’s common stock in connection with the full exercise of theunderwriter’s overallotment option granted in the Company’s March 2021 public offering. These additional shares were sold to the underwriter at apublic offering price of $31.5 per share, resulting in additional net proceeds to the Company, net of the underwriting discount, of approximately$463.e.On May 26, 2021, the Company issued 100,000 shares of common stock to Ms. Zigdon in consideration of the Waiver. See note 1(b) above.f.On October 28, 2021, the Company sold in a registered direct offering 100,592 shares of its common stock and, in a concurrent private placement,an aggregate of 75,444 unregistered warrants to purchase shares of common stock, at an offering price of $33.8 per share and associated warrant.In addition, on the same day, the Company sold in a private placement 150,888 unregistered shares of common stock and unregistered warrants topurchase up to an aggregate of 113,166 shares of common stock at the same purchase price as in the registered direct offering. The warrants areimmediately exercisable and will expire five years from issuance at an exercise price of $31.5 per share, subject to adjustment as set forth therein.The gross proceeds from the offerings were $8,500. The net proceeds to the Company from the offerings were approximately $7,560, afterdeducting placement agent’s fees and other estimated offering expenses payable by the Company. In connection with the offerings, the Companyissued to the placement agent warrants to purchase 17,603 shares on substantially the same terms as the purchasers in the offerings at an exerciseprice of $42.25 per share and a term expiring on October 26, 2026.g.On December 7, 2022, the Company’s board of directors approved a 1for25 reverse stock split of the Company’s issued and outstanding sharesof common stock. The reverse stock split became effective on December 8, 2022. In order not to have fractional shares as a result of the reversestock split, the Company issued an additional 12,091 shares of common stock. As a result, all shares of common stock, options for shares ofcommon stock, exercise price and net loss per share amounts were adjusted retroactively for all periods presented in these financial statements.F22MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITY (Cont.)g.A summary of the warrant activity during the years ended December 31, 2022 and 2021 is presented below:Number ofWarrantsWeightedAverageExercisePriceWeightedAverageRemainingLife inYearsOutstanding, December 31, 2020216,85936.754.26Issued206,214Expired or exercised(135,109)Outstanding, December 31, 2021287,96431.004.35IssuedExpired or exercised(17,901)Outstanding, December 31, 2022270,06330.213.36Exercisable, December 31, 2022270,06330.213.36NOTE 14 STOCK BASED COMPENSATIONThe stockbased expense recognized in the financial statements for services received is related to Research and Development, Sales and Marketingand General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense Research and development15195Stockbased compensation expense Sales and marketing126180Stockbased compensation expense General and administrative17898455373The stockbased expense recognized in the financial statements for services received post Acquisition of Orgad (see note 16) is related to Cost OfGoods, Sales and Marketing and General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense – Cost of goods80Stockbased compensation expense Sales and marketing112Stockbased compensation expense General and administrative127319F23MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Options issued to consultantsWe can sell additional shares of common stock without consulting stockholders and without offering shares to existing stockholders, which wouldresult in dilution of shareholders’ interests in the company and could depress our stock price.Our Certificate of Incorporation currently authorizes 250,000,000 shares of common stock, of which 2,446,780 are currently outstanding as of March 31, 2023and our board of directors is authorized to issue additional shares of our common stock. Although our board of directors intends to utilize its reasonable businessjudgment to fulfil its fiduciary obligations to our then existing stockholders in connection with any future issuance of our capital stock, the future issuance ofadditional shares of our capital stock could cause immediate, and potentially substantial, dilution to our existing stockholders, which could also have a materialeffect on the market value of the shares. Further, other than certain participation rights that we have granted in a past offering, our shares do not have preemptiverights, which means we can sell shares of our capital stock to other persons without offering purchasers in this offering the right to purchase their proportionateshare of such offered shares. Therefore, any additional sales of stock by us could dilute your ownership interest in our Company.Our quarterly operating results may fluctuate significantly.We expect our operating results to be subject to quarterly fluctuations. Our net loss and other operating results will be affected by numerous factors,including:●variations in the level of expenses related to our research and development;●any lawsuits in which we may become involved;●regulatory developments affecting our products; and●our execution of any collaborative, licensing or sales agreements, and the timing of payments under these arrangements.If our quarterly operating results fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially.Furthermore, any quarterly fluctuations in our operating results may, in turn, cause the price of our common stock to fluctuate substantially.If we fail to comply with the rules under the Sarbanes Oxley Act of 2002 related to accounting controls and procedures or if we discover materialweaknesses and deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult.If we fail to comply with the rules under the SarbanesOxley Act of 2002 related to disclosure controls and procedures, or, if we discover materialweaknesses and other deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult. Section 404 of the SarbanesOxley Act requires annual management assessments of the effectiveness of our internal control over financial reporting and, ifwe are no longer a nonaccelerated filer, a report by our independent auditors addressing these assessments. If material weaknesses or significant deficiencies arediscovered or if we otherwise fail to achieve and maintain the adequacy of our internal control, we may not be able to ensure that we can conclude on an ongoingbasis that we have effective internal controls over financial reporting in accordance with Section 404 of the SarbanesOxley Act. Moreover, effective internalcontrols are necessary for us to produce reliable financial reports and are important to helping prevent financial fraud. If we cannot provide reliable financial reportsor prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price ofour common stock could drop significantly.38Our Certificate of Incorporation, Bylaws and Delaware law may have antitakeover effects that could discourage, delay or prevent a change incontrol, which may cause our stock price to decline.Our Certificate of Incorporation, Bylaws and Delaware law could make it more difficult for a thirdparty to acquire us, even if closing such a transactionwould be beneficial to our stockholders. Provisions of our Certificate of Incorporation, Bylaws and Delaware law also could have the effect of discouraging potentialacquisition proposals or making a tender offer or delaying or preventing a change in control, including changes a stockholder might consider favorable. Suchprovisions may also prevent or frustrate attempts by our stockholders to replace or remove our management. In particular, the Certificate of Incorporation, Bylawsand Delaware law, as applicable, among other things:●provide the board of directors with the ability to alter the Bylaws without stockholder approval;●the classification of our board of directors;●place limitations on the removal of directors;●provide that vacancies on the Board of Directors may be filled by a majority of directors in office, although less than a quorum;●require that stockholder actions must be affected at a duly called stockholder meeting and generally prohibiting stockholder actions by written consent;●eliminate the ability of stockholders to call a special meeting of stockholders; and●establish advance notice requirements for nominations for election to the Board of Directors or for proposing matters that can be acted upon at duly calledstockholder meetings.We are subject to Section 203 of the Delaware General Corporation Law which, subject to certain exceptions, prohibits “business combinations” between apubliclyheld Delaware corporation and an “interested stockholder,” which is generally defined as a stockholder who becomes a beneficial owner of 15% or more ofa Delaware corporation’s voting stock for a threeyear period following the date that such stockholder became an interested stockholder. These provisions areexpected to discourage certain types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to firstnegotiate with our board. These provisions may delay or prevent someone from acquiring or merging with us, which may cause the market price of our commonstock and the value of our securities to decline.If we fail to comply with the continued listing requirements of the Nasdaq Capital Market, our common stock may be delisted and the price of ourcommon stock and our ability to access the capital markets could be negatively impacted.Nasdaq has established certain standards for the continued listing of a security on the Nasdaq Capital Market. The standards for continued listing include,among other things, that the minimum bid price for the listed securities not fall below $1.00 per share for a period of 30 consecutive trading days and that wemaintain a minimum of $2,500,000 in shareholders’ equity. We have in the past fallen below the minimum bid price and minimum shareholders’ equity.39No assurance can be given that we will continue to be in compliance with the Rule. Failure to meet applicable Nasdaq continued listing standards couldresult in a delisting of our common stock. A delisting of our common stock from Nasdaq could materially reduce the liquidity of our common stock and result in acorresponding material reduction in the price of our common stock. In addition, delisting could harm our ability to raise capital through alternative financing sourceson terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, employees and fewer business development opportunities.The exercise of outstanding warrants and stock options will have a dilutive effect on the percentage ownership of our capital stock by existingstockholders.As of March 15, 2023, we had outstanding warrants to acquire 2,299,115 shares of our common stock and stock options to purchase 1,659 shares of ourcommon stock, which warrants and options are exercisable for prices ranging between $2.81 and $375. The expiration of the term of such options and warrants rangefrom 0.22 years to 4.83 years. If a significant number of such warrants and stock options are exercised by the holders, the percentage of our common stock ownedby our existing stockholders will be diluted.Were our common stock to become subject to the penny stock rules then this could result in U.S. brokerdealers becoming discouraged from effectingtransactions in shares of our common stock.Rule 15g9 under the Exchange Act establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a marketprice of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. If we do not retain a listing on the NasdaqCapital Market or do not meet certain net tangible asset or average revenue requirements and if the price of our common stock is less than $5.00, our common stockwill be deemed a penny stock. For any transaction involving a penny stock, unless exempt, the rules require: (a) that a broker or dealer approve a person’s accountfor transactions in penny stocks; and (b) the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantityof the penny stock to be purchased.In order to approve a person’s account for transactions in penny stocks, the broker or dealer must: (a) obtain financial information and investmentexperience objectives of the person and (b) make a reasonable determination that the transactions in penny stocks are suitable for that person and the person hassufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver,prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which: (a) sets forth the basis on whichthe broker or dealer made the suitability determination; and (b) confirms that the broker or dealer received a signed, written agreement from the investor prior to thetransaction. Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult forinvestors to dispose of our common stock and cause a decline in the market value of our common stock.Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissionspayable to both the broker or dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor incases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the accountand information on the limited market in penny stocks.Sales of our currently issued and outstanding stock may become freely tradable pursuant to Rule 144 and may dilute the market for your shares andhave a depressive effect on the price of the shares of our common stock.A portion of our outstanding shares of common stock are “restricted securities” within the meaning of Rule 144 under the Securities Act of 1933, asamended, or the Securities Act. As restricted shares, these shares may be resold only pursuant to an effective registration statement or under the requirements ofRule 144 or other applicable exemptions from registration under the Securities Act and as required under applicable state securities laws. Rule 144 provides inessence that an affiliate (as such term is defined in Rule 144(a)(1)) of an issuer who has held restricted securities for a period of at least six months (one year afterfiling Form 10 information with the SEC for shell companies and former shell companies) may, under certain conditions, sell every three months, in brokeragetransactions, a number of shares that does not exceed the greater of 1% of a company’s outstanding shares of common stock or the average weekly trading volumeduring the four calendar weeks prior to the sale (the four calendar week rule does not apply to companies quoted on the OTC Markets). Rule 144 also permits, undercertain circumstances, the sale of securities, without any limitation, by a person who is not an Affiliate of the Company and who has satisfied a oneyear holdingperiod. A sale under Rule 144 or under any other exemption from the Securities Act, if available, or pursuant to subsequent registrations of our shares of commonstock, may have a depressive effect upon the price of our shares of common stock in any active market that may develop.40We are a former “shell company” and as such are subject to certain limitations not applicable to other public companies generally.Prior to our suspension of reporting in 2012, we were a public reporting “shell company,” as defined in Rule 12b2 under the Exchange Act. Although weare no longer a “shell company,” we are subject to certain restrictions under the Securities Act for the resale of securities issued by issuers that have been at anytime previously a shell company. Specifically, the Rule 144 safe harbor available for the resale of our restricted securities is only available to our stockholders if wehave filed all reports and other materials required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934, as amended, or the Exchange Act, asapplicable, during the preceding twelve months, other than current reports on Form 8K, at the time of the proposed sale, regardless of whether the restrictedsecurities were initially issued at the time we were a shell company or subsequent to termination of such status. Accordingly, holders of our “restricted securities”within the meaning of Rule 144 will be subject to the conditions set forth in Rule 144 with respect to our company. Other reporting companies that are not formershell companies and have been reporting for more than twelve months are not subject to this same reporting threshold for nonaffiliate reliance on Rule 144.Accordingly, any restricted securities we have sold or sell in the future or issue to consultants or employees, in consideration for services rendered or for any otherpurpose, may not be resold unless such securities are registered with the SEC or the requirements of Rule 144 have been satisfied. As a result, it may be harder forus to fund our operations and pay our employees and consultants with our securities instead of cash. Furthermore, it may be harder for us to raise funding throughthe sale of debt or equity securities unless we agree to register such securities with the SEC, which could cause us to expend additional resources in the future. Ourprior status as a “shell company” could prevent us in the future from raising additional funds, engaging employees and consultants, and using our securities to payfor any acquisitions, which could cause the value of our securities, if any, to decline in value or become worthless.ITEM 1B. UNRESOLVED STAFF COMMENTSNone.ITEM 2. PROPERTIESWe currently lease 1,660 square feet of office space at 4 HaYarden Street, Airport City, Israel. The lease term is for 36 months beginning on August 20, 2019and ending on August 20, 2022, with an option to extend for an additional 36 months. Monthly rent payments, including utilities, amount to approximately $14,000per month. We extended the lease period until August 20, 2025.ITEM 3. LEGAL PROCEEDINGSFrom time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation issubject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.41North Empire LLCOn August 7, 2018, we commenced an action against North Empire LLC, or North Empire, in the Supreme Court of the State of New York, County of NewYork for breach of a Securities Purchase Agreement or Agreement in which we are seeking damages in an amount to be determined at trial, but in no event less than$616,000. On August 2, 2018, North Empire filed a Summons with Notice against us, also in the same Court, in which they allege damages in an amount of $11.4million arising from an alleged breach of the Agreement. On September 6, 2018, North Empire filed a Notice of Discontinuance of the action it had filed on August 2,2018. On September 27, 2018, North Empire filed an answer and asserted counterclaims in the action commenced by us against them, alleging that we failed to deliverstock certificates to North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against our CEO andnow former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018, we filed a reply to North Empire’scounterclaims. On November 15, 2018, our CEO and now former Chairman of the Board filed a motion to dismiss North Empire’s thirdparty complaint. On January 6,2020, the Court granted the motion and dismissed the thirdparty complaint. Discovery has been completed and both parties have filed motions for summaryjudgment in connection with the claims and counterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summaryjudgment, arguing there were factual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision.On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying the Company’s motion for summary judgment. On or about September 12,2022, the Court issued its Decision and Order denying the Company’s motion to reargue. North Empire filed its opposing brief on December 7, 2022. Both sides weregiven an opportunity to file a reply brief. We filed our reply brief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. Oral argument was heldbefore the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Court filed its Decision and Order, which affirmed the lower court’sdecisions regarding both My Size and North Empire’s motions for summary judgment and sent the case back to the Supreme Court. On or about March 13, 2023, theSupreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date for the mediation has not yet been set. We intend tovigorously defend any claims made by North Empire. We believe it is more likely than not that the counterclaims will be denied.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.42PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur stock currently is listed on the Tel Aviv Stock Exchange and the Nasdaq Capital Market under the symbol “MYSZ”. Our stock has been traded on theNasdaq Capital Market since July 25, 2016.HoldersAs of March 31, 2023, we had 70 shareholders of record. The actual number of stockholders is greater than this number of record holders and includesstockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our Board of Directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our Board of Directors deems relevant.Securities Authorized for Issuance under Equity Compensation PlansInformation about our equity compensation plans is incorporated herein by reference to “Item 12. Security Ownership of Certain Beneficial Owners andManagement and Related Stockholder Matters”, of this Annual Report on Form 10K.Recent Sales of Unregistered SecuritiesNone.ITEM 6. SELECTED FINANCIAL DATAAs a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULT OF OPERATIONSYou should read the following discussion along with our financial statements and the related notes included elsewhere in this Annual Report on Form10K. The following discussion contains forwardlooking statements that are subject to risks, uncertainties and assumptions, including those discussed under“Risk Factors.” Our actual results, performance and achievements may differ materially from those expressed in, or implied by, these forwardlooking statements.OverviewMySize is an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.43Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile device or through MySizeID Widget: a simple questionnaire which was uses a database collected over the years.MySizeID synchronizes the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and onlypresents items available for purchase that match their measurements to ensure a correct fit.MySize is positioning itself as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empowering brand design teams, which are designed to increaseend consumer satisfaction, contributing to a sustainable world and reduce operation costs.Orgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,682 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz BespokeTechnologies, S.L., or Naiz, a limited liability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.44The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 2,365,800 shares of My Size common stock were issuedto Whitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.45Operations in RussiaIn addition to our Israel operations, we had operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia. To date, mainly due to the invasion of Ukraine by Russia and the ongoing sanctions we stopped most ofour efforts in Russia and will probably close the subsidiary in the near future.Results of OperationsThe table below provides our results of operations for the periods indicated.Year ended December 3120222021(dollars in thousands)Revenues4,459131Cost of revenues(3,825)Gross profit634131Research and development expenses$(1,701)$(4,248)Sales and marketing(3,143)(2,336)General and administrative(3,900)(4,124)Operating loss(8,110)(10,577)Financial income (expenses), net(236)57Tax income36Net loss$(8,310)$(10,520)Year Ended December 31, 2022 Compared to Year Ended December 31, 2021RevenuesFrom inception through December 31, 2018, we did not generate any revenue from operations and we continue to expect to incur additional losses toperform further research and development activities. We started to generate revenues only in 2019. Our revenues for the year ended December 31, 2022 amounted to$4,459,000 compared to $131,000 for year ended December 31, 2021. The increase from the corresponding period primarily attributable to $4,132,000 in revenuegenerated from Orgad from February 7, 2022, the date of closing of the Orgad acquisition, or the Acquisition Date and revenue generated from the Naiz Acquisitionfrom October 11, 2022, the date of closing of the Naiz acquisition.In addition, the increase from the corresponding period results from an increase in revenues generated by My Size.Cost Of RevenuesOur cost of revenues expenses for the year ended December 31, 2022 amounted to $3,825,000, compared to none for the year ended December 31, 2021. Thecost of revenues includes cash and equity liabilities expenses in the amount of $194,000. The increase in comparison with the corresponding period was due to thecost of goods of the revenues generated from Orgad’s operations.Research and Development ExpensesOur research and development expenses for the year ended December 31, 2022 amounted to $1,701,000 a decrease of $2,547,000, or approximately 60.0%,compared to $4,248,000 for the year ended December 31, 2021. The decrease from the corresponding period primarily resulted from share based payment in amount of$2,618,000 attributed to the share issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021.Sales and Marketing ExpensesOur sales and marketing expenses for the year ended December 31, 2022 amounted to $3,143,000 an increase of $807,000, or 34.55%, compared to $2,336,000for the year ended December 31, 2021. The increase primarily resulted from an increase in employees expenses mainly due to Orgad and Naiz acquisitions, increase inAmazon fees, increase in cash and equity liabilities expenses attributed to the Orgad acquisition and an increase in share based payments offset by a decrease inpayments to consultants.46General and Administrative ExpensesOur general and administrative expenses for the year ended December 31, 2022 amounted to $3,900,000, a decrease of $224,000, or 5.43%, compared to$4,124,000 for the year ended December 31, 2021. The decrease compared to the corresponding period was mainly due to a decrease in professional expenses, mainlyattributed to shareholder activism including settlement expenses with the Lazar Parties offset by an increase in sharedbased payments and an increase in employeesexpenses mainly due to the Orgad and Naiz acquisitions.Operating LossAs a result of the foregoing, for the year ended December 31, 2022, our operating loss was $8,110,000, a decrease of $2,467,000 or 23.32%, compared to ouroperating loss for the year ended December 31, 2021 of $10,577,000.Financial Income, NetOur financial (expense) income, net for the year ended December 31, 2022 amounted to $236,000 compared to financial income, $57,000 for the year endedDecember 31, 2021. In 2022, we had financial expenses exchange rate differences offset by an income from fair value revaluation of investment in marketablesecurities whereas in 2021 we had financial income from the fair value revaluation of warrants offset by expenses from exchange rate differences and expenses fromfair value revaluation of investment in marketable securities.Net LossAs a result of the foregoing, our net loss for the year ended December 31, 2022 was $8,310,000 compared to net loss of $10,520,000 for the year endedDecember 31, 2021. The decrease in net loss was mainly due increase in sales and marketing expenses and financial expenses as opposed to financial income in thecorresponding period offset by a decrease in research and development expenses in amount of $2,618,000 attributed to the share issuance to Shoshana Zigdonunder the Amendment to Purchase Agreement dated May 26, 2021.Liquidity and Capital ResourcesSince our inception, we have funded our operations primarily through public and private offerings of debt and equity in Israel and in the U.S.As of December 31, 2022, we had cash, cash equivalents and restricted cash of $2,363,000 compared to $10,943,000 cash, cash equivalents, restricted cashas of December 31, 2021. During January 2023, we completed a registered direct and concurrent private placement offering resulting in gross proceeds ofapproximately $3 million. This decrease primarily resulted from our operating activities, the acquisition of Orgad and Naiz Fit, and resources that were deployed togrow of both businesses.Net cash used in operating activities was $7,290,000 for the year ended December 31, 2022 compared to $7,297,000 for the year ended December 31, 2021.The decrease in cash used in operating activity is derived mainly from an increase in share based payments and increase in account receivables mainly from theOrgad and Naiz fit acquisitions offset by a decrease in the net loss.Net cash used in investing activities for the year ended December 31, 2022 was $993,000 as opposed to net cash provided by investing activities of$161,000 for the year ended December 31, 2021. The net cash used in investing activities for the year ended December 31, 2022 was mainly from the acquisition ofOrgad and Naiz as opposed to proceeds from shortterm deposits and restricted deposits during the year ended December 31, 2021.We had a negative cash flow from financing activities of $67,000 for the year ended December 31, 2022 compared to positive cash flow of $16,292,000 for theyear ended December 31, 2021. The negative cash flow from financing activities for the year ended December 31, 2022 was mainly due to repayment of loans andinterest and payments for leases as opposed to proceeds from issuance of shares and from exercise of warrants for the year ended December 31, 2021.47We expect that we will continue to generate losses and negative cash flows from operations for the foreseeable future. Based on the projected cash flowsand cash balances as of December 31, 2022, together with the proceeds from the January 2023 financing, we believe our existing cash will not be sufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. We will need to raiseadditional capital, which may not be available on reasonable terms or at all. Additional capital would be used to accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;●respond to competitive pressures;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, the Russian invasion ofUkraine, the impact of any resurgence of the COVID19 pandemic and a number of other factors, many of which are outside our control, and on our financialperformance. Accordingly, we cannot assure you that we will be able to successfully raise additional capital at all or on terms that are acceptable to us. If we cannotraise additional capital when needed, it may have a material adverse effect on our business, results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.We have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.Recently Issued Accounting PronouncementsCertain recently issued accounting pronouncements are discussed in Note 2, Significant Accounting Policies, to the consolidated financial statementsincluded in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10K.OffBalance Sheet ArrangementsWe have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.48Application of Critical Accounting Policies and EstimatesOur management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we haveprepared in accordance with U.S. generally accepted accounting principles issued by the Financial Accounting Standards Board, or FASB. The preparation of thesefinancial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assetsand liabilities at the date of the financial statements, as well as the reported expenses during the reporting periods. Actual results may differ from these estimatesunder different assumptions or conditions.Our significant accounting policies were revenue from contracts with customers which are more fully described in the notes to our financial statementsincluded herein. We believe these accounting policies discussed below are critical to our financial results and to the understanding of our past and futureperformance, as these policies relate to the more significant areas involving management’s estimates and assumptions. We consider an accounting estimate to becritical if: (1) it requires us to make assumptions because information was not available at the time or it included matters that were highly uncertain at the time wewere making our estimate; and (2) changes in the estimate could have a material impact on our financial condition or results of operations.Accounting for business combinationsWe allocate the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed, based upon their estimated fairvalues at the acquisition date. These fair values are typically estimated with assistance from independent valuation specialists.The purchase price allocation process requires us to make significant estimates and assumptions, especially at the acquisition date with respect tointangible assets, contractual support obligations assumed, contingent consideration arrangements, and preacquisition contingencies.Although we believe the assumptions and estimates we have made in the past have been reasonable and appropriate, they are based in part on historicalexperience and information obtained from the management of the acquired companies and are inherently uncertain.Examples of critical estimates in valuing certain of the intangible assets we have acquired or may acquire in the future include but are not limited to:● future expected cash flows from product sales or other customer contracts;● expected costs of fulfillment including marketing, warehousing and product sales;● the acquired company’s brand and competitive position, as well as assumptions about the period of time the acquired brand will continue to be used inthe combined company’s product portfolio;● cost of capital and discount rates; and● estimating the useful lives of acquired assets as well as the pattern or manner in which the assets will amortize.Refer to Note 16, Business Combination, to the consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” of thisAnnual Report on Form 10K.49Revenue from contracts with customersOur revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled software subscriptions, associatedsoftware maintenance and support.We recognize revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with a customer exists onlywhen: the parties to the contract have approved it and are committed to perform their respective obligations, we can identify each party’s rights regarding thedistinct goods or services to be transferred (“performance obligations”), we can determine the transaction price for the goods or services to be transferred, thecontract has commercial substance and it is probable that we will collect the consideration to which we will be entitled in exchange for the goods or services that willbe transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to a customer.Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted to governmental authorities. Refundsare estimated at contract inception and updated at the end of each reporting period if additional information becomes available. Revenue is recognized when controlof the product is transferred to the customer.We maintain a returns policy that allows our customers to return product within a specified period of time. The estimate of the provision for returns is basedupon historical experience with actual returns.Principal versus Agent ConsiderationsWe follow the guidance provided in ASC 606 for determining whether we are a principal or an agent in arrangements with customers, by assessing whetherthe nature of our promise is a performance obligation to provide the specified goods (principal) or to arrange for those goods to be provided by the other party(agent). With regard to products being sold by Orgad through Amazon, this determination involves judgment. We determine it is the principle when it has controlover the promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).We recognize revenue ratably over the contractual service term for hosted services that are priced based on a committed number of transactions where thedelivery and consumption of the benefit of the services occur evenly over time, beginning on the date the services associated with the committed transactions arefirst made available to the customer and continuing through the end of the contractual service term. Over usage fees and fees based on the actual number oftransactions are billed in accordance with contract terms as these fees are incurred and are included in the transaction price of an arrangement as variableconsideration. Fees based on a number of transactions or impressions per month, are allocated to the period in which the transactions occur. Revenue forsubscriptions sold as a fee per period is recognized ratably over the contractual term as the customer simultaneously receives and consumes the benefit of theunderlying service.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.As a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.50ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAMY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2022U.S. DOLLARS IN THOUSANDSINDEXPageReport of Independent Registered Public Accounting Firm (PCAOB ID: ID 1057)F2Consolidated Balance SheetsF4Consolidated Statements of Comprehensive LossF5Consolidated Statements of Shareholders’ EquityF6Consolidated Statements of Cash FlowsF7Notes to Consolidated Financial StatementsF8 F33F1Report of Independent Registered Public Accounting FirmTo the Shareholders and Board of DirectorsMy Size, Inc.:Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of My Size, Inc. and subsidiaries (the Company) as of December 31, 2022 and 2021, the relatedconsolidated statements of comprehensive loss, shareholders’ equity, and cash flows for each of the years in the twoyear period ended December 31, 2022, and therelated notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, thefinancial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the twoyear periodended December 31, 2022, in conformity with U.S. generally accepted accounting principles.Going ConcernThe accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1d tothe consolidated financial statements, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit thatraises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1d. Theconsolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidatedfinancial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Critical Audit MattersCritical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to becommunicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved ourespecially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidatedfinancial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters oron the accounts or disclosures to which they relate.Acquisitiondate fair value of customer relationshipsAs discussed in Note 16 to the consolidated financial statements, on October 11, 2022, the Company acquired Naiz Bespoke Technologies SL (“Naiz”). As a result ofthe transaction, the Company acquired customer relationships intangible assets (“customer relationships”) representing the generation of future income from Naiz’sexisting customers. The acquisition date fair value of the customer relationships was $726 thousand.F2We identified the evaluation of the acquisitiondate fair value of the Naiz customer relationships as a critical audit matter. A high degree of subjective auditorjudgment was required to evaluate the following internally developed assumptions used to estimate the fair value of such asset, for which there were limitedobservable inputs: (i) forecasted revenues attributable to existing customers, (ii) forecasted earnings before interest, taxes, depreciation, and amortization(“EBITDA”) margins for the acquired business, (iii) estimated annual customer attrition rates and (iv) estimated discount rate. The determined fair value wassensitive to changes in these key assumptions. Additionally, specialized skills and knowledge were needed to evaluate the discount rate used.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s acquisitiondate fair value estimation process, including controls over the development of key assumptions. We performed a sensitivity analysis toassess the impact of reasonably possible changes to forecasted revenues, EBITDA margins, annual customer attrition rates, and the discount rate. We evaluated theforecasted revenue growth rates from existing customers by comparing the growth assumptions to those of the Company’s peers and industry reports. Inconnection with our assessment of the forecasts used in the valuation, we compared (1) forecasted revenue and EBITDA to Naiz’s historical actual results and (2)estimated annual customer attrition rates to historical Naiz customer attrition data. We tested the Company’s determined weighted average cost of capital(“WACC”), which was used to determine the discount rate, by involving valuation professionals with specialized skills and knowledge, who assisted in:Evaluating the selected discount rate by comparing it against a discount rate range that was independently developed using publicly available market datafor comparable companies, and;Assessing the Company’s WACC calculation, by comparing it against an independently estimated WACC range based on inputs obtained throughpublished surveys and studies.Goodwill impairment assessmentAs discussed in Note 16 to the consolidated financial statements, during 2022 the Company recorded goodwill of $1,257 thousand related to the acquisition of NaizBespoke Technologies, S.L. (“Naiz”). The Company performed an annual quantitative impairment test of goodwill at the reporting unit level. Based on this analysis,the Company determined that the fair value of its reporting unit exceeded its carrying value and no impairment charge was required.We identified the evaluation of the goodwill impairment assessment for the Naiz reporting unit as a critical audit matter. A high degree of subjective auditor judgmentwas required to evaluate the following assumptions used to estimate the fair value of the Company’s reporting unit, for which there were limited observable inputs:(i) forecasted reporting unit cash flows, (ii) longterm growth rates, and (iii) discount rates. The fair value was sensitive to changes in these key assumptions.Additionally, specialized skills and knowledge were needed to evaluate the discount rates.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s goodwill impairment evaluation process. We performed sensitivity analyses to assess the impact of reasonably possible changes to forecasted cashflows, longterm growth rates, and discount rates. We evaluated the Company’s forecasted growth rates by comparing the growth assumptions to those of theCompany’s peers and industry reports. We compared the Company’s forecasted revenue, cost of sales, and operating expense margins to historical actual results toassess the reasonableness of the forecasts. In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:– Assessing the Company’s WACC calculation, by comparing it against an estimated WACC range based on inputs obtained through published surveys andstudies– Evaluating the discount rates used by the Company by comparing them against discount rate ranges that were developed using publicly available market data forcomparable companies, and;– Performing an arithmetic recalculation regarding the fair value of the Company’s reporting unit, using the Company’s cash flow forecasts and the independentlydeveloped discount rates, and comparing the results to the Company’s fair value estimates./s/ Somekh ChaikinSomekh ChaikinMember Firm of KPMG InternationalWe have served as the Company’s auditor since 2017.Tel Aviv, IsraelApril 14, 2023F3MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED BALANCE SHEETSU.S. dollars in thousands (except share data)December 31,Note20222021AssetsCurrent assetsCash and cash equivalents32,10010,670Restricted cash263273Inventory997Account receivables1,94040Other receivables and prepaid expenses4758579Total current assets6,05811,562Long term deposits28Property and equipment, net5140112Operating rightofuse asset6583776Intangible assets71,377Goodwill71,395Investment in JV899Investment in marketable securities11471083,669996Total assets9,72712,558Liabilities and shareholders’ equityCurrent liabilitiesOperating lease liability6159138Shortterm loans9155Trade payables2,487635Liabilities to Related parties69863Other payables680392Total current liabilities4,1791,228Longterm loans9376Deferred tax liabilities328Operating lease liability6308473Total noncurrent liabilities1,012473CONTINGENCIES AND COMMITMENTS15Total Liabilities5,1911,701Shareholders’ equity13Stock capital Common stock of $0.001par value Authorized: 250,000,000and 100,000,000shares as of December 31,2022 and 2021; Issued and outstanding: 1,464,117and959,297 as of December 31,2022 and 2021, respectively (*)11Additional paidin capital58,67356,453Accumulated other comprehensive loss(637)(406)Accumulated deficit(53,501)(45,191)Total shareholders’ equity4,53610,857Total liabilities and shareholders’ equity9,72712,558(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F4MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSSU.S. dollars in thousands (except share data and per share data)Year endedDecember 31,Note20222021Revenues4,459131Cost of revenues(3,825)Gross profit634131Operating expensesResearch and development(1,701)(4,248)Sales and marketing18(3,143)(2,336)General and administrative19(3,900)(4,124)Total operating expenses(8,744)(10,708)Operating loss(8,110)(10,577)Financial income (expense), net20(236)57Loss before taxes(8,346)(10,520)Taxes on income36Net loss for the year(8,310)(10,520)Other comprehensive income (loss):Foreign currency translation differences(231)18Total comprehensive loss(8,541)(10,502)Basic and diluted loss per share (*)(7.47)(17.75)Basic and diluted weighted average number of shares outstanding (*)1,111,913420,385(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F5MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITYU.S. dollars in thousands (except share data)Common stockAdditionalpaidinAccumulatedothercomprehensiveAccumulatedTotalstockholders’NumberAmountcapitallossDeficitequityBalance as of January 1, 2021289,314(*)37,171(424)(34,671)2,076Stockbased compensation related to optionsgranted to employees and consultants373373Exercise of options granted to employees178(*)Restricted shares issued to shareholder (***)100,000(*)2,6182,618Issuance of shares, net of issuance cost of$1,160434,700112,58212,583Exercise of warrants135,108(*)3,7093,709Total comprehensive income (loss)18(10,520)(10,502)Balance as of December 31, 2021959,300156,453(406)(45,191)10,857Stockbased compensation related to optionsand restricted shares granted to employeesand consultants176,000(*)455455Issuance of shares in Business Combination(**)295,802(*)1,4461,446Issuance of shares post BusinessCombination (**)20,924(*)319319Effect of reverse stock split (Note 13 g)12,091(*)Total comprehensive income (loss)(231)(8,310)(8,541)Balance as of December 31, 20221,464,117158,673(637)(53,501)4,536(*)Represents an amount of less than $1.(**)See note 16(***)See note 1 bThe accompanying notes are an integral part of the consolidated financial statements.F6MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSU.S. dollars in thousandsYear endedDecember 31,20222021Cash flows from operating activities:Net loss(8,310)(10,520)Adjustments to reconcile net loss to net cash used in operating activities:Depreciation3842Change in operating lease rightofuse asset13543Amortization of intangible assets155foreign exchange differences(23)1Change in liabilities to related parties635Interest on long term liabilities10Interest paid(10)Revaluation of investment in marketable securities62(49)Restricted Shares issued to shareholder2,618Stock based compensation455373Issuance of shares post Business Combination319Change in inventory(219)Change in deferred tax liabilities(36)Change in account receivable(1,863)(12)Changes in operating lease liabilities(142)Change in other receivables and prepaid expenses184(99)Change in trade payables1,315253Change in other payables553Net cash used in operating activities(7,290)(7,297)Cash flows from investing activities:Acquisition of a subsidiary, net of cash acquired(767)Proceeds from restricted deposits, net184investing in other receivable(100)Investment in equity accounted investee(99)Purchase of property and equipment(27)(23)Net cash (used in) provided by investing activities(993)161Cash flows from financing activities:Proceeds from issuance of shares, net of issuance costs12,583Repayment of loans(67)Proceeds from exercise of warrants3,709Net cash (used in) provided by financing activities(67)16,292Effect of exchange rate fluctuations on cash and cash equivalents(230)13Change in cash and cash equivalents and restricted cash(8,580)9,169Cash and cash equivalents and restricted cash at the beginning of the year10,9431,774Cash and cash equivalents and restricted cash at the end of the year2,36310,943B) Aggregate cash flows derived for the Company as a result of the Orgad acquisition (note 16)2022Trade and other receivables364Inventory864Fixed assets55Longterm deposits31Selling Platform378Goodwill152Shortterm credit(181)Trade payables(580)Other payables(88)Longterm loan(138)Longterm provision(13)Deferred Tax Liability(87)Issuance of shares(457)Total acquisition of subsidiary, net of cash300C) Aggregate cash flows derived for the Company as a result of the Naiz acquisition (note 16)2022Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Issuance of shares(1,008)Total acquisition of subsidiary, net of cash467The accompanying notes are an integral part of the consolidated financial statements.F7MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERALa.My Size, Inc. is developing unique measurement technologies based on algorithms with applications in a variety of areas, from the apparel ecommerce market, to the courier services market and to the Do It Yourself (“DIY”) smartphone and tablet apps market. The technology is driven byproprietary algorithms, which are able to calculate and record measurements in a variety of novel ways.Following the acquisition of Naiz Bespoke Technologies, S.L (“Naiz”) in October 2022 (see note 16), the Company expanded its offering outreachand customer base.Following the acquisition of Orgad International Marketing Ltd. (“Orgad”) in February 2022 (see note 16), the Company also operates anomnichannel ecommerce platform.The Company has five subsidiaries, My Size Israel 2014 Ltd (“My Size Israel”), Topspin Medical (Israel) Ltd., and Orgad all of which areincorporated in Israel, and My Size LLC which was incorporated in the Russian Federation and Naiz Bespoke Technologies, S.L., a limited liabilitycompany incorporated under the laws of Spain (see note 16). References to the Company include the subsidiaries unless the context indicatesotherwise.My Size, Inc., was incorporated and commenced operations in September 1999, as Topspin Medical Inc. (“Topspin”), a private company registeredin the State of Delaware. In December 2013, the Company changed its name to Knowledgetree Ventures Inc. Subsequently, in February 2014, theCompany changed its name to My Size, Inc. Topspin was engaged, through its Israeli subsidiary, in research and development in the field ofcardiology and urology.Since September 1, 2005, the Company has traded on the Tel Aviv Stock Exchange (“TASE”).Between 2007 and 2012 the Company reported as a public company with the U.S. Securities and Exchange Commission (the “SEC”). In August2012, the Company suspended its reporting obligations under Section 13(a) and 15(d) of the Securities Exchange Act of 1934. In mid2015, theCompany resumed reporting as a public company.b.On January 9, 2014, at the Company’s general meeting of shareholders, its shareholders approved an engagement with one of the Company’sinvestors (the “Seller”) for the purchase of rights in a Venture (the “Venture”), including the rights to the method and the certain patent applicationthat had been filed by the Seller (the “Assets”). The Venture relates to the development of technologies and applications which will assist theconsumer to take his or her body measurements accurately using a mobile device to ensure the purchase of clothing with the best possible fitwithout the need to try them on.In February 2014, the Company established a wholly owned subsidiary, My Size (Israel) 2014 Ltd., a company registered in Israel, which iscurrently engaged in the development of the Venture described above.In return for purchasing an interest in the Venture, the Company undertook to pay the Seller 18% of the Company’s operating profit, direct orindirect, connected to the Venture for a period of seven years starting from the end of the Venture’s development period.As part of the agreement, the Seller received an option to buy back the Assets for consideration which will reflect the market fair value at that time,on the occurrence of the following events: a) if a motion is filed to liquidate the Company; b) if seven years after signing the agreement, theCompany’s total accumulated revenues, direct or indirect, from the Venture or the commercialization of the patent will be lower than NIS 3.6 million.In such an event, Seller may repurchase the interest in the Venture at a market price to be determined by an independent third party valuationconsultant, who shall be chosen by agreement by the parties, and the audit committee shall conduct the negotiations on behalf of the Company todetermine the identity of the consultant.On May 26, 2021, the Company, My Size Israel and Shoshana Zigdon entered into an Amendment to Purchase Agreement (the “Amendment”)which made certain amendments to a Purchase Agreement between the parties dated February 16, 2014 (the “Purchase Agreement”). Pursuant tothe Amendment, Ms. Zigdon agreed to irrevocably waive the right to repurchase certain assets related to the collection of data for measurementpurposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which the Company’s business is substantiallydependent, and all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My Size Israel underthe Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation,reward or any rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights(the “Waiver”). In consideration of the Waiver, the Company issued 100,000 shares of common stock to Ms. Zigdon in a private placement.F8MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERAL (Cont.)c.On July 25, 2016, the Company’s common stock began publicly trading on the Nasdaq Capital Market under the symbol “MYSZ”. The Company’sshares of common stock are listed both on the Nasdaq Capital Market and TASE.d.Since inception, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit of $53,501.The Company has financed its operations mainly through fundraising from various investors.The Company’s management expects that the Company will continue to generate losses and negative cash flows from operations for theforeseeable future. Based on the projected cash flows and cash balances as of December 31, 2022, management is of the opinion that its existingcash will be sufficient to fund operations for a period less than 12 months. As a result, there is substantial doubt about the Company’s ability tocontinue as a going concern.Management’s plans include the continued commercialization of the Company’s products and securing sufficient financing through the sale ofadditional equity securities, debt or capital inflows from strategic partnerships. Additional funds may not be available when the Company needsthem, on terms that are acceptable to it, or at all. If the Company is unsuccessful in commercializing its products and securing sufficient financing,it may need to cease operations.The financial statements include no adjustments for measurement or presentation of assets and liabilities, which may be required should theCompany fail to operate as a going concern.e.The Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificial intelligencedriven measurement solutions (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions. The fashion and equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. The SaaS based innovativeartificial intelligence driven measurement solutions, or SaaS Solutions operating segment consists of My Size Inc My Size Israel and LLC.NOTE 2 SIGNIFICANT ACCOUNTING POLICIESThe consolidated financial statements are prepared according to United States generally accepted accounting principles (“U.S. GAAP”), applied on aconsistent basis, as followsa.Use of estimates:The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions thataffect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.Information about assumptions made by the Company with respect to the future and other reasons for uncertainty with respect to estimates thathave a significant risk of resulting in a material adjustment to carrying amounts of assets and liabilities in the next financial year are included in thefollowing notes:Acquisitions of subsidiariesThe Company measures the fair value of the consideration transferred (including contingent consideration) and fair value of the assets acquiredand liabilities assumed, in business combination transactions. For information on details on fair value measurement in acquisition of subsidiaries,see Note 16 regarding business combinations.Estimated impairment of nonfinancial assetsThe Company examines on an annual basis whether there is an impairment of goodwill, intangibles and property, plant and equipment that areallocated to cash generating units, in accordance with the accounting policy presented in Note 1(h) below. Recoverable amounts of cashgenerating units are determined on the basis of valueinuse calculations. These calculations require the use of estimates.For information on key assumptions used in calculation of the recoverable amount, see note 7 – Goodwill and other Intangible assets.b.Functional currency:The currency of the primary economic environment in which the operations of the Company is conducted is the United States Dollar and thus it isthe Company’s functional currency. The reporting currency according to which these financial statements are prepared is the U.S. dollar.The currency of the primary economic environment in which the operation of the Subsidiary, My Size Israel and Orgad International MarketingLtd. functional currency is the New Israeli Shekel (“NIS”).The currency of the primary economic environment in which the operation of the Subsidiary, My Size LLC, functional currency is Russian Ruble.The currency of the primary economic environment in which the operation of the Subsidiary, Naiz fit, functional currency is Euro.F9MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)c.Principles of consolidation:The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances andtransactions have been eliminated upon consolidation.d.Cash equivalents:Cash equivalents are shortterm highly liquid investments that are readily convertible to cash with original maturities of three months or less at thedate acquired.e.Restricted cashRestricted cash are deposits for rent, credit card and for hedging activities.f.Inventories:Inventories include finished goods and are measured at the lower of cost or net realizable value. The cost of inventories comprises of the costsincurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary courseof business. At the point of the loss recognition, a new, lowercost basis for that inventory is established, and subsequent changes in facts andcircumstances do not result in the restoration or increase in that newly established cost basis. The costs of purchase of inventories comprise thepurchase price and other costs directly attributable to the acquisition of finished goods. In 2022, the Company recorded an inventory markdownof $48.g.Property and equipment:Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straightline method over theestimated useful lives of the assets, at the following annual rates:%Computers and peripheral equipment33Office furniture and equipment720Leasehold improvementsOver the term of the leaseor the useful life of theimprovements, whicheveris shorterh.Impairment of longlived assets:The Company’s property and equipment are reviewed for impairment in accordance with ASC 360, “Property Plant and Equipment”, wheneverevents or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held andused is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by theassets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount ofthe assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less sellingcosts. During the periods ended December 31, 2022 and 2021, no impairment losses have been recorded.i.Business combinations:The Company applies the provisions of ASC 805, “Business Combination” and allocates the fair value of purchase consideration to the tangibleassets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchaseconsideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assetsacquired and liabilities assumed, the Company estimated the future expected cash flows from acquired platform, customer relationships,Technology and trademark from a market participant perspective, useful lives and discount rates. In addition, management makes significantestimates and assumptions, which are uncertain, but believed to be reasonable.Acquisitionrelated costs are recognized separately from the acquisition and are expensed as incurred.F10MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)j.Goodwill:Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a businesscombination. Under ASC 350, “Intangible Goodwill and Other”, goodwill is not amortized, but rather is subject to an annual impairment test.ASC 350 requires goodwill to be tested for impairment at the reporting unit level at least annually, the fourth quarter, or between annual tests incertain circumstances, and written down when impaired. Goodwill is tested for impairment by comparing the fair value of the reporting unit with itcarrying value. Goodwill from Orgad acquisition was allocated to the fashion and equipment ecommerce platform segment and Goodwill from theNaiz acquisition was allocated to Naiz segment based innovative artificial intelligence driven measurement solutions.Alternatively, ASC 350 permits an entity to bypass the qualitative assessment for any reporting unit and proceed directly to performing the firststep of the goodwill impairment test. There were no impairment charges to goodwill during the period presented.k.Intangible assets:Intangible assets consist of identifiable intangible assets that the Company has acquired from previous business combinations. Intangible assetsare recorded at costs, net of accumulated amortization. The Company amortizes its intangible assets reflecting the pattern in which the economicbenefits of the intangible assets are consumed. When a pattern cannot be reliably determined, the Company uses a straightline amortizationmethod. Amortization is calculated by the straightline method over the estimated useful lives of the following assets.The estimated useful lives of the company’s intangible assets are as follows:yearsCustomer Relationships7Technology5Trademark5Selling Platform3Each period the Company evaluates the estimated remaining useful lives of its intangible assets and whether events or changes in circumstanceswarrant a revision to the remaining period of amortizationl.Severance pay:The Subsidiary’s liability for severance pay is covered by Section 14 of the Israeli Severance Pay Law (“Section 14”). Under Section 14, employeesin Israel are entitled to have monthly deposits, at a rate of 8.33% of their monthly salary, made on their behalf to their insurance funds. Payments inaccordance with Section 14 exempt the Subsidiary from any additional obligation for these employees. As a result, the Subsidiary does notrecognize any liability for severance pay due to these employees and the deposits under Section 14 are not recorded as an asset in theSubsidiary’s balance sheet. These contributions for compensation represent defined contribution plans and expenses are recorded based onactual deposits.Other than the My Size Israel’s liability there are no additional severance pay liabilities.F11MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)m.Research and development costs:Research and development costs are charged to the statement of operations, as incurred. Most of the research and development expenses are forwages, related expenses and subcontractors.n.Income taxes:The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilitiesfor the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Companies’ taxreturns. Deferred taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities using enactedtax rates in effect in the years in which the differences are expected to reverse. The Company assesses the likelihood that its deferred tax assetswill be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely thannot that all or a portion of deferred tax assets will not be realized. The Company establishes a valuation allowance, if necessary, to reduce deferredtax assets to the amount more likely than not to be realized. As of December 31, 2022, and 2021, a full valuation allowance was established by theCompany.The Company implements a twostep approach to recognize and measure the benefit of its tax positions. The first step is to evaluate the taxposition taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that,on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigationprocesses. The second step is to measure the tax benefit as the largest amount that is greater than 50 percent (cumulative basis) likely to berealized upon settlement.The Company believes that its tax positions are all highly certain of being upheld upon examination. As of December 31,2022 and 2021 the Company recorded a liability for unrecognized tax benefits of $328 and none respectively.o.Accounting for stockbased compensation:The Company accounts for its employees’ stockbased compensation as an expense in the financial statements based on ASC 718. All awards areequity classified and therefore such costs are measured at the grant date fair value of the award and graded vesting attribution approach torecognize compensation cost over the vesting period. The Company estimates stock option grant date fair value using the Binomial and BlackScholes option pricingmodel.The Company recorded stock options issued to nonemployees at the grant date fair value, and recognizes expenses over the related serviceperiod by using the straightline attribution approach in accordance with ASU 201807. All awards are equity classified.The expected volatility of the share prices reflects the assumption that the historical volatility of the share prices is reasonably indicative ofexpected future trends.The riskfree interest rate for grants with an exercise price denominated in USD for employees and several consultants is based on the yield fromUS treasury zerocoupon bonds with an equivalent term.The Company has historically not paid dividends and has no foreseeable plans to pay dividends.F12MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)p.Fair value of financial instruments:ASC 820, Fair Value Measurements and Disclosures, relating to fair value measurements, defines fair value and established a framework formeasuring fair value. The ASC 820 fair value hierarchy distinguishes between market participant assumptions developed based on market dataobtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptionsdeveloped based on the best information available in the circumstances. ASC 820 defines fair value as the price that would be received to sell anasset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price. Inaddition, the fair value of assets and liabilities should include consideration of nonperformance risk, which for the liabilities described belowincludes the Company’s own credit risk.As a basis for considering such assumptions, ASC 820 establishes a threetier value hierarchy, which prioritizes the inputs used in the valuationmethodologies in measuring fair value:Level 1 Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access. Valuationadjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readilyand regularly available in an active market, valuation of these products does not entail a significant degree of judgment.Level 2 Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, eitherdirectly or indirectly.Level 3 Valuations based on inputs that are unobservable and significant to the overall fair value measurement.The Company holds share certificates in iMine Corporation (“iMine”) formerly known as Diamante Minerals, Inc., a publiclytraded company onthe OTCQB.Due to sales restrictions on the sale of the iMine shares, the fair value of the shares was measured on the basis of the quoted market price for anotherwise identical unrestricted equity instrument of the same issuer that trades in a public market, adjusted to reflect the effect of the salesrestrictions and is therefore, ranked as Level 2 asset.q.Basic and diluted net loss per share:Basic net loss per share is computed based on the weighted average number of shares of common stock outstanding during each year. Diluted netincome per share is computed based on the weighted average number of shares of common stock outstanding during each year plus dilutivepotential equivalent common stock considered outstanding during the year, in accordance with ASC 260, “Earnings per Share”. For the yearsended December 31, 2022 and 2021, all outstanding options and warrants have been excluded from the calculation of the diluted net loss per sharesince their effect was antidilutive.r.Concentrations of credit risk:Financial instruments that potentially subject the Company and its subsidiaries to concentrations of credit risk consist principally of cash andcash equivalents.Cash and cash equivalents are invested in banks in Israel, Spain and United States. Such deposits in United States may be in excess of insuredlimits and are not insured in other jurisdictions. Management believes that the financial institutions that hold the Company’s investments arefinancially sound and, accordingly, minimal credit risk exists with respect to these investments.The Company and its subsidiaries have no offbalancesheet concentration of credit risk such as foreign exchange contracts, option contracts orother foreign hedging arrangements.F13MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)s.Revenue Recognition:The Company’s revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled softwaresubscriptions, associated software maintenance and support.The Company recognizes revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with acustomer exists only when: the parties to the contract have approved it and are committed to perform their respective obligations, the Companycan identify each party’s rights regarding the distinct goods or services to be transferred (“performance obligations”), the Company can determinethe transaction price for the goods or services to be transferred, the contract has commercial substance and it is probable that the Company willcollect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to acustomer. Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted togovernmental authorities. Refunds are estimated at contract inception and updated at the end of each reporting period if additional informationbecomes available. Revenue is recognized when control of the product is transferred to the customer.The Company maintains a returns policy that allows its customers to return product within a specified period of time. The estimate of the provisionfor returns is based upon historical experience with actual returns.Principal versus Agent ConsiderationsThe Company follows the guidance provided in ASC 606 for determining whether it is a principal or an agent in arrangements with customers, byassessing whether the nature of the Company’s promise is a performance obligation to provide the specified goods (principal) or to arrange forthose goods to be provided by the other party (agent). With regard to products being sold by Orgad through Amazon, this determination involvesjudgment. The Company determines it is the principle when it has control over promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).The Company recognizes revenue ratably over the contractual service term for hosted services that are priced based on a committed number oftransactions where the delivery and consumption of the benefit of the services occur evenly over time, beginning on the date the servicesassociated with the committed transactions are first made available to the customer and continuing through the end of the contractual serviceterm. Over usage fees and fees based on the actual number of transactions are billed in accordance with contract terms as these fees are incurredand are included in the transaction price of an arrangement as variable consideration. Fees based on a number of transactions or impressions permonth, are allocated to the period in which the transactions occur. Revenue for subscriptions sold as a fee per period is recognized ratably overthe contractual term as the customer simultaneously receives and consumes the benefit of the underlying service.F14MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)t.Contingencies and CommitmentsLiabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it isprobable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with losscontingencies are expensed as incurred.u.Derivative instrumentsThe Company accounts for its derivative instruments as either assets or liabilities and measures them at fair value through profit or loss.v.LeasesThe Company leases include an office space lease agreement for 36 months, with an option to extend for an additional 36 months and 36 monthscancelable operating lease agreements on behalf of personnel vehicles. The lease term includes a noncancellable period of the lease plus anyadditional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise,or an option to extend (or not to terminate) the lease controlled by the lessor.ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make leasepayments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value oflease payments over the lease term. The company generally use its incremental borrowing rate based on the estimated rate of interest forcollateralized borrowing over a similar term of the lease payments at commencement date. Lease expense for lease payments is recognized on astraightline basis over the lease term.For the office rent lease, the Company has elected to account for the lease and nonlease maintenance components as a single lease component.Therefore, the lease payments used to measure the lease liability include all of the fixed consideration in the contract, including insubstance fixedpayments, owed over the lease term.w.Impact of recently issued accounting standardIn June 2016, the FASB issued ASU 201613, “Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses on FinancialInstruments”, which requires companies to measure credit losses of financial instruments, including customer accounts receivable, utilizing amethodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information toinform credit loss estimates. Subsequent to the issuance of ASU 201613, the FASB issued several additional Accounting Standard Updates toclarify implementation guidance, provide narrowscope improvements and provide additional disclosure guidance. As an Emerging GrowthCompany, ASU 201613 is effective for fiscal years beginning after December 15, 2022. The Company does not expect this ASU to have a materialimpact on its consolidated financial statements.F15MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 3 CASH AND CASH EQUIVALENTSThe Company’s cash and cash equivalents balance at December 31, 2022 and 2021 is denominated in the following currencies:December 31,20222021US Dollars1,65110,184New Israeli Shekels259433Other190532,10010,670NOTE 4 OTHER RECEIVABLES AND PREPAID EXPENSESDecember 31,20222021Prepaid expenses and other current assets322429Government authorities28317Other153133Total758579NOTE 5 PROPERTY AND EQUIPMENT, NETComputersandperipheralequipmentOfficefurnitureandequipmentLeaseholdimprovementsTotalCostBalance as at January 1, 20211825860300Additions2323Translation adjustments72211Balance as at December 31, 20212126062334Balance as at January 1, 20222126062334Additions161127Business combination401555Translation adjustments(32)(8)(8)(48)Balance as at December 31, 20222367854368Accumulated DepreciationBalance as at January 1, 20211461412172Additions2751042Translation adjustments6118Balance as at December 31, 20211792023222Balance as at January 1, 20221792023222Additions209938Translation adjustments(27)(3)(2)(32)Balance as at December 31, 20221722630228Carrying amountsAs at December 31, 2021334039112As at December 31, 2022645224140F16MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 6 LEASESIn August 2019, The Company entered into an office space lease agreement. The lease term is for 36 months beginning on August 20, 2019 and endingon August 20, 2022, with an option to extend for an additional 36 months. The Company extended the lease period until August 20, 2025. Monthly rentpayments including utilities amounting to approximately USD 14 (NIS 49,500) per month.In addition, The Company entered into a threeyear cancelable operating lease agreement for cars.These operating leases are included in “Right of use asset” on the Company’s December 31, 2022 consolidated balance sheets, and represent theCompany’s right to use the underlying asset for the lease term. The Company’s obligations to make lease payments are included in the currentliabilities as “Operating lease liability” and in the noncurrent liabilities as “Operating lease liability long term” on the Company’s December 31, 2022consolidated balance sheets. As of December 31, 2022, rightofuse of asset was $583. operating lease liabilities were $159 and non current Operatinglease liabilities were $308. Rightofuse asset includes the capitalization of improvements (net of amortization) amounting to $105.Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value ofthe lease payments.The interest rate used to discount future lease payment was 11.95%.Maturities of lease liabilities as of December 31, 2022 were as follows:Year Ending:2023$1912024$1912025$127Thereafter$509Less imputed interest:$(42)Total lease liabilities$467F17MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 7 – Goodwill and other Intangible assetsA.Identified intangible assetsSchedule of Intangible assetsSelling PlatformTechnologyCustomerRelationshipsOtherTotalThousandsUSDThousandsUSDThousandsUSDThousandsUSDThousandsUSDCostAs of January 1, 2022Acquisitions through business combinations378286726771,467Effect of changes in exchange rates(32)2565765As of December 31, 2022346311791841,532AmortizationAs of January 1, 2022Amortization for the year including effect of changes inexchange rates as of December 31, 2022(109)(15)(27)(4)(155)Carrying amountAs of December 31, 2022237296764801,377AmortizationAmortization expenses recorded for identified intangible assets in the Consolidated Statements of Operations for each period and were as follows:Line ItemDecember 31,2022December 31,2021Selling platformCosts of revenues109TrademarkSales and marketing4TechnologyCosts of revenues15Customer relationshipsSales and marketing27Total amortization expenses155Future amortization expenses are expected to be as follows:20232024202520262027ThereafterTotalFuture amortization expenses3033031941771561791,312b.GoodwillThe changes in the carrying amount of goodwill for the years ended December 31, 2022 and 2021 were as follows:Fashion and equipmentecommerce platformNaizTotalBalance as of December 31, 2021Changes during the period:Goodwill acquired1521,1521,304Goodwill impairmentTranslation differences(14)10591Balance as of December 31, 20221381,2571,395The Company operates its business through three reporting segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovativeartificial intelligence driven measurement solutions and (iii) Naiz. See note 17 for additional segments information.The Company determines the fair value of its reporting units using the income approach. According to the income, the Company uses discounted cashflows to estimate the fair value. Cash flow projections are based on the Company’s estimates of revenue growth rates and operating margins, takinginto consideration the industry’s and market’s conditions. The discount rate used is based on the weighted average cost of capital (“WACC”),adjusted for the relevant risk associated with businessspecific characteristics.The Company performed a quantitative assessment as of December, 31 2022 for the reporting units’ fair value. The estimated fair value of the Fashionand equipment ecommerce platform and Naiz reporting units exceeded its estimated carrying amount by 95.9% and 27.7% respectively. This, based thefollowing assumptions:Fashion and equipmentecommerce platformNaizDiscount rate21%23%Terminal growth rate3%3%If business conditions or expectations were to change materially, it may be necessary to record impairment charges to the Company’s reporting units inthe future.F18MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 8 Investment in JVIn August 2022, the Company established a joint venture (“JV”) in Brazil with Santista Têxtil. The Company holds 51% and Santista Têxtil holds 49% of theJV. The purpose of the JV is to serve the Brazilian market according to the business plan that was set. Both parties agree to make an initial investment in theJV of $198that will be made per the holding percentage of each party. As of the reporting date, the JV is in process of establishing its operation.NOTE 9 Financial LiabilitiesThe book value of each of the financial liability categories is an acceptable approximation of fair value.The debt is comprised of four loans that were granted to My Size Israel – in an outstanding amount of approximately $131, bearing interest rangingfrom prime rate to prime+2.8% rate, and four loans that were granted to the Spanish subsidiary– in an outstanding amount of approximately $400,bearing interest ranging from 1% to 3%.The financial liability maturities during the five years following the end of the financial year are shown below:UntilUntilUntilUntilUntilAfterTOTAL311223311224311225311226311227311227311222Debts with credit institutions15513892874712531NOTE 10 RELATED PARTIES TRANSACTIONSA. Balances with related parties:The following related party payables are included in liability to related parties.December 31,20222021Officers (*)4143Liability in respect of business combinations (**)739Other related parties (***)(95)Directors152069863(*)The amount includes the net salaries payables.(**)The amount includes the provision created to former owners of Orgad that are entitled to additional cash and equity consideration and former owners of Naizthat entitled to additional cash consideration, see note 16 business combination.(***)The amount includes an amount receivable from Orgad previous shareholders who currently work in the company.B. Related parties benefits:Year endedDecember 31,20222021Salaries and related expenses1,440852Share based payments39673Cash liability and equity liability expenses related to acquisitions (**)1,058Directors58582,952983(**)The amount includes the expenses for a provision created to former owners of Orgad that are entitled to additional cash and equity consideration and formerowners of Naiz that entitled to additional cash consideration, see note 16 business combination.NOTE 11 FINANCIAL INSTRUMENTSThe following tables presents the Company’s significant assets and liabilities that are measured at fair value on recurring basis and their classificationwithin the fair value hierarchy:December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities47financial assets (*)10December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesDerivatives9December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities108December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesWarrants derivative2(*)the financial asset includes in other receivables.F19MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 11 FINANCIAL INSTRUMENTS (Cont.)The carrying amounts of cash and cash equivalents, restricted cash, short term restricted deposit, accounts receivable, other receivables and prepaidexpenses, trade payable and accounts payable approximate their fair value due to the shortterm maturities of such instruments.At December 31, 2022, the recognized gain and fair value (based on quoted market prices with a discount due to security restrictions on iMine shares)of the marketable securities were $59and $47, respectively (at December 31, 2021 $49and $108, respectively).NOTE 12 TAXES ON INCOMEa.On December 31, 2022, the Company had U.S. federal net operating loss carryforwards of approximately $26 available to reduce future taxableincome. Utilization of the U.S. net operating losses may be subject to substantial limitations due to the change of ownership provisions of theInternal Revenue Code of 1986.The U.S. Company has final tax assessments through 2014.On December 22, 2017, the Tax Reform Act was signed into law. The legislation significantly changes U.S. tax law by, among other things, lowering theU.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. As a result of the decrease in the corporate incometax rate, the Company revalued the ending net deferred tax assets at December 31, 2017, but did not recognize any incremental income tax expense in2017 due to the revaluation of the valuation allowance.b.Foreign tax:1.Tax rates:Presented hereunder are the tax rates relevant to the Company’s Israeli subsidiaries:2022 23%2021 23% Presented hereunder are the tax rates relevant to the Company’s Spanish subsidiary:2022 24%2.The Company’s Israeli subsidiaries have estimated total available carryforward operating tax losses for Israeli income tax purposes ofapproximately $64as of December 31, 2022. Of these losses, a total of $47.5are owned by Topspin Medical (Israel) Ltd. Topspin tax lossesmay be offset only by future income with respect to the same operational activity by which it was incurred for an indefinite period of time. Theother losses are owned by My Size Israel and may be carryforward to offset against future income for an indefinite period of time.3.Topspin Medical (Israel) Ltd. and My Size (Israel) 2014 Ltd. has final tax assessments through 2016.c.U.S. and foreign components of loss from continuing operations, before income taxes consisted of:December 31,20222021U.S(1,180)(3,802)NonU.S. (foreign)(7,130)(6,718)(8,310)(10,520)F20MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 12 TAXES ON INCOME (Cont.)d.Deferred taxes:Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reportingpurposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows:December 31,20222021Deferred tax assets:Operating loss carryforwards20,13120,238Warrants and options145126Marketable securities390377Intangible assets(328)Research and development expenses586341Other temporary differences203Deferred tax assets before valuation allowance21,12721,082Valuation allowance(21,455)(21,082)Net deferred tax liability(328)The following table presents a reconciliation of the beginning and ending valuation allowance:December 31,20222021Balance at beginning of the year21,08218,968Additions in valuation allowance to the income statement1,7581,625Additions in valuation allowance due to exchange rate differences(1,385)489Balance at end of the year21,45521,082In assessing the realization of deferred tax assets, management considers whether it is more likely than not that all or some portion of the deferred taxassets will not be realized.The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporarydifferences are deductible and net operating losses are utilized. Based on consideration of these factors, the Company recorded a full valuationallowance at December 31, 2021 and 2020.e.Theoretical taxThe following presents the adjustment between the theoretical tax amount and the tax amount included in the financial statements:December 31,20222021Loss before income taxes8,34610,520Statutory tax rate21%21%Computed “expected” tax income1,7522,209Foreign tax rate differences and exchange rate differences149131Nondeductible expenses(107)(715)Change in valuation allowance(1,758)(1,625)Taxes on income36F21MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITYa.Common stock confers upon their holders the right to receive notice to participate and vote in general meetings of the Company, and the right toreceive dividends if declared.b.On January 8, 2021, the Company conducted a public offering of its securities pursuant to which it issued 62,768 shares of its common stock forgross proceeds of $2,008. The net proceeds to the Company from the offering were approximately $1,700, after deducting placement agent’s feesand other estimated offering expenses payable by the Company.c.During 2021, a holders of warrants exercised warrants to purchase 135,109 ordinary shares of the Company in exchange for $3,709.d.On March 25, 2021, the Company conducted a public offering of its shares of common stock pursuant to which it issued 104,741 shares of itscommon stock for gross proceeds of $3,300. The net proceeds to the Company from the offering were approximately $2,872, after deductingplacement agent’s fees and other estimated offering expenses payable by the Company.On May 7, 2021, the Company issued an additional 15,711 shares of the Company’s common stock in connection with the full exercise of theunderwriter’s overallotment option granted in the Company’s March 2021 public offering. These additional shares were sold to the underwriter at apublic offering price of $31.5 per share, resulting in additional net proceeds to the Company, net of the underwriting discount, of approximately$463.e.On May 26, 2021, the Company issued 100,000 shares of common stock to Ms. Zigdon in consideration of the Waiver. See note 1(b) above.f.On October 28, 2021, the Company sold in a registered direct offering 100,592 shares of its common stock and, in a concurrent private placement,an aggregate of 75,444 unregistered warrants to purchase shares of common stock, at an offering price of $33.8 per share and associated warrant.In addition, on the same day, the Company sold in a private placement 150,888 unregistered shares of common stock and unregistered warrants topurchase up to an aggregate of 113,166 shares of common stock at the same purchase price as in the registered direct offering. The warrants areimmediately exercisable and will expire five years from issuance at an exercise price of $31.5 per share, subject to adjustment as set forth therein.The gross proceeds from the offerings were $8,500. The net proceeds to the Company from the offerings were approximately $7,560, afterdeducting placement agent’s fees and other estimated offering expenses payable by the Company. In connection with the offerings, the Companyissued to the placement agent warrants to purchase 17,603 shares on substantially the same terms as the purchasers in the offerings at an exerciseprice of $42.25 per share and a term expiring on October 26, 2026.g.On December 7, 2022, the Company’s board of directors approved a 1for25 reverse stock split of the Company’s issued and outstanding sharesof common stock. The reverse stock split became effective on December 8, 2022. In order not to have fractional shares as a result of the reversestock split, the Company issued an additional 12,091 shares of common stock. As a result, all shares of common stock, options for shares ofcommon stock, exercise price and net loss per share amounts were adjusted retroactively for all periods presented in these financial statements.F22MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITY (Cont.)g.A summary of the warrant activity during the years ended December 31, 2022 and 2021 is presented below:Number ofWarrantsWeightedAverageExercisePriceWeightedAverageRemainingLife inYearsOutstanding, December 31, 2020216,85936.754.26Issued206,214Expired or exercised(135,109)Outstanding, December 31, 2021287,96431.004.35IssuedExpired or exercised(17,901)Outstanding, December 31, 2022270,06330.213.36Exercisable, December 31, 2022270,06330.213.36NOTE 14 STOCK BASED COMPENSATIONThe stockbased expense recognized in the financial statements for services received is related to Research and Development, Sales and Marketingand General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense Research and development15195Stockbased compensation expense Sales and marketing126180Stockbased compensation expense General and administrative17898455373The stockbased expense recognized in the financial statements for services received post Acquisition of Orgad (see note 16) is related to Cost OfGoods, Sales and Marketing and General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense – Cost of goods80Stockbased compensation expense Sales and marketing112Stockbased compensation expense General and administrative127319F23MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Options issued to consultantsWe can sell additional shares of common stock without consulting stockholders and without offering shares to existing stockholders, which wouldresult in dilution of shareholders’ interests in the company and could depress our stock price.Our Certificate of Incorporation currently authorizes 250,000,000 shares of common stock, of which 2,446,780 are currently outstanding as of March 31, 2023and our board of directors is authorized to issue additional shares of our common stock. Although our board of directors intends to utilize its reasonable businessjudgment to fulfil its fiduciary obligations to our then existing stockholders in connection with any future issuance of our capital stock, the future issuance ofadditional shares of our capital stock could cause immediate, and potentially substantial, dilution to our existing stockholders, which could also have a materialeffect on the market value of the shares. Further, other than certain participation rights that we have granted in a past offering, our shares do not have preemptiverights, which means we can sell shares of our capital stock to other persons without offering purchasers in this offering the right to purchase their proportionateshare of such offered shares. Therefore, any additional sales of stock by us could dilute your ownership interest in our Company.Our quarterly operating results may fluctuate significantly.We expect our operating results to be subject to quarterly fluctuations. Our net loss and other operating results will be affected by numerous factors,including:●variations in the level of expenses related to our research and development;●any lawsuits in which we may become involved;●regulatory developments affecting our products; and●our execution of any collaborative, licensing or sales agreements, and the timing of payments under these arrangements.If our quarterly operating results fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially.Furthermore, any quarterly fluctuations in our operating results may, in turn, cause the price of our common stock to fluctuate substantially.If we fail to comply with the rules under the Sarbanes Oxley Act of 2002 related to accounting controls and procedures or if we discover materialweaknesses and deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult.If we fail to comply with the rules under the SarbanesOxley Act of 2002 related to disclosure controls and procedures, or, if we discover materialweaknesses and other deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult. Section 404 of the SarbanesOxley Act requires annual management assessments of the effectiveness of our internal control over financial reporting and, ifwe are no longer a nonaccelerated filer, a report by our independent auditors addressing these assessments. If material weaknesses or significant deficiencies arediscovered or if we otherwise fail to achieve and maintain the adequacy of our internal control, we may not be able to ensure that we can conclude on an ongoingbasis that we have effective internal controls over financial reporting in accordance with Section 404 of the SarbanesOxley Act. Moreover, effective internalcontrols are necessary for us to produce reliable financial reports and are important to helping prevent financial fraud. If we cannot provide reliable financial reportsor prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price ofour common stock could drop significantly.38Our Certificate of Incorporation, Bylaws and Delaware law may have antitakeover effects that could discourage, delay or prevent a change incontrol, which may cause our stock price to decline.Our Certificate of Incorporation, Bylaws and Delaware law could make it more difficult for a thirdparty to acquire us, even if closing such a transactionwould be beneficial to our stockholders. Provisions of our Certificate of Incorporation, Bylaws and Delaware law also could have the effect of discouraging potentialacquisition proposals or making a tender offer or delaying or preventing a change in control, including changes a stockholder might consider favorable. Suchprovisions may also prevent or frustrate attempts by our stockholders to replace or remove our management. In particular, the Certificate of Incorporation, Bylawsand Delaware law, as applicable, among other things:●provide the board of directors with the ability to alter the Bylaws without stockholder approval;●the classification of our board of directors;●place limitations on the removal of directors;●provide that vacancies on the Board of Directors may be filled by a majority of directors in office, although less than a quorum;●require that stockholder actions must be affected at a duly called stockholder meeting and generally prohibiting stockholder actions by written consent;●eliminate the ability of stockholders to call a special meeting of stockholders; and●establish advance notice requirements for nominations for election to the Board of Directors or for proposing matters that can be acted upon at duly calledstockholder meetings.We are subject to Section 203 of the Delaware General Corporation Law which, subject to certain exceptions, prohibits “business combinations” between apubliclyheld Delaware corporation and an “interested stockholder,” which is generally defined as a stockholder who becomes a beneficial owner of 15% or more ofa Delaware corporation’s voting stock for a threeyear period following the date that such stockholder became an interested stockholder. These provisions areexpected to discourage certain types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to firstnegotiate with our board. These provisions may delay or prevent someone from acquiring or merging with us, which may cause the market price of our commonstock and the value of our securities to decline.If we fail to comply with the continued listing requirements of the Nasdaq Capital Market, our common stock may be delisted and the price of ourcommon stock and our ability to access the capital markets could be negatively impacted.Nasdaq has established certain standards for the continued listing of a security on the Nasdaq Capital Market. The standards for continued listing include,among other things, that the minimum bid price for the listed securities not fall below $1.00 per share for a period of 30 consecutive trading days and that wemaintain a minimum of $2,500,000 in shareholders’ equity. We have in the past fallen below the minimum bid price and minimum shareholders’ equity.39No assurance can be given that we will continue to be in compliance with the Rule. Failure to meet applicable Nasdaq continued listing standards couldresult in a delisting of our common stock. A delisting of our common stock from Nasdaq could materially reduce the liquidity of our common stock and result in acorresponding material reduction in the price of our common stock. In addition, delisting could harm our ability to raise capital through alternative financing sourceson terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, employees and fewer business development opportunities.The exercise of outstanding warrants and stock options will have a dilutive effect on the percentage ownership of our capital stock by existingstockholders.As of March 15, 2023, we had outstanding warrants to acquire 2,299,115 shares of our common stock and stock options to purchase 1,659 shares of ourcommon stock, which warrants and options are exercisable for prices ranging between $2.81 and $375. The expiration of the term of such options and warrants rangefrom 0.22 years to 4.83 years. If a significant number of such warrants and stock options are exercised by the holders, the percentage of our common stock ownedby our existing stockholders will be diluted.Were our common stock to become subject to the penny stock rules then this could result in U.S. brokerdealers becoming discouraged from effectingtransactions in shares of our common stock.Rule 15g9 under the Exchange Act establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a marketprice of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. If we do not retain a listing on the NasdaqCapital Market or do not meet certain net tangible asset or average revenue requirements and if the price of our common stock is less than $5.00, our common stockwill be deemed a penny stock. For any transaction involving a penny stock, unless exempt, the rules require: (a) that a broker or dealer approve a person’s accountfor transactions in penny stocks; and (b) the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantityof the penny stock to be purchased.In order to approve a person’s account for transactions in penny stocks, the broker or dealer must: (a) obtain financial information and investmentexperience objectives of the person and (b) make a reasonable determination that the transactions in penny stocks are suitable for that person and the person hassufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver,prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which: (a) sets forth the basis on whichthe broker or dealer made the suitability determination; and (b) confirms that the broker or dealer received a signed, written agreement from the investor prior to thetransaction. Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult forinvestors to dispose of our common stock and cause a decline in the market value of our common stock.Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissionspayable to both the broker or dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor incases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the accountand information on the limited market in penny stocks.Sales of our currently issued and outstanding stock may become freely tradable pursuant to Rule 144 and may dilute the market for your shares andhave a depressive effect on the price of the shares of our common stock.A portion of our outstanding shares of common stock are “restricted securities” within the meaning of Rule 144 under the Securities Act of 1933, asamended, or the Securities Act. As restricted shares, these shares may be resold only pursuant to an effective registration statement or under the requirements ofRule 144 or other applicable exemptions from registration under the Securities Act and as required under applicable state securities laws. Rule 144 provides inessence that an affiliate (as such term is defined in Rule 144(a)(1)) of an issuer who has held restricted securities for a period of at least six months (one year afterfiling Form 10 information with the SEC for shell companies and former shell companies) may, under certain conditions, sell every three months, in brokeragetransactions, a number of shares that does not exceed the greater of 1% of a company’s outstanding shares of common stock or the average weekly trading volumeduring the four calendar weeks prior to the sale (the four calendar week rule does not apply to companies quoted on the OTC Markets). Rule 144 also permits, undercertain circumstances, the sale of securities, without any limitation, by a person who is not an Affiliate of the Company and who has satisfied a oneyear holdingperiod. A sale under Rule 144 or under any other exemption from the Securities Act, if available, or pursuant to subsequent registrations of our shares of commonstock, may have a depressive effect upon the price of our shares of common stock in any active market that may develop.40We are a former “shell company” and as such are subject to certain limitations not applicable to other public companies generally.Prior to our suspension of reporting in 2012, we were a public reporting “shell company,” as defined in Rule 12b2 under the Exchange Act. Although weare no longer a “shell company,” we are subject to certain restrictions under the Securities Act for the resale of securities issued by issuers that have been at anytime previously a shell company. Specifically, the Rule 144 safe harbor available for the resale of our restricted securities is only available to our stockholders if wehave filed all reports and other materials required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934, as amended, or the Exchange Act, asapplicable, during the preceding twelve months, other than current reports on Form 8K, at the time of the proposed sale, regardless of whether the restrictedsecurities were initially issued at the time we were a shell company or subsequent to termination of such status. Accordingly, holders of our “restricted securities”within the meaning of Rule 144 will be subject to the conditions set forth in Rule 144 with respect to our company. Other reporting companies that are not formershell companies and have been reporting for more than twelve months are not subject to this same reporting threshold for nonaffiliate reliance on Rule 144.Accordingly, any restricted securities we have sold or sell in the future or issue to consultants or employees, in consideration for services rendered or for any otherpurpose, may not be resold unless such securities are registered with the SEC or the requirements of Rule 144 have been satisfied. As a result, it may be harder forus to fund our operations and pay our employees and consultants with our securities instead of cash. Furthermore, it may be harder for us to raise funding throughthe sale of debt or equity securities unless we agree to register such securities with the SEC, which could cause us to expend additional resources in the future. Ourprior status as a “shell company” could prevent us in the future from raising additional funds, engaging employees and consultants, and using our securities to payfor any acquisitions, which could cause the value of our securities, if any, to decline in value or become worthless.ITEM 1B. UNRESOLVED STAFF COMMENTSNone.ITEM 2. PROPERTIESWe currently lease 1,660 square feet of office space at 4 HaYarden Street, Airport City, Israel. The lease term is for 36 months beginning on August 20, 2019and ending on August 20, 2022, with an option to extend for an additional 36 months. Monthly rent payments, including utilities, amount to approximately $14,000per month. We extended the lease period until August 20, 2025.ITEM 3. LEGAL PROCEEDINGSFrom time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation issubject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.41North Empire LLCOn August 7, 2018, we commenced an action against North Empire LLC, or North Empire, in the Supreme Court of the State of New York, County of NewYork for breach of a Securities Purchase Agreement or Agreement in which we are seeking damages in an amount to be determined at trial, but in no event less than$616,000. On August 2, 2018, North Empire filed a Summons with Notice against us, also in the same Court, in which they allege damages in an amount of $11.4million arising from an alleged breach of the Agreement. On September 6, 2018, North Empire filed a Notice of Discontinuance of the action it had filed on August 2,2018. On September 27, 2018, North Empire filed an answer and asserted counterclaims in the action commenced by us against them, alleging that we failed to deliverstock certificates to North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against our CEO andnow former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018, we filed a reply to North Empire’scounterclaims. On November 15, 2018, our CEO and now former Chairman of the Board filed a motion to dismiss North Empire’s thirdparty complaint. On January 6,2020, the Court granted the motion and dismissed the thirdparty complaint. Discovery has been completed and both parties have filed motions for summaryjudgment in connection with the claims and counterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summaryjudgment, arguing there were factual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision.On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying the Company’s motion for summary judgment. On or about September 12,2022, the Court issued its Decision and Order denying the Company’s motion to reargue. North Empire filed its opposing brief on December 7, 2022. Both sides weregiven an opportunity to file a reply brief. We filed our reply brief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. Oral argument was heldbefore the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Court filed its Decision and Order, which affirmed the lower court’sdecisions regarding both My Size and North Empire’s motions for summary judgment and sent the case back to the Supreme Court. On or about March 13, 2023, theSupreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date for the mediation has not yet been set. We intend tovigorously defend any claims made by North Empire. We believe it is more likely than not that the counterclaims will be denied.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.42PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur stock currently is listed on the Tel Aviv Stock Exchange and the Nasdaq Capital Market under the symbol “MYSZ”. Our stock has been traded on theNasdaq Capital Market since July 25, 2016.HoldersAs of March 31, 2023, we had 70 shareholders of record. The actual number of stockholders is greater than this number of record holders and includesstockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our Board of Directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our Board of Directors deems relevant.Securities Authorized for Issuance under Equity Compensation PlansInformation about our equity compensation plans is incorporated herein by reference to “Item 12. Security Ownership of Certain Beneficial Owners andManagement and Related Stockholder Matters”, of this Annual Report on Form 10K.Recent Sales of Unregistered SecuritiesNone.ITEM 6. SELECTED FINANCIAL DATAAs a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULT OF OPERATIONSYou should read the following discussion along with our financial statements and the related notes included elsewhere in this Annual Report on Form10K. The following discussion contains forwardlooking statements that are subject to risks, uncertainties and assumptions, including those discussed under“Risk Factors.” Our actual results, performance and achievements may differ materially from those expressed in, or implied by, these forwardlooking statements.OverviewMySize is an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.43Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile device or through MySizeID Widget: a simple questionnaire which was uses a database collected over the years.MySizeID synchronizes the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and onlypresents items available for purchase that match their measurements to ensure a correct fit.MySize is positioning itself as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empowering brand design teams, which are designed to increaseend consumer satisfaction, contributing to a sustainable world and reduce operation costs.Orgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,682 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz BespokeTechnologies, S.L., or Naiz, a limited liability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.44The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 2,365,800 shares of My Size common stock were issuedto Whitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.45Operations in RussiaIn addition to our Israel operations, we had operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia. To date, mainly due to the invasion of Ukraine by Russia and the ongoing sanctions we stopped most ofour efforts in Russia and will probably close the subsidiary in the near future.Results of OperationsThe table below provides our results of operations for the periods indicated.Year ended December 3120222021(dollars in thousands)Revenues4,459131Cost of revenues(3,825)Gross profit634131Research and development expenses$(1,701)$(4,248)Sales and marketing(3,143)(2,336)General and administrative(3,900)(4,124)Operating loss(8,110)(10,577)Financial income (expenses), net(236)57Tax income36Net loss$(8,310)$(10,520)Year Ended December 31, 2022 Compared to Year Ended December 31, 2021RevenuesFrom inception through December 31, 2018, we did not generate any revenue from operations and we continue to expect to incur additional losses toperform further research and development activities. We started to generate revenues only in 2019. Our revenues for the year ended December 31, 2022 amounted to$4,459,000 compared to $131,000 for year ended December 31, 2021. The increase from the corresponding period primarily attributable to $4,132,000 in revenuegenerated from Orgad from February 7, 2022, the date of closing of the Orgad acquisition, or the Acquisition Date and revenue generated from the Naiz Acquisitionfrom October 11, 2022, the date of closing of the Naiz acquisition.In addition, the increase from the corresponding period results from an increase in revenues generated by My Size.Cost Of RevenuesOur cost of revenues expenses for the year ended December 31, 2022 amounted to $3,825,000, compared to none for the year ended December 31, 2021. Thecost of revenues includes cash and equity liabilities expenses in the amount of $194,000. The increase in comparison with the corresponding period was due to thecost of goods of the revenues generated from Orgad’s operations.Research and Development ExpensesOur research and development expenses for the year ended December 31, 2022 amounted to $1,701,000 a decrease of $2,547,000, or approximately 60.0%,compared to $4,248,000 for the year ended December 31, 2021. The decrease from the corresponding period primarily resulted from share based payment in amount of$2,618,000 attributed to the share issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021.Sales and Marketing ExpensesOur sales and marketing expenses for the year ended December 31, 2022 amounted to $3,143,000 an increase of $807,000, or 34.55%, compared to $2,336,000for the year ended December 31, 2021. The increase primarily resulted from an increase in employees expenses mainly due to Orgad and Naiz acquisitions, increase inAmazon fees, increase in cash and equity liabilities expenses attributed to the Orgad acquisition and an increase in share based payments offset by a decrease inpayments to consultants.46General and Administrative ExpensesOur general and administrative expenses for the year ended December 31, 2022 amounted to $3,900,000, a decrease of $224,000, or 5.43%, compared to$4,124,000 for the year ended December 31, 2021. The decrease compared to the corresponding period was mainly due to a decrease in professional expenses, mainlyattributed to shareholder activism including settlement expenses with the Lazar Parties offset by an increase in sharedbased payments and an increase in employeesexpenses mainly due to the Orgad and Naiz acquisitions.Operating LossAs a result of the foregoing, for the year ended December 31, 2022, our operating loss was $8,110,000, a decrease of $2,467,000 or 23.32%, compared to ouroperating loss for the year ended December 31, 2021 of $10,577,000.Financial Income, NetOur financial (expense) income, net for the year ended December 31, 2022 amounted to $236,000 compared to financial income, $57,000 for the year endedDecember 31, 2021. In 2022, we had financial expenses exchange rate differences offset by an income from fair value revaluation of investment in marketablesecurities whereas in 2021 we had financial income from the fair value revaluation of warrants offset by expenses from exchange rate differences and expenses fromfair value revaluation of investment in marketable securities.Net LossAs a result of the foregoing, our net loss for the year ended December 31, 2022 was $8,310,000 compared to net loss of $10,520,000 for the year endedDecember 31, 2021. The decrease in net loss was mainly due increase in sales and marketing expenses and financial expenses as opposed to financial income in thecorresponding period offset by a decrease in research and development expenses in amount of $2,618,000 attributed to the share issuance to Shoshana Zigdonunder the Amendment to Purchase Agreement dated May 26, 2021.Liquidity and Capital ResourcesSince our inception, we have funded our operations primarily through public and private offerings of debt and equity in Israel and in the U.S.As of December 31, 2022, we had cash, cash equivalents and restricted cash of $2,363,000 compared to $10,943,000 cash, cash equivalents, restricted cashas of December 31, 2021. During January 2023, we completed a registered direct and concurrent private placement offering resulting in gross proceeds ofapproximately $3 million. This decrease primarily resulted from our operating activities, the acquisition of Orgad and Naiz Fit, and resources that were deployed togrow of both businesses.Net cash used in operating activities was $7,290,000 for the year ended December 31, 2022 compared to $7,297,000 for the year ended December 31, 2021.The decrease in cash used in operating activity is derived mainly from an increase in share based payments and increase in account receivables mainly from theOrgad and Naiz fit acquisitions offset by a decrease in the net loss.Net cash used in investing activities for the year ended December 31, 2022 was $993,000 as opposed to net cash provided by investing activities of$161,000 for the year ended December 31, 2021. The net cash used in investing activities for the year ended December 31, 2022 was mainly from the acquisition ofOrgad and Naiz as opposed to proceeds from shortterm deposits and restricted deposits during the year ended December 31, 2021.We had a negative cash flow from financing activities of $67,000 for the year ended December 31, 2022 compared to positive cash flow of $16,292,000 for theyear ended December 31, 2021. The negative cash flow from financing activities for the year ended December 31, 2022 was mainly due to repayment of loans andinterest and payments for leases as opposed to proceeds from issuance of shares and from exercise of warrants for the year ended December 31, 2021.47We expect that we will continue to generate losses and negative cash flows from operations for the foreseeable future. Based on the projected cash flowsand cash balances as of December 31, 2022, together with the proceeds from the January 2023 financing, we believe our existing cash will not be sufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. We will need to raiseadditional capital, which may not be available on reasonable terms or at all. Additional capital would be used to accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;●respond to competitive pressures;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, the Russian invasion ofUkraine, the impact of any resurgence of the COVID19 pandemic and a number of other factors, many of which are outside our control, and on our financialperformance. Accordingly, we cannot assure you that we will be able to successfully raise additional capital at all or on terms that are acceptable to us. If we cannotraise additional capital when needed, it may have a material adverse effect on our business, results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.We have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.Recently Issued Accounting PronouncementsCertain recently issued accounting pronouncements are discussed in Note 2, Significant Accounting Policies, to the consolidated financial statementsincluded in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10K.OffBalance Sheet ArrangementsWe have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.48Application of Critical Accounting Policies and EstimatesOur management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we haveprepared in accordance with U.S. generally accepted accounting principles issued by the Financial Accounting Standards Board, or FASB. The preparation of thesefinancial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assetsand liabilities at the date of the financial statements, as well as the reported expenses during the reporting periods. Actual results may differ from these estimatesunder different assumptions or conditions.Our significant accounting policies were revenue from contracts with customers which are more fully described in the notes to our financial statementsincluded herein. We believe these accounting policies discussed below are critical to our financial results and to the understanding of our past and futureperformance, as these policies relate to the more significant areas involving management’s estimates and assumptions. We consider an accounting estimate to becritical if: (1) it requires us to make assumptions because information was not available at the time or it included matters that were highly uncertain at the time wewere making our estimate; and (2) changes in the estimate could have a material impact on our financial condition or results of operations.Accounting for business combinationsWe allocate the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed, based upon their estimated fairvalues at the acquisition date. These fair values are typically estimated with assistance from independent valuation specialists.The purchase price allocation process requires us to make significant estimates and assumptions, especially at the acquisition date with respect tointangible assets, contractual support obligations assumed, contingent consideration arrangements, and preacquisition contingencies.Although we believe the assumptions and estimates we have made in the past have been reasonable and appropriate, they are based in part on historicalexperience and information obtained from the management of the acquired companies and are inherently uncertain.Examples of critical estimates in valuing certain of the intangible assets we have acquired or may acquire in the future include but are not limited to:● future expected cash flows from product sales or other customer contracts;● expected costs of fulfillment including marketing, warehousing and product sales;● the acquired company’s brand and competitive position, as well as assumptions about the period of time the acquired brand will continue to be used inthe combined company’s product portfolio;● cost of capital and discount rates; and● estimating the useful lives of acquired assets as well as the pattern or manner in which the assets will amortize.Refer to Note 16, Business Combination, to the consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” of thisAnnual Report on Form 10K.49Revenue from contracts with customersOur revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled software subscriptions, associatedsoftware maintenance and support.We recognize revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with a customer exists onlywhen: the parties to the contract have approved it and are committed to perform their respective obligations, we can identify each party’s rights regarding thedistinct goods or services to be transferred (“performance obligations”), we can determine the transaction price for the goods or services to be transferred, thecontract has commercial substance and it is probable that we will collect the consideration to which we will be entitled in exchange for the goods or services that willbe transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to a customer.Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted to governmental authorities. Refundsare estimated at contract inception and updated at the end of each reporting period if additional information becomes available. Revenue is recognized when controlof the product is transferred to the customer.We maintain a returns policy that allows our customers to return product within a specified period of time. The estimate of the provision for returns is basedupon historical experience with actual returns.Principal versus Agent ConsiderationsWe follow the guidance provided in ASC 606 for determining whether we are a principal or an agent in arrangements with customers, by assessing whetherthe nature of our promise is a performance obligation to provide the specified goods (principal) or to arrange for those goods to be provided by the other party(agent). With regard to products being sold by Orgad through Amazon, this determination involves judgment. We determine it is the principle when it has controlover the promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).We recognize revenue ratably over the contractual service term for hosted services that are priced based on a committed number of transactions where thedelivery and consumption of the benefit of the services occur evenly over time, beginning on the date the services associated with the committed transactions arefirst made available to the customer and continuing through the end of the contractual service term. Over usage fees and fees based on the actual number oftransactions are billed in accordance with contract terms as these fees are incurred and are included in the transaction price of an arrangement as variableconsideration. Fees based on a number of transactions or impressions per month, are allocated to the period in which the transactions occur. Revenue forsubscriptions sold as a fee per period is recognized ratably over the contractual term as the customer simultaneously receives and consumes the benefit of theunderlying service.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.As a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.50ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAMY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2022U.S. DOLLARS IN THOUSANDSINDEXPageReport of Independent Registered Public Accounting Firm (PCAOB ID: ID 1057)F2Consolidated Balance SheetsF4Consolidated Statements of Comprehensive LossF5Consolidated Statements of Shareholders’ EquityF6Consolidated Statements of Cash FlowsF7Notes to Consolidated Financial StatementsF8 F33F1Report of Independent Registered Public Accounting FirmTo the Shareholders and Board of DirectorsMy Size, Inc.:Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of My Size, Inc. and subsidiaries (the Company) as of December 31, 2022 and 2021, the relatedconsolidated statements of comprehensive loss, shareholders’ equity, and cash flows for each of the years in the twoyear period ended December 31, 2022, and therelated notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, thefinancial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the twoyear periodended December 31, 2022, in conformity with U.S. generally accepted accounting principles.Going ConcernThe accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1d tothe consolidated financial statements, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit thatraises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1d. Theconsolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidatedfinancial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Critical Audit MattersCritical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to becommunicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved ourespecially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidatedfinancial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters oron the accounts or disclosures to which they relate.Acquisitiondate fair value of customer relationshipsAs discussed in Note 16 to the consolidated financial statements, on October 11, 2022, the Company acquired Naiz Bespoke Technologies SL (“Naiz”). As a result ofthe transaction, the Company acquired customer relationships intangible assets (“customer relationships”) representing the generation of future income from Naiz’sexisting customers. The acquisition date fair value of the customer relationships was $726 thousand.F2We identified the evaluation of the acquisitiondate fair value of the Naiz customer relationships as a critical audit matter. A high degree of subjective auditorjudgment was required to evaluate the following internally developed assumptions used to estimate the fair value of such asset, for which there were limitedobservable inputs: (i) forecasted revenues attributable to existing customers, (ii) forecasted earnings before interest, taxes, depreciation, and amortization(“EBITDA”) margins for the acquired business, (iii) estimated annual customer attrition rates and (iv) estimated discount rate. The determined fair value wassensitive to changes in these key assumptions. Additionally, specialized skills and knowledge were needed to evaluate the discount rate used.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s acquisitiondate fair value estimation process, including controls over the development of key assumptions. We performed a sensitivity analysis toassess the impact of reasonably possible changes to forecasted revenues, EBITDA margins, annual customer attrition rates, and the discount rate. We evaluated theforecasted revenue growth rates from existing customers by comparing the growth assumptions to those of the Company’s peers and industry reports. Inconnection with our assessment of the forecasts used in the valuation, we compared (1) forecasted revenue and EBITDA to Naiz’s historical actual results and (2)estimated annual customer attrition rates to historical Naiz customer attrition data. We tested the Company’s determined weighted average cost of capital(“WACC”), which was used to determine the discount rate, by involving valuation professionals with specialized skills and knowledge, who assisted in:Evaluating the selected discount rate by comparing it against a discount rate range that was independently developed using publicly available market datafor comparable companies, and;Assessing the Company’s WACC calculation, by comparing it against an independently estimated WACC range based on inputs obtained throughpublished surveys and studies.Goodwill impairment assessmentAs discussed in Note 16 to the consolidated financial statements, during 2022 the Company recorded goodwill of $1,257 thousand related to the acquisition of NaizBespoke Technologies, S.L. (“Naiz”). The Company performed an annual quantitative impairment test of goodwill at the reporting unit level. Based on this analysis,the Company determined that the fair value of its reporting unit exceeded its carrying value and no impairment charge was required.We identified the evaluation of the goodwill impairment assessment for the Naiz reporting unit as a critical audit matter. A high degree of subjective auditor judgmentwas required to evaluate the following assumptions used to estimate the fair value of the Company’s reporting unit, for which there were limited observable inputs:(i) forecasted reporting unit cash flows, (ii) longterm growth rates, and (iii) discount rates. The fair value was sensitive to changes in these key assumptions.Additionally, specialized skills and knowledge were needed to evaluate the discount rates.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s goodwill impairment evaluation process. We performed sensitivity analyses to assess the impact of reasonably possible changes to forecasted cashflows, longterm growth rates, and discount rates. We evaluated the Company’s forecasted growth rates by comparing the growth assumptions to those of theCompany’s peers and industry reports. We compared the Company’s forecasted revenue, cost of sales, and operating expense margins to historical actual results toassess the reasonableness of the forecasts. In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:– Assessing the Company’s WACC calculation, by comparing it against an estimated WACC range based on inputs obtained through published surveys andstudies– Evaluating the discount rates used by the Company by comparing them against discount rate ranges that were developed using publicly available market data forcomparable companies, and;– Performing an arithmetic recalculation regarding the fair value of the Company’s reporting unit, using the Company’s cash flow forecasts and the independentlydeveloped discount rates, and comparing the results to the Company’s fair value estimates./s/ Somekh ChaikinSomekh ChaikinMember Firm of KPMG InternationalWe have served as the Company’s auditor since 2017.Tel Aviv, IsraelApril 14, 2023F3MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED BALANCE SHEETSU.S. dollars in thousands (except share data)December 31,Note20222021AssetsCurrent assetsCash and cash equivalents32,10010,670Restricted cash263273Inventory997Account receivables1,94040Other receivables and prepaid expenses4758579Total current assets6,05811,562Long term deposits28Property and equipment, net5140112Operating rightofuse asset6583776Intangible assets71,377Goodwill71,395Investment in JV899Investment in marketable securities11471083,669996Total assets9,72712,558Liabilities and shareholders’ equityCurrent liabilitiesOperating lease liability6159138Shortterm loans9155Trade payables2,487635Liabilities to Related parties69863Other payables680392Total current liabilities4,1791,228Longterm loans9376Deferred tax liabilities328Operating lease liability6308473Total noncurrent liabilities1,012473CONTINGENCIES AND COMMITMENTS15Total Liabilities5,1911,701Shareholders’ equity13Stock capital Common stock of $0.001par value Authorized: 250,000,000and 100,000,000shares as of December 31,2022 and 2021; Issued and outstanding: 1,464,117and959,297 as of December 31,2022 and 2021, respectively (*)11Additional paidin capital58,67356,453Accumulated other comprehensive loss(637)(406)Accumulated deficit(53,501)(45,191)Total shareholders’ equity4,53610,857Total liabilities and shareholders’ equity9,72712,558(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F4MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSSU.S. dollars in thousands (except share data and per share data)Year endedDecember 31,Note20222021Revenues4,459131Cost of revenues(3,825)Gross profit634131Operating expensesResearch and development(1,701)(4,248)Sales and marketing18(3,143)(2,336)General and administrative19(3,900)(4,124)Total operating expenses(8,744)(10,708)Operating loss(8,110)(10,577)Financial income (expense), net20(236)57Loss before taxes(8,346)(10,520)Taxes on income36Net loss for the year(8,310)(10,520)Other comprehensive income (loss):Foreign currency translation differences(231)18Total comprehensive loss(8,541)(10,502)Basic and diluted loss per share (*)(7.47)(17.75)Basic and diluted weighted average number of shares outstanding (*)1,111,913420,385(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F5MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITYU.S. dollars in thousands (except share data)Common stockAdditionalpaidinAccumulatedothercomprehensiveAccumulatedTotalstockholders’NumberAmountcapitallossDeficitequityBalance as of January 1, 2021289,314(*)37,171(424)(34,671)2,076Stockbased compensation related to optionsgranted to employees and consultants373373Exercise of options granted to employees178(*)Restricted shares issued to shareholder (***)100,000(*)2,6182,618Issuance of shares, net of issuance cost of$1,160434,700112,58212,583Exercise of warrants135,108(*)3,7093,709Total comprehensive income (loss)18(10,520)(10,502)Balance as of December 31, 2021959,300156,453(406)(45,191)10,857Stockbased compensation related to optionsand restricted shares granted to employeesand consultants176,000(*)455455Issuance of shares in Business Combination(**)295,802(*)1,4461,446Issuance of shares post BusinessCombination (**)20,924(*)319319Effect of reverse stock split (Note 13 g)12,091(*)Total comprehensive income (loss)(231)(8,310)(8,541)Balance as of December 31, 20221,464,117158,673(637)(53,501)4,536(*)Represents an amount of less than $1.(**)See note 16(***)See note 1 bThe accompanying notes are an integral part of the consolidated financial statements.F6MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSU.S. dollars in thousandsYear endedDecember 31,20222021Cash flows from operating activities:Net loss(8,310)(10,520)Adjustments to reconcile net loss to net cash used in operating activities:Depreciation3842Change in operating lease rightofuse asset13543Amortization of intangible assets155foreign exchange differences(23)1Change in liabilities to related parties635Interest on long term liabilities10Interest paid(10)Revaluation of investment in marketable securities62(49)Restricted Shares issued to shareholder2,618Stock based compensation455373Issuance of shares post Business Combination319Change in inventory(219)Change in deferred tax liabilities(36)Change in account receivable(1,863)(12)Changes in operating lease liabilities(142)Change in other receivables and prepaid expenses184(99)Change in trade payables1,315253Change in other payables553Net cash used in operating activities(7,290)(7,297)Cash flows from investing activities:Acquisition of a subsidiary, net of cash acquired(767)Proceeds from restricted deposits, net184investing in other receivable(100)Investment in equity accounted investee(99)Purchase of property and equipment(27)(23)Net cash (used in) provided by investing activities(993)161Cash flows from financing activities:Proceeds from issuance of shares, net of issuance costs12,583Repayment of loans(67)Proceeds from exercise of warrants3,709Net cash (used in) provided by financing activities(67)16,292Effect of exchange rate fluctuations on cash and cash equivalents(230)13Change in cash and cash equivalents and restricted cash(8,580)9,169Cash and cash equivalents and restricted cash at the beginning of the year10,9431,774Cash and cash equivalents and restricted cash at the end of the year2,36310,943B) Aggregate cash flows derived for the Company as a result of the Orgad acquisition (note 16)2022Trade and other receivables364Inventory864Fixed assets55Longterm deposits31Selling Platform378Goodwill152Shortterm credit(181)Trade payables(580)Other payables(88)Longterm loan(138)Longterm provision(13)Deferred Tax Liability(87)Issuance of shares(457)Total acquisition of subsidiary, net of cash300C) Aggregate cash flows derived for the Company as a result of the Naiz acquisition (note 16)2022Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Issuance of shares(1,008)Total acquisition of subsidiary, net of cash467The accompanying notes are an integral part of the consolidated financial statements.F7MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERALa.My Size, Inc. is developing unique measurement technologies based on algorithms with applications in a variety of areas, from the apparel ecommerce market, to the courier services market and to the Do It Yourself (“DIY”) smartphone and tablet apps market. The technology is driven byproprietary algorithms, which are able to calculate and record measurements in a variety of novel ways.Following the acquisition of Naiz Bespoke Technologies, S.L (“Naiz”) in October 2022 (see note 16), the Company expanded its offering outreachand customer base.Following the acquisition of Orgad International Marketing Ltd. (“Orgad”) in February 2022 (see note 16), the Company also operates anomnichannel ecommerce platform.The Company has five subsidiaries, My Size Israel 2014 Ltd (“My Size Israel”), Topspin Medical (Israel) Ltd., and Orgad all of which areincorporated in Israel, and My Size LLC which was incorporated in the Russian Federation and Naiz Bespoke Technologies, S.L., a limited liabilitycompany incorporated under the laws of Spain (see note 16). References to the Company include the subsidiaries unless the context indicatesotherwise.My Size, Inc., was incorporated and commenced operations in September 1999, as Topspin Medical Inc. (“Topspin”), a private company registeredin the State of Delaware. In December 2013, the Company changed its name to Knowledgetree Ventures Inc. Subsequently, in February 2014, theCompany changed its name to My Size, Inc. Topspin was engaged, through its Israeli subsidiary, in research and development in the field ofcardiology and urology.Since September 1, 2005, the Company has traded on the Tel Aviv Stock Exchange (“TASE”).Between 2007 and 2012 the Company reported as a public company with the U.S. Securities and Exchange Commission (the “SEC”). In August2012, the Company suspended its reporting obligations under Section 13(a) and 15(d) of the Securities Exchange Act of 1934. In mid2015, theCompany resumed reporting as a public company.b.On January 9, 2014, at the Company’s general meeting of shareholders, its shareholders approved an engagement with one of the Company’sinvestors (the “Seller”) for the purchase of rights in a Venture (the “Venture”), including the rights to the method and the certain patent applicationthat had been filed by the Seller (the “Assets”). The Venture relates to the development of technologies and applications which will assist theconsumer to take his or her body measurements accurately using a mobile device to ensure the purchase of clothing with the best possible fitwithout the need to try them on.In February 2014, the Company established a wholly owned subsidiary, My Size (Israel) 2014 Ltd., a company registered in Israel, which iscurrently engaged in the development of the Venture described above.In return for purchasing an interest in the Venture, the Company undertook to pay the Seller 18% of the Company’s operating profit, direct orindirect, connected to the Venture for a period of seven years starting from the end of the Venture’s development period.As part of the agreement, the Seller received an option to buy back the Assets for consideration which will reflect the market fair value at that time,on the occurrence of the following events: a) if a motion is filed to liquidate the Company; b) if seven years after signing the agreement, theCompany’s total accumulated revenues, direct or indirect, from the Venture or the commercialization of the patent will be lower than NIS 3.6 million.In such an event, Seller may repurchase the interest in the Venture at a market price to be determined by an independent third party valuationconsultant, who shall be chosen by agreement by the parties, and the audit committee shall conduct the negotiations on behalf of the Company todetermine the identity of the consultant.On May 26, 2021, the Company, My Size Israel and Shoshana Zigdon entered into an Amendment to Purchase Agreement (the “Amendment”)which made certain amendments to a Purchase Agreement between the parties dated February 16, 2014 (the “Purchase Agreement”). Pursuant tothe Amendment, Ms. Zigdon agreed to irrevocably waive the right to repurchase certain assets related to the collection of data for measurementpurposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which the Company’s business is substantiallydependent, and all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My Size Israel underthe Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation,reward or any rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights(the “Waiver”). In consideration of the Waiver, the Company issued 100,000 shares of common stock to Ms. Zigdon in a private placement.F8MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERAL (Cont.)c.On July 25, 2016, the Company’s common stock began publicly trading on the Nasdaq Capital Market under the symbol “MYSZ”. The Company’sshares of common stock are listed both on the Nasdaq Capital Market and TASE.d.Since inception, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit of $53,501.The Company has financed its operations mainly through fundraising from various investors.The Company’s management expects that the Company will continue to generate losses and negative cash flows from operations for theforeseeable future. Based on the projected cash flows and cash balances as of December 31, 2022, management is of the opinion that its existingcash will be sufficient to fund operations for a period less than 12 months. As a result, there is substantial doubt about the Company’s ability tocontinue as a going concern.Management’s plans include the continued commercialization of the Company’s products and securing sufficient financing through the sale ofadditional equity securities, debt or capital inflows from strategic partnerships. Additional funds may not be available when the Company needsthem, on terms that are acceptable to it, or at all. If the Company is unsuccessful in commercializing its products and securing sufficient financing,it may need to cease operations.The financial statements include no adjustments for measurement or presentation of assets and liabilities, which may be required should theCompany fail to operate as a going concern.e.The Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificial intelligencedriven measurement solutions (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions. The fashion and equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. The SaaS based innovativeartificial intelligence driven measurement solutions, or SaaS Solutions operating segment consists of My Size Inc My Size Israel and LLC.NOTE 2 SIGNIFICANT ACCOUNTING POLICIESThe consolidated financial statements are prepared according to United States generally accepted accounting principles (“U.S. GAAP”), applied on aconsistent basis, as followsa.Use of estimates:The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions thataffect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.Information about assumptions made by the Company with respect to the future and other reasons for uncertainty with respect to estimates thathave a significant risk of resulting in a material adjustment to carrying amounts of assets and liabilities in the next financial year are included in thefollowing notes:Acquisitions of subsidiariesThe Company measures the fair value of the consideration transferred (including contingent consideration) and fair value of the assets acquiredand liabilities assumed, in business combination transactions. For information on details on fair value measurement in acquisition of subsidiaries,see Note 16 regarding business combinations.Estimated impairment of nonfinancial assetsThe Company examines on an annual basis whether there is an impairment of goodwill, intangibles and property, plant and equipment that areallocated to cash generating units, in accordance with the accounting policy presented in Note 1(h) below. Recoverable amounts of cashgenerating units are determined on the basis of valueinuse calculations. These calculations require the use of estimates.For information on key assumptions used in calculation of the recoverable amount, see note 7 – Goodwill and other Intangible assets.b.Functional currency:The currency of the primary economic environment in which the operations of the Company is conducted is the United States Dollar and thus it isthe Company’s functional currency. The reporting currency according to which these financial statements are prepared is the U.S. dollar.The currency of the primary economic environment in which the operation of the Subsidiary, My Size Israel and Orgad International MarketingLtd. functional currency is the New Israeli Shekel (“NIS”).The currency of the primary economic environment in which the operation of the Subsidiary, My Size LLC, functional currency is Russian Ruble.The currency of the primary economic environment in which the operation of the Subsidiary, Naiz fit, functional currency is Euro.F9MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)c.Principles of consolidation:The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances andtransactions have been eliminated upon consolidation.d.Cash equivalents:Cash equivalents are shortterm highly liquid investments that are readily convertible to cash with original maturities of three months or less at thedate acquired.e.Restricted cashRestricted cash are deposits for rent, credit card and for hedging activities.f.Inventories:Inventories include finished goods and are measured at the lower of cost or net realizable value. The cost of inventories comprises of the costsincurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary courseof business. At the point of the loss recognition, a new, lowercost basis for that inventory is established, and subsequent changes in facts andcircumstances do not result in the restoration or increase in that newly established cost basis. The costs of purchase of inventories comprise thepurchase price and other costs directly attributable to the acquisition of finished goods. In 2022, the Company recorded an inventory markdownof $48.g.Property and equipment:Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straightline method over theestimated useful lives of the assets, at the following annual rates:%Computers and peripheral equipment33Office furniture and equipment720Leasehold improvementsOver the term of the leaseor the useful life of theimprovements, whicheveris shorterh.Impairment of longlived assets:The Company’s property and equipment are reviewed for impairment in accordance with ASC 360, “Property Plant and Equipment”, wheneverevents or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held andused is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by theassets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount ofthe assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less sellingcosts. During the periods ended December 31, 2022 and 2021, no impairment losses have been recorded.i.Business combinations:The Company applies the provisions of ASC 805, “Business Combination” and allocates the fair value of purchase consideration to the tangibleassets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchaseconsideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assetsacquired and liabilities assumed, the Company estimated the future expected cash flows from acquired platform, customer relationships,Technology and trademark from a market participant perspective, useful lives and discount rates. In addition, management makes significantestimates and assumptions, which are uncertain, but believed to be reasonable.Acquisitionrelated costs are recognized separately from the acquisition and are expensed as incurred.F10MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)j.Goodwill:Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a businesscombination. Under ASC 350, “Intangible Goodwill and Other”, goodwill is not amortized, but rather is subject to an annual impairment test.ASC 350 requires goodwill to be tested for impairment at the reporting unit level at least annually, the fourth quarter, or between annual tests incertain circumstances, and written down when impaired. Goodwill is tested for impairment by comparing the fair value of the reporting unit with itcarrying value. Goodwill from Orgad acquisition was allocated to the fashion and equipment ecommerce platform segment and Goodwill from theNaiz acquisition was allocated to Naiz segment based innovative artificial intelligence driven measurement solutions.Alternatively, ASC 350 permits an entity to bypass the qualitative assessment for any reporting unit and proceed directly to performing the firststep of the goodwill impairment test. There were no impairment charges to goodwill during the period presented.k.Intangible assets:Intangible assets consist of identifiable intangible assets that the Company has acquired from previous business combinations. Intangible assetsare recorded at costs, net of accumulated amortization. The Company amortizes its intangible assets reflecting the pattern in which the economicbenefits of the intangible assets are consumed. When a pattern cannot be reliably determined, the Company uses a straightline amortizationmethod. Amortization is calculated by the straightline method over the estimated useful lives of the following assets.The estimated useful lives of the company’s intangible assets are as follows:yearsCustomer Relationships7Technology5Trademark5Selling Platform3Each period the Company evaluates the estimated remaining useful lives of its intangible assets and whether events or changes in circumstanceswarrant a revision to the remaining period of amortizationl.Severance pay:The Subsidiary’s liability for severance pay is covered by Section 14 of the Israeli Severance Pay Law (“Section 14”). Under Section 14, employeesin Israel are entitled to have monthly deposits, at a rate of 8.33% of their monthly salary, made on their behalf to their insurance funds. Payments inaccordance with Section 14 exempt the Subsidiary from any additional obligation for these employees. As a result, the Subsidiary does notrecognize any liability for severance pay due to these employees and the deposits under Section 14 are not recorded as an asset in theSubsidiary’s balance sheet. These contributions for compensation represent defined contribution plans and expenses are recorded based onactual deposits.Other than the My Size Israel’s liability there are no additional severance pay liabilities.F11MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)m.Research and development costs:Research and development costs are charged to the statement of operations, as incurred. Most of the research and development expenses are forwages, related expenses and subcontractors.n.Income taxes:The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilitiesfor the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Companies’ taxreturns. Deferred taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities using enactedtax rates in effect in the years in which the differences are expected to reverse. The Company assesses the likelihood that its deferred tax assetswill be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely thannot that all or a portion of deferred tax assets will not be realized. The Company establishes a valuation allowance, if necessary, to reduce deferredtax assets to the amount more likely than not to be realized. As of December 31, 2022, and 2021, a full valuation allowance was established by theCompany.The Company implements a twostep approach to recognize and measure the benefit of its tax positions. The first step is to evaluate the taxposition taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that,on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigationprocesses. The second step is to measure the tax benefit as the largest amount that is greater than 50 percent (cumulative basis) likely to berealized upon settlement.The Company believes that its tax positions are all highly certain of being upheld upon examination. As of December 31,2022 and 2021 the Company recorded a liability for unrecognized tax benefits of $328 and none respectively.o.Accounting for stockbased compensation:The Company accounts for its employees’ stockbased compensation as an expense in the financial statements based on ASC 718. All awards areequity classified and therefore such costs are measured at the grant date fair value of the award and graded vesting attribution approach torecognize compensation cost over the vesting period. The Company estimates stock option grant date fair value using the Binomial and BlackScholes option pricingmodel.The Company recorded stock options issued to nonemployees at the grant date fair value, and recognizes expenses over the related serviceperiod by using the straightline attribution approach in accordance with ASU 201807. All awards are equity classified.The expected volatility of the share prices reflects the assumption that the historical volatility of the share prices is reasonably indicative ofexpected future trends.The riskfree interest rate for grants with an exercise price denominated in USD for employees and several consultants is based on the yield fromUS treasury zerocoupon bonds with an equivalent term.The Company has historically not paid dividends and has no foreseeable plans to pay dividends.F12MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)p.Fair value of financial instruments:ASC 820, Fair Value Measurements and Disclosures, relating to fair value measurements, defines fair value and established a framework formeasuring fair value. The ASC 820 fair value hierarchy distinguishes between market participant assumptions developed based on market dataobtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptionsdeveloped based on the best information available in the circumstances. ASC 820 defines fair value as the price that would be received to sell anasset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price. Inaddition, the fair value of assets and liabilities should include consideration of nonperformance risk, which for the liabilities described belowincludes the Company’s own credit risk.As a basis for considering such assumptions, ASC 820 establishes a threetier value hierarchy, which prioritizes the inputs used in the valuationmethodologies in measuring fair value:Level 1 Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access. Valuationadjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readilyand regularly available in an active market, valuation of these products does not entail a significant degree of judgment.Level 2 Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, eitherdirectly or indirectly.Level 3 Valuations based on inputs that are unobservable and significant to the overall fair value measurement.The Company holds share certificates in iMine Corporation (“iMine”) formerly known as Diamante Minerals, Inc., a publiclytraded company onthe OTCQB.Due to sales restrictions on the sale of the iMine shares, the fair value of the shares was measured on the basis of the quoted market price for anotherwise identical unrestricted equity instrument of the same issuer that trades in a public market, adjusted to reflect the effect of the salesrestrictions and is therefore, ranked as Level 2 asset.q.Basic and diluted net loss per share:Basic net loss per share is computed based on the weighted average number of shares of common stock outstanding during each year. Diluted netincome per share is computed based on the weighted average number of shares of common stock outstanding during each year plus dilutivepotential equivalent common stock considered outstanding during the year, in accordance with ASC 260, “Earnings per Share”. For the yearsended December 31, 2022 and 2021, all outstanding options and warrants have been excluded from the calculation of the diluted net loss per sharesince their effect was antidilutive.r.Concentrations of credit risk:Financial instruments that potentially subject the Company and its subsidiaries to concentrations of credit risk consist principally of cash andcash equivalents.Cash and cash equivalents are invested in banks in Israel, Spain and United States. Such deposits in United States may be in excess of insuredlimits and are not insured in other jurisdictions. Management believes that the financial institutions that hold the Company’s investments arefinancially sound and, accordingly, minimal credit risk exists with respect to these investments.The Company and its subsidiaries have no offbalancesheet concentration of credit risk such as foreign exchange contracts, option contracts orother foreign hedging arrangements.F13MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)s.Revenue Recognition:The Company’s revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled softwaresubscriptions, associated software maintenance and support.The Company recognizes revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with acustomer exists only when: the parties to the contract have approved it and are committed to perform their respective obligations, the Companycan identify each party’s rights regarding the distinct goods or services to be transferred (“performance obligations”), the Company can determinethe transaction price for the goods or services to be transferred, the contract has commercial substance and it is probable that the Company willcollect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to acustomer. Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted togovernmental authorities. Refunds are estimated at contract inception and updated at the end of each reporting period if additional informationbecomes available. Revenue is recognized when control of the product is transferred to the customer.The Company maintains a returns policy that allows its customers to return product within a specified period of time. The estimate of the provisionfor returns is based upon historical experience with actual returns.Principal versus Agent ConsiderationsThe Company follows the guidance provided in ASC 606 for determining whether it is a principal or an agent in arrangements with customers, byassessing whether the nature of the Company’s promise is a performance obligation to provide the specified goods (principal) or to arrange forthose goods to be provided by the other party (agent). With regard to products being sold by Orgad through Amazon, this determination involvesjudgment. The Company determines it is the principle when it has control over promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).The Company recognizes revenue ratably over the contractual service term for hosted services that are priced based on a committed number oftransactions where the delivery and consumption of the benefit of the services occur evenly over time, beginning on the date the servicesassociated with the committed transactions are first made available to the customer and continuing through the end of the contractual serviceterm. Over usage fees and fees based on the actual number of transactions are billed in accordance with contract terms as these fees are incurredand are included in the transaction price of an arrangement as variable consideration. Fees based on a number of transactions or impressions permonth, are allocated to the period in which the transactions occur. Revenue for subscriptions sold as a fee per period is recognized ratably overthe contractual term as the customer simultaneously receives and consumes the benefit of the underlying service.F14MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)t.Contingencies and CommitmentsLiabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it isprobable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with losscontingencies are expensed as incurred.u.Derivative instrumentsThe Company accounts for its derivative instruments as either assets or liabilities and measures them at fair value through profit or loss.v.LeasesThe Company leases include an office space lease agreement for 36 months, with an option to extend for an additional 36 months and 36 monthscancelable operating lease agreements on behalf of personnel vehicles. The lease term includes a noncancellable period of the lease plus anyadditional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise,or an option to extend (or not to terminate) the lease controlled by the lessor.ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make leasepayments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value oflease payments over the lease term. The company generally use its incremental borrowing rate based on the estimated rate of interest forcollateralized borrowing over a similar term of the lease payments at commencement date. Lease expense for lease payments is recognized on astraightline basis over the lease term.For the office rent lease, the Company has elected to account for the lease and nonlease maintenance components as a single lease component.Therefore, the lease payments used to measure the lease liability include all of the fixed consideration in the contract, including insubstance fixedpayments, owed over the lease term.w.Impact of recently issued accounting standardIn June 2016, the FASB issued ASU 201613, “Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses on FinancialInstruments”, which requires companies to measure credit losses of financial instruments, including customer accounts receivable, utilizing amethodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information toinform credit loss estimates. Subsequent to the issuance of ASU 201613, the FASB issued several additional Accounting Standard Updates toclarify implementation guidance, provide narrowscope improvements and provide additional disclosure guidance. As an Emerging GrowthCompany, ASU 201613 is effective for fiscal years beginning after December 15, 2022. The Company does not expect this ASU to have a materialimpact on its consolidated financial statements.F15MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 3 CASH AND CASH EQUIVALENTSThe Company’s cash and cash equivalents balance at December 31, 2022 and 2021 is denominated in the following currencies:December 31,20222021US Dollars1,65110,184New Israeli Shekels259433Other190532,10010,670NOTE 4 OTHER RECEIVABLES AND PREPAID EXPENSESDecember 31,20222021Prepaid expenses and other current assets322429Government authorities28317Other153133Total758579NOTE 5 PROPERTY AND EQUIPMENT, NETComputersandperipheralequipmentOfficefurnitureandequipmentLeaseholdimprovementsTotalCostBalance as at January 1, 20211825860300Additions2323Translation adjustments72211Balance as at December 31, 20212126062334Balance as at January 1, 20222126062334Additions161127Business combination401555Translation adjustments(32)(8)(8)(48)Balance as at December 31, 20222367854368Accumulated DepreciationBalance as at January 1, 20211461412172Additions2751042Translation adjustments6118Balance as at December 31, 20211792023222Balance as at January 1, 20221792023222Additions209938Translation adjustments(27)(3)(2)(32)Balance as at December 31, 20221722630228Carrying amountsAs at December 31, 2021334039112As at December 31, 2022645224140F16MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 6 LEASESIn August 2019, The Company entered into an office space lease agreement. The lease term is for 36 months beginning on August 20, 2019 and endingon August 20, 2022, with an option to extend for an additional 36 months. The Company extended the lease period until August 20, 2025. Monthly rentpayments including utilities amounting to approximately USD 14 (NIS 49,500) per month.In addition, The Company entered into a threeyear cancelable operating lease agreement for cars.These operating leases are included in “Right of use asset” on the Company’s December 31, 2022 consolidated balance sheets, and represent theCompany’s right to use the underlying asset for the lease term. The Company’s obligations to make lease payments are included in the currentliabilities as “Operating lease liability” and in the noncurrent liabilities as “Operating lease liability long term” on the Company’s December 31, 2022consolidated balance sheets. As of December 31, 2022, rightofuse of asset was $583. operating lease liabilities were $159 and non current Operatinglease liabilities were $308. Rightofuse asset includes the capitalization of improvements (net of amortization) amounting to $105.Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value ofthe lease payments.The interest rate used to discount future lease payment was 11.95%.Maturities of lease liabilities as of December 31, 2022 were as follows:Year Ending:2023$1912024$1912025$127Thereafter$509Less imputed interest:$(42)Total lease liabilities$467F17MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 7 – Goodwill and other Intangible assetsA.Identified intangible assetsSchedule of Intangible assetsSelling PlatformTechnologyCustomerRelationshipsOtherTotalThousandsUSDThousandsUSDThousandsUSDThousandsUSDThousandsUSDCostAs of January 1, 2022Acquisitions through business combinations378286726771,467Effect of changes in exchange rates(32)2565765As of December 31, 2022346311791841,532AmortizationAs of January 1, 2022Amortization for the year including effect of changes inexchange rates as of December 31, 2022(109)(15)(27)(4)(155)Carrying amountAs of December 31, 2022237296764801,377AmortizationAmortization expenses recorded for identified intangible assets in the Consolidated Statements of Operations for each period and were as follows:Line ItemDecember 31,2022December 31,2021Selling platformCosts of revenues109TrademarkSales and marketing4TechnologyCosts of revenues15Customer relationshipsSales and marketing27Total amortization expenses155Future amortization expenses are expected to be as follows:20232024202520262027ThereafterTotalFuture amortization expenses3033031941771561791,312b.GoodwillThe changes in the carrying amount of goodwill for the years ended December 31, 2022 and 2021 were as follows:Fashion and equipmentecommerce platformNaizTotalBalance as of December 31, 2021Changes during the period:Goodwill acquired1521,1521,304Goodwill impairmentTranslation differences(14)10591Balance as of December 31, 20221381,2571,395The Company operates its business through three reporting segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovativeartificial intelligence driven measurement solutions and (iii) Naiz. See note 17 for additional segments information.The Company determines the fair value of its reporting units using the income approach. According to the income, the Company uses discounted cashflows to estimate the fair value. Cash flow projections are based on the Company’s estimates of revenue growth rates and operating margins, takinginto consideration the industry’s and market’s conditions. The discount rate used is based on the weighted average cost of capital (“WACC”),adjusted for the relevant risk associated with businessspecific characteristics.The Company performed a quantitative assessment as of December, 31 2022 for the reporting units’ fair value. The estimated fair value of the Fashionand equipment ecommerce platform and Naiz reporting units exceeded its estimated carrying amount by 95.9% and 27.7% respectively. This, based thefollowing assumptions:Fashion and equipmentecommerce platformNaizDiscount rate21%23%Terminal growth rate3%3%If business conditions or expectations were to change materially, it may be necessary to record impairment charges to the Company’s reporting units inthe future.F18MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 8 Investment in JVIn August 2022, the Company established a joint venture (“JV”) in Brazil with Santista Têxtil. The Company holds 51% and Santista Têxtil holds 49% of theJV. The purpose of the JV is to serve the Brazilian market according to the business plan that was set. Both parties agree to make an initial investment in theJV of $198that will be made per the holding percentage of each party. As of the reporting date, the JV is in process of establishing its operation.NOTE 9 Financial LiabilitiesThe book value of each of the financial liability categories is an acceptable approximation of fair value.The debt is comprised of four loans that were granted to My Size Israel – in an outstanding amount of approximately $131, bearing interest rangingfrom prime rate to prime+2.8% rate, and four loans that were granted to the Spanish subsidiary– in an outstanding amount of approximately $400,bearing interest ranging from 1% to 3%.The financial liability maturities during the five years following the end of the financial year are shown below:UntilUntilUntilUntilUntilAfterTOTAL311223311224311225311226311227311227311222Debts with credit institutions15513892874712531NOTE 10 RELATED PARTIES TRANSACTIONSA. Balances with related parties:The following related party payables are included in liability to related parties.December 31,20222021Officers (*)4143Liability in respect of business combinations (**)739Other related parties (***)(95)Directors152069863(*)The amount includes the net salaries payables.(**)The amount includes the provision created to former owners of Orgad that are entitled to additional cash and equity consideration and former owners of Naizthat entitled to additional cash consideration, see note 16 business combination.(***)The amount includes an amount receivable from Orgad previous shareholders who currently work in the company.B. Related parties benefits:Year endedDecember 31,20222021Salaries and related expenses1,440852Share based payments39673Cash liability and equity liability expenses related to acquisitions (**)1,058Directors58582,952983(**)The amount includes the expenses for a provision created to former owners of Orgad that are entitled to additional cash and equity consideration and formerowners of Naiz that entitled to additional cash consideration, see note 16 business combination.NOTE 11 FINANCIAL INSTRUMENTSThe following tables presents the Company’s significant assets and liabilities that are measured at fair value on recurring basis and their classificationwithin the fair value hierarchy:December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities47financial assets (*)10December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesDerivatives9December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities108December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesWarrants derivative2(*)the financial asset includes in other receivables.F19MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 11 FINANCIAL INSTRUMENTS (Cont.)The carrying amounts of cash and cash equivalents, restricted cash, short term restricted deposit, accounts receivable, other receivables and prepaidexpenses, trade payable and accounts payable approximate their fair value due to the shortterm maturities of such instruments.At December 31, 2022, the recognized gain and fair value (based on quoted market prices with a discount due to security restrictions on iMine shares)of the marketable securities were $59and $47, respectively (at December 31, 2021 $49and $108, respectively).NOTE 12 TAXES ON INCOMEa.On December 31, 2022, the Company had U.S. federal net operating loss carryforwards of approximately $26 available to reduce future taxableincome. Utilization of the U.S. net operating losses may be subject to substantial limitations due to the change of ownership provisions of theInternal Revenue Code of 1986.The U.S. Company has final tax assessments through 2014.On December 22, 2017, the Tax Reform Act was signed into law. The legislation significantly changes U.S. tax law by, among other things, lowering theU.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. As a result of the decrease in the corporate incometax rate, the Company revalued the ending net deferred tax assets at December 31, 2017, but did not recognize any incremental income tax expense in2017 due to the revaluation of the valuation allowance.b.Foreign tax:1.Tax rates:Presented hereunder are the tax rates relevant to the Company’s Israeli subsidiaries:2022 23%2021 23% Presented hereunder are the tax rates relevant to the Company’s Spanish subsidiary:2022 24%2.The Company’s Israeli subsidiaries have estimated total available carryforward operating tax losses for Israeli income tax purposes ofapproximately $64as of December 31, 2022. Of these losses, a total of $47.5are owned by Topspin Medical (Israel) Ltd. Topspin tax lossesmay be offset only by future income with respect to the same operational activity by which it was incurred for an indefinite period of time. Theother losses are owned by My Size Israel and may be carryforward to offset against future income for an indefinite period of time.3.Topspin Medical (Israel) Ltd. and My Size (Israel) 2014 Ltd. has final tax assessments through 2016.c.U.S. and foreign components of loss from continuing operations, before income taxes consisted of:December 31,20222021U.S(1,180)(3,802)NonU.S. (foreign)(7,130)(6,718)(8,310)(10,520)F20MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 12 TAXES ON INCOME (Cont.)d.Deferred taxes:Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reportingpurposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows:December 31,20222021Deferred tax assets:Operating loss carryforwards20,13120,238Warrants and options145126Marketable securities390377Intangible assets(328)Research and development expenses586341Other temporary differences203Deferred tax assets before valuation allowance21,12721,082Valuation allowance(21,455)(21,082)Net deferred tax liability(328)The following table presents a reconciliation of the beginning and ending valuation allowance:December 31,20222021Balance at beginning of the year21,08218,968Additions in valuation allowance to the income statement1,7581,625Additions in valuation allowance due to exchange rate differences(1,385)489Balance at end of the year21,45521,082In assessing the realization of deferred tax assets, management considers whether it is more likely than not that all or some portion of the deferred taxassets will not be realized.The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporarydifferences are deductible and net operating losses are utilized. Based on consideration of these factors, the Company recorded a full valuationallowance at December 31, 2021 and 2020.e.Theoretical taxThe following presents the adjustment between the theoretical tax amount and the tax amount included in the financial statements:December 31,20222021Loss before income taxes8,34610,520Statutory tax rate21%21%Computed “expected” tax income1,7522,209Foreign tax rate differences and exchange rate differences149131Nondeductible expenses(107)(715)Change in valuation allowance(1,758)(1,625)Taxes on income36F21MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITYa.Common stock confers upon their holders the right to receive notice to participate and vote in general meetings of the Company, and the right toreceive dividends if declared.b.On January 8, 2021, the Company conducted a public offering of its securities pursuant to which it issued 62,768 shares of its common stock forgross proceeds of $2,008. The net proceeds to the Company from the offering were approximately $1,700, after deducting placement agent’s feesand other estimated offering expenses payable by the Company.c.During 2021, a holders of warrants exercised warrants to purchase 135,109 ordinary shares of the Company in exchange for $3,709.d.On March 25, 2021, the Company conducted a public offering of its shares of common stock pursuant to which it issued 104,741 shares of itscommon stock for gross proceeds of $3,300. The net proceeds to the Company from the offering were approximately $2,872, after deductingplacement agent’s fees and other estimated offering expenses payable by the Company.On May 7, 2021, the Company issued an additional 15,711 shares of the Company’s common stock in connection with the full exercise of theunderwriter’s overallotment option granted in the Company’s March 2021 public offering. These additional shares were sold to the underwriter at apublic offering price of $31.5 per share, resulting in additional net proceeds to the Company, net of the underwriting discount, of approximately$463.e.On May 26, 2021, the Company issued 100,000 shares of common stock to Ms. Zigdon in consideration of the Waiver. See note 1(b) above.f.On October 28, 2021, the Company sold in a registered direct offering 100,592 shares of its common stock and, in a concurrent private placement,an aggregate of 75,444 unregistered warrants to purchase shares of common stock, at an offering price of $33.8 per share and associated warrant.In addition, on the same day, the Company sold in a private placement 150,888 unregistered shares of common stock and unregistered warrants topurchase up to an aggregate of 113,166 shares of common stock at the same purchase price as in the registered direct offering. The warrants areimmediately exercisable and will expire five years from issuance at an exercise price of $31.5 per share, subject to adjustment as set forth therein.The gross proceeds from the offerings were $8,500. The net proceeds to the Company from the offerings were approximately $7,560, afterdeducting placement agent’s fees and other estimated offering expenses payable by the Company. In connection with the offerings, the Companyissued to the placement agent warrants to purchase 17,603 shares on substantially the same terms as the purchasers in the offerings at an exerciseprice of $42.25 per share and a term expiring on October 26, 2026.g.On December 7, 2022, the Company’s board of directors approved a 1for25 reverse stock split of the Company’s issued and outstanding sharesof common stock. The reverse stock split became effective on December 8, 2022. In order not to have fractional shares as a result of the reversestock split, the Company issued an additional 12,091 shares of common stock. As a result, all shares of common stock, options for shares ofcommon stock, exercise price and net loss per share amounts were adjusted retroactively for all periods presented in these financial statements.F22MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITY (Cont.)g.A summary of the warrant activity during the years ended December 31, 2022 and 2021 is presented below:Number ofWarrantsWeightedAverageExercisePriceWeightedAverageRemainingLife inYearsOutstanding, December 31, 2020216,85936.754.26Issued206,214Expired or exercised(135,109)Outstanding, December 31, 2021287,96431.004.35IssuedExpired or exercised(17,901)Outstanding, December 31, 2022270,06330.213.36Exercisable, December 31, 2022270,06330.213.36NOTE 14 STOCK BASED COMPENSATIONThe stockbased expense recognized in the financial statements for services received is related to Research and Development, Sales and Marketingand General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense Research and development15195Stockbased compensation expense Sales and marketing126180Stockbased compensation expense General and administrative17898455373The stockbased expense recognized in the financial statements for services received post Acquisition of Orgad (see note 16) is related to Cost OfGoods, Sales and Marketing and General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense – Cost of goods80Stockbased compensation expense Sales and marketing112Stockbased compensation expense General and administrative127319F23MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Options issued to consultantsWe can sell additional shares of common stock without consulting stockholders and without offering shares to existing stockholders, which wouldresult in dilution of shareholders’ interests in the company and could depress our stock price.Our Certificate of Incorporation currently authorizes 250,000,000 shares of common stock, of which 2,446,780 are currently outstanding as of March 31, 2023and our board of directors is authorized to issue additional shares of our common stock. Although our board of directors intends to utilize its reasonable businessjudgment to fulfil its fiduciary obligations to our then existing stockholders in connection with any future issuance of our capital stock, the future issuance ofadditional shares of our capital stock could cause immediate, and potentially substantial, dilution to our existing stockholders, which could also have a materialeffect on the market value of the shares. Further, other than certain participation rights that we have granted in a past offering, our shares do not have preemptiverights, which means we can sell shares of our capital stock to other persons without offering purchasers in this offering the right to purchase their proportionateshare of such offered shares. Therefore, any additional sales of stock by us could dilute your ownership interest in our Company.Our quarterly operating results may fluctuate significantly.We expect our operating results to be subject to quarterly fluctuations. Our net loss and other operating results will be affected by numerous factors,including:●variations in the level of expenses related to our research and development;●any lawsuits in which we may become involved;●regulatory developments affecting our products; and●our execution of any collaborative, licensing or sales agreements, and the timing of payments under these arrangements.If our quarterly operating results fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially.Furthermore, any quarterly fluctuations in our operating results may, in turn, cause the price of our common stock to fluctuate substantially.If we fail to comply with the rules under the Sarbanes Oxley Act of 2002 related to accounting controls and procedures or if we discover materialweaknesses and deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult.If we fail to comply with the rules under the SarbanesOxley Act of 2002 related to disclosure controls and procedures, or, if we discover materialweaknesses and other deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult. Section 404 of the SarbanesOxley Act requires annual management assessments of the effectiveness of our internal control over financial reporting and, ifwe are no longer a nonaccelerated filer, a report by our independent auditors addressing these assessments. If material weaknesses or significant deficiencies arediscovered or if we otherwise fail to achieve and maintain the adequacy of our internal control, we may not be able to ensure that we can conclude on an ongoingbasis that we have effective internal controls over financial reporting in accordance with Section 404 of the SarbanesOxley Act. Moreover, effective internalcontrols are necessary for us to produce reliable financial reports and are important to helping prevent financial fraud. If we cannot provide reliable financial reportsor prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price ofour common stock could drop significantly.38Our Certificate of Incorporation, Bylaws and Delaware law may have antitakeover effects that could discourage, delay or prevent a change incontrol, which may cause our stock price to decline.Our Certificate of Incorporation, Bylaws and Delaware law could make it more difficult for a thirdparty to acquire us, even if closing such a transactionwould be beneficial to our stockholders. Provisions of our Certificate of Incorporation, Bylaws and Delaware law also could have the effect of discouraging potentialacquisition proposals or making a tender offer or delaying or preventing a change in control, including changes a stockholder might consider favorable. Suchprovisions may also prevent or frustrate attempts by our stockholders to replace or remove our management. In particular, the Certificate of Incorporation, Bylawsand Delaware law, as applicable, among other things:●provide the board of directors with the ability to alter the Bylaws without stockholder approval;●the classification of our board of directors;●place limitations on the removal of directors;●provide that vacancies on the Board of Directors may be filled by a majority of directors in office, although less than a quorum;●require that stockholder actions must be affected at a duly called stockholder meeting and generally prohibiting stockholder actions by written consent;●eliminate the ability of stockholders to call a special meeting of stockholders; and●establish advance notice requirements for nominations for election to the Board of Directors or for proposing matters that can be acted upon at duly calledstockholder meetings.We are subject to Section 203 of the Delaware General Corporation Law which, subject to certain exceptions, prohibits “business combinations” between apubliclyheld Delaware corporation and an “interested stockholder,” which is generally defined as a stockholder who becomes a beneficial owner of 15% or more ofa Delaware corporation’s voting stock for a threeyear period following the date that such stockholder became an interested stockholder. These provisions areexpected to discourage certain types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to firstnegotiate with our board. These provisions may delay or prevent someone from acquiring or merging with us, which may cause the market price of our commonstock and the value of our securities to decline.If we fail to comply with the continued listing requirements of the Nasdaq Capital Market, our common stock may be delisted and the price of ourcommon stock and our ability to access the capital markets could be negatively impacted.Nasdaq has established certain standards for the continued listing of a security on the Nasdaq Capital Market. The standards for continued listing include,among other things, that the minimum bid price for the listed securities not fall below $1.00 per share for a period of 30 consecutive trading days and that wemaintain a minimum of $2,500,000 in shareholders’ equity. We have in the past fallen below the minimum bid price and minimum shareholders’ equity.39No assurance can be given that we will continue to be in compliance with the Rule. Failure to meet applicable Nasdaq continued listing standards couldresult in a delisting of our common stock. A delisting of our common stock from Nasdaq could materially reduce the liquidity of our common stock and result in acorresponding material reduction in the price of our common stock. In addition, delisting could harm our ability to raise capital through alternative financing sourceson terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, employees and fewer business development opportunities.The exercise of outstanding warrants and stock options will have a dilutive effect on the percentage ownership of our capital stock by existingstockholders.As of March 15, 2023, we had outstanding warrants to acquire 2,299,115 shares of our common stock and stock options to purchase 1,659 shares of ourcommon stock, which warrants and options are exercisable for prices ranging between $2.81 and $375. The expiration of the term of such options and warrants rangefrom 0.22 years to 4.83 years. If a significant number of such warrants and stock options are exercised by the holders, the percentage of our common stock ownedby our existing stockholders will be diluted.Were our common stock to become subject to the penny stock rules then this could result in U.S. brokerdealers becoming discouraged from effectingtransactions in shares of our common stock.Rule 15g9 under the Exchange Act establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a marketprice of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. If we do not retain a listing on the NasdaqCapital Market or do not meet certain net tangible asset or average revenue requirements and if the price of our common stock is less than $5.00, our common stockwill be deemed a penny stock. For any transaction involving a penny stock, unless exempt, the rules require: (a) that a broker or dealer approve a person’s accountfor transactions in penny stocks; and (b) the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantityof the penny stock to be purchased.In order to approve a person’s account for transactions in penny stocks, the broker or dealer must: (a) obtain financial information and investmentexperience objectives of the person and (b) make a reasonable determination that the transactions in penny stocks are suitable for that person and the person hassufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver,prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which: (a) sets forth the basis on whichthe broker or dealer made the suitability determination; and (b) confirms that the broker or dealer received a signed, written agreement from the investor prior to thetransaction. Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult forinvestors to dispose of our common stock and cause a decline in the market value of our common stock.Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissionspayable to both the broker or dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor incases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the accountand information on the limited market in penny stocks.Sales of our currently issued and outstanding stock may become freely tradable pursuant to Rule 144 and may dilute the market for your shares andhave a depressive effect on the price of the shares of our common stock.A portion of our outstanding shares of common stock are “restricted securities” within the meaning of Rule 144 under the Securities Act of 1933, asamended, or the Securities Act. As restricted shares, these shares may be resold only pursuant to an effective registration statement or under the requirements ofRule 144 or other applicable exemptions from registration under the Securities Act and as required under applicable state securities laws. Rule 144 provides inessence that an affiliate (as such term is defined in Rule 144(a)(1)) of an issuer who has held restricted securities for a period of at least six months (one year afterfiling Form 10 information with the SEC for shell companies and former shell companies) may, under certain conditions, sell every three months, in brokeragetransactions, a number of shares that does not exceed the greater of 1% of a company’s outstanding shares of common stock or the average weekly trading volumeduring the four calendar weeks prior to the sale (the four calendar week rule does not apply to companies quoted on the OTC Markets). Rule 144 also permits, undercertain circumstances, the sale of securities, without any limitation, by a person who is not an Affiliate of the Company and who has satisfied a oneyear holdingperiod. A sale under Rule 144 or under any other exemption from the Securities Act, if available, or pursuant to subsequent registrations of our shares of commonstock, may have a depressive effect upon the price of our shares of common stock in any active market that may develop.40We are a former “shell company” and as such are subject to certain limitations not applicable to other public companies generally.Prior to our suspension of reporting in 2012, we were a public reporting “shell company,” as defined in Rule 12b2 under the Exchange Act. Although weare no longer a “shell company,” we are subject to certain restrictions under the Securities Act for the resale of securities issued by issuers that have been at anytime previously a shell company. Specifically, the Rule 144 safe harbor available for the resale of our restricted securities is only available to our stockholders if wehave filed all reports and other materials required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934, as amended, or the Exchange Act, asapplicable, during the preceding twelve months, other than current reports on Form 8K, at the time of the proposed sale, regardless of whether the restrictedsecurities were initially issued at the time we were a shell company or subsequent to termination of such status. Accordingly, holders of our “restricted securities”within the meaning of Rule 144 will be subject to the conditions set forth in Rule 144 with respect to our company. Other reporting companies that are not formershell companies and have been reporting for more than twelve months are not subject to this same reporting threshold for nonaffiliate reliance on Rule 144.Accordingly, any restricted securities we have sold or sell in the future or issue to consultants or employees, in consideration for services rendered or for any otherpurpose, may not be resold unless such securities are registered with the SEC or the requirements of Rule 144 have been satisfied. As a result, it may be harder forus to fund our operations and pay our employees and consultants with our securities instead of cash. Furthermore, it may be harder for us to raise funding throughthe sale of debt or equity securities unless we agree to register such securities with the SEC, which could cause us to expend additional resources in the future. Ourprior status as a “shell company” could prevent us in the future from raising additional funds, engaging employees and consultants, and using our securities to payfor any acquisitions, which could cause the value of our securities, if any, to decline in value or become worthless.ITEM 1B. UNRESOLVED STAFF COMMENTSNone.ITEM 2. PROPERTIESWe currently lease 1,660 square feet of office space at 4 HaYarden Street, Airport City, Israel. The lease term is for 36 months beginning on August 20, 2019and ending on August 20, 2022, with an option to extend for an additional 36 months. Monthly rent payments, including utilities, amount to approximately $14,000per month. We extended the lease period until August 20, 2025.ITEM 3. LEGAL PROCEEDINGSFrom time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation issubject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.41North Empire LLCOn August 7, 2018, we commenced an action against North Empire LLC, or North Empire, in the Supreme Court of the State of New York, County of NewYork for breach of a Securities Purchase Agreement or Agreement in which we are seeking damages in an amount to be determined at trial, but in no event less than$616,000. On August 2, 2018, North Empire filed a Summons with Notice against us, also in the same Court, in which they allege damages in an amount of $11.4million arising from an alleged breach of the Agreement. On September 6, 2018, North Empire filed a Notice of Discontinuance of the action it had filed on August 2,2018. On September 27, 2018, North Empire filed an answer and asserted counterclaims in the action commenced by us against them, alleging that we failed to deliverstock certificates to North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against our CEO andnow former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018, we filed a reply to North Empire’scounterclaims. On November 15, 2018, our CEO and now former Chairman of the Board filed a motion to dismiss North Empire’s thirdparty complaint. On January 6,2020, the Court granted the motion and dismissed the thirdparty complaint. Discovery has been completed and both parties have filed motions for summaryjudgment in connection with the claims and counterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summaryjudgment, arguing there were factual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision.On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying the Company’s motion for summary judgment. On or about September 12,2022, the Court issued its Decision and Order denying the Company’s motion to reargue. North Empire filed its opposing brief on December 7, 2022. Both sides weregiven an opportunity to file a reply brief. We filed our reply brief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. Oral argument was heldbefore the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Court filed its Decision and Order, which affirmed the lower court’sdecisions regarding both My Size and North Empire’s motions for summary judgment and sent the case back to the Supreme Court. On or about March 13, 2023, theSupreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date for the mediation has not yet been set. We intend tovigorously defend any claims made by North Empire. We believe it is more likely than not that the counterclaims will be denied.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.42PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur stock currently is listed on the Tel Aviv Stock Exchange and the Nasdaq Capital Market under the symbol “MYSZ”. Our stock has been traded on theNasdaq Capital Market since July 25, 2016.HoldersAs of March 31, 2023, we had 70 shareholders of record. The actual number of stockholders is greater than this number of record holders and includesstockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our Board of Directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our Board of Directors deems relevant.Securities Authorized for Issuance under Equity Compensation PlansInformation about our equity compensation plans is incorporated herein by reference to “Item 12. Security Ownership of Certain Beneficial Owners andManagement and Related Stockholder Matters”, of this Annual Report on Form 10K.Recent Sales of Unregistered SecuritiesNone.ITEM 6. SELECTED FINANCIAL DATAAs a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULT OF OPERATIONSYou should read the following discussion along with our financial statements and the related notes included elsewhere in this Annual Report on Form10K. The following discussion contains forwardlooking statements that are subject to risks, uncertainties and assumptions, including those discussed under“Risk Factors.” Our actual results, performance and achievements may differ materially from those expressed in, or implied by, these forwardlooking statements.OverviewMySize is an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.43Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile device or through MySizeID Widget: a simple questionnaire which was uses a database collected over the years.MySizeID synchronizes the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and onlypresents items available for purchase that match their measurements to ensure a correct fit.MySize is positioning itself as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empowering brand design teams, which are designed to increaseend consumer satisfaction, contributing to a sustainable world and reduce operation costs.Orgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,682 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz BespokeTechnologies, S.L., or Naiz, a limited liability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.44The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 2,365,800 shares of My Size common stock were issuedto Whitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.45Operations in RussiaIn addition to our Israel operations, we had operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia. To date, mainly due to the invasion of Ukraine by Russia and the ongoing sanctions we stopped most ofour efforts in Russia and will probably close the subsidiary in the near future.Results of OperationsThe table below provides our results of operations for the periods indicated.Year ended December 3120222021(dollars in thousands)Revenues4,459131Cost of revenues(3,825)Gross profit634131Research and development expenses$(1,701)$(4,248)Sales and marketing(3,143)(2,336)General and administrative(3,900)(4,124)Operating loss(8,110)(10,577)Financial income (expenses), net(236)57Tax income36Net loss$(8,310)$(10,520)Year Ended December 31, 2022 Compared to Year Ended December 31, 2021RevenuesFrom inception through December 31, 2018, we did not generate any revenue from operations and we continue to expect to incur additional losses toperform further research and development activities. We started to generate revenues only in 2019. Our revenues for the year ended December 31, 2022 amounted to$4,459,000 compared to $131,000 for year ended December 31, 2021. The increase from the corresponding period primarily attributable to $4,132,000 in revenuegenerated from Orgad from February 7, 2022, the date of closing of the Orgad acquisition, or the Acquisition Date and revenue generated from the Naiz Acquisitionfrom October 11, 2022, the date of closing of the Naiz acquisition.In addition, the increase from the corresponding period results from an increase in revenues generated by My Size.Cost Of RevenuesOur cost of revenues expenses for the year ended December 31, 2022 amounted to $3,825,000, compared to none for the year ended December 31, 2021. Thecost of revenues includes cash and equity liabilities expenses in the amount of $194,000. The increase in comparison with the corresponding period was due to thecost of goods of the revenues generated from Orgad’s operations.Research and Development ExpensesOur research and development expenses for the year ended December 31, 2022 amounted to $1,701,000 a decrease of $2,547,000, or approximately 60.0%,compared to $4,248,000 for the year ended December 31, 2021. The decrease from the corresponding period primarily resulted from share based payment in amount of$2,618,000 attributed to the share issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021.Sales and Marketing ExpensesOur sales and marketing expenses for the year ended December 31, 2022 amounted to $3,143,000 an increase of $807,000, or 34.55%, compared to $2,336,000for the year ended December 31, 2021. The increase primarily resulted from an increase in employees expenses mainly due to Orgad and Naiz acquisitions, increase inAmazon fees, increase in cash and equity liabilities expenses attributed to the Orgad acquisition and an increase in share based payments offset by a decrease inpayments to consultants.46General and Administrative ExpensesOur general and administrative expenses for the year ended December 31, 2022 amounted to $3,900,000, a decrease of $224,000, or 5.43%, compared to$4,124,000 for the year ended December 31, 2021. The decrease compared to the corresponding period was mainly due to a decrease in professional expenses, mainlyattributed to shareholder activism including settlement expenses with the Lazar Parties offset by an increase in sharedbased payments and an increase in employeesexpenses mainly due to the Orgad and Naiz acquisitions.Operating LossAs a result of the foregoing, for the year ended December 31, 2022, our operating loss was $8,110,000, a decrease of $2,467,000 or 23.32%, compared to ouroperating loss for the year ended December 31, 2021 of $10,577,000.Financial Income, NetOur financial (expense) income, net for the year ended December 31, 2022 amounted to $236,000 compared to financial income, $57,000 for the year endedDecember 31, 2021. In 2022, we had financial expenses exchange rate differences offset by an income from fair value revaluation of investment in marketablesecurities whereas in 2021 we had financial income from the fair value revaluation of warrants offset by expenses from exchange rate differences and expenses fromfair value revaluation of investment in marketable securities.Net LossAs a result of the foregoing, our net loss for the year ended December 31, 2022 was $8,310,000 compared to net loss of $10,520,000 for the year endedDecember 31, 2021. The decrease in net loss was mainly due increase in sales and marketing expenses and financial expenses as opposed to financial income in thecorresponding period offset by a decrease in research and development expenses in amount of $2,618,000 attributed to the share issuance to Shoshana Zigdonunder the Amendment to Purchase Agreement dated May 26, 2021.Liquidity and Capital ResourcesSince our inception, we have funded our operations primarily through public and private offerings of debt and equity in Israel and in the U.S.As of December 31, 2022, we had cash, cash equivalents and restricted cash of $2,363,000 compared to $10,943,000 cash, cash equivalents, restricted cashas of December 31, 2021. During January 2023, we completed a registered direct and concurrent private placement offering resulting in gross proceeds ofapproximately $3 million. This decrease primarily resulted from our operating activities, the acquisition of Orgad and Naiz Fit, and resources that were deployed togrow of both businesses.Net cash used in operating activities was $7,290,000 for the year ended December 31, 2022 compared to $7,297,000 for the year ended December 31, 2021.The decrease in cash used in operating activity is derived mainly from an increase in share based payments and increase in account receivables mainly from theOrgad and Naiz fit acquisitions offset by a decrease in the net loss.Net cash used in investing activities for the year ended December 31, 2022 was $993,000 as opposed to net cash provided by investing activities of$161,000 for the year ended December 31, 2021. The net cash used in investing activities for the year ended December 31, 2022 was mainly from the acquisition ofOrgad and Naiz as opposed to proceeds from shortterm deposits and restricted deposits during the year ended December 31, 2021.We had a negative cash flow from financing activities of $67,000 for the year ended December 31, 2022 compared to positive cash flow of $16,292,000 for theyear ended December 31, 2021. The negative cash flow from financing activities for the year ended December 31, 2022 was mainly due to repayment of loans andinterest and payments for leases as opposed to proceeds from issuance of shares and from exercise of warrants for the year ended December 31, 2021.47We expect that we will continue to generate losses and negative cash flows from operations for the foreseeable future. Based on the projected cash flowsand cash balances as of December 31, 2022, together with the proceeds from the January 2023 financing, we believe our existing cash will not be sufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. We will need to raiseadditional capital, which may not be available on reasonable terms or at all. Additional capital would be used to accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;●respond to competitive pressures;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, the Russian invasion ofUkraine, the impact of any resurgence of the COVID19 pandemic and a number of other factors, many of which are outside our control, and on our financialperformance. Accordingly, we cannot assure you that we will be able to successfully raise additional capital at all or on terms that are acceptable to us. If we cannotraise additional capital when needed, it may have a material adverse effect on our business, results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.We have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.Recently Issued Accounting PronouncementsCertain recently issued accounting pronouncements are discussed in Note 2, Significant Accounting Policies, to the consolidated financial statementsincluded in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10K.OffBalance Sheet ArrangementsWe have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.48Application of Critical Accounting Policies and EstimatesOur management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we haveprepared in accordance with U.S. generally accepted accounting principles issued by the Financial Accounting Standards Board, or FASB. The preparation of thesefinancial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assetsand liabilities at the date of the financial statements, as well as the reported expenses during the reporting periods. Actual results may differ from these estimatesunder different assumptions or conditions.Our significant accounting policies were revenue from contracts with customers which are more fully described in the notes to our financial statementsincluded herein. We believe these accounting policies discussed below are critical to our financial results and to the understanding of our past and futureperformance, as these policies relate to the more significant areas involving management’s estimates and assumptions. We consider an accounting estimate to becritical if: (1) it requires us to make assumptions because information was not available at the time or it included matters that were highly uncertain at the time wewere making our estimate; and (2) changes in the estimate could have a material impact on our financial condition or results of operations.Accounting for business combinationsWe allocate the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed, based upon their estimated fairvalues at the acquisition date. These fair values are typically estimated with assistance from independent valuation specialists.The purchase price allocation process requires us to make significant estimates and assumptions, especially at the acquisition date with respect tointangible assets, contractual support obligations assumed, contingent consideration arrangements, and preacquisition contingencies.Although we believe the assumptions and estimates we have made in the past have been reasonable and appropriate, they are based in part on historicalexperience and information obtained from the management of the acquired companies and are inherently uncertain.Examples of critical estimates in valuing certain of the intangible assets we have acquired or may acquire in the future include but are not limited to:● future expected cash flows from product sales or other customer contracts;● expected costs of fulfillment including marketing, warehousing and product sales;● the acquired company’s brand and competitive position, as well as assumptions about the period of time the acquired brand will continue to be used inthe combined company’s product portfolio;● cost of capital and discount rates; and● estimating the useful lives of acquired assets as well as the pattern or manner in which the assets will amortize.Refer to Note 16, Business Combination, to the consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” of thisAnnual Report on Form 10K.49Revenue from contracts with customersOur revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled software subscriptions, associatedsoftware maintenance and support.We recognize revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with a customer exists onlywhen: the parties to the contract have approved it and are committed to perform their respective obligations, we can identify each party’s rights regarding thedistinct goods or services to be transferred (“performance obligations”), we can determine the transaction price for the goods or services to be transferred, thecontract has commercial substance and it is probable that we will collect the consideration to which we will be entitled in exchange for the goods or services that willbe transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to a customer.Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted to governmental authorities. Refundsare estimated at contract inception and updated at the end of each reporting period if additional information becomes available. Revenue is recognized when controlof the product is transferred to the customer.We maintain a returns policy that allows our customers to return product within a specified period of time. The estimate of the provision for returns is basedupon historical experience with actual returns.Principal versus Agent ConsiderationsWe follow the guidance provided in ASC 606 for determining whether we are a principal or an agent in arrangements with customers, by assessing whetherthe nature of our promise is a performance obligation to provide the specified goods (principal) or to arrange for those goods to be provided by the other party(agent). With regard to products being sold by Orgad through Amazon, this determination involves judgment. We determine it is the principle when it has controlover the promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).We recognize revenue ratably over the contractual service term for hosted services that are priced based on a committed number of transactions where thedelivery and consumption of the benefit of the services occur evenly over time, beginning on the date the services associated with the committed transactions arefirst made available to the customer and continuing through the end of the contractual service term. Over usage fees and fees based on the actual number oftransactions are billed in accordance with contract terms as these fees are incurred and are included in the transaction price of an arrangement as variableconsideration. Fees based on a number of transactions or impressions per month, are allocated to the period in which the transactions occur. Revenue forsubscriptions sold as a fee per period is recognized ratably over the contractual term as the customer simultaneously receives and consumes the benefit of theunderlying service.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.As a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.50ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAMY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2022U.S. DOLLARS IN THOUSANDSINDEXPageReport of Independent Registered Public Accounting Firm (PCAOB ID: ID 1057)F2Consolidated Balance SheetsF4Consolidated Statements of Comprehensive LossF5Consolidated Statements of Shareholders’ EquityF6Consolidated Statements of Cash FlowsF7Notes to Consolidated Financial StatementsF8 F33F1Report of Independent Registered Public Accounting FirmTo the Shareholders and Board of DirectorsMy Size, Inc.:Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of My Size, Inc. and subsidiaries (the Company) as of December 31, 2022 and 2021, the relatedconsolidated statements of comprehensive loss, shareholders’ equity, and cash flows for each of the years in the twoyear period ended December 31, 2022, and therelated notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, thefinancial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the twoyear periodended December 31, 2022, in conformity with U.S. generally accepted accounting principles.Going ConcernThe accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1d tothe consolidated financial statements, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit thatraises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1d. Theconsolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidatedfinancial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Critical Audit MattersCritical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to becommunicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved ourespecially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidatedfinancial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters oron the accounts or disclosures to which they relate.Acquisitiondate fair value of customer relationshipsAs discussed in Note 16 to the consolidated financial statements, on October 11, 2022, the Company acquired Naiz Bespoke Technologies SL (“Naiz”). As a result ofthe transaction, the Company acquired customer relationships intangible assets (“customer relationships”) representing the generation of future income from Naiz’sexisting customers. The acquisition date fair value of the customer relationships was $726 thousand.F2We identified the evaluation of the acquisitiondate fair value of the Naiz customer relationships as a critical audit matter. A high degree of subjective auditorjudgment was required to evaluate the following internally developed assumptions used to estimate the fair value of such asset, for which there were limitedobservable inputs: (i) forecasted revenues attributable to existing customers, (ii) forecasted earnings before interest, taxes, depreciation, and amortization(“EBITDA”) margins for the acquired business, (iii) estimated annual customer attrition rates and (iv) estimated discount rate. The determined fair value wassensitive to changes in these key assumptions. Additionally, specialized skills and knowledge were needed to evaluate the discount rate used.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s acquisitiondate fair value estimation process, including controls over the development of key assumptions. We performed a sensitivity analysis toassess the impact of reasonably possible changes to forecasted revenues, EBITDA margins, annual customer attrition rates, and the discount rate. We evaluated theforecasted revenue growth rates from existing customers by comparing the growth assumptions to those of the Company’s peers and industry reports. Inconnection with our assessment of the forecasts used in the valuation, we compared (1) forecasted revenue and EBITDA to Naiz’s historical actual results and (2)estimated annual customer attrition rates to historical Naiz customer attrition data. We tested the Company’s determined weighted average cost of capital(“WACC”), which was used to determine the discount rate, by involving valuation professionals with specialized skills and knowledge, who assisted in:Evaluating the selected discount rate by comparing it against a discount rate range that was independently developed using publicly available market datafor comparable companies, and;Assessing the Company’s WACC calculation, by comparing it against an independently estimated WACC range based on inputs obtained throughpublished surveys and studies.Goodwill impairment assessmentAs discussed in Note 16 to the consolidated financial statements, during 2022 the Company recorded goodwill of $1,257 thousand related to the acquisition of NaizBespoke Technologies, S.L. (“Naiz”). The Company performed an annual quantitative impairment test of goodwill at the reporting unit level. Based on this analysis,the Company determined that the fair value of its reporting unit exceeded its carrying value and no impairment charge was required.We identified the evaluation of the goodwill impairment assessment for the Naiz reporting unit as a critical audit matter. A high degree of subjective auditor judgmentwas required to evaluate the following assumptions used to estimate the fair value of the Company’s reporting unit, for which there were limited observable inputs:(i) forecasted reporting unit cash flows, (ii) longterm growth rates, and (iii) discount rates. The fair value was sensitive to changes in these key assumptions.Additionally, specialized skills and knowledge were needed to evaluate the discount rates.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s goodwill impairment evaluation process. We performed sensitivity analyses to assess the impact of reasonably possible changes to forecasted cashflows, longterm growth rates, and discount rates. We evaluated the Company’s forecasted growth rates by comparing the growth assumptions to those of theCompany’s peers and industry reports. We compared the Company’s forecasted revenue, cost of sales, and operating expense margins to historical actual results toassess the reasonableness of the forecasts. In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:– Assessing the Company’s WACC calculation, by comparing it against an estimated WACC range based on inputs obtained through published surveys andstudies– Evaluating the discount rates used by the Company by comparing them against discount rate ranges that were developed using publicly available market data forcomparable companies, and;– Performing an arithmetic recalculation regarding the fair value of the Company’s reporting unit, using the Company’s cash flow forecasts and the independentlydeveloped discount rates, and comparing the results to the Company’s fair value estimates./s/ Somekh ChaikinSomekh ChaikinMember Firm of KPMG InternationalWe have served as the Company’s auditor since 2017.Tel Aviv, IsraelApril 14, 2023F3MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED BALANCE SHEETSU.S. dollars in thousands (except share data)December 31,Note20222021AssetsCurrent assetsCash and cash equivalents32,10010,670Restricted cash263273Inventory997Account receivables1,94040Other receivables and prepaid expenses4758579Total current assets6,05811,562Long term deposits28Property and equipment, net5140112Operating rightofuse asset6583776Intangible assets71,377Goodwill71,395Investment in JV899Investment in marketable securities11471083,669996Total assets9,72712,558Liabilities and shareholders’ equityCurrent liabilitiesOperating lease liability6159138Shortterm loans9155Trade payables2,487635Liabilities to Related parties69863Other payables680392Total current liabilities4,1791,228Longterm loans9376Deferred tax liabilities328Operating lease liability6308473Total noncurrent liabilities1,012473CONTINGENCIES AND COMMITMENTS15Total Liabilities5,1911,701Shareholders’ equity13Stock capital Common stock of $0.001par value Authorized: 250,000,000and 100,000,000shares as of December 31,2022 and 2021; Issued and outstanding: 1,464,117and959,297 as of December 31,2022 and 2021, respectively (*)11Additional paidin capital58,67356,453Accumulated other comprehensive loss(637)(406)Accumulated deficit(53,501)(45,191)Total shareholders’ equity4,53610,857Total liabilities and shareholders’ equity9,72712,558(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F4MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSSU.S. dollars in thousands (except share data and per share data)Year endedDecember 31,Note20222021Revenues4,459131Cost of revenues(3,825)Gross profit634131Operating expensesResearch and development(1,701)(4,248)Sales and marketing18(3,143)(2,336)General and administrative19(3,900)(4,124)Total operating expenses(8,744)(10,708)Operating loss(8,110)(10,577)Financial income (expense), net20(236)57Loss before taxes(8,346)(10,520)Taxes on income36Net loss for the year(8,310)(10,520)Other comprehensive income (loss):Foreign currency translation differences(231)18Total comprehensive loss(8,541)(10,502)Basic and diluted loss per share (*)(7.47)(17.75)Basic and diluted weighted average number of shares outstanding (*)1,111,913420,385(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F5MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITYU.S. dollars in thousands (except share data)Common stockAdditionalpaidinAccumulatedothercomprehensiveAccumulatedTotalstockholders’NumberAmountcapitallossDeficitequityBalance as of January 1, 2021289,314(*)37,171(424)(34,671)2,076Stockbased compensation related to optionsgranted to employees and consultants373373Exercise of options granted to employees178(*)Restricted shares issued to shareholder (***)100,000(*)2,6182,618Issuance of shares, net of issuance cost of$1,160434,700112,58212,583Exercise of warrants135,108(*)3,7093,709Total comprehensive income (loss)18(10,520)(10,502)Balance as of December 31, 2021959,300156,453(406)(45,191)10,857Stockbased compensation related to optionsand restricted shares granted to employeesand consultants176,000(*)455455Issuance of shares in Business Combination(**)295,802(*)1,4461,446Issuance of shares post BusinessCombination (**)20,924(*)319319Effect of reverse stock split (Note 13 g)12,091(*)Total comprehensive income (loss)(231)(8,310)(8,541)Balance as of December 31, 20221,464,117158,673(637)(53,501)4,536(*)Represents an amount of less than $1.(**)See note 16(***)See note 1 bThe accompanying notes are an integral part of the consolidated financial statements.F6MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSU.S. dollars in thousandsYear endedDecember 31,20222021Cash flows from operating activities:Net loss(8,310)(10,520)Adjustments to reconcile net loss to net cash used in operating activities:Depreciation3842Change in operating lease rightofuse asset13543Amortization of intangible assets155foreign exchange differences(23)1Change in liabilities to related parties635Interest on long term liabilities10Interest paid(10)Revaluation of investment in marketable securities62(49)Restricted Shares issued to shareholder2,618Stock based compensation455373Issuance of shares post Business Combination319Change in inventory(219)Change in deferred tax liabilities(36)Change in account receivable(1,863)(12)Changes in operating lease liabilities(142)Change in other receivables and prepaid expenses184(99)Change in trade payables1,315253Change in other payables553Net cash used in operating activities(7,290)(7,297)Cash flows from investing activities:Acquisition of a subsidiary, net of cash acquired(767)Proceeds from restricted deposits, net184investing in other receivable(100)Investment in equity accounted investee(99)Purchase of property and equipment(27)(23)Net cash (used in) provided by investing activities(993)161Cash flows from financing activities:Proceeds from issuance of shares, net of issuance costs12,583Repayment of loans(67)Proceeds from exercise of warrants3,709Net cash (used in) provided by financing activities(67)16,292Effect of exchange rate fluctuations on cash and cash equivalents(230)13Change in cash and cash equivalents and restricted cash(8,580)9,169Cash and cash equivalents and restricted cash at the beginning of the year10,9431,774Cash and cash equivalents and restricted cash at the end of the year2,36310,943B) Aggregate cash flows derived for the Company as a result of the Orgad acquisition (note 16)2022Trade and other receivables364Inventory864Fixed assets55Longterm deposits31Selling Platform378Goodwill152Shortterm credit(181)Trade payables(580)Other payables(88)Longterm loan(138)Longterm provision(13)Deferred Tax Liability(87)Issuance of shares(457)Total acquisition of subsidiary, net of cash300C) Aggregate cash flows derived for the Company as a result of the Naiz acquisition (note 16)2022Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Issuance of shares(1,008)Total acquisition of subsidiary, net of cash467The accompanying notes are an integral part of the consolidated financial statements.F7MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERALa.My Size, Inc. is developing unique measurement technologies based on algorithms with applications in a variety of areas, from the apparel ecommerce market, to the courier services market and to the Do It Yourself (“DIY”) smartphone and tablet apps market. The technology is driven byproprietary algorithms, which are able to calculate and record measurements in a variety of novel ways.Following the acquisition of Naiz Bespoke Technologies, S.L (“Naiz”) in October 2022 (see note 16), the Company expanded its offering outreachand customer base.Following the acquisition of Orgad International Marketing Ltd. (“Orgad”) in February 2022 (see note 16), the Company also operates anomnichannel ecommerce platform.The Company has five subsidiaries, My Size Israel 2014 Ltd (“My Size Israel”), Topspin Medical (Israel) Ltd., and Orgad all of which areincorporated in Israel, and My Size LLC which was incorporated in the Russian Federation and Naiz Bespoke Technologies, S.L., a limited liabilitycompany incorporated under the laws of Spain (see note 16). References to the Company include the subsidiaries unless the context indicatesotherwise.My Size, Inc., was incorporated and commenced operations in September 1999, as Topspin Medical Inc. (“Topspin”), a private company registeredin the State of Delaware. In December 2013, the Company changed its name to Knowledgetree Ventures Inc. Subsequently, in February 2014, theCompany changed its name to My Size, Inc. Topspin was engaged, through its Israeli subsidiary, in research and development in the field ofcardiology and urology.Since September 1, 2005, the Company has traded on the Tel Aviv Stock Exchange (“TASE”).Between 2007 and 2012 the Company reported as a public company with the U.S. Securities and Exchange Commission (the “SEC”). In August2012, the Company suspended its reporting obligations under Section 13(a) and 15(d) of the Securities Exchange Act of 1934. In mid2015, theCompany resumed reporting as a public company.b.On January 9, 2014, at the Company’s general meeting of shareholders, its shareholders approved an engagement with one of the Company’sinvestors (the “Seller”) for the purchase of rights in a Venture (the “Venture”), including the rights to the method and the certain patent applicationthat had been filed by the Seller (the “Assets”). The Venture relates to the development of technologies and applications which will assist theconsumer to take his or her body measurements accurately using a mobile device to ensure the purchase of clothing with the best possible fitwithout the need to try them on.In February 2014, the Company established a wholly owned subsidiary, My Size (Israel) 2014 Ltd., a company registered in Israel, which iscurrently engaged in the development of the Venture described above.In return for purchasing an interest in the Venture, the Company undertook to pay the Seller 18% of the Company’s operating profit, direct orindirect, connected to the Venture for a period of seven years starting from the end of the Venture’s development period.As part of the agreement, the Seller received an option to buy back the Assets for consideration which will reflect the market fair value at that time,on the occurrence of the following events: a) if a motion is filed to liquidate the Company; b) if seven years after signing the agreement, theCompany’s total accumulated revenues, direct or indirect, from the Venture or the commercialization of the patent will be lower than NIS 3.6 million.In such an event, Seller may repurchase the interest in the Venture at a market price to be determined by an independent third party valuationconsultant, who shall be chosen by agreement by the parties, and the audit committee shall conduct the negotiations on behalf of the Company todetermine the identity of the consultant.On May 26, 2021, the Company, My Size Israel and Shoshana Zigdon entered into an Amendment to Purchase Agreement (the “Amendment”)which made certain amendments to a Purchase Agreement between the parties dated February 16, 2014 (the “Purchase Agreement”). Pursuant tothe Amendment, Ms. Zigdon agreed to irrevocably waive the right to repurchase certain assets related to the collection of data for measurementpurposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which the Company’s business is substantiallydependent, and all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My Size Israel underthe Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation,reward or any rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights(the “Waiver”). In consideration of the Waiver, the Company issued 100,000 shares of common stock to Ms. Zigdon in a private placement.F8MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERAL (Cont.)c.On July 25, 2016, the Company’s common stock began publicly trading on the Nasdaq Capital Market under the symbol “MYSZ”. The Company’sshares of common stock are listed both on the Nasdaq Capital Market and TASE.d.Since inception, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit of $53,501.The Company has financed its operations mainly through fundraising from various investors.The Company’s management expects that the Company will continue to generate losses and negative cash flows from operations for theforeseeable future. Based on the projected cash flows and cash balances as of December 31, 2022, management is of the opinion that its existingcash will be sufficient to fund operations for a period less than 12 months. As a result, there is substantial doubt about the Company’s ability tocontinue as a going concern.Management’s plans include the continued commercialization of the Company’s products and securing sufficient financing through the sale ofadditional equity securities, debt or capital inflows from strategic partnerships. Additional funds may not be available when the Company needsthem, on terms that are acceptable to it, or at all. If the Company is unsuccessful in commercializing its products and securing sufficient financing,it may need to cease operations.The financial statements include no adjustments for measurement or presentation of assets and liabilities, which may be required should theCompany fail to operate as a going concern.e.The Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificial intelligencedriven measurement solutions (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions. The fashion and equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. The SaaS based innovativeartificial intelligence driven measurement solutions, or SaaS Solutions operating segment consists of My Size Inc My Size Israel and LLC.NOTE 2 SIGNIFICANT ACCOUNTING POLICIESThe consolidated financial statements are prepared according to United States generally accepted accounting principles (“U.S. GAAP”), applied on aconsistent basis, as followsa.Use of estimates:The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions thataffect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.Information about assumptions made by the Company with respect to the future and other reasons for uncertainty with respect to estimates thathave a significant risk of resulting in a material adjustment to carrying amounts of assets and liabilities in the next financial year are included in thefollowing notes:Acquisitions of subsidiariesThe Company measures the fair value of the consideration transferred (including contingent consideration) and fair value of the assets acquiredand liabilities assumed, in business combination transactions. For information on details on fair value measurement in acquisition of subsidiaries,see Note 16 regarding business combinations.Estimated impairment of nonfinancial assetsThe Company examines on an annual basis whether there is an impairment of goodwill, intangibles and property, plant and equipment that areallocated to cash generating units, in accordance with the accounting policy presented in Note 1(h) below. Recoverable amounts of cashgenerating units are determined on the basis of valueinuse calculations. These calculations require the use of estimates.For information on key assumptions used in calculation of the recoverable amount, see note 7 – Goodwill and other Intangible assets.b.Functional currency:The currency of the primary economic environment in which the operations of the Company is conducted is the United States Dollar and thus it isthe Company’s functional currency. The reporting currency according to which these financial statements are prepared is the U.S. dollar.The currency of the primary economic environment in which the operation of the Subsidiary, My Size Israel and Orgad International MarketingLtd. functional currency is the New Israeli Shekel (“NIS”).The currency of the primary economic environment in which the operation of the Subsidiary, My Size LLC, functional currency is Russian Ruble.The currency of the primary economic environment in which the operation of the Subsidiary, Naiz fit, functional currency is Euro.F9MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)c.Principles of consolidation:The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances andtransactions have been eliminated upon consolidation.d.Cash equivalents:Cash equivalents are shortterm highly liquid investments that are readily convertible to cash with original maturities of three months or less at thedate acquired.e.Restricted cashRestricted cash are deposits for rent, credit card and for hedging activities.f.Inventories:Inventories include finished goods and are measured at the lower of cost or net realizable value. The cost of inventories comprises of the costsincurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary courseof business. At the point of the loss recognition, a new, lowercost basis for that inventory is established, and subsequent changes in facts andcircumstances do not result in the restoration or increase in that newly established cost basis. The costs of purchase of inventories comprise thepurchase price and other costs directly attributable to the acquisition of finished goods. In 2022, the Company recorded an inventory markdownof $48.g.Property and equipment:Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straightline method over theestimated useful lives of the assets, at the following annual rates:%Computers and peripheral equipment33Office furniture and equipment720Leasehold improvementsOver the term of the leaseor the useful life of theimprovements, whicheveris shorterh.Impairment of longlived assets:The Company’s property and equipment are reviewed for impairment in accordance with ASC 360, “Property Plant and Equipment”, wheneverevents or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held andused is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by theassets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount ofthe assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less sellingcosts. During the periods ended December 31, 2022 and 2021, no impairment losses have been recorded.i.Business combinations:The Company applies the provisions of ASC 805, “Business Combination” and allocates the fair value of purchase consideration to the tangibleassets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchaseconsideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assetsacquired and liabilities assumed, the Company estimated the future expected cash flows from acquired platform, customer relationships,Technology and trademark from a market participant perspective, useful lives and discount rates. In addition, management makes significantestimates and assumptions, which are uncertain, but believed to be reasonable.Acquisitionrelated costs are recognized separately from the acquisition and are expensed as incurred.F10MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)j.Goodwill:Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a businesscombination. Under ASC 350, “Intangible Goodwill and Other”, goodwill is not amortized, but rather is subject to an annual impairment test.ASC 350 requires goodwill to be tested for impairment at the reporting unit level at least annually, the fourth quarter, or between annual tests incertain circumstances, and written down when impaired. Goodwill is tested for impairment by comparing the fair value of the reporting unit with itcarrying value. Goodwill from Orgad acquisition was allocated to the fashion and equipment ecommerce platform segment and Goodwill from theNaiz acquisition was allocated to Naiz segment based innovative artificial intelligence driven measurement solutions.Alternatively, ASC 350 permits an entity to bypass the qualitative assessment for any reporting unit and proceed directly to performing the firststep of the goodwill impairment test. There were no impairment charges to goodwill during the period presented.k.Intangible assets:Intangible assets consist of identifiable intangible assets that the Company has acquired from previous business combinations. Intangible assetsare recorded at costs, net of accumulated amortization. The Company amortizes its intangible assets reflecting the pattern in which the economicbenefits of the intangible assets are consumed. When a pattern cannot be reliably determined, the Company uses a straightline amortizationmethod. Amortization is calculated by the straightline method over the estimated useful lives of the following assets.The estimated useful lives of the company’s intangible assets are as follows:yearsCustomer Relationships7Technology5Trademark5Selling Platform3Each period the Company evaluates the estimated remaining useful lives of its intangible assets and whether events or changes in circumstanceswarrant a revision to the remaining period of amortizationl.Severance pay:The Subsidiary’s liability for severance pay is covered by Section 14 of the Israeli Severance Pay Law (“Section 14”). Under Section 14, employeesin Israel are entitled to have monthly deposits, at a rate of 8.33% of their monthly salary, made on their behalf to their insurance funds. Payments inaccordance with Section 14 exempt the Subsidiary from any additional obligation for these employees. As a result, the Subsidiary does notrecognize any liability for severance pay due to these employees and the deposits under Section 14 are not recorded as an asset in theSubsidiary’s balance sheet. These contributions for compensation represent defined contribution plans and expenses are recorded based onactual deposits.Other than the My Size Israel’s liability there are no additional severance pay liabilities.F11MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)m.Research and development costs:Research and development costs are charged to the statement of operations, as incurred. Most of the research and development expenses are forwages, related expenses and subcontractors.n.Income taxes:The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilitiesfor the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Companies’ taxreturns. Deferred taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities using enactedtax rates in effect in the years in which the differences are expected to reverse. The Company assesses the likelihood that its deferred tax assetswill be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely thannot that all or a portion of deferred tax assets will not be realized. The Company establishes a valuation allowance, if necessary, to reduce deferredtax assets to the amount more likely than not to be realized. As of December 31, 2022, and 2021, a full valuation allowance was established by theCompany.The Company implements a twostep approach to recognize and measure the benefit of its tax positions. The first step is to evaluate the taxposition taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that,on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigationprocesses. The second step is to measure the tax benefit as the largest amount that is greater than 50 percent (cumulative basis) likely to berealized upon settlement.The Company believes that its tax positions are all highly certain of being upheld upon examination. As of December 31,2022 and 2021 the Company recorded a liability for unrecognized tax benefits of $328 and none respectively.o.Accounting for stockbased compensation:The Company accounts for its employees’ stockbased compensation as an expense in the financial statements based on ASC 718. All awards areequity classified and therefore such costs are measured at the grant date fair value of the award and graded vesting attribution approach torecognize compensation cost over the vesting period. The Company estimates stock option grant date fair value using the Binomial and BlackScholes option pricingmodel.The Company recorded stock options issued to nonemployees at the grant date fair value, and recognizes expenses over the related serviceperiod by using the straightline attribution approach in accordance with ASU 201807. All awards are equity classified.The expected volatility of the share prices reflects the assumption that the historical volatility of the share prices is reasonably indicative ofexpected future trends.The riskfree interest rate for grants with an exercise price denominated in USD for employees and several consultants is based on the yield fromUS treasury zerocoupon bonds with an equivalent term.The Company has historically not paid dividends and has no foreseeable plans to pay dividends.F12MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)p.Fair value of financial instruments:ASC 820, Fair Value Measurements and Disclosures, relating to fair value measurements, defines fair value and established a framework formeasuring fair value. The ASC 820 fair value hierarchy distinguishes between market participant assumptions developed based on market dataobtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptionsdeveloped based on the best information available in the circumstances. ASC 820 defines fair value as the price that would be received to sell anasset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price. Inaddition, the fair value of assets and liabilities should include consideration of nonperformance risk, which for the liabilities described belowincludes the Company’s own credit risk.As a basis for considering such assumptions, ASC 820 establishes a threetier value hierarchy, which prioritizes the inputs used in the valuationmethodologies in measuring fair value:Level 1 Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access. Valuationadjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readilyand regularly available in an active market, valuation of these products does not entail a significant degree of judgment.Level 2 Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, eitherdirectly or indirectly.Level 3 Valuations based on inputs that are unobservable and significant to the overall fair value measurement.The Company holds share certificates in iMine Corporation (“iMine”) formerly known as Diamante Minerals, Inc., a publiclytraded company onthe OTCQB.Due to sales restrictions on the sale of the iMine shares, the fair value of the shares was measured on the basis of the quoted market price for anotherwise identical unrestricted equity instrument of the same issuer that trades in a public market, adjusted to reflect the effect of the salesrestrictions and is therefore, ranked as Level 2 asset.q.Basic and diluted net loss per share:Basic net loss per share is computed based on the weighted average number of shares of common stock outstanding during each year. Diluted netincome per share is computed based on the weighted average number of shares of common stock outstanding during each year plus dilutivepotential equivalent common stock considered outstanding during the year, in accordance with ASC 260, “Earnings per Share”. For the yearsended December 31, 2022 and 2021, all outstanding options and warrants have been excluded from the calculation of the diluted net loss per sharesince their effect was antidilutive.r.Concentrations of credit risk:Financial instruments that potentially subject the Company and its subsidiaries to concentrations of credit risk consist principally of cash andcash equivalents.Cash and cash equivalents are invested in banks in Israel, Spain and United States. Such deposits in United States may be in excess of insuredlimits and are not insured in other jurisdictions. Management believes that the financial institutions that hold the Company’s investments arefinancially sound and, accordingly, minimal credit risk exists with respect to these investments.The Company and its subsidiaries have no offbalancesheet concentration of credit risk such as foreign exchange contracts, option contracts orother foreign hedging arrangements.F13MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)s.Revenue Recognition:The Company’s revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled softwaresubscriptions, associated software maintenance and support.The Company recognizes revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with acustomer exists only when: the parties to the contract have approved it and are committed to perform their respective obligations, the Companycan identify each party’s rights regarding the distinct goods or services to be transferred (“performance obligations”), the Company can determinethe transaction price for the goods or services to be transferred, the contract has commercial substance and it is probable that the Company willcollect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to acustomer. Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted togovernmental authorities. Refunds are estimated at contract inception and updated at the end of each reporting period if additional informationbecomes available. Revenue is recognized when control of the product is transferred to the customer.The Company maintains a returns policy that allows its customers to return product within a specified period of time. The estimate of the provisionfor returns is based upon historical experience with actual returns.Principal versus Agent ConsiderationsThe Company follows the guidance provided in ASC 606 for determining whether it is a principal or an agent in arrangements with customers, byassessing whether the nature of the Company’s promise is a performance obligation to provide the specified goods (principal) or to arrange forthose goods to be provided by the other party (agent). With regard to products being sold by Orgad through Amazon, this determination involvesjudgment. The Company determines it is the principle when it has control over promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).The Company recognizes revenue ratably over the contractual service term for hosted services that are priced based on a committed number oftransactions where the delivery and consumption of the benefit of the services occur evenly over time, beginning on the date the servicesassociated with the committed transactions are first made available to the customer and continuing through the end of the contractual serviceterm. Over usage fees and fees based on the actual number of transactions are billed in accordance with contract terms as these fees are incurredand are included in the transaction price of an arrangement as variable consideration. Fees based on a number of transactions or impressions permonth, are allocated to the period in which the transactions occur. Revenue for subscriptions sold as a fee per period is recognized ratably overthe contractual term as the customer simultaneously receives and consumes the benefit of the underlying service.F14MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)t.Contingencies and CommitmentsLiabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it isprobable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with losscontingencies are expensed as incurred.u.Derivative instrumentsThe Company accounts for its derivative instruments as either assets or liabilities and measures them at fair value through profit or loss.v.LeasesThe Company leases include an office space lease agreement for 36 months, with an option to extend for an additional 36 months and 36 monthscancelable operating lease agreements on behalf of personnel vehicles. The lease term includes a noncancellable period of the lease plus anyadditional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise,or an option to extend (or not to terminate) the lease controlled by the lessor.ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make leasepayments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value oflease payments over the lease term. The company generally use its incremental borrowing rate based on the estimated rate of interest forcollateralized borrowing over a similar term of the lease payments at commencement date. Lease expense for lease payments is recognized on astraightline basis over the lease term.For the office rent lease, the Company has elected to account for the lease and nonlease maintenance components as a single lease component.Therefore, the lease payments used to measure the lease liability include all of the fixed consideration in the contract, including insubstance fixedpayments, owed over the lease term.w.Impact of recently issued accounting standardIn June 2016, the FASB issued ASU 201613, “Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses on FinancialInstruments”, which requires companies to measure credit losses of financial instruments, including customer accounts receivable, utilizing amethodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information toinform credit loss estimates. Subsequent to the issuance of ASU 201613, the FASB issued several additional Accounting Standard Updates toclarify implementation guidance, provide narrowscope improvements and provide additional disclosure guidance. As an Emerging GrowthCompany, ASU 201613 is effective for fiscal years beginning after December 15, 2022. The Company does not expect this ASU to have a materialimpact on its consolidated financial statements.F15MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 3 CASH AND CASH EQUIVALENTSThe Company’s cash and cash equivalents balance at December 31, 2022 and 2021 is denominated in the following currencies:December 31,20222021US Dollars1,65110,184New Israeli Shekels259433Other190532,10010,670NOTE 4 OTHER RECEIVABLES AND PREPAID EXPENSESDecember 31,20222021Prepaid expenses and other current assets322429Government authorities28317Other153133Total758579NOTE 5 PROPERTY AND EQUIPMENT, NETComputersandperipheralequipmentOfficefurnitureandequipmentLeaseholdimprovementsTotalCostBalance as at January 1, 20211825860300Additions2323Translation adjustments72211Balance as at December 31, 20212126062334Balance as at January 1, 20222126062334Additions161127Business combination401555Translation adjustments(32)(8)(8)(48)Balance as at December 31, 20222367854368Accumulated DepreciationBalance as at January 1, 20211461412172Additions2751042Translation adjustments6118Balance as at December 31, 20211792023222Balance as at January 1, 20221792023222Additions209938Translation adjustments(27)(3)(2)(32)Balance as at December 31, 20221722630228Carrying amountsAs at December 31, 2021334039112As at December 31, 2022645224140F16MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 6 LEASESIn August 2019, The Company entered into an office space lease agreement. The lease term is for 36 months beginning on August 20, 2019 and endingon August 20, 2022, with an option to extend for an additional 36 months. The Company extended the lease period until August 20, 2025. Monthly rentpayments including utilities amounting to approximately USD 14 (NIS 49,500) per month.In addition, The Company entered into a threeyear cancelable operating lease agreement for cars.These operating leases are included in “Right of use asset” on the Company’s December 31, 2022 consolidated balance sheets, and represent theCompany’s right to use the underlying asset for the lease term. The Company’s obligations to make lease payments are included in the currentliabilities as “Operating lease liability” and in the noncurrent liabilities as “Operating lease liability long term” on the Company’s December 31, 2022consolidated balance sheets. As of December 31, 2022, rightofuse of asset was $583. operating lease liabilities were $159 and non current Operatinglease liabilities were $308. Rightofuse asset includes the capitalization of improvements (net of amortization) amounting to $105.Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value ofthe lease payments.The interest rate used to discount future lease payment was 11.95%.Maturities of lease liabilities as of December 31, 2022 were as follows:Year Ending:2023$1912024$1912025$127Thereafter$509Less imputed interest:$(42)Total lease liabilities$467F17MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 7 – Goodwill and other Intangible assetsA.Identified intangible assetsSchedule of Intangible assetsSelling PlatformTechnologyCustomerRelationshipsOtherTotalThousandsUSDThousandsUSDThousandsUSDThousandsUSDThousandsUSDCostAs of January 1, 2022Acquisitions through business combinations378286726771,467Effect of changes in exchange rates(32)2565765As of December 31, 2022346311791841,532AmortizationAs of January 1, 2022Amortization for the year including effect of changes inexchange rates as of December 31, 2022(109)(15)(27)(4)(155)Carrying amountAs of December 31, 2022237296764801,377AmortizationAmortization expenses recorded for identified intangible assets in the Consolidated Statements of Operations for each period and were as follows:Line ItemDecember 31,2022December 31,2021Selling platformCosts of revenues109TrademarkSales and marketing4TechnologyCosts of revenues15Customer relationshipsSales and marketing27Total amortization expenses155Future amortization expenses are expected to be as follows:20232024202520262027ThereafterTotalFuture amortization expenses3033031941771561791,312b.GoodwillThe changes in the carrying amount of goodwill for the years ended December 31, 2022 and 2021 were as follows:Fashion and equipmentecommerce platformNaizTotalBalance as of December 31, 2021Changes during the period:Goodwill acquired1521,1521,304Goodwill impairmentTranslation differences(14)10591Balance as of December 31, 20221381,2571,395The Company operates its business through three reporting segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovativeartificial intelligence driven measurement solutions and (iii) Naiz. See note 17 for additional segments information.The Company determines the fair value of its reporting units using the income approach. According to the income, the Company uses discounted cashflows to estimate the fair value. Cash flow projections are based on the Company’s estimates of revenue growth rates and operating margins, takinginto consideration the industry’s and market’s conditions. The discount rate used is based on the weighted average cost of capital (“WACC”),adjusted for the relevant risk associated with businessspecific characteristics.The Company performed a quantitative assessment as of December, 31 2022 for the reporting units’ fair value. The estimated fair value of the Fashionand equipment ecommerce platform and Naiz reporting units exceeded its estimated carrying amount by 95.9% and 27.7% respectively. This, based thefollowing assumptions:Fashion and equipmentecommerce platformNaizDiscount rate21%23%Terminal growth rate3%3%If business conditions or expectations were to change materially, it may be necessary to record impairment charges to the Company’s reporting units inthe future.F18MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 8 Investment in JVIn August 2022, the Company established a joint venture (“JV”) in Brazil with Santista Têxtil. The Company holds 51% and Santista Têxtil holds 49% of theJV. The purpose of the JV is to serve the Brazilian market according to the business plan that was set. Both parties agree to make an initial investment in theJV of $198that will be made per the holding percentage of each party. As of the reporting date, the JV is in process of establishing its operation.NOTE 9 Financial LiabilitiesThe book value of each of the financial liability categories is an acceptable approximation of fair value.The debt is comprised of four loans that were granted to My Size Israel – in an outstanding amount of approximately $131, bearing interest rangingfrom prime rate to prime+2.8% rate, and four loans that were granted to the Spanish subsidiary– in an outstanding amount of approximately $400,bearing interest ranging from 1% to 3%.The financial liability maturities during the five years following the end of the financial year are shown below:UntilUntilUntilUntilUntilAfterTOTAL311223311224311225311226311227311227311222Debts with credit institutions15513892874712531NOTE 10 RELATED PARTIES TRANSACTIONSA. Balances with related parties:The following related party payables are included in liability to related parties.December 31,20222021Officers (*)4143Liability in respect of business combinations (**)739Other related parties (***)(95)Directors152069863(*)The amount includes the net salaries payables.(**)The amount includes the provision created to former owners of Orgad that are entitled to additional cash and equity consideration and former owners of Naizthat entitled to additional cash consideration, see note 16 business combination.(***)The amount includes an amount receivable from Orgad previous shareholders who currently work in the company.B. Related parties benefits:Year endedDecember 31,20222021Salaries and related expenses1,440852Share based payments39673Cash liability and equity liability expenses related to acquisitions (**)1,058Directors58582,952983(**)The amount includes the expenses for a provision created to former owners of Orgad that are entitled to additional cash and equity consideration and formerowners of Naiz that entitled to additional cash consideration, see note 16 business combination.NOTE 11 FINANCIAL INSTRUMENTSThe following tables presents the Company’s significant assets and liabilities that are measured at fair value on recurring basis and their classificationwithin the fair value hierarchy:December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities47financial assets (*)10December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesDerivatives9December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities108December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesWarrants derivative2(*)the financial asset includes in other receivables.F19MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 11 FINANCIAL INSTRUMENTS (Cont.)The carrying amounts of cash and cash equivalents, restricted cash, short term restricted deposit, accounts receivable, other receivables and prepaidexpenses, trade payable and accounts payable approximate their fair value due to the shortterm maturities of such instruments.At December 31, 2022, the recognized gain and fair value (based on quoted market prices with a discount due to security restrictions on iMine shares)of the marketable securities were $59and $47, respectively (at December 31, 2021 $49and $108, respectively).NOTE 12 TAXES ON INCOMEa.On December 31, 2022, the Company had U.S. federal net operating loss carryforwards of approximately $26 available to reduce future taxableincome. Utilization of the U.S. net operating losses may be subject to substantial limitations due to the change of ownership provisions of theInternal Revenue Code of 1986.The U.S. Company has final tax assessments through 2014.On December 22, 2017, the Tax Reform Act was signed into law. The legislation significantly changes U.S. tax law by, among other things, lowering theU.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. As a result of the decrease in the corporate incometax rate, the Company revalued the ending net deferred tax assets at December 31, 2017, but did not recognize any incremental income tax expense in2017 due to the revaluation of the valuation allowance.b.Foreign tax:1.Tax rates:Presented hereunder are the tax rates relevant to the Company’s Israeli subsidiaries:2022 23%2021 23% Presented hereunder are the tax rates relevant to the Company’s Spanish subsidiary:2022 24%2.The Company’s Israeli subsidiaries have estimated total available carryforward operating tax losses for Israeli income tax purposes ofapproximately $64as of December 31, 2022. Of these losses, a total of $47.5are owned by Topspin Medical (Israel) Ltd. Topspin tax lossesmay be offset only by future income with respect to the same operational activity by which it was incurred for an indefinite period of time. Theother losses are owned by My Size Israel and may be carryforward to offset against future income for an indefinite period of time.3.Topspin Medical (Israel) Ltd. and My Size (Israel) 2014 Ltd. has final tax assessments through 2016.c.U.S. and foreign components of loss from continuing operations, before income taxes consisted of:December 31,20222021U.S(1,180)(3,802)NonU.S. (foreign)(7,130)(6,718)(8,310)(10,520)F20MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 12 TAXES ON INCOME (Cont.)d.Deferred taxes:Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reportingpurposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows:December 31,20222021Deferred tax assets:Operating loss carryforwards20,13120,238Warrants and options145126Marketable securities390377Intangible assets(328)Research and development expenses586341Other temporary differences203Deferred tax assets before valuation allowance21,12721,082Valuation allowance(21,455)(21,082)Net deferred tax liability(328)The following table presents a reconciliation of the beginning and ending valuation allowance:December 31,20222021Balance at beginning of the year21,08218,968Additions in valuation allowance to the income statement1,7581,625Additions in valuation allowance due to exchange rate differences(1,385)489Balance at end of the year21,45521,082In assessing the realization of deferred tax assets, management considers whether it is more likely than not that all or some portion of the deferred taxassets will not be realized.The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporarydifferences are deductible and net operating losses are utilized. Based on consideration of these factors, the Company recorded a full valuationallowance at December 31, 2021 and 2020.e.Theoretical taxThe following presents the adjustment between the theoretical tax amount and the tax amount included in the financial statements:December 31,20222021Loss before income taxes8,34610,520Statutory tax rate21%21%Computed “expected” tax income1,7522,209Foreign tax rate differences and exchange rate differences149131Nondeductible expenses(107)(715)Change in valuation allowance(1,758)(1,625)Taxes on income36F21MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITYa.Common stock confers upon their holders the right to receive notice to participate and vote in general meetings of the Company, and the right toreceive dividends if declared.b.On January 8, 2021, the Company conducted a public offering of its securities pursuant to which it issued 62,768 shares of its common stock forgross proceeds of $2,008. The net proceeds to the Company from the offering were approximately $1,700, after deducting placement agent’s feesand other estimated offering expenses payable by the Company.c.During 2021, a holders of warrants exercised warrants to purchase 135,109 ordinary shares of the Company in exchange for $3,709.d.On March 25, 2021, the Company conducted a public offering of its shares of common stock pursuant to which it issued 104,741 shares of itscommon stock for gross proceeds of $3,300. The net proceeds to the Company from the offering were approximately $2,872, after deductingplacement agent’s fees and other estimated offering expenses payable by the Company.On May 7, 2021, the Company issued an additional 15,711 shares of the Company’s common stock in connection with the full exercise of theunderwriter’s overallotment option granted in the Company’s March 2021 public offering. These additional shares were sold to the underwriter at apublic offering price of $31.5 per share, resulting in additional net proceeds to the Company, net of the underwriting discount, of approximately$463.e.On May 26, 2021, the Company issued 100,000 shares of common stock to Ms. Zigdon in consideration of the Waiver. See note 1(b) above.f.On October 28, 2021, the Company sold in a registered direct offering 100,592 shares of its common stock and, in a concurrent private placement,an aggregate of 75,444 unregistered warrants to purchase shares of common stock, at an offering price of $33.8 per share and associated warrant.In addition, on the same day, the Company sold in a private placement 150,888 unregistered shares of common stock and unregistered warrants topurchase up to an aggregate of 113,166 shares of common stock at the same purchase price as in the registered direct offering. The warrants areimmediately exercisable and will expire five years from issuance at an exercise price of $31.5 per share, subject to adjustment as set forth therein.The gross proceeds from the offerings were $8,500. The net proceeds to the Company from the offerings were approximately $7,560, afterdeducting placement agent’s fees and other estimated offering expenses payable by the Company. In connection with the offerings, the Companyissued to the placement agent warrants to purchase 17,603 shares on substantially the same terms as the purchasers in the offerings at an exerciseprice of $42.25 per share and a term expiring on October 26, 2026.g.On December 7, 2022, the Company’s board of directors approved a 1for25 reverse stock split of the Company’s issued and outstanding sharesof common stock. The reverse stock split became effective on December 8, 2022. In order not to have fractional shares as a result of the reversestock split, the Company issued an additional 12,091 shares of common stock. As a result, all shares of common stock, options for shares ofcommon stock, exercise price and net loss per share amounts were adjusted retroactively for all periods presented in these financial statements.F22MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITY (Cont.)g.A summary of the warrant activity during the years ended December 31, 2022 and 2021 is presented below:Number ofWarrantsWeightedAverageExercisePriceWeightedAverageRemainingLife inYearsOutstanding, December 31, 2020216,85936.754.26Issued206,214Expired or exercised(135,109)Outstanding, December 31, 2021287,96431.004.35IssuedExpired or exercised(17,901)Outstanding, December 31, 2022270,06330.213.36Exercisable, December 31, 2022270,06330.213.36NOTE 14 STOCK BASED COMPENSATIONThe stockbased expense recognized in the financial statements for services received is related to Research and Development, Sales and Marketingand General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense Research and development15195Stockbased compensation expense Sales and marketing126180Stockbased compensation expense General and administrative17898455373The stockbased expense recognized in the financial statements for services received post Acquisition of Orgad (see note 16) is related to Cost OfGoods, Sales and Marketing and General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense – Cost of goods80Stockbased compensation expense Sales and marketing112Stockbased compensation expense General and administrative127319F23MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Options issued to consultantsWe can sell additional shares of common stock without consulting stockholders and without offering shares to existing stockholders, which wouldresult in dilution of shareholders’ interests in the company and could depress our stock price.Our Certificate of Incorporation currently authorizes 250,000,000 shares of common stock, of which 2,446,780 are currently outstanding as of March 31, 2023and our board of directors is authorized to issue additional shares of our common stock. Although our board of directors intends to utilize its reasonable businessjudgment to fulfil its fiduciary obligations to our then existing stockholders in connection with any future issuance of our capital stock, the future issuance ofadditional shares of our capital stock could cause immediate, and potentially substantial, dilution to our existing stockholders, which could also have a materialeffect on the market value of the shares. Further, other than certain participation rights that we have granted in a past offering, our shares do not have preemptiverights, which means we can sell shares of our capital stock to other persons without offering purchasers in this offering the right to purchase their proportionateshare of such offered shares. Therefore, any additional sales of stock by us could dilute your ownership interest in our Company.Our quarterly operating results may fluctuate significantly.We expect our operating results to be subject to quarterly fluctuations. Our net loss and other operating results will be affected by numerous factors,including:●variations in the level of expenses related to our research and development;●any lawsuits in which we may become involved;●regulatory developments affecting our products; and●our execution of any collaborative, licensing or sales agreements, and the timing of payments under these arrangements.If our quarterly operating results fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially.Furthermore, any quarterly fluctuations in our operating results may, in turn, cause the price of our common stock to fluctuate substantially.If we fail to comply with the rules under the Sarbanes Oxley Act of 2002 related to accounting controls and procedures or if we discover materialweaknesses and deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult.If we fail to comply with the rules under the SarbanesOxley Act of 2002 related to disclosure controls and procedures, or, if we discover materialweaknesses and other deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult. Section 404 of the SarbanesOxley Act requires annual management assessments of the effectiveness of our internal control over financial reporting and, ifwe are no longer a nonaccelerated filer, a report by our independent auditors addressing these assessments. If material weaknesses or significant deficiencies arediscovered or if we otherwise fail to achieve and maintain the adequacy of our internal control, we may not be able to ensure that we can conclude on an ongoingbasis that we have effective internal controls over financial reporting in accordance with Section 404 of the SarbanesOxley Act. Moreover, effective internalcontrols are necessary for us to produce reliable financial reports and are important to helping prevent financial fraud. If we cannot provide reliable financial reportsor prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price ofour common stock could drop significantly.38Our Certificate of Incorporation, Bylaws and Delaware law may have antitakeover effects that could discourage, delay or prevent a change incontrol, which may cause our stock price to decline.Our Certificate of Incorporation, Bylaws and Delaware law could make it more difficult for a thirdparty to acquire us, even if closing such a transactionwould be beneficial to our stockholders. Provisions of our Certificate of Incorporation, Bylaws and Delaware law also could have the effect of discouraging potentialacquisition proposals or making a tender offer or delaying or preventing a change in control, including changes a stockholder might consider favorable. Suchprovisions may also prevent or frustrate attempts by our stockholders to replace or remove our management. In particular, the Certificate of Incorporation, Bylawsand Delaware law, as applicable, among other things:●provide the board of directors with the ability to alter the Bylaws without stockholder approval;●the classification of our board of directors;●place limitations on the removal of directors;●provide that vacancies on the Board of Directors may be filled by a majority of directors in office, although less than a quorum;●require that stockholder actions must be affected at a duly called stockholder meeting and generally prohibiting stockholder actions by written consent;●eliminate the ability of stockholders to call a special meeting of stockholders; and●establish advance notice requirements for nominations for election to the Board of Directors or for proposing matters that can be acted upon at duly calledstockholder meetings.We are subject to Section 203 of the Delaware General Corporation Law which, subject to certain exceptions, prohibits “business combinations” between apubliclyheld Delaware corporation and an “interested stockholder,” which is generally defined as a stockholder who becomes a beneficial owner of 15% or more ofa Delaware corporation’s voting stock for a threeyear period following the date that such stockholder became an interested stockholder. These provisions areexpected to discourage certain types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to firstnegotiate with our board. These provisions may delay or prevent someone from acquiring or merging with us, which may cause the market price of our commonstock and the value of our securities to decline.If we fail to comply with the continued listing requirements of the Nasdaq Capital Market, our common stock may be delisted and the price of ourcommon stock and our ability to access the capital markets could be negatively impacted.Nasdaq has established certain standards for the continued listing of a security on the Nasdaq Capital Market. The standards for continued listing include,among other things, that the minimum bid price for the listed securities not fall below $1.00 per share for a period of 30 consecutive trading days and that wemaintain a minimum of $2,500,000 in shareholders’ equity. We have in the past fallen below the minimum bid price and minimum shareholders’ equity.39No assurance can be given that we will continue to be in compliance with the Rule. Failure to meet applicable Nasdaq continued listing standards couldresult in a delisting of our common stock. A delisting of our common stock from Nasdaq could materially reduce the liquidity of our common stock and result in acorresponding material reduction in the price of our common stock. In addition, delisting could harm our ability to raise capital through alternative financing sourceson terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, employees and fewer business development opportunities.The exercise of outstanding warrants and stock options will have a dilutive effect on the percentage ownership of our capital stock by existingstockholders.As of March 15, 2023, we had outstanding warrants to acquire 2,299,115 shares of our common stock and stock options to purchase 1,659 shares of ourcommon stock, which warrants and options are exercisable for prices ranging between $2.81 and $375. The expiration of the term of such options and warrants rangefrom 0.22 years to 4.83 years. If a significant number of such warrants and stock options are exercised by the holders, the percentage of our common stock ownedby our existing stockholders will be diluted.Were our common stock to become subject to the penny stock rules then this could result in U.S. brokerdealers becoming discouraged from effectingtransactions in shares of our common stock.Rule 15g9 under the Exchange Act establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a marketprice of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. If we do not retain a listing on the NasdaqCapital Market or do not meet certain net tangible asset or average revenue requirements and if the price of our common stock is less than $5.00, our common stockwill be deemed a penny stock. For any transaction involving a penny stock, unless exempt, the rules require: (a) that a broker or dealer approve a person’s accountfor transactions in penny stocks; and (b) the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantityof the penny stock to be purchased.In order to approve a person’s account for transactions in penny stocks, the broker or dealer must: (a) obtain financial information and investmentexperience objectives of the person and (b) make a reasonable determination that the transactions in penny stocks are suitable for that person and the person hassufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver,prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which: (a) sets forth the basis on whichthe broker or dealer made the suitability determination; and (b) confirms that the broker or dealer received a signed, written agreement from the investor prior to thetransaction. Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult forinvestors to dispose of our common stock and cause a decline in the market value of our common stock.Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissionspayable to both the broker or dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor incases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the accountand information on the limited market in penny stocks.Sales of our currently issued and outstanding stock may become freely tradable pursuant to Rule 144 and may dilute the market for your shares andhave a depressive effect on the price of the shares of our common stock.A portion of our outstanding shares of common stock are “restricted securities” within the meaning of Rule 144 under the Securities Act of 1933, asamended, or the Securities Act. As restricted shares, these shares may be resold only pursuant to an effective registration statement or under the requirements ofRule 144 or other applicable exemptions from registration under the Securities Act and as required under applicable state securities laws. Rule 144 provides inessence that an affiliate (as such term is defined in Rule 144(a)(1)) of an issuer who has held restricted securities for a period of at least six months (one year afterfiling Form 10 information with the SEC for shell companies and former shell companies) may, under certain conditions, sell every three months, in brokeragetransactions, a number of shares that does not exceed the greater of 1% of a company’s outstanding shares of common stock or the average weekly trading volumeduring the four calendar weeks prior to the sale (the four calendar week rule does not apply to companies quoted on the OTC Markets). Rule 144 also permits, undercertain circumstances, the sale of securities, without any limitation, by a person who is not an Affiliate of the Company and who has satisfied a oneyear holdingperiod. A sale under Rule 144 or under any other exemption from the Securities Act, if available, or pursuant to subsequent registrations of our shares of commonstock, may have a depressive effect upon the price of our shares of common stock in any active market that may develop.40We are a former “shell company” and as such are subject to certain limitations not applicable to other public companies generally.Prior to our suspension of reporting in 2012, we were a public reporting “shell company,” as defined in Rule 12b2 under the Exchange Act. Although weare no longer a “shell company,” we are subject to certain restrictions under the Securities Act for the resale of securities issued by issuers that have been at anytime previously a shell company. Specifically, the Rule 144 safe harbor available for the resale of our restricted securities is only available to our stockholders if wehave filed all reports and other materials required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934, as amended, or the Exchange Act, asapplicable, during the preceding twelve months, other than current reports on Form 8K, at the time of the proposed sale, regardless of whether the restrictedsecurities were initially issued at the time we were a shell company or subsequent to termination of such status. Accordingly, holders of our “restricted securities”within the meaning of Rule 144 will be subject to the conditions set forth in Rule 144 with respect to our company. Other reporting companies that are not formershell companies and have been reporting for more than twelve months are not subject to this same reporting threshold for nonaffiliate reliance on Rule 144.Accordingly, any restricted securities we have sold or sell in the future or issue to consultants or employees, in consideration for services rendered or for any otherpurpose, may not be resold unless such securities are registered with the SEC or the requirements of Rule 144 have been satisfied. As a result, it may be harder forus to fund our operations and pay our employees and consultants with our securities instead of cash. Furthermore, it may be harder for us to raise funding throughthe sale of debt or equity securities unless we agree to register such securities with the SEC, which could cause us to expend additional resources in the future. Ourprior status as a “shell company” could prevent us in the future from raising additional funds, engaging employees and consultants, and using our securities to payfor any acquisitions, which could cause the value of our securities, if any, to decline in value or become worthless.ITEM 1B. UNRESOLVED STAFF COMMENTSNone.ITEM 2. PROPERTIESWe currently lease 1,660 square feet of office space at 4 HaYarden Street, Airport City, Israel. The lease term is for 36 months beginning on August 20, 2019and ending on August 20, 2022, with an option to extend for an additional 36 months. Monthly rent payments, including utilities, amount to approximately $14,000per month. We extended the lease period until August 20, 2025.ITEM 3. LEGAL PROCEEDINGSFrom time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation issubject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.41North Empire LLCOn August 7, 2018, we commenced an action against North Empire LLC, or North Empire, in the Supreme Court of the State of New York, County of NewYork for breach of a Securities Purchase Agreement or Agreement in which we are seeking damages in an amount to be determined at trial, but in no event less than$616,000. On August 2, 2018, North Empire filed a Summons with Notice against us, also in the same Court, in which they allege damages in an amount of $11.4million arising from an alleged breach of the Agreement. On September 6, 2018, North Empire filed a Notice of Discontinuance of the action it had filed on August 2,2018. On September 27, 2018, North Empire filed an answer and asserted counterclaims in the action commenced by us against them, alleging that we failed to deliverstock certificates to North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against our CEO andnow former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018, we filed a reply to North Empire’scounterclaims. On November 15, 2018, our CEO and now former Chairman of the Board filed a motion to dismiss North Empire’s thirdparty complaint. On January 6,2020, the Court granted the motion and dismissed the thirdparty complaint. Discovery has been completed and both parties have filed motions for summaryjudgment in connection with the claims and counterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summaryjudgment, arguing there were factual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision.On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying the Company’s motion for summary judgment. On or about September 12,2022, the Court issued its Decision and Order denying the Company’s motion to reargue. North Empire filed its opposing brief on December 7, 2022. Both sides weregiven an opportunity to file a reply brief. We filed our reply brief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. Oral argument was heldbefore the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Court filed its Decision and Order, which affirmed the lower court’sdecisions regarding both My Size and North Empire’s motions for summary judgment and sent the case back to the Supreme Court. On or about March 13, 2023, theSupreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date for the mediation has not yet been set. We intend tovigorously defend any claims made by North Empire. We believe it is more likely than not that the counterclaims will be denied.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.42PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur stock currently is listed on the Tel Aviv Stock Exchange and the Nasdaq Capital Market under the symbol “MYSZ”. Our stock has been traded on theNasdaq Capital Market since July 25, 2016.HoldersAs of March 31, 2023, we had 70 shareholders of record. The actual number of stockholders is greater than this number of record holders and includesstockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our Board of Directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our Board of Directors deems relevant.Securities Authorized for Issuance under Equity Compensation PlansInformation about our equity compensation plans is incorporated herein by reference to “Item 12. Security Ownership of Certain Beneficial Owners andManagement and Related Stockholder Matters”, of this Annual Report on Form 10K.Recent Sales of Unregistered SecuritiesNone.ITEM 6. SELECTED FINANCIAL DATAAs a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULT OF OPERATIONSYou should read the following discussion along with our financial statements and the related notes included elsewhere in this Annual Report on Form10K. The following discussion contains forwardlooking statements that are subject to risks, uncertainties and assumptions, including those discussed under“Risk Factors.” Our actual results, performance and achievements may differ materially from those expressed in, or implied by, these forwardlooking statements.OverviewMySize is an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.43Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile device or through MySizeID Widget: a simple questionnaire which was uses a database collected over the years.MySizeID synchronizes the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and onlypresents items available for purchase that match their measurements to ensure a correct fit.MySize is positioning itself as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empowering brand design teams, which are designed to increaseend consumer satisfaction, contributing to a sustainable world and reduce operation costs.Orgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,682 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz BespokeTechnologies, S.L., or Naiz, a limited liability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.44The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 2,365,800 shares of My Size common stock were issuedto Whitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.45Operations in RussiaIn addition to our Israel operations, we had operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia. To date, mainly due to the invasion of Ukraine by Russia and the ongoing sanctions we stopped most ofour efforts in Russia and will probably close the subsidiary in the near future.Results of OperationsThe table below provides our results of operations for the periods indicated.Year ended December 3120222021(dollars in thousands)Revenues4,459131Cost of revenues(3,825)Gross profit634131Research and development expenses$(1,701)$(4,248)Sales and marketing(3,143)(2,336)General and administrative(3,900)(4,124)Operating loss(8,110)(10,577)Financial income (expenses), net(236)57Tax income36Net loss$(8,310)$(10,520)Year Ended December 31, 2022 Compared to Year Ended December 31, 2021RevenuesFrom inception through December 31, 2018, we did not generate any revenue from operations and we continue to expect to incur additional losses toperform further research and development activities. We started to generate revenues only in 2019. Our revenues for the year ended December 31, 2022 amounted to$4,459,000 compared to $131,000 for year ended December 31, 2021. The increase from the corresponding period primarily attributable to $4,132,000 in revenuegenerated from Orgad from February 7, 2022, the date of closing of the Orgad acquisition, or the Acquisition Date and revenue generated from the Naiz Acquisitionfrom October 11, 2022, the date of closing of the Naiz acquisition.In addition, the increase from the corresponding period results from an increase in revenues generated by My Size.Cost Of RevenuesOur cost of revenues expenses for the year ended December 31, 2022 amounted to $3,825,000, compared to none for the year ended December 31, 2021. Thecost of revenues includes cash and equity liabilities expenses in the amount of $194,000. The increase in comparison with the corresponding period was due to thecost of goods of the revenues generated from Orgad’s operations.Research and Development ExpensesOur research and development expenses for the year ended December 31, 2022 amounted to $1,701,000 a decrease of $2,547,000, or approximately 60.0%,compared to $4,248,000 for the year ended December 31, 2021. The decrease from the corresponding period primarily resulted from share based payment in amount of$2,618,000 attributed to the share issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021.Sales and Marketing ExpensesOur sales and marketing expenses for the year ended December 31, 2022 amounted to $3,143,000 an increase of $807,000, or 34.55%, compared to $2,336,000for the year ended December 31, 2021. The increase primarily resulted from an increase in employees expenses mainly due to Orgad and Naiz acquisitions, increase inAmazon fees, increase in cash and equity liabilities expenses attributed to the Orgad acquisition and an increase in share based payments offset by a decrease inpayments to consultants.46General and Administrative ExpensesOur general and administrative expenses for the year ended December 31, 2022 amounted to $3,900,000, a decrease of $224,000, or 5.43%, compared to$4,124,000 for the year ended December 31, 2021. The decrease compared to the corresponding period was mainly due to a decrease in professional expenses, mainlyattributed to shareholder activism including settlement expenses with the Lazar Parties offset by an increase in sharedbased payments and an increase in employeesexpenses mainly due to the Orgad and Naiz acquisitions.Operating LossAs a result of the foregoing, for the year ended December 31, 2022, our operating loss was $8,110,000, a decrease of $2,467,000 or 23.32%, compared to ouroperating loss for the year ended December 31, 2021 of $10,577,000.Financial Income, NetOur financial (expense) income, net for the year ended December 31, 2022 amounted to $236,000 compared to financial income, $57,000 for the year endedDecember 31, 2021. In 2022, we had financial expenses exchange rate differences offset by an income from fair value revaluation of investment in marketablesecurities whereas in 2021 we had financial income from the fair value revaluation of warrants offset by expenses from exchange rate differences and expenses fromfair value revaluation of investment in marketable securities.Net LossAs a result of the foregoing, our net loss for the year ended December 31, 2022 was $8,310,000 compared to net loss of $10,520,000 for the year endedDecember 31, 2021. The decrease in net loss was mainly due increase in sales and marketing expenses and financial expenses as opposed to financial income in thecorresponding period offset by a decrease in research and development expenses in amount of $2,618,000 attributed to the share issuance to Shoshana Zigdonunder the Amendment to Purchase Agreement dated May 26, 2021.Liquidity and Capital ResourcesSince our inception, we have funded our operations primarily through public and private offerings of debt and equity in Israel and in the U.S.As of December 31, 2022, we had cash, cash equivalents and restricted cash of $2,363,000 compared to $10,943,000 cash, cash equivalents, restricted cashas of December 31, 2021. During January 2023, we completed a registered direct and concurrent private placement offering resulting in gross proceeds ofapproximately $3 million. This decrease primarily resulted from our operating activities, the acquisition of Orgad and Naiz Fit, and resources that were deployed togrow of both businesses.Net cash used in operating activities was $7,290,000 for the year ended December 31, 2022 compared to $7,297,000 for the year ended December 31, 2021.The decrease in cash used in operating activity is derived mainly from an increase in share based payments and increase in account receivables mainly from theOrgad and Naiz fit acquisitions offset by a decrease in the net loss.Net cash used in investing activities for the year ended December 31, 2022 was $993,000 as opposed to net cash provided by investing activities of$161,000 for the year ended December 31, 2021. The net cash used in investing activities for the year ended December 31, 2022 was mainly from the acquisition ofOrgad and Naiz as opposed to proceeds from shortterm deposits and restricted deposits during the year ended December 31, 2021.We had a negative cash flow from financing activities of $67,000 for the year ended December 31, 2022 compared to positive cash flow of $16,292,000 for theyear ended December 31, 2021. The negative cash flow from financing activities for the year ended December 31, 2022 was mainly due to repayment of loans andinterest and payments for leases as opposed to proceeds from issuance of shares and from exercise of warrants for the year ended December 31, 2021.47We expect that we will continue to generate losses and negative cash flows from operations for the foreseeable future. Based on the projected cash flowsand cash balances as of December 31, 2022, together with the proceeds from the January 2023 financing, we believe our existing cash will not be sufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. We will need to raiseadditional capital, which may not be available on reasonable terms or at all. Additional capital would be used to accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;●respond to competitive pressures;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, the Russian invasion ofUkraine, the impact of any resurgence of the COVID19 pandemic and a number of other factors, many of which are outside our control, and on our financialperformance. Accordingly, we cannot assure you that we will be able to successfully raise additional capital at all or on terms that are acceptable to us. If we cannotraise additional capital when needed, it may have a material adverse effect on our business, results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.We have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.Recently Issued Accounting PronouncementsCertain recently issued accounting pronouncements are discussed in Note 2, Significant Accounting Policies, to the consolidated financial statementsincluded in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10K.OffBalance Sheet ArrangementsWe have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.48Application of Critical Accounting Policies and EstimatesOur management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we haveprepared in accordance with U.S. generally accepted accounting principles issued by the Financial Accounting Standards Board, or FASB. The preparation of thesefinancial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assetsand liabilities at the date of the financial statements, as well as the reported expenses during the reporting periods. Actual results may differ from these estimatesunder different assumptions or conditions.Our significant accounting policies were revenue from contracts with customers which are more fully described in the notes to our financial statementsincluded herein. We believe these accounting policies discussed below are critical to our financial results and to the understanding of our past and futureperformance, as these policies relate to the more significant areas involving management’s estimates and assumptions. We consider an accounting estimate to becritical if: (1) it requires us to make assumptions because information was not available at the time or it included matters that were highly uncertain at the time wewere making our estimate; and (2) changes in the estimate could have a material impact on our financial condition or results of operations.Accounting for business combinationsWe allocate the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed, based upon their estimated fairvalues at the acquisition date. These fair values are typically estimated with assistance from independent valuation specialists.The purchase price allocation process requires us to make significant estimates and assumptions, especially at the acquisition date with respect tointangible assets, contractual support obligations assumed, contingent consideration arrangements, and preacquisition contingencies.Although we believe the assumptions and estimates we have made in the past have been reasonable and appropriate, they are based in part on historicalexperience and information obtained from the management of the acquired companies and are inherently uncertain.Examples of critical estimates in valuing certain of the intangible assets we have acquired or may acquire in the future include but are not limited to:● future expected cash flows from product sales or other customer contracts;● expected costs of fulfillment including marketing, warehousing and product sales;● the acquired company’s brand and competitive position, as well as assumptions about the period of time the acquired brand will continue to be used inthe combined company’s product portfolio;● cost of capital and discount rates; and● estimating the useful lives of acquired assets as well as the pattern or manner in which the assets will amortize.Refer to Note 16, Business Combination, to the consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” of thisAnnual Report on Form 10K.49Revenue from contracts with customersOur revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled software subscriptions, associatedsoftware maintenance and support.We recognize revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with a customer exists onlywhen: the parties to the contract have approved it and are committed to perform their respective obligations, we can identify each party’s rights regarding thedistinct goods or services to be transferred (“performance obligations”), we can determine the transaction price for the goods or services to be transferred, thecontract has commercial substance and it is probable that we will collect the consideration to which we will be entitled in exchange for the goods or services that willbe transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to a customer.Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted to governmental authorities. Refundsare estimated at contract inception and updated at the end of each reporting period if additional information becomes available. Revenue is recognized when controlof the product is transferred to the customer.We maintain a returns policy that allows our customers to return product within a specified period of time. The estimate of the provision for returns is basedupon historical experience with actual returns.Principal versus Agent ConsiderationsWe follow the guidance provided in ASC 606 for determining whether we are a principal or an agent in arrangements with customers, by assessing whetherthe nature of our promise is a performance obligation to provide the specified goods (principal) or to arrange for those goods to be provided by the other party(agent). With regard to products being sold by Orgad through Amazon, this determination involves judgment. We determine it is the principle when it has controlover the promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).We recognize revenue ratably over the contractual service term for hosted services that are priced based on a committed number of transactions where thedelivery and consumption of the benefit of the services occur evenly over time, beginning on the date the services associated with the committed transactions arefirst made available to the customer and continuing through the end of the contractual service term. Over usage fees and fees based on the actual number oftransactions are billed in accordance with contract terms as these fees are incurred and are included in the transaction price of an arrangement as variableconsideration. Fees based on a number of transactions or impressions per month, are allocated to the period in which the transactions occur. Revenue forsubscriptions sold as a fee per period is recognized ratably over the contractual term as the customer simultaneously receives and consumes the benefit of theunderlying service.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.As a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.50ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAMY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2022U.S. DOLLARS IN THOUSANDSINDEXPageReport of Independent Registered Public Accounting Firm (PCAOB ID: ID 1057)F2Consolidated Balance SheetsF4Consolidated Statements of Comprehensive LossF5Consolidated Statements of Shareholders’ EquityF6Consolidated Statements of Cash FlowsF7Notes to Consolidated Financial StatementsF8 F33F1Report of Independent Registered Public Accounting FirmTo the Shareholders and Board of DirectorsMy Size, Inc.:Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of My Size, Inc. and subsidiaries (the Company) as of December 31, 2022 and 2021, the relatedconsolidated statements of comprehensive loss, shareholders’ equity, and cash flows for each of the years in the twoyear period ended December 31, 2022, and therelated notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, thefinancial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the twoyear periodended December 31, 2022, in conformity with U.S. generally accepted accounting principles.Going ConcernThe accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1d tothe consolidated financial statements, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit thatraises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1d. Theconsolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidatedfinancial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Critical Audit MattersCritical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to becommunicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved ourespecially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidatedfinancial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters oron the accounts or disclosures to which they relate.Acquisitiondate fair value of customer relationshipsAs discussed in Note 16 to the consolidated financial statements, on October 11, 2022, the Company acquired Naiz Bespoke Technologies SL (“Naiz”). As a result ofthe transaction, the Company acquired customer relationships intangible assets (“customer relationships”) representing the generation of future income from Naiz’sexisting customers. The acquisition date fair value of the customer relationships was $726 thousand.F2We identified the evaluation of the acquisitiondate fair value of the Naiz customer relationships as a critical audit matter. A high degree of subjective auditorjudgment was required to evaluate the following internally developed assumptions used to estimate the fair value of such asset, for which there were limitedobservable inputs: (i) forecasted revenues attributable to existing customers, (ii) forecasted earnings before interest, taxes, depreciation, and amortization(“EBITDA”) margins for the acquired business, (iii) estimated annual customer attrition rates and (iv) estimated discount rate. The determined fair value wassensitive to changes in these key assumptions. Additionally, specialized skills and knowledge were needed to evaluate the discount rate used.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s acquisitiondate fair value estimation process, including controls over the development of key assumptions. We performed a sensitivity analysis toassess the impact of reasonably possible changes to forecasted revenues, EBITDA margins, annual customer attrition rates, and the discount rate. We evaluated theforecasted revenue growth rates from existing customers by comparing the growth assumptions to those of the Company’s peers and industry reports. Inconnection with our assessment of the forecasts used in the valuation, we compared (1) forecasted revenue and EBITDA to Naiz’s historical actual results and (2)estimated annual customer attrition rates to historical Naiz customer attrition data. We tested the Company’s determined weighted average cost of capital(“WACC”), which was used to determine the discount rate, by involving valuation professionals with specialized skills and knowledge, who assisted in:Evaluating the selected discount rate by comparing it against a discount rate range that was independently developed using publicly available market datafor comparable companies, and;Assessing the Company’s WACC calculation, by comparing it against an independently estimated WACC range based on inputs obtained throughpublished surveys and studies.Goodwill impairment assessmentAs discussed in Note 16 to the consolidated financial statements, during 2022 the Company recorded goodwill of $1,257 thousand related to the acquisition of NaizBespoke Technologies, S.L. (“Naiz”). The Company performed an annual quantitative impairment test of goodwill at the reporting unit level. Based on this analysis,the Company determined that the fair value of its reporting unit exceeded its carrying value and no impairment charge was required.We identified the evaluation of the goodwill impairment assessment for the Naiz reporting unit as a critical audit matter. A high degree of subjective auditor judgmentwas required to evaluate the following assumptions used to estimate the fair value of the Company’s reporting unit, for which there were limited observable inputs:(i) forecasted reporting unit cash flows, (ii) longterm growth rates, and (iii) discount rates. The fair value was sensitive to changes in these key assumptions.Additionally, specialized skills and knowledge were needed to evaluate the discount rates.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s goodwill impairment evaluation process. We performed sensitivity analyses to assess the impact of reasonably possible changes to forecasted cashflows, longterm growth rates, and discount rates. We evaluated the Company’s forecasted growth rates by comparing the growth assumptions to those of theCompany’s peers and industry reports. We compared the Company’s forecasted revenue, cost of sales, and operating expense margins to historical actual results toassess the reasonableness of the forecasts. In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:– Assessing the Company’s WACC calculation, by comparing it against an estimated WACC range based on inputs obtained through published surveys andstudies– Evaluating the discount rates used by the Company by comparing them against discount rate ranges that were developed using publicly available market data forcomparable companies, and;– Performing an arithmetic recalculation regarding the fair value of the Company’s reporting unit, using the Company’s cash flow forecasts and the independentlydeveloped discount rates, and comparing the results to the Company’s fair value estimates./s/ Somekh ChaikinSomekh ChaikinMember Firm of KPMG InternationalWe have served as the Company’s auditor since 2017.Tel Aviv, IsraelApril 14, 2023F3MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED BALANCE SHEETSU.S. dollars in thousands (except share data)December 31,Note20222021AssetsCurrent assetsCash and cash equivalents32,10010,670Restricted cash263273Inventory997Account receivables1,94040Other receivables and prepaid expenses4758579Total current assets6,05811,562Long term deposits28Property and equipment, net5140112Operating rightofuse asset6583776Intangible assets71,377Goodwill71,395Investment in JV899Investment in marketable securities11471083,669996Total assets9,72712,558Liabilities and shareholders’ equityCurrent liabilitiesOperating lease liability6159138Shortterm loans9155Trade payables2,487635Liabilities to Related parties69863Other payables680392Total current liabilities4,1791,228Longterm loans9376Deferred tax liabilities328Operating lease liability6308473Total noncurrent liabilities1,012473CONTINGENCIES AND COMMITMENTS15Total Liabilities5,1911,701Shareholders’ equity13Stock capital Common stock of $0.001par value Authorized: 250,000,000and 100,000,000shares as of December 31,2022 and 2021; Issued and outstanding: 1,464,117and959,297 as of December 31,2022 and 2021, respectively (*)11Additional paidin capital58,67356,453Accumulated other comprehensive loss(637)(406)Accumulated deficit(53,501)(45,191)Total shareholders’ equity4,53610,857Total liabilities and shareholders’ equity9,72712,558(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F4MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSSU.S. dollars in thousands (except share data and per share data)Year endedDecember 31,Note20222021Revenues4,459131Cost of revenues(3,825)Gross profit634131Operating expensesResearch and development(1,701)(4,248)Sales and marketing18(3,143)(2,336)General and administrative19(3,900)(4,124)Total operating expenses(8,744)(10,708)Operating loss(8,110)(10,577)Financial income (expense), net20(236)57Loss before taxes(8,346)(10,520)Taxes on income36Net loss for the year(8,310)(10,520)Other comprehensive income (loss):Foreign currency translation differences(231)18Total comprehensive loss(8,541)(10,502)Basic and diluted loss per share (*)(7.47)(17.75)Basic and diluted weighted average number of shares outstanding (*)1,111,913420,385(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F5MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITYU.S. dollars in thousands (except share data)Common stockAdditionalpaidinAccumulatedothercomprehensiveAccumulatedTotalstockholders’NumberAmountcapitallossDeficitequityBalance as of January 1, 2021289,314(*)37,171(424)(34,671)2,076Stockbased compensation related to optionsgranted to employees and consultants373373Exercise of options granted to employees178(*)Restricted shares issued to shareholder (***)100,000(*)2,6182,618Issuance of shares, net of issuance cost of$1,160434,700112,58212,583Exercise of warrants135,108(*)3,7093,709Total comprehensive income (loss)18(10,520)(10,502)Balance as of December 31, 2021959,300156,453(406)(45,191)10,857Stockbased compensation related to optionsand restricted shares granted to employeesand consultants176,000(*)455455Issuance of shares in Business Combination(**)295,802(*)1,4461,446Issuance of shares post BusinessCombination (**)20,924(*)319319Effect of reverse stock split (Note 13 g)12,091(*)Total comprehensive income (loss)(231)(8,310)(8,541)Balance as of December 31, 20221,464,117158,673(637)(53,501)4,536(*)Represents an amount of less than $1.(**)See note 16(***)See note 1 bThe accompanying notes are an integral part of the consolidated financial statements.F6MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSU.S. dollars in thousandsYear endedDecember 31,20222021Cash flows from operating activities:Net loss(8,310)(10,520)Adjustments to reconcile net loss to net cash used in operating activities:Depreciation3842Change in operating lease rightofuse asset13543Amortization of intangible assets155foreign exchange differences(23)1Change in liabilities to related parties635Interest on long term liabilities10Interest paid(10)Revaluation of investment in marketable securities62(49)Restricted Shares issued to shareholder2,618Stock based compensation455373Issuance of shares post Business Combination319Change in inventory(219)Change in deferred tax liabilities(36)Change in account receivable(1,863)(12)Changes in operating lease liabilities(142)Change in other receivables and prepaid expenses184(99)Change in trade payables1,315253Change in other payables553Net cash used in operating activities(7,290)(7,297)Cash flows from investing activities:Acquisition of a subsidiary, net of cash acquired(767)Proceeds from restricted deposits, net184investing in other receivable(100)Investment in equity accounted investee(99)Purchase of property and equipment(27)(23)Net cash (used in) provided by investing activities(993)161Cash flows from financing activities:Proceeds from issuance of shares, net of issuance costs12,583Repayment of loans(67)Proceeds from exercise of warrants3,709Net cash (used in) provided by financing activities(67)16,292Effect of exchange rate fluctuations on cash and cash equivalents(230)13Change in cash and cash equivalents and restricted cash(8,580)9,169Cash and cash equivalents and restricted cash at the beginning of the year10,9431,774Cash and cash equivalents and restricted cash at the end of the year2,36310,943B) Aggregate cash flows derived for the Company as a result of the Orgad acquisition (note 16)2022Trade and other receivables364Inventory864Fixed assets55Longterm deposits31Selling Platform378Goodwill152Shortterm credit(181)Trade payables(580)Other payables(88)Longterm loan(138)Longterm provision(13)Deferred Tax Liability(87)Issuance of shares(457)Total acquisition of subsidiary, net of cash300C) Aggregate cash flows derived for the Company as a result of the Naiz acquisition (note 16)2022Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Issuance of shares(1,008)Total acquisition of subsidiary, net of cash467The accompanying notes are an integral part of the consolidated financial statements.F7MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERALa.My Size, Inc. is developing unique measurement technologies based on algorithms with applications in a variety of areas, from the apparel ecommerce market, to the courier services market and to the Do It Yourself (“DIY”) smartphone and tablet apps market. The technology is driven byproprietary algorithms, which are able to calculate and record measurements in a variety of novel ways.Following the acquisition of Naiz Bespoke Technologies, S.L (“Naiz”) in October 2022 (see note 16), the Company expanded its offering outreachand customer base.Following the acquisition of Orgad International Marketing Ltd. (“Orgad”) in February 2022 (see note 16), the Company also operates anomnichannel ecommerce platform.The Company has five subsidiaries, My Size Israel 2014 Ltd (“My Size Israel”), Topspin Medical (Israel) Ltd., and Orgad all of which areincorporated in Israel, and My Size LLC which was incorporated in the Russian Federation and Naiz Bespoke Technologies, S.L., a limited liabilitycompany incorporated under the laws of Spain (see note 16). References to the Company include the subsidiaries unless the context indicatesotherwise.My Size, Inc., was incorporated and commenced operations in September 1999, as Topspin Medical Inc. (“Topspin”), a private company registeredin the State of Delaware. In December 2013, the Company changed its name to Knowledgetree Ventures Inc. Subsequently, in February 2014, theCompany changed its name to My Size, Inc. Topspin was engaged, through its Israeli subsidiary, in research and development in the field ofcardiology and urology.Since September 1, 2005, the Company has traded on the Tel Aviv Stock Exchange (“TASE”).Between 2007 and 2012 the Company reported as a public company with the U.S. Securities and Exchange Commission (the “SEC”). In August2012, the Company suspended its reporting obligations under Section 13(a) and 15(d) of the Securities Exchange Act of 1934. In mid2015, theCompany resumed reporting as a public company.b.On January 9, 2014, at the Company’s general meeting of shareholders, its shareholders approved an engagement with one of the Company’sinvestors (the “Seller”) for the purchase of rights in a Venture (the “Venture”), including the rights to the method and the certain patent applicationthat had been filed by the Seller (the “Assets”). The Venture relates to the development of technologies and applications which will assist theconsumer to take his or her body measurements accurately using a mobile device to ensure the purchase of clothing with the best possible fitwithout the need to try them on.In February 2014, the Company established a wholly owned subsidiary, My Size (Israel) 2014 Ltd., a company registered in Israel, which iscurrently engaged in the development of the Venture described above.In return for purchasing an interest in the Venture, the Company undertook to pay the Seller 18% of the Company’s operating profit, direct orindirect, connected to the Venture for a period of seven years starting from the end of the Venture’s development period.As part of the agreement, the Seller received an option to buy back the Assets for consideration which will reflect the market fair value at that time,on the occurrence of the following events: a) if a motion is filed to liquidate the Company; b) if seven years after signing the agreement, theCompany’s total accumulated revenues, direct or indirect, from the Venture or the commercialization of the patent will be lower than NIS 3.6 million.In such an event, Seller may repurchase the interest in the Venture at a market price to be determined by an independent third party valuationconsultant, who shall be chosen by agreement by the parties, and the audit committee shall conduct the negotiations on behalf of the Company todetermine the identity of the consultant.On May 26, 2021, the Company, My Size Israel and Shoshana Zigdon entered into an Amendment to Purchase Agreement (the “Amendment”)which made certain amendments to a Purchase Agreement between the parties dated February 16, 2014 (the “Purchase Agreement”). Pursuant tothe Amendment, Ms. Zigdon agreed to irrevocably waive the right to repurchase certain assets related to the collection of data for measurementpurposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which the Company’s business is substantiallydependent, and all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My Size Israel underthe Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation,reward or any rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights(the “Waiver”). In consideration of the Waiver, the Company issued 100,000 shares of common stock to Ms. Zigdon in a private placement.F8MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERAL (Cont.)c.On July 25, 2016, the Company’s common stock began publicly trading on the Nasdaq Capital Market under the symbol “MYSZ”. The Company’sshares of common stock are listed both on the Nasdaq Capital Market and TASE.d.Since inception, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit of $53,501.The Company has financed its operations mainly through fundraising from various investors.The Company’s management expects that the Company will continue to generate losses and negative cash flows from operations for theforeseeable future. Based on the projected cash flows and cash balances as of December 31, 2022, management is of the opinion that its existingcash will be sufficient to fund operations for a period less than 12 months. As a result, there is substantial doubt about the Company’s ability tocontinue as a going concern.Management’s plans include the continued commercialization of the Company’s products and securing sufficient financing through the sale ofadditional equity securities, debt or capital inflows from strategic partnerships. Additional funds may not be available when the Company needsthem, on terms that are acceptable to it, or at all. If the Company is unsuccessful in commercializing its products and securing sufficient financing,it may need to cease operations.The financial statements include no adjustments for measurement or presentation of assets and liabilities, which may be required should theCompany fail to operate as a going concern.e.The Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificial intelligencedriven measurement solutions (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions. The fashion and equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. The SaaS based innovativeartificial intelligence driven measurement solutions, or SaaS Solutions operating segment consists of My Size Inc My Size Israel and LLC.NOTE 2 SIGNIFICANT ACCOUNTING POLICIESThe consolidated financial statements are prepared according to United States generally accepted accounting principles (“U.S. GAAP”), applied on aconsistent basis, as followsa.Use of estimates:The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions thataffect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.Information about assumptions made by the Company with respect to the future and other reasons for uncertainty with respect to estimates thathave a significant risk of resulting in a material adjustment to carrying amounts of assets and liabilities in the next financial year are included in thefollowing notes:Acquisitions of subsidiariesThe Company measures the fair value of the consideration transferred (including contingent consideration) and fair value of the assets acquiredand liabilities assumed, in business combination transactions. For information on details on fair value measurement in acquisition of subsidiaries,see Note 16 regarding business combinations.Estimated impairment of nonfinancial assetsThe Company examines on an annual basis whether there is an impairment of goodwill, intangibles and property, plant and equipment that areallocated to cash generating units, in accordance with the accounting policy presented in Note 1(h) below. Recoverable amounts of cashgenerating units are determined on the basis of valueinuse calculations. These calculations require the use of estimates.For information on key assumptions used in calculation of the recoverable amount, see note 7 – Goodwill and other Intangible assets.b.Functional currency:The currency of the primary economic environment in which the operations of the Company is conducted is the United States Dollar and thus it isthe Company’s functional currency. The reporting currency according to which these financial statements are prepared is the U.S. dollar.The currency of the primary economic environment in which the operation of the Subsidiary, My Size Israel and Orgad International MarketingLtd. functional currency is the New Israeli Shekel (“NIS”).The currency of the primary economic environment in which the operation of the Subsidiary, My Size LLC, functional currency is Russian Ruble.The currency of the primary economic environment in which the operation of the Subsidiary, Naiz fit, functional currency is Euro.F9MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)c.Principles of consolidation:The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances andtransactions have been eliminated upon consolidation.d.Cash equivalents:Cash equivalents are shortterm highly liquid investments that are readily convertible to cash with original maturities of three months or less at thedate acquired.e.Restricted cashRestricted cash are deposits for rent, credit card and for hedging activities.f.Inventories:Inventories include finished goods and are measured at the lower of cost or net realizable value. The cost of inventories comprises of the costsincurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary courseof business. At the point of the loss recognition, a new, lowercost basis for that inventory is established, and subsequent changes in facts andcircumstances do not result in the restoration or increase in that newly established cost basis. The costs of purchase of inventories comprise thepurchase price and other costs directly attributable to the acquisition of finished goods. In 2022, the Company recorded an inventory markdownof $48.g.Property and equipment:Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straightline method over theestimated useful lives of the assets, at the following annual rates:%Computers and peripheral equipment33Office furniture and equipment720Leasehold improvementsOver the term of the leaseor the useful life of theimprovements, whicheveris shorterh.Impairment of longlived assets:The Company’s property and equipment are reviewed for impairment in accordance with ASC 360, “Property Plant and Equipment”, wheneverevents or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held andused is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by theassets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount ofthe assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less sellingcosts. During the periods ended December 31, 2022 and 2021, no impairment losses have been recorded.i.Business combinations:The Company applies the provisions of ASC 805, “Business Combination” and allocates the fair value of purchase consideration to the tangibleassets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchaseconsideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assetsacquired and liabilities assumed, the Company estimated the future expected cash flows from acquired platform, customer relationships,Technology and trademark from a market participant perspective, useful lives and discount rates. In addition, management makes significantestimates and assumptions, which are uncertain, but believed to be reasonable.Acquisitionrelated costs are recognized separately from the acquisition and are expensed as incurred.F10MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)j.Goodwill:Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a businesscombination. Under ASC 350, “Intangible Goodwill and Other”, goodwill is not amortized, but rather is subject to an annual impairment test.ASC 350 requires goodwill to be tested for impairment at the reporting unit level at least annually, the fourth quarter, or between annual tests incertain circumstances, and written down when impaired. Goodwill is tested for impairment by comparing the fair value of the reporting unit with itcarrying value. Goodwill from Orgad acquisition was allocated to the fashion and equipment ecommerce platform segment and Goodwill from theNaiz acquisition was allocated to Naiz segment based innovative artificial intelligence driven measurement solutions.Alternatively, ASC 350 permits an entity to bypass the qualitative assessment for any reporting unit and proceed directly to performing the firststep of the goodwill impairment test. There were no impairment charges to goodwill during the period presented.k.Intangible assets:Intangible assets consist of identifiable intangible assets that the Company has acquired from previous business combinations. Intangible assetsare recorded at costs, net of accumulated amortization. The Company amortizes its intangible assets reflecting the pattern in which the economicbenefits of the intangible assets are consumed. When a pattern cannot be reliably determined, the Company uses a straightline amortizationmethod. Amortization is calculated by the straightline method over the estimated useful lives of the following assets.The estimated useful lives of the company’s intangible assets are as follows:yearsCustomer Relationships7Technology5Trademark5Selling Platform3Each period the Company evaluates the estimated remaining useful lives of its intangible assets and whether events or changes in circumstanceswarrant a revision to the remaining period of amortizationl.Severance pay:The Subsidiary’s liability for severance pay is covered by Section 14 of the Israeli Severance Pay Law (“Section 14”). Under Section 14, employeesin Israel are entitled to have monthly deposits, at a rate of 8.33% of their monthly salary, made on their behalf to their insurance funds. Payments inaccordance with Section 14 exempt the Subsidiary from any additional obligation for these employees. As a result, the Subsidiary does notrecognize any liability for severance pay due to these employees and the deposits under Section 14 are not recorded as an asset in theSubsidiary’s balance sheet. These contributions for compensation represent defined contribution plans and expenses are recorded based onactual deposits.Other than the My Size Israel’s liability there are no additional severance pay liabilities.F11MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)m.Research and development costs:Research and development costs are charged to the statement of operations, as incurred. Most of the research and development expenses are forwages, related expenses and subcontractors.n.Income taxes:The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilitiesfor the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Companies’ taxreturns. Deferred taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities using enactedtax rates in effect in the years in which the differences are expected to reverse. The Company assesses the likelihood that its deferred tax assetswill be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely thannot that all or a portion of deferred tax assets will not be realized. The Company establishes a valuation allowance, if necessary, to reduce deferredtax assets to the amount more likely than not to be realized. As of December 31, 2022, and 2021, a full valuation allowance was established by theCompany.The Company implements a twostep approach to recognize and measure the benefit of its tax positions. The first step is to evaluate the taxposition taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that,on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigationprocesses. The second step is to measure the tax benefit as the largest amount that is greater than 50 percent (cumulative basis) likely to berealized upon settlement.The Company believes that its tax positions are all highly certain of being upheld upon examination. As of December 31,2022 and 2021 the Company recorded a liability for unrecognized tax benefits of $328 and none respectively.o.Accounting for stockbased compensation:The Company accounts for its employees’ stockbased compensation as an expense in the financial statements based on ASC 718. All awards areequity classified and therefore such costs are measured at the grant date fair value of the award and graded vesting attribution approach torecognize compensation cost over the vesting period. The Company estimates stock option grant date fair value using the Binomial and BlackScholes option pricingmodel.The Company recorded stock options issued to nonemployees at the grant date fair value, and recognizes expenses over the related serviceperiod by using the straightline attribution approach in accordance with ASU 201807. All awards are equity classified.The expected volatility of the share prices reflects the assumption that the historical volatility of the share prices is reasonably indicative ofexpected future trends.The riskfree interest rate for grants with an exercise price denominated in USD for employees and several consultants is based on the yield fromUS treasury zerocoupon bonds with an equivalent term.The Company has historically not paid dividends and has no foreseeable plans to pay dividends.F12MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)p.Fair value of financial instruments:ASC 820, Fair Value Measurements and Disclosures, relating to fair value measurements, defines fair value and established a framework formeasuring fair value. The ASC 820 fair value hierarchy distinguishes between market participant assumptions developed based on market dataobtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptionsdeveloped based on the best information available in the circumstances. ASC 820 defines fair value as the price that would be received to sell anasset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price. Inaddition, the fair value of assets and liabilities should include consideration of nonperformance risk, which for the liabilities described belowincludes the Company’s own credit risk.As a basis for considering such assumptions, ASC 820 establishes a threetier value hierarchy, which prioritizes the inputs used in the valuationmethodologies in measuring fair value:Level 1 Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access. Valuationadjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readilyand regularly available in an active market, valuation of these products does not entail a significant degree of judgment.Level 2 Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, eitherdirectly or indirectly.Level 3 Valuations based on inputs that are unobservable and significant to the overall fair value measurement.The Company holds share certificates in iMine Corporation (“iMine”) formerly known as Diamante Minerals, Inc., a publiclytraded company onthe OTCQB.Due to sales restrictions on the sale of the iMine shares, the fair value of the shares was measured on the basis of the quoted market price for anotherwise identical unrestricted equity instrument of the same issuer that trades in a public market, adjusted to reflect the effect of the salesrestrictions and is therefore, ranked as Level 2 asset.q.Basic and diluted net loss per share:Basic net loss per share is computed based on the weighted average number of shares of common stock outstanding during each year. Diluted netincome per share is computed based on the weighted average number of shares of common stock outstanding during each year plus dilutivepotential equivalent common stock considered outstanding during the year, in accordance with ASC 260, “Earnings per Share”. For the yearsended December 31, 2022 and 2021, all outstanding options and warrants have been excluded from the calculation of the diluted net loss per sharesince their effect was antidilutive.r.Concentrations of credit risk:Financial instruments that potentially subject the Company and its subsidiaries to concentrations of credit risk consist principally of cash andcash equivalents.Cash and cash equivalents are invested in banks in Israel, Spain and United States. Such deposits in United States may be in excess of insuredlimits and are not insured in other jurisdictions. Management believes that the financial institutions that hold the Company’s investments arefinancially sound and, accordingly, minimal credit risk exists with respect to these investments.The Company and its subsidiaries have no offbalancesheet concentration of credit risk such as foreign exchange contracts, option contracts orother foreign hedging arrangements.F13MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)s.Revenue Recognition:The Company’s revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled softwaresubscriptions, associated software maintenance and support.The Company recognizes revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with acustomer exists only when: the parties to the contract have approved it and are committed to perform their respective obligations, the Companycan identify each party’s rights regarding the distinct goods or services to be transferred (“performance obligations”), the Company can determinethe transaction price for the goods or services to be transferred, the contract has commercial substance and it is probable that the Company willcollect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to acustomer. Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted togovernmental authorities. Refunds are estimated at contract inception and updated at the end of each reporting period if additional informationbecomes available. Revenue is recognized when control of the product is transferred to the customer.The Company maintains a returns policy that allows its customers to return product within a specified period of time. The estimate of the provisionfor returns is based upon historical experience with actual returns.Principal versus Agent ConsiderationsThe Company follows the guidance provided in ASC 606 for determining whether it is a principal or an agent in arrangements with customers, byassessing whether the nature of the Company’s promise is a performance obligation to provide the specified goods (principal) or to arrange forthose goods to be provided by the other party (agent). With regard to products being sold by Orgad through Amazon, this determination involvesjudgment. The Company determines it is the principle when it has control over promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).The Company recognizes revenue ratably over the contractual service term for hosted services that are priced based on a committed number oftransactions where the delivery and consumption of the benefit of the services occur evenly over time, beginning on the date the servicesassociated with the committed transactions are first made available to the customer and continuing through the end of the contractual serviceterm. Over usage fees and fees based on the actual number of transactions are billed in accordance with contract terms as these fees are incurredand are included in the transaction price of an arrangement as variable consideration. Fees based on a number of transactions or impressions permonth, are allocated to the period in which the transactions occur. Revenue for subscriptions sold as a fee per period is recognized ratably overthe contractual term as the customer simultaneously receives and consumes the benefit of the underlying service.F14MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)t.Contingencies and CommitmentsLiabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it isprobable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with losscontingencies are expensed as incurred.u.Derivative instrumentsThe Company accounts for its derivative instruments as either assets or liabilities and measures them at fair value through profit or loss.v.LeasesThe Company leases include an office space lease agreement for 36 months, with an option to extend for an additional 36 months and 36 monthscancelable operating lease agreements on behalf of personnel vehicles. The lease term includes a noncancellable period of the lease plus anyadditional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise,or an option to extend (or not to terminate) the lease controlled by the lessor.ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make leasepayments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value oflease payments over the lease term. The company generally use its incremental borrowing rate based on the estimated rate of interest forcollateralized borrowing over a similar term of the lease payments at commencement date. Lease expense for lease payments is recognized on astraightline basis over the lease term.For the office rent lease, the Company has elected to account for the lease and nonlease maintenance components as a single lease component.Therefore, the lease payments used to measure the lease liability include all of the fixed consideration in the contract, including insubstance fixedpayments, owed over the lease term.w.Impact of recently issued accounting standardIn June 2016, the FASB issued ASU 201613, “Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses on FinancialInstruments”, which requires companies to measure credit losses of financial instruments, including customer accounts receivable, utilizing amethodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information toinform credit loss estimates. Subsequent to the issuance of ASU 201613, the FASB issued several additional Accounting Standard Updates toclarify implementation guidance, provide narrowscope improvements and provide additional disclosure guidance. As an Emerging GrowthCompany, ASU 201613 is effective for fiscal years beginning after December 15, 2022. The Company does not expect this ASU to have a materialimpact on its consolidated financial statements.F15MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 3 CASH AND CASH EQUIVALENTSThe Company’s cash and cash equivalents balance at December 31, 2022 and 2021 is denominated in the following currencies:December 31,20222021US Dollars1,65110,184New Israeli Shekels259433Other190532,10010,670NOTE 4 OTHER RECEIVABLES AND PREPAID EXPENSESDecember 31,20222021Prepaid expenses and other current assets322429Government authorities28317Other153133Total758579NOTE 5 PROPERTY AND EQUIPMENT, NETComputersandperipheralequipmentOfficefurnitureandequipmentLeaseholdimprovementsTotalCostBalance as at January 1, 20211825860300Additions2323Translation adjustments72211Balance as at December 31, 20212126062334Balance as at January 1, 20222126062334Additions161127Business combination401555Translation adjustments(32)(8)(8)(48)Balance as at December 31, 20222367854368Accumulated DepreciationBalance as at January 1, 20211461412172Additions2751042Translation adjustments6118Balance as at December 31, 20211792023222Balance as at January 1, 20221792023222Additions209938Translation adjustments(27)(3)(2)(32)Balance as at December 31, 20221722630228Carrying amountsAs at December 31, 2021334039112As at December 31, 2022645224140F16MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 6 LEASESIn August 2019, The Company entered into an office space lease agreement. The lease term is for 36 months beginning on August 20, 2019 and endingon August 20, 2022, with an option to extend for an additional 36 months. The Company extended the lease period until August 20, 2025. Monthly rentpayments including utilities amounting to approximately USD 14 (NIS 49,500) per month.In addition, The Company entered into a threeyear cancelable operating lease agreement for cars.These operating leases are included in “Right of use asset” on the Company’s December 31, 2022 consolidated balance sheets, and represent theCompany’s right to use the underlying asset for the lease term. The Company’s obligations to make lease payments are included in the currentliabilities as “Operating lease liability” and in the noncurrent liabilities as “Operating lease liability long term” on the Company’s December 31, 2022consolidated balance sheets. As of December 31, 2022, rightofuse of asset was $583. operating lease liabilities were $159 and non current Operatinglease liabilities were $308. Rightofuse asset includes the capitalization of improvements (net of amortization) amounting to $105.Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value ofthe lease payments.The interest rate used to discount future lease payment was 11.95%.Maturities of lease liabilities as of December 31, 2022 were as follows:Year Ending:2023$1912024$1912025$127Thereafter$509Less imputed interest:$(42)Total lease liabilities$467F17MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 7 – Goodwill and other Intangible assetsA.Identified intangible assetsSchedule of Intangible assetsSelling PlatformTechnologyCustomerRelationshipsOtherTotalThousandsUSDThousandsUSDThousandsUSDThousandsUSDThousandsUSDCostAs of January 1, 2022Acquisitions through business combinations378286726771,467Effect of changes in exchange rates(32)2565765As of December 31, 2022346311791841,532AmortizationAs of January 1, 2022Amortization for the year including effect of changes inexchange rates as of December 31, 2022(109)(15)(27)(4)(155)Carrying amountAs of December 31, 2022237296764801,377AmortizationAmortization expenses recorded for identified intangible assets in the Consolidated Statements of Operations for each period and were as follows:Line ItemDecember 31,2022December 31,2021Selling platformCosts of revenues109TrademarkSales and marketing4TechnologyCosts of revenues15Customer relationshipsSales and marketing27Total amortization expenses155Future amortization expenses are expected to be as follows:20232024202520262027ThereafterTotalFuture amortization expenses3033031941771561791,312b.GoodwillThe changes in the carrying amount of goodwill for the years ended December 31, 2022 and 2021 were as follows:Fashion and equipmentecommerce platformNaizTotalBalance as of December 31, 2021Changes during the period:Goodwill acquired1521,1521,304Goodwill impairmentTranslation differences(14)10591Balance as of December 31, 20221381,2571,395The Company operates its business through three reporting segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovativeartificial intelligence driven measurement solutions and (iii) Naiz. See note 17 for additional segments information.The Company determines the fair value of its reporting units using the income approach. According to the income, the Company uses discounted cashflows to estimate the fair value. Cash flow projections are based on the Company’s estimates of revenue growth rates and operating margins, takinginto consideration the industry’s and market’s conditions. The discount rate used is based on the weighted average cost of capital (“WACC”),adjusted for the relevant risk associated with businessspecific characteristics.The Company performed a quantitative assessment as of December, 31 2022 for the reporting units’ fair value. The estimated fair value of the Fashionand equipment ecommerce platform and Naiz reporting units exceeded its estimated carrying amount by 95.9% and 27.7% respectively. This, based thefollowing assumptions:Fashion and equipmentecommerce platformNaizDiscount rate21%23%Terminal growth rate3%3%If business conditions or expectations were to change materially, it may be necessary to record impairment charges to the Company’s reporting units inthe future.F18MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 8 Investment in JVIn August 2022, the Company established a joint venture (“JV”) in Brazil with Santista Têxtil. The Company holds 51% and Santista Têxtil holds 49% of theJV. The purpose of the JV is to serve the Brazilian market according to the business plan that was set. Both parties agree to make an initial investment in theJV of $198that will be made per the holding percentage of each party. As of the reporting date, the JV is in process of establishing its operation.NOTE 9 Financial LiabilitiesThe book value of each of the financial liability categories is an acceptable approximation of fair value.The debt is comprised of four loans that were granted to My Size Israel – in an outstanding amount of approximately $131, bearing interest rangingfrom prime rate to prime+2.8% rate, and four loans that were granted to the Spanish subsidiary– in an outstanding amount of approximately $400,bearing interest ranging from 1% to 3%.The financial liability maturities during the five years following the end of the financial year are shown below:UntilUntilUntilUntilUntilAfterTOTAL311223311224311225311226311227311227311222Debts with credit institutions15513892874712531NOTE 10 RELATED PARTIES TRANSACTIONSA. Balances with related parties:The following related party payables are included in liability to related parties.December 31,20222021Officers (*)4143Liability in respect of business combinations (**)739Other related parties (***)(95)Directors152069863(*)The amount includes the net salaries payables.(**)The amount includes the provision created to former owners of Orgad that are entitled to additional cash and equity consideration and former owners of Naizthat entitled to additional cash consideration, see note 16 business combination.(***)The amount includes an amount receivable from Orgad previous shareholders who currently work in the company.B. Related parties benefits:Year endedDecember 31,20222021Salaries and related expenses1,440852Share based payments39673Cash liability and equity liability expenses related to acquisitions (**)1,058Directors58582,952983(**)The amount includes the expenses for a provision created to former owners of Orgad that are entitled to additional cash and equity consideration and formerowners of Naiz that entitled to additional cash consideration, see note 16 business combination.NOTE 11 FINANCIAL INSTRUMENTSThe following tables presents the Company’s significant assets and liabilities that are measured at fair value on recurring basis and their classificationwithin the fair value hierarchy:December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities47financial assets (*)10December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesDerivatives9December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities108December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesWarrants derivative2(*)the financial asset includes in other receivables.F19MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 11 FINANCIAL INSTRUMENTS (Cont.)The carrying amounts of cash and cash equivalents, restricted cash, short term restricted deposit, accounts receivable, other receivables and prepaidexpenses, trade payable and accounts payable approximate their fair value due to the shortterm maturities of such instruments.At December 31, 2022, the recognized gain and fair value (based on quoted market prices with a discount due to security restrictions on iMine shares)of the marketable securities were $59and $47, respectively (at December 31, 2021 $49and $108, respectively).NOTE 12 TAXES ON INCOMEa.On December 31, 2022, the Company had U.S. federal net operating loss carryforwards of approximately $26 available to reduce future taxableincome. Utilization of the U.S. net operating losses may be subject to substantial limitations due to the change of ownership provisions of theInternal Revenue Code of 1986.The U.S. Company has final tax assessments through 2014.On December 22, 2017, the Tax Reform Act was signed into law. The legislation significantly changes U.S. tax law by, among other things, lowering theU.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. As a result of the decrease in the corporate incometax rate, the Company revalued the ending net deferred tax assets at December 31, 2017, but did not recognize any incremental income tax expense in2017 due to the revaluation of the valuation allowance.b.Foreign tax:1.Tax rates:Presented hereunder are the tax rates relevant to the Company’s Israeli subsidiaries:2022 23%2021 23% Presented hereunder are the tax rates relevant to the Company’s Spanish subsidiary:2022 24%2.The Company’s Israeli subsidiaries have estimated total available carryforward operating tax losses for Israeli income tax purposes ofapproximately $64as of December 31, 2022. Of these losses, a total of $47.5are owned by Topspin Medical (Israel) Ltd. Topspin tax lossesmay be offset only by future income with respect to the same operational activity by which it was incurred for an indefinite period of time. Theother losses are owned by My Size Israel and may be carryforward to offset against future income for an indefinite period of time.3.Topspin Medical (Israel) Ltd. and My Size (Israel) 2014 Ltd. has final tax assessments through 2016.c.U.S. and foreign components of loss from continuing operations, before income taxes consisted of:December 31,20222021U.S(1,180)(3,802)NonU.S. (foreign)(7,130)(6,718)(8,310)(10,520)F20MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 12 TAXES ON INCOME (Cont.)d.Deferred taxes:Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reportingpurposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows:December 31,20222021Deferred tax assets:Operating loss carryforwards20,13120,238Warrants and options145126Marketable securities390377Intangible assets(328)Research and development expenses586341Other temporary differences203Deferred tax assets before valuation allowance21,12721,082Valuation allowance(21,455)(21,082)Net deferred tax liability(328)The following table presents a reconciliation of the beginning and ending valuation allowance:December 31,20222021Balance at beginning of the year21,08218,968Additions in valuation allowance to the income statement1,7581,625Additions in valuation allowance due to exchange rate differences(1,385)489Balance at end of the year21,45521,082In assessing the realization of deferred tax assets, management considers whether it is more likely than not that all or some portion of the deferred taxassets will not be realized.The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporarydifferences are deductible and net operating losses are utilized. Based on consideration of these factors, the Company recorded a full valuationallowance at December 31, 2021 and 2020.e.Theoretical taxThe following presents the adjustment between the theoretical tax amount and the tax amount included in the financial statements:December 31,20222021Loss before income taxes8,34610,520Statutory tax rate21%21%Computed “expected” tax income1,7522,209Foreign tax rate differences and exchange rate differences149131Nondeductible expenses(107)(715)Change in valuation allowance(1,758)(1,625)Taxes on income36F21MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITYa.Common stock confers upon their holders the right to receive notice to participate and vote in general meetings of the Company, and the right toreceive dividends if declared.b.On January 8, 2021, the Company conducted a public offering of its securities pursuant to which it issued 62,768 shares of its common stock forgross proceeds of $2,008. The net proceeds to the Company from the offering were approximately $1,700, after deducting placement agent’s feesand other estimated offering expenses payable by the Company.c.During 2021, a holders of warrants exercised warrants to purchase 135,109 ordinary shares of the Company in exchange for $3,709.d.On March 25, 2021, the Company conducted a public offering of its shares of common stock pursuant to which it issued 104,741 shares of itscommon stock for gross proceeds of $3,300. The net proceeds to the Company from the offering were approximately $2,872, after deductingplacement agent’s fees and other estimated offering expenses payable by the Company.On May 7, 2021, the Company issued an additional 15,711 shares of the Company’s common stock in connection with the full exercise of theunderwriter’s overallotment option granted in the Company’s March 2021 public offering. These additional shares were sold to the underwriter at apublic offering price of $31.5 per share, resulting in additional net proceeds to the Company, net of the underwriting discount, of approximately$463.e.On May 26, 2021, the Company issued 100,000 shares of common stock to Ms. Zigdon in consideration of the Waiver. See note 1(b) above.f.On October 28, 2021, the Company sold in a registered direct offering 100,592 shares of its common stock and, in a concurrent private placement,an aggregate of 75,444 unregistered warrants to purchase shares of common stock, at an offering price of $33.8 per share and associated warrant.In addition, on the same day, the Company sold in a private placement 150,888 unregistered shares of common stock and unregistered warrants topurchase up to an aggregate of 113,166 shares of common stock at the same purchase price as in the registered direct offering. The warrants areimmediately exercisable and will expire five years from issuance at an exercise price of $31.5 per share, subject to adjustment as set forth therein.The gross proceeds from the offerings were $8,500. The net proceeds to the Company from the offerings were approximately $7,560, afterdeducting placement agent’s fees and other estimated offering expenses payable by the Company. In connection with the offerings, the Companyissued to the placement agent warrants to purchase 17,603 shares on substantially the same terms as the purchasers in the offerings at an exerciseprice of $42.25 per share and a term expiring on October 26, 2026.g.On December 7, 2022, the Company’s board of directors approved a 1for25 reverse stock split of the Company’s issued and outstanding sharesof common stock. The reverse stock split became effective on December 8, 2022. In order not to have fractional shares as a result of the reversestock split, the Company issued an additional 12,091 shares of common stock. As a result, all shares of common stock, options for shares ofcommon stock, exercise price and net loss per share amounts were adjusted retroactively for all periods presented in these financial statements.F22MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITY (Cont.)g.A summary of the warrant activity during the years ended December 31, 2022 and 2021 is presented below:Number ofWarrantsWeightedAverageExercisePriceWeightedAverageRemainingLife inYearsOutstanding, December 31, 2020216,85936.754.26Issued206,214Expired or exercised(135,109)Outstanding, December 31, 2021287,96431.004.35IssuedExpired or exercised(17,901)Outstanding, December 31, 2022270,06330.213.36Exercisable, December 31, 2022270,06330.213.36NOTE 14 STOCK BASED COMPENSATIONThe stockbased expense recognized in the financial statements for services received is related to Research and Development, Sales and Marketingand General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense Research and development15195Stockbased compensation expense Sales and marketing126180Stockbased compensation expense General and administrative17898455373The stockbased expense recognized in the financial statements for services received post Acquisition of Orgad (see note 16) is related to Cost OfGoods, Sales and Marketing and General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense – Cost of goods80Stockbased compensation expense Sales and marketing112Stockbased compensation expense General and administrative127319F23MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Options issued to consultantsWe can sell additional shares of common stock without consulting stockholders and without offering shares to existing stockholders, which wouldresult in dilution of shareholders’ interests in the company and could depress our stock price.Our Certificate of Incorporation currently authorizes 250,000,000 shares of common stock, of which 2,446,780 are currently outstanding as of March 31, 2023and our board of directors is authorized to issue additional shares of our common stock. Although our board of directors intends to utilize its reasonable businessjudgment to fulfil its fiduciary obligations to our then existing stockholders in connection with any future issuance of our capital stock, the future issuance ofadditional shares of our capital stock could cause immediate, and potentially substantial, dilution to our existing stockholders, which could also have a materialeffect on the market value of the shares. Further, other than certain participation rights that we have granted in a past offering, our shares do not have preemptiverights, which means we can sell shares of our capital stock to other persons without offering purchasers in this offering the right to purchase their proportionateshare of such offered shares. Therefore, any additional sales of stock by us could dilute your ownership interest in our Company.Our quarterly operating results may fluctuate significantly.We expect our operating results to be subject to quarterly fluctuations. Our net loss and other operating results will be affected by numerous factors,including:●variations in the level of expenses related to our research and development;●any lawsuits in which we may become involved;●regulatory developments affecting our products; and●our execution of any collaborative, licensing or sales agreements, and the timing of payments under these arrangements.If our quarterly operating results fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially.Furthermore, any quarterly fluctuations in our operating results may, in turn, cause the price of our common stock to fluctuate substantially.If we fail to comply with the rules under the Sarbanes Oxley Act of 2002 related to accounting controls and procedures or if we discover materialweaknesses and deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult.If we fail to comply with the rules under the SarbanesOxley Act of 2002 related to disclosure controls and procedures, or, if we discover materialweaknesses and other deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult. Section 404 of the SarbanesOxley Act requires annual management assessments of the effectiveness of our internal control over financial reporting and, ifwe are no longer a nonaccelerated filer, a report by our independent auditors addressing these assessments. If material weaknesses or significant deficiencies arediscovered or if we otherwise fail to achieve and maintain the adequacy of our internal control, we may not be able to ensure that we can conclude on an ongoingbasis that we have effective internal controls over financial reporting in accordance with Section 404 of the SarbanesOxley Act. Moreover, effective internalcontrols are necessary for us to produce reliable financial reports and are important to helping prevent financial fraud. If we cannot provide reliable financial reportsor prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price ofour common stock could drop significantly.38Our Certificate of Incorporation, Bylaws and Delaware law may have antitakeover effects that could discourage, delay or prevent a change incontrol, which may cause our stock price to decline.Our Certificate of Incorporation, Bylaws and Delaware law could make it more difficult for a thirdparty to acquire us, even if closing such a transactionwould be beneficial to our stockholders. Provisions of our Certificate of Incorporation, Bylaws and Delaware law also could have the effect of discouraging potentialacquisition proposals or making a tender offer or delaying or preventing a change in control, including changes a stockholder might consider favorable. Suchprovisions may also prevent or frustrate attempts by our stockholders to replace or remove our management. In particular, the Certificate of Incorporation, Bylawsand Delaware law, as applicable, among other things:●provide the board of directors with the ability to alter the Bylaws without stockholder approval;●the classification of our board of directors;●place limitations on the removal of directors;●provide that vacancies on the Board of Directors may be filled by a majority of directors in office, although less than a quorum;●require that stockholder actions must be affected at a duly called stockholder meeting and generally prohibiting stockholder actions by written consent;●eliminate the ability of stockholders to call a special meeting of stockholders; and●establish advance notice requirements for nominations for election to the Board of Directors or for proposing matters that can be acted upon at duly calledstockholder meetings.We are subject to Section 203 of the Delaware General Corporation Law which, subject to certain exceptions, prohibits “business combinations” between apubliclyheld Delaware corporation and an “interested stockholder,” which is generally defined as a stockholder who becomes a beneficial owner of 15% or more ofa Delaware corporation’s voting stock for a threeyear period following the date that such stockholder became an interested stockholder. These provisions areexpected to discourage certain types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to firstnegotiate with our board. These provisions may delay or prevent someone from acquiring or merging with us, which may cause the market price of our commonstock and the value of our securities to decline.If we fail to comply with the continued listing requirements of the Nasdaq Capital Market, our common stock may be delisted and the price of ourcommon stock and our ability to access the capital markets could be negatively impacted.Nasdaq has established certain standards for the continued listing of a security on the Nasdaq Capital Market. The standards for continued listing include,among other things, that the minimum bid price for the listed securities not fall below $1.00 per share for a period of 30 consecutive trading days and that wemaintain a minimum of $2,500,000 in shareholders’ equity. We have in the past fallen below the minimum bid price and minimum shareholders’ equity.39No assurance can be given that we will continue to be in compliance with the Rule. Failure to meet applicable Nasdaq continued listing standards couldresult in a delisting of our common stock. A delisting of our common stock from Nasdaq could materially reduce the liquidity of our common stock and result in acorresponding material reduction in the price of our common stock. In addition, delisting could harm our ability to raise capital through alternative financing sourceson terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, employees and fewer business development opportunities.The exercise of outstanding warrants and stock options will have a dilutive effect on the percentage ownership of our capital stock by existingstockholders.As of March 15, 2023, we had outstanding warrants to acquire 2,299,115 shares of our common stock and stock options to purchase 1,659 shares of ourcommon stock, which warrants and options are exercisable for prices ranging between $2.81 and $375. The expiration of the term of such options and warrants rangefrom 0.22 years to 4.83 years. If a significant number of such warrants and stock options are exercised by the holders, the percentage of our common stock ownedby our existing stockholders will be diluted.Were our common stock to become subject to the penny stock rules then this could result in U.S. brokerdealers becoming discouraged from effectingtransactions in shares of our common stock.Rule 15g9 under the Exchange Act establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a marketprice of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. If we do not retain a listing on the NasdaqCapital Market or do not meet certain net tangible asset or average revenue requirements and if the price of our common stock is less than $5.00, our common stockwill be deemed a penny stock. For any transaction involving a penny stock, unless exempt, the rules require: (a) that a broker or dealer approve a person’s accountfor transactions in penny stocks; and (b) the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantityof the penny stock to be purchased.In order to approve a person’s account for transactions in penny stocks, the broker or dealer must: (a) obtain financial information and investmentexperience objectives of the person and (b) make a reasonable determination that the transactions in penny stocks are suitable for that person and the person hassufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver,prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which: (a) sets forth the basis on whichthe broker or dealer made the suitability determination; and (b) confirms that the broker or dealer received a signed, written agreement from the investor prior to thetransaction. Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult forinvestors to dispose of our common stock and cause a decline in the market value of our common stock.Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissionspayable to both the broker or dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor incases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the accountand information on the limited market in penny stocks.Sales of our currently issued and outstanding stock may become freely tradable pursuant to Rule 144 and may dilute the market for your shares andhave a depressive effect on the price of the shares of our common stock.A portion of our outstanding shares of common stock are “restricted securities” within the meaning of Rule 144 under the Securities Act of 1933, asamended, or the Securities Act. As restricted shares, these shares may be resold only pursuant to an effective registration statement or under the requirements ofRule 144 or other applicable exemptions from registration under the Securities Act and as required under applicable state securities laws. Rule 144 provides inessence that an affiliate (as such term is defined in Rule 144(a)(1)) of an issuer who has held restricted securities for a period of at least six months (one year afterfiling Form 10 information with the SEC for shell companies and former shell companies) may, under certain conditions, sell every three months, in brokeragetransactions, a number of shares that does not exceed the greater of 1% of a company’s outstanding shares of common stock or the average weekly trading volumeduring the four calendar weeks prior to the sale (the four calendar week rule does not apply to companies quoted on the OTC Markets). Rule 144 also permits, undercertain circumstances, the sale of securities, without any limitation, by a person who is not an Affiliate of the Company and who has satisfied a oneyear holdingperiod. A sale under Rule 144 or under any other exemption from the Securities Act, if available, or pursuant to subsequent registrations of our shares of commonstock, may have a depressive effect upon the price of our shares of common stock in any active market that may develop.40We are a former “shell company” and as such are subject to certain limitations not applicable to other public companies generally.Prior to our suspension of reporting in 2012, we were a public reporting “shell company,” as defined in Rule 12b2 under the Exchange Act. Although weare no longer a “shell company,” we are subject to certain restrictions under the Securities Act for the resale of securities issued by issuers that have been at anytime previously a shell company. Specifically, the Rule 144 safe harbor available for the resale of our restricted securities is only available to our stockholders if wehave filed all reports and other materials required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934, as amended, or the Exchange Act, asapplicable, during the preceding twelve months, other than current reports on Form 8K, at the time of the proposed sale, regardless of whether the restrictedsecurities were initially issued at the time we were a shell company or subsequent to termination of such status. Accordingly, holders of our “restricted securities”within the meaning of Rule 144 will be subject to the conditions set forth in Rule 144 with respect to our company. Other reporting companies that are not formershell companies and have been reporting for more than twelve months are not subject to this same reporting threshold for nonaffiliate reliance on Rule 144.Accordingly, any restricted securities we have sold or sell in the future or issue to consultants or employees, in consideration for services rendered or for any otherpurpose, may not be resold unless such securities are registered with the SEC or the requirements of Rule 144 have been satisfied. As a result, it may be harder forus to fund our operations and pay our employees and consultants with our securities instead of cash. Furthermore, it may be harder for us to raise funding throughthe sale of debt or equity securities unless we agree to register such securities with the SEC, which could cause us to expend additional resources in the future. Ourprior status as a “shell company” could prevent us in the future from raising additional funds, engaging employees and consultants, and using our securities to payfor any acquisitions, which could cause the value of our securities, if any, to decline in value or become worthless.ITEM 1B. UNRESOLVED STAFF COMMENTSNone.ITEM 2. PROPERTIESWe currently lease 1,660 square feet of office space at 4 HaYarden Street, Airport City, Israel. The lease term is for 36 months beginning on August 20, 2019and ending on August 20, 2022, with an option to extend for an additional 36 months. Monthly rent payments, including utilities, amount to approximately $14,000per month. We extended the lease period until August 20, 2025.ITEM 3. LEGAL PROCEEDINGSFrom time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation issubject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.41North Empire LLCOn August 7, 2018, we commenced an action against North Empire LLC, or North Empire, in the Supreme Court of the State of New York, County of NewYork for breach of a Securities Purchase Agreement or Agreement in which we are seeking damages in an amount to be determined at trial, but in no event less than$616,000. On August 2, 2018, North Empire filed a Summons with Notice against us, also in the same Court, in which they allege damages in an amount of $11.4million arising from an alleged breach of the Agreement. On September 6, 2018, North Empire filed a Notice of Discontinuance of the action it had filed on August 2,2018. On September 27, 2018, North Empire filed an answer and asserted counterclaims in the action commenced by us against them, alleging that we failed to deliverstock certificates to North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against our CEO andnow former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018, we filed a reply to North Empire’scounterclaims. On November 15, 2018, our CEO and now former Chairman of the Board filed a motion to dismiss North Empire’s thirdparty complaint. On January 6,2020, the Court granted the motion and dismissed the thirdparty complaint. Discovery has been completed and both parties have filed motions for summaryjudgment in connection with the claims and counterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summaryjudgment, arguing there were factual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision.On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying the Company’s motion for summary judgment. On or about September 12,2022, the Court issued its Decision and Order denying the Company’s motion to reargue. North Empire filed its opposing brief on December 7, 2022. Both sides weregiven an opportunity to file a reply brief. We filed our reply brief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. Oral argument was heldbefore the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Court filed its Decision and Order, which affirmed the lower court’sdecisions regarding both My Size and North Empire’s motions for summary judgment and sent the case back to the Supreme Court. On or about March 13, 2023, theSupreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date for the mediation has not yet been set. We intend tovigorously defend any claims made by North Empire. We believe it is more likely than not that the counterclaims will be denied.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.42PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur stock currently is listed on the Tel Aviv Stock Exchange and the Nasdaq Capital Market under the symbol “MYSZ”. Our stock has been traded on theNasdaq Capital Market since July 25, 2016.HoldersAs of March 31, 2023, we had 70 shareholders of record. The actual number of stockholders is greater than this number of record holders and includesstockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our Board of Directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our Board of Directors deems relevant.Securities Authorized for Issuance under Equity Compensation PlansInformation about our equity compensation plans is incorporated herein by reference to “Item 12. Security Ownership of Certain Beneficial Owners andManagement and Related Stockholder Matters”, of this Annual Report on Form 10K.Recent Sales of Unregistered SecuritiesNone.ITEM 6. SELECTED FINANCIAL DATAAs a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULT OF OPERATIONSYou should read the following discussion along with our financial statements and the related notes included elsewhere in this Annual Report on Form10K. The following discussion contains forwardlooking statements that are subject to risks, uncertainties and assumptions, including those discussed under“Risk Factors.” Our actual results, performance and achievements may differ materially from those expressed in, or implied by, these forwardlooking statements.OverviewMySize is an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.43Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile device or through MySizeID Widget: a simple questionnaire which was uses a database collected over the years.MySizeID synchronizes the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and onlypresents items available for purchase that match their measurements to ensure a correct fit.MySize is positioning itself as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empowering brand design teams, which are designed to increaseend consumer satisfaction, contributing to a sustainable world and reduce operation costs.Orgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,682 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz BespokeTechnologies, S.L., or Naiz, a limited liability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.44The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 2,365,800 shares of My Size common stock were issuedto Whitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.45Operations in RussiaIn addition to our Israel operations, we had operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia. To date, mainly due to the invasion of Ukraine by Russia and the ongoing sanctions we stopped most ofour efforts in Russia and will probably close the subsidiary in the near future.Results of OperationsThe table below provides our results of operations for the periods indicated.Year ended December 3120222021(dollars in thousands)Revenues4,459131Cost of revenues(3,825)Gross profit634131Research and development expenses$(1,701)$(4,248)Sales and marketing(3,143)(2,336)General and administrative(3,900)(4,124)Operating loss(8,110)(10,577)Financial income (expenses), net(236)57Tax income36Net loss$(8,310)$(10,520)Year Ended December 31, 2022 Compared to Year Ended December 31, 2021RevenuesFrom inception through December 31, 2018, we did not generate any revenue from operations and we continue to expect to incur additional losses toperform further research and development activities. We started to generate revenues only in 2019. Our revenues for the year ended December 31, 2022 amounted to$4,459,000 compared to $131,000 for year ended December 31, 2021. The increase from the corresponding period primarily attributable to $4,132,000 in revenuegenerated from Orgad from February 7, 2022, the date of closing of the Orgad acquisition, or the Acquisition Date and revenue generated from the Naiz Acquisitionfrom October 11, 2022, the date of closing of the Naiz acquisition.In addition, the increase from the corresponding period results from an increase in revenues generated by My Size.Cost Of RevenuesOur cost of revenues expenses for the year ended December 31, 2022 amounted to $3,825,000, compared to none for the year ended December 31, 2021. Thecost of revenues includes cash and equity liabilities expenses in the amount of $194,000. The increase in comparison with the corresponding period was due to thecost of goods of the revenues generated from Orgad’s operations.Research and Development ExpensesOur research and development expenses for the year ended December 31, 2022 amounted to $1,701,000 a decrease of $2,547,000, or approximately 60.0%,compared to $4,248,000 for the year ended December 31, 2021. The decrease from the corresponding period primarily resulted from share based payment in amount of$2,618,000 attributed to the share issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021.Sales and Marketing ExpensesOur sales and marketing expenses for the year ended December 31, 2022 amounted to $3,143,000 an increase of $807,000, or 34.55%, compared to $2,336,000for the year ended December 31, 2021. The increase primarily resulted from an increase in employees expenses mainly due to Orgad and Naiz acquisitions, increase inAmazon fees, increase in cash and equity liabilities expenses attributed to the Orgad acquisition and an increase in share based payments offset by a decrease inpayments to consultants.46General and Administrative ExpensesOur general and administrative expenses for the year ended December 31, 2022 amounted to $3,900,000, a decrease of $224,000, or 5.43%, compared to$4,124,000 for the year ended December 31, 2021. The decrease compared to the corresponding period was mainly due to a decrease in professional expenses, mainlyattributed to shareholder activism including settlement expenses with the Lazar Parties offset by an increase in sharedbased payments and an increase in employeesexpenses mainly due to the Orgad and Naiz acquisitions.Operating LossAs a result of the foregoing, for the year ended December 31, 2022, our operating loss was $8,110,000, a decrease of $2,467,000 or 23.32%, compared to ouroperating loss for the year ended December 31, 2021 of $10,577,000.Financial Income, NetOur financial (expense) income, net for the year ended December 31, 2022 amounted to $236,000 compared to financial income, $57,000 for the year endedDecember 31, 2021. In 2022, we had financial expenses exchange rate differences offset by an income from fair value revaluation of investment in marketablesecurities whereas in 2021 we had financial income from the fair value revaluation of warrants offset by expenses from exchange rate differences and expenses fromfair value revaluation of investment in marketable securities.Net LossAs a result of the foregoing, our net loss for the year ended December 31, 2022 was $8,310,000 compared to net loss of $10,520,000 for the year endedDecember 31, 2021. The decrease in net loss was mainly due increase in sales and marketing expenses and financial expenses as opposed to financial income in thecorresponding period offset by a decrease in research and development expenses in amount of $2,618,000 attributed to the share issuance to Shoshana Zigdonunder the Amendment to Purchase Agreement dated May 26, 2021.Liquidity and Capital ResourcesSince our inception, we have funded our operations primarily through public and private offerings of debt and equity in Israel and in the U.S.As of December 31, 2022, we had cash, cash equivalents and restricted cash of $2,363,000 compared to $10,943,000 cash, cash equivalents, restricted cashas of December 31, 2021. During January 2023, we completed a registered direct and concurrent private placement offering resulting in gross proceeds ofapproximately $3 million. This decrease primarily resulted from our operating activities, the acquisition of Orgad and Naiz Fit, and resources that were deployed togrow of both businesses.Net cash used in operating activities was $7,290,000 for the year ended December 31, 2022 compared to $7,297,000 for the year ended December 31, 2021.The decrease in cash used in operating activity is derived mainly from an increase in share based payments and increase in account receivables mainly from theOrgad and Naiz fit acquisitions offset by a decrease in the net loss.Net cash used in investing activities for the year ended December 31, 2022 was $993,000 as opposed to net cash provided by investing activities of$161,000 for the year ended December 31, 2021. The net cash used in investing activities for the year ended December 31, 2022 was mainly from the acquisition ofOrgad and Naiz as opposed to proceeds from shortterm deposits and restricted deposits during the year ended December 31, 2021.We had a negative cash flow from financing activities of $67,000 for the year ended December 31, 2022 compared to positive cash flow of $16,292,000 for theyear ended December 31, 2021. The negative cash flow from financing activities for the year ended December 31, 2022 was mainly due to repayment of loans andinterest and payments for leases as opposed to proceeds from issuance of shares and from exercise of warrants for the year ended December 31, 2021.47We expect that we will continue to generate losses and negative cash flows from operations for the foreseeable future. Based on the projected cash flowsand cash balances as of December 31, 2022, together with the proceeds from the January 2023 financing, we believe our existing cash will not be sufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. We will need to raiseadditional capital, which may not be available on reasonable terms or at all. Additional capital would be used to accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;●respond to competitive pressures;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, the Russian invasion ofUkraine, the impact of any resurgence of the COVID19 pandemic and a number of other factors, many of which are outside our control, and on our financialperformance. Accordingly, we cannot assure you that we will be able to successfully raise additional capital at all or on terms that are acceptable to us. If we cannotraise additional capital when needed, it may have a material adverse effect on our business, results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.We have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.Recently Issued Accounting PronouncementsCertain recently issued accounting pronouncements are discussed in Note 2, Significant Accounting Policies, to the consolidated financial statementsincluded in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10K.OffBalance Sheet ArrangementsWe have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.48Application of Critical Accounting Policies and EstimatesOur management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we haveprepared in accordance with U.S. generally accepted accounting principles issued by the Financial Accounting Standards Board, or FASB. The preparation of thesefinancial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assetsand liabilities at the date of the financial statements, as well as the reported expenses during the reporting periods. Actual results may differ from these estimatesunder different assumptions or conditions.Our significant accounting policies were revenue from contracts with customers which are more fully described in the notes to our financial statementsincluded herein. We believe these accounting policies discussed below are critical to our financial results and to the understanding of our past and futureperformance, as these policies relate to the more significant areas involving management’s estimates and assumptions. We consider an accounting estimate to becritical if: (1) it requires us to make assumptions because information was not available at the time or it included matters that were highly uncertain at the time wewere making our estimate; and (2) changes in the estimate could have a material impact on our financial condition or results of operations.Accounting for business combinationsWe allocate the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed, based upon their estimated fairvalues at the acquisition date. These fair values are typically estimated with assistance from independent valuation specialists.The purchase price allocation process requires us to make significant estimates and assumptions, especially at the acquisition date with respect tointangible assets, contractual support obligations assumed, contingent consideration arrangements, and preacquisition contingencies.Although we believe the assumptions and estimates we have made in the past have been reasonable and appropriate, they are based in part on historicalexperience and information obtained from the management of the acquired companies and are inherently uncertain.Examples of critical estimates in valuing certain of the intangible assets we have acquired or may acquire in the future include but are not limited to:● future expected cash flows from product sales or other customer contracts;● expected costs of fulfillment including marketing, warehousing and product sales;● the acquired company’s brand and competitive position, as well as assumptions about the period of time the acquired brand will continue to be used inthe combined company’s product portfolio;● cost of capital and discount rates; and● estimating the useful lives of acquired assets as well as the pattern or manner in which the assets will amortize.Refer to Note 16, Business Combination, to the consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” of thisAnnual Report on Form 10K.49Revenue from contracts with customersOur revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled software subscriptions, associatedsoftware maintenance and support.We recognize revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with a customer exists onlywhen: the parties to the contract have approved it and are committed to perform their respective obligations, we can identify each party’s rights regarding thedistinct goods or services to be transferred (“performance obligations”), we can determine the transaction price for the goods or services to be transferred, thecontract has commercial substance and it is probable that we will collect the consideration to which we will be entitled in exchange for the goods or services that willbe transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to a customer.Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted to governmental authorities. Refundsare estimated at contract inception and updated at the end of each reporting period if additional information becomes available. Revenue is recognized when controlof the product is transferred to the customer.We maintain a returns policy that allows our customers to return product within a specified period of time. The estimate of the provision for returns is basedupon historical experience with actual returns.Principal versus Agent ConsiderationsWe follow the guidance provided in ASC 606 for determining whether we are a principal or an agent in arrangements with customers, by assessing whetherthe nature of our promise is a performance obligation to provide the specified goods (principal) or to arrange for those goods to be provided by the other party(agent). With regard to products being sold by Orgad through Amazon, this determination involves judgment. We determine it is the principle when it has controlover the promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).We recognize revenue ratably over the contractual service term for hosted services that are priced based on a committed number of transactions where thedelivery and consumption of the benefit of the services occur evenly over time, beginning on the date the services associated with the committed transactions arefirst made available to the customer and continuing through the end of the contractual service term. Over usage fees and fees based on the actual number oftransactions are billed in accordance with contract terms as these fees are incurred and are included in the transaction price of an arrangement as variableconsideration. Fees based on a number of transactions or impressions per month, are allocated to the period in which the transactions occur. Revenue forsubscriptions sold as a fee per period is recognized ratably over the contractual term as the customer simultaneously receives and consumes the benefit of theunderlying service.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.As a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.50ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAMY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2022U.S. DOLLARS IN THOUSANDSINDEXPageReport of Independent Registered Public Accounting Firm (PCAOB ID: ID 1057)F2Consolidated Balance SheetsF4Consolidated Statements of Comprehensive LossF5Consolidated Statements of Shareholders’ EquityF6Consolidated Statements of Cash FlowsF7Notes to Consolidated Financial StatementsF8 F33F1Report of Independent Registered Public Accounting FirmTo the Shareholders and Board of DirectorsMy Size, Inc.:Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of My Size, Inc. and subsidiaries (the Company) as of December 31, 2022 and 2021, the relatedconsolidated statements of comprehensive loss, shareholders’ equity, and cash flows for each of the years in the twoyear period ended December 31, 2022, and therelated notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, thefinancial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the twoyear periodended December 31, 2022, in conformity with U.S. generally accepted accounting principles.Going ConcernThe accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1d tothe consolidated financial statements, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit thatraises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1d. Theconsolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidatedfinancial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Critical Audit MattersCritical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to becommunicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved ourespecially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidatedfinancial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters oron the accounts or disclosures to which they relate.Acquisitiondate fair value of customer relationshipsAs discussed in Note 16 to the consolidated financial statements, on October 11, 2022, the Company acquired Naiz Bespoke Technologies SL (“Naiz”). As a result ofthe transaction, the Company acquired customer relationships intangible assets (“customer relationships”) representing the generation of future income from Naiz’sexisting customers. The acquisition date fair value of the customer relationships was $726 thousand.F2We identified the evaluation of the acquisitiondate fair value of the Naiz customer relationships as a critical audit matter. A high degree of subjective auditorjudgment was required to evaluate the following internally developed assumptions used to estimate the fair value of such asset, for which there were limitedobservable inputs: (i) forecasted revenues attributable to existing customers, (ii) forecasted earnings before interest, taxes, depreciation, and amortization(“EBITDA”) margins for the acquired business, (iii) estimated annual customer attrition rates and (iv) estimated discount rate. The determined fair value wassensitive to changes in these key assumptions. Additionally, specialized skills and knowledge were needed to evaluate the discount rate used.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s acquisitiondate fair value estimation process, including controls over the development of key assumptions. We performed a sensitivity analysis toassess the impact of reasonably possible changes to forecasted revenues, EBITDA margins, annual customer attrition rates, and the discount rate. We evaluated theforecasted revenue growth rates from existing customers by comparing the growth assumptions to those of the Company’s peers and industry reports. Inconnection with our assessment of the forecasts used in the valuation, we compared (1) forecasted revenue and EBITDA to Naiz’s historical actual results and (2)estimated annual customer attrition rates to historical Naiz customer attrition data. We tested the Company’s determined weighted average cost of capital(“WACC”), which was used to determine the discount rate, by involving valuation professionals with specialized skills and knowledge, who assisted in:Evaluating the selected discount rate by comparing it against a discount rate range that was independently developed using publicly available market datafor comparable companies, and;Assessing the Company’s WACC calculation, by comparing it against an independently estimated WACC range based on inputs obtained throughpublished surveys and studies.Goodwill impairment assessmentAs discussed in Note 16 to the consolidated financial statements, during 2022 the Company recorded goodwill of $1,257 thousand related to the acquisition of NaizBespoke Technologies, S.L. (“Naiz”). The Company performed an annual quantitative impairment test of goodwill at the reporting unit level. Based on this analysis,the Company determined that the fair value of its reporting unit exceeded its carrying value and no impairment charge was required.We identified the evaluation of the goodwill impairment assessment for the Naiz reporting unit as a critical audit matter. A high degree of subjective auditor judgmentwas required to evaluate the following assumptions used to estimate the fair value of the Company’s reporting unit, for which there were limited observable inputs:(i) forecasted reporting unit cash flows, (ii) longterm growth rates, and (iii) discount rates. The fair value was sensitive to changes in these key assumptions.Additionally, specialized skills and knowledge were needed to evaluate the discount rates.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s goodwill impairment evaluation process. We performed sensitivity analyses to assess the impact of reasonably possible changes to forecasted cashflows, longterm growth rates, and discount rates. We evaluated the Company’s forecasted growth rates by comparing the growth assumptions to those of theCompany’s peers and industry reports. We compared the Company’s forecasted revenue, cost of sales, and operating expense margins to historical actual results toassess the reasonableness of the forecasts. In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:– Assessing the Company’s WACC calculation, by comparing it against an estimated WACC range based on inputs obtained through published surveys andstudies– Evaluating the discount rates used by the Company by comparing them against discount rate ranges that were developed using publicly available market data forcomparable companies, and;– Performing an arithmetic recalculation regarding the fair value of the Company’s reporting unit, using the Company’s cash flow forecasts and the independentlydeveloped discount rates, and comparing the results to the Company’s fair value estimates./s/ Somekh ChaikinSomekh ChaikinMember Firm of KPMG InternationalWe have served as the Company’s auditor since 2017.Tel Aviv, IsraelApril 14, 2023F3MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED BALANCE SHEETSU.S. dollars in thousands (except share data)December 31,Note20222021AssetsCurrent assetsCash and cash equivalents32,10010,670Restricted cash263273Inventory997Account receivables1,94040Other receivables and prepaid expenses4758579Total current assets6,05811,562Long term deposits28Property and equipment, net5140112Operating rightofuse asset6583776Intangible assets71,377Goodwill71,395Investment in JV899Investment in marketable securities11471083,669996Total assets9,72712,558Liabilities and shareholders’ equityCurrent liabilitiesOperating lease liability6159138Shortterm loans9155Trade payables2,487635Liabilities to Related parties69863Other payables680392Total current liabilities4,1791,228Longterm loans9376Deferred tax liabilities328Operating lease liability6308473Total noncurrent liabilities1,012473CONTINGENCIES AND COMMITMENTS15Total Liabilities5,1911,701Shareholders’ equity13Stock capital Common stock of $0.001par value Authorized: 250,000,000and 100,000,000shares as of December 31,2022 and 2021; Issued and outstanding: 1,464,117and959,297 as of December 31,2022 and 2021, respectively (*)11Additional paidin capital58,67356,453Accumulated other comprehensive loss(637)(406)Accumulated deficit(53,501)(45,191)Total shareholders’ equity4,53610,857Total liabilities and shareholders’ equity9,72712,558(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F4MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSSU.S. dollars in thousands (except share data and per share data)Year endedDecember 31,Note20222021Revenues4,459131Cost of revenues(3,825)Gross profit634131Operating expensesResearch and development(1,701)(4,248)Sales and marketing18(3,143)(2,336)General and administrative19(3,900)(4,124)Total operating expenses(8,744)(10,708)Operating loss(8,110)(10,577)Financial income (expense), net20(236)57Loss before taxes(8,346)(10,520)Taxes on income36Net loss for the year(8,310)(10,520)Other comprehensive income (loss):Foreign currency translation differences(231)18Total comprehensive loss(8,541)(10,502)Basic and diluted loss per share (*)(7.47)(17.75)Basic and diluted weighted average number of shares outstanding (*)1,111,913420,385(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F5MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITYU.S. dollars in thousands (except share data)Common stockAdditionalpaidinAccumulatedothercomprehensiveAccumulatedTotalstockholders’NumberAmountcapitallossDeficitequityBalance as of January 1, 2021289,314(*)37,171(424)(34,671)2,076Stockbased compensation related to optionsgranted to employees and consultants373373Exercise of options granted to employees178(*)Restricted shares issued to shareholder (***)100,000(*)2,6182,618Issuance of shares, net of issuance cost of$1,160434,700112,58212,583Exercise of warrants135,108(*)3,7093,709Total comprehensive income (loss)18(10,520)(10,502)Balance as of December 31, 2021959,300156,453(406)(45,191)10,857Stockbased compensation related to optionsand restricted shares granted to employeesand consultants176,000(*)455455Issuance of shares in Business Combination(**)295,802(*)1,4461,446Issuance of shares post BusinessCombination (**)20,924(*)319319Effect of reverse stock split (Note 13 g)12,091(*)Total comprehensive income (loss)(231)(8,310)(8,541)Balance as of December 31, 20221,464,117158,673(637)(53,501)4,536(*)Represents an amount of less than $1.(**)See note 16(***)See note 1 bThe accompanying notes are an integral part of the consolidated financial statements.F6MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSU.S. dollars in thousandsYear endedDecember 31,20222021Cash flows from operating activities:Net loss(8,310)(10,520)Adjustments to reconcile net loss to net cash used in operating activities:Depreciation3842Change in operating lease rightofuse asset13543Amortization of intangible assets155foreign exchange differences(23)1Change in liabilities to related parties635Interest on long term liabilities10Interest paid(10)Revaluation of investment in marketable securities62(49)Restricted Shares issued to shareholder2,618Stock based compensation455373Issuance of shares post Business Combination319Change in inventory(219)Change in deferred tax liabilities(36)Change in account receivable(1,863)(12)Changes in operating lease liabilities(142)Change in other receivables and prepaid expenses184(99)Change in trade payables1,315253Change in other payables553Net cash used in operating activities(7,290)(7,297)Cash flows from investing activities:Acquisition of a subsidiary, net of cash acquired(767)Proceeds from restricted deposits, net184investing in other receivable(100)Investment in equity accounted investee(99)Purchase of property and equipment(27)(23)Net cash (used in) provided by investing activities(993)161Cash flows from financing activities:Proceeds from issuance of shares, net of issuance costs12,583Repayment of loans(67)Proceeds from exercise of warrants3,709Net cash (used in) provided by financing activities(67)16,292Effect of exchange rate fluctuations on cash and cash equivalents(230)13Change in cash and cash equivalents and restricted cash(8,580)9,169Cash and cash equivalents and restricted cash at the beginning of the year10,9431,774Cash and cash equivalents and restricted cash at the end of the year2,36310,943B) Aggregate cash flows derived for the Company as a result of the Orgad acquisition (note 16)2022Trade and other receivables364Inventory864Fixed assets55Longterm deposits31Selling Platform378Goodwill152Shortterm credit(181)Trade payables(580)Other payables(88)Longterm loan(138)Longterm provision(13)Deferred Tax Liability(87)Issuance of shares(457)Total acquisition of subsidiary, net of cash300C) Aggregate cash flows derived for the Company as a result of the Naiz acquisition (note 16)2022Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Issuance of shares(1,008)Total acquisition of subsidiary, net of cash467The accompanying notes are an integral part of the consolidated financial statements.F7MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERALa.My Size, Inc. is developing unique measurement technologies based on algorithms with applications in a variety of areas, from the apparel ecommerce market, to the courier services market and to the Do It Yourself (“DIY”) smartphone and tablet apps market. The technology is driven byproprietary algorithms, which are able to calculate and record measurements in a variety of novel ways.Following the acquisition of Naiz Bespoke Technologies, S.L (“Naiz”) in October 2022 (see note 16), the Company expanded its offering outreachand customer base.Following the acquisition of Orgad International Marketing Ltd. (“Orgad”) in February 2022 (see note 16), the Company also operates anomnichannel ecommerce platform.The Company has five subsidiaries, My Size Israel 2014 Ltd (“My Size Israel”), Topspin Medical (Israel) Ltd., and Orgad all of which areincorporated in Israel, and My Size LLC which was incorporated in the Russian Federation and Naiz Bespoke Technologies, S.L., a limited liabilitycompany incorporated under the laws of Spain (see note 16). References to the Company include the subsidiaries unless the context indicatesotherwise.My Size, Inc., was incorporated and commenced operations in September 1999, as Topspin Medical Inc. (“Topspin”), a private company registeredin the State of Delaware. In December 2013, the Company changed its name to Knowledgetree Ventures Inc. Subsequently, in February 2014, theCompany changed its name to My Size, Inc. Topspin was engaged, through its Israeli subsidiary, in research and development in the field ofcardiology and urology.Since September 1, 2005, the Company has traded on the Tel Aviv Stock Exchange (“TASE”).Between 2007 and 2012 the Company reported as a public company with the U.S. Securities and Exchange Commission (the “SEC”). In August2012, the Company suspended its reporting obligations under Section 13(a) and 15(d) of the Securities Exchange Act of 1934. In mid2015, theCompany resumed reporting as a public company.b.On January 9, 2014, at the Company’s general meeting of shareholders, its shareholders approved an engagement with one of the Company’sinvestors (the “Seller”) for the purchase of rights in a Venture (the “Venture”), including the rights to the method and the certain patent applicationthat had been filed by the Seller (the “Assets”). The Venture relates to the development of technologies and applications which will assist theconsumer to take his or her body measurements accurately using a mobile device to ensure the purchase of clothing with the best possible fitwithout the need to try them on.In February 2014, the Company established a wholly owned subsidiary, My Size (Israel) 2014 Ltd., a company registered in Israel, which iscurrently engaged in the development of the Venture described above.In return for purchasing an interest in the Venture, the Company undertook to pay the Seller 18% of the Company’s operating profit, direct orindirect, connected to the Venture for a period of seven years starting from the end of the Venture’s development period.As part of the agreement, the Seller received an option to buy back the Assets for consideration which will reflect the market fair value at that time,on the occurrence of the following events: a) if a motion is filed to liquidate the Company; b) if seven years after signing the agreement, theCompany’s total accumulated revenues, direct or indirect, from the Venture or the commercialization of the patent will be lower than NIS 3.6 million.In such an event, Seller may repurchase the interest in the Venture at a market price to be determined by an independent third party valuationconsultant, who shall be chosen by agreement by the parties, and the audit committee shall conduct the negotiations on behalf of the Company todetermine the identity of the consultant.On May 26, 2021, the Company, My Size Israel and Shoshana Zigdon entered into an Amendment to Purchase Agreement (the “Amendment”)which made certain amendments to a Purchase Agreement between the parties dated February 16, 2014 (the “Purchase Agreement”). Pursuant tothe Amendment, Ms. Zigdon agreed to irrevocably waive the right to repurchase certain assets related to the collection of data for measurementpurposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which the Company’s business is substantiallydependent, and all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My Size Israel underthe Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation,reward or any rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights(the “Waiver”). In consideration of the Waiver, the Company issued 100,000 shares of common stock to Ms. Zigdon in a private placement.F8MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERAL (Cont.)c.On July 25, 2016, the Company’s common stock began publicly trading on the Nasdaq Capital Market under the symbol “MYSZ”. The Company’sshares of common stock are listed both on the Nasdaq Capital Market and TASE.d.Since inception, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit of $53,501.The Company has financed its operations mainly through fundraising from various investors.The Company’s management expects that the Company will continue to generate losses and negative cash flows from operations for theforeseeable future. Based on the projected cash flows and cash balances as of December 31, 2022, management is of the opinion that its existingcash will be sufficient to fund operations for a period less than 12 months. As a result, there is substantial doubt about the Company’s ability tocontinue as a going concern.Management’s plans include the continued commercialization of the Company’s products and securing sufficient financing through the sale ofadditional equity securities, debt or capital inflows from strategic partnerships. Additional funds may not be available when the Company needsthem, on terms that are acceptable to it, or at all. If the Company is unsuccessful in commercializing its products and securing sufficient financing,it may need to cease operations.The financial statements include no adjustments for measurement or presentation of assets and liabilities, which may be required should theCompany fail to operate as a going concern.e.The Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificial intelligencedriven measurement solutions (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions. The fashion and equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. The SaaS based innovativeartificial intelligence driven measurement solutions, or SaaS Solutions operating segment consists of My Size Inc My Size Israel and LLC.NOTE 2 SIGNIFICANT ACCOUNTING POLICIESThe consolidated financial statements are prepared according to United States generally accepted accounting principles (“U.S. GAAP”), applied on aconsistent basis, as followsa.Use of estimates:The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions thataffect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.Information about assumptions made by the Company with respect to the future and other reasons for uncertainty with respect to estimates thathave a significant risk of resulting in a material adjustment to carrying amounts of assets and liabilities in the next financial year are included in thefollowing notes:Acquisitions of subsidiariesThe Company measures the fair value of the consideration transferred (including contingent consideration) and fair value of the assets acquiredand liabilities assumed, in business combination transactions. For information on details on fair value measurement in acquisition of subsidiaries,see Note 16 regarding business combinations.Estimated impairment of nonfinancial assetsThe Company examines on an annual basis whether there is an impairment of goodwill, intangibles and property, plant and equipment that areallocated to cash generating units, in accordance with the accounting policy presented in Note 1(h) below. Recoverable amounts of cashgenerating units are determined on the basis of valueinuse calculations. These calculations require the use of estimates.For information on key assumptions used in calculation of the recoverable amount, see note 7 – Goodwill and other Intangible assets.b.Functional currency:The currency of the primary economic environment in which the operations of the Company is conducted is the United States Dollar and thus it isthe Company’s functional currency. The reporting currency according to which these financial statements are prepared is the U.S. dollar.The currency of the primary economic environment in which the operation of the Subsidiary, My Size Israel and Orgad International MarketingLtd. functional currency is the New Israeli Shekel (“NIS”).The currency of the primary economic environment in which the operation of the Subsidiary, My Size LLC, functional currency is Russian Ruble.The currency of the primary economic environment in which the operation of the Subsidiary, Naiz fit, functional currency is Euro.F9MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)c.Principles of consolidation:The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances andtransactions have been eliminated upon consolidation.d.Cash equivalents:Cash equivalents are shortterm highly liquid investments that are readily convertible to cash with original maturities of three months or less at thedate acquired.e.Restricted cashRestricted cash are deposits for rent, credit card and for hedging activities.f.Inventories:Inventories include finished goods and are measured at the lower of cost or net realizable value. The cost of inventories comprises of the costsincurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary courseof business. At the point of the loss recognition, a new, lowercost basis for that inventory is established, and subsequent changes in facts andcircumstances do not result in the restoration or increase in that newly established cost basis. The costs of purchase of inventories comprise thepurchase price and other costs directly attributable to the acquisition of finished goods. In 2022, the Company recorded an inventory markdownof $48.g.Property and equipment:Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straightline method over theestimated useful lives of the assets, at the following annual rates:%Computers and peripheral equipment33Office furniture and equipment720Leasehold improvementsOver the term of the leaseor the useful life of theimprovements, whicheveris shorterh.Impairment of longlived assets:The Company’s property and equipment are reviewed for impairment in accordance with ASC 360, “Property Plant and Equipment”, wheneverevents or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held andused is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by theassets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount ofthe assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less sellingcosts. During the periods ended December 31, 2022 and 2021, no impairment losses have been recorded.i.Business combinations:The Company applies the provisions of ASC 805, “Business Combination” and allocates the fair value of purchase consideration to the tangibleassets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchaseconsideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assetsacquired and liabilities assumed, the Company estimated the future expected cash flows from acquired platform, customer relationships,Technology and trademark from a market participant perspective, useful lives and discount rates. In addition, management makes significantestimates and assumptions, which are uncertain, but believed to be reasonable.Acquisitionrelated costs are recognized separately from the acquisition and are expensed as incurred.F10MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)j.Goodwill:Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a businesscombination. Under ASC 350, “Intangible Goodwill and Other”, goodwill is not amortized, but rather is subject to an annual impairment test.ASC 350 requires goodwill to be tested for impairment at the reporting unit level at least annually, the fourth quarter, or between annual tests incertain circumstances, and written down when impaired. Goodwill is tested for impairment by comparing the fair value of the reporting unit with itcarrying value. Goodwill from Orgad acquisition was allocated to the fashion and equipment ecommerce platform segment and Goodwill from theNaiz acquisition was allocated to Naiz segment based innovative artificial intelligence driven measurement solutions.Alternatively, ASC 350 permits an entity to bypass the qualitative assessment for any reporting unit and proceed directly to performing the firststep of the goodwill impairment test. There were no impairment charges to goodwill during the period presented.k.Intangible assets:Intangible assets consist of identifiable intangible assets that the Company has acquired from previous business combinations. Intangible assetsare recorded at costs, net of accumulated amortization. The Company amortizes its intangible assets reflecting the pattern in which the economicbenefits of the intangible assets are consumed. When a pattern cannot be reliably determined, the Company uses a straightline amortizationmethod. Amortization is calculated by the straightline method over the estimated useful lives of the following assets.The estimated useful lives of the company’s intangible assets are as follows:yearsCustomer Relationships7Technology5Trademark5Selling Platform3Each period the Company evaluates the estimated remaining useful lives of its intangible assets and whether events or changes in circumstanceswarrant a revision to the remaining period of amortizationl.Severance pay:The Subsidiary’s liability for severance pay is covered by Section 14 of the Israeli Severance Pay Law (“Section 14”). Under Section 14, employeesin Israel are entitled to have monthly deposits, at a rate of 8.33% of their monthly salary, made on their behalf to their insurance funds. Payments inaccordance with Section 14 exempt the Subsidiary from any additional obligation for these employees. As a result, the Subsidiary does notrecognize any liability for severance pay due to these employees and the deposits under Section 14 are not recorded as an asset in theSubsidiary’s balance sheet. These contributions for compensation represent defined contribution plans and expenses are recorded based onactual deposits.Other than the My Size Israel’s liability there are no additional severance pay liabilities.F11MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)m.Research and development costs:Research and development costs are charged to the statement of operations, as incurred. Most of the research and development expenses are forwages, related expenses and subcontractors.n.Income taxes:The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilitiesfor the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Companies’ taxreturns. Deferred taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities using enactedtax rates in effect in the years in which the differences are expected to reverse. The Company assesses the likelihood that its deferred tax assetswill be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely thannot that all or a portion of deferred tax assets will not be realized. The Company establishes a valuation allowance, if necessary, to reduce deferredtax assets to the amount more likely than not to be realized. As of December 31, 2022, and 2021, a full valuation allowance was established by theCompany.The Company implements a twostep approach to recognize and measure the benefit of its tax positions. The first step is to evaluate the taxposition taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that,on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigationprocesses. The second step is to measure the tax benefit as the largest amount that is greater than 50 percent (cumulative basis) likely to berealized upon settlement.The Company believes that its tax positions are all highly certain of being upheld upon examination. As of December 31,2022 and 2021 the Company recorded a liability for unrecognized tax benefits of $328 and none respectively.o.Accounting for stockbased compensation:The Company accounts for its employees’ stockbased compensation as an expense in the financial statements based on ASC 718. All awards areequity classified and therefore such costs are measured at the grant date fair value of the award and graded vesting attribution approach torecognize compensation cost over the vesting period. The Company estimates stock option grant date fair value using the Binomial and BlackScholes option pricingmodel.The Company recorded stock options issued to nonemployees at the grant date fair value, and recognizes expenses over the related serviceperiod by using the straightline attribution approach in accordance with ASU 201807. All awards are equity classified.The expected volatility of the share prices reflects the assumption that the historical volatility of the share prices is reasonably indicative ofexpected future trends.The riskfree interest rate for grants with an exercise price denominated in USD for employees and several consultants is based on the yield fromUS treasury zerocoupon bonds with an equivalent term.The Company has historically not paid dividends and has no foreseeable plans to pay dividends.F12MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)p.Fair value of financial instruments:ASC 820, Fair Value Measurements and Disclosures, relating to fair value measurements, defines fair value and established a framework formeasuring fair value. The ASC 820 fair value hierarchy distinguishes between market participant assumptions developed based on market dataobtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptionsdeveloped based on the best information available in the circumstances. ASC 820 defines fair value as the price that would be received to sell anasset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price. Inaddition, the fair value of assets and liabilities should include consideration of nonperformance risk, which for the liabilities described belowincludes the Company’s own credit risk.As a basis for considering such assumptions, ASC 820 establishes a threetier value hierarchy, which prioritizes the inputs used in the valuationmethodologies in measuring fair value:Level 1 Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access. Valuationadjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readilyand regularly available in an active market, valuation of these products does not entail a significant degree of judgment.Level 2 Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, eitherdirectly or indirectly.Level 3 Valuations based on inputs that are unobservable and significant to the overall fair value measurement.The Company holds share certificates in iMine Corporation (“iMine”) formerly known as Diamante Minerals, Inc., a publiclytraded company onthe OTCQB.Due to sales restrictions on the sale of the iMine shares, the fair value of the shares was measured on the basis of the quoted market price for anotherwise identical unrestricted equity instrument of the same issuer that trades in a public market, adjusted to reflect the effect of the salesrestrictions and is therefore, ranked as Level 2 asset.q.Basic and diluted net loss per share:Basic net loss per share is computed based on the weighted average number of shares of common stock outstanding during each year. Diluted netincome per share is computed based on the weighted average number of shares of common stock outstanding during each year plus dilutivepotential equivalent common stock considered outstanding during the year, in accordance with ASC 260, “Earnings per Share”. For the yearsended December 31, 2022 and 2021, all outstanding options and warrants have been excluded from the calculation of the diluted net loss per sharesince their effect was antidilutive.r.Concentrations of credit risk:Financial instruments that potentially subject the Company and its subsidiaries to concentrations of credit risk consist principally of cash andcash equivalents.Cash and cash equivalents are invested in banks in Israel, Spain and United States. Such deposits in United States may be in excess of insuredlimits and are not insured in other jurisdictions. Management believes that the financial institutions that hold the Company’s investments arefinancially sound and, accordingly, minimal credit risk exists with respect to these investments.The Company and its subsidiaries have no offbalancesheet concentration of credit risk such as foreign exchange contracts, option contracts orother foreign hedging arrangements.F13MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)s.Revenue Recognition:The Company’s revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled softwaresubscriptions, associated software maintenance and support.The Company recognizes revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with acustomer exists only when: the parties to the contract have approved it and are committed to perform their respective obligations, the Companycan identify each party’s rights regarding the distinct goods or services to be transferred (“performance obligations”), the Company can determinethe transaction price for the goods or services to be transferred, the contract has commercial substance and it is probable that the Company willcollect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to acustomer. Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted togovernmental authorities. Refunds are estimated at contract inception and updated at the end of each reporting period if additional informationbecomes available. Revenue is recognized when control of the product is transferred to the customer.The Company maintains a returns policy that allows its customers to return product within a specified period of time. The estimate of the provisionfor returns is based upon historical experience with actual returns.Principal versus Agent ConsiderationsThe Company follows the guidance provided in ASC 606 for determining whether it is a principal or an agent in arrangements with customers, byassessing whether the nature of the Company’s promise is a performance obligation to provide the specified goods (principal) or to arrange forthose goods to be provided by the other party (agent). With regard to products being sold by Orgad through Amazon, this determination involvesjudgment. The Company determines it is the principle when it has control over promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).The Company recognizes revenue ratably over the contractual service term for hosted services that are priced based on a committed number oftransactions where the delivery and consumption of the benefit of the services occur evenly over time, beginning on the date the servicesassociated with the committed transactions are first made available to the customer and continuing through the end of the contractual serviceterm. Over usage fees and fees based on the actual number of transactions are billed in accordance with contract terms as these fees are incurredand are included in the transaction price of an arrangement as variable consideration. Fees based on a number of transactions or impressions permonth, are allocated to the period in which the transactions occur. Revenue for subscriptions sold as a fee per period is recognized ratably overthe contractual term as the customer simultaneously receives and consumes the benefit of the underlying service.F14MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)t.Contingencies and CommitmentsLiabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it isprobable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with losscontingencies are expensed as incurred.u.Derivative instrumentsThe Company accounts for its derivative instruments as either assets or liabilities and measures them at fair value through profit or loss.v.LeasesThe Company leases include an office space lease agreement for 36 months, with an option to extend for an additional 36 months and 36 monthscancelable operating lease agreements on behalf of personnel vehicles. The lease term includes a noncancellable period of the lease plus anyadditional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise,or an option to extend (or not to terminate) the lease controlled by the lessor.ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make leasepayments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value oflease payments over the lease term. The company generally use its incremental borrowing rate based on the estimated rate of interest forcollateralized borrowing over a similar term of the lease payments at commencement date. Lease expense for lease payments is recognized on astraightline basis over the lease term.For the office rent lease, the Company has elected to account for the lease and nonlease maintenance components as a single lease component.Therefore, the lease payments used to measure the lease liability include all of the fixed consideration in the contract, including insubstance fixedpayments, owed over the lease term.w.Impact of recently issued accounting standardIn June 2016, the FASB issued ASU 201613, “Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses on FinancialInstruments”, which requires companies to measure credit losses of financial instruments, including customer accounts receivable, utilizing amethodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information toinform credit loss estimates. Subsequent to the issuance of ASU 201613, the FASB issued several additional Accounting Standard Updates toclarify implementation guidance, provide narrowscope improvements and provide additional disclosure guidance. As an Emerging GrowthCompany, ASU 201613 is effective for fiscal years beginning after December 15, 2022. The Company does not expect this ASU to have a materialimpact on its consolidated financial statements.F15MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 3 CASH AND CASH EQUIVALENTSThe Company’s cash and cash equivalents balance at December 31, 2022 and 2021 is denominated in the following currencies:December 31,20222021US Dollars1,65110,184New Israeli Shekels259433Other190532,10010,670NOTE 4 OTHER RECEIVABLES AND PREPAID EXPENSESDecember 31,20222021Prepaid expenses and other current assets322429Government authorities28317Other153133Total758579NOTE 5 PROPERTY AND EQUIPMENT, NETComputersandperipheralequipmentOfficefurnitureandequipmentLeaseholdimprovementsTotalCostBalance as at January 1, 20211825860300Additions2323Translation adjustments72211Balance as at December 31, 20212126062334Balance as at January 1, 20222126062334Additions161127Business combination401555Translation adjustments(32)(8)(8)(48)Balance as at December 31, 20222367854368Accumulated DepreciationBalance as at January 1, 20211461412172Additions2751042Translation adjustments6118Balance as at December 31, 20211792023222Balance as at January 1, 20221792023222Additions209938Translation adjustments(27)(3)(2)(32)Balance as at December 31, 20221722630228Carrying amountsAs at December 31, 2021334039112As at December 31, 2022645224140F16MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 6 LEASESIn August 2019, The Company entered into an office space lease agreement. The lease term is for 36 months beginning on August 20, 2019 and endingon August 20, 2022, with an option to extend for an additional 36 months. The Company extended the lease period until August 20, 2025. Monthly rentpayments including utilities amounting to approximately USD 14 (NIS 49,500) per month.In addition, The Company entered into a threeyear cancelable operating lease agreement for cars.These operating leases are included in “Right of use asset” on the Company’s December 31, 2022 consolidated balance sheets, and represent theCompany’s right to use the underlying asset for the lease term. The Company’s obligations to make lease payments are included in the currentliabilities as “Operating lease liability” and in the noncurrent liabilities as “Operating lease liability long term” on the Company’s December 31, 2022consolidated balance sheets. As of December 31, 2022, rightofuse of asset was $583. operating lease liabilities were $159 and non current Operatinglease liabilities were $308. Rightofuse asset includes the capitalization of improvements (net of amortization) amounting to $105.Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value ofthe lease payments.The interest rate used to discount future lease payment was 11.95%.Maturities of lease liabilities as of December 31, 2022 were as follows:Year Ending:2023$1912024$1912025$127Thereafter$509Less imputed interest:$(42)Total lease liabilities$467F17MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 7 – Goodwill and other Intangible assetsA.Identified intangible assetsSchedule of Intangible assetsSelling PlatformTechnologyCustomerRelationshipsOtherTotalThousandsUSDThousandsUSDThousandsUSDThousandsUSDThousandsUSDCostAs of January 1, 2022Acquisitions through business combinations378286726771,467Effect of changes in exchange rates(32)2565765As of December 31, 2022346311791841,532AmortizationAs of January 1, 2022Amortization for the year including effect of changes inexchange rates as of December 31, 2022(109)(15)(27)(4)(155)Carrying amountAs of December 31, 2022237296764801,377AmortizationAmortization expenses recorded for identified intangible assets in the Consolidated Statements of Operations for each period and were as follows:Line ItemDecember 31,2022December 31,2021Selling platformCosts of revenues109TrademarkSales and marketing4TechnologyCosts of revenues15Customer relationshipsSales and marketing27Total amortization expenses155Future amortization expenses are expected to be as follows:20232024202520262027ThereafterTotalFuture amortization expenses3033031941771561791,312b.GoodwillThe changes in the carrying amount of goodwill for the years ended December 31, 2022 and 2021 were as follows:Fashion and equipmentecommerce platformNaizTotalBalance as of December 31, 2021Changes during the period:Goodwill acquired1521,1521,304Goodwill impairmentTranslation differences(14)10591Balance as of December 31, 20221381,2571,395The Company operates its business through three reporting segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovativeartificial intelligence driven measurement solutions and (iii) Naiz. See note 17 for additional segments information.The Company determines the fair value of its reporting units using the income approach. According to the income, the Company uses discounted cashflows to estimate the fair value. Cash flow projections are based on the Company’s estimates of revenue growth rates and operating margins, takinginto consideration the industry’s and market’s conditions. The discount rate used is based on the weighted average cost of capital (“WACC”),adjusted for the relevant risk associated with businessspecific characteristics.The Company performed a quantitative assessment as of December, 31 2022 for the reporting units’ fair value. The estimated fair value of the Fashionand equipment ecommerce platform and Naiz reporting units exceeded its estimated carrying amount by 95.9% and 27.7% respectively. This, based thefollowing assumptions:Fashion and equipmentecommerce platformNaizDiscount rate21%23%Terminal growth rate3%3%If business conditions or expectations were to change materially, it may be necessary to record impairment charges to the Company’s reporting units inthe future.F18MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 8 Investment in JVIn August 2022, the Company established a joint venture (“JV”) in Brazil with Santista Têxtil. The Company holds 51% and Santista Têxtil holds 49% of theJV. The purpose of the JV is to serve the Brazilian market according to the business plan that was set. Both parties agree to make an initial investment in theJV of $198that will be made per the holding percentage of each party. As of the reporting date, the JV is in process of establishing its operation.NOTE 9 Financial LiabilitiesThe book value of each of the financial liability categories is an acceptable approximation of fair value.The debt is comprised of four loans that were granted to My Size Israel – in an outstanding amount of approximately $131, bearing interest rangingfrom prime rate to prime+2.8% rate, and four loans that were granted to the Spanish subsidiary– in an outstanding amount of approximately $400,bearing interest ranging from 1% to 3%.The financial liability maturities during the five years following the end of the financial year are shown below:UntilUntilUntilUntilUntilAfterTOTAL311223311224311225311226311227311227311222Debts with credit institutions15513892874712531NOTE 10 RELATED PARTIES TRANSACTIONSA. Balances with related parties:The following related party payables are included in liability to related parties.December 31,20222021Officers (*)4143Liability in respect of business combinations (**)739Other related parties (***)(95)Directors152069863(*)The amount includes the net salaries payables.(**)The amount includes the provision created to former owners of Orgad that are entitled to additional cash and equity consideration and former owners of Naizthat entitled to additional cash consideration, see note 16 business combination.(***)The amount includes an amount receivable from Orgad previous shareholders who currently work in the company.B. Related parties benefits:Year endedDecember 31,20222021Salaries and related expenses1,440852Share based payments39673Cash liability and equity liability expenses related to acquisitions (**)1,058Directors58582,952983(**)The amount includes the expenses for a provision created to former owners of Orgad that are entitled to additional cash and equity consideration and formerowners of Naiz that entitled to additional cash consideration, see note 16 business combination.NOTE 11 FINANCIAL INSTRUMENTSThe following tables presents the Company’s significant assets and liabilities that are measured at fair value on recurring basis and their classificationwithin the fair value hierarchy:December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities47financial assets (*)10December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesDerivatives9December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities108December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesWarrants derivative2(*)the financial asset includes in other receivables.F19MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 11 FINANCIAL INSTRUMENTS (Cont.)The carrying amounts of cash and cash equivalents, restricted cash, short term restricted deposit, accounts receivable, other receivables and prepaidexpenses, trade payable and accounts payable approximate their fair value due to the shortterm maturities of such instruments.At December 31, 2022, the recognized gain and fair value (based on quoted market prices with a discount due to security restrictions on iMine shares)of the marketable securities were $59and $47, respectively (at December 31, 2021 $49and $108, respectively).NOTE 12 TAXES ON INCOMEa.On December 31, 2022, the Company had U.S. federal net operating loss carryforwards of approximately $26 available to reduce future taxableincome. Utilization of the U.S. net operating losses may be subject to substantial limitations due to the change of ownership provisions of theInternal Revenue Code of 1986.The U.S. Company has final tax assessments through 2014.On December 22, 2017, the Tax Reform Act was signed into law. The legislation significantly changes U.S. tax law by, among other things, lowering theU.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. As a result of the decrease in the corporate incometax rate, the Company revalued the ending net deferred tax assets at December 31, 2017, but did not recognize any incremental income tax expense in2017 due to the revaluation of the valuation allowance.b.Foreign tax:1.Tax rates:Presented hereunder are the tax rates relevant to the Company’s Israeli subsidiaries:2022 23%2021 23% Presented hereunder are the tax rates relevant to the Company’s Spanish subsidiary:2022 24%2.The Company’s Israeli subsidiaries have estimated total available carryforward operating tax losses for Israeli income tax purposes ofapproximately $64as of December 31, 2022. Of these losses, a total of $47.5are owned by Topspin Medical (Israel) Ltd. Topspin tax lossesmay be offset only by future income with respect to the same operational activity by which it was incurred for an indefinite period of time. Theother losses are owned by My Size Israel and may be carryforward to offset against future income for an indefinite period of time.3.Topspin Medical (Israel) Ltd. and My Size (Israel) 2014 Ltd. has final tax assessments through 2016.c.U.S. and foreign components of loss from continuing operations, before income taxes consisted of:December 31,20222021U.S(1,180)(3,802)NonU.S. (foreign)(7,130)(6,718)(8,310)(10,520)F20MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 12 TAXES ON INCOME (Cont.)d.Deferred taxes:Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reportingpurposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows:December 31,20222021Deferred tax assets:Operating loss carryforwards20,13120,238Warrants and options145126Marketable securities390377Intangible assets(328)Research and development expenses586341Other temporary differences203Deferred tax assets before valuation allowance21,12721,082Valuation allowance(21,455)(21,082)Net deferred tax liability(328)The following table presents a reconciliation of the beginning and ending valuation allowance:December 31,20222021Balance at beginning of the year21,08218,968Additions in valuation allowance to the income statement1,7581,625Additions in valuation allowance due to exchange rate differences(1,385)489Balance at end of the year21,45521,082In assessing the realization of deferred tax assets, management considers whether it is more likely than not that all or some portion of the deferred taxassets will not be realized.The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporarydifferences are deductible and net operating losses are utilized. Based on consideration of these factors, the Company recorded a full valuationallowance at December 31, 2021 and 2020.e.Theoretical taxThe following presents the adjustment between the theoretical tax amount and the tax amount included in the financial statements:December 31,20222021Loss before income taxes8,34610,520Statutory tax rate21%21%Computed “expected” tax income1,7522,209Foreign tax rate differences and exchange rate differences149131Nondeductible expenses(107)(715)Change in valuation allowance(1,758)(1,625)Taxes on income36F21MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITYa.Common stock confers upon their holders the right to receive notice to participate and vote in general meetings of the Company, and the right toreceive dividends if declared.b.On January 8, 2021, the Company conducted a public offering of its securities pursuant to which it issued 62,768 shares of its common stock forgross proceeds of $2,008. The net proceeds to the Company from the offering were approximately $1,700, after deducting placement agent’s feesand other estimated offering expenses payable by the Company.c.During 2021, a holders of warrants exercised warrants to purchase 135,109 ordinary shares of the Company in exchange for $3,709.d.On March 25, 2021, the Company conducted a public offering of its shares of common stock pursuant to which it issued 104,741 shares of itscommon stock for gross proceeds of $3,300. The net proceeds to the Company from the offering were approximately $2,872, after deductingplacement agent’s fees and other estimated offering expenses payable by the Company.On May 7, 2021, the Company issued an additional 15,711 shares of the Company’s common stock in connection with the full exercise of theunderwriter’s overallotment option granted in the Company’s March 2021 public offering. These additional shares were sold to the underwriter at apublic offering price of $31.5 per share, resulting in additional net proceeds to the Company, net of the underwriting discount, of approximately$463.e.On May 26, 2021, the Company issued 100,000 shares of common stock to Ms. Zigdon in consideration of the Waiver. See note 1(b) above.f.On October 28, 2021, the Company sold in a registered direct offering 100,592 shares of its common stock and, in a concurrent private placement,an aggregate of 75,444 unregistered warrants to purchase shares of common stock, at an offering price of $33.8 per share and associated warrant.In addition, on the same day, the Company sold in a private placement 150,888 unregistered shares of common stock and unregistered warrants topurchase up to an aggregate of 113,166 shares of common stock at the same purchase price as in the registered direct offering. The warrants areimmediately exercisable and will expire five years from issuance at an exercise price of $31.5 per share, subject to adjustment as set forth therein.The gross proceeds from the offerings were $8,500. The net proceeds to the Company from the offerings were approximately $7,560, afterdeducting placement agent’s fees and other estimated offering expenses payable by the Company. In connection with the offerings, the Companyissued to the placement agent warrants to purchase 17,603 shares on substantially the same terms as the purchasers in the offerings at an exerciseprice of $42.25 per share and a term expiring on October 26, 2026.g.On December 7, 2022, the Company’s board of directors approved a 1for25 reverse stock split of the Company’s issued and outstanding sharesof common stock. The reverse stock split became effective on December 8, 2022. In order not to have fractional shares as a result of the reversestock split, the Company issued an additional 12,091 shares of common stock. As a result, all shares of common stock, options for shares ofcommon stock, exercise price and net loss per share amounts were adjusted retroactively for all periods presented in these financial statements.F22MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITY (Cont.)g.A summary of the warrant activity during the years ended December 31, 2022 and 2021 is presented below:Number ofWarrantsWeightedAverageExercisePriceWeightedAverageRemainingLife inYearsOutstanding, December 31, 2020216,85936.754.26Issued206,214Expired or exercised(135,109)Outstanding, December 31, 2021287,96431.004.35IssuedExpired or exercised(17,901)Outstanding, December 31, 2022270,06330.213.36Exercisable, December 31, 2022270,06330.213.36NOTE 14 STOCK BASED COMPENSATIONThe stockbased expense recognized in the financial statements for services received is related to Research and Development, Sales and Marketingand General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense Research and development15195Stockbased compensation expense Sales and marketing126180Stockbased compensation expense General and administrative17898455373The stockbased expense recognized in the financial statements for services received post Acquisition of Orgad (see note 16) is related to Cost OfGoods, Sales and Marketing and General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense – Cost of goods80Stockbased compensation expense Sales and marketing112Stockbased compensation expense General and administrative127319F23MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Options issued to consultantsWe can sell additional shares of common stock without consulting stockholders and without offering shares to existing stockholders, which wouldresult in dilution of shareholders’ interests in the company and could depress our stock price.Our Certificate of Incorporation currently authorizes 250,000,000 shares of common stock, of which 2,446,780 are currently outstanding as of March 31, 2023and our board of directors is authorized to issue additional shares of our common stock. Although our board of directors intends to utilize its reasonable businessjudgment to fulfil its fiduciary obligations to our then existing stockholders in connection with any future issuance of our capital stock, the future issuance ofadditional shares of our capital stock could cause immediate, and potentially substantial, dilution to our existing stockholders, which could also have a materialeffect on the market value of the shares. Further, other than certain participation rights that we have granted in a past offering, our shares do not have preemptiverights, which means we can sell shares of our capital stock to other persons without offering purchasers in this offering the right to purchase their proportionateshare of such offered shares. Therefore, any additional sales of stock by us could dilute your ownership interest in our Company.Our quarterly operating results may fluctuate significantly.We expect our operating results to be subject to quarterly fluctuations. Our net loss and other operating results will be affected by numerous factors,including:●variations in the level of expenses related to our research and development;●any lawsuits in which we may become involved;●regulatory developments affecting our products; and●our execution of any collaborative, licensing or sales agreements, and the timing of payments under these arrangements.If our quarterly operating results fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially.Furthermore, any quarterly fluctuations in our operating results may, in turn, cause the price of our common stock to fluctuate substantially.If we fail to comply with the rules under the Sarbanes Oxley Act of 2002 related to accounting controls and procedures or if we discover materialweaknesses and deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult.If we fail to comply with the rules under the SarbanesOxley Act of 2002 related to disclosure controls and procedures, or, if we discover materialweaknesses and other deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult. Section 404 of the SarbanesOxley Act requires annual management assessments of the effectiveness of our internal control over financial reporting and, ifwe are no longer a nonaccelerated filer, a report by our independent auditors addressing these assessments. If material weaknesses or significant deficiencies arediscovered or if we otherwise fail to achieve and maintain the adequacy of our internal control, we may not be able to ensure that we can conclude on an ongoingbasis that we have effective internal controls over financial reporting in accordance with Section 404 of the SarbanesOxley Act. Moreover, effective internalcontrols are necessary for us to produce reliable financial reports and are important to helping prevent financial fraud. If we cannot provide reliable financial reportsor prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price ofour common stock could drop significantly.38Our Certificate of Incorporation, Bylaws and Delaware law may have antitakeover effects that could discourage, delay or prevent a change incontrol, which may cause our stock price to decline.Our Certificate of Incorporation, Bylaws and Delaware law could make it more difficult for a thirdparty to acquire us, even if closing such a transactionwould be beneficial to our stockholders. Provisions of our Certificate of Incorporation, Bylaws and Delaware law also could have the effect of discouraging potentialacquisition proposals or making a tender offer or delaying or preventing a change in control, including changes a stockholder might consider favorable. Suchprovisions may also prevent or frustrate attempts by our stockholders to replace or remove our management. In particular, the Certificate of Incorporation, Bylawsand Delaware law, as applicable, among other things:●provide the board of directors with the ability to alter the Bylaws without stockholder approval;●the classification of our board of directors;●place limitations on the removal of directors;●provide that vacancies on the Board of Directors may be filled by a majority of directors in office, although less than a quorum;●require that stockholder actions must be affected at a duly called stockholder meeting and generally prohibiting stockholder actions by written consent;●eliminate the ability of stockholders to call a special meeting of stockholders; and●establish advance notice requirements for nominations for election to the Board of Directors or for proposing matters that can be acted upon at duly calledstockholder meetings.We are subject to Section 203 of the Delaware General Corporation Law which, subject to certain exceptions, prohibits “business combinations” between apubliclyheld Delaware corporation and an “interested stockholder,” which is generally defined as a stockholder who becomes a beneficial owner of 15% or more ofa Delaware corporation’s voting stock for a threeyear period following the date that such stockholder became an interested stockholder. These provisions areexpected to discourage certain types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to firstnegotiate with our board. These provisions may delay or prevent someone from acquiring or merging with us, which may cause the market price of our commonstock and the value of our securities to decline.If we fail to comply with the continued listing requirements of the Nasdaq Capital Market, our common stock may be delisted and the price of ourcommon stock and our ability to access the capital markets could be negatively impacted.Nasdaq has established certain standards for the continued listing of a security on the Nasdaq Capital Market. The standards for continued listing include,among other things, that the minimum bid price for the listed securities not fall below $1.00 per share for a period of 30 consecutive trading days and that wemaintain a minimum of $2,500,000 in shareholders’ equity. We have in the past fallen below the minimum bid price and minimum shareholders’ equity.39No assurance can be given that we will continue to be in compliance with the Rule. Failure to meet applicable Nasdaq continued listing standards couldresult in a delisting of our common stock. A delisting of our common stock from Nasdaq could materially reduce the liquidity of our common stock and result in acorresponding material reduction in the price of our common stock. In addition, delisting could harm our ability to raise capital through alternative financing sourceson terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, employees and fewer business development opportunities.The exercise of outstanding warrants and stock options will have a dilutive effect on the percentage ownership of our capital stock by existingstockholders.As of March 15, 2023, we had outstanding warrants to acquire 2,299,115 shares of our common stock and stock options to purchase 1,659 shares of ourcommon stock, which warrants and options are exercisable for prices ranging between $2.81 and $375. The expiration of the term of such options and warrants rangefrom 0.22 years to 4.83 years. If a significant number of such warrants and stock options are exercised by the holders, the percentage of our common stock ownedby our existing stockholders will be diluted.Were our common stock to become subject to the penny stock rules then this could result in U.S. brokerdealers becoming discouraged from effectingtransactions in shares of our common stock.Rule 15g9 under the Exchange Act establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a marketprice of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. If we do not retain a listing on the NasdaqCapital Market or do not meet certain net tangible asset or average revenue requirements and if the price of our common stock is less than $5.00, our common stockwill be deemed a penny stock. For any transaction involving a penny stock, unless exempt, the rules require: (a) that a broker or dealer approve a person’s accountfor transactions in penny stocks; and (b) the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantityof the penny stock to be purchased.In order to approve a person’s account for transactions in penny stocks, the broker or dealer must: (a) obtain financial information and investmentexperience objectives of the person and (b) make a reasonable determination that the transactions in penny stocks are suitable for that person and the person hassufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver,prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which: (a) sets forth the basis on whichthe broker or dealer made the suitability determination; and (b) confirms that the broker or dealer received a signed, written agreement from the investor prior to thetransaction. Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult forinvestors to dispose of our common stock and cause a decline in the market value of our common stock.Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissionspayable to both the broker or dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor incases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the accountand information on the limited market in penny stocks.Sales of our currently issued and outstanding stock may become freely tradable pursuant to Rule 144 and may dilute the market for your shares andhave a depressive effect on the price of the shares of our common stock.A portion of our outstanding shares of common stock are “restricted securities” within the meaning of Rule 144 under the Securities Act of 1933, asamended, or the Securities Act. As restricted shares, these shares may be resold only pursuant to an effective registration statement or under the requirements ofRule 144 or other applicable exemptions from registration under the Securities Act and as required under applicable state securities laws. Rule 144 provides inessence that an affiliate (as such term is defined in Rule 144(a)(1)) of an issuer who has held restricted securities for a period of at least six months (one year afterfiling Form 10 information with the SEC for shell companies and former shell companies) may, under certain conditions, sell every three months, in brokeragetransactions, a number of shares that does not exceed the greater of 1% of a company’s outstanding shares of common stock or the average weekly trading volumeduring the four calendar weeks prior to the sale (the four calendar week rule does not apply to companies quoted on the OTC Markets). Rule 144 also permits, undercertain circumstances, the sale of securities, without any limitation, by a person who is not an Affiliate of the Company and who has satisfied a oneyear holdingperiod. A sale under Rule 144 or under any other exemption from the Securities Act, if available, or pursuant to subsequent registrations of our shares of commonstock, may have a depressive effect upon the price of our shares of common stock in any active market that may develop.40We are a former “shell company” and as such are subject to certain limitations not applicable to other public companies generally.Prior to our suspension of reporting in 2012, we were a public reporting “shell company,” as defined in Rule 12b2 under the Exchange Act. Although weare no longer a “shell company,” we are subject to certain restrictions under the Securities Act for the resale of securities issued by issuers that have been at anytime previously a shell company. Specifically, the Rule 144 safe harbor available for the resale of our restricted securities is only available to our stockholders if wehave filed all reports and other materials required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934, as amended, or the Exchange Act, asapplicable, during the preceding twelve months, other than current reports on Form 8K, at the time of the proposed sale, regardless of whether the restrictedsecurities were initially issued at the time we were a shell company or subsequent to termination of such status. Accordingly, holders of our “restricted securities”within the meaning of Rule 144 will be subject to the conditions set forth in Rule 144 with respect to our company. Other reporting companies that are not formershell companies and have been reporting for more than twelve months are not subject to this same reporting threshold for nonaffiliate reliance on Rule 144.Accordingly, any restricted securities we have sold or sell in the future or issue to consultants or employees, in consideration for services rendered or for any otherpurpose, may not be resold unless such securities are registered with the SEC or the requirements of Rule 144 have been satisfied. As a result, it may be harder forus to fund our operations and pay our employees and consultants with our securities instead of cash. Furthermore, it may be harder for us to raise funding throughthe sale of debt or equity securities unless we agree to register such securities with the SEC, which could cause us to expend additional resources in the future. Ourprior status as a “shell company” could prevent us in the future from raising additional funds, engaging employees and consultants, and using our securities to payfor any acquisitions, which could cause the value of our securities, if any, to decline in value or become worthless.ITEM 1B. UNRESOLVED STAFF COMMENTSNone.ITEM 2. PROPERTIESWe currently lease 1,660 square feet of office space at 4 HaYarden Street, Airport City, Israel. The lease term is for 36 months beginning on August 20, 2019and ending on August 20, 2022, with an option to extend for an additional 36 months. Monthly rent payments, including utilities, amount to approximately $14,000per month. We extended the lease period until August 20, 2025.ITEM 3. LEGAL PROCEEDINGSFrom time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation issubject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.41North Empire LLCOn August 7, 2018, we commenced an action against North Empire LLC, or North Empire, in the Supreme Court of the State of New York, County of NewYork for breach of a Securities Purchase Agreement or Agreement in which we are seeking damages in an amount to be determined at trial, but in no event less than$616,000. On August 2, 2018, North Empire filed a Summons with Notice against us, also in the same Court, in which they allege damages in an amount of $11.4million arising from an alleged breach of the Agreement. On September 6, 2018, North Empire filed a Notice of Discontinuance of the action it had filed on August 2,2018. On September 27, 2018, North Empire filed an answer and asserted counterclaims in the action commenced by us against them, alleging that we failed to deliverstock certificates to North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against our CEO andnow former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018, we filed a reply to North Empire’scounterclaims. On November 15, 2018, our CEO and now former Chairman of the Board filed a motion to dismiss North Empire’s thirdparty complaint. On January 6,2020, the Court granted the motion and dismissed the thirdparty complaint. Discovery has been completed and both parties have filed motions for summaryjudgment in connection with the claims and counterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summaryjudgment, arguing there were factual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision.On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying the Company’s motion for summary judgment. On or about September 12,2022, the Court issued its Decision and Order denying the Company’s motion to reargue. North Empire filed its opposing brief on December 7, 2022. Both sides weregiven an opportunity to file a reply brief. We filed our reply brief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. Oral argument was heldbefore the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Court filed its Decision and Order, which affirmed the lower court’sdecisions regarding both My Size and North Empire’s motions for summary judgment and sent the case back to the Supreme Court. On or about March 13, 2023, theSupreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date for the mediation has not yet been set. We intend tovigorously defend any claims made by North Empire. We believe it is more likely than not that the counterclaims will be denied.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.42PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur stock currently is listed on the Tel Aviv Stock Exchange and the Nasdaq Capital Market under the symbol “MYSZ”. Our stock has been traded on theNasdaq Capital Market since July 25, 2016.HoldersAs of March 31, 2023, we had 70 shareholders of record. The actual number of stockholders is greater than this number of record holders and includesstockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our Board of Directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our Board of Directors deems relevant.Securities Authorized for Issuance under Equity Compensation PlansInformation about our equity compensation plans is incorporated herein by reference to “Item 12. Security Ownership of Certain Beneficial Owners andManagement and Related Stockholder Matters”, of this Annual Report on Form 10K.Recent Sales of Unregistered SecuritiesNone.ITEM 6. SELECTED FINANCIAL DATAAs a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULT OF OPERATIONSYou should read the following discussion along with our financial statements and the related notes included elsewhere in this Annual Report on Form10K. The following discussion contains forwardlooking statements that are subject to risks, uncertainties and assumptions, including those discussed under“Risk Factors.” Our actual results, performance and achievements may differ materially from those expressed in, or implied by, these forwardlooking statements.OverviewMySize is an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.43Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile device or through MySizeID Widget: a simple questionnaire which was uses a database collected over the years.MySizeID synchronizes the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and onlypresents items available for purchase that match their measurements to ensure a correct fit.MySize is positioning itself as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empowering brand design teams, which are designed to increaseend consumer satisfaction, contributing to a sustainable world and reduce operation costs.Orgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,682 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz BespokeTechnologies, S.L., or Naiz, a limited liability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.44The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 2,365,800 shares of My Size common stock were issuedto Whitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.45Operations in RussiaIn addition to our Israel operations, we had operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia. To date, mainly due to the invasion of Ukraine by Russia and the ongoing sanctions we stopped most ofour efforts in Russia and will probably close the subsidiary in the near future.Results of OperationsThe table below provides our results of operations for the periods indicated.Year ended December 3120222021(dollars in thousands)Revenues4,459131Cost of revenues(3,825)Gross profit634131Research and development expenses$(1,701)$(4,248)Sales and marketing(3,143)(2,336)General and administrative(3,900)(4,124)Operating loss(8,110)(10,577)Financial income (expenses), net(236)57Tax income36Net loss$(8,310)$(10,520)Year Ended December 31, 2022 Compared to Year Ended December 31, 2021RevenuesFrom inception through December 31, 2018, we did not generate any revenue from operations and we continue to expect to incur additional losses toperform further research and development activities. We started to generate revenues only in 2019. Our revenues for the year ended December 31, 2022 amounted to$4,459,000 compared to $131,000 for year ended December 31, 2021. The increase from the corresponding period primarily attributable to $4,132,000 in revenuegenerated from Orgad from February 7, 2022, the date of closing of the Orgad acquisition, or the Acquisition Date and revenue generated from the Naiz Acquisitionfrom October 11, 2022, the date of closing of the Naiz acquisition.In addition, the increase from the corresponding period results from an increase in revenues generated by My Size.Cost Of RevenuesOur cost of revenues expenses for the year ended December 31, 2022 amounted to $3,825,000, compared to none for the year ended December 31, 2021. Thecost of revenues includes cash and equity liabilities expenses in the amount of $194,000. The increase in comparison with the corresponding period was due to thecost of goods of the revenues generated from Orgad’s operations.Research and Development ExpensesOur research and development expenses for the year ended December 31, 2022 amounted to $1,701,000 a decrease of $2,547,000, or approximately 60.0%,compared to $4,248,000 for the year ended December 31, 2021. The decrease from the corresponding period primarily resulted from share based payment in amount of$2,618,000 attributed to the share issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021.Sales and Marketing ExpensesOur sales and marketing expenses for the year ended December 31, 2022 amounted to $3,143,000 an increase of $807,000, or 34.55%, compared to $2,336,000for the year ended December 31, 2021. The increase primarily resulted from an increase in employees expenses mainly due to Orgad and Naiz acquisitions, increase inAmazon fees, increase in cash and equity liabilities expenses attributed to the Orgad acquisition and an increase in share based payments offset by a decrease inpayments to consultants.46General and Administrative ExpensesOur general and administrative expenses for the year ended December 31, 2022 amounted to $3,900,000, a decrease of $224,000, or 5.43%, compared to$4,124,000 for the year ended December 31, 2021. The decrease compared to the corresponding period was mainly due to a decrease in professional expenses, mainlyattributed to shareholder activism including settlement expenses with the Lazar Parties offset by an increase in sharedbased payments and an increase in employeesexpenses mainly due to the Orgad and Naiz acquisitions.Operating LossAs a result of the foregoing, for the year ended December 31, 2022, our operating loss was $8,110,000, a decrease of $2,467,000 or 23.32%, compared to ouroperating loss for the year ended December 31, 2021 of $10,577,000.Financial Income, NetOur financial (expense) income, net for the year ended December 31, 2022 amounted to $236,000 compared to financial income, $57,000 for the year endedDecember 31, 2021. In 2022, we had financial expenses exchange rate differences offset by an income from fair value revaluation of investment in marketablesecurities whereas in 2021 we had financial income from the fair value revaluation of warrants offset by expenses from exchange rate differences and expenses fromfair value revaluation of investment in marketable securities.Net LossAs a result of the foregoing, our net loss for the year ended December 31, 2022 was $8,310,000 compared to net loss of $10,520,000 for the year endedDecember 31, 2021. The decrease in net loss was mainly due increase in sales and marketing expenses and financial expenses as opposed to financial income in thecorresponding period offset by a decrease in research and development expenses in amount of $2,618,000 attributed to the share issuance to Shoshana Zigdonunder the Amendment to Purchase Agreement dated May 26, 2021.Liquidity and Capital ResourcesSince our inception, we have funded our operations primarily through public and private offerings of debt and equity in Israel and in the U.S.As of December 31, 2022, we had cash, cash equivalents and restricted cash of $2,363,000 compared to $10,943,000 cash, cash equivalents, restricted cashas of December 31, 2021. During January 2023, we completed a registered direct and concurrent private placement offering resulting in gross proceeds ofapproximately $3 million. This decrease primarily resulted from our operating activities, the acquisition of Orgad and Naiz Fit, and resources that were deployed togrow of both businesses.Net cash used in operating activities was $7,290,000 for the year ended December 31, 2022 compared to $7,297,000 for the year ended December 31, 2021.The decrease in cash used in operating activity is derived mainly from an increase in share based payments and increase in account receivables mainly from theOrgad and Naiz fit acquisitions offset by a decrease in the net loss.Net cash used in investing activities for the year ended December 31, 2022 was $993,000 as opposed to net cash provided by investing activities of$161,000 for the year ended December 31, 2021. The net cash used in investing activities for the year ended December 31, 2022 was mainly from the acquisition ofOrgad and Naiz as opposed to proceeds from shortterm deposits and restricted deposits during the year ended December 31, 2021.We had a negative cash flow from financing activities of $67,000 for the year ended December 31, 2022 compared to positive cash flow of $16,292,000 for theyear ended December 31, 2021. The negative cash flow from financing activities for the year ended December 31, 2022 was mainly due to repayment of loans andinterest and payments for leases as opposed to proceeds from issuance of shares and from exercise of warrants for the year ended December 31, 2021.47We expect that we will continue to generate losses and negative cash flows from operations for the foreseeable future. Based on the projected cash flowsand cash balances as of December 31, 2022, together with the proceeds from the January 2023 financing, we believe our existing cash will not be sufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. We will need to raiseadditional capital, which may not be available on reasonable terms or at all. Additional capital would be used to accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;●respond to competitive pressures;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, the Russian invasion ofUkraine, the impact of any resurgence of the COVID19 pandemic and a number of other factors, many of which are outside our control, and on our financialperformance. Accordingly, we cannot assure you that we will be able to successfully raise additional capital at all or on terms that are acceptable to us. If we cannotraise additional capital when needed, it may have a material adverse effect on our business, results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.We have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.Recently Issued Accounting PronouncementsCertain recently issued accounting pronouncements are discussed in Note 2, Significant Accounting Policies, to the consolidated financial statementsincluded in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10K.OffBalance Sheet ArrangementsWe have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.48Application of Critical Accounting Policies and EstimatesOur management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we haveprepared in accordance with U.S. generally accepted accounting principles issued by the Financial Accounting Standards Board, or FASB. The preparation of thesefinancial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assetsand liabilities at the date of the financial statements, as well as the reported expenses during the reporting periods. Actual results may differ from these estimatesunder different assumptions or conditions.Our significant accounting policies were revenue from contracts with customers which are more fully described in the notes to our financial statementsincluded herein. We believe these accounting policies discussed below are critical to our financial results and to the understanding of our past and futureperformance, as these policies relate to the more significant areas involving management’s estimates and assumptions. We consider an accounting estimate to becritical if: (1) it requires us to make assumptions because information was not available at the time or it included matters that were highly uncertain at the time wewere making our estimate; and (2) changes in the estimate could have a material impact on our financial condition or results of operations.Accounting for business combinationsWe allocate the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed, based upon their estimated fairvalues at the acquisition date. These fair values are typically estimated with assistance from independent valuation specialists.The purchase price allocation process requires us to make significant estimates and assumptions, especially at the acquisition date with respect tointangible assets, contractual support obligations assumed, contingent consideration arrangements, and preacquisition contingencies.Although we believe the assumptions and estimates we have made in the past have been reasonable and appropriate, they are based in part on historicalexperience and information obtained from the management of the acquired companies and are inherently uncertain.Examples of critical estimates in valuing certain of the intangible assets we have acquired or may acquire in the future include but are not limited to:● future expected cash flows from product sales or other customer contracts;● expected costs of fulfillment including marketing, warehousing and product sales;● the acquired company’s brand and competitive position, as well as assumptions about the period of time the acquired brand will continue to be used inthe combined company’s product portfolio;● cost of capital and discount rates; and● estimating the useful lives of acquired assets as well as the pattern or manner in which the assets will amortize.Refer to Note 16, Business Combination, to the consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” of thisAnnual Report on Form 10K.49Revenue from contracts with customersOur revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled software subscriptions, associatedsoftware maintenance and support.We recognize revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with a customer exists onlywhen: the parties to the contract have approved it and are committed to perform their respective obligations, we can identify each party’s rights regarding thedistinct goods or services to be transferred (“performance obligations”), we can determine the transaction price for the goods or services to be transferred, thecontract has commercial substance and it is probable that we will collect the consideration to which we will be entitled in exchange for the goods or services that willbe transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to a customer.Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted to governmental authorities. Refundsare estimated at contract inception and updated at the end of each reporting period if additional information becomes available. Revenue is recognized when controlof the product is transferred to the customer.We maintain a returns policy that allows our customers to return product within a specified period of time. The estimate of the provision for returns is basedupon historical experience with actual returns.Principal versus Agent ConsiderationsWe follow the guidance provided in ASC 606 for determining whether we are a principal or an agent in arrangements with customers, by assessing whetherthe nature of our promise is a performance obligation to provide the specified goods (principal) or to arrange for those goods to be provided by the other party(agent). With regard to products being sold by Orgad through Amazon, this determination involves judgment. We determine it is the principle when it has controlover the promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).We recognize revenue ratably over the contractual service term for hosted services that are priced based on a committed number of transactions where thedelivery and consumption of the benefit of the services occur evenly over time, beginning on the date the services associated with the committed transactions arefirst made available to the customer and continuing through the end of the contractual service term. Over usage fees and fees based on the actual number oftransactions are billed in accordance with contract terms as these fees are incurred and are included in the transaction price of an arrangement as variableconsideration. Fees based on a number of transactions or impressions per month, are allocated to the period in which the transactions occur. Revenue forsubscriptions sold as a fee per period is recognized ratably over the contractual term as the customer simultaneously receives and consumes the benefit of theunderlying service.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.As a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.50ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAMY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2022U.S. DOLLARS IN THOUSANDSINDEXPageReport of Independent Registered Public Accounting Firm (PCAOB ID: ID 1057)F2Consolidated Balance SheetsF4Consolidated Statements of Comprehensive LossF5Consolidated Statements of Shareholders’ EquityF6Consolidated Statements of Cash FlowsF7Notes to Consolidated Financial StatementsF8 F33F1Report of Independent Registered Public Accounting FirmTo the Shareholders and Board of DirectorsMy Size, Inc.:Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of My Size, Inc. and subsidiaries (the Company) as of December 31, 2022 and 2021, the relatedconsolidated statements of comprehensive loss, shareholders’ equity, and cash flows for each of the years in the twoyear period ended December 31, 2022, and therelated notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, thefinancial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the twoyear periodended December 31, 2022, in conformity with U.S. generally accepted accounting principles.Going ConcernThe accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1d tothe consolidated financial statements, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit thatraises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1d. Theconsolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidatedfinancial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Critical Audit MattersCritical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to becommunicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved ourespecially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidatedfinancial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters oron the accounts or disclosures to which they relate.Acquisitiondate fair value of customer relationshipsAs discussed in Note 16 to the consolidated financial statements, on October 11, 2022, the Company acquired Naiz Bespoke Technologies SL (“Naiz”). As a result ofthe transaction, the Company acquired customer relationships intangible assets (“customer relationships”) representing the generation of future income from Naiz’sexisting customers. The acquisition date fair value of the customer relationships was $726 thousand.F2We identified the evaluation of the acquisitiondate fair value of the Naiz customer relationships as a critical audit matter. A high degree of subjective auditorjudgment was required to evaluate the following internally developed assumptions used to estimate the fair value of such asset, for which there were limitedobservable inputs: (i) forecasted revenues attributable to existing customers, (ii) forecasted earnings before interest, taxes, depreciation, and amortization(“EBITDA”) margins for the acquired business, (iii) estimated annual customer attrition rates and (iv) estimated discount rate. The determined fair value wassensitive to changes in these key assumptions. Additionally, specialized skills and knowledge were needed to evaluate the discount rate used.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s acquisitiondate fair value estimation process, including controls over the development of key assumptions. We performed a sensitivity analysis toassess the impact of reasonably possible changes to forecasted revenues, EBITDA margins, annual customer attrition rates, and the discount rate. We evaluated theforecasted revenue growth rates from existing customers by comparing the growth assumptions to those of the Company’s peers and industry reports. Inconnection with our assessment of the forecasts used in the valuation, we compared (1) forecasted revenue and EBITDA to Naiz’s historical actual results and (2)estimated annual customer attrition rates to historical Naiz customer attrition data. We tested the Company’s determined weighted average cost of capital(“WACC”), which was used to determine the discount rate, by involving valuation professionals with specialized skills and knowledge, who assisted in:Evaluating the selected discount rate by comparing it against a discount rate range that was independently developed using publicly available market datafor comparable companies, and;Assessing the Company’s WACC calculation, by comparing it against an independently estimated WACC range based on inputs obtained throughpublished surveys and studies.Goodwill impairment assessmentAs discussed in Note 16 to the consolidated financial statements, during 2022 the Company recorded goodwill of $1,257 thousand related to the acquisition of NaizBespoke Technologies, S.L. (“Naiz”). The Company performed an annual quantitative impairment test of goodwill at the reporting unit level. Based on this analysis,the Company determined that the fair value of its reporting unit exceeded its carrying value and no impairment charge was required.We identified the evaluation of the goodwill impairment assessment for the Naiz reporting unit as a critical audit matter. A high degree of subjective auditor judgmentwas required to evaluate the following assumptions used to estimate the fair value of the Company’s reporting unit, for which there were limited observable inputs:(i) forecasted reporting unit cash flows, (ii) longterm growth rates, and (iii) discount rates. The fair value was sensitive to changes in these key assumptions.Additionally, specialized skills and knowledge were needed to evaluate the discount rates.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s goodwill impairment evaluation process. We performed sensitivity analyses to assess the impact of reasonably possible changes to forecasted cashflows, longterm growth rates, and discount rates. We evaluated the Company’s forecasted growth rates by comparing the growth assumptions to those of theCompany’s peers and industry reports. We compared the Company’s forecasted revenue, cost of sales, and operating expense margins to historical actual results toassess the reasonableness of the forecasts. In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:– Assessing the Company’s WACC calculation, by comparing it against an estimated WACC range based on inputs obtained through published surveys andstudies– Evaluating the discount rates used by the Company by comparing them against discount rate ranges that were developed using publicly available market data forcomparable companies, and;– Performing an arithmetic recalculation regarding the fair value of the Company’s reporting unit, using the Company’s cash flow forecasts and the independentlydeveloped discount rates, and comparing the results to the Company’s fair value estimates./s/ Somekh ChaikinSomekh ChaikinMember Firm of KPMG InternationalWe have served as the Company’s auditor since 2017.Tel Aviv, IsraelApril 14, 2023F3MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED BALANCE SHEETSU.S. dollars in thousands (except share data)December 31,Note20222021AssetsCurrent assetsCash and cash equivalents32,10010,670Restricted cash263273Inventory997Account receivables1,94040Other receivables and prepaid expenses4758579Total current assets6,05811,562Long term deposits28Property and equipment, net5140112Operating rightofuse asset6583776Intangible assets71,377Goodwill71,395Investment in JV899Investment in marketable securities11471083,669996Total assets9,72712,558Liabilities and shareholders’ equityCurrent liabilitiesOperating lease liability6159138Shortterm loans9155Trade payables2,487635Liabilities to Related parties69863Other payables680392Total current liabilities4,1791,228Longterm loans9376Deferred tax liabilities328Operating lease liability6308473Total noncurrent liabilities1,012473CONTINGENCIES AND COMMITMENTS15Total Liabilities5,1911,701Shareholders’ equity13Stock capital Common stock of $0.001par value Authorized: 250,000,000and 100,000,000shares as of December 31,2022 and 2021; Issued and outstanding: 1,464,117and959,297 as of December 31,2022 and 2021, respectively (*)11Additional paidin capital58,67356,453Accumulated other comprehensive loss(637)(406)Accumulated deficit(53,501)(45,191)Total shareholders’ equity4,53610,857Total liabilities and shareholders’ equity9,72712,558(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F4MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSSU.S. dollars in thousands (except share data and per share data)Year endedDecember 31,Note20222021Revenues4,459131Cost of revenues(3,825)Gross profit634131Operating expensesResearch and development(1,701)(4,248)Sales and marketing18(3,143)(2,336)General and administrative19(3,900)(4,124)Total operating expenses(8,744)(10,708)Operating loss(8,110)(10,577)Financial income (expense), net20(236)57Loss before taxes(8,346)(10,520)Taxes on income36Net loss for the year(8,310)(10,520)Other comprehensive income (loss):Foreign currency translation differences(231)18Total comprehensive loss(8,541)(10,502)Basic and diluted loss per share (*)(7.47)(17.75)Basic and diluted weighted average number of shares outstanding (*)1,111,913420,385(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F5MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITYU.S. dollars in thousands (except share data)Common stockAdditionalpaidinAccumulatedothercomprehensiveAccumulatedTotalstockholders’NumberAmountcapitallossDeficitequityBalance as of January 1, 2021289,314(*)37,171(424)(34,671)2,076Stockbased compensation related to optionsgranted to employees and consultants373373Exercise of options granted to employees178(*)Restricted shares issued to shareholder (***)100,000(*)2,6182,618Issuance of shares, net of issuance cost of$1,160434,700112,58212,583Exercise of warrants135,108(*)3,7093,709Total comprehensive income (loss)18(10,520)(10,502)Balance as of December 31, 2021959,300156,453(406)(45,191)10,857Stockbased compensation related to optionsand restricted shares granted to employeesand consultants176,000(*)455455Issuance of shares in Business Combination(**)295,802(*)1,4461,446Issuance of shares post BusinessCombination (**)20,924(*)319319Effect of reverse stock split (Note 13 g)12,091(*)Total comprehensive income (loss)(231)(8,310)(8,541)Balance as of December 31, 20221,464,117158,673(637)(53,501)4,536(*)Represents an amount of less than $1.(**)See note 16(***)See note 1 bThe accompanying notes are an integral part of the consolidated financial statements.F6MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSU.S. dollars in thousandsYear endedDecember 31,20222021Cash flows from operating activities:Net loss(8,310)(10,520)Adjustments to reconcile net loss to net cash used in operating activities:Depreciation3842Change in operating lease rightofuse asset13543Amortization of intangible assets155foreign exchange differences(23)1Change in liabilities to related parties635Interest on long term liabilities10Interest paid(10)Revaluation of investment in marketable securities62(49)Restricted Shares issued to shareholder2,618Stock based compensation455373Issuance of shares post Business Combination319Change in inventory(219)Change in deferred tax liabilities(36)Change in account receivable(1,863)(12)Changes in operating lease liabilities(142)Change in other receivables and prepaid expenses184(99)Change in trade payables1,315253Change in other payables553Net cash used in operating activities(7,290)(7,297)Cash flows from investing activities:Acquisition of a subsidiary, net of cash acquired(767)Proceeds from restricted deposits, net184investing in other receivable(100)Investment in equity accounted investee(99)Purchase of property and equipment(27)(23)Net cash (used in) provided by investing activities(993)161Cash flows from financing activities:Proceeds from issuance of shares, net of issuance costs12,583Repayment of loans(67)Proceeds from exercise of warrants3,709Net cash (used in) provided by financing activities(67)16,292Effect of exchange rate fluctuations on cash and cash equivalents(230)13Change in cash and cash equivalents and restricted cash(8,580)9,169Cash and cash equivalents and restricted cash at the beginning of the year10,9431,774Cash and cash equivalents and restricted cash at the end of the year2,36310,943B) Aggregate cash flows derived for the Company as a result of the Orgad acquisition (note 16)2022Trade and other receivables364Inventory864Fixed assets55Longterm deposits31Selling Platform378Goodwill152Shortterm credit(181)Trade payables(580)Other payables(88)Longterm loan(138)Longterm provision(13)Deferred Tax Liability(87)Issuance of shares(457)Total acquisition of subsidiary, net of cash300C) Aggregate cash flows derived for the Company as a result of the Naiz acquisition (note 16)2022Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Issuance of shares(1,008)Total acquisition of subsidiary, net of cash467The accompanying notes are an integral part of the consolidated financial statements.F7MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERALa.My Size, Inc. is developing unique measurement technologies based on algorithms with applications in a variety of areas, from the apparel ecommerce market, to the courier services market and to the Do It Yourself (“DIY”) smartphone and tablet apps market. The technology is driven byproprietary algorithms, which are able to calculate and record measurements in a variety of novel ways.Following the acquisition of Naiz Bespoke Technologies, S.L (“Naiz”) in October 2022 (see note 16), the Company expanded its offering outreachand customer base.Following the acquisition of Orgad International Marketing Ltd. (“Orgad”) in February 2022 (see note 16), the Company also operates anomnichannel ecommerce platform.The Company has five subsidiaries, My Size Israel 2014 Ltd (“My Size Israel”), Topspin Medical (Israel) Ltd., and Orgad all of which areincorporated in Israel, and My Size LLC which was incorporated in the Russian Federation and Naiz Bespoke Technologies, S.L., a limited liabilitycompany incorporated under the laws of Spain (see note 16). References to the Company include the subsidiaries unless the context indicatesotherwise.My Size, Inc., was incorporated and commenced operations in September 1999, as Topspin Medical Inc. (“Topspin”), a private company registeredin the State of Delaware. In December 2013, the Company changed its name to Knowledgetree Ventures Inc. Subsequently, in February 2014, theCompany changed its name to My Size, Inc. Topspin was engaged, through its Israeli subsidiary, in research and development in the field ofcardiology and urology.Since September 1, 2005, the Company has traded on the Tel Aviv Stock Exchange (“TASE”).Between 2007 and 2012 the Company reported as a public company with the U.S. Securities and Exchange Commission (the “SEC”). In August2012, the Company suspended its reporting obligations under Section 13(a) and 15(d) of the Securities Exchange Act of 1934. In mid2015, theCompany resumed reporting as a public company.b.On January 9, 2014, at the Company’s general meeting of shareholders, its shareholders approved an engagement with one of the Company’sinvestors (the “Seller”) for the purchase of rights in a Venture (the “Venture”), including the rights to the method and the certain patent applicationthat had been filed by the Seller (the “Assets”). The Venture relates to the development of technologies and applications which will assist theconsumer to take his or her body measurements accurately using a mobile device to ensure the purchase of clothing with the best possible fitwithout the need to try them on.In February 2014, the Company established a wholly owned subsidiary, My Size (Israel) 2014 Ltd., a company registered in Israel, which iscurrently engaged in the development of the Venture described above.In return for purchasing an interest in the Venture, the Company undertook to pay the Seller 18% of the Company’s operating profit, direct orindirect, connected to the Venture for a period of seven years starting from the end of the Venture’s development period.As part of the agreement, the Seller received an option to buy back the Assets for consideration which will reflect the market fair value at that time,on the occurrence of the following events: a) if a motion is filed to liquidate the Company; b) if seven years after signing the agreement, theCompany’s total accumulated revenues, direct or indirect, from the Venture or the commercialization of the patent will be lower than NIS 3.6 million.In such an event, Seller may repurchase the interest in the Venture at a market price to be determined by an independent third party valuationconsultant, who shall be chosen by agreement by the parties, and the audit committee shall conduct the negotiations on behalf of the Company todetermine the identity of the consultant.On May 26, 2021, the Company, My Size Israel and Shoshana Zigdon entered into an Amendment to Purchase Agreement (the “Amendment”)which made certain amendments to a Purchase Agreement between the parties dated February 16, 2014 (the “Purchase Agreement”). Pursuant tothe Amendment, Ms. Zigdon agreed to irrevocably waive the right to repurchase certain assets related to the collection of data for measurementpurposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which the Company’s business is substantiallydependent, and all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My Size Israel underthe Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation,reward or any rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights(the “Waiver”). In consideration of the Waiver, the Company issued 100,000 shares of common stock to Ms. Zigdon in a private placement.F8MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERAL (Cont.)c.On July 25, 2016, the Company’s common stock began publicly trading on the Nasdaq Capital Market under the symbol “MYSZ”. The Company’sshares of common stock are listed both on the Nasdaq Capital Market and TASE.d.Since inception, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit of $53,501.The Company has financed its operations mainly through fundraising from various investors.The Company’s management expects that the Company will continue to generate losses and negative cash flows from operations for theforeseeable future. Based on the projected cash flows and cash balances as of December 31, 2022, management is of the opinion that its existingcash will be sufficient to fund operations for a period less than 12 months. As a result, there is substantial doubt about the Company’s ability tocontinue as a going concern.Management’s plans include the continued commercialization of the Company’s products and securing sufficient financing through the sale ofadditional equity securities, debt or capital inflows from strategic partnerships. Additional funds may not be available when the Company needsthem, on terms that are acceptable to it, or at all. If the Company is unsuccessful in commercializing its products and securing sufficient financing,it may need to cease operations.The financial statements include no adjustments for measurement or presentation of assets and liabilities, which may be required should theCompany fail to operate as a going concern.e.The Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificial intelligencedriven measurement solutions (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions. The fashion and equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. The SaaS based innovativeartificial intelligence driven measurement solutions, or SaaS Solutions operating segment consists of My Size Inc My Size Israel and LLC.NOTE 2 SIGNIFICANT ACCOUNTING POLICIESThe consolidated financial statements are prepared according to United States generally accepted accounting principles (“U.S. GAAP”), applied on aconsistent basis, as followsa.Use of estimates:The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions thataffect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.Information about assumptions made by the Company with respect to the future and other reasons for uncertainty with respect to estimates thathave a significant risk of resulting in a material adjustment to carrying amounts of assets and liabilities in the next financial year are included in thefollowing notes:Acquisitions of subsidiariesThe Company measures the fair value of the consideration transferred (including contingent consideration) and fair value of the assets acquiredand liabilities assumed, in business combination transactions. For information on details on fair value measurement in acquisition of subsidiaries,see Note 16 regarding business combinations.Estimated impairment of nonfinancial assetsThe Company examines on an annual basis whether there is an impairment of goodwill, intangibles and property, plant and equipment that areallocated to cash generating units, in accordance with the accounting policy presented in Note 1(h) below. Recoverable amounts of cashgenerating units are determined on the basis of valueinuse calculations. These calculations require the use of estimates.For information on key assumptions used in calculation of the recoverable amount, see note 7 – Goodwill and other Intangible assets.b.Functional currency:The currency of the primary economic environment in which the operations of the Company is conducted is the United States Dollar and thus it isthe Company’s functional currency. The reporting currency according to which these financial statements are prepared is the U.S. dollar.The currency of the primary economic environment in which the operation of the Subsidiary, My Size Israel and Orgad International MarketingLtd. functional currency is the New Israeli Shekel (“NIS”).The currency of the primary economic environment in which the operation of the Subsidiary, My Size LLC, functional currency is Russian Ruble.The currency of the primary economic environment in which the operation of the Subsidiary, Naiz fit, functional currency is Euro.F9MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)c.Principles of consolidation:The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances andtransactions have been eliminated upon consolidation.d.Cash equivalents:Cash equivalents are shortterm highly liquid investments that are readily convertible to cash with original maturities of three months or less at thedate acquired.e.Restricted cashRestricted cash are deposits for rent, credit card and for hedging activities.f.Inventories:Inventories include finished goods and are measured at the lower of cost or net realizable value. The cost of inventories comprises of the costsincurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary courseof business. At the point of the loss recognition, a new, lowercost basis for that inventory is established, and subsequent changes in facts andcircumstances do not result in the restoration or increase in that newly established cost basis. The costs of purchase of inventories comprise thepurchase price and other costs directly attributable to the acquisition of finished goods. In 2022, the Company recorded an inventory markdownof $48.g.Property and equipment:Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straightline method over theestimated useful lives of the assets, at the following annual rates:%Computers and peripheral equipment33Office furniture and equipment720Leasehold improvementsOver the term of the leaseor the useful life of theimprovements, whicheveris shorterh.Impairment of longlived assets:The Company’s property and equipment are reviewed for impairment in accordance with ASC 360, “Property Plant and Equipment”, wheneverevents or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held andused is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by theassets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount ofthe assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less sellingcosts. During the periods ended December 31, 2022 and 2021, no impairment losses have been recorded.i.Business combinations:The Company applies the provisions of ASC 805, “Business Combination” and allocates the fair value of purchase consideration to the tangibleassets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchaseconsideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assetsacquired and liabilities assumed, the Company estimated the future expected cash flows from acquired platform, customer relationships,Technology and trademark from a market participant perspective, useful lives and discount rates. In addition, management makes significantestimates and assumptions, which are uncertain, but believed to be reasonable.Acquisitionrelated costs are recognized separately from the acquisition and are expensed as incurred.F10MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)j.Goodwill:Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a businesscombination. Under ASC 350, “Intangible Goodwill and Other”, goodwill is not amortized, but rather is subject to an annual impairment test.ASC 350 requires goodwill to be tested for impairment at the reporting unit level at least annually, the fourth quarter, or between annual tests incertain circumstances, and written down when impaired. Goodwill is tested for impairment by comparing the fair value of the reporting unit with itcarrying value. Goodwill from Orgad acquisition was allocated to the fashion and equipment ecommerce platform segment and Goodwill from theNaiz acquisition was allocated to Naiz segment based innovative artificial intelligence driven measurement solutions.Alternatively, ASC 350 permits an entity to bypass the qualitative assessment for any reporting unit and proceed directly to performing the firststep of the goodwill impairment test. There were no impairment charges to goodwill during the period presented.k.Intangible assets:Intangible assets consist of identifiable intangible assets that the Company has acquired from previous business combinations. Intangible assetsare recorded at costs, net of accumulated amortization. The Company amortizes its intangible assets reflecting the pattern in which the economicbenefits of the intangible assets are consumed. When a pattern cannot be reliably determined, the Company uses a straightline amortizationmethod. Amortization is calculated by the straightline method over the estimated useful lives of the following assets.The estimated useful lives of the company’s intangible assets are as follows:yearsCustomer Relationships7Technology5Trademark5Selling Platform3Each period the Company evaluates the estimated remaining useful lives of its intangible assets and whether events or changes in circumstanceswarrant a revision to the remaining period of amortizationl.Severance pay:The Subsidiary’s liability for severance pay is covered by Section 14 of the Israeli Severance Pay Law (“Section 14”). Under Section 14, employeesin Israel are entitled to have monthly deposits, at a rate of 8.33% of their monthly salary, made on their behalf to their insurance funds. Payments inaccordance with Section 14 exempt the Subsidiary from any additional obligation for these employees. As a result, the Subsidiary does notrecognize any liability for severance pay due to these employees and the deposits under Section 14 are not recorded as an asset in theSubsidiary’s balance sheet. These contributions for compensation represent defined contribution plans and expenses are recorded based onactual deposits.Other than the My Size Israel’s liability there are no additional severance pay liabilities.F11MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)m.Research and development costs:Research and development costs are charged to the statement of operations, as incurred. Most of the research and development expenses are forwages, related expenses and subcontractors.n.Income taxes:The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilitiesfor the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Companies’ taxreturns. Deferred taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities using enactedtax rates in effect in the years in which the differences are expected to reverse. The Company assesses the likelihood that its deferred tax assetswill be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely thannot that all or a portion of deferred tax assets will not be realized. The Company establishes a valuation allowance, if necessary, to reduce deferredtax assets to the amount more likely than not to be realized. As of December 31, 2022, and 2021, a full valuation allowance was established by theCompany.The Company implements a twostep approach to recognize and measure the benefit of its tax positions. The first step is to evaluate the taxposition taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that,on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigationprocesses. The second step is to measure the tax benefit as the largest amount that is greater than 50 percent (cumulative basis) likely to berealized upon settlement.The Company believes that its tax positions are all highly certain of being upheld upon examination. As of December 31,2022 and 2021 the Company recorded a liability for unrecognized tax benefits of $328 and none respectively.o.Accounting for stockbased compensation:The Company accounts for its employees’ stockbased compensation as an expense in the financial statements based on ASC 718. All awards areequity classified and therefore such costs are measured at the grant date fair value of the award and graded vesting attribution approach torecognize compensation cost over the vesting period. The Company estimates stock option grant date fair value using the Binomial and BlackScholes option pricingmodel.The Company recorded stock options issued to nonemployees at the grant date fair value, and recognizes expenses over the related serviceperiod by using the straightline attribution approach in accordance with ASU 201807. All awards are equity classified.The expected volatility of the share prices reflects the assumption that the historical volatility of the share prices is reasonably indicative ofexpected future trends.The riskfree interest rate for grants with an exercise price denominated in USD for employees and several consultants is based on the yield fromUS treasury zerocoupon bonds with an equivalent term.The Company has historically not paid dividends and has no foreseeable plans to pay dividends.F12MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)p.Fair value of financial instruments:ASC 820, Fair Value Measurements and Disclosures, relating to fair value measurements, defines fair value and established a framework formeasuring fair value. The ASC 820 fair value hierarchy distinguishes between market participant assumptions developed based on market dataobtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptionsdeveloped based on the best information available in the circumstances. ASC 820 defines fair value as the price that would be received to sell anasset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price. Inaddition, the fair value of assets and liabilities should include consideration of nonperformance risk, which for the liabilities described belowincludes the Company’s own credit risk.As a basis for considering such assumptions, ASC 820 establishes a threetier value hierarchy, which prioritizes the inputs used in the valuationmethodologies in measuring fair value:Level 1 Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access. Valuationadjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readilyand regularly available in an active market, valuation of these products does not entail a significant degree of judgment.Level 2 Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, eitherdirectly or indirectly.Level 3 Valuations based on inputs that are unobservable and significant to the overall fair value measurement.The Company holds share certificates in iMine Corporation (“iMine”) formerly known as Diamante Minerals, Inc., a publiclytraded company onthe OTCQB.Due to sales restrictions on the sale of the iMine shares, the fair value of the shares was measured on the basis of the quoted market price for anotherwise identical unrestricted equity instrument of the same issuer that trades in a public market, adjusted to reflect the effect of the salesrestrictions and is therefore, ranked as Level 2 asset.q.Basic and diluted net loss per share:Basic net loss per share is computed based on the weighted average number of shares of common stock outstanding during each year. Diluted netincome per share is computed based on the weighted average number of shares of common stock outstanding during each year plus dilutivepotential equivalent common stock considered outstanding during the year, in accordance with ASC 260, “Earnings per Share”. For the yearsended December 31, 2022 and 2021, all outstanding options and warrants have been excluded from the calculation of the diluted net loss per sharesince their effect was antidilutive.r.Concentrations of credit risk:Financial instruments that potentially subject the Company and its subsidiaries to concentrations of credit risk consist principally of cash andcash equivalents.Cash and cash equivalents are invested in banks in Israel, Spain and United States. Such deposits in United States may be in excess of insuredlimits and are not insured in other jurisdictions. Management believes that the financial institutions that hold the Company’s investments arefinancially sound and, accordingly, minimal credit risk exists with respect to these investments.The Company and its subsidiaries have no offbalancesheet concentration of credit risk such as foreign exchange contracts, option contracts orother foreign hedging arrangements.F13MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)s.Revenue Recognition:The Company’s revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled softwaresubscriptions, associated software maintenance and support.The Company recognizes revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with acustomer exists only when: the parties to the contract have approved it and are committed to perform their respective obligations, the Companycan identify each party’s rights regarding the distinct goods or services to be transferred (“performance obligations”), the Company can determinethe transaction price for the goods or services to be transferred, the contract has commercial substance and it is probable that the Company willcollect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to acustomer. Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted togovernmental authorities. Refunds are estimated at contract inception and updated at the end of each reporting period if additional informationbecomes available. Revenue is recognized when control of the product is transferred to the customer.The Company maintains a returns policy that allows its customers to return product within a specified period of time. The estimate of the provisionfor returns is based upon historical experience with actual returns.Principal versus Agent ConsiderationsThe Company follows the guidance provided in ASC 606 for determining whether it is a principal or an agent in arrangements with customers, byassessing whether the nature of the Company’s promise is a performance obligation to provide the specified goods (principal) or to arrange forthose goods to be provided by the other party (agent). With regard to products being sold by Orgad through Amazon, this determination involvesjudgment. The Company determines it is the principle when it has control over promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).The Company recognizes revenue ratably over the contractual service term for hosted services that are priced based on a committed number oftransactions where the delivery and consumption of the benefit of the services occur evenly over time, beginning on the date the servicesassociated with the committed transactions are first made available to the customer and continuing through the end of the contractual serviceterm. Over usage fees and fees based on the actual number of transactions are billed in accordance with contract terms as these fees are incurredand are included in the transaction price of an arrangement as variable consideration. Fees based on a number of transactions or impressions permonth, are allocated to the period in which the transactions occur. Revenue for subscriptions sold as a fee per period is recognized ratably overthe contractual term as the customer simultaneously receives and consumes the benefit of the underlying service.F14MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)t.Contingencies and CommitmentsLiabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it isprobable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with losscontingencies are expensed as incurred.u.Derivative instrumentsThe Company accounts for its derivative instruments as either assets or liabilities and measures them at fair value through profit or loss.v.LeasesThe Company leases include an office space lease agreement for 36 months, with an option to extend for an additional 36 months and 36 monthscancelable operating lease agreements on behalf of personnel vehicles. The lease term includes a noncancellable period of the lease plus anyadditional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise,or an option to extend (or not to terminate) the lease controlled by the lessor.ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make leasepayments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value oflease payments over the lease term. The company generally use its incremental borrowing rate based on the estimated rate of interest forcollateralized borrowing over a similar term of the lease payments at commencement date. Lease expense for lease payments is recognized on astraightline basis over the lease term.For the office rent lease, the Company has elected to account for the lease and nonlease maintenance components as a single lease component.Therefore, the lease payments used to measure the lease liability include all of the fixed consideration in the contract, including insubstance fixedpayments, owed over the lease term.w.Impact of recently issued accounting standardIn June 2016, the FASB issued ASU 201613, “Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses on FinancialInstruments”, which requires companies to measure credit losses of financial instruments, including customer accounts receivable, utilizing amethodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information toinform credit loss estimates. Subsequent to the issuance of ASU 201613, the FASB issued several additional Accounting Standard Updates toclarify implementation guidance, provide narrowscope improvements and provide additional disclosure guidance. As an Emerging GrowthCompany, ASU 201613 is effective for fiscal years beginning after December 15, 2022. The Company does not expect this ASU to have a materialimpact on its consolidated financial statements.F15MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 3 CASH AND CASH EQUIVALENTSThe Company’s cash and cash equivalents balance at December 31, 2022 and 2021 is denominated in the following currencies:December 31,20222021US Dollars1,65110,184New Israeli Shekels259433Other190532,10010,670NOTE 4 OTHER RECEIVABLES AND PREPAID EXPENSESDecember 31,20222021Prepaid expenses and other current assets322429Government authorities28317Other153133Total758579NOTE 5 PROPERTY AND EQUIPMENT, NETComputersandperipheralequipmentOfficefurnitureandequipmentLeaseholdimprovementsTotalCostBalance as at January 1, 20211825860300Additions2323Translation adjustments72211Balance as at December 31, 20212126062334Balance as at January 1, 20222126062334Additions161127Business combination401555Translation adjustments(32)(8)(8)(48)Balance as at December 31, 20222367854368Accumulated DepreciationBalance as at January 1, 20211461412172Additions2751042Translation adjustments6118Balance as at December 31, 20211792023222Balance as at January 1, 20221792023222Additions209938Translation adjustments(27)(3)(2)(32)Balance as at December 31, 20221722630228Carrying amountsAs at December 31, 2021334039112As at December 31, 2022645224140F16MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 6 LEASESIn August 2019, The Company entered into an office space lease agreement. The lease term is for 36 months beginning on August 20, 2019 and endingon August 20, 2022, with an option to extend for an additional 36 months. The Company extended the lease period until August 20, 2025. Monthly rentpayments including utilities amounting to approximately USD 14 (NIS 49,500) per month.In addition, The Company entered into a threeyear cancelable operating lease agreement for cars.These operating leases are included in “Right of use asset” on the Company’s December 31, 2022 consolidated balance sheets, and represent theCompany’s right to use the underlying asset for the lease term. The Company’s obligations to make lease payments are included in the currentliabilities as “Operating lease liability” and in the noncurrent liabilities as “Operating lease liability long term” on the Company’s December 31, 2022consolidated balance sheets. As of December 31, 2022, rightofuse of asset was $583. operating lease liabilities were $159 and non current Operatinglease liabilities were $308. Rightofuse asset includes the capitalization of improvements (net of amortization) amounting to $105.Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value ofthe lease payments.The interest rate used to discount future lease payment was 11.95%.Maturities of lease liabilities as of December 31, 2022 were as follows:Year Ending:2023$1912024$1912025$127Thereafter$509Less imputed interest:$(42)Total lease liabilities$467F17MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 7 – Goodwill and other Intangible assetsA.Identified intangible assetsSchedule of Intangible assetsSelling PlatformTechnologyCustomerRelationshipsOtherTotalThousandsUSDThousandsUSDThousandsUSDThousandsUSDThousandsUSDCostAs of January 1, 2022Acquisitions through business combinations378286726771,467Effect of changes in exchange rates(32)2565765As of December 31, 2022346311791841,532AmortizationAs of January 1, 2022Amortization for the year including effect of changes inexchange rates as of December 31, 2022(109)(15)(27)(4)(155)Carrying amountAs of December 31, 2022237296764801,377AmortizationAmortization expenses recorded for identified intangible assets in the Consolidated Statements of Operations for each period and were as follows:Line ItemDecember 31,2022December 31,2021Selling platformCosts of revenues109TrademarkSales and marketing4TechnologyCosts of revenues15Customer relationshipsSales and marketing27Total amortization expenses155Future amortization expenses are expected to be as follows:20232024202520262027ThereafterTotalFuture amortization expenses3033031941771561791,312b.GoodwillThe changes in the carrying amount of goodwill for the years ended December 31, 2022 and 2021 were as follows:Fashion and equipmentecommerce platformNaizTotalBalance as of December 31, 2021Changes during the period:Goodwill acquired1521,1521,304Goodwill impairmentTranslation differences(14)10591Balance as of December 31, 20221381,2571,395The Company operates its business through three reporting segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovativeartificial intelligence driven measurement solutions and (iii) Naiz. See note 17 for additional segments information.The Company determines the fair value of its reporting units using the income approach. According to the income, the Company uses discounted cashflows to estimate the fair value. Cash flow projections are based on the Company’s estimates of revenue growth rates and operating margins, takinginto consideration the industry’s and market’s conditions. The discount rate used is based on the weighted average cost of capital (“WACC”),adjusted for the relevant risk associated with businessspecific characteristics.The Company performed a quantitative assessment as of December, 31 2022 for the reporting units’ fair value. The estimated fair value of the Fashionand equipment ecommerce platform and Naiz reporting units exceeded its estimated carrying amount by 95.9% and 27.7% respectively. This, based thefollowing assumptions:Fashion and equipmentecommerce platformNaizDiscount rate21%23%Terminal growth rate3%3%If business conditions or expectations were to change materially, it may be necessary to record impairment charges to the Company’s reporting units inthe future.F18MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 8 Investment in JVIn August 2022, the Company established a joint venture (“JV”) in Brazil with Santista Têxtil. The Company holds 51% and Santista Têxtil holds 49% of theJV. The purpose of the JV is to serve the Brazilian market according to the business plan that was set. Both parties agree to make an initial investment in theJV of $198that will be made per the holding percentage of each party. As of the reporting date, the JV is in process of establishing its operation.NOTE 9 Financial LiabilitiesThe book value of each of the financial liability categories is an acceptable approximation of fair value.The debt is comprised of four loans that were granted to My Size Israel – in an outstanding amount of approximately $131, bearing interest rangingfrom prime rate to prime+2.8% rate, and four loans that were granted to the Spanish subsidiary– in an outstanding amount of approximately $400,bearing interest ranging from 1% to 3%.The financial liability maturities during the five years following the end of the financial year are shown below:UntilUntilUntilUntilUntilAfterTOTAL311223311224311225311226311227311227311222Debts with credit institutions15513892874712531NOTE 10 RELATED PARTIES TRANSACTIONSA. Balances with related parties:The following related party payables are included in liability to related parties.December 31,20222021Officers (*)4143Liability in respect of business combinations (**)739Other related parties (***)(95)Directors152069863(*)The amount includes the net salaries payables.(**)The amount includes the provision created to former owners of Orgad that are entitled to additional cash and equity consideration and former owners of Naizthat entitled to additional cash consideration, see note 16 business combination.(***)The amount includes an amount receivable from Orgad previous shareholders who currently work in the company.B. Related parties benefits:Year endedDecember 31,20222021Salaries and related expenses1,440852Share based payments39673Cash liability and equity liability expenses related to acquisitions (**)1,058Directors58582,952983(**)The amount includes the expenses for a provision created to former owners of Orgad that are entitled to additional cash and equity consideration and formerowners of Naiz that entitled to additional cash consideration, see note 16 business combination.NOTE 11 FINANCIAL INSTRUMENTSThe following tables presents the Company’s significant assets and liabilities that are measured at fair value on recurring basis and their classificationwithin the fair value hierarchy:December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities47financial assets (*)10December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesDerivatives9December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities108December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesWarrants derivative2(*)the financial asset includes in other receivables.F19MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 11 FINANCIAL INSTRUMENTS (Cont.)The carrying amounts of cash and cash equivalents, restricted cash, short term restricted deposit, accounts receivable, other receivables and prepaidexpenses, trade payable and accounts payable approximate their fair value due to the shortterm maturities of such instruments.At December 31, 2022, the recognized gain and fair value (based on quoted market prices with a discount due to security restrictions on iMine shares)of the marketable securities were $59and $47, respectively (at December 31, 2021 $49and $108, respectively).NOTE 12 TAXES ON INCOMEa.On December 31, 2022, the Company had U.S. federal net operating loss carryforwards of approximately $26 available to reduce future taxableincome. Utilization of the U.S. net operating losses may be subject to substantial limitations due to the change of ownership provisions of theInternal Revenue Code of 1986.The U.S. Company has final tax assessments through 2014.On December 22, 2017, the Tax Reform Act was signed into law. The legislation significantly changes U.S. tax law by, among other things, lowering theU.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. As a result of the decrease in the corporate incometax rate, the Company revalued the ending net deferred tax assets at December 31, 2017, but did not recognize any incremental income tax expense in2017 due to the revaluation of the valuation allowance.b.Foreign tax:1.Tax rates:Presented hereunder are the tax rates relevant to the Company’s Israeli subsidiaries:2022 23%2021 23% Presented hereunder are the tax rates relevant to the Company’s Spanish subsidiary:2022 24%2.The Company’s Israeli subsidiaries have estimated total available carryforward operating tax losses for Israeli income tax purposes ofapproximately $64as of December 31, 2022. Of these losses, a total of $47.5are owned by Topspin Medical (Israel) Ltd. Topspin tax lossesmay be offset only by future income with respect to the same operational activity by which it was incurred for an indefinite period of time. Theother losses are owned by My Size Israel and may be carryforward to offset against future income for an indefinite period of time.3.Topspin Medical (Israel) Ltd. and My Size (Israel) 2014 Ltd. has final tax assessments through 2016.c.U.S. and foreign components of loss from continuing operations, before income taxes consisted of:December 31,20222021U.S(1,180)(3,802)NonU.S. (foreign)(7,130)(6,718)(8,310)(10,520)F20MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 12 TAXES ON INCOME (Cont.)d.Deferred taxes:Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reportingpurposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows:December 31,20222021Deferred tax assets:Operating loss carryforwards20,13120,238Warrants and options145126Marketable securities390377Intangible assets(328)Research and development expenses586341Other temporary differences203Deferred tax assets before valuation allowance21,12721,082Valuation allowance(21,455)(21,082)Net deferred tax liability(328)The following table presents a reconciliation of the beginning and ending valuation allowance:December 31,20222021Balance at beginning of the year21,08218,968Additions in valuation allowance to the income statement1,7581,625Additions in valuation allowance due to exchange rate differences(1,385)489Balance at end of the year21,45521,082In assessing the realization of deferred tax assets, management considers whether it is more likely than not that all or some portion of the deferred taxassets will not be realized.The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporarydifferences are deductible and net operating losses are utilized. Based on consideration of these factors, the Company recorded a full valuationallowance at December 31, 2021 and 2020.e.Theoretical taxThe following presents the adjustment between the theoretical tax amount and the tax amount included in the financial statements:December 31,20222021Loss before income taxes8,34610,520Statutory tax rate21%21%Computed “expected” tax income1,7522,209Foreign tax rate differences and exchange rate differences149131Nondeductible expenses(107)(715)Change in valuation allowance(1,758)(1,625)Taxes on income36F21MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITYa.Common stock confers upon their holders the right to receive notice to participate and vote in general meetings of the Company, and the right toreceive dividends if declared.b.On January 8, 2021, the Company conducted a public offering of its securities pursuant to which it issued 62,768 shares of its common stock forgross proceeds of $2,008. The net proceeds to the Company from the offering were approximately $1,700, after deducting placement agent’s feesand other estimated offering expenses payable by the Company.c.During 2021, a holders of warrants exercised warrants to purchase 135,109 ordinary shares of the Company in exchange for $3,709.d.On March 25, 2021, the Company conducted a public offering of its shares of common stock pursuant to which it issued 104,741 shares of itscommon stock for gross proceeds of $3,300. The net proceeds to the Company from the offering were approximately $2,872, after deductingplacement agent’s fees and other estimated offering expenses payable by the Company.On May 7, 2021, the Company issued an additional 15,711 shares of the Company’s common stock in connection with the full exercise of theunderwriter’s overallotment option granted in the Company’s March 2021 public offering. These additional shares were sold to the underwriter at apublic offering price of $31.5 per share, resulting in additional net proceeds to the Company, net of the underwriting discount, of approximately$463.e.On May 26, 2021, the Company issued 100,000 shares of common stock to Ms. Zigdon in consideration of the Waiver. See note 1(b) above.f.On October 28, 2021, the Company sold in a registered direct offering 100,592 shares of its common stock and, in a concurrent private placement,an aggregate of 75,444 unregistered warrants to purchase shares of common stock, at an offering price of $33.8 per share and associated warrant.In addition, on the same day, the Company sold in a private placement 150,888 unregistered shares of common stock and unregistered warrants topurchase up to an aggregate of 113,166 shares of common stock at the same purchase price as in the registered direct offering. The warrants areimmediately exercisable and will expire five years from issuance at an exercise price of $31.5 per share, subject to adjustment as set forth therein.The gross proceeds from the offerings were $8,500. The net proceeds to the Company from the offerings were approximately $7,560, afterdeducting placement agent’s fees and other estimated offering expenses payable by the Company. In connection with the offerings, the Companyissued to the placement agent warrants to purchase 17,603 shares on substantially the same terms as the purchasers in the offerings at an exerciseprice of $42.25 per share and a term expiring on October 26, 2026.g.On December 7, 2022, the Company’s board of directors approved a 1for25 reverse stock split of the Company’s issued and outstanding sharesof common stock. The reverse stock split became effective on December 8, 2022. In order not to have fractional shares as a result of the reversestock split, the Company issued an additional 12,091 shares of common stock. As a result, all shares of common stock, options for shares ofcommon stock, exercise price and net loss per share amounts were adjusted retroactively for all periods presented in these financial statements.F22MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITY (Cont.)g.A summary of the warrant activity during the years ended December 31, 2022 and 2021 is presented below:Number ofWarrantsWeightedAverageExercisePriceWeightedAverageRemainingLife inYearsOutstanding, December 31, 2020216,85936.754.26Issued206,214Expired or exercised(135,109)Outstanding, December 31, 2021287,96431.004.35IssuedExpired or exercised(17,901)Outstanding, December 31, 2022270,06330.213.36Exercisable, December 31, 2022270,06330.213.36NOTE 14 STOCK BASED COMPENSATIONThe stockbased expense recognized in the financial statements for services received is related to Research and Development, Sales and Marketingand General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense Research and development15195Stockbased compensation expense Sales and marketing126180Stockbased compensation expense General and administrative17898455373The stockbased expense recognized in the financial statements for services received post Acquisition of Orgad (see note 16) is related to Cost OfGoods, Sales and Marketing and General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense – Cost of goods80Stockbased compensation expense Sales and marketing112Stockbased compensation expense General and administrative127319F23MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Options issued to consultantsWe can sell additional shares of common stock without consulting stockholders and without offering shares to existing stockholders, which wouldresult in dilution of shareholders’ interests in the company and could depress our stock price.Our Certificate of Incorporation currently authorizes 250,000,000 shares of common stock, of which 2,446,780 are currently outstanding as of March 31, 2023and our board of directors is authorized to issue additional shares of our common stock. Although our board of directors intends to utilize its reasonable businessjudgment to fulfil its fiduciary obligations to our then existing stockholders in connection with any future issuance of our capital stock, the future issuance ofadditional shares of our capital stock could cause immediate, and potentially substantial, dilution to our existing stockholders, which could also have a materialeffect on the market value of the shares. Further, other than certain participation rights that we have granted in a past offering, our shares do not have preemptiverights, which means we can sell shares of our capital stock to other persons without offering purchasers in this offering the right to purchase their proportionateshare of such offered shares. Therefore, any additional sales of stock by us could dilute your ownership interest in our Company.Our quarterly operating results may fluctuate significantly.We expect our operating results to be subject to quarterly fluctuations. Our net loss and other operating results will be affected by numerous factors,including:●variations in the level of expenses related to our research and development;●any lawsuits in which we may become involved;●regulatory developments affecting our products; and●our execution of any collaborative, licensing or sales agreements, and the timing of payments under these arrangements.If our quarterly operating results fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially.Furthermore, any quarterly fluctuations in our operating results may, in turn, cause the price of our common stock to fluctuate substantially.If we fail to comply with the rules under the Sarbanes Oxley Act of 2002 related to accounting controls and procedures or if we discover materialweaknesses and deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult.If we fail to comply with the rules under the SarbanesOxley Act of 2002 related to disclosure controls and procedures, or, if we discover materialweaknesses and other deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult. Section 404 of the SarbanesOxley Act requires annual management assessments of the effectiveness of our internal control over financial reporting and, ifwe are no longer a nonaccelerated filer, a report by our independent auditors addressing these assessments. If material weaknesses or significant deficiencies arediscovered or if we otherwise fail to achieve and maintain the adequacy of our internal control, we may not be able to ensure that we can conclude on an ongoingbasis that we have effective internal controls over financial reporting in accordance with Section 404 of the SarbanesOxley Act. Moreover, effective internalcontrols are necessary for us to produce reliable financial reports and are important to helping prevent financial fraud. If we cannot provide reliable financial reportsor prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price ofour common stock could drop significantly.38Our Certificate of Incorporation, Bylaws and Delaware law may have antitakeover effects that could discourage, delay or prevent a change incontrol, which may cause our stock price to decline.Our Certificate of Incorporation, Bylaws and Delaware law could make it more difficult for a thirdparty to acquire us, even if closing such a transactionwould be beneficial to our stockholders. Provisions of our Certificate of Incorporation, Bylaws and Delaware law also could have the effect of discouraging potentialacquisition proposals or making a tender offer or delaying or preventing a change in control, including changes a stockholder might consider favorable. Suchprovisions may also prevent or frustrate attempts by our stockholders to replace or remove our management. In particular, the Certificate of Incorporation, Bylawsand Delaware law, as applicable, among other things:●provide the board of directors with the ability to alter the Bylaws without stockholder approval;●the classification of our board of directors;●place limitations on the removal of directors;●provide that vacancies on the Board of Directors may be filled by a majority of directors in office, although less than a quorum;●require that stockholder actions must be affected at a duly called stockholder meeting and generally prohibiting stockholder actions by written consent;●eliminate the ability of stockholders to call a special meeting of stockholders; and●establish advance notice requirements for nominations for election to the Board of Directors or for proposing matters that can be acted upon at duly calledstockholder meetings.We are subject to Section 203 of the Delaware General Corporation Law which, subject to certain exceptions, prohibits “business combinations” between apubliclyheld Delaware corporation and an “interested stockholder,” which is generally defined as a stockholder who becomes a beneficial owner of 15% or more ofa Delaware corporation’s voting stock for a threeyear period following the date that such stockholder became an interested stockholder. These provisions areexpected to discourage certain types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to firstnegotiate with our board. These provisions may delay or prevent someone from acquiring or merging with us, which may cause the market price of our commonstock and the value of our securities to decline.If we fail to comply with the continued listing requirements of the Nasdaq Capital Market, our common stock may be delisted and the price of ourcommon stock and our ability to access the capital markets could be negatively impacted.Nasdaq has established certain standards for the continued listing of a security on the Nasdaq Capital Market. The standards for continued listing include,among other things, that the minimum bid price for the listed securities not fall below $1.00 per share for a period of 30 consecutive trading days and that wemaintain a minimum of $2,500,000 in shareholders’ equity. We have in the past fallen below the minimum bid price and minimum shareholders’ equity.39No assurance can be given that we will continue to be in compliance with the Rule. Failure to meet applicable Nasdaq continued listing standards couldresult in a delisting of our common stock. A delisting of our common stock from Nasdaq could materially reduce the liquidity of our common stock and result in acorresponding material reduction in the price of our common stock. In addition, delisting could harm our ability to raise capital through alternative financing sourceson terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, employees and fewer business development opportunities.The exercise of outstanding warrants and stock options will have a dilutive effect on the percentage ownership of our capital stock by existingstockholders.As of March 15, 2023, we had outstanding warrants to acquire 2,299,115 shares of our common stock and stock options to purchase 1,659 shares of ourcommon stock, which warrants and options are exercisable for prices ranging between $2.81 and $375. The expiration of the term of such options and warrants rangefrom 0.22 years to 4.83 years. If a significant number of such warrants and stock options are exercised by the holders, the percentage of our common stock ownedby our existing stockholders will be diluted.Were our common stock to become subject to the penny stock rules then this could result in U.S. brokerdealers becoming discouraged from effectingtransactions in shares of our common stock.Rule 15g9 under the Exchange Act establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a marketprice of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. If we do not retain a listing on the NasdaqCapital Market or do not meet certain net tangible asset or average revenue requirements and if the price of our common stock is less than $5.00, our common stockwill be deemed a penny stock. For any transaction involving a penny stock, unless exempt, the rules require: (a) that a broker or dealer approve a person’s accountfor transactions in penny stocks; and (b) the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantityof the penny stock to be purchased.In order to approve a person’s account for transactions in penny stocks, the broker or dealer must: (a) obtain financial information and investmentexperience objectives of the person and (b) make a reasonable determination that the transactions in penny stocks are suitable for that person and the person hassufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver,prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which: (a) sets forth the basis on whichthe broker or dealer made the suitability determination; and (b) confirms that the broker or dealer received a signed, written agreement from the investor prior to thetransaction. Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult forinvestors to dispose of our common stock and cause a decline in the market value of our common stock.Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissionspayable to both the broker or dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor incases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the accountand information on the limited market in penny stocks.Sales of our currently issued and outstanding stock may become freely tradable pursuant to Rule 144 and may dilute the market for your shares andhave a depressive effect on the price of the shares of our common stock.A portion of our outstanding shares of common stock are “restricted securities” within the meaning of Rule 144 under the Securities Act of 1933, asamended, or the Securities Act. As restricted shares, these shares may be resold only pursuant to an effective registration statement or under the requirements ofRule 144 or other applicable exemptions from registration under the Securities Act and as required under applicable state securities laws. Rule 144 provides inessence that an affiliate (as such term is defined in Rule 144(a)(1)) of an issuer who has held restricted securities for a period of at least six months (one year afterfiling Form 10 information with the SEC for shell companies and former shell companies) may, under certain conditions, sell every three months, in brokeragetransactions, a number of shares that does not exceed the greater of 1% of a company’s outstanding shares of common stock or the average weekly trading volumeduring the four calendar weeks prior to the sale (the four calendar week rule does not apply to companies quoted on the OTC Markets). Rule 144 also permits, undercertain circumstances, the sale of securities, without any limitation, by a person who is not an Affiliate of the Company and who has satisfied a oneyear holdingperiod. A sale under Rule 144 or under any other exemption from the Securities Act, if available, or pursuant to subsequent registrations of our shares of commonstock, may have a depressive effect upon the price of our shares of common stock in any active market that may develop.40We are a former “shell company” and as such are subject to certain limitations not applicable to other public companies generally.Prior to our suspension of reporting in 2012, we were a public reporting “shell company,” as defined in Rule 12b2 under the Exchange Act. Although weare no longer a “shell company,” we are subject to certain restrictions under the Securities Act for the resale of securities issued by issuers that have been at anytime previously a shell company. Specifically, the Rule 144 safe harbor available for the resale of our restricted securities is only available to our stockholders if wehave filed all reports and other materials required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934, as amended, or the Exchange Act, asapplicable, during the preceding twelve months, other than current reports on Form 8K, at the time of the proposed sale, regardless of whether the restrictedsecurities were initially issued at the time we were a shell company or subsequent to termination of such status. Accordingly, holders of our “restricted securities”within the meaning of Rule 144 will be subject to the conditions set forth in Rule 144 with respect to our company. Other reporting companies that are not formershell companies and have been reporting for more than twelve months are not subject to this same reporting threshold for nonaffiliate reliance on Rule 144.Accordingly, any restricted securities we have sold or sell in the future or issue to consultants or employees, in consideration for services rendered or for any otherpurpose, may not be resold unless such securities are registered with the SEC or the requirements of Rule 144 have been satisfied. As a result, it may be harder forus to fund our operations and pay our employees and consultants with our securities instead of cash. Furthermore, it may be harder for us to raise funding throughthe sale of debt or equity securities unless we agree to register such securities with the SEC, which could cause us to expend additional resources in the future. Ourprior status as a “shell company” could prevent us in the future from raising additional funds, engaging employees and consultants, and using our securities to payfor any acquisitions, which could cause the value of our securities, if any, to decline in value or become worthless.ITEM 1B. UNRESOLVED STAFF COMMENTSNone.ITEM 2. PROPERTIESWe currently lease 1,660 square feet of office space at 4 HaYarden Street, Airport City, Israel. The lease term is for 36 months beginning on August 20, 2019and ending on August 20, 2022, with an option to extend for an additional 36 months. Monthly rent payments, including utilities, amount to approximately $14,000per month. We extended the lease period until August 20, 2025.ITEM 3. LEGAL PROCEEDINGSFrom time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation issubject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.41North Empire LLCOn August 7, 2018, we commenced an action against North Empire LLC, or North Empire, in the Supreme Court of the State of New York, County of NewYork for breach of a Securities Purchase Agreement or Agreement in which we are seeking damages in an amount to be determined at trial, but in no event less than$616,000. On August 2, 2018, North Empire filed a Summons with Notice against us, also in the same Court, in which they allege damages in an amount of $11.4million arising from an alleged breach of the Agreement. On September 6, 2018, North Empire filed a Notice of Discontinuance of the action it had filed on August 2,2018. On September 27, 2018, North Empire filed an answer and asserted counterclaims in the action commenced by us against them, alleging that we failed to deliverstock certificates to North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against our CEO andnow former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018, we filed a reply to North Empire’scounterclaims. On November 15, 2018, our CEO and now former Chairman of the Board filed a motion to dismiss North Empire’s thirdparty complaint. On January 6,2020, the Court granted the motion and dismissed the thirdparty complaint. Discovery has been completed and both parties have filed motions for summaryjudgment in connection with the claims and counterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summaryjudgment, arguing there were factual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision.On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying the Company’s motion for summary judgment. On or about September 12,2022, the Court issued its Decision and Order denying the Company’s motion to reargue. North Empire filed its opposing brief on December 7, 2022. Both sides weregiven an opportunity to file a reply brief. We filed our reply brief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. Oral argument was heldbefore the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Court filed its Decision and Order, which affirmed the lower court’sdecisions regarding both My Size and North Empire’s motions for summary judgment and sent the case back to the Supreme Court. On or about March 13, 2023, theSupreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date for the mediation has not yet been set. We intend tovigorously defend any claims made by North Empire. We believe it is more likely than not that the counterclaims will be denied.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.42PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur stock currently is listed on the Tel Aviv Stock Exchange and the Nasdaq Capital Market under the symbol “MYSZ”. Our stock has been traded on theNasdaq Capital Market since July 25, 2016.HoldersAs of March 31, 2023, we had 70 shareholders of record. The actual number of stockholders is greater than this number of record holders and includesstockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our Board of Directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our Board of Directors deems relevant.Securities Authorized for Issuance under Equity Compensation PlansInformation about our equity compensation plans is incorporated herein by reference to “Item 12. Security Ownership of Certain Beneficial Owners andManagement and Related Stockholder Matters”, of this Annual Report on Form 10K.Recent Sales of Unregistered SecuritiesNone.ITEM 6. SELECTED FINANCIAL DATAAs a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULT OF OPERATIONSYou should read the following discussion along with our financial statements and the related notes included elsewhere in this Annual Report on Form10K. The following discussion contains forwardlooking statements that are subject to risks, uncertainties and assumptions, including those discussed under“Risk Factors.” Our actual results, performance and achievements may differ materially from those expressed in, or implied by, these forwardlooking statements.OverviewMySize is an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.43Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile device or through MySizeID Widget: a simple questionnaire which was uses a database collected over the years.MySizeID synchronizes the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and onlypresents items available for purchase that match their measurements to ensure a correct fit.MySize is positioning itself as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empowering brand design teams, which are designed to increaseend consumer satisfaction, contributing to a sustainable world and reduce operation costs.Orgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,682 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz BespokeTechnologies, S.L., or Naiz, a limited liability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.44The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 2,365,800 shares of My Size common stock were issuedto Whitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.45Operations in RussiaIn addition to our Israel operations, we had operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia. To date, mainly due to the invasion of Ukraine by Russia and the ongoing sanctions we stopped most ofour efforts in Russia and will probably close the subsidiary in the near future.Results of OperationsThe table below provides our results of operations for the periods indicated.Year ended December 3120222021(dollars in thousands)Revenues4,459131Cost of revenues(3,825)Gross profit634131Research and development expenses$(1,701)$(4,248)Sales and marketing(3,143)(2,336)General and administrative(3,900)(4,124)Operating loss(8,110)(10,577)Financial income (expenses), net(236)57Tax income36Net loss$(8,310)$(10,520)Year Ended December 31, 2022 Compared to Year Ended December 31, 2021RevenuesFrom inception through December 31, 2018, we did not generate any revenue from operations and we continue to expect to incur additional losses toperform further research and development activities. We started to generate revenues only in 2019. Our revenues for the year ended December 31, 2022 amounted to$4,459,000 compared to $131,000 for year ended December 31, 2021. The increase from the corresponding period primarily attributable to $4,132,000 in revenuegenerated from Orgad from February 7, 2022, the date of closing of the Orgad acquisition, or the Acquisition Date and revenue generated from the Naiz Acquisitionfrom October 11, 2022, the date of closing of the Naiz acquisition.In addition, the increase from the corresponding period results from an increase in revenues generated by My Size.Cost Of RevenuesOur cost of revenues expenses for the year ended December 31, 2022 amounted to $3,825,000, compared to none for the year ended December 31, 2021. Thecost of revenues includes cash and equity liabilities expenses in the amount of $194,000. The increase in comparison with the corresponding period was due to thecost of goods of the revenues generated from Orgad’s operations.Research and Development ExpensesOur research and development expenses for the year ended December 31, 2022 amounted to $1,701,000 a decrease of $2,547,000, or approximately 60.0%,compared to $4,248,000 for the year ended December 31, 2021. The decrease from the corresponding period primarily resulted from share based payment in amount of$2,618,000 attributed to the share issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021.Sales and Marketing ExpensesOur sales and marketing expenses for the year ended December 31, 2022 amounted to $3,143,000 an increase of $807,000, or 34.55%, compared to $2,336,000for the year ended December 31, 2021. The increase primarily resulted from an increase in employees expenses mainly due to Orgad and Naiz acquisitions, increase inAmazon fees, increase in cash and equity liabilities expenses attributed to the Orgad acquisition and an increase in share based payments offset by a decrease inpayments to consultants.46General and Administrative ExpensesOur general and administrative expenses for the year ended December 31, 2022 amounted to $3,900,000, a decrease of $224,000, or 5.43%, compared to$4,124,000 for the year ended December 31, 2021. The decrease compared to the corresponding period was mainly due to a decrease in professional expenses, mainlyattributed to shareholder activism including settlement expenses with the Lazar Parties offset by an increase in sharedbased payments and an increase in employeesexpenses mainly due to the Orgad and Naiz acquisitions.Operating LossAs a result of the foregoing, for the year ended December 31, 2022, our operating loss was $8,110,000, a decrease of $2,467,000 or 23.32%, compared to ouroperating loss for the year ended December 31, 2021 of $10,577,000.Financial Income, NetOur financial (expense) income, net for the year ended December 31, 2022 amounted to $236,000 compared to financial income, $57,000 for the year endedDecember 31, 2021. In 2022, we had financial expenses exchange rate differences offset by an income from fair value revaluation of investment in marketablesecurities whereas in 2021 we had financial income from the fair value revaluation of warrants offset by expenses from exchange rate differences and expenses fromfair value revaluation of investment in marketable securities.Net LossAs a result of the foregoing, our net loss for the year ended December 31, 2022 was $8,310,000 compared to net loss of $10,520,000 for the year endedDecember 31, 2021. The decrease in net loss was mainly due increase in sales and marketing expenses and financial expenses as opposed to financial income in thecorresponding period offset by a decrease in research and development expenses in amount of $2,618,000 attributed to the share issuance to Shoshana Zigdonunder the Amendment to Purchase Agreement dated May 26, 2021.Liquidity and Capital ResourcesSince our inception, we have funded our operations primarily through public and private offerings of debt and equity in Israel and in the U.S.As of December 31, 2022, we had cash, cash equivalents and restricted cash of $2,363,000 compared to $10,943,000 cash, cash equivalents, restricted cashas of December 31, 2021. During January 2023, we completed a registered direct and concurrent private placement offering resulting in gross proceeds ofapproximately $3 million. This decrease primarily resulted from our operating activities, the acquisition of Orgad and Naiz Fit, and resources that were deployed togrow of both businesses.Net cash used in operating activities was $7,290,000 for the year ended December 31, 2022 compared to $7,297,000 for the year ended December 31, 2021.The decrease in cash used in operating activity is derived mainly from an increase in share based payments and increase in account receivables mainly from theOrgad and Naiz fit acquisitions offset by a decrease in the net loss.Net cash used in investing activities for the year ended December 31, 2022 was $993,000 as opposed to net cash provided by investing activities of$161,000 for the year ended December 31, 2021. The net cash used in investing activities for the year ended December 31, 2022 was mainly from the acquisition ofOrgad and Naiz as opposed to proceeds from shortterm deposits and restricted deposits during the year ended December 31, 2021.We had a negative cash flow from financing activities of $67,000 for the year ended December 31, 2022 compared to positive cash flow of $16,292,000 for theyear ended December 31, 2021. The negative cash flow from financing activities for the year ended December 31, 2022 was mainly due to repayment of loans andinterest and payments for leases as opposed to proceeds from issuance of shares and from exercise of warrants for the year ended December 31, 2021.47We expect that we will continue to generate losses and negative cash flows from operations for the foreseeable future. Based on the projected cash flowsand cash balances as of December 31, 2022, together with the proceeds from the January 2023 financing, we believe our existing cash will not be sufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. We will need to raiseadditional capital, which may not be available on reasonable terms or at all. Additional capital would be used to accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;●respond to competitive pressures;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, the Russian invasion ofUkraine, the impact of any resurgence of the COVID19 pandemic and a number of other factors, many of which are outside our control, and on our financialperformance. Accordingly, we cannot assure you that we will be able to successfully raise additional capital at all or on terms that are acceptable to us. If we cannotraise additional capital when needed, it may have a material adverse effect on our business, results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.We have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.Recently Issued Accounting PronouncementsCertain recently issued accounting pronouncements are discussed in Note 2, Significant Accounting Policies, to the consolidated financial statementsincluded in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10K.OffBalance Sheet ArrangementsWe have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.48Application of Critical Accounting Policies and EstimatesOur management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we haveprepared in accordance with U.S. generally accepted accounting principles issued by the Financial Accounting Standards Board, or FASB. The preparation of thesefinancial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assetsand liabilities at the date of the financial statements, as well as the reported expenses during the reporting periods. Actual results may differ from these estimatesunder different assumptions or conditions.Our significant accounting policies were revenue from contracts with customers which are more fully described in the notes to our financial statementsincluded herein. We believe these accounting policies discussed below are critical to our financial results and to the understanding of our past and futureperformance, as these policies relate to the more significant areas involving management’s estimates and assumptions. We consider an accounting estimate to becritical if: (1) it requires us to make assumptions because information was not available at the time or it included matters that were highly uncertain at the time wewere making our estimate; and (2) changes in the estimate could have a material impact on our financial condition or results of operations.Accounting for business combinationsWe allocate the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed, based upon their estimated fairvalues at the acquisition date. These fair values are typically estimated with assistance from independent valuation specialists.The purchase price allocation process requires us to make significant estimates and assumptions, especially at the acquisition date with respect tointangible assets, contractual support obligations assumed, contingent consideration arrangements, and preacquisition contingencies.Although we believe the assumptions and estimates we have made in the past have been reasonable and appropriate, they are based in part on historicalexperience and information obtained from the management of the acquired companies and are inherently uncertain.Examples of critical estimates in valuing certain of the intangible assets we have acquired or may acquire in the future include but are not limited to:● future expected cash flows from product sales or other customer contracts;● expected costs of fulfillment including marketing, warehousing and product sales;● the acquired company’s brand and competitive position, as well as assumptions about the period of time the acquired brand will continue to be used inthe combined company’s product portfolio;● cost of capital and discount rates; and● estimating the useful lives of acquired assets as well as the pattern or manner in which the assets will amortize.Refer to Note 16, Business Combination, to the consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” of thisAnnual Report on Form 10K.49Revenue from contracts with customersOur revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled software subscriptions, associatedsoftware maintenance and support.We recognize revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with a customer exists onlywhen: the parties to the contract have approved it and are committed to perform their respective obligations, we can identify each party’s rights regarding thedistinct goods or services to be transferred (“performance obligations”), we can determine the transaction price for the goods or services to be transferred, thecontract has commercial substance and it is probable that we will collect the consideration to which we will be entitled in exchange for the goods or services that willbe transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to a customer.Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted to governmental authorities. Refundsare estimated at contract inception and updated at the end of each reporting period if additional information becomes available. Revenue is recognized when controlof the product is transferred to the customer.We maintain a returns policy that allows our customers to return product within a specified period of time. The estimate of the provision for returns is basedupon historical experience with actual returns.Principal versus Agent ConsiderationsWe follow the guidance provided in ASC 606 for determining whether we are a principal or an agent in arrangements with customers, by assessing whetherthe nature of our promise is a performance obligation to provide the specified goods (principal) or to arrange for those goods to be provided by the other party(agent). With regard to products being sold by Orgad through Amazon, this determination involves judgment. We determine it is the principle when it has controlover the promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).We recognize revenue ratably over the contractual service term for hosted services that are priced based on a committed number of transactions where thedelivery and consumption of the benefit of the services occur evenly over time, beginning on the date the services associated with the committed transactions arefirst made available to the customer and continuing through the end of the contractual service term. Over usage fees and fees based on the actual number oftransactions are billed in accordance with contract terms as these fees are incurred and are included in the transaction price of an arrangement as variableconsideration. Fees based on a number of transactions or impressions per month, are allocated to the period in which the transactions occur. Revenue forsubscriptions sold as a fee per period is recognized ratably over the contractual term as the customer simultaneously receives and consumes the benefit of theunderlying service.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.As a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.50ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAMY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2022U.S. DOLLARS IN THOUSANDSINDEXPageReport of Independent Registered Public Accounting Firm (PCAOB ID: ID 1057)F2Consolidated Balance SheetsF4Consolidated Statements of Comprehensive LossF5Consolidated Statements of Shareholders’ EquityF6Consolidated Statements of Cash FlowsF7Notes to Consolidated Financial StatementsF8 F33F1Report of Independent Registered Public Accounting FirmTo the Shareholders and Board of DirectorsMy Size, Inc.:Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of My Size, Inc. and subsidiaries (the Company) as of December 31, 2022 and 2021, the relatedconsolidated statements of comprehensive loss, shareholders’ equity, and cash flows for each of the years in the twoyear period ended December 31, 2022, and therelated notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, thefinancial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the twoyear periodended December 31, 2022, in conformity with U.S. generally accepted accounting principles.Going ConcernThe accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1d tothe consolidated financial statements, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit thatraises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1d. Theconsolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidatedfinancial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Critical Audit MattersCritical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to becommunicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved ourespecially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidatedfinancial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters oron the accounts or disclosures to which they relate.Acquisitiondate fair value of customer relationshipsAs discussed in Note 16 to the consolidated financial statements, on October 11, 2022, the Company acquired Naiz Bespoke Technologies SL (“Naiz”). As a result ofthe transaction, the Company acquired customer relationships intangible assets (“customer relationships”) representing the generation of future income from Naiz’sexisting customers. The acquisition date fair value of the customer relationships was $726 thousand.F2We identified the evaluation of the acquisitiondate fair value of the Naiz customer relationships as a critical audit matter. A high degree of subjective auditorjudgment was required to evaluate the following internally developed assumptions used to estimate the fair value of such asset, for which there were limitedobservable inputs: (i) forecasted revenues attributable to existing customers, (ii) forecasted earnings before interest, taxes, depreciation, and amortization(“EBITDA”) margins for the acquired business, (iii) estimated annual customer attrition rates and (iv) estimated discount rate. The determined fair value wassensitive to changes in these key assumptions. Additionally, specialized skills and knowledge were needed to evaluate the discount rate used.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s acquisitiondate fair value estimation process, including controls over the development of key assumptions. We performed a sensitivity analysis toassess the impact of reasonably possible changes to forecasted revenues, EBITDA margins, annual customer attrition rates, and the discount rate. We evaluated theforecasted revenue growth rates from existing customers by comparing the growth assumptions to those of the Company’s peers and industry reports. Inconnection with our assessment of the forecasts used in the valuation, we compared (1) forecasted revenue and EBITDA to Naiz’s historical actual results and (2)estimated annual customer attrition rates to historical Naiz customer attrition data. We tested the Company’s determined weighted average cost of capital(“WACC”), which was used to determine the discount rate, by involving valuation professionals with specialized skills and knowledge, who assisted in:Evaluating the selected discount rate by comparing it against a discount rate range that was independently developed using publicly available market datafor comparable companies, and;Assessing the Company’s WACC calculation, by comparing it against an independently estimated WACC range based on inputs obtained throughpublished surveys and studies.Goodwill impairment assessmentAs discussed in Note 16 to the consolidated financial statements, during 2022 the Company recorded goodwill of $1,257 thousand related to the acquisition of NaizBespoke Technologies, S.L. (“Naiz”). The Company performed an annual quantitative impairment test of goodwill at the reporting unit level. Based on this analysis,the Company determined that the fair value of its reporting unit exceeded its carrying value and no impairment charge was required.We identified the evaluation of the goodwill impairment assessment for the Naiz reporting unit as a critical audit matter. A high degree of subjective auditor judgmentwas required to evaluate the following assumptions used to estimate the fair value of the Company’s reporting unit, for which there were limited observable inputs:(i) forecasted reporting unit cash flows, (ii) longterm growth rates, and (iii) discount rates. The fair value was sensitive to changes in these key assumptions.Additionally, specialized skills and knowledge were needed to evaluate the discount rates.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s goodwill impairment evaluation process. We performed sensitivity analyses to assess the impact of reasonably possible changes to forecasted cashflows, longterm growth rates, and discount rates. We evaluated the Company’s forecasted growth rates by comparing the growth assumptions to those of theCompany’s peers and industry reports. We compared the Company’s forecasted revenue, cost of sales, and operating expense margins to historical actual results toassess the reasonableness of the forecasts. In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:– Assessing the Company’s WACC calculation, by comparing it against an estimated WACC range based on inputs obtained through published surveys andstudies– Evaluating the discount rates used by the Company by comparing them against discount rate ranges that were developed using publicly available market data forcomparable companies, and;– Performing an arithmetic recalculation regarding the fair value of the Company’s reporting unit, using the Company’s cash flow forecasts and the independentlydeveloped discount rates, and comparing the results to the Company’s fair value estimates./s/ Somekh ChaikinSomekh ChaikinMember Firm of KPMG InternationalWe have served as the Company’s auditor since 2017.Tel Aviv, IsraelApril 14, 2023F3MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED BALANCE SHEETSU.S. dollars in thousands (except share data)December 31,Note20222021AssetsCurrent assetsCash and cash equivalents32,10010,670Restricted cash263273Inventory997Account receivables1,94040Other receivables and prepaid expenses4758579Total current assets6,05811,562Long term deposits28Property and equipment, net5140112Operating rightofuse asset6583776Intangible assets71,377Goodwill71,395Investment in JV899Investment in marketable securities11471083,669996Total assets9,72712,558Liabilities and shareholders’ equityCurrent liabilitiesOperating lease liability6159138Shortterm loans9155Trade payables2,487635Liabilities to Related parties69863Other payables680392Total current liabilities4,1791,228Longterm loans9376Deferred tax liabilities328Operating lease liability6308473Total noncurrent liabilities1,012473CONTINGENCIES AND COMMITMENTS15Total Liabilities5,1911,701Shareholders’ equity13Stock capital Common stock of $0.001par value Authorized: 250,000,000and 100,000,000shares as of December 31,2022 and 2021; Issued and outstanding: 1,464,117and959,297 as of December 31,2022 and 2021, respectively (*)11Additional paidin capital58,67356,453Accumulated other comprehensive loss(637)(406)Accumulated deficit(53,501)(45,191)Total shareholders’ equity4,53610,857Total liabilities and shareholders’ equity9,72712,558(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F4MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSSU.S. dollars in thousands (except share data and per share data)Year endedDecember 31,Note20222021Revenues4,459131Cost of revenues(3,825)Gross profit634131Operating expensesResearch and development(1,701)(4,248)Sales and marketing18(3,143)(2,336)General and administrative19(3,900)(4,124)Total operating expenses(8,744)(10,708)Operating loss(8,110)(10,577)Financial income (expense), net20(236)57Loss before taxes(8,346)(10,520)Taxes on income36Net loss for the year(8,310)(10,520)Other comprehensive income (loss):Foreign currency translation differences(231)18Total comprehensive loss(8,541)(10,502)Basic and diluted loss per share (*)(7.47)(17.75)Basic and diluted weighted average number of shares outstanding (*)1,111,913420,385(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F5MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITYU.S. dollars in thousands (except share data)Common stockAdditionalpaidinAccumulatedothercomprehensiveAccumulatedTotalstockholders’NumberAmountcapitallossDeficitequityBalance as of January 1, 2021289,314(*)37,171(424)(34,671)2,076Stockbased compensation related to optionsgranted to employees and consultants373373Exercise of options granted to employees178(*)Restricted shares issued to shareholder (***)100,000(*)2,6182,618Issuance of shares, net of issuance cost of$1,160434,700112,58212,583Exercise of warrants135,108(*)3,7093,709Total comprehensive income (loss)18(10,520)(10,502)Balance as of December 31, 2021959,300156,453(406)(45,191)10,857Stockbased compensation related to optionsand restricted shares granted to employeesand consultants176,000(*)455455Issuance of shares in Business Combination(**)295,802(*)1,4461,446Issuance of shares post BusinessCombination (**)20,924(*)319319Effect of reverse stock split (Note 13 g)12,091(*)Total comprehensive income (loss)(231)(8,310)(8,541)Balance as of December 31, 20221,464,117158,673(637)(53,501)4,536(*)Represents an amount of less than $1.(**)See note 16(***)See note 1 bThe accompanying notes are an integral part of the consolidated financial statements.F6MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSU.S. dollars in thousandsYear endedDecember 31,20222021Cash flows from operating activities:Net loss(8,310)(10,520)Adjustments to reconcile net loss to net cash used in operating activities:Depreciation3842Change in operating lease rightofuse asset13543Amortization of intangible assets155foreign exchange differences(23)1Change in liabilities to related parties635Interest on long term liabilities10Interest paid(10)Revaluation of investment in marketable securities62(49)Restricted Shares issued to shareholder2,618Stock based compensation455373Issuance of shares post Business Combination319Change in inventory(219)Change in deferred tax liabilities(36)Change in account receivable(1,863)(12)Changes in operating lease liabilities(142)Change in other receivables and prepaid expenses184(99)Change in trade payables1,315253Change in other payables553Net cash used in operating activities(7,290)(7,297)Cash flows from investing activities:Acquisition of a subsidiary, net of cash acquired(767)Proceeds from restricted deposits, net184investing in other receivable(100)Investment in equity accounted investee(99)Purchase of property and equipment(27)(23)Net cash (used in) provided by investing activities(993)161Cash flows from financing activities:Proceeds from issuance of shares, net of issuance costs12,583Repayment of loans(67)Proceeds from exercise of warrants3,709Net cash (used in) provided by financing activities(67)16,292Effect of exchange rate fluctuations on cash and cash equivalents(230)13Change in cash and cash equivalents and restricted cash(8,580)9,169Cash and cash equivalents and restricted cash at the beginning of the year10,9431,774Cash and cash equivalents and restricted cash at the end of the year2,36310,943B) Aggregate cash flows derived for the Company as a result of the Orgad acquisition (note 16)2022Trade and other receivables364Inventory864Fixed assets55Longterm deposits31Selling Platform378Goodwill152Shortterm credit(181)Trade payables(580)Other payables(88)Longterm loan(138)Longterm provision(13)Deferred Tax Liability(87)Issuance of shares(457)Total acquisition of subsidiary, net of cash300C) Aggregate cash flows derived for the Company as a result of the Naiz acquisition (note 16)2022Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Issuance of shares(1,008)Total acquisition of subsidiary, net of cash467The accompanying notes are an integral part of the consolidated financial statements.F7MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERALa.My Size, Inc. is developing unique measurement technologies based on algorithms with applications in a variety of areas, from the apparel ecommerce market, to the courier services market and to the Do It Yourself (“DIY”) smartphone and tablet apps market. The technology is driven byproprietary algorithms, which are able to calculate and record measurements in a variety of novel ways.Following the acquisition of Naiz Bespoke Technologies, S.L (“Naiz”) in October 2022 (see note 16), the Company expanded its offering outreachand customer base.Following the acquisition of Orgad International Marketing Ltd. (“Orgad”) in February 2022 (see note 16), the Company also operates anomnichannel ecommerce platform.The Company has five subsidiaries, My Size Israel 2014 Ltd (“My Size Israel”), Topspin Medical (Israel) Ltd., and Orgad all of which areincorporated in Israel, and My Size LLC which was incorporated in the Russian Federation and Naiz Bespoke Technologies, S.L., a limited liabilitycompany incorporated under the laws of Spain (see note 16). References to the Company include the subsidiaries unless the context indicatesotherwise.My Size, Inc., was incorporated and commenced operations in September 1999, as Topspin Medical Inc. (“Topspin”), a private company registeredin the State of Delaware. In December 2013, the Company changed its name to Knowledgetree Ventures Inc. Subsequently, in February 2014, theCompany changed its name to My Size, Inc. Topspin was engaged, through its Israeli subsidiary, in research and development in the field ofcardiology and urology.Since September 1, 2005, the Company has traded on the Tel Aviv Stock Exchange (“TASE”).Between 2007 and 2012 the Company reported as a public company with the U.S. Securities and Exchange Commission (the “SEC”). In August2012, the Company suspended its reporting obligations under Section 13(a) and 15(d) of the Securities Exchange Act of 1934. In mid2015, theCompany resumed reporting as a public company.b.On January 9, 2014, at the Company’s general meeting of shareholders, its shareholders approved an engagement with one of the Company’sinvestors (the “Seller”) for the purchase of rights in a Venture (the “Venture”), including the rights to the method and the certain patent applicationthat had been filed by the Seller (the “Assets”). The Venture relates to the development of technologies and applications which will assist theconsumer to take his or her body measurements accurately using a mobile device to ensure the purchase of clothing with the best possible fitwithout the need to try them on.In February 2014, the Company established a wholly owned subsidiary, My Size (Israel) 2014 Ltd., a company registered in Israel, which iscurrently engaged in the development of the Venture described above.In return for purchasing an interest in the Venture, the Company undertook to pay the Seller 18% of the Company’s operating profit, direct orindirect, connected to the Venture for a period of seven years starting from the end of the Venture’s development period.As part of the agreement, the Seller received an option to buy back the Assets for consideration which will reflect the market fair value at that time,on the occurrence of the following events: a) if a motion is filed to liquidate the Company; b) if seven years after signing the agreement, theCompany’s total accumulated revenues, direct or indirect, from the Venture or the commercialization of the patent will be lower than NIS 3.6 million.In such an event, Seller may repurchase the interest in the Venture at a market price to be determined by an independent third party valuationconsultant, who shall be chosen by agreement by the parties, and the audit committee shall conduct the negotiations on behalf of the Company todetermine the identity of the consultant.On May 26, 2021, the Company, My Size Israel and Shoshana Zigdon entered into an Amendment to Purchase Agreement (the “Amendment”)which made certain amendments to a Purchase Agreement between the parties dated February 16, 2014 (the “Purchase Agreement”). Pursuant tothe Amendment, Ms. Zigdon agreed to irrevocably waive the right to repurchase certain assets related to the collection of data for measurementpurposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which the Company’s business is substantiallydependent, and all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My Size Israel underthe Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation,reward or any rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights(the “Waiver”). In consideration of the Waiver, the Company issued 100,000 shares of common stock to Ms. Zigdon in a private placement.F8MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERAL (Cont.)c.On July 25, 2016, the Company’s common stock began publicly trading on the Nasdaq Capital Market under the symbol “MYSZ”. The Company’sshares of common stock are listed both on the Nasdaq Capital Market and TASE.d.Since inception, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit of $53,501.The Company has financed its operations mainly through fundraising from various investors.The Company’s management expects that the Company will continue to generate losses and negative cash flows from operations for theforeseeable future. Based on the projected cash flows and cash balances as of December 31, 2022, management is of the opinion that its existingcash will be sufficient to fund operations for a period less than 12 months. As a result, there is substantial doubt about the Company’s ability tocontinue as a going concern.Management’s plans include the continued commercialization of the Company’s products and securing sufficient financing through the sale ofadditional equity securities, debt or capital inflows from strategic partnerships. Additional funds may not be available when the Company needsthem, on terms that are acceptable to it, or at all. If the Company is unsuccessful in commercializing its products and securing sufficient financing,it may need to cease operations.The financial statements include no adjustments for measurement or presentation of assets and liabilities, which may be required should theCompany fail to operate as a going concern.e.The Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificial intelligencedriven measurement solutions (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions. The fashion and equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. The SaaS based innovativeartificial intelligence driven measurement solutions, or SaaS Solutions operating segment consists of My Size Inc My Size Israel and LLC.NOTE 2 SIGNIFICANT ACCOUNTING POLICIESThe consolidated financial statements are prepared according to United States generally accepted accounting principles (“U.S. GAAP”), applied on aconsistent basis, as followsa.Use of estimates:The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions thataffect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.Information about assumptions made by the Company with respect to the future and other reasons for uncertainty with respect to estimates thathave a significant risk of resulting in a material adjustment to carrying amounts of assets and liabilities in the next financial year are included in thefollowing notes:Acquisitions of subsidiariesThe Company measures the fair value of the consideration transferred (including contingent consideration) and fair value of the assets acquiredand liabilities assumed, in business combination transactions. For information on details on fair value measurement in acquisition of subsidiaries,see Note 16 regarding business combinations.Estimated impairment of nonfinancial assetsThe Company examines on an annual basis whether there is an impairment of goodwill, intangibles and property, plant and equipment that areallocated to cash generating units, in accordance with the accounting policy presented in Note 1(h) below. Recoverable amounts of cashgenerating units are determined on the basis of valueinuse calculations. These calculations require the use of estimates.For information on key assumptions used in calculation of the recoverable amount, see note 7 – Goodwill and other Intangible assets.b.Functional currency:The currency of the primary economic environment in which the operations of the Company is conducted is the United States Dollar and thus it isthe Company’s functional currency. The reporting currency according to which these financial statements are prepared is the U.S. dollar.The currency of the primary economic environment in which the operation of the Subsidiary, My Size Israel and Orgad International MarketingLtd. functional currency is the New Israeli Shekel (“NIS”).The currency of the primary economic environment in which the operation of the Subsidiary, My Size LLC, functional currency is Russian Ruble.The currency of the primary economic environment in which the operation of the Subsidiary, Naiz fit, functional currency is Euro.F9MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)c.Principles of consolidation:The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances andtransactions have been eliminated upon consolidation.d.Cash equivalents:Cash equivalents are shortterm highly liquid investments that are readily convertible to cash with original maturities of three months or less at thedate acquired.e.Restricted cashRestricted cash are deposits for rent, credit card and for hedging activities.f.Inventories:Inventories include finished goods and are measured at the lower of cost or net realizable value. The cost of inventories comprises of the costsincurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary courseof business. At the point of the loss recognition, a new, lowercost basis for that inventory is established, and subsequent changes in facts andcircumstances do not result in the restoration or increase in that newly established cost basis. The costs of purchase of inventories comprise thepurchase price and other costs directly attributable to the acquisition of finished goods. In 2022, the Company recorded an inventory markdownof $48.g.Property and equipment:Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straightline method over theestimated useful lives of the assets, at the following annual rates:%Computers and peripheral equipment33Office furniture and equipment720Leasehold improvementsOver the term of the leaseor the useful life of theimprovements, whicheveris shorterh.Impairment of longlived assets:The Company’s property and equipment are reviewed for impairment in accordance with ASC 360, “Property Plant and Equipment”, wheneverevents or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held andused is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by theassets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount ofthe assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less sellingcosts. During the periods ended December 31, 2022 and 2021, no impairment losses have been recorded.i.Business combinations:The Company applies the provisions of ASC 805, “Business Combination” and allocates the fair value of purchase consideration to the tangibleassets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchaseconsideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assetsacquired and liabilities assumed, the Company estimated the future expected cash flows from acquired platform, customer relationships,Technology and trademark from a market participant perspective, useful lives and discount rates. In addition, management makes significantestimates and assumptions, which are uncertain, but believed to be reasonable.Acquisitionrelated costs are recognized separately from the acquisition and are expensed as incurred.F10MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)j.Goodwill:Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a businesscombination. Under ASC 350, “Intangible Goodwill and Other”, goodwill is not amortized, but rather is subject to an annual impairment test.ASC 350 requires goodwill to be tested for impairment at the reporting unit level at least annually, the fourth quarter, or between annual tests incertain circumstances, and written down when impaired. Goodwill is tested for impairment by comparing the fair value of the reporting unit with itcarrying value. Goodwill from Orgad acquisition was allocated to the fashion and equipment ecommerce platform segment and Goodwill from theNaiz acquisition was allocated to Naiz segment based innovative artificial intelligence driven measurement solutions.Alternatively, ASC 350 permits an entity to bypass the qualitative assessment for any reporting unit and proceed directly to performing the firststep of the goodwill impairment test. There were no impairment charges to goodwill during the period presented.k.Intangible assets:Intangible assets consist of identifiable intangible assets that the Company has acquired from previous business combinations. Intangible assetsare recorded at costs, net of accumulated amortization. The Company amortizes its intangible assets reflecting the pattern in which the economicbenefits of the intangible assets are consumed. When a pattern cannot be reliably determined, the Company uses a straightline amortizationmethod. Amortization is calculated by the straightline method over the estimated useful lives of the following assets.The estimated useful lives of the company’s intangible assets are as follows:yearsCustomer Relationships7Technology5Trademark5Selling Platform3Each period the Company evaluates the estimated remaining useful lives of its intangible assets and whether events or changes in circumstanceswarrant a revision to the remaining period of amortizationl.Severance pay:The Subsidiary’s liability for severance pay is covered by Section 14 of the Israeli Severance Pay Law (“Section 14”). Under Section 14, employeesin Israel are entitled to have monthly deposits, at a rate of 8.33% of their monthly salary, made on their behalf to their insurance funds. Payments inaccordance with Section 14 exempt the Subsidiary from any additional obligation for these employees. As a result, the Subsidiary does notrecognize any liability for severance pay due to these employees and the deposits under Section 14 are not recorded as an asset in theSubsidiary’s balance sheet. These contributions for compensation represent defined contribution plans and expenses are recorded based onactual deposits.Other than the My Size Israel’s liability there are no additional severance pay liabilities.F11MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)m.Research and development costs:Research and development costs are charged to the statement of operations, as incurred. Most of the research and development expenses are forwages, related expenses and subcontractors.n.Income taxes:The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilitiesfor the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Companies’ taxreturns. Deferred taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities using enactedtax rates in effect in the years in which the differences are expected to reverse. The Company assesses the likelihood that its deferred tax assetswill be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely thannot that all or a portion of deferred tax assets will not be realized. The Company establishes a valuation allowance, if necessary, to reduce deferredtax assets to the amount more likely than not to be realized. As of December 31, 2022, and 2021, a full valuation allowance was established by theCompany.The Company implements a twostep approach to recognize and measure the benefit of its tax positions. The first step is to evaluate the taxposition taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that,on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigationprocesses. The second step is to measure the tax benefit as the largest amount that is greater than 50 percent (cumulative basis) likely to berealized upon settlement.The Company believes that its tax positions are all highly certain of being upheld upon examination. As of December 31,2022 and 2021 the Company recorded a liability for unrecognized tax benefits of $328 and none respectively.o.Accounting for stockbased compensation:The Company accounts for its employees’ stockbased compensation as an expense in the financial statements based on ASC 718. All awards areequity classified and therefore such costs are measured at the grant date fair value of the award and graded vesting attribution approach torecognize compensation cost over the vesting period. The Company estimates stock option grant date fair value using the Binomial and BlackScholes option pricingmodel.The Company recorded stock options issued to nonemployees at the grant date fair value, and recognizes expenses over the related serviceperiod by using the straightline attribution approach in accordance with ASU 201807. All awards are equity classified.The expected volatility of the share prices reflects the assumption that the historical volatility of the share prices is reasonably indicative ofexpected future trends.The riskfree interest rate for grants with an exercise price denominated in USD for employees and several consultants is based on the yield fromUS treasury zerocoupon bonds with an equivalent term.The Company has historically not paid dividends and has no foreseeable plans to pay dividends.F12MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)p.Fair value of financial instruments:ASC 820, Fair Value Measurements and Disclosures, relating to fair value measurements, defines fair value and established a framework formeasuring fair value. The ASC 820 fair value hierarchy distinguishes between market participant assumptions developed based on market dataobtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptionsdeveloped based on the best information available in the circumstances. ASC 820 defines fair value as the price that would be received to sell anasset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price. Inaddition, the fair value of assets and liabilities should include consideration of nonperformance risk, which for the liabilities described belowincludes the Company’s own credit risk.As a basis for considering such assumptions, ASC 820 establishes a threetier value hierarchy, which prioritizes the inputs used in the valuationmethodologies in measuring fair value:Level 1 Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access. Valuationadjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readilyand regularly available in an active market, valuation of these products does not entail a significant degree of judgment.Level 2 Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, eitherdirectly or indirectly.Level 3 Valuations based on inputs that are unobservable and significant to the overall fair value measurement.The Company holds share certificates in iMine Corporation (“iMine”) formerly known as Diamante Minerals, Inc., a publiclytraded company onthe OTCQB.Due to sales restrictions on the sale of the iMine shares, the fair value of the shares was measured on the basis of the quoted market price for anotherwise identical unrestricted equity instrument of the same issuer that trades in a public market, adjusted to reflect the effect of the salesrestrictions and is therefore, ranked as Level 2 asset.q.Basic and diluted net loss per share:Basic net loss per share is computed based on the weighted average number of shares of common stock outstanding during each year. Diluted netincome per share is computed based on the weighted average number of shares of common stock outstanding during each year plus dilutivepotential equivalent common stock considered outstanding during the year, in accordance with ASC 260, “Earnings per Share”. For the yearsended December 31, 2022 and 2021, all outstanding options and warrants have been excluded from the calculation of the diluted net loss per sharesince their effect was antidilutive.r.Concentrations of credit risk:Financial instruments that potentially subject the Company and its subsidiaries to concentrations of credit risk consist principally of cash andcash equivalents.Cash and cash equivalents are invested in banks in Israel, Spain and United States. Such deposits in United States may be in excess of insuredlimits and are not insured in other jurisdictions. Management believes that the financial institutions that hold the Company’s investments arefinancially sound and, accordingly, minimal credit risk exists with respect to these investments.The Company and its subsidiaries have no offbalancesheet concentration of credit risk such as foreign exchange contracts, option contracts orother foreign hedging arrangements.F13MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)s.Revenue Recognition:The Company’s revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled softwaresubscriptions, associated software maintenance and support.The Company recognizes revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with acustomer exists only when: the parties to the contract have approved it and are committed to perform their respective obligations, the Companycan identify each party’s rights regarding the distinct goods or services to be transferred (“performance obligations”), the Company can determinethe transaction price for the goods or services to be transferred, the contract has commercial substance and it is probable that the Company willcollect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to acustomer. Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted togovernmental authorities. Refunds are estimated at contract inception and updated at the end of each reporting period if additional informationbecomes available. Revenue is recognized when control of the product is transferred to the customer.The Company maintains a returns policy that allows its customers to return product within a specified period of time. The estimate of the provisionfor returns is based upon historical experience with actual returns.Principal versus Agent ConsiderationsThe Company follows the guidance provided in ASC 606 for determining whether it is a principal or an agent in arrangements with customers, byassessing whether the nature of the Company’s promise is a performance obligation to provide the specified goods (principal) or to arrange forthose goods to be provided by the other party (agent). With regard to products being sold by Orgad through Amazon, this determination involvesjudgment. The Company determines it is the principle when it has control over promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).The Company recognizes revenue ratably over the contractual service term for hosted services that are priced based on a committed number oftransactions where the delivery and consumption of the benefit of the services occur evenly over time, beginning on the date the servicesassociated with the committed transactions are first made available to the customer and continuing through the end of the contractual serviceterm. Over usage fees and fees based on the actual number of transactions are billed in accordance with contract terms as these fees are incurredand are included in the transaction price of an arrangement as variable consideration. Fees based on a number of transactions or impressions permonth, are allocated to the period in which the transactions occur. Revenue for subscriptions sold as a fee per period is recognized ratably overthe contractual term as the customer simultaneously receives and consumes the benefit of the underlying service.F14MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)t.Contingencies and CommitmentsLiabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it isprobable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with losscontingencies are expensed as incurred.u.Derivative instrumentsThe Company accounts for its derivative instruments as either assets or liabilities and measures them at fair value through profit or loss.v.LeasesThe Company leases include an office space lease agreement for 36 months, with an option to extend for an additional 36 months and 36 monthscancelable operating lease agreements on behalf of personnel vehicles. The lease term includes a noncancellable period of the lease plus anyadditional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise,or an option to extend (or not to terminate) the lease controlled by the lessor.ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make leasepayments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value oflease payments over the lease term. The company generally use its incremental borrowing rate based on the estimated rate of interest forcollateralized borrowing over a similar term of the lease payments at commencement date. Lease expense for lease payments is recognized on astraightline basis over the lease term.For the office rent lease, the Company has elected to account for the lease and nonlease maintenance components as a single lease component.Therefore, the lease payments used to measure the lease liability include all of the fixed consideration in the contract, including insubstance fixedpayments, owed over the lease term.w.Impact of recently issued accounting standardIn June 2016, the FASB issued ASU 201613, “Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses on FinancialInstruments”, which requires companies to measure credit losses of financial instruments, including customer accounts receivable, utilizing amethodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information toinform credit loss estimates. Subsequent to the issuance of ASU 201613, the FASB issued several additional Accounting Standard Updates toclarify implementation guidance, provide narrowscope improvements and provide additional disclosure guidance. As an Emerging GrowthCompany, ASU 201613 is effective for fiscal years beginning after December 15, 2022. The Company does not expect this ASU to have a materialimpact on its consolidated financial statements.F15MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 3 CASH AND CASH EQUIVALENTSThe Company’s cash and cash equivalents balance at December 31, 2022 and 2021 is denominated in the following currencies:December 31,20222021US Dollars1,65110,184New Israeli Shekels259433Other190532,10010,670NOTE 4 OTHER RECEIVABLES AND PREPAID EXPENSESDecember 31,20222021Prepaid expenses and other current assets322429Government authorities28317Other153133Total758579NOTE 5 PROPERTY AND EQUIPMENT, NETComputersandperipheralequipmentOfficefurnitureandequipmentLeaseholdimprovementsTotalCostBalance as at January 1, 20211825860300Additions2323Translation adjustments72211Balance as at December 31, 20212126062334Balance as at January 1, 20222126062334Additions161127Business combination401555Translation adjustments(32)(8)(8)(48)Balance as at December 31, 20222367854368Accumulated DepreciationBalance as at January 1, 20211461412172Additions2751042Translation adjustments6118Balance as at December 31, 20211792023222Balance as at January 1, 20221792023222Additions209938Translation adjustments(27)(3)(2)(32)Balance as at December 31, 20221722630228Carrying amountsAs at December 31, 2021334039112As at December 31, 2022645224140F16MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 6 LEASESIn August 2019, The Company entered into an office space lease agreement. The lease term is for 36 months beginning on August 20, 2019 and endingon August 20, 2022, with an option to extend for an additional 36 months. The Company extended the lease period until August 20, 2025. Monthly rentpayments including utilities amounting to approximately USD 14 (NIS 49,500) per month.In addition, The Company entered into a threeyear cancelable operating lease agreement for cars.These operating leases are included in “Right of use asset” on the Company’s December 31, 2022 consolidated balance sheets, and represent theCompany’s right to use the underlying asset for the lease term. The Company’s obligations to make lease payments are included in the currentliabilities as “Operating lease liability” and in the noncurrent liabilities as “Operating lease liability long term” on the Company’s December 31, 2022consolidated balance sheets. As of December 31, 2022, rightofuse of asset was $583. operating lease liabilities were $159 and non current Operatinglease liabilities were $308. Rightofuse asset includes the capitalization of improvements (net of amortization) amounting to $105.Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value ofthe lease payments.The interest rate used to discount future lease payment was 11.95%.Maturities of lease liabilities as of December 31, 2022 were as follows:Year Ending:2023$1912024$1912025$127Thereafter$509Less imputed interest:$(42)Total lease liabilities$467F17MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 7 – Goodwill and other Intangible assetsA.Identified intangible assetsSchedule of Intangible assetsSelling PlatformTechnologyCustomerRelationshipsOtherTotalThousandsUSDThousandsUSDThousandsUSDThousandsUSDThousandsUSDCostAs of January 1, 2022Acquisitions through business combinations378286726771,467Effect of changes in exchange rates(32)2565765As of December 31, 2022346311791841,532AmortizationAs of January 1, 2022Amortization for the year including effect of changes inexchange rates as of December 31, 2022(109)(15)(27)(4)(155)Carrying amountAs of December 31, 2022237296764801,377AmortizationAmortization expenses recorded for identified intangible assets in the Consolidated Statements of Operations for each period and were as follows:Line ItemDecember 31,2022December 31,2021Selling platformCosts of revenues109TrademarkSales and marketing4TechnologyCosts of revenues15Customer relationshipsSales and marketing27Total amortization expenses155Future amortization expenses are expected to be as follows:20232024202520262027ThereafterTotalFuture amortization expenses3033031941771561791,312b.GoodwillThe changes in the carrying amount of goodwill for the years ended December 31, 2022 and 2021 were as follows:Fashion and equipmentecommerce platformNaizTotalBalance as of December 31, 2021Changes during the period:Goodwill acquired1521,1521,304Goodwill impairmentTranslation differences(14)10591Balance as of December 31, 20221381,2571,395The Company operates its business through three reporting segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovativeartificial intelligence driven measurement solutions and (iii) Naiz. See note 17 for additional segments information.The Company determines the fair value of its reporting units using the income approach. According to the income, the Company uses discounted cashflows to estimate the fair value. Cash flow projections are based on the Company’s estimates of revenue growth rates and operating margins, takinginto consideration the industry’s and market’s conditions. The discount rate used is based on the weighted average cost of capital (“WACC”),adjusted for the relevant risk associated with businessspecific characteristics.The Company performed a quantitative assessment as of December, 31 2022 for the reporting units’ fair value. The estimated fair value of the Fashionand equipment ecommerce platform and Naiz reporting units exceeded its estimated carrying amount by 95.9% and 27.7% respectively. This, based thefollowing assumptions:Fashion and equipmentecommerce platformNaizDiscount rate21%23%Terminal growth rate3%3%If business conditions or expectations were to change materially, it may be necessary to record impairment charges to the Company’s reporting units inthe future.F18MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 8 Investment in JVIn August 2022, the Company established a joint venture (“JV”) in Brazil with Santista Têxtil. The Company holds 51% and Santista Têxtil holds 49% of theJV. The purpose of the JV is to serve the Brazilian market according to the business plan that was set. Both parties agree to make an initial investment in theJV of $198that will be made per the holding percentage of each party. As of the reporting date, the JV is in process of establishing its operation.NOTE 9 Financial LiabilitiesThe book value of each of the financial liability categories is an acceptable approximation of fair value.The debt is comprised of four loans that were granted to My Size Israel – in an outstanding amount of approximately $131, bearing interest rangingfrom prime rate to prime+2.8% rate, and four loans that were granted to the Spanish subsidiary– in an outstanding amount of approximately $400,bearing interest ranging from 1% to 3%.The financial liability maturities during the five years following the end of the financial year are shown below:UntilUntilUntilUntilUntilAfterTOTAL311223311224311225311226311227311227311222Debts with credit institutions15513892874712531NOTE 10 RELATED PARTIES TRANSACTIONSA. Balances with related parties:The following related party payables are included in liability to related parties.December 31,20222021Officers (*)4143Liability in respect of business combinations (**)739Other related parties (***)(95)Directors152069863(*)The amount includes the net salaries payables.(**)The amount includes the provision created to former owners of Orgad that are entitled to additional cash and equity consideration and former owners of Naizthat entitled to additional cash consideration, see note 16 business combination.(***)The amount includes an amount receivable from Orgad previous shareholders who currently work in the company.B. Related parties benefits:Year endedDecember 31,20222021Salaries and related expenses1,440852Share based payments39673Cash liability and equity liability expenses related to acquisitions (**)1,058Directors58582,952983(**)The amount includes the expenses for a provision created to former owners of Orgad that are entitled to additional cash and equity consideration and formerowners of Naiz that entitled to additional cash consideration, see note 16 business combination.NOTE 11 FINANCIAL INSTRUMENTSThe following tables presents the Company’s significant assets and liabilities that are measured at fair value on recurring basis and their classificationwithin the fair value hierarchy:December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities47financial assets (*)10December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesDerivatives9December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities108December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesWarrants derivative2(*)the financial asset includes in other receivables.F19MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 11 FINANCIAL INSTRUMENTS (Cont.)The carrying amounts of cash and cash equivalents, restricted cash, short term restricted deposit, accounts receivable, other receivables and prepaidexpenses, trade payable and accounts payable approximate their fair value due to the shortterm maturities of such instruments.At December 31, 2022, the recognized gain and fair value (based on quoted market prices with a discount due to security restrictions on iMine shares)of the marketable securities were $59and $47, respectively (at December 31, 2021 $49and $108, respectively).NOTE 12 TAXES ON INCOMEa.On December 31, 2022, the Company had U.S. federal net operating loss carryforwards of approximately $26 available to reduce future taxableincome. Utilization of the U.S. net operating losses may be subject to substantial limitations due to the change of ownership provisions of theInternal Revenue Code of 1986.The U.S. Company has final tax assessments through 2014.On December 22, 2017, the Tax Reform Act was signed into law. The legislation significantly changes U.S. tax law by, among other things, lowering theU.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. As a result of the decrease in the corporate incometax rate, the Company revalued the ending net deferred tax assets at December 31, 2017, but did not recognize any incremental income tax expense in2017 due to the revaluation of the valuation allowance.b.Foreign tax:1.Tax rates:Presented hereunder are the tax rates relevant to the Company’s Israeli subsidiaries:2022 23%2021 23% Presented hereunder are the tax rates relevant to the Company’s Spanish subsidiary:2022 24%2.The Company’s Israeli subsidiaries have estimated total available carryforward operating tax losses for Israeli income tax purposes ofapproximately $64as of December 31, 2022. Of these losses, a total of $47.5are owned by Topspin Medical (Israel) Ltd. Topspin tax lossesmay be offset only by future income with respect to the same operational activity by which it was incurred for an indefinite period of time. Theother losses are owned by My Size Israel and may be carryforward to offset against future income for an indefinite period of time.3.Topspin Medical (Israel) Ltd. and My Size (Israel) 2014 Ltd. has final tax assessments through 2016.c.U.S. and foreign components of loss from continuing operations, before income taxes consisted of:December 31,20222021U.S(1,180)(3,802)NonU.S. (foreign)(7,130)(6,718)(8,310)(10,520)F20MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 12 TAXES ON INCOME (Cont.)d.Deferred taxes:Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reportingpurposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows:December 31,20222021Deferred tax assets:Operating loss carryforwards20,13120,238Warrants and options145126Marketable securities390377Intangible assets(328)Research and development expenses586341Other temporary differences203Deferred tax assets before valuation allowance21,12721,082Valuation allowance(21,455)(21,082)Net deferred tax liability(328)The following table presents a reconciliation of the beginning and ending valuation allowance:December 31,20222021Balance at beginning of the year21,08218,968Additions in valuation allowance to the income statement1,7581,625Additions in valuation allowance due to exchange rate differences(1,385)489Balance at end of the year21,45521,082In assessing the realization of deferred tax assets, management considers whether it is more likely than not that all or some portion of the deferred taxassets will not be realized.The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporarydifferences are deductible and net operating losses are utilized. Based on consideration of these factors, the Company recorded a full valuationallowance at December 31, 2021 and 2020.e.Theoretical taxThe following presents the adjustment between the theoretical tax amount and the tax amount included in the financial statements:December 31,20222021Loss before income taxes8,34610,520Statutory tax rate21%21%Computed “expected” tax income1,7522,209Foreign tax rate differences and exchange rate differences149131Nondeductible expenses(107)(715)Change in valuation allowance(1,758)(1,625)Taxes on income36F21MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITYa.Common stock confers upon their holders the right to receive notice to participate and vote in general meetings of the Company, and the right toreceive dividends if declared.b.On January 8, 2021, the Company conducted a public offering of its securities pursuant to which it issued 62,768 shares of its common stock forgross proceeds of $2,008. The net proceeds to the Company from the offering were approximately $1,700, after deducting placement agent’s feesand other estimated offering expenses payable by the Company.c.During 2021, a holders of warrants exercised warrants to purchase 135,109 ordinary shares of the Company in exchange for $3,709.d.On March 25, 2021, the Company conducted a public offering of its shares of common stock pursuant to which it issued 104,741 shares of itscommon stock for gross proceeds of $3,300. The net proceeds to the Company from the offering were approximately $2,872, after deductingplacement agent’s fees and other estimated offering expenses payable by the Company.On May 7, 2021, the Company issued an additional 15,711 shares of the Company’s common stock in connection with the full exercise of theunderwriter’s overallotment option granted in the Company’s March 2021 public offering. These additional shares were sold to the underwriter at apublic offering price of $31.5 per share, resulting in additional net proceeds to the Company, net of the underwriting discount, of approximately$463.e.On May 26, 2021, the Company issued 100,000 shares of common stock to Ms. Zigdon in consideration of the Waiver. See note 1(b) above.f.On October 28, 2021, the Company sold in a registered direct offering 100,592 shares of its common stock and, in a concurrent private placement,an aggregate of 75,444 unregistered warrants to purchase shares of common stock, at an offering price of $33.8 per share and associated warrant.In addition, on the same day, the Company sold in a private placement 150,888 unregistered shares of common stock and unregistered warrants topurchase up to an aggregate of 113,166 shares of common stock at the same purchase price as in the registered direct offering. The warrants areimmediately exercisable and will expire five years from issuance at an exercise price of $31.5 per share, subject to adjustment as set forth therein.The gross proceeds from the offerings were $8,500. The net proceeds to the Company from the offerings were approximately $7,560, afterdeducting placement agent’s fees and other estimated offering expenses payable by the Company. In connection with the offerings, the Companyissued to the placement agent warrants to purchase 17,603 shares on substantially the same terms as the purchasers in the offerings at an exerciseprice of $42.25 per share and a term expiring on October 26, 2026.g.On December 7, 2022, the Company’s board of directors approved a 1for25 reverse stock split of the Company’s issued and outstanding sharesof common stock. The reverse stock split became effective on December 8, 2022. In order not to have fractional shares as a result of the reversestock split, the Company issued an additional 12,091 shares of common stock. As a result, all shares of common stock, options for shares ofcommon stock, exercise price and net loss per share amounts were adjusted retroactively for all periods presented in these financial statements.F22MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITY (Cont.)g.A summary of the warrant activity during the years ended December 31, 2022 and 2021 is presented below:Number ofWarrantsWeightedAverageExercisePriceWeightedAverageRemainingLife inYearsOutstanding, December 31, 2020216,85936.754.26Issued206,214Expired or exercised(135,109)Outstanding, December 31, 2021287,96431.004.35IssuedExpired or exercised(17,901)Outstanding, December 31, 2022270,06330.213.36Exercisable, December 31, 2022270,06330.213.36NOTE 14 STOCK BASED COMPENSATIONThe stockbased expense recognized in the financial statements for services received is related to Research and Development, Sales and Marketingand General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense Research and development15195Stockbased compensation expense Sales and marketing126180Stockbased compensation expense General and administrative17898455373The stockbased expense recognized in the financial statements for services received post Acquisition of Orgad (see note 16) is related to Cost OfGoods, Sales and Marketing and General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense – Cost of goods80Stockbased compensation expense Sales and marketing112Stockbased compensation expense General and administrative127319F23MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Options issued to consultantsWe can sell additional shares of common stock without consulting stockholders and without offering shares to existing stockholders, which wouldresult in dilution of shareholders’ interests in the company and could depress our stock price.Our Certificate of Incorporation currently authorizes 250,000,000 shares of common stock, of which 2,446,780 are currently outstanding as of March 31, 2023and our board of directors is authorized to issue additional shares of our common stock. Although our board of directors intends to utilize its reasonable businessjudgment to fulfil its fiduciary obligations to our then existing stockholders in connection with any future issuance of our capital stock, the future issuance ofadditional shares of our capital stock could cause immediate, and potentially substantial, dilution to our existing stockholders, which could also have a materialeffect on the market value of the shares. Further, other than certain participation rights that we have granted in a past offering, our shares do not have preemptiverights, which means we can sell shares of our capital stock to other persons without offering purchasers in this offering the right to purchase their proportionateshare of such offered shares. Therefore, any additional sales of stock by us could dilute your ownership interest in our Company.Our quarterly operating results may fluctuate significantly.We expect our operating results to be subject to quarterly fluctuations. Our net loss and other operating results will be affected by numerous factors,including:●variations in the level of expenses related to our research and development;●any lawsuits in which we may become involved;●regulatory developments affecting our products; and●our execution of any collaborative, licensing or sales agreements, and the timing of payments under these arrangements.If our quarterly operating results fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially.Furthermore, any quarterly fluctuations in our operating results may, in turn, cause the price of our common stock to fluctuate substantially.If we fail to comply with the rules under the Sarbanes Oxley Act of 2002 related to accounting controls and procedures or if we discover materialweaknesses and deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult.If we fail to comply with the rules under the SarbanesOxley Act of 2002 related to disclosure controls and procedures, or, if we discover materialweaknesses and other deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be moredifficult. Section 404 of the SarbanesOxley Act requires annual management assessments of the effectiveness of our internal control over financial reporting and, ifwe are no longer a nonaccelerated filer, a report by our independent auditors addressing these assessments. If material weaknesses or significant deficiencies arediscovered or if we otherwise fail to achieve and maintain the adequacy of our internal control, we may not be able to ensure that we can conclude on an ongoingbasis that we have effective internal controls over financial reporting in accordance with Section 404 of the SarbanesOxley Act. Moreover, effective internalcontrols are necessary for us to produce reliable financial reports and are important to helping prevent financial fraud. If we cannot provide reliable financial reportsor prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price ofour common stock could drop significantly.38Our Certificate of Incorporation, Bylaws and Delaware law may have antitakeover effects that could discourage, delay or prevent a change incontrol, which may cause our stock price to decline.Our Certificate of Incorporation, Bylaws and Delaware law could make it more difficult for a thirdparty to acquire us, even if closing such a transactionwould be beneficial to our stockholders. Provisions of our Certificate of Incorporation, Bylaws and Delaware law also could have the effect of discouraging potentialacquisition proposals or making a tender offer or delaying or preventing a change in control, including changes a stockholder might consider favorable. Suchprovisions may also prevent or frustrate attempts by our stockholders to replace or remove our management. In particular, the Certificate of Incorporation, Bylawsand Delaware law, as applicable, among other things:●provide the board of directors with the ability to alter the Bylaws without stockholder approval;●the classification of our board of directors;●place limitations on the removal of directors;●provide that vacancies on the Board of Directors may be filled by a majority of directors in office, although less than a quorum;●require that stockholder actions must be affected at a duly called stockholder meeting and generally prohibiting stockholder actions by written consent;●eliminate the ability of stockholders to call a special meeting of stockholders; and●establish advance notice requirements for nominations for election to the Board of Directors or for proposing matters that can be acted upon at duly calledstockholder meetings.We are subject to Section 203 of the Delaware General Corporation Law which, subject to certain exceptions, prohibits “business combinations” between apubliclyheld Delaware corporation and an “interested stockholder,” which is generally defined as a stockholder who becomes a beneficial owner of 15% or more ofa Delaware corporation’s voting stock for a threeyear period following the date that such stockholder became an interested stockholder. These provisions areexpected to discourage certain types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to firstnegotiate with our board. These provisions may delay or prevent someone from acquiring or merging with us, which may cause the market price of our commonstock and the value of our securities to decline.If we fail to comply with the continued listing requirements of the Nasdaq Capital Market, our common stock may be delisted and the price of ourcommon stock and our ability to access the capital markets could be negatively impacted.Nasdaq has established certain standards for the continued listing of a security on the Nasdaq Capital Market. The standards for continued listing include,among other things, that the minimum bid price for the listed securities not fall below $1.00 per share for a period of 30 consecutive trading days and that wemaintain a minimum of $2,500,000 in shareholders’ equity. We have in the past fallen below the minimum bid price and minimum shareholders’ equity.39No assurance can be given that we will continue to be in compliance with the Rule. Failure to meet applicable Nasdaq continued listing standards couldresult in a delisting of our common stock. A delisting of our common stock from Nasdaq could materially reduce the liquidity of our common stock and result in acorresponding material reduction in the price of our common stock. In addition, delisting could harm our ability to raise capital through alternative financing sourceson terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, employees and fewer business development opportunities.The exercise of outstanding warrants and stock options will have a dilutive effect on the percentage ownership of our capital stock by existingstockholders.As of March 15, 2023, we had outstanding warrants to acquire 2,299,115 shares of our common stock and stock options to purchase 1,659 shares of ourcommon stock, which warrants and options are exercisable for prices ranging between $2.81 and $375. The expiration of the term of such options and warrants rangefrom 0.22 years to 4.83 years. If a significant number of such warrants and stock options are exercised by the holders, the percentage of our common stock ownedby our existing stockholders will be diluted.Were our common stock to become subject to the penny stock rules then this could result in U.S. brokerdealers becoming discouraged from effectingtransactions in shares of our common stock.Rule 15g9 under the Exchange Act establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a marketprice of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. If we do not retain a listing on the NasdaqCapital Market or do not meet certain net tangible asset or average revenue requirements and if the price of our common stock is less than $5.00, our common stockwill be deemed a penny stock. For any transaction involving a penny stock, unless exempt, the rules require: (a) that a broker or dealer approve a person’s accountfor transactions in penny stocks; and (b) the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantityof the penny stock to be purchased.In order to approve a person’s account for transactions in penny stocks, the broker or dealer must: (a) obtain financial information and investmentexperience objectives of the person and (b) make a reasonable determination that the transactions in penny stocks are suitable for that person and the person hassufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver,prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which: (a) sets forth the basis on whichthe broker or dealer made the suitability determination; and (b) confirms that the broker or dealer received a signed, written agreement from the investor prior to thetransaction. Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult forinvestors to dispose of our common stock and cause a decline in the market value of our common stock.Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissionspayable to both the broker or dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor incases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the accountand information on the limited market in penny stocks.Sales of our currently issued and outstanding stock may become freely tradable pursuant to Rule 144 and may dilute the market for your shares andhave a depressive effect on the price of the shares of our common stock.A portion of our outstanding shares of common stock are “restricted securities” within the meaning of Rule 144 under the Securities Act of 1933, asamended, or the Securities Act. As restricted shares, these shares may be resold only pursuant to an effective registration statement or under the requirements ofRule 144 or other applicable exemptions from registration under the Securities Act and as required under applicable state securities laws. Rule 144 provides inessence that an affiliate (as such term is defined in Rule 144(a)(1)) of an issuer who has held restricted securities for a period of at least six months (one year afterfiling Form 10 information with the SEC for shell companies and former shell companies) may, under certain conditions, sell every three months, in brokeragetransactions, a number of shares that does not exceed the greater of 1% of a company’s outstanding shares of common stock or the average weekly trading volumeduring the four calendar weeks prior to the sale (the four calendar week rule does not apply to companies quoted on the OTC Markets). Rule 144 also permits, undercertain circumstances, the sale of securities, without any limitation, by a person who is not an Affiliate of the Company and who has satisfied a oneyear holdingperiod. A sale under Rule 144 or under any other exemption from the Securities Act, if available, or pursuant to subsequent registrations of our shares of commonstock, may have a depressive effect upon the price of our shares of common stock in any active market that may develop.40We are a former “shell company” and as such are subject to certain limitations not applicable to other public companies generally.Prior to our suspension of reporting in 2012, we were a public reporting “shell company,” as defined in Rule 12b2 under the Exchange Act. Although weare no longer a “shell company,” we are subject to certain restrictions under the Securities Act for the resale of securities issued by issuers that have been at anytime previously a shell company. Specifically, the Rule 144 safe harbor available for the resale of our restricted securities is only available to our stockholders if wehave filed all reports and other materials required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934, as amended, or the Exchange Act, asapplicable, during the preceding twelve months, other than current reports on Form 8K, at the time of the proposed sale, regardless of whether the restrictedsecurities were initially issued at the time we were a shell company or subsequent to termination of such status. Accordingly, holders of our “restricted securities”within the meaning of Rule 144 will be subject to the conditions set forth in Rule 144 with respect to our company. Other reporting companies that are not formershell companies and have been reporting for more than twelve months are not subject to this same reporting threshold for nonaffiliate reliance on Rule 144.Accordingly, any restricted securities we have sold or sell in the future or issue to consultants or employees, in consideration for services rendered or for any otherpurpose, may not be resold unless such securities are registered with the SEC or the requirements of Rule 144 have been satisfied. As a result, it may be harder forus to fund our operations and pay our employees and consultants with our securities instead of cash. Furthermore, it may be harder for us to raise funding throughthe sale of debt or equity securities unless we agree to register such securities with the SEC, which could cause us to expend additional resources in the future. Ourprior status as a “shell company” could prevent us in the future from raising additional funds, engaging employees and consultants, and using our securities to payfor any acquisitions, which could cause the value of our securities, if any, to decline in value or become worthless.ITEM 1B. UNRESOLVED STAFF COMMENTSNone.ITEM 2. PROPERTIESWe currently lease 1,660 square feet of office space at 4 HaYarden Street, Airport City, Israel. The lease term is for 36 months beginning on August 20, 2019and ending on August 20, 2022, with an option to extend for an additional 36 months. Monthly rent payments, including utilities, amount to approximately $14,000per month. We extended the lease period until August 20, 2025.ITEM 3. LEGAL PROCEEDINGSFrom time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation issubject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.41North Empire LLCOn August 7, 2018, we commenced an action against North Empire LLC, or North Empire, in the Supreme Court of the State of New York, County of NewYork for breach of a Securities Purchase Agreement or Agreement in which we are seeking damages in an amount to be determined at trial, but in no event less than$616,000. On August 2, 2018, North Empire filed a Summons with Notice against us, also in the same Court, in which they allege damages in an amount of $11.4million arising from an alleged breach of the Agreement. On September 6, 2018, North Empire filed a Notice of Discontinuance of the action it had filed on August 2,2018. On September 27, 2018, North Empire filed an answer and asserted counterclaims in the action commenced by us against them, alleging that we failed to deliverstock certificates to North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against our CEO andnow former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018, we filed a reply to North Empire’scounterclaims. On November 15, 2018, our CEO and now former Chairman of the Board filed a motion to dismiss North Empire’s thirdparty complaint. On January 6,2020, the Court granted the motion and dismissed the thirdparty complaint. Discovery has been completed and both parties have filed motions for summaryjudgment in connection with the claims and counterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summaryjudgment, arguing there were factual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision.On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying the Company’s motion for summary judgment. On or about September 12,2022, the Court issued its Decision and Order denying the Company’s motion to reargue. North Empire filed its opposing brief on December 7, 2022. Both sides weregiven an opportunity to file a reply brief. We filed our reply brief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. Oral argument was heldbefore the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Court filed its Decision and Order, which affirmed the lower court’sdecisions regarding both My Size and North Empire’s motions for summary judgment and sent the case back to the Supreme Court. On or about March 13, 2023, theSupreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date for the mediation has not yet been set. We intend tovigorously defend any claims made by North Empire. We believe it is more likely than not that the counterclaims will be denied.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.42PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur stock currently is listed on the Tel Aviv Stock Exchange and the Nasdaq Capital Market under the symbol “MYSZ”. Our stock has been traded on theNasdaq Capital Market since July 25, 2016.HoldersAs of March 31, 2023, we had 70 shareholders of record. The actual number of stockholders is greater than this number of record holders and includesstockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.Dividend PolicyWe have never declared or paid cash dividends on our common stock. We intend to retain our future earnings, if any, in order to reinvest in thedevelopment and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determinationto pay dividends will be at the discretion of our Board of Directors and will depend on our financial condition, results of operations, capital requirements, and suchother factors as our Board of Directors deems relevant.Securities Authorized for Issuance under Equity Compensation PlansInformation about our equity compensation plans is incorporated herein by reference to “Item 12. Security Ownership of Certain Beneficial Owners andManagement and Related Stockholder Matters”, of this Annual Report on Form 10K.Recent Sales of Unregistered SecuritiesNone.ITEM 6. SELECTED FINANCIAL DATAAs a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULT OF OPERATIONSYou should read the following discussion along with our financial statements and the related notes included elsewhere in this Annual Report on Form10K. The following discussion contains forwardlooking statements that are subject to risks, uncertainties and assumptions, including those discussed under“Risk Factors.” Our actual results, performance and achievements may differ materially from those expressed in, or implied by, these forwardlooking statements.OverviewMySize is an omnichannel ecommerce platform and provider of AIdriven apparel sizing and digital experience solutions that drive revenue growth andreduce costs for our business clients for online shopping and physical stores.43Our flagship innovative tech products, MySizeID, enables shoppers to generate highly accurate measurements of their body to find the accurate fittingapparel by using our application on their mobile device or through MySizeID Widget: a simple questionnaire which was uses a database collected over the years.MySizeID synchronizes the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application, and onlypresents items available for purchase that match their measurements to ensure a correct fit.MySize is positioning itself as a consolidator of sizing solutions and new digital experience due to new developments for the fashion industry needs. Ourother product offerings include First Look Smart Mirror for physical stores and Smart Catalog to empowering brand design teams, which are designed to increaseend consumer satisfaction, contributing to a sustainable world and reduce operation costs.Orgad AcquisitionOn February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar Guy Shalomand Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued and outstanding equity of Orgad.Orgad operates an omnichannel ecommerce platform engaged in online retailing in the global market. It operates as a thirdparty seller on Amazon.com,eBay and others. Orgad currently manages more than 1,000 stockkeeping units, or SKUs, mainly in fashion, apparel and shoes.The Orgad Sellers are the sole title and beneficial owners of 100% of the shares of Orgad. In consideration of the shares of Orgad, the Orgad Sellers areentitled to receive (i) up to $1,000,000 in cash, or the Orgad Cash Consideration, (ii) an aggregate of 111,682 shares, or the Orgad Equity Consideration, of ourcommon stock, and (iii) earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023. The transaction closed on the same day.The Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule: (i) $300,000 which wepaid upon closing, (ii) $350,000 payable on the twoyear anniversary of the closing, and (iii) $350,000 payable on the threeyear anniversary of the closing, providedthat in the case of the second and third installments certain revenue targets are met and subject further to certain downward postclosing adjustment.The Equity Consideration is payable to the Orgad Sellers according to the following payment schedule: (i) 55,801 shares were issued at closing, and (ii)55,801 shares will be issued in eight equal quarterly installments until the lapse of two years from closing, subject to certain downward postclosing adjustment.The payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad Sellers beingactively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating to material reduction of salary or adversechange in their position with Orgad or its affiliates).In connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and sixmonth lockup agreementswith us.Naiz AcquisitionOn October 7, 2022, we entered into a Share Purchase Agreement, or the Naiz Agreement, with Borja Cembrero Saralegui, or Borja, Aritz Torre Garcia, orAritz, Whitehole, S.L., or Whitehole, Twinbel, S.L., or Twinbel and EGI Acceleration, S.L., or EGI. Each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred toas the Naiz Sellers herein. Pursuant to the Naiz Agreement, the Naiz Sellers agreed to sell to My Size all of the issued and outstanding equity of Naiz BespokeTechnologies, S.L., or Naiz, a limited liability company incorporated under the laws of Spain. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) an aggregate of 240,000shares, or the Naiz Equity Consideration, of My Size common stock, or the Shares, representing in the aggregate, immediately prior to the issuance of such shares atthe closing of the transaction, not more than 19.9% of the issued and outstanding Shares and (ii) up to $2,050,000 in cash, the Naiz Cash Consideration.44The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 2,365,800 shares of My Size common stock were issuedto Whitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the 10 trading days prior to the closing of thetransaction, or the Equity Value Averaging Period) is less than $1,650,000, My Size shall make an additional cash payment, or the Shortfall Value to the Naiz Sellerswithin 45 days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period,it was determined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers are subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into sixmonths lockup agreements, or the LockUp Agreement, with My Size,(ii) Whitehole, Twinbel and EGI entered into a voting agreement, or the Voting Agreement, with My Size and (iii) each of the Key Persons entered into employmentagreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonths period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonths “dribbleout”provision that provides following the expiration of the initial sixmonths lockup period, without My Size’s prior written consent (which My Size shall be permitted towithhold at its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than theaverage daily trading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.45Operations in RussiaIn addition to our Israel operations, we had operations in Russia through our wholly owned subsidiary, My Size LLC. Specifically, we undertake some ofour sales and marketing using personnel located in Russia. To date, mainly due to the invasion of Ukraine by Russia and the ongoing sanctions we stopped most ofour efforts in Russia and will probably close the subsidiary in the near future.Results of OperationsThe table below provides our results of operations for the periods indicated.Year ended December 3120222021(dollars in thousands)Revenues4,459131Cost of revenues(3,825)Gross profit634131Research and development expenses$(1,701)$(4,248)Sales and marketing(3,143)(2,336)General and administrative(3,900)(4,124)Operating loss(8,110)(10,577)Financial income (expenses), net(236)57Tax income36Net loss$(8,310)$(10,520)Year Ended December 31, 2022 Compared to Year Ended December 31, 2021RevenuesFrom inception through December 31, 2018, we did not generate any revenue from operations and we continue to expect to incur additional losses toperform further research and development activities. We started to generate revenues only in 2019. Our revenues for the year ended December 31, 2022 amounted to$4,459,000 compared to $131,000 for year ended December 31, 2021. The increase from the corresponding period primarily attributable to $4,132,000 in revenuegenerated from Orgad from February 7, 2022, the date of closing of the Orgad acquisition, or the Acquisition Date and revenue generated from the Naiz Acquisitionfrom October 11, 2022, the date of closing of the Naiz acquisition.In addition, the increase from the corresponding period results from an increase in revenues generated by My Size.Cost Of RevenuesOur cost of revenues expenses for the year ended December 31, 2022 amounted to $3,825,000, compared to none for the year ended December 31, 2021. Thecost of revenues includes cash and equity liabilities expenses in the amount of $194,000. The increase in comparison with the corresponding period was due to thecost of goods of the revenues generated from Orgad’s operations.Research and Development ExpensesOur research and development expenses for the year ended December 31, 2022 amounted to $1,701,000 a decrease of $2,547,000, or approximately 60.0%,compared to $4,248,000 for the year ended December 31, 2021. The decrease from the corresponding period primarily resulted from share based payment in amount of$2,618,000 attributed to the share issuance to Shoshana Zigdon under the Amendment to Purchase Agreement dated May 26, 2021.Sales and Marketing ExpensesOur sales and marketing expenses for the year ended December 31, 2022 amounted to $3,143,000 an increase of $807,000, or 34.55%, compared to $2,336,000for the year ended December 31, 2021. The increase primarily resulted from an increase in employees expenses mainly due to Orgad and Naiz acquisitions, increase inAmazon fees, increase in cash and equity liabilities expenses attributed to the Orgad acquisition and an increase in share based payments offset by a decrease inpayments to consultants.46General and Administrative ExpensesOur general and administrative expenses for the year ended December 31, 2022 amounted to $3,900,000, a decrease of $224,000, or 5.43%, compared to$4,124,000 for the year ended December 31, 2021. The decrease compared to the corresponding period was mainly due to a decrease in professional expenses, mainlyattributed to shareholder activism including settlement expenses with the Lazar Parties offset by an increase in sharedbased payments and an increase in employeesexpenses mainly due to the Orgad and Naiz acquisitions.Operating LossAs a result of the foregoing, for the year ended December 31, 2022, our operating loss was $8,110,000, a decrease of $2,467,000 or 23.32%, compared to ouroperating loss for the year ended December 31, 2021 of $10,577,000.Financial Income, NetOur financial (expense) income, net for the year ended December 31, 2022 amounted to $236,000 compared to financial income, $57,000 for the year endedDecember 31, 2021. In 2022, we had financial expenses exchange rate differences offset by an income from fair value revaluation of investment in marketablesecurities whereas in 2021 we had financial income from the fair value revaluation of warrants offset by expenses from exchange rate differences and expenses fromfair value revaluation of investment in marketable securities.Net LossAs a result of the foregoing, our net loss for the year ended December 31, 2022 was $8,310,000 compared to net loss of $10,520,000 for the year endedDecember 31, 2021. The decrease in net loss was mainly due increase in sales and marketing expenses and financial expenses as opposed to financial income in thecorresponding period offset by a decrease in research and development expenses in amount of $2,618,000 attributed to the share issuance to Shoshana Zigdonunder the Amendment to Purchase Agreement dated May 26, 2021.Liquidity and Capital ResourcesSince our inception, we have funded our operations primarily through public and private offerings of debt and equity in Israel and in the U.S.As of December 31, 2022, we had cash, cash equivalents and restricted cash of $2,363,000 compared to $10,943,000 cash, cash equivalents, restricted cashas of December 31, 2021. During January 2023, we completed a registered direct and concurrent private placement offering resulting in gross proceeds ofapproximately $3 million. This decrease primarily resulted from our operating activities, the acquisition of Orgad and Naiz Fit, and resources that were deployed togrow of both businesses.Net cash used in operating activities was $7,290,000 for the year ended December 31, 2022 compared to $7,297,000 for the year ended December 31, 2021.The decrease in cash used in operating activity is derived mainly from an increase in share based payments and increase in account receivables mainly from theOrgad and Naiz fit acquisitions offset by a decrease in the net loss.Net cash used in investing activities for the year ended December 31, 2022 was $993,000 as opposed to net cash provided by investing activities of$161,000 for the year ended December 31, 2021. The net cash used in investing activities for the year ended December 31, 2022 was mainly from the acquisition ofOrgad and Naiz as opposed to proceeds from shortterm deposits and restricted deposits during the year ended December 31, 2021.We had a negative cash flow from financing activities of $67,000 for the year ended December 31, 2022 compared to positive cash flow of $16,292,000 for theyear ended December 31, 2021. The negative cash flow from financing activities for the year ended December 31, 2022 was mainly due to repayment of loans andinterest and payments for leases as opposed to proceeds from issuance of shares and from exercise of warrants for the year ended December 31, 2021.47We expect that we will continue to generate losses and negative cash flows from operations for the foreseeable future. Based on the projected cash flowsand cash balances as of December 31, 2022, together with the proceeds from the January 2023 financing, we believe our existing cash will not be sufficient to fundoperations for a period of more than 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. We will need to raiseadditional capital, which may not be available on reasonable terms or at all. Additional capital would be used to accomplish the following:●finance our current operating expenses;●pursue growth opportunities;●hire and retain qualified management and key employees;●respond to competitive pressures;●comply with regulatory requirements; and●maintain compliance with applicable laws.Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only onunfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions, the Russian invasion ofUkraine, the impact of any resurgence of the COVID19 pandemic and a number of other factors, many of which are outside our control, and on our financialperformance. Accordingly, we cannot assure you that we will be able to successfully raise additional capital at all or on terms that are acceptable to us. If we cannotraise additional capital when needed, it may have a material adverse effect on our business, results of operations and financial condition.To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result insubstantial dilution for our current stockholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, andmay include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders ofany of our securities thenoutstanding. We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for ourcommon stock in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capitalraising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the marketprice of our common stock to decline and existing stockholders may not agree with our financing plans or the terms of such financings. In addition, we may incursubstantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing anddistribution expenses and other costs. We may also be required to recognize noncash expenses in connection with certain securities we issue, such as convertiblenotes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be availableon terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities andgrowth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect onour business, results of operations and financial condition.We have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.Recently Issued Accounting PronouncementsCertain recently issued accounting pronouncements are discussed in Note 2, Significant Accounting Policies, to the consolidated financial statementsincluded in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10K.OffBalance Sheet ArrangementsWe have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivativeinstruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest inan unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.48Application of Critical Accounting Policies and EstimatesOur management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we haveprepared in accordance with U.S. generally accepted accounting principles issued by the Financial Accounting Standards Board, or FASB. The preparation of thesefinancial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assetsand liabilities at the date of the financial statements, as well as the reported expenses during the reporting periods. Actual results may differ from these estimatesunder different assumptions or conditions.Our significant accounting policies were revenue from contracts with customers which are more fully described in the notes to our financial statementsincluded herein. We believe these accounting policies discussed below are critical to our financial results and to the understanding of our past and futureperformance, as these policies relate to the more significant areas involving management’s estimates and assumptions. We consider an accounting estimate to becritical if: (1) it requires us to make assumptions because information was not available at the time or it included matters that were highly uncertain at the time wewere making our estimate; and (2) changes in the estimate could have a material impact on our financial condition or results of operations.Accounting for business combinationsWe allocate the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed, based upon their estimated fairvalues at the acquisition date. These fair values are typically estimated with assistance from independent valuation specialists.The purchase price allocation process requires us to make significant estimates and assumptions, especially at the acquisition date with respect tointangible assets, contractual support obligations assumed, contingent consideration arrangements, and preacquisition contingencies.Although we believe the assumptions and estimates we have made in the past have been reasonable and appropriate, they are based in part on historicalexperience and information obtained from the management of the acquired companies and are inherently uncertain.Examples of critical estimates in valuing certain of the intangible assets we have acquired or may acquire in the future include but are not limited to:● future expected cash flows from product sales or other customer contracts;● expected costs of fulfillment including marketing, warehousing and product sales;● the acquired company’s brand and competitive position, as well as assumptions about the period of time the acquired brand will continue to be used inthe combined company’s product portfolio;● cost of capital and discount rates; and● estimating the useful lives of acquired assets as well as the pattern or manner in which the assets will amortize.Refer to Note 16, Business Combination, to the consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” of thisAnnual Report on Form 10K.49Revenue from contracts with customersOur revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled software subscriptions, associatedsoftware maintenance and support.We recognize revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with a customer exists onlywhen: the parties to the contract have approved it and are committed to perform their respective obligations, we can identify each party’s rights regarding thedistinct goods or services to be transferred (“performance obligations”), we can determine the transaction price for the goods or services to be transferred, thecontract has commercial substance and it is probable that we will collect the consideration to which we will be entitled in exchange for the goods or services that willbe transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to a customer.Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted to governmental authorities. Refundsare estimated at contract inception and updated at the end of each reporting period if additional information becomes available. Revenue is recognized when controlof the product is transferred to the customer.We maintain a returns policy that allows our customers to return product within a specified period of time. The estimate of the provision for returns is basedupon historical experience with actual returns.Principal versus Agent ConsiderationsWe follow the guidance provided in ASC 606 for determining whether we are a principal or an agent in arrangements with customers, by assessing whetherthe nature of our promise is a performance obligation to provide the specified goods (principal) or to arrange for those goods to be provided by the other party(agent). With regard to products being sold by Orgad through Amazon, this determination involves judgment. We determine it is the principle when it has controlover the promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).We recognize revenue ratably over the contractual service term for hosted services that are priced based on a committed number of transactions where thedelivery and consumption of the benefit of the services occur evenly over time, beginning on the date the services associated with the committed transactions arefirst made available to the customer and continuing through the end of the contractual service term. Over usage fees and fees based on the actual number oftransactions are billed in accordance with contract terms as these fees are incurred and are included in the transaction price of an arrangement as variableconsideration. Fees based on a number of transactions or impressions per month, are allocated to the period in which the transactions occur. Revenue forsubscriptions sold as a fee per period is recognized ratably over the contractual term as the customer simultaneously receives and consumes the benefit of theunderlying service.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.As a “smaller reporting company” as defined by Item 10 of Regulation SK, we are not required to provide this information.50ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAMY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2022U.S. DOLLARS IN THOUSANDSINDEXPageReport of Independent Registered Public Accounting Firm (PCAOB ID: ID 1057)F2Consolidated Balance SheetsF4Consolidated Statements of Comprehensive LossF5Consolidated Statements of Shareholders’ EquityF6Consolidated Statements of Cash FlowsF7Notes to Consolidated Financial StatementsF8 F33F1Report of Independent Registered Public Accounting FirmTo the Shareholders and Board of DirectorsMy Size, Inc.:Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of My Size, Inc. and subsidiaries (the Company) as of December 31, 2022 and 2021, the relatedconsolidated statements of comprehensive loss, shareholders’ equity, and cash flows for each of the years in the twoyear period ended December 31, 2022, and therelated notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, thefinancial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the twoyear periodended December 31, 2022, in conformity with U.S. generally accepted accounting principles.Going ConcernThe accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1d tothe consolidated financial statements, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit thatraises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1d. Theconsolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidatedfinancial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Critical Audit MattersCritical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to becommunicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved ourespecially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidatedfinancial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters oron the accounts or disclosures to which they relate.Acquisitiondate fair value of customer relationshipsAs discussed in Note 16 to the consolidated financial statements, on October 11, 2022, the Company acquired Naiz Bespoke Technologies SL (“Naiz”). As a result ofthe transaction, the Company acquired customer relationships intangible assets (“customer relationships”) representing the generation of future income from Naiz’sexisting customers. The acquisition date fair value of the customer relationships was $726 thousand.F2We identified the evaluation of the acquisitiondate fair value of the Naiz customer relationships as a critical audit matter. A high degree of subjective auditorjudgment was required to evaluate the following internally developed assumptions used to estimate the fair value of such asset, for which there were limitedobservable inputs: (i) forecasted revenues attributable to existing customers, (ii) forecasted earnings before interest, taxes, depreciation, and amortization(“EBITDA”) margins for the acquired business, (iii) estimated annual customer attrition rates and (iv) estimated discount rate. The determined fair value wassensitive to changes in these key assumptions. Additionally, specialized skills and knowledge were needed to evaluate the discount rate used.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s acquisitiondate fair value estimation process, including controls over the development of key assumptions. We performed a sensitivity analysis toassess the impact of reasonably possible changes to forecasted revenues, EBITDA margins, annual customer attrition rates, and the discount rate. We evaluated theforecasted revenue growth rates from existing customers by comparing the growth assumptions to those of the Company’s peers and industry reports. Inconnection with our assessment of the forecasts used in the valuation, we compared (1) forecasted revenue and EBITDA to Naiz’s historical actual results and (2)estimated annual customer attrition rates to historical Naiz customer attrition data. We tested the Company’s determined weighted average cost of capital(“WACC”), which was used to determine the discount rate, by involving valuation professionals with specialized skills and knowledge, who assisted in:Evaluating the selected discount rate by comparing it against a discount rate range that was independently developed using publicly available market datafor comparable companies, and;Assessing the Company’s WACC calculation, by comparing it against an independently estimated WACC range based on inputs obtained throughpublished surveys and studies.Goodwill impairment assessmentAs discussed in Note 16 to the consolidated financial statements, during 2022 the Company recorded goodwill of $1,257 thousand related to the acquisition of NaizBespoke Technologies, S.L. (“Naiz”). The Company performed an annual quantitative impairment test of goodwill at the reporting unit level. Based on this analysis,the Company determined that the fair value of its reporting unit exceeded its carrying value and no impairment charge was required.We identified the evaluation of the goodwill impairment assessment for the Naiz reporting unit as a critical audit matter. A high degree of subjective auditor judgmentwas required to evaluate the following assumptions used to estimate the fair value of the Company’s reporting unit, for which there were limited observable inputs:(i) forecasted reporting unit cash flows, (ii) longterm growth rates, and (iii) discount rates. The fair value was sensitive to changes in these key assumptions.Additionally, specialized skills and knowledge were needed to evaluate the discount rates.The primary procedures we performed to address this critical audit matter included the following. We evaluated the design of certain internal controls over theCompany’s goodwill impairment evaluation process. We performed sensitivity analyses to assess the impact of reasonably possible changes to forecasted cashflows, longterm growth rates, and discount rates. We evaluated the Company’s forecasted growth rates by comparing the growth assumptions to those of theCompany’s peers and industry reports. We compared the Company’s forecasted revenue, cost of sales, and operating expense margins to historical actual results toassess the reasonableness of the forecasts. In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:– Assessing the Company’s WACC calculation, by comparing it against an estimated WACC range based on inputs obtained through published surveys andstudies– Evaluating the discount rates used by the Company by comparing them against discount rate ranges that were developed using publicly available market data forcomparable companies, and;– Performing an arithmetic recalculation regarding the fair value of the Company’s reporting unit, using the Company’s cash flow forecasts and the independentlydeveloped discount rates, and comparing the results to the Company’s fair value estimates./s/ Somekh ChaikinSomekh ChaikinMember Firm of KPMG InternationalWe have served as the Company’s auditor since 2017.Tel Aviv, IsraelApril 14, 2023F3MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED BALANCE SHEETSU.S. dollars in thousands (except share data)December 31,Note20222021AssetsCurrent assetsCash and cash equivalents32,10010,670Restricted cash263273Inventory997Account receivables1,94040Other receivables and prepaid expenses4758579Total current assets6,05811,562Long term deposits28Property and equipment, net5140112Operating rightofuse asset6583776Intangible assets71,377Goodwill71,395Investment in JV899Investment in marketable securities11471083,669996Total assets9,72712,558Liabilities and shareholders’ equityCurrent liabilitiesOperating lease liability6159138Shortterm loans9155Trade payables2,487635Liabilities to Related parties69863Other payables680392Total current liabilities4,1791,228Longterm loans9376Deferred tax liabilities328Operating lease liability6308473Total noncurrent liabilities1,012473CONTINGENCIES AND COMMITMENTS15Total Liabilities5,1911,701Shareholders’ equity13Stock capital Common stock of $0.001par value Authorized: 250,000,000and 100,000,000shares as of December 31,2022 and 2021; Issued and outstanding: 1,464,117and959,297 as of December 31,2022 and 2021, respectively (*)11Additional paidin capital58,67356,453Accumulated other comprehensive loss(637)(406)Accumulated deficit(53,501)(45,191)Total shareholders’ equity4,53610,857Total liabilities and shareholders’ equity9,72712,558(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F4MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSSU.S. dollars in thousands (except share data and per share data)Year endedDecember 31,Note20222021Revenues4,459131Cost of revenues(3,825)Gross profit634131Operating expensesResearch and development(1,701)(4,248)Sales and marketing18(3,143)(2,336)General and administrative19(3,900)(4,124)Total operating expenses(8,744)(10,708)Operating loss(8,110)(10,577)Financial income (expense), net20(236)57Loss before taxes(8,346)(10,520)Taxes on income36Net loss for the year(8,310)(10,520)Other comprehensive income (loss):Foreign currency translation differences(231)18Total comprehensive loss(8,541)(10,502)Basic and diluted loss per share (*)(7.47)(17.75)Basic and diluted weighted average number of shares outstanding (*)1,111,913420,385(*)Adjusted to give retroactive effect of 1:25 reverse stock split, see Note 13 (g)The accompanying notes are an integral part of the consolidated financial statements.F5MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITYU.S. dollars in thousands (except share data)Common stockAdditionalpaidinAccumulatedothercomprehensiveAccumulatedTotalstockholders’NumberAmountcapitallossDeficitequityBalance as of January 1, 2021289,314(*)37,171(424)(34,671)2,076Stockbased compensation related to optionsgranted to employees and consultants373373Exercise of options granted to employees178(*)Restricted shares issued to shareholder (***)100,000(*)2,6182,618Issuance of shares, net of issuance cost of$1,160434,700112,58212,583Exercise of warrants135,108(*)3,7093,709Total comprehensive income (loss)18(10,520)(10,502)Balance as of December 31, 2021959,300156,453(406)(45,191)10,857Stockbased compensation related to optionsand restricted shares granted to employeesand consultants176,000(*)455455Issuance of shares in Business Combination(**)295,802(*)1,4461,446Issuance of shares post BusinessCombination (**)20,924(*)319319Effect of reverse stock split (Note 13 g)12,091(*)Total comprehensive income (loss)(231)(8,310)(8,541)Balance as of December 31, 20221,464,117158,673(637)(53,501)4,536(*)Represents an amount of less than $1.(**)See note 16(***)See note 1 bThe accompanying notes are an integral part of the consolidated financial statements.F6MY SIZE, INC. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSU.S. dollars in thousandsYear endedDecember 31,20222021Cash flows from operating activities:Net loss(8,310)(10,520)Adjustments to reconcile net loss to net cash used in operating activities:Depreciation3842Change in operating lease rightofuse asset13543Amortization of intangible assets155foreign exchange differences(23)1Change in liabilities to related parties635Interest on long term liabilities10Interest paid(10)Revaluation of investment in marketable securities62(49)Restricted Shares issued to shareholder2,618Stock based compensation455373Issuance of shares post Business Combination319Change in inventory(219)Change in deferred tax liabilities(36)Change in account receivable(1,863)(12)Changes in operating lease liabilities(142)Change in other receivables and prepaid expenses184(99)Change in trade payables1,315253Change in other payables553Net cash used in operating activities(7,290)(7,297)Cash flows from investing activities:Acquisition of a subsidiary, net of cash acquired(767)Proceeds from restricted deposits, net184investing in other receivable(100)Investment in equity accounted investee(99)Purchase of property and equipment(27)(23)Net cash (used in) provided by investing activities(993)161Cash flows from financing activities:Proceeds from issuance of shares, net of issuance costs12,583Repayment of loans(67)Proceeds from exercise of warrants3,709Net cash (used in) provided by financing activities(67)16,292Effect of exchange rate fluctuations on cash and cash equivalents(230)13Change in cash and cash equivalents and restricted cash(8,580)9,169Cash and cash equivalents and restricted cash at the beginning of the year10,9431,774Cash and cash equivalents and restricted cash at the end of the year2,36310,943B) Aggregate cash flows derived for the Company as a result of the Orgad acquisition (note 16)2022Trade and other receivables364Inventory864Fixed assets55Longterm deposits31Selling Platform378Goodwill152Shortterm credit(181)Trade payables(580)Other payables(88)Longterm loan(138)Longterm provision(13)Deferred Tax Liability(87)Issuance of shares(457)Total acquisition of subsidiary, net of cash300C) Aggregate cash flows derived for the Company as a result of the Naiz acquisition (note 16)2022Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Issuance of shares(1,008)Total acquisition of subsidiary, net of cash467The accompanying notes are an integral part of the consolidated financial statements.F7MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERALa.My Size, Inc. is developing unique measurement technologies based on algorithms with applications in a variety of areas, from the apparel ecommerce market, to the courier services market and to the Do It Yourself (“DIY”) smartphone and tablet apps market. The technology is driven byproprietary algorithms, which are able to calculate and record measurements in a variety of novel ways.Following the acquisition of Naiz Bespoke Technologies, S.L (“Naiz”) in October 2022 (see note 16), the Company expanded its offering outreachand customer base.Following the acquisition of Orgad International Marketing Ltd. (“Orgad”) in February 2022 (see note 16), the Company also operates anomnichannel ecommerce platform.The Company has five subsidiaries, My Size Israel 2014 Ltd (“My Size Israel”), Topspin Medical (Israel) Ltd., and Orgad all of which areincorporated in Israel, and My Size LLC which was incorporated in the Russian Federation and Naiz Bespoke Technologies, S.L., a limited liabilitycompany incorporated under the laws of Spain (see note 16). References to the Company include the subsidiaries unless the context indicatesotherwise.My Size, Inc., was incorporated and commenced operations in September 1999, as Topspin Medical Inc. (“Topspin”), a private company registeredin the State of Delaware. In December 2013, the Company changed its name to Knowledgetree Ventures Inc. Subsequently, in February 2014, theCompany changed its name to My Size, Inc. Topspin was engaged, through its Israeli subsidiary, in research and development in the field ofcardiology and urology.Since September 1, 2005, the Company has traded on the Tel Aviv Stock Exchange (“TASE”).Between 2007 and 2012 the Company reported as a public company with the U.S. Securities and Exchange Commission (the “SEC”). In August2012, the Company suspended its reporting obligations under Section 13(a) and 15(d) of the Securities Exchange Act of 1934. In mid2015, theCompany resumed reporting as a public company.b.On January 9, 2014, at the Company’s general meeting of shareholders, its shareholders approved an engagement with one of the Company’sinvestors (the “Seller”) for the purchase of rights in a Venture (the “Venture”), including the rights to the method and the certain patent applicationthat had been filed by the Seller (the “Assets”). The Venture relates to the development of technologies and applications which will assist theconsumer to take his or her body measurements accurately using a mobile device to ensure the purchase of clothing with the best possible fitwithout the need to try them on.In February 2014, the Company established a wholly owned subsidiary, My Size (Israel) 2014 Ltd., a company registered in Israel, which iscurrently engaged in the development of the Venture described above.In return for purchasing an interest in the Venture, the Company undertook to pay the Seller 18% of the Company’s operating profit, direct orindirect, connected to the Venture for a period of seven years starting from the end of the Venture’s development period.As part of the agreement, the Seller received an option to buy back the Assets for consideration which will reflect the market fair value at that time,on the occurrence of the following events: a) if a motion is filed to liquidate the Company; b) if seven years after signing the agreement, theCompany’s total accumulated revenues, direct or indirect, from the Venture or the commercialization of the patent will be lower than NIS 3.6 million.In such an event, Seller may repurchase the interest in the Venture at a market price to be determined by an independent third party valuationconsultant, who shall be chosen by agreement by the parties, and the audit committee shall conduct the negotiations on behalf of the Company todetermine the identity of the consultant.On May 26, 2021, the Company, My Size Israel and Shoshana Zigdon entered into an Amendment to Purchase Agreement (the “Amendment”)which made certain amendments to a Purchase Agreement between the parties dated February 16, 2014 (the “Purchase Agreement”). Pursuant tothe Amendment, Ms. Zigdon agreed to irrevocably waive the right to repurchase certain assets related to the collection of data for measurementpurposes that My Size Israel acquired from Ms. Zigdon under the Purchase Agreement and upon which the Company’s business is substantiallydependent, and all past, present and future rights in any of the intellectual property rights sold, transferred and assigned to My Size Israel underthe Purchase Agreement and any modifications, amendments or improvements made thereto, including, without limitation, any compensation,reward or any rights to royalties or to receive any payment or other consideration whatsoever in connection with such intellectual property rights(the “Waiver”). In consideration of the Waiver, the Company issued 100,000 shares of common stock to Ms. Zigdon in a private placement.F8MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 1 GENERAL (Cont.)c.On July 25, 2016, the Company’s common stock began publicly trading on the Nasdaq Capital Market under the symbol “MYSZ”. The Company’sshares of common stock are listed both on the Nasdaq Capital Market and TASE.d.Since inception, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit of $53,501.The Company has financed its operations mainly through fundraising from various investors.The Company’s management expects that the Company will continue to generate losses and negative cash flows from operations for theforeseeable future. Based on the projected cash flows and cash balances as of December 31, 2022, management is of the opinion that its existingcash will be sufficient to fund operations for a period less than 12 months. As a result, there is substantial doubt about the Company’s ability tocontinue as a going concern.Management’s plans include the continued commercialization of the Company’s products and securing sufficient financing through the sale ofadditional equity securities, debt or capital inflows from strategic partnerships. Additional funds may not be available when the Company needsthem, on terms that are acceptable to it, or at all. If the Company is unsuccessful in commercializing its products and securing sufficient financing,it may need to cease operations.The financial statements include no adjustments for measurement or presentation of assets and liabilities, which may be required should theCompany fail to operate as a going concern.e.The Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificial intelligencedriven measurement solutions (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions. The fashion and equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. The SaaS based innovativeartificial intelligence driven measurement solutions, or SaaS Solutions operating segment consists of My Size Inc My Size Israel and LLC.NOTE 2 SIGNIFICANT ACCOUNTING POLICIESThe consolidated financial statements are prepared according to United States generally accepted accounting principles (“U.S. GAAP”), applied on aconsistent basis, as followsa.Use of estimates:The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions thataffect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.Information about assumptions made by the Company with respect to the future and other reasons for uncertainty with respect to estimates thathave a significant risk of resulting in a material adjustment to carrying amounts of assets and liabilities in the next financial year are included in thefollowing notes:Acquisitions of subsidiariesThe Company measures the fair value of the consideration transferred (including contingent consideration) and fair value of the assets acquiredand liabilities assumed, in business combination transactions. For information on details on fair value measurement in acquisition of subsidiaries,see Note 16 regarding business combinations.Estimated impairment of nonfinancial assetsThe Company examines on an annual basis whether there is an impairment of goodwill, intangibles and property, plant and equipment that areallocated to cash generating units, in accordance with the accounting policy presented in Note 1(h) below. Recoverable amounts of cashgenerating units are determined on the basis of valueinuse calculations. These calculations require the use of estimates.For information on key assumptions used in calculation of the recoverable amount, see note 7 – Goodwill and other Intangible assets.b.Functional currency:The currency of the primary economic environment in which the operations of the Company is conducted is the United States Dollar and thus it isthe Company’s functional currency. The reporting currency according to which these financial statements are prepared is the U.S. dollar.The currency of the primary economic environment in which the operation of the Subsidiary, My Size Israel and Orgad International MarketingLtd. functional currency is the New Israeli Shekel (“NIS”).The currency of the primary economic environment in which the operation of the Subsidiary, My Size LLC, functional currency is Russian Ruble.The currency of the primary economic environment in which the operation of the Subsidiary, Naiz fit, functional currency is Euro.F9MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)c.Principles of consolidation:The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances andtransactions have been eliminated upon consolidation.d.Cash equivalents:Cash equivalents are shortterm highly liquid investments that are readily convertible to cash with original maturities of three months or less at thedate acquired.e.Restricted cashRestricted cash are deposits for rent, credit card and for hedging activities.f.Inventories:Inventories include finished goods and are measured at the lower of cost or net realizable value. The cost of inventories comprises of the costsincurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary courseof business. At the point of the loss recognition, a new, lowercost basis for that inventory is established, and subsequent changes in facts andcircumstances do not result in the restoration or increase in that newly established cost basis. The costs of purchase of inventories comprise thepurchase price and other costs directly attributable to the acquisition of finished goods. In 2022, the Company recorded an inventory markdownof $48.g.Property and equipment:Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straightline method over theestimated useful lives of the assets, at the following annual rates:%Computers and peripheral equipment33Office furniture and equipment720Leasehold improvementsOver the term of the leaseor the useful life of theimprovements, whicheveris shorterh.Impairment of longlived assets:The Company’s property and equipment are reviewed for impairment in accordance with ASC 360, “Property Plant and Equipment”, wheneverevents or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held andused is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by theassets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount ofthe assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less sellingcosts. During the periods ended December 31, 2022 and 2021, no impairment losses have been recorded.i.Business combinations:The Company applies the provisions of ASC 805, “Business Combination” and allocates the fair value of purchase consideration to the tangibleassets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchaseconsideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assetsacquired and liabilities assumed, the Company estimated the future expected cash flows from acquired platform, customer relationships,Technology and trademark from a market participant perspective, useful lives and discount rates. In addition, management makes significantestimates and assumptions, which are uncertain, but believed to be reasonable.Acquisitionrelated costs are recognized separately from the acquisition and are expensed as incurred.F10MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)j.Goodwill:Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a businesscombination. Under ASC 350, “Intangible Goodwill and Other”, goodwill is not amortized, but rather is subject to an annual impairment test.ASC 350 requires goodwill to be tested for impairment at the reporting unit level at least annually, the fourth quarter, or between annual tests incertain circumstances, and written down when impaired. Goodwill is tested for impairment by comparing the fair value of the reporting unit with itcarrying value. Goodwill from Orgad acquisition was allocated to the fashion and equipment ecommerce platform segment and Goodwill from theNaiz acquisition was allocated to Naiz segment based innovative artificial intelligence driven measurement solutions.Alternatively, ASC 350 permits an entity to bypass the qualitative assessment for any reporting unit and proceed directly to performing the firststep of the goodwill impairment test. There were no impairment charges to goodwill during the period presented.k.Intangible assets:Intangible assets consist of identifiable intangible assets that the Company has acquired from previous business combinations. Intangible assetsare recorded at costs, net of accumulated amortization. The Company amortizes its intangible assets reflecting the pattern in which the economicbenefits of the intangible assets are consumed. When a pattern cannot be reliably determined, the Company uses a straightline amortizationmethod. Amortization is calculated by the straightline method over the estimated useful lives of the following assets.The estimated useful lives of the company’s intangible assets are as follows:yearsCustomer Relationships7Technology5Trademark5Selling Platform3Each period the Company evaluates the estimated remaining useful lives of its intangible assets and whether events or changes in circumstanceswarrant a revision to the remaining period of amortizationl.Severance pay:The Subsidiary’s liability for severance pay is covered by Section 14 of the Israeli Severance Pay Law (“Section 14”). Under Section 14, employeesin Israel are entitled to have monthly deposits, at a rate of 8.33% of their monthly salary, made on their behalf to their insurance funds. Payments inaccordance with Section 14 exempt the Subsidiary from any additional obligation for these employees. As a result, the Subsidiary does notrecognize any liability for severance pay due to these employees and the deposits under Section 14 are not recorded as an asset in theSubsidiary’s balance sheet. These contributions for compensation represent defined contribution plans and expenses are recorded based onactual deposits.Other than the My Size Israel’s liability there are no additional severance pay liabilities.F11MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)m.Research and development costs:Research and development costs are charged to the statement of operations, as incurred. Most of the research and development expenses are forwages, related expenses and subcontractors.n.Income taxes:The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilitiesfor the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Companies’ taxreturns. Deferred taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities using enactedtax rates in effect in the years in which the differences are expected to reverse. The Company assesses the likelihood that its deferred tax assetswill be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely thannot that all or a portion of deferred tax assets will not be realized. The Company establishes a valuation allowance, if necessary, to reduce deferredtax assets to the amount more likely than not to be realized. As of December 31, 2022, and 2021, a full valuation allowance was established by theCompany.The Company implements a twostep approach to recognize and measure the benefit of its tax positions. The first step is to evaluate the taxposition taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that,on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigationprocesses. The second step is to measure the tax benefit as the largest amount that is greater than 50 percent (cumulative basis) likely to berealized upon settlement.The Company believes that its tax positions are all highly certain of being upheld upon examination. As of December 31,2022 and 2021 the Company recorded a liability for unrecognized tax benefits of $328 and none respectively.o.Accounting for stockbased compensation:The Company accounts for its employees’ stockbased compensation as an expense in the financial statements based on ASC 718. All awards areequity classified and therefore such costs are measured at the grant date fair value of the award and graded vesting attribution approach torecognize compensation cost over the vesting period. The Company estimates stock option grant date fair value using the Binomial and BlackScholes option pricingmodel.The Company recorded stock options issued to nonemployees at the grant date fair value, and recognizes expenses over the related serviceperiod by using the straightline attribution approach in accordance with ASU 201807. All awards are equity classified.The expected volatility of the share prices reflects the assumption that the historical volatility of the share prices is reasonably indicative ofexpected future trends.The riskfree interest rate for grants with an exercise price denominated in USD for employees and several consultants is based on the yield fromUS treasury zerocoupon bonds with an equivalent term.The Company has historically not paid dividends and has no foreseeable plans to pay dividends.F12MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)p.Fair value of financial instruments:ASC 820, Fair Value Measurements and Disclosures, relating to fair value measurements, defines fair value and established a framework formeasuring fair value. The ASC 820 fair value hierarchy distinguishes between market participant assumptions developed based on market dataobtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptionsdeveloped based on the best information available in the circumstances. ASC 820 defines fair value as the price that would be received to sell anasset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price. Inaddition, the fair value of assets and liabilities should include consideration of nonperformance risk, which for the liabilities described belowincludes the Company’s own credit risk.As a basis for considering such assumptions, ASC 820 establishes a threetier value hierarchy, which prioritizes the inputs used in the valuationmethodologies in measuring fair value:Level 1 Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access. Valuationadjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readilyand regularly available in an active market, valuation of these products does not entail a significant degree of judgment.Level 2 Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, eitherdirectly or indirectly.Level 3 Valuations based on inputs that are unobservable and significant to the overall fair value measurement.The Company holds share certificates in iMine Corporation (“iMine”) formerly known as Diamante Minerals, Inc., a publiclytraded company onthe OTCQB.Due to sales restrictions on the sale of the iMine shares, the fair value of the shares was measured on the basis of the quoted market price for anotherwise identical unrestricted equity instrument of the same issuer that trades in a public market, adjusted to reflect the effect of the salesrestrictions and is therefore, ranked as Level 2 asset.q.Basic and diluted net loss per share:Basic net loss per share is computed based on the weighted average number of shares of common stock outstanding during each year. Diluted netincome per share is computed based on the weighted average number of shares of common stock outstanding during each year plus dilutivepotential equivalent common stock considered outstanding during the year, in accordance with ASC 260, “Earnings per Share”. For the yearsended December 31, 2022 and 2021, all outstanding options and warrants have been excluded from the calculation of the diluted net loss per sharesince their effect was antidilutive.r.Concentrations of credit risk:Financial instruments that potentially subject the Company and its subsidiaries to concentrations of credit risk consist principally of cash andcash equivalents.Cash and cash equivalents are invested in banks in Israel, Spain and United States. Such deposits in United States may be in excess of insuredlimits and are not insured in other jurisdictions. Management believes that the financial institutions that hold the Company’s investments arefinancially sound and, accordingly, minimal credit risk exists with respect to these investments.The Company and its subsidiaries have no offbalancesheet concentration of credit risk such as foreign exchange contracts, option contracts orother foreign hedging arrangements.F13MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)s.Revenue Recognition:The Company’s revenues are comprised of two main categories: (1) selling products to customers, and (2) licensing cloudenabled softwaresubscriptions, associated software maintenance and support.The Company recognizes revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”). A contract with acustomer exists only when: the parties to the contract have approved it and are committed to perform their respective obligations, the Companycan identify each party’s rights regarding the distinct goods or services to be transferred (“performance obligations”), the Company can determinethe transaction price for the goods or services to be transferred, the contract has commercial substance and it is probable that the Company willcollect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.Revenue from sale of products is recognized at the time the related performance obligation is satisfied by transferring a promised good to acustomer. Revenue is recognized net of allowances for refunds and any taxes collected from customers, which are subsequently remitted togovernmental authorities. Refunds are estimated at contract inception and updated at the end of each reporting period if additional informationbecomes available. Revenue is recognized when control of the product is transferred to the customer.The Company maintains a returns policy that allows its customers to return product within a specified period of time. The estimate of the provisionfor returns is based upon historical experience with actual returns.Principal versus Agent ConsiderationsThe Company follows the guidance provided in ASC 606 for determining whether it is a principal or an agent in arrangements with customers, byassessing whether the nature of the Company’s promise is a performance obligation to provide the specified goods (principal) or to arrange forthose goods to be provided by the other party (agent). With regard to products being sold by Orgad through Amazon, this determination involvesjudgment. The Company determines it is the principle when it has control over promised product before it is transferred to the end customers.Subscription and Services OfferingsSuch performance obligations include cloud enabled subscriptions, software maintenance and technical support.Fully hosted subscription services (SaaS) allow customers to access hosted software during the contractual term without taking possession of thesoftware. Cloud hosted subscription services are sold on a fee per subscription that is based on consumption or usage (per fit recommendation).The Company recognizes revenue ratably over the contractual service term for hosted services that are priced based on a committed number oftransactions where the delivery and consumption of the benefit of the services occur evenly over time, beginning on the date the servicesassociated with the committed transactions are first made available to the customer and continuing through the end of the contractual serviceterm. Over usage fees and fees based on the actual number of transactions are billed in accordance with contract terms as these fees are incurredand are included in the transaction price of an arrangement as variable consideration. Fees based on a number of transactions or impressions permonth, are allocated to the period in which the transactions occur. Revenue for subscriptions sold as a fee per period is recognized ratably overthe contractual term as the customer simultaneously receives and consumes the benefit of the underlying service.F14MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Cont.)t.Contingencies and CommitmentsLiabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it isprobable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with losscontingencies are expensed as incurred.u.Derivative instrumentsThe Company accounts for its derivative instruments as either assets or liabilities and measures them at fair value through profit or loss.v.LeasesThe Company leases include an office space lease agreement for 36 months, with an option to extend for an additional 36 months and 36 monthscancelable operating lease agreements on behalf of personnel vehicles. The lease term includes a noncancellable period of the lease plus anyadditional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise,or an option to extend (or not to terminate) the lease controlled by the lessor.ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make leasepayments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value oflease payments over the lease term. The company generally use its incremental borrowing rate based on the estimated rate of interest forcollateralized borrowing over a similar term of the lease payments at commencement date. Lease expense for lease payments is recognized on astraightline basis over the lease term.For the office rent lease, the Company has elected to account for the lease and nonlease maintenance components as a single lease component.Therefore, the lease payments used to measure the lease liability include all of the fixed consideration in the contract, including insubstance fixedpayments, owed over the lease term.w.Impact of recently issued accounting standardIn June 2016, the FASB issued ASU 201613, “Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses on FinancialInstruments”, which requires companies to measure credit losses of financial instruments, including customer accounts receivable, utilizing amethodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information toinform credit loss estimates. Subsequent to the issuance of ASU 201613, the FASB issued several additional Accounting Standard Updates toclarify implementation guidance, provide narrowscope improvements and provide additional disclosure guidance. As an Emerging GrowthCompany, ASU 201613 is effective for fiscal years beginning after December 15, 2022. The Company does not expect this ASU to have a materialimpact on its consolidated financial statements.F15MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 3 CASH AND CASH EQUIVALENTSThe Company’s cash and cash equivalents balance at December 31, 2022 and 2021 is denominated in the following currencies:December 31,20222021US Dollars1,65110,184New Israeli Shekels259433Other190532,10010,670NOTE 4 OTHER RECEIVABLES AND PREPAID EXPENSESDecember 31,20222021Prepaid expenses and other current assets322429Government authorities28317Other153133Total758579NOTE 5 PROPERTY AND EQUIPMENT, NETComputersandperipheralequipmentOfficefurnitureandequipmentLeaseholdimprovementsTotalCostBalance as at January 1, 20211825860300Additions2323Translation adjustments72211Balance as at December 31, 20212126062334Balance as at January 1, 20222126062334Additions161127Business combination401555Translation adjustments(32)(8)(8)(48)Balance as at December 31, 20222367854368Accumulated DepreciationBalance as at January 1, 20211461412172Additions2751042Translation adjustments6118Balance as at December 31, 20211792023222Balance as at January 1, 20221792023222Additions209938Translation adjustments(27)(3)(2)(32)Balance as at December 31, 20221722630228Carrying amountsAs at December 31, 2021334039112As at December 31, 2022645224140F16MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 6 LEASESIn August 2019, The Company entered into an office space lease agreement. The lease term is for 36 months beginning on August 20, 2019 and endingon August 20, 2022, with an option to extend for an additional 36 months. The Company extended the lease period until August 20, 2025. Monthly rentpayments including utilities amounting to approximately USD 14 (NIS 49,500) per month.In addition, The Company entered into a threeyear cancelable operating lease agreement for cars.These operating leases are included in “Right of use asset” on the Company’s December 31, 2022 consolidated balance sheets, and represent theCompany’s right to use the underlying asset for the lease term. The Company’s obligations to make lease payments are included in the currentliabilities as “Operating lease liability” and in the noncurrent liabilities as “Operating lease liability long term” on the Company’s December 31, 2022consolidated balance sheets. As of December 31, 2022, rightofuse of asset was $583. operating lease liabilities were $159 and non current Operatinglease liabilities were $308. Rightofuse asset includes the capitalization of improvements (net of amortization) amounting to $105.Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value ofthe lease payments.The interest rate used to discount future lease payment was 11.95%.Maturities of lease liabilities as of December 31, 2022 were as follows:Year Ending:2023$1912024$1912025$127Thereafter$509Less imputed interest:$(42)Total lease liabilities$467F17MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 7 – Goodwill and other Intangible assetsA.Identified intangible assetsSchedule of Intangible assetsSelling PlatformTechnologyCustomerRelationshipsOtherTotalThousandsUSDThousandsUSDThousandsUSDThousandsUSDThousandsUSDCostAs of January 1, 2022Acquisitions through business combinations378286726771,467Effect of changes in exchange rates(32)2565765As of December 31, 2022346311791841,532AmortizationAs of January 1, 2022Amortization for the year including effect of changes inexchange rates as of December 31, 2022(109)(15)(27)(4)(155)Carrying amountAs of December 31, 2022237296764801,377AmortizationAmortization expenses recorded for identified intangible assets in the Consolidated Statements of Operations for each period and were as follows:Line ItemDecember 31,2022December 31,2021Selling platformCosts of revenues109TrademarkSales and marketing4TechnologyCosts of revenues15Customer relationshipsSales and marketing27Total amortization expenses155Future amortization expenses are expected to be as follows:20232024202520262027ThereafterTotalFuture amortization expenses3033031941771561791,312b.GoodwillThe changes in the carrying amount of goodwill for the years ended December 31, 2022 and 2021 were as follows:Fashion and equipmentecommerce platformNaizTotalBalance as of December 31, 2021Changes during the period:Goodwill acquired1521,1521,304Goodwill impairmentTranslation differences(14)10591Balance as of December 31, 20221381,2571,395The Company operates its business through three reporting segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovativeartificial intelligence driven measurement solutions and (iii) Naiz. See note 17 for additional segments information.The Company determines the fair value of its reporting units using the income approach. According to the income, the Company uses discounted cashflows to estimate the fair value. Cash flow projections are based on the Company’s estimates of revenue growth rates and operating margins, takinginto consideration the industry’s and market’s conditions. The discount rate used is based on the weighted average cost of capital (“WACC”),adjusted for the relevant risk associated with businessspecific characteristics.The Company performed a quantitative assessment as of December, 31 2022 for the reporting units’ fair value. The estimated fair value of the Fashionand equipment ecommerce platform and Naiz reporting units exceeded its estimated carrying amount by 95.9% and 27.7% respectively. This, based thefollowing assumptions:Fashion and equipmentecommerce platformNaizDiscount rate21%23%Terminal growth rate3%3%If business conditions or expectations were to change materially, it may be necessary to record impairment charges to the Company’s reporting units inthe future.F18MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 8 Investment in JVIn August 2022, the Company established a joint venture (“JV”) in Brazil with Santista Têxtil. The Company holds 51% and Santista Têxtil holds 49% of theJV. The purpose of the JV is to serve the Brazilian market according to the business plan that was set. Both parties agree to make an initial investment in theJV of $198that will be made per the holding percentage of each party. As of the reporting date, the JV is in process of establishing its operation.NOTE 9 Financial LiabilitiesThe book value of each of the financial liability categories is an acceptable approximation of fair value.The debt is comprised of four loans that were granted to My Size Israel – in an outstanding amount of approximately $131, bearing interest rangingfrom prime rate to prime+2.8% rate, and four loans that were granted to the Spanish subsidiary– in an outstanding amount of approximately $400,bearing interest ranging from 1% to 3%.The financial liability maturities during the five years following the end of the financial year are shown below:UntilUntilUntilUntilUntilAfterTOTAL311223311224311225311226311227311227311222Debts with credit institutions15513892874712531NOTE 10 RELATED PARTIES TRANSACTIONSA. Balances with related parties:The following related party payables are included in liability to related parties.December 31,20222021Officers (*)4143Liability in respect of business combinations (**)739Other related parties (***)(95)Directors152069863(*)The amount includes the net salaries payables.(**)The amount includes the provision created to former owners of Orgad that are entitled to additional cash and equity consideration and former owners of Naizthat entitled to additional cash consideration, see note 16 business combination.(***)The amount includes an amount receivable from Orgad previous shareholders who currently work in the company.B. Related parties benefits:Year endedDecember 31,20222021Salaries and related expenses1,440852Share based payments39673Cash liability and equity liability expenses related to acquisitions (**)1,058Directors58582,952983(**)The amount includes the expenses for a provision created to former owners of Orgad that are entitled to additional cash and equity consideration and formerowners of Naiz that entitled to additional cash consideration, see note 16 business combination.NOTE 11 FINANCIAL INSTRUMENTSThe following tables presents the Company’s significant assets and liabilities that are measured at fair value on recurring basis and their classificationwithin the fair value hierarchy:December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities47financial assets (*)10December 31, 2022Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesDerivatives9December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial assetsInvestment in marketable securities108December 31, 2021Fair value hierarchyLevel 1Level 2Level 3Financial liabilitiesWarrants derivative2(*)the financial asset includes in other receivables.F19MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 11 FINANCIAL INSTRUMENTS (Cont.)The carrying amounts of cash and cash equivalents, restricted cash, short term restricted deposit, accounts receivable, other receivables and prepaidexpenses, trade payable and accounts payable approximate their fair value due to the shortterm maturities of such instruments.At December 31, 2022, the recognized gain and fair value (based on quoted market prices with a discount due to security restrictions on iMine shares)of the marketable securities were $59and $47, respectively (at December 31, 2021 $49and $108, respectively).NOTE 12 TAXES ON INCOMEa.On December 31, 2022, the Company had U.S. federal net operating loss carryforwards of approximately $26 available to reduce future taxableincome. Utilization of the U.S. net operating losses may be subject to substantial limitations due to the change of ownership provisions of theInternal Revenue Code of 1986.The U.S. Company has final tax assessments through 2014.On December 22, 2017, the Tax Reform Act was signed into law. The legislation significantly changes U.S. tax law by, among other things, lowering theU.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. As a result of the decrease in the corporate incometax rate, the Company revalued the ending net deferred tax assets at December 31, 2017, but did not recognize any incremental income tax expense in2017 due to the revaluation of the valuation allowance.b.Foreign tax:1.Tax rates:Presented hereunder are the tax rates relevant to the Company’s Israeli subsidiaries:2022 23%2021 23% Presented hereunder are the tax rates relevant to the Company’s Spanish subsidiary:2022 24%2.The Company’s Israeli subsidiaries have estimated total available carryforward operating tax losses for Israeli income tax purposes ofapproximately $64as of December 31, 2022. Of these losses, a total of $47.5are owned by Topspin Medical (Israel) Ltd. Topspin tax lossesmay be offset only by future income with respect to the same operational activity by which it was incurred for an indefinite period of time. Theother losses are owned by My Size Israel and may be carryforward to offset against future income for an indefinite period of time.3.Topspin Medical (Israel) Ltd. and My Size (Israel) 2014 Ltd. has final tax assessments through 2016.c.U.S. and foreign components of loss from continuing operations, before income taxes consisted of:December 31,20222021U.S(1,180)(3,802)NonU.S. (foreign)(7,130)(6,718)(8,310)(10,520)F20MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 12 TAXES ON INCOME (Cont.)d.Deferred taxes:Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reportingpurposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows:December 31,20222021Deferred tax assets:Operating loss carryforwards20,13120,238Warrants and options145126Marketable securities390377Intangible assets(328)Research and development expenses586341Other temporary differences203Deferred tax assets before valuation allowance21,12721,082Valuation allowance(21,455)(21,082)Net deferred tax liability(328)The following table presents a reconciliation of the beginning and ending valuation allowance:December 31,20222021Balance at beginning of the year21,08218,968Additions in valuation allowance to the income statement1,7581,625Additions in valuation allowance due to exchange rate differences(1,385)489Balance at end of the year21,45521,082In assessing the realization of deferred tax assets, management considers whether it is more likely than not that all or some portion of the deferred taxassets will not be realized.The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporarydifferences are deductible and net operating losses are utilized. Based on consideration of these factors, the Company recorded a full valuationallowance at December 31, 2021 and 2020.e.Theoretical taxThe following presents the adjustment between the theoretical tax amount and the tax amount included in the financial statements:December 31,20222021Loss before income taxes8,34610,520Statutory tax rate21%21%Computed “expected” tax income1,7522,209Foreign tax rate differences and exchange rate differences149131Nondeductible expenses(107)(715)Change in valuation allowance(1,758)(1,625)Taxes on income36F21MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITYa.Common stock confers upon their holders the right to receive notice to participate and vote in general meetings of the Company, and the right toreceive dividends if declared.b.On January 8, 2021, the Company conducted a public offering of its securities pursuant to which it issued 62,768 shares of its common stock forgross proceeds of $2,008. The net proceeds to the Company from the offering were approximately $1,700, after deducting placement agent’s feesand other estimated offering expenses payable by the Company.c.During 2021, a holders of warrants exercised warrants to purchase 135,109 ordinary shares of the Company in exchange for $3,709.d.On March 25, 2021, the Company conducted a public offering of its shares of common stock pursuant to which it issued 104,741 shares of itscommon stock for gross proceeds of $3,300. The net proceeds to the Company from the offering were approximately $2,872, after deductingplacement agent’s fees and other estimated offering expenses payable by the Company.On May 7, 2021, the Company issued an additional 15,711 shares of the Company’s common stock in connection with the full exercise of theunderwriter’s overallotment option granted in the Company’s March 2021 public offering. These additional shares were sold to the underwriter at apublic offering price of $31.5 per share, resulting in additional net proceeds to the Company, net of the underwriting discount, of approximately$463.e.On May 26, 2021, the Company issued 100,000 shares of common stock to Ms. Zigdon in consideration of the Waiver. See note 1(b) above.f.On October 28, 2021, the Company sold in a registered direct offering 100,592 shares of its common stock and, in a concurrent private placement,an aggregate of 75,444 unregistered warrants to purchase shares of common stock, at an offering price of $33.8 per share and associated warrant.In addition, on the same day, the Company sold in a private placement 150,888 unregistered shares of common stock and unregistered warrants topurchase up to an aggregate of 113,166 shares of common stock at the same purchase price as in the registered direct offering. The warrants areimmediately exercisable and will expire five years from issuance at an exercise price of $31.5 per share, subject to adjustment as set forth therein.The gross proceeds from the offerings were $8,500. The net proceeds to the Company from the offerings were approximately $7,560, afterdeducting placement agent’s fees and other estimated offering expenses payable by the Company. In connection with the offerings, the Companyissued to the placement agent warrants to purchase 17,603 shares on substantially the same terms as the purchasers in the offerings at an exerciseprice of $42.25 per share and a term expiring on October 26, 2026.g.On December 7, 2022, the Company’s board of directors approved a 1for25 reverse stock split of the Company’s issued and outstanding sharesof common stock. The reverse stock split became effective on December 8, 2022. In order not to have fractional shares as a result of the reversestock split, the Company issued an additional 12,091 shares of common stock. As a result, all shares of common stock, options for shares ofcommon stock, exercise price and net loss per share amounts were adjusted retroactively for all periods presented in these financial statements.F22MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 13 SHAREHOLDERS’ EQUITY (Cont.)g.A summary of the warrant activity during the years ended December 31, 2022 and 2021 is presented below:Number ofWarrantsWeightedAverageExercisePriceWeightedAverageRemainingLife inYearsOutstanding, December 31, 2020216,85936.754.26Issued206,214Expired or exercised(135,109)Outstanding, December 31, 2021287,96431.004.35IssuedExpired or exercised(17,901)Outstanding, December 31, 2022270,06330.213.36Exercisable, December 31, 2022270,06330.213.36NOTE 14 STOCK BASED COMPENSATIONThe stockbased expense recognized in the financial statements for services received is related to Research and Development, Sales and Marketingand General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense Research and development15195Stockbased compensation expense Sales and marketing126180Stockbased compensation expense General and administrative17898455373The stockbased expense recognized in the financial statements for services received post Acquisition of Orgad (see note 16) is related to Cost OfGoods, Sales and Marketing and General and Administrative expenses as shown in the following table:Year endedDecember 31,20222021Stockbased compensation expense – Cost of goods80Stockbased compensation expense Sales and marketing112Stockbased compensation expense General and administrative127319F23MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Options issued to consultantsa.In July 2019, the Company entered into a threeyear agreement with a consultant (“Consultant14”) to provide services to the Company includingassisting the Company to promote, market and sell the Company’s technology to potential customers. Pursuant to such agreement and in partialconsideration for such consulting services, the Company agreed to issue to Consultant14 options to purchase up to 107 shares of the Company’scommon stock upon execution of the agreement. The options are exercisable at $375.00 per share and shall vest in 3 equal instalments every twelvemonths starting July 2019. Unexercised options shall expire 4 years from the effective date.In addition, the Company agreed to issue to Consultant14 options to purchase up to 890 shares of the Company’s common stock upon executionof the agreement. The options are exercisable at $27.00 per share and shall vest in 4 equal instalments every six months starting September 2020.Unexercised options shall expire 5 years from the effective date.During 2022 and 2021, an amount of $7 and $14 respectively, were recorded by the Company as stockbased equity awards with respect to Consultant14.F24MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The Company’s outstanding options granted to consultants as of December 31, 2022 are as follows:Issuance dateOptions forCommon stockWeightedAverageexercise priceper shareOptionsexercisableExpirationdateFebruary 201815USD528.7515February 2023August 2018December 2018531USD352.38264August 2023 December 2023July 2020107USD375107July 2023SeptemberOctober 20201,488USD27.201,288October 2024 September 2025Total2,1411,674The Company uses the Black Scholes model to measure the fair value of the stock options with the assistance of a third party valuation.No stock options were granted during 2022 to consultants.The fair value of the Company’s stock options granted to nonemployees was calculated using the following weighted average assumptions:20222021GrantsGrantsDividend yield0%Expected volatility125.15%Riskfree interest0.16%Contractual term of up to (years)1.52F25MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Stock Option Plan for employeesIn March 2017, the Company adopted a stock option plan (the “Plan”) pursuant to which the Company’s Board of Directors may grant stock options toofficers and key employees. The total number of options which may be granted to directors, officers, employees under this plan, is limited to 289,000options. Stock options can be granted with an exercise price equal to or less than the stock’s fair market value at the date of grant.The fair value of each option award is estimated on the date of grant using the Binomial optionpricing model that used the weighted averageassumptions in the following table. The risk free rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the timeof grant.2022Grants2021GrantsDividend yield0%0%Expected volatility96.52%98.47%Riskfree interest4.06%0.96%expected life522.27In the years ended December 31, 2022 and 2021, 10,000 and 3,900 options, respectively, were granted.On December 7, 2022, the Company’s stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from230,800 shares to 289,000 shares.On September 29, 2022, the Compensation Committee of the Company approved grants of restricted share awards under the Company’s 2017 EquityIncentive Plan to Ronen Luzon (CEO), Or Kles (CFO), Billy Pardo (COO), Ilia Turchinsky (CTO) and Ezequiel Javier Brandwain (CCO), pursuant towhich were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000 restricted shares and 12,000 restricted shares,respectively. Each restricted share awarded under section 102 Capital Gain Restricted Stock Award Agreement (the “Agreement”). The restrictedshares shall vest in three equal installments on January 1, 2023, January 1, 2024 and January 1, 2025 for Ronen Luzon, Or Kles, Billy Pardo and IliaTurchinsky and on January 27, 2023, January 27, 2024 and January 27, 2025 for Ezequiel Javier Brandwain, conditioned upon continuous employmentwith the Company, and subject to accelerated vesting upon a change in control of the Company.On the same day, the Company granted fiveyears options to purchase up to 10,000 ordinary shares to other employees of the Company at an exerciseprice of $0.21 per share. The options vesting period is over three years in three equal portions from the vesting commencement date.F26MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The total stock option compensation expense in the year ended December 31, 2022 amounted to $448as follows: Research and development expensesamounted to $151, sales and marketing expenses amounted to $119and general and administrative expenses amounted to $178.The total stock option compensation expense in the year ended December 31, 2021 amounted to $252 as follows: Research and development expensesamounted to $94, sales and marketing expenses amounted to $97 and general and administrative expenses amounted to $61.As of December 31, 2022, there was a total of $530 unrecognized compensation cost relating to nonvested sharebased compensation arrangements.That cost is expected to be recognized over a weightedaverage period of 2.0 years.Share option activity during 2022 is as follows:2022Number ofoptionsWeightedaverageexerciseprice US$Outstanding as of January 135,74226.5Granted10,0005.25ExercisedExpired(4,136)Outstanding as of year end41,60622.48Vested as of year end33,20825.17Share option activity during 2021 is as follows:2021Number ofoptionsWeightedaverageExerciseprice US$Outstanding as of January 139,094$26.0Granted3,90032.0Exercised(751)Expired(6,501)Outstanding as of year end35,74226.5Vested as of year end27,06326.5F27MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 15 CONTINGENCIES AND COMMITMENTSa.On August 7, 2018, the Company commenced an action against North Empire LLC (“North Empire”) in the Supreme Court of the State of New York,County of New York for breach of a Securities Purchase Agreement (the “Agreement”) in which it is seeking damages in an amount to bedetermined at trial, but in no event less than $616. On August 2, 2018, North Empire filed a Summons with Notice against the Company, also in thesame Court, in which they allege damages in an amount of $11.4 million arising from an alleged breach of the Agreement. On September 6, 2018North Empire filed a Notice of Discontinuance of the action it had filed on August 2, 2018. On September 27, 2018, North Empire filed an answerand asserted counterclaims in the action commenced by the Company against them, alleging that the Company failed to deliver stock certificatesto North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against theCompany’s CEO and now former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018,the Company filed a reply to North Empire’s counterclaims. On November 15, 2018, the Company’s CEO and now former Chairman of the Boardfiled a motion to dismiss North Empire’s thirdparty complaint. On January 6, 2020, the Court granted the motion and dismissed the thirdpartycomplaint. Discovery has been completed and both parties have filed motions for summary judgment in connection with the claims andcounterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summary judgment, arguing there werefactual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision. The appealmust be fully perfected and filed by July 26, 2022. On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying theCompany’s motion for summary judgment. North Empire will file its opposition papers on or before March 31, 2022, and the Company will file replypapers on April 29, 2022. On or about September 12, 2022, the Court issued its Decision and Order denying the Company’s motion to reargue.North Empire filed its opposing brief on December 7, 2022. Both sides were given an opportunity to file a reply brief. The Company filed our replybrief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. The Appellate Court has scheduled oral argument for the appealfor February 7, 2023. Oral argument was held before the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Courtfiled its Decision and Order, which affirmed the lower court’s decisions regarding both My Size and North Empire’s motions for summary judgmentand sent the case back to the Supreme Court.On or about March 13, 2023, the Supreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date forthe mediation has not yet been set. The Company intends to vigorously defend any claims made by North Empire.The Company believes it is more likely than not that the counterclaims will be denied.b.In May 2021, the Company received notice from Custodian Ventures, LLC (“Custodian”) of its intention to nominate four candidates to stand forelection to our Board of Directors at the Company’s 2021 annual meeting of stockholders. Custodian subsequently made a book and recordsrequest and has made public statements calling for changes to our management.On September 22, 2021, Custodian commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v.MySize, Inc. (the “Delaware Action”). In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting.On October 19, 2021, the Company commenced an action in the United States District Court for the Southern District of New York againstCustodian, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, and certain rulespromulgated thereunder (the “SDNY Action”). The complaint sought, among other things, declaratory and injunctive relief related to defendants’efforts to nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed“group” for purposes of Section 13(d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. Inaddition, the complaint alleged that the defendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules inconnection with their efforts to elect a slate of directors to the Company’s Board of Directors. On October 20, 2021, the Court signed an ordergranting a hearing on an anticipated motion for a preliminary injunction and expedited scheduling and discovery in aid thereof, and scheduled thathearing for December 2, 2021.On November 4, 2021, the Company entered into the Settlement Agreement with the Lazar Parties. Pursuant to the Settlement Agreement, theCompany and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the SettlementAgreement, the Company agreed to reimburse Custodian for out of pocket expenses and in consideration for the dismissal and release of claimsagainst the Company an aggregate amount equal to $275, to be paid within three business days of the effective date of the Settlement Agreement.With respect to the Company’s 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) its May 12,2021 notice of stockholder nominations of four director candidates with respect to the Company’s 2021 annual meeting of stockholders, (ii) thenotice dated October 28, 2021 submitted by Custodian to the Company notifying the Company of Custodian’s continued intent to bring itsnomination of four director candidates before the Company’s stockholders at the 2021 annual meeting, and (iii) any and all related materials andnotices submitted to the Company in connection therewith or related thereto and to not take any further action in connection with the solicitationof any proxies in connection with the Company. Custodian also agreed to cease any and all solicitation and other activities in connection with the2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effectivedate of the Agreement (the “Standstill Period”). The Settlement Agreement also provides that during the Standstill Period, the Lazar Parties willvote all shares of common stock of the Company it beneficially owns in in accordance with any proposal or recommendation made by theCompany or the Board of Directors of the Company that is submitted to the stockholders of the Company, unless to do so would violateapplicable law and except with respect to certain extraordinary transactions. The Settlement Agreement also contains nondisparagement andconfidentiality provisions, subject to certain exceptions.On December 9, 2021, the Company subsequently entered into a Settlement Agreement (the “Ault Settlement Agreement”), with Milton C. Ault III,Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed towithdraw the SDNY Action against the Ault Parties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that actionagainst the Company. In addition, pursuant to the Settlement Agreement, the Company paid $70 to the Ault Parties in consideration for thereleases and other good and valuable consideration as set forth in the Ault Settlement Agreement.c.On July 5, 2021, the Company was served with a legal complaint filed by Fidelity Venture Capital Ltd. and Dror Atzmon in the Magistrate’s Court inTel Aviv for a monetary award in an amount of NIS 1,436,679 (approximately $450) and a declaratory relief. The plaintiffs allege that the Companybreached its contractual obligations to pay them for services allegedly rendered to the Company by the plaintiffs under a certain consultingagreement dated July 2, 2014, in an amount of NIS 819,000 (approximately $256). Additionally, the plaintiffs allege that the Company shouldcompensate them for losses allegedly incurred by them following their investment in the Company’s shares issued under a certain private offering.In the alternative, the plaintiffs move that the court will declare the investment agreement void with full restitution of plaintiffs’ original investmentin an amount of NIS 1,329,650(approximately $415). The Company filed its statement of defense on October 25, 2021. The first preliminary courthearing of the case is scheduled for January 23, 2022.The first court preliminary hearing was held on March 1, 2022.Following the first preliminary hearing and the Court’s comments and recommendation, the Plaintiffs filed a motion to strike out the claim withoutprejudice.On March 8, 2022 the Court ordered dismissal without prejudice of the claim.F28MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATIONAcquisition of OrgadOn February 7, 2022, the Company acquired 100% of the shares and voting interests in Orgad an omnichannel ecommerce platform. The acquisitionwas designed to create an additional revenue stream for the Company by becoming a direct ecommerce seller while leveraging the synergies betweenMySizeID and Orgad’s ecommerce platform.Unaudited proforma informationThe results of operations of Orgad have been included in the consolidated financial statements since the acquisition date of February 7, 2022. Orgadrevenues included in the Company’s consolidated statement of operations from February 7, 2022 through December 31, 2022 were $4,132. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,662 and $2,850 respectively, and the net loss after tax would have been $8,519 and $10,149 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash (*)300Issuance of shares of common stock (69,752 shares) (**)457Total consideration transferred757(*)The cash payment is subject to working capital adjustments.(**)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Orgad, on the twoyear and the threeyear anniversary of the closing, $350in each ofthese years provided that in the case of the second and third instalments certain revenue targets are met and subject further to certain downward postclosing adjustment. Furthermore, 69,752shares of common stock will be issued in eight equal quarterly instalments until the lapse of two years fromclosing. Additional earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023 will also be paid. All of these payments aresubject to the former owners being actively engaged with Orgad at the date such payment is due, and therefore were not taken as part of theconsideration for the business combination.During the year ended December 31, 2022 an amount of $456and $319was recorded in respect of the cash instalments and in respect of stocksissuance, respectively in Cost Of Goods, Sales and Marketing and General and Administrative expenses as shown in the following table:2022Stockbased compensation expense – Cost of goods194Stockbased compensation expense Sales and marketing271Stockbased compensation expense General and administrative310775(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the preliminary estimates of their fair values, which were determined using generally accepted valuation techniques based onestimates and assumptions made by management at the time of the acquisition. Such estimates are subject to change during the measurement periodwhich is not expected to exceed one year. The purchase price allocation was not finalized duo to examination of the net working capital of Orgad at theacquisition date. Any adjustments to the preliminary purchase price allocation identified during the measurement period will be recognized in theperiod in which the adjustments are determined.The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and Cash EquivalentTrade receivables364PP&E55Inventory864Longterm financial investment31Selling platform378Goodwill152Shortterm accruals and deferrals(181)Trade payables(668)Long term provision(13)Longterm debt(138)Deferred Taxes(87)Total net assets acquired757F29MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)(c)Acquisitionrelated costsThe Company incurred transaction costs of approximately $40and none during twelvemonth period ended December 31, 2022 which were included ingeneral and administrative expenses in the consolidated statements of income (loss).Acquisition of Naiz Bespoke Technologies, S.L. (“Naiz”)On October 11, 2022, the Company acquired 100% of the shares and voting interests in Naiz a provider of SaaS technology solutions that solve sizeand fit issues for fashion ecommerce companies. The acquisition was designed to allow Naiz’s customers benefit from MySize’s deep understanding ofthe fashion ecommerce retail landscape, while creating an additional revenue stream for the Company.Unaudited proforma informationThe results of operations of Naiz have been included in the consolidated financial statements since the acquisition date of October 11, 2022. Naizrevenues included in the Company’s consolidated statement of operations from October 11, 2022 through December 31, 2022 were $103. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,738 and $379 respectively and the net loss after tax would have been $8,695 and $10,717 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash503Issuance of shares of common stock (240,000 shares) (*)1,008Total consideration transferred1,511(*)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Naiz, additional cash consideration (up to $1,550) in four instalments subject to thefollowing conditions:(i)Continuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result ofa Good Reason; and(ii)Naiz’s Revenues reaching or exceeding the respective Target Revenues defined in the agreement. The revenues will be calculated in four periods:(1) January 1, 2022 – December 31, 2022; (2) January 1, 2023 – June 30, 2023; (3) July 1, 2023 – December 31, 2023; (4) January 1, 2024 – December31, 2024.Former owners of Naiz are entitled to additional cash consideration following December 31, 2025 (up to $1,650) in an event when the actual value of theequity consideration is less than $1,650, subject to completion of a Target Revenue for the period of January 1, 2025 – December 31, 2025 andcontinuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result of aGood Reason;F30MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)During the year ended December 31, 2022 an amount of $283 was recorded in respect of the additional cash consideration.(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the estimates of their fair values, which were determined using generally accepted valuation techniques based on estimates andassumptions made by management at the time of the acquisition.The following table summarizes the fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and cash equivalent36Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Total net assets acquired1,511(c)Acquisitionrelated costsDuring 2022, the Company incurred transaction costs of approximately $75 which were included in general and administrative expenses in theconsolidated statements of income (loss).F31MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)Note 17 – Operating SegmentsDuring the year ended December 31, 2021, the Company had one reportable segment. As a result of the business combinations in the reporting period(see note 13), the Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificialintelligence driven measurement solutions and (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions and. The fashionand equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. Orgad has onecustomer that is responsible for 37.9% of the Company consolidated revenues. The SaaS based innovative artificial intelligence driven measurementsolutions, or SaaS Solutions operating segment consists of My Size Inc and My Size Israel and My Size LLC.Information related to the operations of the Company’s reportable operating segments is set forth below:Fashion andequipment ecommerce platformSaaSSolutionsNaizTotalAs of the year ended December 31, 2022Revenues from external customers4,1322241034,459Operating (loss) income(591)(7,181)(338)(8,110)Financial income (expense), net(236)Net loss before tax(8,346)Fashion andequipment ecommerce platformSaasSolutionNaizAs of December 31, 2022:Assets2,0225,9661,691Amortization of intangible assets(114)(34)(46)The Company elected to present geographic information in respect with revenues generated from external customers based on the location of the selling entity:All the revenues of the fashion and equipment ecommerce platform segment are generated by Orgad, located in Israel.All the revenues of the Naiz segment are generated by Naiz, located in Spain.The revenues of the Saas Solutions segment are generated by My Size Ltd. located in Israel (approximately 75% of the segment revenues) and by My Size Inc.located in the U.S. (approximately 25% of the segment revenues).NOTE 18 SALES AND MARKETINGYear endedDecember 31,20222021Salaries836574Consultants and subcontractors5831,086Marketing481283Selling fees489Share based payments post Orgad acquisition (*)271Share based payments for consultants and employees127180Travel21142Other1451713,1432,336(*) See note 16.NOTE 19 GENERAL AND ADMINISTRATIVE EXPENSESYear endedDecember 31,20222021Salaries1,007461Professional services7051,832Share based payments for consultants, directors and employees18098Rent, office expenses and communication442372Insurance564627cash liability and equity liability expenses related to Orgad acquisition310cash liability expenses related to Naiz acquisition217Settlement fees (*)345Directors8259Other3933303,9004,124(*)See note 15(b)F32MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 20 FINANCIAL INCOME (EXPENSE), NETA.Financial incomeYear endedDecember 31,20222021Revaluation investment in marketable securities49Other26172666B.Financial expenseYear endedDecember 31,20222021Exchange rate differences33Revaluation of loan granted100Revaluation investment in marketable securities62Other6792629NOTE 21 EVENTS SUBSEQUENT TO THE BALANCE SHEET DATEa.On January 2, 2023, Orgad experienced a fire at its warehouse in Israel. The Company is not aware of any casualties or injuries associated with thefire. The Company shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450.The Company believes that this incident did not affect the future sales results of Orgad for the year 2023. The inventory was not insured and it istoo early to determine the potential impact of this incident on the other parties that were involved in the incident (lessor and others that leasedproperties near the warehouse).b.On January 10, 2023, the Company entered into a securities purchase agreement pursuant to which the Company sold an aggregate of 162,000ofthe Company’s shares of common stock and prefunded warrants to purchase up to 278,899shares of common stock and, in a concurrent privateplacement, unregistered warrants to purchase up to883,798 shares of common stock, consisting of Series A warrants to purchase up to 441,899shares of common stock and Series B warrants to purchase up to 441,899shares of common stock, at an offering price of $3.055per share ofcommon stock and associated Series A and Series B warrants and an offering price of $3.054per prefunded warrant and associated Series A andSeries B warrants.In addition, the Company entered into a securities purchase agreement pursuant to which the Company agreed to sell and issue in a privateplacement an aggregate of up to 540,098 unregistered prefunded warrants and unregistered warrants to purchase up to an aggregate of 1,080,196shares of common stock, consisting of Series A warrants to purchase up to 540,098 shares of common stock and Series B warrants to purchase upto 540,098 shares of common stock at an offering price of $3.054 per prefunded warrant and associated Series A and Series B warrants.As of March 31,2023 all the pre funded warrants were exercised by the investor.F33ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSUREThere were no disagreements with accountants on accounting and financial disclosure of a type described in Item 304 (a)(1)(iv) or any reportable event asdescribed in Item 304 (a)(1)(v) of Regulation SK.ITEM 9A. CONTROLS AND PROCEDURESDisclosure ControlsWe carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief FinancialOfficer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) as of December 31, 2022. Basedupon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this Annual Report on Form10K, our disclosure controls and procedures were effective to ensure that information required to be disclosed in reports filed under the Exchange Act, as amended,is recorded, processed, summarized and reported within the required time periods specified in the SEC’s rules and forms and is accumulated and communicated toour management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.Management’s Report on Internal Control Over Financial ReportingOur internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records, that, in reasonable detail,accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only inaccordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition, use or disposition of our assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance withthe policies or procedures may deteriorate.Our management, including our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financialreporting at December 31, 2022. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the TreadwayCommission (COSO) in Internal Control—Integrated Framework (2013). Based on that assessment under those criteria, management has determined that, as ofDecember 31, 2022, our internal control over financial reporting was effective.This Annual Report on Form 10K does not include an attestation report of our registered public accounting firm regarding internal control over financialreporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to the exemption provided to issuersthat are not “large accelerated filers” nor “accelerated filers” under the DoddFrank Wall Street Reform and Consumer Protection Act.Changes in Internal Control Over Financial ReportingDuring the year ended December 31, 2022, we made two acquisitions, as discussed in Note 1a and Note 16 of the audited consolidated financial statementsfor the year ended December 31, 2022 included in this Annual Report on Form 10K. As a result, we made additions and/or modifications to policies, procedures,systems and controls that have materially affected our internal control over financial reporting from the acquisitions, including new controls for consolidationprocess that relates to accounting policies and procedures, operational processes and documentation practices. Management excluded the acquired businessesfrom management’s report on internal control over financial reporting. ITEM 9B. OTHER INFORMATIONNone.ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNot applicable.51PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe following table sets forth the name, age and positions of our executive officers and directors.NAMEAgePOSITIONRonen Luzon52Chief Executive Officer and Class III DirectorOr Kles40Chief Financial OfficerBilly Pardo47Chief Operating Officer and Chief Product OfficerIlia Turchinsky35Chief Technology OfficerEzequiel Javier Brandwain53Chief Commercial OfficerOron Branitzky (1)(2)(3)*63Class II DirectorOren Elmaliah (1)(2)(3)*38Class I DirectorArik Kaufman (1)(2)(3)*41Class I DirectorGuy Zimmerman*53Class II Director(1)Member of our audit committee(2)Member of our nominating and corporate governance committee(3)Member of our compensation committee* Independent as that term is defined by the rules of the Nasdaq Stock Market.The business background and certain other information about our directors and executive officers is set forth below:Ronen Luzon has served as our Chief Executive Officer and a member of our board of directors since September 2013. Since 2006, Mr. Luzon hasadditionally served as Chief Executive Officer and founder of Malers Ltd., a company in the global security solutions market which provides technological solutionsfor integrated communication infrastructures, security and control systems. Prior to Malers, he held several senior marketing, sales management and professionalservices positions in a variety of international high tech companies including VP marketing of GA Tech and Professional Services Manager of Eldat Communication.Mr. Luzon graduated from Middlesex University in London with a B.S. in IT and Business Information Systems. We believe that Mr. Luzon is qualified to serve as amember of our board of directors because of his more than 20 years of experience in the technology sector.Or Kles has served as our Chief Financial Officer since May 2016. He is a certified public accountant with a broad, diverse financial background. From May2013 until April 2016 he served as Assistant Controller of Shikun and BinuiSolel Boneh Infrastructure Ltd. and from December 2010 until May 2013 he served as anAssociate at KPMG. Mr. Kles holds an MBA and a B.A. in Business Management and Accounting (specializing in financing) from The College of ManagementAcademic Studies. Mr. Kles is a certified public accountant in Israel.Billy Pardo has served as our Chief Product Officer since May 2014 and Chief Operating Officer since April 2019. From April 2010 until August 2013, Ms.Pardo served as Senior Director of Product Management of Fourier Education. Among her areas of expertise are launching products from concept to successfuldelivery in various methodologies, including Fourier Education’s awardwinning einstein™ Science Tablet. Prior to that Ms. Pardo served in various productmanagement positions including, Project Manager of Time to Know, Product Marketing Manager of RiT Technologies, Product Manager of Pricer AB and R&DTeam Leader at Pricer AB. Ms. Pardo previously served as Software Engineer at Eldat Communication Ltd., and QA Engineer at NICE Systems. Ms. Pardo receivedan MBA from The Interdisciplinary Center and a B.A. in Computer Science from The Academic College of TelAvivYaffo.Ilia Turchinsky has served as our Chief Technology Officer since April 2019 and from July 2018 until April 2019 as our Director of Technology. Prior tojoining us, from 2013 until 2018, Mr. Turchinsky served in various roles, most recently Chief Technology Officer, at MonkeyTech Ltd., a company that providesdesign, development and characterization of mobile applications. Prior to that, Mr. Turchinsky served in various roles including development course instructor atIQLine, was a founder of Arnavsoft and was a software developer for MintLab and a political party. Mr. Turchinsky holds a B.Sc. from the Ben Gurion University inComputer Science and an M.Sc. from the Open University of Israel in Computer Science.52Ezequiel Javier Brandwain has served as our Chief Commercial Officer since February 2022. Mr. Brandwain brings more than two decades of globalexperience in retail and the fashion industry, mainly in business development, operations, and international markets. Before joining the Company, Mr. Brandwainheld positions of increasing responsibility at several companies, including between June 2017 and November 2020, at 7 For All Mankind International, where heserved as Director, Latin America and Caribbean, managing business development and operations across Latin America and the Caribbean. Before that, betweenMay 2016 and June 2017, Mr. Brandwain served as Chief Business Development Officer at Replay – Fashion Box SPA, where he oversaw business development andoperations, expansion and control in the Americas, the Caribbean, and NorthEast Asia. Prior this role, between September 2015 and May 2016, he served as theReplay’s Managing Director in Latin America and the Caribbean, leading the company’s international expansion in these regions. Prior to that, between April 2015and September 2015, Mr. Brandwain served as Managing Director, Latin America and Caribbean at Authentic Brands Group LLC, where he led that company’soperations, business developments and international expansion within these regions, and served as the direct liaison with the company’s headquarters in New York.Prior to that, between April 2015 and September 2015, Mr. Brandwain served as Chief Operating Officer, Latin America and Caribbean at Flemingo International Ltd.,overseeing operations, as well as projected operations in the travel retail field across these regions. Prior to that, between December 2010 and February 2014, Mr.Brandwain served as Regional Director, Southern Hemisphere at Calvin Klein, where he was responsible for defining and implementing the operational andcommercial strategy for Southern Hemisphere, as well as overseeing the retail, travel retail, concession, and wholesale businesses of the company. During his tenureat Calvin Klein, Mr. Brandwain also served as Travel Retail Director, Latin America, where he built the travel retail business and developed operations. Prior to that,between July 2010 and November 2010, Mr. Brandwain served as Business Director, Latin America and Caribbean at Givenchy Latin America, and between January2010 and June 2010 he served as Commercial Director, Latin America and Caribbean at Nautica Latin America. During December 2004 and December 2009, Mr.Brandwain served as Vice President, International Business Development at Report Collection/Modextil, Inc., where he was in charge of business and operationalexpansion, global growth, and brand extensions. Prior to that, between 2003 and October 2004, Mr. Brandwain served as General Manager at Andrew KoenigInternational, Inc. Between September 2019 and November 2020, Mr. Brandwain served as a member of the Board of Directors of 7 For All Mankind BrazilImportacao, Comercio E Distribuicao S.A. Mr. Brandwain earned a Bachelor degree in architecture from the University of the Republic (Uruguay).Oron Branitzky has served as a member of our board of directors since March 2017. Mr. Barnitzky has vast experience in retail technology. SinceNovember 2017, Mr. Branitzky has served as Global Retail Business Development at Superup, and from January 2007 until December 2014 he served as VicePresident of Sales and Marketing at Pricer AB. Prior to that, Mr. Branitzky has served as VP Marketing and Sales at Eldat Communication and Sarin TechnologiesLtd. Since January 2015, Mr. Branitzky has served as chairman of the board of directors of WiseShelf Ltd. and from May 2015 until March 2016, Mr. Branitzky servedas an advisory board member of ciValue. Mr. Branitzky received a B.S. from the Hebrew University of Jerusalem and an MBA in International Marketing from TelAviv University. We believe that Mr. Branitzky is qualified to serve as a member of our board of directors because of his more than 20 years of experience inmanaging the sales of hitech solutions to retailers across the globe.Oren Elmaliah, has served as a member of our board of directors since May 2017. In September 2015, Oren Elmaliah founded Accounting Team IL and hasacted as Account Manager since then. Accounting Team IL is a financial consultancy and service provider to public companies traded in Israel and abroad. SinceFebruary 2017, Mr. Elmaliah has served as controller of Enlivex Therapeutics Ltd., and since January 2017 he has served as Chief Financial Officer of Presstek Israel.In addition, since September 2015, Mr. Elmaliah has served as an Israel Authorities Reporting Officer of LG Electronics Israel and since September 2015 he hasserved as Local Financial Report Consultant of Chiasma. From July 2011 until August 2015, Mr. Elmaliah served as CPA, Financial Director of CFO Director Ltd andfrom June 2010 until July 2011 he served as Risk Management Consultant of RSM International Limited. Mr. Elmaliah holds a B.A. in Accounting/Economics and aMsc. in Finance/Accounting from Tel Aviv University, Israel. He is a licensed Certified Public Accountant in Israel. We believe that Mr. Elmaliah is qualified to serveas a member of our board of directors because of his vast finance experience and public company management and administration in the fields of finance,accounting, and financial regulation.53Arik Kaufman has served as a member of our board of directors since June 2017. Mr. Kaufman is an attorney specializing in the fields of commercial law,corporate law and capital markets and since 2016 runs his own law office in Israel. He has vast experience in the fields of financial reporting and financial regulation.Mr. Kaufman serves as the Chief Executive Officer of Steakholder Foods since January 2022. From September 2017 until January 2022, Mr. Kaufman served as VPBusiness Development of Mor Research Applications. Mr. Kaufman holds an LLB in Law from the Interdisciplinary Center, Herzliya, and is admitted to the IsraeliBar. We believe that Mr. Kaufman is qualified to serve as a member of our board of directors based upon his experience of assisting with the completion of numerousventure capital financings, mergers, acquisitions, and strategic relationships. In addition, he has served as a member of the board of various publicly tradedcompanies, including companies that operate in the same industry as us.Guy Zimmerman has served as a member of our board of directors since August 2021. Previously, Mr. Zimmerman served as Founder and CEO ofManuFuture, an online b2b engineering market place, since February 2021. Prior to that from 2017 to 2021, Mr. Zimmerman acted as a consultant to severaltechnology startups and was a founding partner of a business travel online platform. From 2013 to 2017, Mr. Zimmerman served as EVP of Marketing and BusinessDevelopment of Kornit Digital and was part of the IPO leadership. Prior to that, Mr. Zimmerman served as VP of Global Sales and Business Development at TefronLtd., a provider of seamless garment technology, where he led the $100m sales and sales support organization serving global retail and fashion brands. Prior to thathe served as Vice President of Strategy and Business Development at Tnuva Group, Israel’s largest food manufacturer and spent eight years at McKinsey &Company. Mr. Zimmerman previously led a software startup in the field of operational healthcare management systems. Mr. Zimmerman holds a B.Sc. in IndustrialEngineering from Tel Aviv University in Israel. We believe that Mr. Zimmerman is qualified to serve as a member of our board of directors because of his experiencein business development in the technology and retail sectors.Board Diversity MatrixThe table below provides certain information regarding the diversity of our board of directors as of the date of this annual report.Board Diversity Matrix (As of March 31, 2023)Total Number of Directors5FemaleMaleNonBinaryDid Not DiscloseGenderPart I: Gender IdentityDirectors#5##Part II: Demographic BackgroundAfrican American or Black####Alaskan Native or Native American####Asian####Hispanic or Latinx####Native Hawaiian or Pacific Islander####White#1##Two or More Races or Ethnicities#2##LGBTQ+0Did Not Disclose Demographic Background2Family RelationshipsRonen Luzon, the Chief Executive Officer and a member of our board of directors, and Billy Pardo, the Chief Product Officer and Chief Operating Officer, arehusband and wife. There are no other family relationships among any of our current or former directors or executive officers.Involvement in Certain Legal ProceedingsWe are not aware of any of our directors or officers being involved in any legal proceedings in the past ten years relating to any matters in bankruptcy,insolvency, criminal proceedings (other than traffic and other minor offenses), or being subject to any of the items set forth under Item 401(f) of Regulation SK.Arrangements between Officers and DirectorsTo our knowledge, there is no arrangement or understanding between any of our officers and any other person, including directors, pursuant to which theofficer was selected to serve as an officer.Board of DirectorsThere are no agreements with respect to the election of directors.On January 6, 2022, we filed with the Secretary of State of Delaware a Certificate of Amendment to our Amended and Restated Certificate of Incorporationproviding for a classified Board. Following filing of the Certificate of Amendment, members of our board are now classified into three classes with staggered threeyear terms (with the exception of the expiration of the initial Class I and Class II directors), as follows:●Class I, comprised of two directors, initially Arik Kaufman and Oren Elmaliah (with their initial terms expiring at our 2022 annual meeting of stockholders andmembers of such class serving successive threeyear terms);●Class II, comprised of two directors, initially Oron Branitzky and Guy Zimmerman (with their initial terms expiring at our 2023 annual meeting of stockholdersand members of such class serving successive threeyear terms); and●Class III, comprised of one director, initially Ronen Luzon (with his initial term expiring at our 2024 annual meeting of stockholders and members of suchclass serving successive threeyear terms).54To preserve the classified Board structure, a director elected by the Board of Directors to fill a vacancy holds office until the next election of the class forwhich such director has been chosen, and until that director’s successor has been elected and qualified or until his or her earlier death, resignation, retirement orremoval.Our board of directors has reviewed the materiality of any relationship that each of our directors has with us, either directly or indirectly. Based upon thisreview, we believe that Arik Kaufman, Oren Elmaliach, Oron Branitzky and Guy Zimmerman qualify as independent directors in accordance with the standards set bythe Nasdaq and Rule 10A3 promulgated under the Exchange Act.Committees of the BoardAudit CommitteeOur audit committee is comprised of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Elmaliah serves as chairman of the audit committee. The auditcommittee is responsible for retaining and overseeing our independent registered public accounting firm, approving the services performed by our independentregistered public accounting firm and reviewing our annual financial statements, accounting policies and our system of internal controls. The audit committee actsunder a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the audit committee’s composition and meetings.The audit committee charter is available on our website www.mysizeid.com.The Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by applicable SEC rules. Inaddition, the Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by the rules of the Nasdaq StockMarket.The Board of Directors has determined that Oren Elmaliah is an “audit committee financial expert” serving on its audit committee, and is independent, as theSEC has defined that term in Item 407 of Regulation SK.Compensation CommitteeOur compensation committee consists of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Branitzky serves as chairman of the compensationcommittee.The compensation committee’s roles and responsibilities include making recommendations to the Board of Directors regarding the compensation for ourexecutives, the role and performance of our executive officers, and appropriate compensation levels for our CEO, which are determined without the CEO present, andother executives. Our compensation committee also administers our 2017 Equity Incentive Plan and our 2017 Consultant Equity Incentive Plan. The compensationcommittee acts under a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the compensation committee’scomposition and meetings. The compensation committee charter is available on our website www.mysizeid.com.Our Board of Directors has determined that all of the members of the compensation committee are “independent” as that term is defined by the rules of theNasdaq Stock Market.Nominating and Corporate Governance CommitteeThe members of the nominating and corporate governance committee are Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Kaufman serves aschairman of the corporate governance and nominations committee. The nominating and corporate governance committee acts under a written charter, which morespecifically sets forth its responsibilities and duties, as well as requirements for the nominating and corporate governance committee’s composition and meetings.The nominating and corporate governance committee charter is available on our website www.mysizeid.com.The nominating and corporate governance committee develops, recommends and oversees implementation of corporate governance principles for us andconsiders recommendations for director nominees. The nominating and corporate governance committee also considers stockholder recommendations for directornominees that are properly received in accordance with applicable rules and regulations of the SEC. Our stockholders that wish to nominate a director for election tothe Board of Directors should follow the procedures set forth in our bylaws.55The nominating and corporate governance committee will consider persons identified by its members, management, stockholders, investment bankers andothers. The guidelines for selecting nominees, which are specified in the nominating committee charter, generally provide that persons to be nominated:●should be accomplished in his or her field and have a reputation, both personal and professional, that is consistent with our image and reputation;●should have relevant experience and expertise and would be able to provide insights and practical wisdom based upon that experience and expertise; and●should be of high moral and ethical character and would be willing to apply sound, objective and independent business judgment, and to assume broadfiduciary responsibility.The nominating and corporate governance committee will consider a number of qualifications relating to management and leadership experience,background and integrity and professionalism in evaluating a person’s candidacy for membership on the Board of Directors. The nominating and corporategovernance committee may require certain skills or attributes, such as financial or accounting experience, to meet specific Board needs that arise from time to timeand will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of Board of Directors members. The nominating andcorporate governance committee will not distinguish among nominees recommended by stockholders and other persons.Our Board of Directors has determined that all of the members of the nominating and corporate governance committee are “independent” as that term isdefined by the rules of the Nasdaq Stock Market.Code of Conduct and EthicsWe have a Code of Business Conduct and Ethics that applies to all our employees. The text of the Code of Business Conduct and Ethics is publiclyavailable on our website at www.mysizeid.com. Information contained on, or that can be accessed through, our website does not constitute a part of this report andis not incorporated by reference herein. Disclosure regarding any amendments to, or waivers from, provisions of the code of conduct and ethics that apply to ourdirectors, principal executive and financial officers will be posted on the “InvestorsCorporate Governance” section of our website at www.mysizeid.com or will beincluded in a Current Report on Form 8K, which we will file within four business days following the date of the amendment or waiver.Change in Procedures for Recommending DirectorsThere have been no material changes to the procedures by which our stockholders may recommend nominees to our Board of Directors from thoseprocedures set forth in our Proxy Statement for our 2021 Annual Meeting of Stockholders, filed with the SEC on December 7, 2022.56ITEM 11. EXECUTIVE COMPENSATIONSummary Compensation TableThe following sets forth the compensation paid by us to our named executive officers, during the years ended December 31, 2022 and December 31, 2021.Name and Principal PositionYearSalary($) (1)Bonus($)StockAwards($)OptionAwards($) (2)All OtherCompensation($)Total($)Ronen Luzon2022173,000223,0008,000126,000530,000Chief Executive Officer2021194,0005,00023,00097,000319,000Or Kles2022123,00053,0007,00071,000254,000Chief Financial Officer2021123,0008,00030,00061,000222,000Billy Pardo2022134,00053,0007,000100,00294,000Chief Operating Officer2021162,0007,00018,00074,000261,000(1) Salary for the years 2022 and 2021 are based on average US$/NIS representative exchange rates of NIS 3.358 and NIS 3.11 respectively.(2) Amounts in this column represent the grant date fair value of options granted to the named executive officers during 2022 and 2021, computed in accordance withFASB ASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the named executive officers. The assumptionsmade in valuing the options reported in this column are discussed in Note 11 to our audited financial statements for the year ended December 31, 2021 and Note 4 toour condensed consolidated interim financial statements for the quarterly period ended September 30, 2022.All Other Compensation TableThe “All Other Compensation” amounts set forth in the Summary Compensation Table above consist of the following:NameYearAutomobileRelatedExpenses($)Manager’sInsurance*($)EducationFund*($)Othersocialbenefits**($)Total($)Ronen Luzon202232,00031,00015,00048,000126,000202133,00033,00015,00016,00097,000Or Kles202215,00021,00010,00025,00071,000202114,00019,0009,00019,00061,000Billy Pardo202216,00025,00013,00046,000100,000202117,00024,00012,00021,00074,000* Manager’s insurance and education funds are customary benefits provided to employees based in Israel. Manager’s insurance is a combination of severancesavings (in accordance with Israeli law), defined contribution taxqualified pension savings and disability insurance premiums. An education fund is a savings fundof pretax contributions to be used after a specified period of time for educational or other permitted purposes.** Other social benefits for 2022 and 2021 for all named individuals includes tax payments in respect of social benefits.57Agreements with Named Executive OfficersRonen LuzonOn November 18, 2018, My Size Israel, our wholly owned subsidiary, entered into an employment agreement with Ronen Luzon, or the Luzon EmploymentAgreement, pursuant to which Mr. Luzon will serve as our Chief Executive Officer. Pursuant to the terms of the Luzon Employment Agreement, Mr. Luzon receivesNIS 55,000 per month as his base salary and shall be eligible to receive such bonus as determined by us. In addition, Mr. Luzon shall be entitled social benefits andto other benefits, including, but not limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, includinginsurance in case of disability, annual vacation days, sick leave and expense reimbursement. Pursuant to the terms of the Luzon Employment Agreement and subjectto certain conditions, payments made by the Company to the pension fund or manager’s insurance fund shall be made in lieu of severance payments due to Mr.Luzon. The term of the Luzon Employment Agreement shall be effective as of September 1, 2018 and shall continue until such time either party provides writtennotice to the other party at least 75 days in advance of the termination of such agreement. We may also terminate Mr. Luzon’s employment without prior writtennotice (or payment in lieu of such notice) for Cause (as defined in the Luzon Employment Agreement).Or KlesOn November 18, 2018, My Size Israel entered into an employment agreement with Or Kles, or the Kles Employment Agreement, pursuant to which Mr. Kleswill serve as our Chief Financial Officer. Pursuant to the terms of the Kles Employment Agreement, Mr. Kles receives NIS 38,000 per month as his base salary andshall be eligible to receive such bonus as determined by us. In addition, Mr. Kles shall be entitled to social benefits and other benefits, including, but not limited to,contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annual vacation days,sick leave and expense reimbursement. Pursuant to the terms of the Kles Employment Agreement and subject to certain conditions, payments made by us to thepension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Mr. Kles. The term of the Kles Employment Agreement shall beeffective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days in advance of thetermination of such agreement. We may also terminate Mr. Kles’s employment without prior written notice (or payment in lieu of such notice) for Cause (as defined inthe Kles Employment Agreement).Billy PardoOn November 18, 2018, My Size Israel entered into an employment agreement with Billy Pardo, or the Pardo Employment Agreement, pursuant to which Ms.Pardo will serve as our Chief Product Officer. Pursuant to the terms of the Pardo Employment Agreement, Ms. Pardo receives NIS 47,500 per month as her basesalary and shall be eligible to receive such bonus as determined by us. In addition, Ms. Pardo shall be entitled to social benefits and other benefits, including, butnot limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annualvacation days, sick leave and expense reimbursement. Pursuant to the terms of the Pardo Employment Agreement and subject to certain conditions, payments madeby us to the pension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Ms. Pardo. The term of the Pardo EmploymentAgreement shall be effective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days inadvance of the termination of such agreement. We may also terminate Ms. Pardo’s employment without prior written notice (or payment in lieu of such notice) forCause (as defined in the Pardo Employment Agreement).58Outstanding Equity Awards at Fiscal YearEndThe following table provides information regarding options held by each of our named executive officers that were outstanding as of December 31, 2022.Option AwardsStock AwardsName and Principal PositionNumber ofSecuritiesUnderlyingUnexercisedOptionsExercisableNumber ofSecuritiesUnderlyingUnexercisedOptionsUnexercisableOptionExercisePriceOptionExpirationDateEquityincentiveplan awards:Number ofUnearnedShares that HaveNot VestedEquityincentiveplan awards:Market Value ofUnearnedShares, That Have Not VestedRonen Luzon Chief Executive Officer400(1)$26(8)7/24/20231,601(2)$26(8)5/29/20256,400(3)$268/10/2025100,000(9)100,000$511,250Or Kles – Chief Financial Officer227(4)$26(8)7/24/2023427(5)$26(8)5/29/20255,200(6)$268/10/202524,000(10)24,000$122,700Billy Pardo Chief Operating Officer400(1)$26(8)7/24/2023894(7)$26(8)5/29/20255,200(6)$268/10/202524,000(11)24,000$122,700(1) The option has a grant date of July 24, 2017 and vested in full on January 24, 2018.(2) The option has a grant date of May 29, 2019. 267 options vested immediately upon grant, 445 options vested on January 24, 2019, 445 options vested on January24, 2020 and 444 options vested on January 24, 2021.(3) The option has a grant date of October 8, 2020, 1,600 options vested on November 26, 2020, 1,600 options vested on May 26, 2021, 1,600 options vested onNovember 26, 2021, and 1,600 options vested on May 26, 2022.(4) The option has a grant date of July 24, 2017. 76 options vested immediately upon grant, 76 options vested on May 1, 2018 and 75 options vested on May 1, 2019.(5) The option has a grant date of May 29, 2019. 160 options vested immediately upon grant, 445 options vested on May 1, 2020, 445 options vested on May 21, 2021and 444 options vested on May 1, 2022.(6) The option has a grant date of October 8, 2020, 1,300 options vested on November 26, 2020, 1,300 options vested on May 26, 2021, 1,300 options vested onNovember 26, 2021, and 1,300 options vested on May 26, 2022.(7) The option has a grant date of May 29, 2019. 214 options vested immediately upon grant, 227 options vested on January 24, 2019, 227 options vested on January24, 2020 and 226 options vested on January 24, 2021.(8) On May 25, 2020, the compensation committee of the Board of Directors of the Company reduced the exercise price of outstanding options of employees anddirectors of the Company for the purchase of an aggregate of 5,610 shares of common stock of the Company (with exercise prices ranging between $453.75 and$228.75) to $26 per share, which was the closing price for the Company’s common stock on May 22, 2020, and extended the term of the foregoing options for anadditional one year from the original date of expiration.(9) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(10) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(11) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.59Director CompensationThe following table sets forth compensation information for our nonemployee directors for the year ended December 31, 2022.NameFees earned orpaid incash ($)(1)Optionawards($)(1)(2)Total($)Oren Elmalih15,078 15,078Oron Barnitzky15,34715,347Arik Kaufman14,44114,441Guy Zimmerman13,03313,033(1)Fees for the year 2022 are based on average US$/NIS representative exchange rates of NIS 3.519.(2)Amounts in this column represent the grant date fair value of options granted to the nonemployee directors during 2022 computed in accordance with FASBASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the nonemployee directors. The assumptions made invaluing the options reported in this column are discussed in Note 11 to our financial statements for the year ended December 31, 2022.We compensate our nonemployee directors for their service as a member of our board. Mr. Luzon received no separate compensation for board service. Mr.Luzon’s compensation is set forth above in the Summary Compensation Table.Each nonemployee director is entitled to receive a per meeting fee of $318. Nonemployee directors are also reimbursed for their travel and reasonable outofpocket expenses incurred in connection with attending board and committee meetings, to the extent that attendance is required by the board or the committee(s)on which that director serves.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurity Ownership of Certain Beneficial Holders and ManagementThe following table sets forth certain information regarding beneficial ownership of shares of our common stock as of March 31, 2023 by (i) each personknown to beneficially own more than 5% of our outstanding common stock, (ii) each of our directors, (iii) each of our executive officers, and (iv) all of our directorsand executive officers as a group. Except as otherwise indicated, the persons named in the table below have sole voting and investment power with respect to allshares beneficially owned, subject to community property laws, where applicable.Beneficial Owner(1)Shares ofCommon StockBeneficiallyOwnedPercentage(2)Executive officers and directors:Ronen Luzon143,578(3)5.8%Or Kles29,854(4)1.2%Billy Pardo143,578(5)5.8%Ezequiel Javier Brandwain12,000(6)*Ilia Turchinsky18,313(7)*Arik Kaufman1,294(8)*Oren Elmaliah1,294(9)*Oron Branitzky1,294(10)*Guy ZimmermanAll Executive Officers and Directors as a Group (9 persons)207,6268.4%*Less than 1%(1) The address of each person is c/o My Size, Inc., 4 HaYarden St., P.O.B. 1026, Airport City, Israel 7010000 unless otherwise indicated herein.60(2) The calculation in this column is based upon 2,446,780 shares of common stock outstanding on March 31, 2023. Beneficial ownership is determined in accordancewith the rules of the SEC and generally includes voting or investment power with respect to the subject securities. Shares of common stock that are currentlyexercisable or exercisable within 60 days of March 31, 2023 are deemed to be beneficially owned by the person holding such securities for the purpose of computingthe percentage beneficial ownership of such person, but are not treated as outstanding for the purpose of computing the percentage beneficial ownership of anyother person(3) Consists of (i) 100,000 shares of restricted stock granted under the 2017 Plan, (ii) 4,683 shares of common stock, (iii) options to purchase up to 8,401 shares of ourcommon stock, and (iv) 24,000 shares of restricted stock and options to purchase up to 6,494 shares of our common stock which are held by Billy Pardo, RonenLuzon’s spouse. Mr. Luzon may be deemed to beneficially hold the securities of us held by Ms. Pardo.(4) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, and (ii) an option to purchase 5,854 shares of our common stock. Does not includean aggregate of 119,760 shares of restricted stock over which Mr. Kles has been designated the initial proxy to vote such shares pursuant to a voting agreemententered into between Whitehole S.L., Twinbel S.L. and EGI Acceleration, S.L.(5) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, (ii) options to purchase up to 6,494 shares of our common stock, (iii) 100,000 sharesof restricted stock which are held by Ronen Luzon, Billy Pardo’s spouse (iii) 8,401 shares of common stock which are held by Mr. Luzon, and (iii) options to purchaseup to 4,683 shares of our common stock which are held by Mr. Luzon. Ms. Pardo may be deemed to beneficially hold the securities of the Company held by Mr.Luzon.(6) Consists of 12,000 shares of restricted stock granted under the 2017 Plan.(7) Consists of (i) 16,000 shares of restricted stock granted under the 2017 Plan, and (ii) options to purchase up to 2,313 shares of our common stock.(8) Consists of options to purchase up to 1,294 shares of our common stock.(9) Consists of options to purchase up to 1,294 shares of our common stock.(10) Consists of options to purchase up to 1,294 shares of our common stock.Change in ControlWe are not aware of any arrangement that might result in a change in control in the future. We have no knowledge of any arrangements, including anypledge by any person of our securities, the operation of which may at a subsequent date result in a change in the Company’s control.Securities Authorized for Issuance Under Equity Compensation PlansOn January 29, 2017, our Board of Directors approved the 2017 Equity Incentive Plan and the 2017 Consultant Equity Incentive Plan, which were approvedby our stockholders on March 21, 2017. In addition, on January 29, 2017, our Board of Directors approved the Stock Option Plan Israel Grantees SubPlan. The 2017Equity Incentive Plan initially authorized the issuance of up to 5,334 shares of common stock under the plan and the 2017 Consultant Equity Incentive Plan initiallyauthorized the issuance of up to 8,000 shares of common stock under the plan.On February 12, 2018, our stockholders approved an amendment to the 2017 Consultant Equity Incentive Plan to increase the maximum number of shares ofour common stock available for issuance under the plan from 8,000 to 12,000. On July 3, 2018, our stockholders approved an amendment to the 2017 Equity IncentivePlan to increase the maximum number of shares of our common stock available for issuance under the plan from 5,334 to 8,000 and an amendment to the 2017Consultant Equity Incentive Plan to increase the maximum number of shares of our common stock available for issuance under the plan from 12,000 to 18,667.On May 25, 2020, our Board reduced the exercise price of outstanding options of our employees and directors for the purchase of an aggregate of 140,237of our common stock (with exercise prices ranging between $453.75 and $228.75) to $26.0 per share, and extended the term of the foregoing options for an additionalone year from the original date of expiration.61On August 10, 2020, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 80,000 to 58,000shares, and a decrease of the numbers of shares available for issuance under the 2017 Consultant Incentive Plan to 8,667 shares from 18,667 shares.On December 30, 2021, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 58,000 sharesto 230,800 shares.On December 7, 2022, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Plan from 230,800 shares to 289,000shares.The following table summarizes information about our equity compensation plans and individual compensation arrangements as of December 31, 2022.Number of securities to be issued upon exercise of outstanding options, warrants and rights(a)Weighted average exercise price of outstandingoptions, warrants and rights (b)Number of securities remaining availablefor future issuanceunder equity compensationplans (excludingsecurities reflected in column (a) (c)Equity compensation plans approved by security holders43,49724.7477,455Equity compensation plans not approved by security holdersTotal43,49724.7477,455ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEDuring years ended December 31, 2022 and 2021, except for compensation arrangements described elsewhere herein and the transactions described below,we did not participate in any transaction, and we are not currently participating in any proposed transaction, or series of transactions, in which the amount involvedexceeded the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years, and in which, to our knowledge,any of our directors, officers, five percent beneficial security holders, or any member of the immediate family of the foregoing persons had, or will have, a direct orindirect material interest.Compensation arrangements for our named executive officers and directors are described in the section entitled “Executive Compensation.”Employment AgreementsWe have entered into written employment agreements with each of our executive officers. These agreements generally provide for notice periods of varyingduration for termination of the agreement by us or by the relevant executive officer, during which time the executive officer will continue to receive base salary andbenefits. We have also entered into customary noncompetition, confidentiality of information and ownership of inventions arrangements with our executiveofficers. However, the enforceability of the noncompetition provisions may be limited under applicable law.OptionsSince our inception we have granted options to purchase our common stock to our officers and directors. Such option agreements may contain accelerationprovisions upon certain merger, acquisition, or change of control transactions.62Restricted Stock GrantsOn September 29, 2022, our compensation committee approved grants of restricted share awards under our 2017 Plan to Ronen Luzon, Or Kles, Billy Pardo,Ilia Turchinsky and Ezequiel Javier Brandwain, pursuant to which they were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000restricted shares and 12,000 restricted shares, respectively. The restricted shares shall vest in three equal installments on January 1, 2023, January 1, 2024 andJanuary 1, 2025, conditioned upon continuous employment with us, and subject to accelerated vesting upon a change in control of the Company.Shareholder ActivismIn May 2021, we received notice from Custodian Ventures, LLC, or Custodian, of its intention to nominate four candidates to stand for election to our Boardof Directors at our 2021 annual meeting of stockholders. Custodian subsequently made a book and records request and has made public statements calling forchanges to our management.On September 22, 2021, Custodian, commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v. Mysize,Inc., C.A. No. 20210817LWW, or the Delaware Action. In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting. As further described below, on November 4, 2021, we entered into asettlement agreement, or the Settlement Agreement, with Custodian, Activist Investing LLC, David Aboudi, Partick Loney and David Natan, collectively, the LazarParties, settling and dismissing the Delaware Action.On October 19, 2021, we commenced an action in the United States District Court for the Southern District of New York captioned My Size, Inc. v. DavidLazar, Custodian Ventures LLC, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, Civil Action No, 1:21cv08585, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, andcertain rules promulgated thereunder, or the SDNY Action. The complaint sought, among other things, declaratory and injunctive relief related to defendants’ effortsto nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed “group” for purposes ofSection 13 (d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. In addition, the complaint alleged that thedefendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules in connection with their efforts to elect a slate of directorsto our Board of Directors. On October 20, 2021, the Court signed an order granting a hearing on an anticipated motion for a preliminary injunction and expeditedscheduling and discovery in aid thereof, and scheduled that hearing for December 2, 2021. As further described below, on November 4, 2021, we entered into theSettlement Agreement with the Lazar Parties settling and dismissing the claims asserted in the SDNY Action and the Delaware Action against one another. OnNovember 8, 2021, the remaining defendants in the SDNY Action filed and answer and counterclaim asserting a claim against us pursuant to New York Civil RightsLaw Section 70a, also known as New York’s antiSLAPP statute.On November 4, 2021, we entered into the Settlement Agreement, or the Lazar Settlement Agreement, with the Lazar Parties. Pursuant to the LazarSettlement Agreement, we and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the LazarSettlement Agreement, we reimbursed Custodian for out of pocket expenses and in consideration for the dismissal and release of claims against the Company anaggregate amount equal to $275,000. With respect to our 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) itsMay 12, 2021 notice of stockholder nominations of four director candidates with respect to our 2021 annual meeting of stockholders, (ii) the notice dated October 28,2021 submitted by Custodian to us notifying us of Custodian’s continued intent to bring its nomination of four director candidates before our stockholders at the2021 annual meeting, and (iii) any and all related materials and notices submitted to us in connection therewith or related thereto and to not take any further action inconnection with the solicitation of any proxies in connection with us. Custodian also agreed to cease any and all solicitation and other activities in connection withthe 2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effective date of theAgreement, or the Standstill Period. The Lazar Settlement Agreement also provides that during the Standstill Period, the Lazar Parties will vote all shares of ourcommon stock it beneficially owns in accordance with any proposal or recommendation made by us or our Board of Directors that is submitted to our stockholders,unless to do so would violate applicable law and except with respect to certain extraordinary transactions. The Lazar Settlement Agreement also contains nondisparagement and confidentiality provisions, subject to certain exceptions.63On December 9, 2021, we subsequently entered into a Settlement Agreement, or the Ault Settlement Agreement, with Milton C. Ault III, Ault Alpha LP, AultAlpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed to withdraw the SDNY Action against the AultParties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that action against the Company. In addition, pursuant to the SettlementAgreement, we paid $70,000 to the Ault Parties in consideration for the releases and other good and valuable consideration as set forth in the Ault SettlementAgreement.Naiz Bespoke Technologies AcquisitionOn October 7, 2022, we entered into the Naiz Agreement with the Naiz Sellers, pursuant to which the Naiz Sellers agreed to sell to us all of the issued andoutstanding equity of Naiz. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) ) the Naiz EquityConsideration and (ii) up the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the Equity Value Averaging Period) is less than $1,650,000, My Size shall pay the Shortfall Value to the Naiz Sellers within 45days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period, it wasdetermined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement)).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers will be subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into the LockUp Agreement with My Size, (ii) Whitehole, Twinbel and EGIentered into the Voting Agreement with My Size and (iii) each of the Key Persons entered into employment agreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonth period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonth “dribbleout” provisionthat provides following the expiration of the initial sixmonth lockup period, without My Size’s prior written consent (which My Size shall be permitted to withholdat its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than the average dailytrading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.64The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Indemnification Agreements and Directors’ and Officers’ Liability InsuranceWe have entered into indemnification agreements with each of our directors and executive officers. These agreements, among other things, require us toindemnify these individuals and, in certain cases, affiliates of such individuals, to the fullest extent permitted by Delaware law against liabilities that may arise byreason of their service to us or at our direction, and to advance expenses incurred as a result of any proceedings against them as to which they could beindemnified. We also maintain an insurance policy that insures our directors and officers against certain liabilities, including liabilities arising under applicablesecurities laws.Director IndependenceSee “Item 10. Directors, Executive Officers and Corporate Governance; Corporate Governance, Board Composition” above for a discussion regarding theindependence of the members of our board of directors.ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICESSomekh Chaikin, a member firm of KPMG International, located in Tel Aviv, Israel, PCAOB ID 1057, has served as our independent registered publicaccounting firm for 2022 and 2021. The following are Somekh Chaikin’s fees for professional services in each of the respective fiscal years:Fee Category20222021Audit Fees198,910298,300Tax Fees30,66729,300Auditrelated Fees18,000Total Fees247,577327,600Audit Fees:Audit Fees consist of fees billed for professional services performed by Somekh Chaikin for the audit of our annual financial statements, thereview of interim consolidated financial statements, and related services that are normally provided in connection with registration statements, including theregistration statement for S1 and S3.Tax Fees: Tax Fees may consist of fees for professional services, including tax and VAT consulting and compliance performed by an independent registeredpublic accounting provided during the period.PreApproval Policies and ProceduresIn accordance with the SarbanesOxley Act of 2002, as amended, our audit committee charter requires the audit committee to preapprove all audit andpermitted nonaudit services provided by our independent registered public accounting firm, including the review and approval in advance of our independentregistered public accounting firm’s annual engagement letter and the proposed fees contained therein. The audit committee has the ability to delegate the authorityto preapprove nonaudit services to one or more designated members of the audit committee. If such authority is delegated, such delegated members of the auditcommittee must report to the full audit committee at the next audit committee meeting all items preapproved by such delegated members. In the fiscal years endedDecember 31, 2022 and December 31, 2021 all of the services performed by our independent registered public accounting firm were preapproved by the auditcommittee.65PART IVITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES(a)Financial StatementsThe financial statements required by this Item are included beginning at page F1.(b)ExhibitsSee Exhibit IndexITEM 16. FORM 10K SUMMARYNot applicableEXHIBIT INDEXExhibitNumberDescription3.1Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Form on Form8K filed on March 23, 2017)3.2Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10K filed onMarch 4, 2016)3.3Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’s Current Report onForm 8K filed on February 20, 2018)3.4Second Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8K filedon April 24, 2018)3.5Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’sCurrent Report on Form 8K filed on November 18, 2019)3.6Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on January 7, 2022)3.7Amendment No. 1 to Second Amended and Restated ByLaws (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8K filed on January 7, 2022)3.8Certificate of Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on December 7, 2022)4.1Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S3/A filed onNovember 14, 2016)4.2Form of Warrant to Purchase Common Stock issued on February 2, 2018 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report onForm 10K filed on March 27, 2019)4.3Description of Securities Registered under Section 12 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report on Form 10K filedon March 19, 2020)4.4Form of Warrant (incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S1, Amendment No. 1, filed with the SECon May 5, 2020.)4.5Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)4.6Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.1My Size, Inc. 2017 Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement on Schedule DEF 14Afiled on March 2, 2017)10.2My Size, Inc. 2017 Consultant Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement onSchedule DEF 14A filed on March 2, 2017)10.3My Size, Inc. 2017 Stock Option Plan Israel Grantees SubPlan (incorporated by reference to Exhibit 10.3 to the Company’s Annual Report on Form10K filed on March 27, 2019)6610.4Purchase Agreement between My Size, Inc. and Shoshana Zigdon dated as of February 16, 2014 (incorporated by reference to Exhibit 10.2 to theCompany’s Annual Report on Form 10K filed on March 4, 2016)10.5 +Employment Agreement between My Size Israel 2014 Ltd. and Ronen Luzon dated November 18, 2018 (incorporated by reference to Exhibit 10.1 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.6 +Employment Agreement between My Size Israel 2014 Ltd. and Or Kles dated November 18, 2018 (incorporated by reference to Exhibit 10.2 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.7 +Employment Agreement between My Size Israel 2014 Ltd. and Billy Pardo dated November 18, 2018 (incorporated by reference to Exhibit 10.3 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.8Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on January 15,2020)10.9Form of Warrant (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.10Form of Placement Agent Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.11Securities Purchase Agreement (incorporated by reference to Exhibit 10.30 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.12Underwriting Agreement, dated January 5, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on January 7, 2021)10.13Underwriting Agreement, dated March 22, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on March 25, 2021)10.14Amendment to Purchase Agreement between My Size Israel 2014 Ltd., My Size, Inc. and Shoshana Zigdon (incorporated by reference to Exhibit 10.1to the Company’s Quarterly Report on Form 10Q on August 16, 2021)10.15Form of Registered Direct Offering Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.16Form of PIPE Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.17Form of Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.18Form of Placement Agent Warrant issued by the Company on October 28, 2021 (incorporated by reference to Exhibit 10.22 to the Company’s Form S1filed on November 12, 2021)10.19Form of Registration Rights Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.4 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.20Engagement Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference to Exhibit 10.5 to theCompany’s Current Report on Form 8K filed on October 28, 2021)10.21Settlement Agreement dated November 4, 2021, among My Size, Inc., David Lazar and certain of his affiliates (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on November 5, 2021)10.22Share Purchase Agreement dated as of February 7, 2022 between My Size Israel 2014 Ltd. and Amar Guy Shalom and Elad Bretfeld (incorporated byreference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SEC on February 8, 2022)10.23Employment Agreement between My Size Israel 2014 Ltd. and Ezequiel Javier Brandwain dated January 27, 2022 (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on February 1, 2022)10.24Form of Section 102 Capital Gain Restricted Stock Award Agreement under the Company’s 2017 Equity Incentive Plan (incorporated by reference toExhibit 10.1 to the Company’s Quarterly Report on Form 10Q, filed with the SEC on November 14, 2022)10.25Share Purchase Agreement, dated as of October 6, 2022, by and among My Size, Inc., Borja Cembrero Saralegui, Artiz Toree Garcia, Whitehold, S.L.,Twinbel, S.L., and EGI Acceleration, S.L. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SECon October 12, 2022)10.26Form of LockUp Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)10.27Form of Voting Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.3 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)6710.28My Size, Inc. Amendment to the My Size, Inc. 2017 Equity Plan (incorporated by reference to Appendix B to the Company’s definitive proxystatement filed with the SEC on November 4, 2022)10.29Form of Registered Direct Offering Securities Purchase Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.1 to theCompany’s Current Report on Form 8K filed with the SEC on January 12, 2023)10.30Form of PIPE Securities Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8Kfiled with the SEC on January 12, 2023)10.31Form of Registered Direct PreFunded Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.32Form of Series A and Series B Warrant (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8K filed with the SEC onJanuary 12, 2023)10.33Form of Private Placement PreFunded Warrant (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.34Form of Registration Rights Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form8K filed with the SEC on January 12, 2023)10.35Engagement Agreement, dated December 5, 2022 (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8K filed withthe SEC on January 12, 2023)10.36*Form of Placement Agent Warrant21.1*List of Subsidiaries23.1*Consent of Somekh Chaikin, a member firm of KPMG International, registered public accounting firm31.1*Certification of the Chief Executive Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200231.2*Certification of the Chief Financial Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200232.1*Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a14(b) of the Exchange Act and 18 U.S.C. Section 1350, asadopted pursuant to Section 906 of the SarbanesOxley Act of 2002101.INS*Inline XBRL Instance Document101.SCH*Inline XBRL Taxonomy Schema101.CAL*Inline XBRL Taxonomy Calculation Linkbase101.DEF*Inline XBRL Taxonomy Definition Linkbase101.LAB*Inline XBRL Taxonomy Label Linkbase101.PRE*Inline XBRL Taxonomy Presentation Linkbase104Cover Page Interactive Data File (formatted as Inline XBRL document and contained in Exhibit 101)*Filed herewith.+Indicates a management contract or any compensatory plan, contract or arrangement68SIGNATURESPursuant to the requirements of Section 13 and 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10K to be signed on its behalf by the undersigned, thereunto duly authorized on this 14th day of April, 2023.MY SIZE, INC./s/ Ronen LuzonRonen LuzonChief Executive Officer (Principle Executive Officer)/s/ Or KlesOr KlesChief Financial Officer(Principal Financial and Accounting Officer)Pursuant to the requirements of the Securities Act of 1934, this annual report on Form 10K has been signed below by the following persons on behalf ofthe registrant and in the capacities and on the dates indicated.SignatureTitleDate/s/ Ronen LuzonChief Executive Officer and DirectorApril 14, 2023Ronen Luzon(Principle Executive Officer)/s/ Or KlesChief Financial OfficerApril 14, 2023Or Kles(Principal Financial and Accounting Officer)/s/ Oren ElmaliahDirectorApril 14, 2023Oren Elmaliah/s/ Arik KaufmanDirectorApril 14, 2023Arik Kaufman/s/ Oron BranitzkyDirectorApril 14, 2023Oron Branitzky/s/ Guy ZimmermanDirectorApril 14, 2023Guy Zimmerman69EX10.36 2 ex1036.htmExhibit 10.36NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES ANDEXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THESECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO ANEFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTIONNOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGINACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.PLACEMENT AGENT COMMON STOCK PURCHASE WARRANTMY SIZE, INC.Warrant Shares: _______Issue Date: January 12, 2023Initial Exercise Date: January 12, 2023THIS PLACEMENT AGENT COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _____________ or itsassigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the dateset forth above (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on January 10, 2028 (the “Termination Date”) but not thereafter, tosubscribe for and purchase from My Size, Inc., a Delaware corporation (the “Company”), up to ______ shares (as subject to adjustment hereunder, the “WarrantShares”) of the Company’s Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined inSection 2(b). This Warrant is issued pursuant to that certain engagement letter, dated as of December 5, 2022, by and between the Company and H.C. Wainwright &Co., LLC.Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities PurchaseAgreement (the “Purchase Agreement”), dated January 10, 2023, among the Company and the purchasers signatory thereto.1Section 2. Exercise.a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or afterthe Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted by email (or emailattachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the numberof Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shalldeliver the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on aUnited States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No inkoriginalNotice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required.Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder haspurchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrantto the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercisesof this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering theoutstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder andthe Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver anyobjection to any Notice of Exercise within one (1) Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant,acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, thenumber of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.b) Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $3.8188, subject to adjustment hereunder (the“Exercise Price”).c) Cashless Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein isnot available for the issuance or resale of the Warrant Shares to or by the Holder, then this Warrant may also be exercised, in whole or in part, at such timeby means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing[(AB) (X)] by (A), where:(A) =as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice ofExercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed anddelivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) ofRegulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAPon the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on theprincipal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s execution of the applicable Notice ofExercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hoursthereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii)the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice ofExercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;(B) =the Exercise Price of this Warrant, as adjusted hereunder; and(X) =the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if suchexercise were by means of a cash exercise rather than a cashless exercise.2“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which theCommon Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York Citytime)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest precedingdate) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for theCommon Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the mostrecent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by anindependent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to theCompany, the fees and expenses of which shall be paid by the Company.“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the TradingMarket on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or thenearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and ifprices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reportingprices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock asdetermined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonablyacceptable to the Company, the fees and expenses of which shall be paid by the Company.If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of theSecurities Act, the Warrant Shares shall take on the characteristics of the Warrants being exercised, and the holding period of the Warrant Shares beingissued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section 2(c).3d) Mechanics of Exercise.i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to betransmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with TheDepository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant insuch system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of theWarrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or mannerofsale limitationspursuant to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, registered in theCompany’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitledpursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2)Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate ExercisePrice to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Companyof the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall bedeemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant hasbeen exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (otherthan in the case of a cashless exercise) is received by the Warrant Share Delivery Date. If the Company fails for any reason to deliver tothe Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder,in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP ofthe Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifthTrading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share Delivery Date until such WarrantShares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FASTprogram so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standardsettlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stockas in effect on the date of delivery of the Notice of Exercise.4ii.Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the requestof a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a newWarrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrantshall in all other respects be identical with this Warrant; provided, however, that the Holder shall be required to return any WarrantShares subject to any such rescinded exercise notice concurrently with the return to Holder of the aggregate Exercise Price paid to theCompany for such Warrant Shares and the restoration of Holder’s right to acquire such Warrant Shares pursuant to this Warrant(including, issuance of a replacement warrant certificate evidencing such restored right).iii. Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant toSection 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.iv. Compensation for BuyIn on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights availableto the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with theprovisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date theHolder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwisepurchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipatedreceiving upon such exercise (a “BuyIn”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) theHolder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) theamount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connectionwith the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at theoption of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was nothonored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock thatwould have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holderpurchases Common Stock having a total purchase price of $11,000 to cover a BuyIn with respect to an attempted exercise of shares ofCommon Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediatelypreceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written noticeindicating the amounts payable to the Holder in respect of the BuyIn and, upon request of the Company, evidence of the amount of suchloss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including,without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver sharesof Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.5v. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise ofthis Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Companyshall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by theExercise Price or round up to the next whole share.vi. Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue ortransfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paidby the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by theHolder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, thisWarrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder andthe Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.The Company shall pay all Transfer Agent fees required for sameday processing of any Notice of Exercise and all fees to the DepositoryTrust Company (or another established clearing corporation performing similar functions) required for sameday electronic delivery of theWarrant Shares.vii. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timelyexercise of this Warrant, pursuant to the terms hereof.6e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise anyportion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicableNotice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of theHolder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). Forpurposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Partiesshall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, butshall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrantbeneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion ofany other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exerciseanalogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in thepreceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act andthe rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that suchcalculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed inaccordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (inrelation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisableshall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether thisWarrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of thisWarrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm theaccuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number ofoutstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s mostrecent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recentwritten notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request ofa Holder, the Company shall within one (1) Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock thenoutstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise ofsecurities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number ofoutstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stockoutstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice tothe Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial OwnershipLimitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares ofCommon Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in theBeneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shallbe construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portionhereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplementsnecessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of thisWarrant.7Section 3. Certain Adjustments.a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes adistribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which,for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstandingshares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into asmaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case theExercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any)outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately aftersuch event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of thisWarrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for thedetermination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case ofa subdivision, combination or reclassification.b) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sellsany Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares ofCommon Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregatePurchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise ofthis Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before thedate on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the recordholders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that to the extent that theHolder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall notbe entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Rightto such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not resultin the Holder exceeding the Beneficial Ownership Limitation).c) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend (other than cash) orother distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including,without limitation, any distribution of stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement,scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holdershall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number ofshares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including withoutlimitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken,the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, thatto the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, thenthe Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a resultof such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as itsright thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).8d) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more relatedtransactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease,license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, director indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of CommonStock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more ofthe outstanding Common Stock or 50% or more of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in oneor more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchangepursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly orindirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, withoutlimitation, a reorganization, recapitalization, spinoff, merger or scheme of arrangement) with another Person or group of Persons whereby such otherPerson or group acquires more than 50% of the outstanding shares of Common Stock or 50% or more of the voting power of the common equity of theCompany (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for eachWarrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of theHolder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor oracquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as aresult of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior tosuch Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, thedetermination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of AlternateConsideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Priceamong the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. Ifholders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall begiven the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at theHolder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date ofthe public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cashequal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of suchFundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company’s control, including not approved by theCompany’s Board of Directors, the Holder shall only be entitled to receive from the Company or any Successor Entity the same type or form ofconsideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to theholders of Common Stock of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, stock or anycombination thereof, or whether the holders of Common Stock are given the choice to receive from among alternative forms of consideration in connectionwith the Fundamental Transaction; provided, further, that if holders of Common Stock of the Company are not offered or paid any consideration in suchFundamental Transaction, such holders of Common Stock will be deemed to have received common stock of the Successor Entity (which Entity may be theCompany following such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on theBlackScholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day of consummation of the applicableFundamental Transaction for pricing purposes and reflecting (A) a riskfree interest rate corresponding to the U.S. Treasury rate for a period equal to thetime between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expectedvolatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualizationfactor) as of the Trading Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlyingprice per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any noncashconsideration, if any, being offered in such Fundamental Transaction and (ii) the highest VWAP during the period beginning on the Trading Dayimmediately preceding the public announcement of the applicable contemplated Fundamental Transaction (or the consummation of the applicableFundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant to this Section 3(e) and (D) a remaining option timeequal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date and (E) azero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds (or such other consideration)within the later of (i) five Business Days of the Holder’s election and (ii) the date of consummation of the Fundamental Transaction. The Company shallcause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of theobligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant towritten agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to suchFundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entityevidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares ofcapital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of thisWarrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which appliesthe exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to suchFundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for thepurpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which isreasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall beadded to the term “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction, each andevery provision of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to each of the Company and theSuccessor Entity or Successor Entities, jointly and severally), and the Successor Entity or Successor Entities, jointly and severally with the Company, mayexercise every right and power of the Company prior thereto and the Successor Entity or Successor Entities shall assume all of the obligations of theCompany prior thereto under this Warrant and the other Transaction Documents with the same effect as if the Company and such Successor Entity orSuccessor Entities, jointly and severally, had been named as the Company herein.e) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. Forpurposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the numberof shares of Common Stock (excluding treasury shares, if any) issued and outstanding.9f) Notice to Holder.i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, theCompany shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resultingadjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form)on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C)the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any sharesof capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection withany reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all orsubstantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into othersecurities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of theaffairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as itshall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective datehereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to beentitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification,consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expectedthat holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or otherproperty deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure todeliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to bespecified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, nonpublic informationregarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to aCurrent Report on Form 8K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of suchnotice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.10Section 4. Transfer of Warrant.a) Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and to theprovisions of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights) aretransferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a writtenassignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay anytransfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a newWarrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument ofassignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly becancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unlessthe Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of thedate on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordanceherewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company,together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent orattorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute anddeliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issuedon transfers or exchanges shall be dated the Issue Date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Sharesissuable pursuant thereto.c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “WarrantRegister”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as theabsolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to thecontrary.d) Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrantshall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue skylaws or (ii) eligible for resale without volume or mannerofsale restrictions or current public information requirements pursuant to Rule 144, the Companymay require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, comply with the provisions ofSection 5.7 of the Purchase Agreement.11e) Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon anyexercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling suchWarrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exemptedunder the Securities Act.Section 5. Miscellaneous.a) No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends orother rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Withoutlimiting the rights of a Holder to receive Warrant Shares on a “cashless exercise,” and to receive the cash payments contemplated pursuant to Sections 2(d)(i) and 2(d)(iv), in no event will the Company be required to net cash settle an exercise of this Warrant.a.In July 2019, the Company entered into a threeyear agreement with a consultant (“Consultant14”) to provide services to the Company includingassisting the Company to promote, market and sell the Company’s technology to potential customers. Pursuant to such agreement and in partialconsideration for such consulting services, the Company agreed to issue to Consultant14 options to purchase up to 107 shares of the Company’scommon stock upon execution of the agreement. The options are exercisable at $375.00 per share and shall vest in 3 equal instalments every twelvemonths starting July 2019. Unexercised options shall expire 4 years from the effective date.In addition, the Company agreed to issue to Consultant14 options to purchase up to 890 shares of the Company’s common stock upon executionof the agreement. The options are exercisable at $27.00 per share and shall vest in 4 equal instalments every six months starting September 2020.Unexercised options shall expire 5 years from the effective date.During 2022 and 2021, an amount of $7 and $14 respectively, were recorded by the Company as stockbased equity awards with respect to Consultant14.F24MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The Company’s outstanding options granted to consultants as of December 31, 2022 are as follows:Issuance dateOptions forCommon stockWeightedAverageexercise priceper shareOptionsexercisableExpirationdateFebruary 201815USD528.7515February 2023August 2018December 2018531USD352.38264August 2023 December 2023July 2020107USD375107July 2023SeptemberOctober 20201,488USD27.201,288October 2024 September 2025Total2,1411,674The Company uses the Black Scholes model to measure the fair value of the stock options with the assistance of a third party valuation.No stock options were granted during 2022 to consultants.The fair value of the Company’s stock options granted to nonemployees was calculated using the following weighted average assumptions:20222021GrantsGrantsDividend yield0%Expected volatility125.15%Riskfree interest0.16%Contractual term of up to (years)1.52F25MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Stock Option Plan for employeesIn March 2017, the Company adopted a stock option plan (the “Plan”) pursuant to which the Company’s Board of Directors may grant stock options toofficers and key employees. The total number of options which may be granted to directors, officers, employees under this plan, is limited to 289,000options. Stock options can be granted with an exercise price equal to or less than the stock’s fair market value at the date of grant.The fair value of each option award is estimated on the date of grant using the Binomial optionpricing model that used the weighted averageassumptions in the following table. The risk free rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the timeof grant.2022Grants2021GrantsDividend yield0%0%Expected volatility96.52%98.47%Riskfree interest4.06%0.96%expected life522.27In the years ended December 31, 2022 and 2021, 10,000 and 3,900 options, respectively, were granted.On December 7, 2022, the Company’s stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from230,800 shares to 289,000 shares.On September 29, 2022, the Compensation Committee of the Company approved grants of restricted share awards under the Company’s 2017 EquityIncentive Plan to Ronen Luzon (CEO), Or Kles (CFO), Billy Pardo (COO), Ilia Turchinsky (CTO) and Ezequiel Javier Brandwain (CCO), pursuant towhich were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000 restricted shares and 12,000 restricted shares,respectively. Each restricted share awarded under section 102 Capital Gain Restricted Stock Award Agreement (the “Agreement”). The restrictedshares shall vest in three equal installments on January 1, 2023, January 1, 2024 and January 1, 2025 for Ronen Luzon, Or Kles, Billy Pardo and IliaTurchinsky and on January 27, 2023, January 27, 2024 and January 27, 2025 for Ezequiel Javier Brandwain, conditioned upon continuous employmentwith the Company, and subject to accelerated vesting upon a change in control of the Company.On the same day, the Company granted fiveyears options to purchase up to 10,000 ordinary shares to other employees of the Company at an exerciseprice of $0.21 per share. The options vesting period is over three years in three equal portions from the vesting commencement date.F26MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The total stock option compensation expense in the year ended December 31, 2022 amounted to $448as follows: Research and development expensesamounted to $151, sales and marketing expenses amounted to $119and general and administrative expenses amounted to $178.The total stock option compensation expense in the year ended December 31, 2021 amounted to $252 as follows: Research and development expensesamounted to $94, sales and marketing expenses amounted to $97 and general and administrative expenses amounted to $61.As of December 31, 2022, there was a total of $530 unrecognized compensation cost relating to nonvested sharebased compensation arrangements.That cost is expected to be recognized over a weightedaverage period of 2.0 years.Share option activity during 2022 is as follows:2022Number ofoptionsWeightedaverageexerciseprice US$Outstanding as of January 135,74226.5Granted10,0005.25ExercisedExpired(4,136)Outstanding as of year end41,60622.48Vested as of year end33,20825.17Share option activity during 2021 is as follows:2021Number ofoptionsWeightedaverageExerciseprice US$Outstanding as of January 139,094$26.0Granted3,90032.0Exercised(751)Expired(6,501)Outstanding as of year end35,74226.5Vested as of year end27,06326.5F27MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 15 CONTINGENCIES AND COMMITMENTSa.On August 7, 2018, the Company commenced an action against North Empire LLC (“North Empire”) in the Supreme Court of the State of New York,County of New York for breach of a Securities Purchase Agreement (the “Agreement”) in which it is seeking damages in an amount to bedetermined at trial, but in no event less than $616. On August 2, 2018, North Empire filed a Summons with Notice against the Company, also in thesame Court, in which they allege damages in an amount of $11.4 million arising from an alleged breach of the Agreement. On September 6, 2018North Empire filed a Notice of Discontinuance of the action it had filed on August 2, 2018. On September 27, 2018, North Empire filed an answerand asserted counterclaims in the action commenced by the Company against them, alleging that the Company failed to deliver stock certificatesto North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against theCompany’s CEO and now former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018,the Company filed a reply to North Empire’s counterclaims. On November 15, 2018, the Company’s CEO and now former Chairman of the Boardfiled a motion to dismiss North Empire’s thirdparty complaint. On January 6, 2020, the Court granted the motion and dismissed the thirdpartycomplaint. Discovery has been completed and both parties have filed motions for summary judgment in connection with the claims andcounterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summary judgment, arguing there werefactual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision. The appealmust be fully perfected and filed by July 26, 2022. On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying theCompany’s motion for summary judgment. North Empire will file its opposition papers on or before March 31, 2022, and the Company will file replypapers on April 29, 2022. On or about September 12, 2022, the Court issued its Decision and Order denying the Company’s motion to reargue.North Empire filed its opposing brief on December 7, 2022. Both sides were given an opportunity to file a reply brief. The Company filed our replybrief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. The Appellate Court has scheduled oral argument for the appealfor February 7, 2023. Oral argument was held before the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Courtfiled its Decision and Order, which affirmed the lower court’s decisions regarding both My Size and North Empire’s motions for summary judgmentand sent the case back to the Supreme Court.On or about March 13, 2023, the Supreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date forthe mediation has not yet been set. The Company intends to vigorously defend any claims made by North Empire.The Company believes it is more likely than not that the counterclaims will be denied.b.In May 2021, the Company received notice from Custodian Ventures, LLC (“Custodian”) of its intention to nominate four candidates to stand forelection to our Board of Directors at the Company’s 2021 annual meeting of stockholders. Custodian subsequently made a book and recordsrequest and has made public statements calling for changes to our management.On September 22, 2021, Custodian commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v.MySize, Inc. (the “Delaware Action”). In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting.On October 19, 2021, the Company commenced an action in the United States District Court for the Southern District of New York againstCustodian, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, and certain rulespromulgated thereunder (the “SDNY Action”). The complaint sought, among other things, declaratory and injunctive relief related to defendants’efforts to nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed“group” for purposes of Section 13(d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. Inaddition, the complaint alleged that the defendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules inconnection with their efforts to elect a slate of directors to the Company’s Board of Directors. On October 20, 2021, the Court signed an ordergranting a hearing on an anticipated motion for a preliminary injunction and expedited scheduling and discovery in aid thereof, and scheduled thathearing for December 2, 2021.On November 4, 2021, the Company entered into the Settlement Agreement with the Lazar Parties. Pursuant to the Settlement Agreement, theCompany and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the SettlementAgreement, the Company agreed to reimburse Custodian for out of pocket expenses and in consideration for the dismissal and release of claimsagainst the Company an aggregate amount equal to $275, to be paid within three business days of the effective date of the Settlement Agreement.With respect to the Company’s 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) its May 12,2021 notice of stockholder nominations of four director candidates with respect to the Company’s 2021 annual meeting of stockholders, (ii) thenotice dated October 28, 2021 submitted by Custodian to the Company notifying the Company of Custodian’s continued intent to bring itsnomination of four director candidates before the Company’s stockholders at the 2021 annual meeting, and (iii) any and all related materials andnotices submitted to the Company in connection therewith or related thereto and to not take any further action in connection with the solicitationof any proxies in connection with the Company. Custodian also agreed to cease any and all solicitation and other activities in connection with the2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effectivedate of the Agreement (the “Standstill Period”). The Settlement Agreement also provides that during the Standstill Period, the Lazar Parties willvote all shares of common stock of the Company it beneficially owns in in accordance with any proposal or recommendation made by theCompany or the Board of Directors of the Company that is submitted to the stockholders of the Company, unless to do so would violateapplicable law and except with respect to certain extraordinary transactions. The Settlement Agreement also contains nondisparagement andconfidentiality provisions, subject to certain exceptions.On December 9, 2021, the Company subsequently entered into a Settlement Agreement (the “Ault Settlement Agreement”), with Milton C. Ault III,Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed towithdraw the SDNY Action against the Ault Parties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that actionagainst the Company. In addition, pursuant to the Settlement Agreement, the Company paid $70 to the Ault Parties in consideration for thereleases and other good and valuable consideration as set forth in the Ault Settlement Agreement.c.On July 5, 2021, the Company was served with a legal complaint filed by Fidelity Venture Capital Ltd. and Dror Atzmon in the Magistrate’s Court inTel Aviv for a monetary award in an amount of NIS 1,436,679 (approximately $450) and a declaratory relief. The plaintiffs allege that the Companybreached its contractual obligations to pay them for services allegedly rendered to the Company by the plaintiffs under a certain consultingagreement dated July 2, 2014, in an amount of NIS 819,000 (approximately $256). Additionally, the plaintiffs allege that the Company shouldcompensate them for losses allegedly incurred by them following their investment in the Company’s shares issued under a certain private offering.In the alternative, the plaintiffs move that the court will declare the investment agreement void with full restitution of plaintiffs’ original investmentin an amount of NIS 1,329,650(approximately $415). The Company filed its statement of defense on October 25, 2021. The first preliminary courthearing of the case is scheduled for January 23, 2022.The first court preliminary hearing was held on March 1, 2022.Following the first preliminary hearing and the Court’s comments and recommendation, the Plaintiffs filed a motion to strike out the claim withoutprejudice.On March 8, 2022 the Court ordered dismissal without prejudice of the claim.F28MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATIONAcquisition of OrgadOn February 7, 2022, the Company acquired 100% of the shares and voting interests in Orgad an omnichannel ecommerce platform. The acquisitionwas designed to create an additional revenue stream for the Company by becoming a direct ecommerce seller while leveraging the synergies betweenMySizeID and Orgad’s ecommerce platform.Unaudited proforma informationThe results of operations of Orgad have been included in the consolidated financial statements since the acquisition date of February 7, 2022. Orgadrevenues included in the Company’s consolidated statement of operations from February 7, 2022 through December 31, 2022 were $4,132. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,662 and $2,850 respectively, and the net loss after tax would have been $8,519 and $10,149 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash (*)300Issuance of shares of common stock (69,752 shares) (**)457Total consideration transferred757(*)The cash payment is subject to working capital adjustments.(**)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Orgad, on the twoyear and the threeyear anniversary of the closing, $350in each ofthese years provided that in the case of the second and third instalments certain revenue targets are met and subject further to certain downward postclosing adjustment. Furthermore, 69,752shares of common stock will be issued in eight equal quarterly instalments until the lapse of two years fromclosing. Additional earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023 will also be paid. All of these payments aresubject to the former owners being actively engaged with Orgad at the date such payment is due, and therefore were not taken as part of theconsideration for the business combination.During the year ended December 31, 2022 an amount of $456and $319was recorded in respect of the cash instalments and in respect of stocksissuance, respectively in Cost Of Goods, Sales and Marketing and General and Administrative expenses as shown in the following table:2022Stockbased compensation expense – Cost of goods194Stockbased compensation expense Sales and marketing271Stockbased compensation expense General and administrative310775(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the preliminary estimates of their fair values, which were determined using generally accepted valuation techniques based onestimates and assumptions made by management at the time of the acquisition. Such estimates are subject to change during the measurement periodwhich is not expected to exceed one year. The purchase price allocation was not finalized duo to examination of the net working capital of Orgad at theacquisition date. Any adjustments to the preliminary purchase price allocation identified during the measurement period will be recognized in theperiod in which the adjustments are determined.The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and Cash EquivalentTrade receivables364PP&E55Inventory864Longterm financial investment31Selling platform378Goodwill152Shortterm accruals and deferrals(181)Trade payables(668)Long term provision(13)Longterm debt(138)Deferred Taxes(87)Total net assets acquired757F29MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)(c)Acquisitionrelated costsThe Company incurred transaction costs of approximately $40and none during twelvemonth period ended December 31, 2022 which were included ingeneral and administrative expenses in the consolidated statements of income (loss).Acquisition of Naiz Bespoke Technologies, S.L. (“Naiz”)On October 11, 2022, the Company acquired 100% of the shares and voting interests in Naiz a provider of SaaS technology solutions that solve sizeand fit issues for fashion ecommerce companies. The acquisition was designed to allow Naiz’s customers benefit from MySize’s deep understanding ofthe fashion ecommerce retail landscape, while creating an additional revenue stream for the Company.Unaudited proforma informationThe results of operations of Naiz have been included in the consolidated financial statements since the acquisition date of October 11, 2022. Naizrevenues included in the Company’s consolidated statement of operations from October 11, 2022 through December 31, 2022 were $103. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,738 and $379 respectively and the net loss after tax would have been $8,695 and $10,717 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash503Issuance of shares of common stock (240,000 shares) (*)1,008Total consideration transferred1,511(*)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Naiz, additional cash consideration (up to $1,550) in four instalments subject to thefollowing conditions:(i)Continuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result ofa Good Reason; and(ii)Naiz’s Revenues reaching or exceeding the respective Target Revenues defined in the agreement. The revenues will be calculated in four periods:(1) January 1, 2022 – December 31, 2022; (2) January 1, 2023 – June 30, 2023; (3) July 1, 2023 – December 31, 2023; (4) January 1, 2024 – December31, 2024.Former owners of Naiz are entitled to additional cash consideration following December 31, 2025 (up to $1,650) in an event when the actual value of theequity consideration is less than $1,650, subject to completion of a Target Revenue for the period of January 1, 2025 – December 31, 2025 andcontinuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result of aGood Reason;F30MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)During the year ended December 31, 2022 an amount of $283 was recorded in respect of the additional cash consideration.(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the estimates of their fair values, which were determined using generally accepted valuation techniques based on estimates andassumptions made by management at the time of the acquisition.The following table summarizes the fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and cash equivalent36Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Total net assets acquired1,511(c)Acquisitionrelated costsDuring 2022, the Company incurred transaction costs of approximately $75 which were included in general and administrative expenses in theconsolidated statements of income (loss).F31MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)Note 17 – Operating SegmentsDuring the year ended December 31, 2021, the Company had one reportable segment. As a result of the business combinations in the reporting period(see note 13), the Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificialintelligence driven measurement solutions and (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions and. The fashionand equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. Orgad has onecustomer that is responsible for 37.9% of the Company consolidated revenues. The SaaS based innovative artificial intelligence driven measurementsolutions, or SaaS Solutions operating segment consists of My Size Inc and My Size Israel and My Size LLC.Information related to the operations of the Company’s reportable operating segments is set forth below:Fashion andequipment ecommerce platformSaaSSolutionsNaizTotalAs of the year ended December 31, 2022Revenues from external customers4,1322241034,459Operating (loss) income(591)(7,181)(338)(8,110)Financial income (expense), net(236)Net loss before tax(8,346)Fashion andequipment ecommerce platformSaasSolutionNaizAs of December 31, 2022:Assets2,0225,9661,691Amortization of intangible assets(114)(34)(46)The Company elected to present geographic information in respect with revenues generated from external customers based on the location of the selling entity:All the revenues of the fashion and equipment ecommerce platform segment are generated by Orgad, located in Israel.All the revenues of the Naiz segment are generated by Naiz, located in Spain.The revenues of the Saas Solutions segment are generated by My Size Ltd. located in Israel (approximately 75% of the segment revenues) and by My Size Inc.located in the U.S. (approximately 25% of the segment revenues).NOTE 18 SALES AND MARKETINGYear endedDecember 31,20222021Salaries836574Consultants and subcontractors5831,086Marketing481283Selling fees489Share based payments post Orgad acquisition (*)271Share based payments for consultants and employees127180Travel21142Other1451713,1432,336(*) See note 16.NOTE 19 GENERAL AND ADMINISTRATIVE EXPENSESYear endedDecember 31,20222021Salaries1,007461Professional services7051,832Share based payments for consultants, directors and employees18098Rent, office expenses and communication442372Insurance564627cash liability and equity liability expenses related to Orgad acquisition310cash liability expenses related to Naiz acquisition217Settlement fees (*)345Directors8259Other3933303,9004,124(*)See note 15(b)F32MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 20 FINANCIAL INCOME (EXPENSE), NETA.Financial incomeYear endedDecember 31,20222021Revaluation investment in marketable securities49Other26172666B.Financial expenseYear endedDecember 31,20222021Exchange rate differences33Revaluation of loan granted100Revaluation investment in marketable securities62Other6792629NOTE 21 EVENTS SUBSEQUENT TO THE BALANCE SHEET DATEa.On January 2, 2023, Orgad experienced a fire at its warehouse in Israel. The Company is not aware of any casualties or injuries associated with thefire. The Company shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450.The Company believes that this incident did not affect the future sales results of Orgad for the year 2023. The inventory was not insured and it istoo early to determine the potential impact of this incident on the other parties that were involved in the incident (lessor and others that leasedproperties near the warehouse).b.On January 10, 2023, the Company entered into a securities purchase agreement pursuant to which the Company sold an aggregate of 162,000ofthe Company’s shares of common stock and prefunded warrants to purchase up to 278,899shares of common stock and, in a concurrent privateplacement, unregistered warrants to purchase up to883,798 shares of common stock, consisting of Series A warrants to purchase up to 441,899shares of common stock and Series B warrants to purchase up to 441,899shares of common stock, at an offering price of $3.055per share ofcommon stock and associated Series A and Series B warrants and an offering price of $3.054per prefunded warrant and associated Series A andSeries B warrants.In addition, the Company entered into a securities purchase agreement pursuant to which the Company agreed to sell and issue in a privateplacement an aggregate of up to 540,098 unregistered prefunded warrants and unregistered warrants to purchase up to an aggregate of 1,080,196shares of common stock, consisting of Series A warrants to purchase up to 540,098 shares of common stock and Series B warrants to purchase upto 540,098 shares of common stock at an offering price of $3.054 per prefunded warrant and associated Series A and Series B warrants.As of March 31,2023 all the pre funded warrants were exercised by the investor.F33ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSUREThere were no disagreements with accountants on accounting and financial disclosure of a type described in Item 304 (a)(1)(iv) or any reportable event asdescribed in Item 304 (a)(1)(v) of Regulation SK.ITEM 9A. CONTROLS AND PROCEDURESDisclosure ControlsWe carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief FinancialOfficer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) as of December 31, 2022. Basedupon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this Annual Report on Form10K, our disclosure controls and procedures were effective to ensure that information required to be disclosed in reports filed under the Exchange Act, as amended,is recorded, processed, summarized and reported within the required time periods specified in the SEC’s rules and forms and is accumulated and communicated toour management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.Management’s Report on Internal Control Over Financial ReportingOur internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records, that, in reasonable detail,accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only inaccordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition, use or disposition of our assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance withthe policies or procedures may deteriorate.Our management, including our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financialreporting at December 31, 2022. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the TreadwayCommission (COSO) in Internal Control—Integrated Framework (2013). Based on that assessment under those criteria, management has determined that, as ofDecember 31, 2022, our internal control over financial reporting was effective.This Annual Report on Form 10K does not include an attestation report of our registered public accounting firm regarding internal control over financialreporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to the exemption provided to issuersthat are not “large accelerated filers” nor “accelerated filers” under the DoddFrank Wall Street Reform and Consumer Protection Act.Changes in Internal Control Over Financial ReportingDuring the year ended December 31, 2022, we made two acquisitions, as discussed in Note 1a and Note 16 of the audited consolidated financial statementsfor the year ended December 31, 2022 included in this Annual Report on Form 10K. As a result, we made additions and/or modifications to policies, procedures,systems and controls that have materially affected our internal control over financial reporting from the acquisitions, including new controls for consolidationprocess that relates to accounting policies and procedures, operational processes and documentation practices. Management excluded the acquired businessesfrom management’s report on internal control over financial reporting. ITEM 9B. OTHER INFORMATIONNone.ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNot applicable.51PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe following table sets forth the name, age and positions of our executive officers and directors.NAMEAgePOSITIONRonen Luzon52Chief Executive Officer and Class III DirectorOr Kles40Chief Financial OfficerBilly Pardo47Chief Operating Officer and Chief Product OfficerIlia Turchinsky35Chief Technology OfficerEzequiel Javier Brandwain53Chief Commercial OfficerOron Branitzky (1)(2)(3)*63Class II DirectorOren Elmaliah (1)(2)(3)*38Class I DirectorArik Kaufman (1)(2)(3)*41Class I DirectorGuy Zimmerman*53Class II Director(1)Member of our audit committee(2)Member of our nominating and corporate governance committee(3)Member of our compensation committee* Independent as that term is defined by the rules of the Nasdaq Stock Market.The business background and certain other information about our directors and executive officers is set forth below:Ronen Luzon has served as our Chief Executive Officer and a member of our board of directors since September 2013. Since 2006, Mr. Luzon hasadditionally served as Chief Executive Officer and founder of Malers Ltd., a company in the global security solutions market which provides technological solutionsfor integrated communication infrastructures, security and control systems. Prior to Malers, he held several senior marketing, sales management and professionalservices positions in a variety of international high tech companies including VP marketing of GA Tech and Professional Services Manager of Eldat Communication.Mr. Luzon graduated from Middlesex University in London with a B.S. in IT and Business Information Systems. We believe that Mr. Luzon is qualified to serve as amember of our board of directors because of his more than 20 years of experience in the technology sector.Or Kles has served as our Chief Financial Officer since May 2016. He is a certified public accountant with a broad, diverse financial background. From May2013 until April 2016 he served as Assistant Controller of Shikun and BinuiSolel Boneh Infrastructure Ltd. and from December 2010 until May 2013 he served as anAssociate at KPMG. Mr. Kles holds an MBA and a B.A. in Business Management and Accounting (specializing in financing) from The College of ManagementAcademic Studies. Mr. Kles is a certified public accountant in Israel.Billy Pardo has served as our Chief Product Officer since May 2014 and Chief Operating Officer since April 2019. From April 2010 until August 2013, Ms.Pardo served as Senior Director of Product Management of Fourier Education. Among her areas of expertise are launching products from concept to successfuldelivery in various methodologies, including Fourier Education’s awardwinning einstein™ Science Tablet. Prior to that Ms. Pardo served in various productmanagement positions including, Project Manager of Time to Know, Product Marketing Manager of RiT Technologies, Product Manager of Pricer AB and R&DTeam Leader at Pricer AB. Ms. Pardo previously served as Software Engineer at Eldat Communication Ltd., and QA Engineer at NICE Systems. Ms. Pardo receivedan MBA from The Interdisciplinary Center and a B.A. in Computer Science from The Academic College of TelAvivYaffo.Ilia Turchinsky has served as our Chief Technology Officer since April 2019 and from July 2018 until April 2019 as our Director of Technology. Prior tojoining us, from 2013 until 2018, Mr. Turchinsky served in various roles, most recently Chief Technology Officer, at MonkeyTech Ltd., a company that providesdesign, development and characterization of mobile applications. Prior to that, Mr. Turchinsky served in various roles including development course instructor atIQLine, was a founder of Arnavsoft and was a software developer for MintLab and a political party. Mr. Turchinsky holds a B.Sc. from the Ben Gurion University inComputer Science and an M.Sc. from the Open University of Israel in Computer Science.52Ezequiel Javier Brandwain has served as our Chief Commercial Officer since February 2022. Mr. Brandwain brings more than two decades of globalexperience in retail and the fashion industry, mainly in business development, operations, and international markets. Before joining the Company, Mr. Brandwainheld positions of increasing responsibility at several companies, including between June 2017 and November 2020, at 7 For All Mankind International, where heserved as Director, Latin America and Caribbean, managing business development and operations across Latin America and the Caribbean. Before that, betweenMay 2016 and June 2017, Mr. Brandwain served as Chief Business Development Officer at Replay – Fashion Box SPA, where he oversaw business development andoperations, expansion and control in the Americas, the Caribbean, and NorthEast Asia. Prior this role, between September 2015 and May 2016, he served as theReplay’s Managing Director in Latin America and the Caribbean, leading the company’s international expansion in these regions. Prior to that, between April 2015and September 2015, Mr. Brandwain served as Managing Director, Latin America and Caribbean at Authentic Brands Group LLC, where he led that company’soperations, business developments and international expansion within these regions, and served as the direct liaison with the company’s headquarters in New York.Prior to that, between April 2015 and September 2015, Mr. Brandwain served as Chief Operating Officer, Latin America and Caribbean at Flemingo International Ltd.,overseeing operations, as well as projected operations in the travel retail field across these regions. Prior to that, between December 2010 and February 2014, Mr.Brandwain served as Regional Director, Southern Hemisphere at Calvin Klein, where he was responsible for defining and implementing the operational andcommercial strategy for Southern Hemisphere, as well as overseeing the retail, travel retail, concession, and wholesale businesses of the company. During his tenureat Calvin Klein, Mr. Brandwain also served as Travel Retail Director, Latin America, where he built the travel retail business and developed operations. Prior to that,between July 2010 and November 2010, Mr. Brandwain served as Business Director, Latin America and Caribbean at Givenchy Latin America, and between January2010 and June 2010 he served as Commercial Director, Latin America and Caribbean at Nautica Latin America. During December 2004 and December 2009, Mr.Brandwain served as Vice President, International Business Development at Report Collection/Modextil, Inc., where he was in charge of business and operationalexpansion, global growth, and brand extensions. Prior to that, between 2003 and October 2004, Mr. Brandwain served as General Manager at Andrew KoenigInternational, Inc. Between September 2019 and November 2020, Mr. Brandwain served as a member of the Board of Directors of 7 For All Mankind BrazilImportacao, Comercio E Distribuicao S.A. Mr. Brandwain earned a Bachelor degree in architecture from the University of the Republic (Uruguay).Oron Branitzky has served as a member of our board of directors since March 2017. Mr. Barnitzky has vast experience in retail technology. SinceNovember 2017, Mr. Branitzky has served as Global Retail Business Development at Superup, and from January 2007 until December 2014 he served as VicePresident of Sales and Marketing at Pricer AB. Prior to that, Mr. Branitzky has served as VP Marketing and Sales at Eldat Communication and Sarin TechnologiesLtd. Since January 2015, Mr. Branitzky has served as chairman of the board of directors of WiseShelf Ltd. and from May 2015 until March 2016, Mr. Branitzky servedas an advisory board member of ciValue. Mr. Branitzky received a B.S. from the Hebrew University of Jerusalem and an MBA in International Marketing from TelAviv University. We believe that Mr. Branitzky is qualified to serve as a member of our board of directors because of his more than 20 years of experience inmanaging the sales of hitech solutions to retailers across the globe.Oren Elmaliah, has served as a member of our board of directors since May 2017. In September 2015, Oren Elmaliah founded Accounting Team IL and hasacted as Account Manager since then. Accounting Team IL is a financial consultancy and service provider to public companies traded in Israel and abroad. SinceFebruary 2017, Mr. Elmaliah has served as controller of Enlivex Therapeutics Ltd., and since January 2017 he has served as Chief Financial Officer of Presstek Israel.In addition, since September 2015, Mr. Elmaliah has served as an Israel Authorities Reporting Officer of LG Electronics Israel and since September 2015 he hasserved as Local Financial Report Consultant of Chiasma. From July 2011 until August 2015, Mr. Elmaliah served as CPA, Financial Director of CFO Director Ltd andfrom June 2010 until July 2011 he served as Risk Management Consultant of RSM International Limited. Mr. Elmaliah holds a B.A. in Accounting/Economics and aMsc. in Finance/Accounting from Tel Aviv University, Israel. He is a licensed Certified Public Accountant in Israel. We believe that Mr. Elmaliah is qualified to serveas a member of our board of directors because of his vast finance experience and public company management and administration in the fields of finance,accounting, and financial regulation.53Arik Kaufman has served as a member of our board of directors since June 2017. Mr. Kaufman is an attorney specializing in the fields of commercial law,corporate law and capital markets and since 2016 runs his own law office in Israel. He has vast experience in the fields of financial reporting and financial regulation.Mr. Kaufman serves as the Chief Executive Officer of Steakholder Foods since January 2022. From September 2017 until January 2022, Mr. Kaufman served as VPBusiness Development of Mor Research Applications. Mr. Kaufman holds an LLB in Law from the Interdisciplinary Center, Herzliya, and is admitted to the IsraeliBar. We believe that Mr. Kaufman is qualified to serve as a member of our board of directors based upon his experience of assisting with the completion of numerousventure capital financings, mergers, acquisitions, and strategic relationships. In addition, he has served as a member of the board of various publicly tradedcompanies, including companies that operate in the same industry as us.Guy Zimmerman has served as a member of our board of directors since August 2021. Previously, Mr. Zimmerman served as Founder and CEO ofManuFuture, an online b2b engineering market place, since February 2021. Prior to that from 2017 to 2021, Mr. Zimmerman acted as a consultant to severaltechnology startups and was a founding partner of a business travel online platform. From 2013 to 2017, Mr. Zimmerman served as EVP of Marketing and BusinessDevelopment of Kornit Digital and was part of the IPO leadership. Prior to that, Mr. Zimmerman served as VP of Global Sales and Business Development at TefronLtd., a provider of seamless garment technology, where he led the $100m sales and sales support organization serving global retail and fashion brands. Prior to thathe served as Vice President of Strategy and Business Development at Tnuva Group, Israel’s largest food manufacturer and spent eight years at McKinsey &Company. Mr. Zimmerman previously led a software startup in the field of operational healthcare management systems. Mr. Zimmerman holds a B.Sc. in IndustrialEngineering from Tel Aviv University in Israel. We believe that Mr. Zimmerman is qualified to serve as a member of our board of directors because of his experiencein business development in the technology and retail sectors.Board Diversity MatrixThe table below provides certain information regarding the diversity of our board of directors as of the date of this annual report.Board Diversity Matrix (As of March 31, 2023)Total Number of Directors5FemaleMaleNonBinaryDid Not DiscloseGenderPart I: Gender IdentityDirectors#5##Part II: Demographic BackgroundAfrican American or Black####Alaskan Native or Native American####Asian####Hispanic or Latinx####Native Hawaiian or Pacific Islander####White#1##Two or More Races or Ethnicities#2##LGBTQ+0Did Not Disclose Demographic Background2Family RelationshipsRonen Luzon, the Chief Executive Officer and a member of our board of directors, and Billy Pardo, the Chief Product Officer and Chief Operating Officer, arehusband and wife. There are no other family relationships among any of our current or former directors or executive officers.Involvement in Certain Legal ProceedingsWe are not aware of any of our directors or officers being involved in any legal proceedings in the past ten years relating to any matters in bankruptcy,insolvency, criminal proceedings (other than traffic and other minor offenses), or being subject to any of the items set forth under Item 401(f) of Regulation SK.Arrangements between Officers and DirectorsTo our knowledge, there is no arrangement or understanding between any of our officers and any other person, including directors, pursuant to which theofficer was selected to serve as an officer.Board of DirectorsThere are no agreements with respect to the election of directors.On January 6, 2022, we filed with the Secretary of State of Delaware a Certificate of Amendment to our Amended and Restated Certificate of Incorporationproviding for a classified Board. Following filing of the Certificate of Amendment, members of our board are now classified into three classes with staggered threeyear terms (with the exception of the expiration of the initial Class I and Class II directors), as follows:●Class I, comprised of two directors, initially Arik Kaufman and Oren Elmaliah (with their initial terms expiring at our 2022 annual meeting of stockholders andmembers of such class serving successive threeyear terms);●Class II, comprised of two directors, initially Oron Branitzky and Guy Zimmerman (with their initial terms expiring at our 2023 annual meeting of stockholdersand members of such class serving successive threeyear terms); and●Class III, comprised of one director, initially Ronen Luzon (with his initial term expiring at our 2024 annual meeting of stockholders and members of suchclass serving successive threeyear terms).54To preserve the classified Board structure, a director elected by the Board of Directors to fill a vacancy holds office until the next election of the class forwhich such director has been chosen, and until that director’s successor has been elected and qualified or until his or her earlier death, resignation, retirement orremoval.Our board of directors has reviewed the materiality of any relationship that each of our directors has with us, either directly or indirectly. Based upon thisreview, we believe that Arik Kaufman, Oren Elmaliach, Oron Branitzky and Guy Zimmerman qualify as independent directors in accordance with the standards set bythe Nasdaq and Rule 10A3 promulgated under the Exchange Act.Committees of the BoardAudit CommitteeOur audit committee is comprised of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Elmaliah serves as chairman of the audit committee. The auditcommittee is responsible for retaining and overseeing our independent registered public accounting firm, approving the services performed by our independentregistered public accounting firm and reviewing our annual financial statements, accounting policies and our system of internal controls. The audit committee actsunder a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the audit committee’s composition and meetings.The audit committee charter is available on our website www.mysizeid.com.The Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by applicable SEC rules. Inaddition, the Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by the rules of the Nasdaq StockMarket.The Board of Directors has determined that Oren Elmaliah is an “audit committee financial expert” serving on its audit committee, and is independent, as theSEC has defined that term in Item 407 of Regulation SK.Compensation CommitteeOur compensation committee consists of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Branitzky serves as chairman of the compensationcommittee.The compensation committee’s roles and responsibilities include making recommendations to the Board of Directors regarding the compensation for ourexecutives, the role and performance of our executive officers, and appropriate compensation levels for our CEO, which are determined without the CEO present, andother executives. Our compensation committee also administers our 2017 Equity Incentive Plan and our 2017 Consultant Equity Incentive Plan. The compensationcommittee acts under a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the compensation committee’scomposition and meetings. The compensation committee charter is available on our website www.mysizeid.com.Our Board of Directors has determined that all of the members of the compensation committee are “independent” as that term is defined by the rules of theNasdaq Stock Market.Nominating and Corporate Governance CommitteeThe members of the nominating and corporate governance committee are Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Kaufman serves aschairman of the corporate governance and nominations committee. The nominating and corporate governance committee acts under a written charter, which morespecifically sets forth its responsibilities and duties, as well as requirements for the nominating and corporate governance committee’s composition and meetings.The nominating and corporate governance committee charter is available on our website www.mysizeid.com.The nominating and corporate governance committee develops, recommends and oversees implementation of corporate governance principles for us andconsiders recommendations for director nominees. The nominating and corporate governance committee also considers stockholder recommendations for directornominees that are properly received in accordance with applicable rules and regulations of the SEC. Our stockholders that wish to nominate a director for election tothe Board of Directors should follow the procedures set forth in our bylaws.55The nominating and corporate governance committee will consider persons identified by its members, management, stockholders, investment bankers andothers. The guidelines for selecting nominees, which are specified in the nominating committee charter, generally provide that persons to be nominated:●should be accomplished in his or her field and have a reputation, both personal and professional, that is consistent with our image and reputation;●should have relevant experience and expertise and would be able to provide insights and practical wisdom based upon that experience and expertise; and●should be of high moral and ethical character and would be willing to apply sound, objective and independent business judgment, and to assume broadfiduciary responsibility.The nominating and corporate governance committee will consider a number of qualifications relating to management and leadership experience,background and integrity and professionalism in evaluating a person’s candidacy for membership on the Board of Directors. The nominating and corporategovernance committee may require certain skills or attributes, such as financial or accounting experience, to meet specific Board needs that arise from time to timeand will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of Board of Directors members. The nominating andcorporate governance committee will not distinguish among nominees recommended by stockholders and other persons.Our Board of Directors has determined that all of the members of the nominating and corporate governance committee are “independent” as that term isdefined by the rules of the Nasdaq Stock Market.Code of Conduct and EthicsWe have a Code of Business Conduct and Ethics that applies to all our employees. The text of the Code of Business Conduct and Ethics is publiclyavailable on our website at www.mysizeid.com. Information contained on, or that can be accessed through, our website does not constitute a part of this report andis not incorporated by reference herein. Disclosure regarding any amendments to, or waivers from, provisions of the code of conduct and ethics that apply to ourdirectors, principal executive and financial officers will be posted on the “InvestorsCorporate Governance” section of our website at www.mysizeid.com or will beincluded in a Current Report on Form 8K, which we will file within four business days following the date of the amendment or waiver.Change in Procedures for Recommending DirectorsThere have been no material changes to the procedures by which our stockholders may recommend nominees to our Board of Directors from thoseprocedures set forth in our Proxy Statement for our 2021 Annual Meeting of Stockholders, filed with the SEC on December 7, 2022.56ITEM 11. EXECUTIVE COMPENSATIONSummary Compensation TableThe following sets forth the compensation paid by us to our named executive officers, during the years ended December 31, 2022 and December 31, 2021.Name and Principal PositionYearSalary($) (1)Bonus($)StockAwards($)OptionAwards($) (2)All OtherCompensation($)Total($)Ronen Luzon2022173,000223,0008,000126,000530,000Chief Executive Officer2021194,0005,00023,00097,000319,000Or Kles2022123,00053,0007,00071,000254,000Chief Financial Officer2021123,0008,00030,00061,000222,000Billy Pardo2022134,00053,0007,000100,00294,000Chief Operating Officer2021162,0007,00018,00074,000261,000(1) Salary for the years 2022 and 2021 are based on average US$/NIS representative exchange rates of NIS 3.358 and NIS 3.11 respectively.(2) Amounts in this column represent the grant date fair value of options granted to the named executive officers during 2022 and 2021, computed in accordance withFASB ASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the named executive officers. The assumptionsmade in valuing the options reported in this column are discussed in Note 11 to our audited financial statements for the year ended December 31, 2021 and Note 4 toour condensed consolidated interim financial statements for the quarterly period ended September 30, 2022.All Other Compensation TableThe “All Other Compensation” amounts set forth in the Summary Compensation Table above consist of the following:NameYearAutomobileRelatedExpenses($)Manager’sInsurance*($)EducationFund*($)Othersocialbenefits**($)Total($)Ronen Luzon202232,00031,00015,00048,000126,000202133,00033,00015,00016,00097,000Or Kles202215,00021,00010,00025,00071,000202114,00019,0009,00019,00061,000Billy Pardo202216,00025,00013,00046,000100,000202117,00024,00012,00021,00074,000* Manager’s insurance and education funds are customary benefits provided to employees based in Israel. Manager’s insurance is a combination of severancesavings (in accordance with Israeli law), defined contribution taxqualified pension savings and disability insurance premiums. An education fund is a savings fundof pretax contributions to be used after a specified period of time for educational or other permitted purposes.** Other social benefits for 2022 and 2021 for all named individuals includes tax payments in respect of social benefits.57Agreements with Named Executive OfficersRonen LuzonOn November 18, 2018, My Size Israel, our wholly owned subsidiary, entered into an employment agreement with Ronen Luzon, or the Luzon EmploymentAgreement, pursuant to which Mr. Luzon will serve as our Chief Executive Officer. Pursuant to the terms of the Luzon Employment Agreement, Mr. Luzon receivesNIS 55,000 per month as his base salary and shall be eligible to receive such bonus as determined by us. In addition, Mr. Luzon shall be entitled social benefits andto other benefits, including, but not limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, includinginsurance in case of disability, annual vacation days, sick leave and expense reimbursement. Pursuant to the terms of the Luzon Employment Agreement and subjectto certain conditions, payments made by the Company to the pension fund or manager’s insurance fund shall be made in lieu of severance payments due to Mr.Luzon. The term of the Luzon Employment Agreement shall be effective as of September 1, 2018 and shall continue until such time either party provides writtennotice to the other party at least 75 days in advance of the termination of such agreement. We may also terminate Mr. Luzon’s employment without prior writtennotice (or payment in lieu of such notice) for Cause (as defined in the Luzon Employment Agreement).Or KlesOn November 18, 2018, My Size Israel entered into an employment agreement with Or Kles, or the Kles Employment Agreement, pursuant to which Mr. Kleswill serve as our Chief Financial Officer. Pursuant to the terms of the Kles Employment Agreement, Mr. Kles receives NIS 38,000 per month as his base salary andshall be eligible to receive such bonus as determined by us. In addition, Mr. Kles shall be entitled to social benefits and other benefits, including, but not limited to,contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annual vacation days,sick leave and expense reimbursement. Pursuant to the terms of the Kles Employment Agreement and subject to certain conditions, payments made by us to thepension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Mr. Kles. The term of the Kles Employment Agreement shall beeffective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days in advance of thetermination of such agreement. We may also terminate Mr. Kles’s employment without prior written notice (or payment in lieu of such notice) for Cause (as defined inthe Kles Employment Agreement).Billy PardoOn November 18, 2018, My Size Israel entered into an employment agreement with Billy Pardo, or the Pardo Employment Agreement, pursuant to which Ms.Pardo will serve as our Chief Product Officer. Pursuant to the terms of the Pardo Employment Agreement, Ms. Pardo receives NIS 47,500 per month as her basesalary and shall be eligible to receive such bonus as determined by us. In addition, Ms. Pardo shall be entitled to social benefits and other benefits, including, butnot limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annualvacation days, sick leave and expense reimbursement. Pursuant to the terms of the Pardo Employment Agreement and subject to certain conditions, payments madeby us to the pension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Ms. Pardo. The term of the Pardo EmploymentAgreement shall be effective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days inadvance of the termination of such agreement. We may also terminate Ms. Pardo’s employment without prior written notice (or payment in lieu of such notice) forCause (as defined in the Pardo Employment Agreement).58Outstanding Equity Awards at Fiscal YearEndThe following table provides information regarding options held by each of our named executive officers that were outstanding as of December 31, 2022.Option AwardsStock AwardsName and Principal PositionNumber ofSecuritiesUnderlyingUnexercisedOptionsExercisableNumber ofSecuritiesUnderlyingUnexercisedOptionsUnexercisableOptionExercisePriceOptionExpirationDateEquityincentiveplan awards:Number ofUnearnedShares that HaveNot VestedEquityincentiveplan awards:Market Value ofUnearnedShares, That Have Not VestedRonen Luzon Chief Executive Officer400(1)$26(8)7/24/20231,601(2)$26(8)5/29/20256,400(3)$268/10/2025100,000(9)100,000$511,250Or Kles – Chief Financial Officer227(4)$26(8)7/24/2023427(5)$26(8)5/29/20255,200(6)$268/10/202524,000(10)24,000$122,700Billy Pardo Chief Operating Officer400(1)$26(8)7/24/2023894(7)$26(8)5/29/20255,200(6)$268/10/202524,000(11)24,000$122,700(1) The option has a grant date of July 24, 2017 and vested in full on January 24, 2018.(2) The option has a grant date of May 29, 2019. 267 options vested immediately upon grant, 445 options vested on January 24, 2019, 445 options vested on January24, 2020 and 444 options vested on January 24, 2021.(3) The option has a grant date of October 8, 2020, 1,600 options vested on November 26, 2020, 1,600 options vested on May 26, 2021, 1,600 options vested onNovember 26, 2021, and 1,600 options vested on May 26, 2022.(4) The option has a grant date of July 24, 2017. 76 options vested immediately upon grant, 76 options vested on May 1, 2018 and 75 options vested on May 1, 2019.(5) The option has a grant date of May 29, 2019. 160 options vested immediately upon grant, 445 options vested on May 1, 2020, 445 options vested on May 21, 2021and 444 options vested on May 1, 2022.(6) The option has a grant date of October 8, 2020, 1,300 options vested on November 26, 2020, 1,300 options vested on May 26, 2021, 1,300 options vested onNovember 26, 2021, and 1,300 options vested on May 26, 2022.(7) The option has a grant date of May 29, 2019. 214 options vested immediately upon grant, 227 options vested on January 24, 2019, 227 options vested on January24, 2020 and 226 options vested on January 24, 2021.(8) On May 25, 2020, the compensation committee of the Board of Directors of the Company reduced the exercise price of outstanding options of employees anddirectors of the Company for the purchase of an aggregate of 5,610 shares of common stock of the Company (with exercise prices ranging between $453.75 and$228.75) to $26 per share, which was the closing price for the Company’s common stock on May 22, 2020, and extended the term of the foregoing options for anadditional one year from the original date of expiration.(9) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(10) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(11) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.59Director CompensationThe following table sets forth compensation information for our nonemployee directors for the year ended December 31, 2022.NameFees earned orpaid incash ($)(1)Optionawards($)(1)(2)Total($)Oren Elmalih15,078 15,078Oron Barnitzky15,34715,347Arik Kaufman14,44114,441Guy Zimmerman13,03313,033(1)Fees for the year 2022 are based on average US$/NIS representative exchange rates of NIS 3.519.(2)Amounts in this column represent the grant date fair value of options granted to the nonemployee directors during 2022 computed in accordance with FASBASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the nonemployee directors. The assumptions made invaluing the options reported in this column are discussed in Note 11 to our financial statements for the year ended December 31, 2022.We compensate our nonemployee directors for their service as a member of our board. Mr. Luzon received no separate compensation for board service. Mr.Luzon’s compensation is set forth above in the Summary Compensation Table.Each nonemployee director is entitled to receive a per meeting fee of $318. Nonemployee directors are also reimbursed for their travel and reasonable outofpocket expenses incurred in connection with attending board and committee meetings, to the extent that attendance is required by the board or the committee(s)on which that director serves.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurity Ownership of Certain Beneficial Holders and ManagementThe following table sets forth certain information regarding beneficial ownership of shares of our common stock as of March 31, 2023 by (i) each personknown to beneficially own more than 5% of our outstanding common stock, (ii) each of our directors, (iii) each of our executive officers, and (iv) all of our directorsand executive officers as a group. Except as otherwise indicated, the persons named in the table below have sole voting and investment power with respect to allshares beneficially owned, subject to community property laws, where applicable.Beneficial Owner(1)Shares ofCommon StockBeneficiallyOwnedPercentage(2)Executive officers and directors:Ronen Luzon143,578(3)5.8%Or Kles29,854(4)1.2%Billy Pardo143,578(5)5.8%Ezequiel Javier Brandwain12,000(6)*Ilia Turchinsky18,313(7)*Arik Kaufman1,294(8)*Oren Elmaliah1,294(9)*Oron Branitzky1,294(10)*Guy ZimmermanAll Executive Officers and Directors as a Group (9 persons)207,6268.4%*Less than 1%(1) The address of each person is c/o My Size, Inc., 4 HaYarden St., P.O.B. 1026, Airport City, Israel 7010000 unless otherwise indicated herein.60(2) The calculation in this column is based upon 2,446,780 shares of common stock outstanding on March 31, 2023. Beneficial ownership is determined in accordancewith the rules of the SEC and generally includes voting or investment power with respect to the subject securities. Shares of common stock that are currentlyexercisable or exercisable within 60 days of March 31, 2023 are deemed to be beneficially owned by the person holding such securities for the purpose of computingthe percentage beneficial ownership of such person, but are not treated as outstanding for the purpose of computing the percentage beneficial ownership of anyother person(3) Consists of (i) 100,000 shares of restricted stock granted under the 2017 Plan, (ii) 4,683 shares of common stock, (iii) options to purchase up to 8,401 shares of ourcommon stock, and (iv) 24,000 shares of restricted stock and options to purchase up to 6,494 shares of our common stock which are held by Billy Pardo, RonenLuzon’s spouse. Mr. Luzon may be deemed to beneficially hold the securities of us held by Ms. Pardo.(4) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, and (ii) an option to purchase 5,854 shares of our common stock. Does not includean aggregate of 119,760 shares of restricted stock over which Mr. Kles has been designated the initial proxy to vote such shares pursuant to a voting agreemententered into between Whitehole S.L., Twinbel S.L. and EGI Acceleration, S.L.(5) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, (ii) options to purchase up to 6,494 shares of our common stock, (iii) 100,000 sharesof restricted stock which are held by Ronen Luzon, Billy Pardo’s spouse (iii) 8,401 shares of common stock which are held by Mr. Luzon, and (iii) options to purchaseup to 4,683 shares of our common stock which are held by Mr. Luzon. Ms. Pardo may be deemed to beneficially hold the securities of the Company held by Mr.Luzon.(6) Consists of 12,000 shares of restricted stock granted under the 2017 Plan.(7) Consists of (i) 16,000 shares of restricted stock granted under the 2017 Plan, and (ii) options to purchase up to 2,313 shares of our common stock.(8) Consists of options to purchase up to 1,294 shares of our common stock.(9) Consists of options to purchase up to 1,294 shares of our common stock.(10) Consists of options to purchase up to 1,294 shares of our common stock.Change in ControlWe are not aware of any arrangement that might result in a change in control in the future. We have no knowledge of any arrangements, including anypledge by any person of our securities, the operation of which may at a subsequent date result in a change in the Company’s control.Securities Authorized for Issuance Under Equity Compensation PlansOn January 29, 2017, our Board of Directors approved the 2017 Equity Incentive Plan and the 2017 Consultant Equity Incentive Plan, which were approvedby our stockholders on March 21, 2017. In addition, on January 29, 2017, our Board of Directors approved the Stock Option Plan Israel Grantees SubPlan. The 2017Equity Incentive Plan initially authorized the issuance of up to 5,334 shares of common stock under the plan and the 2017 Consultant Equity Incentive Plan initiallyauthorized the issuance of up to 8,000 shares of common stock under the plan.On February 12, 2018, our stockholders approved an amendment to the 2017 Consultant Equity Incentive Plan to increase the maximum number of shares ofour common stock available for issuance under the plan from 8,000 to 12,000. On July 3, 2018, our stockholders approved an amendment to the 2017 Equity IncentivePlan to increase the maximum number of shares of our common stock available for issuance under the plan from 5,334 to 8,000 and an amendment to the 2017Consultant Equity Incentive Plan to increase the maximum number of shares of our common stock available for issuance under the plan from 12,000 to 18,667.On May 25, 2020, our Board reduced the exercise price of outstanding options of our employees and directors for the purchase of an aggregate of 140,237of our common stock (with exercise prices ranging between $453.75 and $228.75) to $26.0 per share, and extended the term of the foregoing options for an additionalone year from the original date of expiration.61On August 10, 2020, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 80,000 to 58,000shares, and a decrease of the numbers of shares available for issuance under the 2017 Consultant Incentive Plan to 8,667 shares from 18,667 shares.On December 30, 2021, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 58,000 sharesto 230,800 shares.On December 7, 2022, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Plan from 230,800 shares to 289,000shares.The following table summarizes information about our equity compensation plans and individual compensation arrangements as of December 31, 2022.Number of securities to be issued upon exercise of outstanding options, warrants and rights(a)Weighted average exercise price of outstandingoptions, warrants and rights (b)Number of securities remaining availablefor future issuanceunder equity compensationplans (excludingsecurities reflected in column (a) (c)Equity compensation plans approved by security holders43,49724.7477,455Equity compensation plans not approved by security holdersTotal43,49724.7477,455ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEDuring years ended December 31, 2022 and 2021, except for compensation arrangements described elsewhere herein and the transactions described below,we did not participate in any transaction, and we are not currently participating in any proposed transaction, or series of transactions, in which the amount involvedexceeded the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years, and in which, to our knowledge,any of our directors, officers, five percent beneficial security holders, or any member of the immediate family of the foregoing persons had, or will have, a direct orindirect material interest.Compensation arrangements for our named executive officers and directors are described in the section entitled “Executive Compensation.”Employment AgreementsWe have entered into written employment agreements with each of our executive officers. These agreements generally provide for notice periods of varyingduration for termination of the agreement by us or by the relevant executive officer, during which time the executive officer will continue to receive base salary andbenefits. We have also entered into customary noncompetition, confidentiality of information and ownership of inventions arrangements with our executiveofficers. However, the enforceability of the noncompetition provisions may be limited under applicable law.OptionsSince our inception we have granted options to purchase our common stock to our officers and directors. Such option agreements may contain accelerationprovisions upon certain merger, acquisition, or change of control transactions.62Restricted Stock GrantsOn September 29, 2022, our compensation committee approved grants of restricted share awards under our 2017 Plan to Ronen Luzon, Or Kles, Billy Pardo,Ilia Turchinsky and Ezequiel Javier Brandwain, pursuant to which they were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000restricted shares and 12,000 restricted shares, respectively. The restricted shares shall vest in three equal installments on January 1, 2023, January 1, 2024 andJanuary 1, 2025, conditioned upon continuous employment with us, and subject to accelerated vesting upon a change in control of the Company.Shareholder ActivismIn May 2021, we received notice from Custodian Ventures, LLC, or Custodian, of its intention to nominate four candidates to stand for election to our Boardof Directors at our 2021 annual meeting of stockholders. Custodian subsequently made a book and records request and has made public statements calling forchanges to our management.On September 22, 2021, Custodian, commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v. Mysize,Inc., C.A. No. 20210817LWW, or the Delaware Action. In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting. As further described below, on November 4, 2021, we entered into asettlement agreement, or the Settlement Agreement, with Custodian, Activist Investing LLC, David Aboudi, Partick Loney and David Natan, collectively, the LazarParties, settling and dismissing the Delaware Action.On October 19, 2021, we commenced an action in the United States District Court for the Southern District of New York captioned My Size, Inc. v. DavidLazar, Custodian Ventures LLC, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, Civil Action No, 1:21cv08585, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, andcertain rules promulgated thereunder, or the SDNY Action. The complaint sought, among other things, declaratory and injunctive relief related to defendants’ effortsto nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed “group” for purposes ofSection 13 (d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. In addition, the complaint alleged that thedefendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules in connection with their efforts to elect a slate of directorsto our Board of Directors. On October 20, 2021, the Court signed an order granting a hearing on an anticipated motion for a preliminary injunction and expeditedscheduling and discovery in aid thereof, and scheduled that hearing for December 2, 2021. As further described below, on November 4, 2021, we entered into theSettlement Agreement with the Lazar Parties settling and dismissing the claims asserted in the SDNY Action and the Delaware Action against one another. OnNovember 8, 2021, the remaining defendants in the SDNY Action filed and answer and counterclaim asserting a claim against us pursuant to New York Civil RightsLaw Section 70a, also known as New York’s antiSLAPP statute.On November 4, 2021, we entered into the Settlement Agreement, or the Lazar Settlement Agreement, with the Lazar Parties. Pursuant to the LazarSettlement Agreement, we and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the LazarSettlement Agreement, we reimbursed Custodian for out of pocket expenses and in consideration for the dismissal and release of claims against the Company anaggregate amount equal to $275,000. With respect to our 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) itsMay 12, 2021 notice of stockholder nominations of four director candidates with respect to our 2021 annual meeting of stockholders, (ii) the notice dated October 28,2021 submitted by Custodian to us notifying us of Custodian’s continued intent to bring its nomination of four director candidates before our stockholders at the2021 annual meeting, and (iii) any and all related materials and notices submitted to us in connection therewith or related thereto and to not take any further action inconnection with the solicitation of any proxies in connection with us. Custodian also agreed to cease any and all solicitation and other activities in connection withthe 2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effective date of theAgreement, or the Standstill Period. The Lazar Settlement Agreement also provides that during the Standstill Period, the Lazar Parties will vote all shares of ourcommon stock it beneficially owns in accordance with any proposal or recommendation made by us or our Board of Directors that is submitted to our stockholders,unless to do so would violate applicable law and except with respect to certain extraordinary transactions. The Lazar Settlement Agreement also contains nondisparagement and confidentiality provisions, subject to certain exceptions.63On December 9, 2021, we subsequently entered into a Settlement Agreement, or the Ault Settlement Agreement, with Milton C. Ault III, Ault Alpha LP, AultAlpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed to withdraw the SDNY Action against the AultParties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that action against the Company. In addition, pursuant to the SettlementAgreement, we paid $70,000 to the Ault Parties in consideration for the releases and other good and valuable consideration as set forth in the Ault SettlementAgreement.Naiz Bespoke Technologies AcquisitionOn October 7, 2022, we entered into the Naiz Agreement with the Naiz Sellers, pursuant to which the Naiz Sellers agreed to sell to us all of the issued andoutstanding equity of Naiz. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) ) the Naiz EquityConsideration and (ii) up the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the Equity Value Averaging Period) is less than $1,650,000, My Size shall pay the Shortfall Value to the Naiz Sellers within 45days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period, it wasdetermined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement)).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers will be subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into the LockUp Agreement with My Size, (ii) Whitehole, Twinbel and EGIentered into the Voting Agreement with My Size and (iii) each of the Key Persons entered into employment agreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonth period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonth “dribbleout” provisionthat provides following the expiration of the initial sixmonth lockup period, without My Size’s prior written consent (which My Size shall be permitted to withholdat its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than the average dailytrading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.64The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Indemnification Agreements and Directors’ and Officers’ Liability InsuranceWe have entered into indemnification agreements with each of our directors and executive officers. These agreements, among other things, require us toindemnify these individuals and, in certain cases, affiliates of such individuals, to the fullest extent permitted by Delaware law against liabilities that may arise byreason of their service to us or at our direction, and to advance expenses incurred as a result of any proceedings against them as to which they could beindemnified. We also maintain an insurance policy that insures our directors and officers against certain liabilities, including liabilities arising under applicablesecurities laws.Director IndependenceSee “Item 10. Directors, Executive Officers and Corporate Governance; Corporate Governance, Board Composition” above for a discussion regarding theindependence of the members of our board of directors.ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICESSomekh Chaikin, a member firm of KPMG International, located in Tel Aviv, Israel, PCAOB ID 1057, has served as our independent registered publicaccounting firm for 2022 and 2021. The following are Somekh Chaikin’s fees for professional services in each of the respective fiscal years:Fee Category20222021Audit Fees198,910298,300Tax Fees30,66729,300Auditrelated Fees18,000Total Fees247,577327,600Audit Fees:Audit Fees consist of fees billed for professional services performed by Somekh Chaikin for the audit of our annual financial statements, thereview of interim consolidated financial statements, and related services that are normally provided in connection with registration statements, including theregistration statement for S1 and S3.Tax Fees: Tax Fees may consist of fees for professional services, including tax and VAT consulting and compliance performed by an independent registeredpublic accounting provided during the period.PreApproval Policies and ProceduresIn accordance with the SarbanesOxley Act of 2002, as amended, our audit committee charter requires the audit committee to preapprove all audit andpermitted nonaudit services provided by our independent registered public accounting firm, including the review and approval in advance of our independentregistered public accounting firm’s annual engagement letter and the proposed fees contained therein. The audit committee has the ability to delegate the authorityto preapprove nonaudit services to one or more designated members of the audit committee. If such authority is delegated, such delegated members of the auditcommittee must report to the full audit committee at the next audit committee meeting all items preapproved by such delegated members. In the fiscal years endedDecember 31, 2022 and December 31, 2021 all of the services performed by our independent registered public accounting firm were preapproved by the auditcommittee.65PART IVITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES(a)Financial StatementsThe financial statements required by this Item are included beginning at page F1.(b)ExhibitsSee Exhibit IndexITEM 16. FORM 10K SUMMARYNot applicableEXHIBIT INDEXExhibitNumberDescription3.1Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Form on Form8K filed on March 23, 2017)3.2Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10K filed onMarch 4, 2016)3.3Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’s Current Report onForm 8K filed on February 20, 2018)3.4Second Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8K filedon April 24, 2018)3.5Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’sCurrent Report on Form 8K filed on November 18, 2019)3.6Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on January 7, 2022)3.7Amendment No. 1 to Second Amended and Restated ByLaws (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8K filed on January 7, 2022)3.8Certificate of Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on December 7, 2022)4.1Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S3/A filed onNovember 14, 2016)4.2Form of Warrant to Purchase Common Stock issued on February 2, 2018 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report onForm 10K filed on March 27, 2019)4.3Description of Securities Registered under Section 12 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report on Form 10K filedon March 19, 2020)4.4Form of Warrant (incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S1, Amendment No. 1, filed with the SECon May 5, 2020.)4.5Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)4.6Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.1My Size, Inc. 2017 Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement on Schedule DEF 14Afiled on March 2, 2017)10.2My Size, Inc. 2017 Consultant Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement onSchedule DEF 14A filed on March 2, 2017)10.3My Size, Inc. 2017 Stock Option Plan Israel Grantees SubPlan (incorporated by reference to Exhibit 10.3 to the Company’s Annual Report on Form10K filed on March 27, 2019)6610.4Purchase Agreement between My Size, Inc. and Shoshana Zigdon dated as of February 16, 2014 (incorporated by reference to Exhibit 10.2 to theCompany’s Annual Report on Form 10K filed on March 4, 2016)10.5 +Employment Agreement between My Size Israel 2014 Ltd. and Ronen Luzon dated November 18, 2018 (incorporated by reference to Exhibit 10.1 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.6 +Employment Agreement between My Size Israel 2014 Ltd. and Or Kles dated November 18, 2018 (incorporated by reference to Exhibit 10.2 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.7 +Employment Agreement between My Size Israel 2014 Ltd. and Billy Pardo dated November 18, 2018 (incorporated by reference to Exhibit 10.3 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.8Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on January 15,2020)10.9Form of Warrant (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.10Form of Placement Agent Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.11Securities Purchase Agreement (incorporated by reference to Exhibit 10.30 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.12Underwriting Agreement, dated January 5, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on January 7, 2021)10.13Underwriting Agreement, dated March 22, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on March 25, 2021)10.14Amendment to Purchase Agreement between My Size Israel 2014 Ltd., My Size, Inc. and Shoshana Zigdon (incorporated by reference to Exhibit 10.1to the Company’s Quarterly Report on Form 10Q on August 16, 2021)10.15Form of Registered Direct Offering Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.16Form of PIPE Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.17Form of Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.18Form of Placement Agent Warrant issued by the Company on October 28, 2021 (incorporated by reference to Exhibit 10.22 to the Company’s Form S1filed on November 12, 2021)10.19Form of Registration Rights Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.4 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.20Engagement Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference to Exhibit 10.5 to theCompany’s Current Report on Form 8K filed on October 28, 2021)10.21Settlement Agreement dated November 4, 2021, among My Size, Inc., David Lazar and certain of his affiliates (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on November 5, 2021)10.22Share Purchase Agreement dated as of February 7, 2022 between My Size Israel 2014 Ltd. and Amar Guy Shalom and Elad Bretfeld (incorporated byreference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SEC on February 8, 2022)10.23Employment Agreement between My Size Israel 2014 Ltd. and Ezequiel Javier Brandwain dated January 27, 2022 (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on February 1, 2022)10.24Form of Section 102 Capital Gain Restricted Stock Award Agreement under the Company’s 2017 Equity Incentive Plan (incorporated by reference toExhibit 10.1 to the Company’s Quarterly Report on Form 10Q, filed with the SEC on November 14, 2022)10.25Share Purchase Agreement, dated as of October 6, 2022, by and among My Size, Inc., Borja Cembrero Saralegui, Artiz Toree Garcia, Whitehold, S.L.,Twinbel, S.L., and EGI Acceleration, S.L. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SECon October 12, 2022)10.26Form of LockUp Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)10.27Form of Voting Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.3 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)6710.28My Size, Inc. Amendment to the My Size, Inc. 2017 Equity Plan (incorporated by reference to Appendix B to the Company’s definitive proxystatement filed with the SEC on November 4, 2022)10.29Form of Registered Direct Offering Securities Purchase Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.1 to theCompany’s Current Report on Form 8K filed with the SEC on January 12, 2023)10.30Form of PIPE Securities Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8Kfiled with the SEC on January 12, 2023)10.31Form of Registered Direct PreFunded Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.32Form of Series A and Series B Warrant (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8K filed with the SEC onJanuary 12, 2023)10.33Form of Private Placement PreFunded Warrant (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.34Form of Registration Rights Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form8K filed with the SEC on January 12, 2023)10.35Engagement Agreement, dated December 5, 2022 (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8K filed withthe SEC on January 12, 2023)10.36*Form of Placement Agent Warrant21.1*List of Subsidiaries23.1*Consent of Somekh Chaikin, a member firm of KPMG International, registered public accounting firm31.1*Certification of the Chief Executive Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200231.2*Certification of the Chief Financial Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200232.1*Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a14(b) of the Exchange Act and 18 U.S.C. Section 1350, asadopted pursuant to Section 906 of the SarbanesOxley Act of 2002101.INS*Inline XBRL Instance Document101.SCH*Inline XBRL Taxonomy Schema101.CAL*Inline XBRL Taxonomy Calculation Linkbase101.DEF*Inline XBRL Taxonomy Definition Linkbase101.LAB*Inline XBRL Taxonomy Label Linkbase101.PRE*Inline XBRL Taxonomy Presentation Linkbase104Cover Page Interactive Data File (formatted as Inline XBRL document and contained in Exhibit 101)*Filed herewith.+Indicates a management contract or any compensatory plan, contract or arrangement68SIGNATURESPursuant to the requirements of Section 13 and 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10K to be signed on its behalf by the undersigned, thereunto duly authorized on this 14th day of April, 2023.MY SIZE, INC./s/ Ronen LuzonRonen LuzonChief Executive Officer (Principle Executive Officer)/s/ Or KlesOr KlesChief Financial Officer(Principal Financial and Accounting Officer)Pursuant to the requirements of the Securities Act of 1934, this annual report on Form 10K has been signed below by the following persons on behalf ofthe registrant and in the capacities and on the dates indicated.SignatureTitleDate/s/ Ronen LuzonChief Executive Officer and DirectorApril 14, 2023Ronen Luzon(Principle Executive Officer)/s/ Or KlesChief Financial OfficerApril 14, 2023Or Kles(Principal Financial and Accounting Officer)/s/ Oren ElmaliahDirectorApril 14, 2023Oren Elmaliah/s/ Arik KaufmanDirectorApril 14, 2023Arik Kaufman/s/ Oron BranitzkyDirectorApril 14, 2023Oron Branitzky/s/ Guy ZimmermanDirectorApril 14, 2023Guy Zimmerman69EX10.36 2 ex1036.htmExhibit 10.36NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES ANDEXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THESECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO ANEFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTIONNOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGINACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.PLACEMENT AGENT COMMON STOCK PURCHASE WARRANTMY SIZE, INC.Warrant Shares: _______Issue Date: January 12, 2023Initial Exercise Date: January 12, 2023THIS PLACEMENT AGENT COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _____________ or itsassigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the dateset forth above (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on January 10, 2028 (the “Termination Date”) but not thereafter, tosubscribe for and purchase from My Size, Inc., a Delaware corporation (the “Company”), up to ______ shares (as subject to adjustment hereunder, the “WarrantShares”) of the Company’s Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined inSection 2(b). This Warrant is issued pursuant to that certain engagement letter, dated as of December 5, 2022, by and between the Company and H.C. Wainwright &Co., LLC.Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities PurchaseAgreement (the “Purchase Agreement”), dated January 10, 2023, among the Company and the purchasers signatory thereto.1Section 2. Exercise.a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or afterthe Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted by email (or emailattachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the numberof Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shalldeliver the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on aUnited States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No inkoriginalNotice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required.Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder haspurchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrantto the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercisesof this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering theoutstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder andthe Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver anyobjection to any Notice of Exercise within one (1) Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant,acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, thenumber of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.b) Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $3.8188, subject to adjustment hereunder (the“Exercise Price”).c) Cashless Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein isnot available for the issuance or resale of the Warrant Shares to or by the Holder, then this Warrant may also be exercised, in whole or in part, at such timeby means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing[(AB) (X)] by (A), where:(A) =as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice ofExercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed anddelivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) ofRegulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAPon the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on theprincipal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s execution of the applicable Notice ofExercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hoursthereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii)the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice ofExercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;(B) =the Exercise Price of this Warrant, as adjusted hereunder; and(X) =the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if suchexercise were by means of a cash exercise rather than a cashless exercise.2“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which theCommon Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York Citytime)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest precedingdate) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for theCommon Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the mostrecent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by anindependent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to theCompany, the fees and expenses of which shall be paid by the Company.“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the TradingMarket on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or thenearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and ifprices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reportingprices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock asdetermined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonablyacceptable to the Company, the fees and expenses of which shall be paid by the Company.If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of theSecurities Act, the Warrant Shares shall take on the characteristics of the Warrants being exercised, and the holding period of the Warrant Shares beingissued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section 2(c).3d) Mechanics of Exercise.i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to betransmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with TheDepository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant insuch system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of theWarrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or mannerofsale limitationspursuant to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, registered in theCompany’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitledpursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2)Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate ExercisePrice to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Companyof the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall bedeemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant hasbeen exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (otherthan in the case of a cashless exercise) is received by the Warrant Share Delivery Date. If the Company fails for any reason to deliver tothe Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder,in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP ofthe Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifthTrading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share Delivery Date until such WarrantShares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FASTprogram so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standardsettlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stockas in effect on the date of delivery of the Notice of Exercise.4ii.Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the requestof a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a newWarrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrantshall in all other respects be identical with this Warrant; provided, however, that the Holder shall be required to return any WarrantShares subject to any such rescinded exercise notice concurrently with the return to Holder of the aggregate Exercise Price paid to theCompany for such Warrant Shares and the restoration of Holder’s right to acquire such Warrant Shares pursuant to this Warrant(including, issuance of a replacement warrant certificate evidencing such restored right).iii. Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant toSection 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.iv. Compensation for BuyIn on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights availableto the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with theprovisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date theHolder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwisepurchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipatedreceiving upon such exercise (a “BuyIn”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) theHolder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) theamount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connectionwith the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at theoption of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was nothonored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock thatwould have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holderpurchases Common Stock having a total purchase price of $11,000 to cover a BuyIn with respect to an attempted exercise of shares ofCommon Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediatelypreceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written noticeindicating the amounts payable to the Holder in respect of the BuyIn and, upon request of the Company, evidence of the amount of suchloss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including,without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver sharesof Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.5v. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise ofthis Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Companyshall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by theExercise Price or round up to the next whole share.vi. Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue ortransfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paidby the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by theHolder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, thisWarrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder andthe Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.The Company shall pay all Transfer Agent fees required for sameday processing of any Notice of Exercise and all fees to the DepositoryTrust Company (or another established clearing corporation performing similar functions) required for sameday electronic delivery of theWarrant Shares.vii. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timelyexercise of this Warrant, pursuant to the terms hereof.6e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise anyportion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicableNotice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of theHolder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). Forpurposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Partiesshall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, butshall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrantbeneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion ofany other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exerciseanalogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in thepreceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act andthe rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that suchcalculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed inaccordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (inrelation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisableshall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether thisWarrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of thisWarrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm theaccuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number ofoutstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s mostrecent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recentwritten notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request ofa Holder, the Company shall within one (1) Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock thenoutstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise ofsecurities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number ofoutstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stockoutstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice tothe Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial OwnershipLimitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares ofCommon Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in theBeneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shallbe construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portionhereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplementsnecessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of thisWarrant.7Section 3. Certain Adjustments.a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes adistribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which,for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstandingshares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into asmaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case theExercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any)outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately aftersuch event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of thisWarrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for thedetermination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case ofa subdivision, combination or reclassification.b) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sellsany Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares ofCommon Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregatePurchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise ofthis Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before thedate on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the recordholders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that to the extent that theHolder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall notbe entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Rightto such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not resultin the Holder exceeding the Beneficial Ownership Limitation).c) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend (other than cash) orother distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including,without limitation, any distribution of stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement,scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holdershall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number ofshares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including withoutlimitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken,the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, thatto the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, thenthe Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a resultof such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as itsright thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).8d) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more relatedtransactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease,license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, director indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of CommonStock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more ofthe outstanding Common Stock or 50% or more of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in oneor more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchangepursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly orindirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, withoutlimitation, a reorganization, recapitalization, spinoff, merger or scheme of arrangement) with another Person or group of Persons whereby such otherPerson or group acquires more than 50% of the outstanding shares of Common Stock or 50% or more of the voting power of the common equity of theCompany (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for eachWarrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of theHolder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor oracquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as aresult of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior tosuch Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, thedetermination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of AlternateConsideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Priceamong the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. Ifholders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall begiven the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at theHolder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date ofthe public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cashequal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of suchFundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company’s control, including not approved by theCompany’s Board of Directors, the Holder shall only be entitled to receive from the Company or any Successor Entity the same type or form ofconsideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to theholders of Common Stock of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, stock or anycombination thereof, or whether the holders of Common Stock are given the choice to receive from among alternative forms of consideration in connectionwith the Fundamental Transaction; provided, further, that if holders of Common Stock of the Company are not offered or paid any consideration in suchFundamental Transaction, such holders of Common Stock will be deemed to have received common stock of the Successor Entity (which Entity may be theCompany following such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on theBlackScholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day of consummation of the applicableFundamental Transaction for pricing purposes and reflecting (A) a riskfree interest rate corresponding to the U.S. Treasury rate for a period equal to thetime between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expectedvolatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualizationfactor) as of the Trading Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlyingprice per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any noncashconsideration, if any, being offered in such Fundamental Transaction and (ii) the highest VWAP during the period beginning on the Trading Dayimmediately preceding the public announcement of the applicable contemplated Fundamental Transaction (or the consummation of the applicableFundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant to this Section 3(e) and (D) a remaining option timeequal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date and (E) azero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds (or such other consideration)within the later of (i) five Business Days of the Holder’s election and (ii) the date of consummation of the Fundamental Transaction. The Company shallcause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of theobligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant towritten agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to suchFundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entityevidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares ofcapital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of thisWarrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which appliesthe exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to suchFundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for thepurpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which isreasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall beadded to the term “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction, each andevery provision of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to each of the Company and theSuccessor Entity or Successor Entities, jointly and severally), and the Successor Entity or Successor Entities, jointly and severally with the Company, mayexercise every right and power of the Company prior thereto and the Successor Entity or Successor Entities shall assume all of the obligations of theCompany prior thereto under this Warrant and the other Transaction Documents with the same effect as if the Company and such Successor Entity orSuccessor Entities, jointly and severally, had been named as the Company herein.e) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. Forpurposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the numberof shares of Common Stock (excluding treasury shares, if any) issued and outstanding.9f) Notice to Holder.i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, theCompany shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resultingadjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form)on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C)the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any sharesof capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection withany reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all orsubstantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into othersecurities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of theaffairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as itshall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective datehereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to beentitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification,consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expectedthat holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or otherproperty deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure todeliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to bespecified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, nonpublic informationregarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to aCurrent Report on Form 8K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of suchnotice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.10Section 4. Transfer of Warrant.a) Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and to theprovisions of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights) aretransferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a writtenassignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay anytransfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a newWarrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument ofassignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly becancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unlessthe Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of thedate on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordanceherewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company,together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent orattorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute anddeliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issuedon transfers or exchanges shall be dated the Issue Date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Sharesissuable pursuant thereto.c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “WarrantRegister”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as theabsolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to thecontrary.d) Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrantshall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue skylaws or (ii) eligible for resale without volume or mannerofsale restrictions or current public information requirements pursuant to Rule 144, the Companymay require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, comply with the provisions ofSection 5.7 of the Purchase Agreement.11e) Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon anyexercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling suchWarrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exemptedunder the Securities Act.Section 5. Miscellaneous.a) No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends orother rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Withoutlimiting the rights of a Holder to receive Warrant Shares on a “cashless exercise,” and to receive the cash payments contemplated pursuant to Sections 2(d)(i) and 2(d)(iv), in no event will the Company be required to net cash settle an exercise of this Warrant.a.In July 2019, the Company entered into a threeyear agreement with a consultant (“Consultant14”) to provide services to the Company includingassisting the Company to promote, market and sell the Company’s technology to potential customers. Pursuant to such agreement and in partialconsideration for such consulting services, the Company agreed to issue to Consultant14 options to purchase up to 107 shares of the Company’scommon stock upon execution of the agreement. The options are exercisable at $375.00 per share and shall vest in 3 equal instalments every twelvemonths starting July 2019. Unexercised options shall expire 4 years from the effective date.In addition, the Company agreed to issue to Consultant14 options to purchase up to 890 shares of the Company’s common stock upon executionof the agreement. The options are exercisable at $27.00 per share and shall vest in 4 equal instalments every six months starting September 2020.Unexercised options shall expire 5 years from the effective date.During 2022 and 2021, an amount of $7 and $14 respectively, were recorded by the Company as stockbased equity awards with respect to Consultant14.F24MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The Company’s outstanding options granted to consultants as of December 31, 2022 are as follows:Issuance dateOptions forCommon stockWeightedAverageexercise priceper shareOptionsexercisableExpirationdateFebruary 201815USD528.7515February 2023August 2018December 2018531USD352.38264August 2023 December 2023July 2020107USD375107July 2023SeptemberOctober 20201,488USD27.201,288October 2024 September 2025Total2,1411,674The Company uses the Black Scholes model to measure the fair value of the stock options with the assistance of a third party valuation.No stock options were granted during 2022 to consultants.The fair value of the Company’s stock options granted to nonemployees was calculated using the following weighted average assumptions:20222021GrantsGrantsDividend yield0%Expected volatility125.15%Riskfree interest0.16%Contractual term of up to (years)1.52F25MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Stock Option Plan for employeesIn March 2017, the Company adopted a stock option plan (the “Plan”) pursuant to which the Company’s Board of Directors may grant stock options toofficers and key employees. The total number of options which may be granted to directors, officers, employees under this plan, is limited to 289,000options. Stock options can be granted with an exercise price equal to or less than the stock’s fair market value at the date of grant.The fair value of each option award is estimated on the date of grant using the Binomial optionpricing model that used the weighted averageassumptions in the following table. The risk free rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the timeof grant.2022Grants2021GrantsDividend yield0%0%Expected volatility96.52%98.47%Riskfree interest4.06%0.96%expected life522.27In the years ended December 31, 2022 and 2021, 10,000 and 3,900 options, respectively, were granted.On December 7, 2022, the Company’s stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from230,800 shares to 289,000 shares.On September 29, 2022, the Compensation Committee of the Company approved grants of restricted share awards under the Company’s 2017 EquityIncentive Plan to Ronen Luzon (CEO), Or Kles (CFO), Billy Pardo (COO), Ilia Turchinsky (CTO) and Ezequiel Javier Brandwain (CCO), pursuant towhich were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000 restricted shares and 12,000 restricted shares,respectively. Each restricted share awarded under section 102 Capital Gain Restricted Stock Award Agreement (the “Agreement”). The restrictedshares shall vest in three equal installments on January 1, 2023, January 1, 2024 and January 1, 2025 for Ronen Luzon, Or Kles, Billy Pardo and IliaTurchinsky and on January 27, 2023, January 27, 2024 and January 27, 2025 for Ezequiel Javier Brandwain, conditioned upon continuous employmentwith the Company, and subject to accelerated vesting upon a change in control of the Company.On the same day, the Company granted fiveyears options to purchase up to 10,000 ordinary shares to other employees of the Company at an exerciseprice of $0.21 per share. The options vesting period is over three years in three equal portions from the vesting commencement date.F26MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The total stock option compensation expense in the year ended December 31, 2022 amounted to $448as follows: Research and development expensesamounted to $151, sales and marketing expenses amounted to $119and general and administrative expenses amounted to $178.The total stock option compensation expense in the year ended December 31, 2021 amounted to $252 as follows: Research and development expensesamounted to $94, sales and marketing expenses amounted to $97 and general and administrative expenses amounted to $61.As of December 31, 2022, there was a total of $530 unrecognized compensation cost relating to nonvested sharebased compensation arrangements.That cost is expected to be recognized over a weightedaverage period of 2.0 years.Share option activity during 2022 is as follows:2022Number ofoptionsWeightedaverageexerciseprice US$Outstanding as of January 135,74226.5Granted10,0005.25ExercisedExpired(4,136)Outstanding as of year end41,60622.48Vested as of year end33,20825.17Share option activity during 2021 is as follows:2021Number ofoptionsWeightedaverageExerciseprice US$Outstanding as of January 139,094$26.0Granted3,90032.0Exercised(751)Expired(6,501)Outstanding as of year end35,74226.5Vested as of year end27,06326.5F27MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 15 CONTINGENCIES AND COMMITMENTSa.On August 7, 2018, the Company commenced an action against North Empire LLC (“North Empire”) in the Supreme Court of the State of New York,County of New York for breach of a Securities Purchase Agreement (the “Agreement”) in which it is seeking damages in an amount to bedetermined at trial, but in no event less than $616. On August 2, 2018, North Empire filed a Summons with Notice against the Company, also in thesame Court, in which they allege damages in an amount of $11.4 million arising from an alleged breach of the Agreement. On September 6, 2018North Empire filed a Notice of Discontinuance of the action it had filed on August 2, 2018. On September 27, 2018, North Empire filed an answerand asserted counterclaims in the action commenced by the Company against them, alleging that the Company failed to deliver stock certificatesto North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against theCompany’s CEO and now former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018,the Company filed a reply to North Empire’s counterclaims. On November 15, 2018, the Company’s CEO and now former Chairman of the Boardfiled a motion to dismiss North Empire’s thirdparty complaint. On January 6, 2020, the Court granted the motion and dismissed the thirdpartycomplaint. Discovery has been completed and both parties have filed motions for summary judgment in connection with the claims andcounterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summary judgment, arguing there werefactual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision. The appealmust be fully perfected and filed by July 26, 2022. On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying theCompany’s motion for summary judgment. North Empire will file its opposition papers on or before March 31, 2022, and the Company will file replypapers on April 29, 2022. On or about September 12, 2022, the Court issued its Decision and Order denying the Company’s motion to reargue.North Empire filed its opposing brief on December 7, 2022. Both sides were given an opportunity to file a reply brief. The Company filed our replybrief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. The Appellate Court has scheduled oral argument for the appealfor February 7, 2023. Oral argument was held before the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Courtfiled its Decision and Order, which affirmed the lower court’s decisions regarding both My Size and North Empire’s motions for summary judgmentand sent the case back to the Supreme Court.On or about March 13, 2023, the Supreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date forthe mediation has not yet been set. The Company intends to vigorously defend any claims made by North Empire.The Company believes it is more likely than not that the counterclaims will be denied.b.In May 2021, the Company received notice from Custodian Ventures, LLC (“Custodian”) of its intention to nominate four candidates to stand forelection to our Board of Directors at the Company’s 2021 annual meeting of stockholders. Custodian subsequently made a book and recordsrequest and has made public statements calling for changes to our management.On September 22, 2021, Custodian commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v.MySize, Inc. (the “Delaware Action”). In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting.On October 19, 2021, the Company commenced an action in the United States District Court for the Southern District of New York againstCustodian, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, and certain rulespromulgated thereunder (the “SDNY Action”). The complaint sought, among other things, declaratory and injunctive relief related to defendants’efforts to nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed“group” for purposes of Section 13(d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. Inaddition, the complaint alleged that the defendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules inconnection with their efforts to elect a slate of directors to the Company’s Board of Directors. On October 20, 2021, the Court signed an ordergranting a hearing on an anticipated motion for a preliminary injunction and expedited scheduling and discovery in aid thereof, and scheduled thathearing for December 2, 2021.On November 4, 2021, the Company entered into the Settlement Agreement with the Lazar Parties. Pursuant to the Settlement Agreement, theCompany and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the SettlementAgreement, the Company agreed to reimburse Custodian for out of pocket expenses and in consideration for the dismissal and release of claimsagainst the Company an aggregate amount equal to $275, to be paid within three business days of the effective date of the Settlement Agreement.With respect to the Company’s 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) its May 12,2021 notice of stockholder nominations of four director candidates with respect to the Company’s 2021 annual meeting of stockholders, (ii) thenotice dated October 28, 2021 submitted by Custodian to the Company notifying the Company of Custodian’s continued intent to bring itsnomination of four director candidates before the Company’s stockholders at the 2021 annual meeting, and (iii) any and all related materials andnotices submitted to the Company in connection therewith or related thereto and to not take any further action in connection with the solicitationof any proxies in connection with the Company. Custodian also agreed to cease any and all solicitation and other activities in connection with the2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effectivedate of the Agreement (the “Standstill Period”). The Settlement Agreement also provides that during the Standstill Period, the Lazar Parties willvote all shares of common stock of the Company it beneficially owns in in accordance with any proposal or recommendation made by theCompany or the Board of Directors of the Company that is submitted to the stockholders of the Company, unless to do so would violateapplicable law and except with respect to certain extraordinary transactions. The Settlement Agreement also contains nondisparagement andconfidentiality provisions, subject to certain exceptions.On December 9, 2021, the Company subsequently entered into a Settlement Agreement (the “Ault Settlement Agreement”), with Milton C. Ault III,Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed towithdraw the SDNY Action against the Ault Parties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that actionagainst the Company. In addition, pursuant to the Settlement Agreement, the Company paid $70 to the Ault Parties in consideration for thereleases and other good and valuable consideration as set forth in the Ault Settlement Agreement.c.On July 5, 2021, the Company was served with a legal complaint filed by Fidelity Venture Capital Ltd. and Dror Atzmon in the Magistrate’s Court inTel Aviv for a monetary award in an amount of NIS 1,436,679 (approximately $450) and a declaratory relief. The plaintiffs allege that the Companybreached its contractual obligations to pay them for services allegedly rendered to the Company by the plaintiffs under a certain consultingagreement dated July 2, 2014, in an amount of NIS 819,000 (approximately $256). Additionally, the plaintiffs allege that the Company shouldcompensate them for losses allegedly incurred by them following their investment in the Company’s shares issued under a certain private offering.In the alternative, the plaintiffs move that the court will declare the investment agreement void with full restitution of plaintiffs’ original investmentin an amount of NIS 1,329,650(approximately $415). The Company filed its statement of defense on October 25, 2021. The first preliminary courthearing of the case is scheduled for January 23, 2022.The first court preliminary hearing was held on March 1, 2022.Following the first preliminary hearing and the Court’s comments and recommendation, the Plaintiffs filed a motion to strike out the claim withoutprejudice.On March 8, 2022 the Court ordered dismissal without prejudice of the claim.F28MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATIONAcquisition of OrgadOn February 7, 2022, the Company acquired 100% of the shares and voting interests in Orgad an omnichannel ecommerce platform. The acquisitionwas designed to create an additional revenue stream for the Company by becoming a direct ecommerce seller while leveraging the synergies betweenMySizeID and Orgad’s ecommerce platform.Unaudited proforma informationThe results of operations of Orgad have been included in the consolidated financial statements since the acquisition date of February 7, 2022. Orgadrevenues included in the Company’s consolidated statement of operations from February 7, 2022 through December 31, 2022 were $4,132. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,662 and $2,850 respectively, and the net loss after tax would have been $8,519 and $10,149 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash (*)300Issuance of shares of common stock (69,752 shares) (**)457Total consideration transferred757(*)The cash payment is subject to working capital adjustments.(**)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Orgad, on the twoyear and the threeyear anniversary of the closing, $350in each ofthese years provided that in the case of the second and third instalments certain revenue targets are met and subject further to certain downward postclosing adjustment. Furthermore, 69,752shares of common stock will be issued in eight equal quarterly instalments until the lapse of two years fromclosing. Additional earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023 will also be paid. All of these payments aresubject to the former owners being actively engaged with Orgad at the date such payment is due, and therefore were not taken as part of theconsideration for the business combination.During the year ended December 31, 2022 an amount of $456and $319was recorded in respect of the cash instalments and in respect of stocksissuance, respectively in Cost Of Goods, Sales and Marketing and General and Administrative expenses as shown in the following table:2022Stockbased compensation expense – Cost of goods194Stockbased compensation expense Sales and marketing271Stockbased compensation expense General and administrative310775(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the preliminary estimates of their fair values, which were determined using generally accepted valuation techniques based onestimates and assumptions made by management at the time of the acquisition. Such estimates are subject to change during the measurement periodwhich is not expected to exceed one year. The purchase price allocation was not finalized duo to examination of the net working capital of Orgad at theacquisition date. Any adjustments to the preliminary purchase price allocation identified during the measurement period will be recognized in theperiod in which the adjustments are determined.The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and Cash EquivalentTrade receivables364PP&E55Inventory864Longterm financial investment31Selling platform378Goodwill152Shortterm accruals and deferrals(181)Trade payables(668)Long term provision(13)Longterm debt(138)Deferred Taxes(87)Total net assets acquired757F29MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)(c)Acquisitionrelated costsThe Company incurred transaction costs of approximately $40and none during twelvemonth period ended December 31, 2022 which were included ingeneral and administrative expenses in the consolidated statements of income (loss).Acquisition of Naiz Bespoke Technologies, S.L. (“Naiz”)On October 11, 2022, the Company acquired 100% of the shares and voting interests in Naiz a provider of SaaS technology solutions that solve sizeand fit issues for fashion ecommerce companies. The acquisition was designed to allow Naiz’s customers benefit from MySize’s deep understanding ofthe fashion ecommerce retail landscape, while creating an additional revenue stream for the Company.Unaudited proforma informationThe results of operations of Naiz have been included in the consolidated financial statements since the acquisition date of October 11, 2022. Naizrevenues included in the Company’s consolidated statement of operations from October 11, 2022 through December 31, 2022 were $103. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,738 and $379 respectively and the net loss after tax would have been $8,695 and $10,717 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash503Issuance of shares of common stock (240,000 shares) (*)1,008Total consideration transferred1,511(*)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Naiz, additional cash consideration (up to $1,550) in four instalments subject to thefollowing conditions:(i)Continuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result ofa Good Reason; and(ii)Naiz’s Revenues reaching or exceeding the respective Target Revenues defined in the agreement. The revenues will be calculated in four periods:(1) January 1, 2022 – December 31, 2022; (2) January 1, 2023 – June 30, 2023; (3) July 1, 2023 – December 31, 2023; (4) January 1, 2024 – December31, 2024.Former owners of Naiz are entitled to additional cash consideration following December 31, 2025 (up to $1,650) in an event when the actual value of theequity consideration is less than $1,650, subject to completion of a Target Revenue for the period of January 1, 2025 – December 31, 2025 andcontinuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result of aGood Reason;F30MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)During the year ended December 31, 2022 an amount of $283 was recorded in respect of the additional cash consideration.(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the estimates of their fair values, which were determined using generally accepted valuation techniques based on estimates andassumptions made by management at the time of the acquisition.The following table summarizes the fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and cash equivalent36Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Total net assets acquired1,511(c)Acquisitionrelated costsDuring 2022, the Company incurred transaction costs of approximately $75 which were included in general and administrative expenses in theconsolidated statements of income (loss).F31MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)Note 17 – Operating SegmentsDuring the year ended December 31, 2021, the Company had one reportable segment. As a result of the business combinations in the reporting period(see note 13), the Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificialintelligence driven measurement solutions and (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions and. The fashionand equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. Orgad has onecustomer that is responsible for 37.9% of the Company consolidated revenues. The SaaS based innovative artificial intelligence driven measurementsolutions, or SaaS Solutions operating segment consists of My Size Inc and My Size Israel and My Size LLC.Information related to the operations of the Company’s reportable operating segments is set forth below:Fashion andequipment ecommerce platformSaaSSolutionsNaizTotalAs of the year ended December 31, 2022Revenues from external customers4,1322241034,459Operating (loss) income(591)(7,181)(338)(8,110)Financial income (expense), net(236)Net loss before tax(8,346)Fashion andequipment ecommerce platformSaasSolutionNaizAs of December 31, 2022:Assets2,0225,9661,691Amortization of intangible assets(114)(34)(46)The Company elected to present geographic information in respect with revenues generated from external customers based on the location of the selling entity:All the revenues of the fashion and equipment ecommerce platform segment are generated by Orgad, located in Israel.All the revenues of the Naiz segment are generated by Naiz, located in Spain.The revenues of the Saas Solutions segment are generated by My Size Ltd. located in Israel (approximately 75% of the segment revenues) and by My Size Inc.located in the U.S. (approximately 25% of the segment revenues).NOTE 18 SALES AND MARKETINGYear endedDecember 31,20222021Salaries836574Consultants and subcontractors5831,086Marketing481283Selling fees489Share based payments post Orgad acquisition (*)271Share based payments for consultants and employees127180Travel21142Other1451713,1432,336(*) See note 16.NOTE 19 GENERAL AND ADMINISTRATIVE EXPENSESYear endedDecember 31,20222021Salaries1,007461Professional services7051,832Share based payments for consultants, directors and employees18098Rent, office expenses and communication442372Insurance564627cash liability and equity liability expenses related to Orgad acquisition310cash liability expenses related to Naiz acquisition217Settlement fees (*)345Directors8259Other3933303,9004,124(*)See note 15(b)F32MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 20 FINANCIAL INCOME (EXPENSE), NETA.Financial incomeYear endedDecember 31,20222021Revaluation investment in marketable securities49Other26172666B.Financial expenseYear endedDecember 31,20222021Exchange rate differences33Revaluation of loan granted100Revaluation investment in marketable securities62Other6792629NOTE 21 EVENTS SUBSEQUENT TO THE BALANCE SHEET DATEa.On January 2, 2023, Orgad experienced a fire at its warehouse in Israel. The Company is not aware of any casualties or injuries associated with thefire. The Company shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450.The Company believes that this incident did not affect the future sales results of Orgad for the year 2023. The inventory was not insured and it istoo early to determine the potential impact of this incident on the other parties that were involved in the incident (lessor and others that leasedproperties near the warehouse).b.On January 10, 2023, the Company entered into a securities purchase agreement pursuant to which the Company sold an aggregate of 162,000ofthe Company’s shares of common stock and prefunded warrants to purchase up to 278,899shares of common stock and, in a concurrent privateplacement, unregistered warrants to purchase up to883,798 shares of common stock, consisting of Series A warrants to purchase up to 441,899shares of common stock and Series B warrants to purchase up to 441,899shares of common stock, at an offering price of $3.055per share ofcommon stock and associated Series A and Series B warrants and an offering price of $3.054per prefunded warrant and associated Series A andSeries B warrants.In addition, the Company entered into a securities purchase agreement pursuant to which the Company agreed to sell and issue in a privateplacement an aggregate of up to 540,098 unregistered prefunded warrants and unregistered warrants to purchase up to an aggregate of 1,080,196shares of common stock, consisting of Series A warrants to purchase up to 540,098 shares of common stock and Series B warrants to purchase upto 540,098 shares of common stock at an offering price of $3.054 per prefunded warrant and associated Series A and Series B warrants.As of March 31,2023 all the pre funded warrants were exercised by the investor.F33ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSUREThere were no disagreements with accountants on accounting and financial disclosure of a type described in Item 304 (a)(1)(iv) or any reportable event asdescribed in Item 304 (a)(1)(v) of Regulation SK.ITEM 9A. CONTROLS AND PROCEDURESDisclosure ControlsWe carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief FinancialOfficer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) as of December 31, 2022. Basedupon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this Annual Report on Form10K, our disclosure controls and procedures were effective to ensure that information required to be disclosed in reports filed under the Exchange Act, as amended,is recorded, processed, summarized and reported within the required time periods specified in the SEC’s rules and forms and is accumulated and communicated toour management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.Management’s Report on Internal Control Over Financial ReportingOur internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records, that, in reasonable detail,accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only inaccordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition, use or disposition of our assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance withthe policies or procedures may deteriorate.Our management, including our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financialreporting at December 31, 2022. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the TreadwayCommission (COSO) in Internal Control—Integrated Framework (2013). Based on that assessment under those criteria, management has determined that, as ofDecember 31, 2022, our internal control over financial reporting was effective.This Annual Report on Form 10K does not include an attestation report of our registered public accounting firm regarding internal control over financialreporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to the exemption provided to issuersthat are not “large accelerated filers” nor “accelerated filers” under the DoddFrank Wall Street Reform and Consumer Protection Act.Changes in Internal Control Over Financial ReportingDuring the year ended December 31, 2022, we made two acquisitions, as discussed in Note 1a and Note 16 of the audited consolidated financial statementsfor the year ended December 31, 2022 included in this Annual Report on Form 10K. As a result, we made additions and/or modifications to policies, procedures,systems and controls that have materially affected our internal control over financial reporting from the acquisitions, including new controls for consolidationprocess that relates to accounting policies and procedures, operational processes and documentation practices. Management excluded the acquired businessesfrom management’s report on internal control over financial reporting. ITEM 9B. OTHER INFORMATIONNone.ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNot applicable.51PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe following table sets forth the name, age and positions of our executive officers and directors.NAMEAgePOSITIONRonen Luzon52Chief Executive Officer and Class III DirectorOr Kles40Chief Financial OfficerBilly Pardo47Chief Operating Officer and Chief Product OfficerIlia Turchinsky35Chief Technology OfficerEzequiel Javier Brandwain53Chief Commercial OfficerOron Branitzky (1)(2)(3)*63Class II DirectorOren Elmaliah (1)(2)(3)*38Class I DirectorArik Kaufman (1)(2)(3)*41Class I DirectorGuy Zimmerman*53Class II Director(1)Member of our audit committee(2)Member of our nominating and corporate governance committee(3)Member of our compensation committee* Independent as that term is defined by the rules of the Nasdaq Stock Market.The business background and certain other information about our directors and executive officers is set forth below:Ronen Luzon has served as our Chief Executive Officer and a member of our board of directors since September 2013. Since 2006, Mr. Luzon hasadditionally served as Chief Executive Officer and founder of Malers Ltd., a company in the global security solutions market which provides technological solutionsfor integrated communication infrastructures, security and control systems. Prior to Malers, he held several senior marketing, sales management and professionalservices positions in a variety of international high tech companies including VP marketing of GA Tech and Professional Services Manager of Eldat Communication.Mr. Luzon graduated from Middlesex University in London with a B.S. in IT and Business Information Systems. We believe that Mr. Luzon is qualified to serve as amember of our board of directors because of his more than 20 years of experience in the technology sector.Or Kles has served as our Chief Financial Officer since May 2016. He is a certified public accountant with a broad, diverse financial background. From May2013 until April 2016 he served as Assistant Controller of Shikun and BinuiSolel Boneh Infrastructure Ltd. and from December 2010 until May 2013 he served as anAssociate at KPMG. Mr. Kles holds an MBA and a B.A. in Business Management and Accounting (specializing in financing) from The College of ManagementAcademic Studies. Mr. Kles is a certified public accountant in Israel.Billy Pardo has served as our Chief Product Officer since May 2014 and Chief Operating Officer since April 2019. From April 2010 until August 2013, Ms.Pardo served as Senior Director of Product Management of Fourier Education. Among her areas of expertise are launching products from concept to successfuldelivery in various methodologies, including Fourier Education’s awardwinning einstein™ Science Tablet. Prior to that Ms. Pardo served in various productmanagement positions including, Project Manager of Time to Know, Product Marketing Manager of RiT Technologies, Product Manager of Pricer AB and R&DTeam Leader at Pricer AB. Ms. Pardo previously served as Software Engineer at Eldat Communication Ltd., and QA Engineer at NICE Systems. Ms. Pardo receivedan MBA from The Interdisciplinary Center and a B.A. in Computer Science from The Academic College of TelAvivYaffo.Ilia Turchinsky has served as our Chief Technology Officer since April 2019 and from July 2018 until April 2019 as our Director of Technology. Prior tojoining us, from 2013 until 2018, Mr. Turchinsky served in various roles, most recently Chief Technology Officer, at MonkeyTech Ltd., a company that providesdesign, development and characterization of mobile applications. Prior to that, Mr. Turchinsky served in various roles including development course instructor atIQLine, was a founder of Arnavsoft and was a software developer for MintLab and a political party. Mr. Turchinsky holds a B.Sc. from the Ben Gurion University inComputer Science and an M.Sc. from the Open University of Israel in Computer Science.52Ezequiel Javier Brandwain has served as our Chief Commercial Officer since February 2022. Mr. Brandwain brings more than two decades of globalexperience in retail and the fashion industry, mainly in business development, operations, and international markets. Before joining the Company, Mr. Brandwainheld positions of increasing responsibility at several companies, including between June 2017 and November 2020, at 7 For All Mankind International, where heserved as Director, Latin America and Caribbean, managing business development and operations across Latin America and the Caribbean. Before that, betweenMay 2016 and June 2017, Mr. Brandwain served as Chief Business Development Officer at Replay – Fashion Box SPA, where he oversaw business development andoperations, expansion and control in the Americas, the Caribbean, and NorthEast Asia. Prior this role, between September 2015 and May 2016, he served as theReplay’s Managing Director in Latin America and the Caribbean, leading the company’s international expansion in these regions. Prior to that, between April 2015and September 2015, Mr. Brandwain served as Managing Director, Latin America and Caribbean at Authentic Brands Group LLC, where he led that company’soperations, business developments and international expansion within these regions, and served as the direct liaison with the company’s headquarters in New York.Prior to that, between April 2015 and September 2015, Mr. Brandwain served as Chief Operating Officer, Latin America and Caribbean at Flemingo International Ltd.,overseeing operations, as well as projected operations in the travel retail field across these regions. Prior to that, between December 2010 and February 2014, Mr.Brandwain served as Regional Director, Southern Hemisphere at Calvin Klein, where he was responsible for defining and implementing the operational andcommercial strategy for Southern Hemisphere, as well as overseeing the retail, travel retail, concession, and wholesale businesses of the company. During his tenureat Calvin Klein, Mr. Brandwain also served as Travel Retail Director, Latin America, where he built the travel retail business and developed operations. Prior to that,between July 2010 and November 2010, Mr. Brandwain served as Business Director, Latin America and Caribbean at Givenchy Latin America, and between January2010 and June 2010 he served as Commercial Director, Latin America and Caribbean at Nautica Latin America. During December 2004 and December 2009, Mr.Brandwain served as Vice President, International Business Development at Report Collection/Modextil, Inc., where he was in charge of business and operationalexpansion, global growth, and brand extensions. Prior to that, between 2003 and October 2004, Mr. Brandwain served as General Manager at Andrew KoenigInternational, Inc. Between September 2019 and November 2020, Mr. Brandwain served as a member of the Board of Directors of 7 For All Mankind BrazilImportacao, Comercio E Distribuicao S.A. Mr. Brandwain earned a Bachelor degree in architecture from the University of the Republic (Uruguay).Oron Branitzky has served as a member of our board of directors since March 2017. Mr. Barnitzky has vast experience in retail technology. SinceNovember 2017, Mr. Branitzky has served as Global Retail Business Development at Superup, and from January 2007 until December 2014 he served as VicePresident of Sales and Marketing at Pricer AB. Prior to that, Mr. Branitzky has served as VP Marketing and Sales at Eldat Communication and Sarin TechnologiesLtd. Since January 2015, Mr. Branitzky has served as chairman of the board of directors of WiseShelf Ltd. and from May 2015 until March 2016, Mr. Branitzky servedas an advisory board member of ciValue. Mr. Branitzky received a B.S. from the Hebrew University of Jerusalem and an MBA in International Marketing from TelAviv University. We believe that Mr. Branitzky is qualified to serve as a member of our board of directors because of his more than 20 years of experience inmanaging the sales of hitech solutions to retailers across the globe.Oren Elmaliah, has served as a member of our board of directors since May 2017. In September 2015, Oren Elmaliah founded Accounting Team IL and hasacted as Account Manager since then. Accounting Team IL is a financial consultancy and service provider to public companies traded in Israel and abroad. SinceFebruary 2017, Mr. Elmaliah has served as controller of Enlivex Therapeutics Ltd., and since January 2017 he has served as Chief Financial Officer of Presstek Israel.In addition, since September 2015, Mr. Elmaliah has served as an Israel Authorities Reporting Officer of LG Electronics Israel and since September 2015 he hasserved as Local Financial Report Consultant of Chiasma. From July 2011 until August 2015, Mr. Elmaliah served as CPA, Financial Director of CFO Director Ltd andfrom June 2010 until July 2011 he served as Risk Management Consultant of RSM International Limited. Mr. Elmaliah holds a B.A. in Accounting/Economics and aMsc. in Finance/Accounting from Tel Aviv University, Israel. He is a licensed Certified Public Accountant in Israel. We believe that Mr. Elmaliah is qualified to serveas a member of our board of directors because of his vast finance experience and public company management and administration in the fields of finance,accounting, and financial regulation.53Arik Kaufman has served as a member of our board of directors since June 2017. Mr. Kaufman is an attorney specializing in the fields of commercial law,corporate law and capital markets and since 2016 runs his own law office in Israel. He has vast experience in the fields of financial reporting and financial regulation.Mr. Kaufman serves as the Chief Executive Officer of Steakholder Foods since January 2022. From September 2017 until January 2022, Mr. Kaufman served as VPBusiness Development of Mor Research Applications. Mr. Kaufman holds an LLB in Law from the Interdisciplinary Center, Herzliya, and is admitted to the IsraeliBar. We believe that Mr. Kaufman is qualified to serve as a member of our board of directors based upon his experience of assisting with the completion of numerousventure capital financings, mergers, acquisitions, and strategic relationships. In addition, he has served as a member of the board of various publicly tradedcompanies, including companies that operate in the same industry as us.Guy Zimmerman has served as a member of our board of directors since August 2021. Previously, Mr. Zimmerman served as Founder and CEO ofManuFuture, an online b2b engineering market place, since February 2021. Prior to that from 2017 to 2021, Mr. Zimmerman acted as a consultant to severaltechnology startups and was a founding partner of a business travel online platform. From 2013 to 2017, Mr. Zimmerman served as EVP of Marketing and BusinessDevelopment of Kornit Digital and was part of the IPO leadership. Prior to that, Mr. Zimmerman served as VP of Global Sales and Business Development at TefronLtd., a provider of seamless garment technology, where he led the $100m sales and sales support organization serving global retail and fashion brands. Prior to thathe served as Vice President of Strategy and Business Development at Tnuva Group, Israel’s largest food manufacturer and spent eight years at McKinsey &Company. Mr. Zimmerman previously led a software startup in the field of operational healthcare management systems. Mr. Zimmerman holds a B.Sc. in IndustrialEngineering from Tel Aviv University in Israel. We believe that Mr. Zimmerman is qualified to serve as a member of our board of directors because of his experiencein business development in the technology and retail sectors.Board Diversity MatrixThe table below provides certain information regarding the diversity of our board of directors as of the date of this annual report.Board Diversity Matrix (As of March 31, 2023)Total Number of Directors5FemaleMaleNonBinaryDid Not DiscloseGenderPart I: Gender IdentityDirectors#5##Part II: Demographic BackgroundAfrican American or Black####Alaskan Native or Native American####Asian####Hispanic or Latinx####Native Hawaiian or Pacific Islander####White#1##Two or More Races or Ethnicities#2##LGBTQ+0Did Not Disclose Demographic Background2Family RelationshipsRonen Luzon, the Chief Executive Officer and a member of our board of directors, and Billy Pardo, the Chief Product Officer and Chief Operating Officer, arehusband and wife. There are no other family relationships among any of our current or former directors or executive officers.Involvement in Certain Legal ProceedingsWe are not aware of any of our directors or officers being involved in any legal proceedings in the past ten years relating to any matters in bankruptcy,insolvency, criminal proceedings (other than traffic and other minor offenses), or being subject to any of the items set forth under Item 401(f) of Regulation SK.Arrangements between Officers and DirectorsTo our knowledge, there is no arrangement or understanding between any of our officers and any other person, including directors, pursuant to which theofficer was selected to serve as an officer.Board of DirectorsThere are no agreements with respect to the election of directors.On January 6, 2022, we filed with the Secretary of State of Delaware a Certificate of Amendment to our Amended and Restated Certificate of Incorporationproviding for a classified Board. Following filing of the Certificate of Amendment, members of our board are now classified into three classes with staggered threeyear terms (with the exception of the expiration of the initial Class I and Class II directors), as follows:●Class I, comprised of two directors, initially Arik Kaufman and Oren Elmaliah (with their initial terms expiring at our 2022 annual meeting of stockholders andmembers of such class serving successive threeyear terms);●Class II, comprised of two directors, initially Oron Branitzky and Guy Zimmerman (with their initial terms expiring at our 2023 annual meeting of stockholdersand members of such class serving successive threeyear terms); and●Class III, comprised of one director, initially Ronen Luzon (with his initial term expiring at our 2024 annual meeting of stockholders and members of suchclass serving successive threeyear terms).54To preserve the classified Board structure, a director elected by the Board of Directors to fill a vacancy holds office until the next election of the class forwhich such director has been chosen, and until that director’s successor has been elected and qualified or until his or her earlier death, resignation, retirement orremoval.Our board of directors has reviewed the materiality of any relationship that each of our directors has with us, either directly or indirectly. Based upon thisreview, we believe that Arik Kaufman, Oren Elmaliach, Oron Branitzky and Guy Zimmerman qualify as independent directors in accordance with the standards set bythe Nasdaq and Rule 10A3 promulgated under the Exchange Act.Committees of the BoardAudit CommitteeOur audit committee is comprised of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Elmaliah serves as chairman of the audit committee. The auditcommittee is responsible for retaining and overseeing our independent registered public accounting firm, approving the services performed by our independentregistered public accounting firm and reviewing our annual financial statements, accounting policies and our system of internal controls. The audit committee actsunder a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the audit committee’s composition and meetings.The audit committee charter is available on our website www.mysizeid.com.The Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by applicable SEC rules. Inaddition, the Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by the rules of the Nasdaq StockMarket.The Board of Directors has determined that Oren Elmaliah is an “audit committee financial expert” serving on its audit committee, and is independent, as theSEC has defined that term in Item 407 of Regulation SK.Compensation CommitteeOur compensation committee consists of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Branitzky serves as chairman of the compensationcommittee.The compensation committee’s roles and responsibilities include making recommendations to the Board of Directors regarding the compensation for ourexecutives, the role and performance of our executive officers, and appropriate compensation levels for our CEO, which are determined without the CEO present, andother executives. Our compensation committee also administers our 2017 Equity Incentive Plan and our 2017 Consultant Equity Incentive Plan. The compensationcommittee acts under a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the compensation committee’scomposition and meetings. The compensation committee charter is available on our website www.mysizeid.com.Our Board of Directors has determined that all of the members of the compensation committee are “independent” as that term is defined by the rules of theNasdaq Stock Market.Nominating and Corporate Governance CommitteeThe members of the nominating and corporate governance committee are Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Kaufman serves aschairman of the corporate governance and nominations committee. The nominating and corporate governance committee acts under a written charter, which morespecifically sets forth its responsibilities and duties, as well as requirements for the nominating and corporate governance committee’s composition and meetings.The nominating and corporate governance committee charter is available on our website www.mysizeid.com.The nominating and corporate governance committee develops, recommends and oversees implementation of corporate governance principles for us andconsiders recommendations for director nominees. The nominating and corporate governance committee also considers stockholder recommendations for directornominees that are properly received in accordance with applicable rules and regulations of the SEC. Our stockholders that wish to nominate a director for election tothe Board of Directors should follow the procedures set forth in our bylaws.55The nominating and corporate governance committee will consider persons identified by its members, management, stockholders, investment bankers andothers. The guidelines for selecting nominees, which are specified in the nominating committee charter, generally provide that persons to be nominated:●should be accomplished in his or her field and have a reputation, both personal and professional, that is consistent with our image and reputation;●should have relevant experience and expertise and would be able to provide insights and practical wisdom based upon that experience and expertise; and●should be of high moral and ethical character and would be willing to apply sound, objective and independent business judgment, and to assume broadfiduciary responsibility.The nominating and corporate governance committee will consider a number of qualifications relating to management and leadership experience,background and integrity and professionalism in evaluating a person’s candidacy for membership on the Board of Directors. The nominating and corporategovernance committee may require certain skills or attributes, such as financial or accounting experience, to meet specific Board needs that arise from time to timeand will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of Board of Directors members. The nominating andcorporate governance committee will not distinguish among nominees recommended by stockholders and other persons.Our Board of Directors has determined that all of the members of the nominating and corporate governance committee are “independent” as that term isdefined by the rules of the Nasdaq Stock Market.Code of Conduct and EthicsWe have a Code of Business Conduct and Ethics that applies to all our employees. The text of the Code of Business Conduct and Ethics is publiclyavailable on our website at www.mysizeid.com. Information contained on, or that can be accessed through, our website does not constitute a part of this report andis not incorporated by reference herein. Disclosure regarding any amendments to, or waivers from, provisions of the code of conduct and ethics that apply to ourdirectors, principal executive and financial officers will be posted on the “InvestorsCorporate Governance” section of our website at www.mysizeid.com or will beincluded in a Current Report on Form 8K, which we will file within four business days following the date of the amendment or waiver.Change in Procedures for Recommending DirectorsThere have been no material changes to the procedures by which our stockholders may recommend nominees to our Board of Directors from thoseprocedures set forth in our Proxy Statement for our 2021 Annual Meeting of Stockholders, filed with the SEC on December 7, 2022.56ITEM 11. EXECUTIVE COMPENSATIONSummary Compensation TableThe following sets forth the compensation paid by us to our named executive officers, during the years ended December 31, 2022 and December 31, 2021.Name and Principal PositionYearSalary($) (1)Bonus($)StockAwards($)OptionAwards($) (2)All OtherCompensation($)Total($)Ronen Luzon2022173,000223,0008,000126,000530,000Chief Executive Officer2021194,0005,00023,00097,000319,000Or Kles2022123,00053,0007,00071,000254,000Chief Financial Officer2021123,0008,00030,00061,000222,000Billy Pardo2022134,00053,0007,000100,00294,000Chief Operating Officer2021162,0007,00018,00074,000261,000(1) Salary for the years 2022 and 2021 are based on average US$/NIS representative exchange rates of NIS 3.358 and NIS 3.11 respectively.(2) Amounts in this column represent the grant date fair value of options granted to the named executive officers during 2022 and 2021, computed in accordance withFASB ASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the named executive officers. The assumptionsmade in valuing the options reported in this column are discussed in Note 11 to our audited financial statements for the year ended December 31, 2021 and Note 4 toour condensed consolidated interim financial statements for the quarterly period ended September 30, 2022.All Other Compensation TableThe “All Other Compensation” amounts set forth in the Summary Compensation Table above consist of the following:NameYearAutomobileRelatedExpenses($)Manager’sInsurance*($)EducationFund*($)Othersocialbenefits**($)Total($)Ronen Luzon202232,00031,00015,00048,000126,000202133,00033,00015,00016,00097,000Or Kles202215,00021,00010,00025,00071,000202114,00019,0009,00019,00061,000Billy Pardo202216,00025,00013,00046,000100,000202117,00024,00012,00021,00074,000* Manager’s insurance and education funds are customary benefits provided to employees based in Israel. Manager’s insurance is a combination of severancesavings (in accordance with Israeli law), defined contribution taxqualified pension savings and disability insurance premiums. An education fund is a savings fundof pretax contributions to be used after a specified period of time for educational or other permitted purposes.** Other social benefits for 2022 and 2021 for all named individuals includes tax payments in respect of social benefits.57Agreements with Named Executive OfficersRonen LuzonOn November 18, 2018, My Size Israel, our wholly owned subsidiary, entered into an employment agreement with Ronen Luzon, or the Luzon EmploymentAgreement, pursuant to which Mr. Luzon will serve as our Chief Executive Officer. Pursuant to the terms of the Luzon Employment Agreement, Mr. Luzon receivesNIS 55,000 per month as his base salary and shall be eligible to receive such bonus as determined by us. In addition, Mr. Luzon shall be entitled social benefits andto other benefits, including, but not limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, includinginsurance in case of disability, annual vacation days, sick leave and expense reimbursement. Pursuant to the terms of the Luzon Employment Agreement and subjectto certain conditions, payments made by the Company to the pension fund or manager’s insurance fund shall be made in lieu of severance payments due to Mr.Luzon. The term of the Luzon Employment Agreement shall be effective as of September 1, 2018 and shall continue until such time either party provides writtennotice to the other party at least 75 days in advance of the termination of such agreement. We may also terminate Mr. Luzon’s employment without prior writtennotice (or payment in lieu of such notice) for Cause (as defined in the Luzon Employment Agreement).Or KlesOn November 18, 2018, My Size Israel entered into an employment agreement with Or Kles, or the Kles Employment Agreement, pursuant to which Mr. Kleswill serve as our Chief Financial Officer. Pursuant to the terms of the Kles Employment Agreement, Mr. Kles receives NIS 38,000 per month as his base salary andshall be eligible to receive such bonus as determined by us. In addition, Mr. Kles shall be entitled to social benefits and other benefits, including, but not limited to,contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annual vacation days,sick leave and expense reimbursement. Pursuant to the terms of the Kles Employment Agreement and subject to certain conditions, payments made by us to thepension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Mr. Kles. The term of the Kles Employment Agreement shall beeffective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days in advance of thetermination of such agreement. We may also terminate Mr. Kles’s employment without prior written notice (or payment in lieu of such notice) for Cause (as defined inthe Kles Employment Agreement).Billy PardoOn November 18, 2018, My Size Israel entered into an employment agreement with Billy Pardo, or the Pardo Employment Agreement, pursuant to which Ms.Pardo will serve as our Chief Product Officer. Pursuant to the terms of the Pardo Employment Agreement, Ms. Pardo receives NIS 47,500 per month as her basesalary and shall be eligible to receive such bonus as determined by us. In addition, Ms. Pardo shall be entitled to social benefits and other benefits, including, butnot limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annualvacation days, sick leave and expense reimbursement. Pursuant to the terms of the Pardo Employment Agreement and subject to certain conditions, payments madeby us to the pension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Ms. Pardo. The term of the Pardo EmploymentAgreement shall be effective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days inadvance of the termination of such agreement. We may also terminate Ms. Pardo’s employment without prior written notice (or payment in lieu of such notice) forCause (as defined in the Pardo Employment Agreement).58Outstanding Equity Awards at Fiscal YearEndThe following table provides information regarding options held by each of our named executive officers that were outstanding as of December 31, 2022.Option AwardsStock AwardsName and Principal PositionNumber ofSecuritiesUnderlyingUnexercisedOptionsExercisableNumber ofSecuritiesUnderlyingUnexercisedOptionsUnexercisableOptionExercisePriceOptionExpirationDateEquityincentiveplan awards:Number ofUnearnedShares that HaveNot VestedEquityincentiveplan awards:Market Value ofUnearnedShares, That Have Not VestedRonen Luzon Chief Executive Officer400(1)$26(8)7/24/20231,601(2)$26(8)5/29/20256,400(3)$268/10/2025100,000(9)100,000$511,250Or Kles – Chief Financial Officer227(4)$26(8)7/24/2023427(5)$26(8)5/29/20255,200(6)$268/10/202524,000(10)24,000$122,700Billy Pardo Chief Operating Officer400(1)$26(8)7/24/2023894(7)$26(8)5/29/20255,200(6)$268/10/202524,000(11)24,000$122,700(1) The option has a grant date of July 24, 2017 and vested in full on January 24, 2018.(2) The option has a grant date of May 29, 2019. 267 options vested immediately upon grant, 445 options vested on January 24, 2019, 445 options vested on January24, 2020 and 444 options vested on January 24, 2021.(3) The option has a grant date of October 8, 2020, 1,600 options vested on November 26, 2020, 1,600 options vested on May 26, 2021, 1,600 options vested onNovember 26, 2021, and 1,600 options vested on May 26, 2022.(4) The option has a grant date of July 24, 2017. 76 options vested immediately upon grant, 76 options vested on May 1, 2018 and 75 options vested on May 1, 2019.(5) The option has a grant date of May 29, 2019. 160 options vested immediately upon grant, 445 options vested on May 1, 2020, 445 options vested on May 21, 2021and 444 options vested on May 1, 2022.(6) The option has a grant date of October 8, 2020, 1,300 options vested on November 26, 2020, 1,300 options vested on May 26, 2021, 1,300 options vested onNovember 26, 2021, and 1,300 options vested on May 26, 2022.(7) The option has a grant date of May 29, 2019. 214 options vested immediately upon grant, 227 options vested on January 24, 2019, 227 options vested on January24, 2020 and 226 options vested on January 24, 2021.(8) On May 25, 2020, the compensation committee of the Board of Directors of the Company reduced the exercise price of outstanding options of employees anddirectors of the Company for the purchase of an aggregate of 5,610 shares of common stock of the Company (with exercise prices ranging between $453.75 and$228.75) to $26 per share, which was the closing price for the Company’s common stock on May 22, 2020, and extended the term of the foregoing options for anadditional one year from the original date of expiration.(9) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(10) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(11) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.59Director CompensationThe following table sets forth compensation information for our nonemployee directors for the year ended December 31, 2022.NameFees earned orpaid incash ($)(1)Optionawards($)(1)(2)Total($)Oren Elmalih15,078 15,078Oron Barnitzky15,34715,347Arik Kaufman14,44114,441Guy Zimmerman13,03313,033(1)Fees for the year 2022 are based on average US$/NIS representative exchange rates of NIS 3.519.(2)Amounts in this column represent the grant date fair value of options granted to the nonemployee directors during 2022 computed in accordance with FASBASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the nonemployee directors. The assumptions made invaluing the options reported in this column are discussed in Note 11 to our financial statements for the year ended December 31, 2022.We compensate our nonemployee directors for their service as a member of our board. Mr. Luzon received no separate compensation for board service. Mr.Luzon’s compensation is set forth above in the Summary Compensation Table.Each nonemployee director is entitled to receive a per meeting fee of $318. Nonemployee directors are also reimbursed for their travel and reasonable outofpocket expenses incurred in connection with attending board and committee meetings, to the extent that attendance is required by the board or the committee(s)on which that director serves.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurity Ownership of Certain Beneficial Holders and ManagementThe following table sets forth certain information regarding beneficial ownership of shares of our common stock as of March 31, 2023 by (i) each personknown to beneficially own more than 5% of our outstanding common stock, (ii) each of our directors, (iii) each of our executive officers, and (iv) all of our directorsand executive officers as a group. Except as otherwise indicated, the persons named in the table below have sole voting and investment power with respect to allshares beneficially owned, subject to community property laws, where applicable.Beneficial Owner(1)Shares ofCommon StockBeneficiallyOwnedPercentage(2)Executive officers and directors:Ronen Luzon143,578(3)5.8%Or Kles29,854(4)1.2%Billy Pardo143,578(5)5.8%Ezequiel Javier Brandwain12,000(6)*Ilia Turchinsky18,313(7)*Arik Kaufman1,294(8)*Oren Elmaliah1,294(9)*Oron Branitzky1,294(10)*Guy ZimmermanAll Executive Officers and Directors as a Group (9 persons)207,6268.4%*Less than 1%(1) The address of each person is c/o My Size, Inc., 4 HaYarden St., P.O.B. 1026, Airport City, Israel 7010000 unless otherwise indicated herein.60(2) The calculation in this column is based upon 2,446,780 shares of common stock outstanding on March 31, 2023. Beneficial ownership is determined in accordancewith the rules of the SEC and generally includes voting or investment power with respect to the subject securities. Shares of common stock that are currentlyexercisable or exercisable within 60 days of March 31, 2023 are deemed to be beneficially owned by the person holding such securities for the purpose of computingthe percentage beneficial ownership of such person, but are not treated as outstanding for the purpose of computing the percentage beneficial ownership of anyother person(3) Consists of (i) 100,000 shares of restricted stock granted under the 2017 Plan, (ii) 4,683 shares of common stock, (iii) options to purchase up to 8,401 shares of ourcommon stock, and (iv) 24,000 shares of restricted stock and options to purchase up to 6,494 shares of our common stock which are held by Billy Pardo, RonenLuzon’s spouse. Mr. Luzon may be deemed to beneficially hold the securities of us held by Ms. Pardo.(4) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, and (ii) an option to purchase 5,854 shares of our common stock. Does not includean aggregate of 119,760 shares of restricted stock over which Mr. Kles has been designated the initial proxy to vote such shares pursuant to a voting agreemententered into between Whitehole S.L., Twinbel S.L. and EGI Acceleration, S.L.(5) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, (ii) options to purchase up to 6,494 shares of our common stock, (iii) 100,000 sharesof restricted stock which are held by Ronen Luzon, Billy Pardo’s spouse (iii) 8,401 shares of common stock which are held by Mr. Luzon, and (iii) options to purchaseup to 4,683 shares of our common stock which are held by Mr. Luzon. Ms. Pardo may be deemed to beneficially hold the securities of the Company held by Mr.Luzon.(6) Consists of 12,000 shares of restricted stock granted under the 2017 Plan.(7) Consists of (i) 16,000 shares of restricted stock granted under the 2017 Plan, and (ii) options to purchase up to 2,313 shares of our common stock.(8) Consists of options to purchase up to 1,294 shares of our common stock.(9) Consists of options to purchase up to 1,294 shares of our common stock.(10) Consists of options to purchase up to 1,294 shares of our common stock.Change in ControlWe are not aware of any arrangement that might result in a change in control in the future. We have no knowledge of any arrangements, including anypledge by any person of our securities, the operation of which may at a subsequent date result in a change in the Company’s control.Securities Authorized for Issuance Under Equity Compensation PlansOn January 29, 2017, our Board of Directors approved the 2017 Equity Incentive Plan and the 2017 Consultant Equity Incentive Plan, which were approvedby our stockholders on March 21, 2017. In addition, on January 29, 2017, our Board of Directors approved the Stock Option Plan Israel Grantees SubPlan. The 2017Equity Incentive Plan initially authorized the issuance of up to 5,334 shares of common stock under the plan and the 2017 Consultant Equity Incentive Plan initiallyauthorized the issuance of up to 8,000 shares of common stock under the plan.On February 12, 2018, our stockholders approved an amendment to the 2017 Consultant Equity Incentive Plan to increase the maximum number of shares ofour common stock available for issuance under the plan from 8,000 to 12,000. On July 3, 2018, our stockholders approved an amendment to the 2017 Equity IncentivePlan to increase the maximum number of shares of our common stock available for issuance under the plan from 5,334 to 8,000 and an amendment to the 2017Consultant Equity Incentive Plan to increase the maximum number of shares of our common stock available for issuance under the plan from 12,000 to 18,667.On May 25, 2020, our Board reduced the exercise price of outstanding options of our employees and directors for the purchase of an aggregate of 140,237of our common stock (with exercise prices ranging between $453.75 and $228.75) to $26.0 per share, and extended the term of the foregoing options for an additionalone year from the original date of expiration.61On August 10, 2020, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 80,000 to 58,000shares, and a decrease of the numbers of shares available for issuance under the 2017 Consultant Incentive Plan to 8,667 shares from 18,667 shares.On December 30, 2021, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 58,000 sharesto 230,800 shares.On December 7, 2022, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Plan from 230,800 shares to 289,000shares.The following table summarizes information about our equity compensation plans and individual compensation arrangements as of December 31, 2022.Number of securities to be issued upon exercise of outstanding options, warrants and rights(a)Weighted average exercise price of outstandingoptions, warrants and rights (b)Number of securities remaining availablefor future issuanceunder equity compensationplans (excludingsecurities reflected in column (a) (c)Equity compensation plans approved by security holders43,49724.7477,455Equity compensation plans not approved by security holdersTotal43,49724.7477,455ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEDuring years ended December 31, 2022 and 2021, except for compensation arrangements described elsewhere herein and the transactions described below,we did not participate in any transaction, and we are not currently participating in any proposed transaction, or series of transactions, in which the amount involvedexceeded the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years, and in which, to our knowledge,any of our directors, officers, five percent beneficial security holders, or any member of the immediate family of the foregoing persons had, or will have, a direct orindirect material interest.Compensation arrangements for our named executive officers and directors are described in the section entitled “Executive Compensation.”Employment AgreementsWe have entered into written employment agreements with each of our executive officers. These agreements generally provide for notice periods of varyingduration for termination of the agreement by us or by the relevant executive officer, during which time the executive officer will continue to receive base salary andbenefits. We have also entered into customary noncompetition, confidentiality of information and ownership of inventions arrangements with our executiveofficers. However, the enforceability of the noncompetition provisions may be limited under applicable law.OptionsSince our inception we have granted options to purchase our common stock to our officers and directors. Such option agreements may contain accelerationprovisions upon certain merger, acquisition, or change of control transactions.62Restricted Stock GrantsOn September 29, 2022, our compensation committee approved grants of restricted share awards under our 2017 Plan to Ronen Luzon, Or Kles, Billy Pardo,Ilia Turchinsky and Ezequiel Javier Brandwain, pursuant to which they were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000restricted shares and 12,000 restricted shares, respectively. The restricted shares shall vest in three equal installments on January 1, 2023, January 1, 2024 andJanuary 1, 2025, conditioned upon continuous employment with us, and subject to accelerated vesting upon a change in control of the Company.Shareholder ActivismIn May 2021, we received notice from Custodian Ventures, LLC, or Custodian, of its intention to nominate four candidates to stand for election to our Boardof Directors at our 2021 annual meeting of stockholders. Custodian subsequently made a book and records request and has made public statements calling forchanges to our management.On September 22, 2021, Custodian, commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v. Mysize,Inc., C.A. No. 20210817LWW, or the Delaware Action. In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting. As further described below, on November 4, 2021, we entered into asettlement agreement, or the Settlement Agreement, with Custodian, Activist Investing LLC, David Aboudi, Partick Loney and David Natan, collectively, the LazarParties, settling and dismissing the Delaware Action.On October 19, 2021, we commenced an action in the United States District Court for the Southern District of New York captioned My Size, Inc. v. DavidLazar, Custodian Ventures LLC, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, Civil Action No, 1:21cv08585, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, andcertain rules promulgated thereunder, or the SDNY Action. The complaint sought, among other things, declaratory and injunctive relief related to defendants’ effortsto nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed “group” for purposes ofSection 13 (d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. In addition, the complaint alleged that thedefendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules in connection with their efforts to elect a slate of directorsto our Board of Directors. On October 20, 2021, the Court signed an order granting a hearing on an anticipated motion for a preliminary injunction and expeditedscheduling and discovery in aid thereof, and scheduled that hearing for December 2, 2021. As further described below, on November 4, 2021, we entered into theSettlement Agreement with the Lazar Parties settling and dismissing the claims asserted in the SDNY Action and the Delaware Action against one another. OnNovember 8, 2021, the remaining defendants in the SDNY Action filed and answer and counterclaim asserting a claim against us pursuant to New York Civil RightsLaw Section 70a, also known as New York’s antiSLAPP statute.On November 4, 2021, we entered into the Settlement Agreement, or the Lazar Settlement Agreement, with the Lazar Parties. Pursuant to the LazarSettlement Agreement, we and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the LazarSettlement Agreement, we reimbursed Custodian for out of pocket expenses and in consideration for the dismissal and release of claims against the Company anaggregate amount equal to $275,000. With respect to our 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) itsMay 12, 2021 notice of stockholder nominations of four director candidates with respect to our 2021 annual meeting of stockholders, (ii) the notice dated October 28,2021 submitted by Custodian to us notifying us of Custodian’s continued intent to bring its nomination of four director candidates before our stockholders at the2021 annual meeting, and (iii) any and all related materials and notices submitted to us in connection therewith or related thereto and to not take any further action inconnection with the solicitation of any proxies in connection with us. Custodian also agreed to cease any and all solicitation and other activities in connection withthe 2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effective date of theAgreement, or the Standstill Period. The Lazar Settlement Agreement also provides that during the Standstill Period, the Lazar Parties will vote all shares of ourcommon stock it beneficially owns in accordance with any proposal or recommendation made by us or our Board of Directors that is submitted to our stockholders,unless to do so would violate applicable law and except with respect to certain extraordinary transactions. The Lazar Settlement Agreement also contains nondisparagement and confidentiality provisions, subject to certain exceptions.63On December 9, 2021, we subsequently entered into a Settlement Agreement, or the Ault Settlement Agreement, with Milton C. Ault III, Ault Alpha LP, AultAlpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed to withdraw the SDNY Action against the AultParties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that action against the Company. In addition, pursuant to the SettlementAgreement, we paid $70,000 to the Ault Parties in consideration for the releases and other good and valuable consideration as set forth in the Ault SettlementAgreement.Naiz Bespoke Technologies AcquisitionOn October 7, 2022, we entered into the Naiz Agreement with the Naiz Sellers, pursuant to which the Naiz Sellers agreed to sell to us all of the issued andoutstanding equity of Naiz. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) ) the Naiz EquityConsideration and (ii) up the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the Equity Value Averaging Period) is less than $1,650,000, My Size shall pay the Shortfall Value to the Naiz Sellers within 45days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period, it wasdetermined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement)).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers will be subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into the LockUp Agreement with My Size, (ii) Whitehole, Twinbel and EGIentered into the Voting Agreement with My Size and (iii) each of the Key Persons entered into employment agreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonth period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonth “dribbleout” provisionthat provides following the expiration of the initial sixmonth lockup period, without My Size’s prior written consent (which My Size shall be permitted to withholdat its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than the average dailytrading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.64The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Indemnification Agreements and Directors’ and Officers’ Liability InsuranceWe have entered into indemnification agreements with each of our directors and executive officers. These agreements, among other things, require us toindemnify these individuals and, in certain cases, affiliates of such individuals, to the fullest extent permitted by Delaware law against liabilities that may arise byreason of their service to us or at our direction, and to advance expenses incurred as a result of any proceedings against them as to which they could beindemnified. We also maintain an insurance policy that insures our directors and officers against certain liabilities, including liabilities arising under applicablesecurities laws.Director IndependenceSee “Item 10. Directors, Executive Officers and Corporate Governance; Corporate Governance, Board Composition” above for a discussion regarding theindependence of the members of our board of directors.ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICESSomekh Chaikin, a member firm of KPMG International, located in Tel Aviv, Israel, PCAOB ID 1057, has served as our independent registered publicaccounting firm for 2022 and 2021. The following are Somekh Chaikin’s fees for professional services in each of the respective fiscal years:Fee Category20222021Audit Fees198,910298,300Tax Fees30,66729,300Auditrelated Fees18,000Total Fees247,577327,600Audit Fees:Audit Fees consist of fees billed for professional services performed by Somekh Chaikin for the audit of our annual financial statements, thereview of interim consolidated financial statements, and related services that are normally provided in connection with registration statements, including theregistration statement for S1 and S3.Tax Fees: Tax Fees may consist of fees for professional services, including tax and VAT consulting and compliance performed by an independent registeredpublic accounting provided during the period.PreApproval Policies and ProceduresIn accordance with the SarbanesOxley Act of 2002, as amended, our audit committee charter requires the audit committee to preapprove all audit andpermitted nonaudit services provided by our independent registered public accounting firm, including the review and approval in advance of our independentregistered public accounting firm’s annual engagement letter and the proposed fees contained therein. The audit committee has the ability to delegate the authorityto preapprove nonaudit services to one or more designated members of the audit committee. If such authority is delegated, such delegated members of the auditcommittee must report to the full audit committee at the next audit committee meeting all items preapproved by such delegated members. In the fiscal years endedDecember 31, 2022 and December 31, 2021 all of the services performed by our independent registered public accounting firm were preapproved by the auditcommittee.65PART IVITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES(a)Financial StatementsThe financial statements required by this Item are included beginning at page F1.(b)ExhibitsSee Exhibit IndexITEM 16. FORM 10K SUMMARYNot applicableEXHIBIT INDEXExhibitNumberDescription3.1Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Form on Form8K filed on March 23, 2017)3.2Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10K filed onMarch 4, 2016)3.3Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’s Current Report onForm 8K filed on February 20, 2018)3.4Second Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8K filedon April 24, 2018)3.5Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’sCurrent Report on Form 8K filed on November 18, 2019)3.6Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on January 7, 2022)3.7Amendment No. 1 to Second Amended and Restated ByLaws (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8K filed on January 7, 2022)3.8Certificate of Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on December 7, 2022)4.1Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S3/A filed onNovember 14, 2016)4.2Form of Warrant to Purchase Common Stock issued on February 2, 2018 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report onForm 10K filed on March 27, 2019)4.3Description of Securities Registered under Section 12 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report on Form 10K filedon March 19, 2020)4.4Form of Warrant (incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S1, Amendment No. 1, filed with the SECon May 5, 2020.)4.5Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)4.6Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.1My Size, Inc. 2017 Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement on Schedule DEF 14Afiled on March 2, 2017)10.2My Size, Inc. 2017 Consultant Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement onSchedule DEF 14A filed on March 2, 2017)10.3My Size, Inc. 2017 Stock Option Plan Israel Grantees SubPlan (incorporated by reference to Exhibit 10.3 to the Company’s Annual Report on Form10K filed on March 27, 2019)6610.4Purchase Agreement between My Size, Inc. and Shoshana Zigdon dated as of February 16, 2014 (incorporated by reference to Exhibit 10.2 to theCompany’s Annual Report on Form 10K filed on March 4, 2016)10.5 +Employment Agreement between My Size Israel 2014 Ltd. and Ronen Luzon dated November 18, 2018 (incorporated by reference to Exhibit 10.1 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.6 +Employment Agreement between My Size Israel 2014 Ltd. and Or Kles dated November 18, 2018 (incorporated by reference to Exhibit 10.2 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.7 +Employment Agreement between My Size Israel 2014 Ltd. and Billy Pardo dated November 18, 2018 (incorporated by reference to Exhibit 10.3 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.8Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on January 15,2020)10.9Form of Warrant (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.10Form of Placement Agent Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.11Securities Purchase Agreement (incorporated by reference to Exhibit 10.30 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.12Underwriting Agreement, dated January 5, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on January 7, 2021)10.13Underwriting Agreement, dated March 22, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on March 25, 2021)10.14Amendment to Purchase Agreement between My Size Israel 2014 Ltd., My Size, Inc. and Shoshana Zigdon (incorporated by reference to Exhibit 10.1to the Company’s Quarterly Report on Form 10Q on August 16, 2021)10.15Form of Registered Direct Offering Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.16Form of PIPE Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.17Form of Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.18Form of Placement Agent Warrant issued by the Company on October 28, 2021 (incorporated by reference to Exhibit 10.22 to the Company’s Form S1filed on November 12, 2021)10.19Form of Registration Rights Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.4 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.20Engagement Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference to Exhibit 10.5 to theCompany’s Current Report on Form 8K filed on October 28, 2021)10.21Settlement Agreement dated November 4, 2021, among My Size, Inc., David Lazar and certain of his affiliates (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on November 5, 2021)10.22Share Purchase Agreement dated as of February 7, 2022 between My Size Israel 2014 Ltd. and Amar Guy Shalom and Elad Bretfeld (incorporated byreference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SEC on February 8, 2022)10.23Employment Agreement between My Size Israel 2014 Ltd. and Ezequiel Javier Brandwain dated January 27, 2022 (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on February 1, 2022)10.24Form of Section 102 Capital Gain Restricted Stock Award Agreement under the Company’s 2017 Equity Incentive Plan (incorporated by reference toExhibit 10.1 to the Company’s Quarterly Report on Form 10Q, filed with the SEC on November 14, 2022)10.25Share Purchase Agreement, dated as of October 6, 2022, by and among My Size, Inc., Borja Cembrero Saralegui, Artiz Toree Garcia, Whitehold, S.L.,Twinbel, S.L., and EGI Acceleration, S.L. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SECon October 12, 2022)10.26Form of LockUp Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)10.27Form of Voting Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.3 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)6710.28My Size, Inc. Amendment to the My Size, Inc. 2017 Equity Plan (incorporated by reference to Appendix B to the Company’s definitive proxystatement filed with the SEC on November 4, 2022)10.29Form of Registered Direct Offering Securities Purchase Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.1 to theCompany’s Current Report on Form 8K filed with the SEC on January 12, 2023)10.30Form of PIPE Securities Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8Kfiled with the SEC on January 12, 2023)10.31Form of Registered Direct PreFunded Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.32Form of Series A and Series B Warrant (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8K filed with the SEC onJanuary 12, 2023)10.33Form of Private Placement PreFunded Warrant (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.34Form of Registration Rights Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form8K filed with the SEC on January 12, 2023)10.35Engagement Agreement, dated December 5, 2022 (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8K filed withthe SEC on January 12, 2023)10.36*Form of Placement Agent Warrant21.1*List of Subsidiaries23.1*Consent of Somekh Chaikin, a member firm of KPMG International, registered public accounting firm31.1*Certification of the Chief Executive Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200231.2*Certification of the Chief Financial Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200232.1*Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a14(b) of the Exchange Act and 18 U.S.C. Section 1350, asadopted pursuant to Section 906 of the SarbanesOxley Act of 2002101.INS*Inline XBRL Instance Document101.SCH*Inline XBRL Taxonomy Schema101.CAL*Inline XBRL Taxonomy Calculation Linkbase101.DEF*Inline XBRL Taxonomy Definition Linkbase101.LAB*Inline XBRL Taxonomy Label Linkbase101.PRE*Inline XBRL Taxonomy Presentation Linkbase104Cover Page Interactive Data File (formatted as Inline XBRL document and contained in Exhibit 101)*Filed herewith.+Indicates a management contract or any compensatory plan, contract or arrangement68SIGNATURESPursuant to the requirements of Section 13 and 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10K to be signed on its behalf by the undersigned, thereunto duly authorized on this 14th day of April, 2023.MY SIZE, INC./s/ Ronen LuzonRonen LuzonChief Executive Officer (Principle Executive Officer)/s/ Or KlesOr KlesChief Financial Officer(Principal Financial and Accounting Officer)Pursuant to the requirements of the Securities Act of 1934, this annual report on Form 10K has been signed below by the following persons on behalf ofthe registrant and in the capacities and on the dates indicated.SignatureTitleDate/s/ Ronen LuzonChief Executive Officer and DirectorApril 14, 2023Ronen Luzon(Principle Executive Officer)/s/ Or KlesChief Financial OfficerApril 14, 2023Or Kles(Principal Financial and Accounting Officer)/s/ Oren ElmaliahDirectorApril 14, 2023Oren Elmaliah/s/ Arik KaufmanDirectorApril 14, 2023Arik Kaufman/s/ Oron BranitzkyDirectorApril 14, 2023Oron Branitzky/s/ Guy ZimmermanDirectorApril 14, 2023Guy Zimmerman69EX10.36 2 ex1036.htmExhibit 10.36NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES ANDEXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THESECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO ANEFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTIONNOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGINACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.PLACEMENT AGENT COMMON STOCK PURCHASE WARRANTMY SIZE, INC.Warrant Shares: _______Issue Date: January 12, 2023Initial Exercise Date: January 12, 2023THIS PLACEMENT AGENT COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _____________ or itsassigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the dateset forth above (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on January 10, 2028 (the “Termination Date”) but not thereafter, tosubscribe for and purchase from My Size, Inc., a Delaware corporation (the “Company”), up to ______ shares (as subject to adjustment hereunder, the “WarrantShares”) of the Company’s Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined inSection 2(b). This Warrant is issued pursuant to that certain engagement letter, dated as of December 5, 2022, by and between the Company and H.C. Wainwright &Co., LLC.Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities PurchaseAgreement (the “Purchase Agreement”), dated January 10, 2023, among the Company and the purchasers signatory thereto.1Section 2. Exercise.a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or afterthe Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted by email (or emailattachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the numberof Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shalldeliver the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on aUnited States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No inkoriginalNotice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required.Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder haspurchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrantto the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercisesof this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering theoutstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder andthe Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver anyobjection to any Notice of Exercise within one (1) Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant,acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, thenumber of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.b) Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $3.8188, subject to adjustment hereunder (the“Exercise Price”).c) Cashless Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein isnot available for the issuance or resale of the Warrant Shares to or by the Holder, then this Warrant may also be exercised, in whole or in part, at such timeby means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing[(AB) (X)] by (A), where:(A) =as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice ofExercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed anddelivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) ofRegulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAPon the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on theprincipal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s execution of the applicable Notice ofExercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hoursthereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii)the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice ofExercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;(B) =the Exercise Price of this Warrant, as adjusted hereunder; and(X) =the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if suchexercise were by means of a cash exercise rather than a cashless exercise.2“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which theCommon Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York Citytime)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest precedingdate) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for theCommon Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the mostrecent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by anindependent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to theCompany, the fees and expenses of which shall be paid by the Company.“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the TradingMarket on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or thenearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and ifprices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reportingprices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock asdetermined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonablyacceptable to the Company, the fees and expenses of which shall be paid by the Company.If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of theSecurities Act, the Warrant Shares shall take on the characteristics of the Warrants being exercised, and the holding period of the Warrant Shares beingissued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section 2(c).3d) Mechanics of Exercise.i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to betransmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with TheDepository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant insuch system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of theWarrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or mannerofsale limitationspursuant to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, registered in theCompany’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitledpursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2)Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate ExercisePrice to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Companyof the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall bedeemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant hasbeen exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (otherthan in the case of a cashless exercise) is received by the Warrant Share Delivery Date. If the Company fails for any reason to deliver tothe Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder,in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP ofthe Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifthTrading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share Delivery Date until such WarrantShares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FASTprogram so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standardsettlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stockas in effect on the date of delivery of the Notice of Exercise.4ii.Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the requestof a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a newWarrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrantshall in all other respects be identical with this Warrant; provided, however, that the Holder shall be required to return any WarrantShares subject to any such rescinded exercise notice concurrently with the return to Holder of the aggregate Exercise Price paid to theCompany for such Warrant Shares and the restoration of Holder’s right to acquire such Warrant Shares pursuant to this Warrant(including, issuance of a replacement warrant certificate evidencing such restored right).iii. Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant toSection 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.iv. Compensation for BuyIn on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights availableto the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with theprovisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date theHolder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwisepurchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipatedreceiving upon such exercise (a “BuyIn”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) theHolder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) theamount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connectionwith the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at theoption of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was nothonored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock thatwould have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holderpurchases Common Stock having a total purchase price of $11,000 to cover a BuyIn with respect to an attempted exercise of shares ofCommon Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediatelypreceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written noticeindicating the amounts payable to the Holder in respect of the BuyIn and, upon request of the Company, evidence of the amount of suchloss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including,without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver sharesof Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.5v. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise ofthis Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Companyshall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by theExercise Price or round up to the next whole share.vi. Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue ortransfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paidby the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by theHolder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, thisWarrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder andthe Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.The Company shall pay all Transfer Agent fees required for sameday processing of any Notice of Exercise and all fees to the DepositoryTrust Company (or another established clearing corporation performing similar functions) required for sameday electronic delivery of theWarrant Shares.vii. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timelyexercise of this Warrant, pursuant to the terms hereof.6e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise anyportion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicableNotice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of theHolder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). Forpurposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Partiesshall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, butshall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrantbeneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion ofany other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exerciseanalogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in thepreceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act andthe rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that suchcalculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed inaccordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (inrelation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisableshall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether thisWarrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of thisWarrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm theaccuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number ofoutstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s mostrecent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recentwritten notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request ofa Holder, the Company shall within one (1) Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock thenoutstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise ofsecurities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number ofoutstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stockoutstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice tothe Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial OwnershipLimitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares ofCommon Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in theBeneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shallbe construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portionhereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplementsnecessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of thisWarrant.7Section 3. Certain Adjustments.a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes adistribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which,for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstandingshares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into asmaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case theExercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any)outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately aftersuch event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of thisWarrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for thedetermination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case ofa subdivision, combination or reclassification.b) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sellsany Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares ofCommon Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregatePurchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise ofthis Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before thedate on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the recordholders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that to the extent that theHolder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall notbe entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Rightto such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not resultin the Holder exceeding the Beneficial Ownership Limitation).c) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend (other than cash) orother distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including,without limitation, any distribution of stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement,scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holdershall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number ofshares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including withoutlimitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken,the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, thatto the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, thenthe Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a resultof such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as itsright thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).8d) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more relatedtransactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease,license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, director indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of CommonStock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more ofthe outstanding Common Stock or 50% or more of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in oneor more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchangepursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly orindirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, withoutlimitation, a reorganization, recapitalization, spinoff, merger or scheme of arrangement) with another Person or group of Persons whereby such otherPerson or group acquires more than 50% of the outstanding shares of Common Stock or 50% or more of the voting power of the common equity of theCompany (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for eachWarrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of theHolder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor oracquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as aresult of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior tosuch Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, thedetermination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of AlternateConsideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Priceamong the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. Ifholders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall begiven the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at theHolder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date ofthe public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cashequal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of suchFundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company’s control, including not approved by theCompany’s Board of Directors, the Holder shall only be entitled to receive from the Company or any Successor Entity the same type or form ofconsideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to theholders of Common Stock of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, stock or anycombination thereof, or whether the holders of Common Stock are given the choice to receive from among alternative forms of consideration in connectionwith the Fundamental Transaction; provided, further, that if holders of Common Stock of the Company are not offered or paid any consideration in suchFundamental Transaction, such holders of Common Stock will be deemed to have received common stock of the Successor Entity (which Entity may be theCompany following such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on theBlackScholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day of consummation of the applicableFundamental Transaction for pricing purposes and reflecting (A) a riskfree interest rate corresponding to the U.S. Treasury rate for a period equal to thetime between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expectedvolatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualizationfactor) as of the Trading Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlyingprice per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any noncashconsideration, if any, being offered in such Fundamental Transaction and (ii) the highest VWAP during the period beginning on the Trading Dayimmediately preceding the public announcement of the applicable contemplated Fundamental Transaction (or the consummation of the applicableFundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant to this Section 3(e) and (D) a remaining option timeequal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date and (E) azero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds (or such other consideration)within the later of (i) five Business Days of the Holder’s election and (ii) the date of consummation of the Fundamental Transaction. The Company shallcause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of theobligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant towritten agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to suchFundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entityevidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares ofcapital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of thisWarrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which appliesthe exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to suchFundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for thepurpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which isreasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall beadded to the term “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction, each andevery provision of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to each of the Company and theSuccessor Entity or Successor Entities, jointly and severally), and the Successor Entity or Successor Entities, jointly and severally with the Company, mayexercise every right and power of the Company prior thereto and the Successor Entity or Successor Entities shall assume all of the obligations of theCompany prior thereto under this Warrant and the other Transaction Documents with the same effect as if the Company and such Successor Entity orSuccessor Entities, jointly and severally, had been named as the Company herein.e) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. Forpurposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the numberof shares of Common Stock (excluding treasury shares, if any) issued and outstanding.9f) Notice to Holder.i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, theCompany shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resultingadjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form)on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C)the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any sharesof capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection withany reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all orsubstantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into othersecurities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of theaffairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as itshall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective datehereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to beentitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification,consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expectedthat holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or otherproperty deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure todeliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to bespecified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, nonpublic informationregarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to aCurrent Report on Form 8K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of suchnotice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.10Section 4. Transfer of Warrant.a) Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and to theprovisions of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights) aretransferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a writtenassignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay anytransfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a newWarrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument ofassignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly becancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unlessthe Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of thedate on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordanceherewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company,together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent orattorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute anddeliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issuedon transfers or exchanges shall be dated the Issue Date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Sharesissuable pursuant thereto.c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “WarrantRegister”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as theabsolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to thecontrary.d) Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrantshall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue skylaws or (ii) eligible for resale without volume or mannerofsale restrictions or current public information requirements pursuant to Rule 144, the Companymay require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, comply with the provisions ofSection 5.7 of the Purchase Agreement.11e) Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon anyexercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling suchWarrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exemptedunder the Securities Act.Section 5. Miscellaneous.a) No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends orother rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Withoutlimiting the rights of a Holder to receive Warrant Shares on a “cashless exercise,” and to receive the cash payments contemplated pursuant to Sections 2(d)(i) and 2(d)(iv), in no event will the Company be required to net cash settle an exercise of this Warrant.a.In July 2019, the Company entered into a threeyear agreement with a consultant (“Consultant14”) to provide services to the Company includingassisting the Company to promote, market and sell the Company’s technology to potential customers. Pursuant to such agreement and in partialconsideration for such consulting services, the Company agreed to issue to Consultant14 options to purchase up to 107 shares of the Company’scommon stock upon execution of the agreement. The options are exercisable at $375.00 per share and shall vest in 3 equal instalments every twelvemonths starting July 2019. Unexercised options shall expire 4 years from the effective date.In addition, the Company agreed to issue to Consultant14 options to purchase up to 890 shares of the Company’s common stock upon executionof the agreement. The options are exercisable at $27.00 per share and shall vest in 4 equal instalments every six months starting September 2020.Unexercised options shall expire 5 years from the effective date.During 2022 and 2021, an amount of $7 and $14 respectively, were recorded by the Company as stockbased equity awards with respect to Consultant14.F24MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The Company’s outstanding options granted to consultants as of December 31, 2022 are as follows:Issuance dateOptions forCommon stockWeightedAverageexercise priceper shareOptionsexercisableExpirationdateFebruary 201815USD528.7515February 2023August 2018December 2018531USD352.38264August 2023 December 2023July 2020107USD375107July 2023SeptemberOctober 20201,488USD27.201,288October 2024 September 2025Total2,1411,674The Company uses the Black Scholes model to measure the fair value of the stock options with the assistance of a third party valuation.No stock options were granted during 2022 to consultants.The fair value of the Company’s stock options granted to nonemployees was calculated using the following weighted average assumptions:20222021GrantsGrantsDividend yield0%Expected volatility125.15%Riskfree interest0.16%Contractual term of up to (years)1.52F25MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Stock Option Plan for employeesIn March 2017, the Company adopted a stock option plan (the “Plan”) pursuant to which the Company’s Board of Directors may grant stock options toofficers and key employees. The total number of options which may be granted to directors, officers, employees under this plan, is limited to 289,000options. Stock options can be granted with an exercise price equal to or less than the stock’s fair market value at the date of grant.The fair value of each option award is estimated on the date of grant using the Binomial optionpricing model that used the weighted averageassumptions in the following table. The risk free rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the timeof grant.2022Grants2021GrantsDividend yield0%0%Expected volatility96.52%98.47%Riskfree interest4.06%0.96%expected life522.27In the years ended December 31, 2022 and 2021, 10,000 and 3,900 options, respectively, were granted.On December 7, 2022, the Company’s stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from230,800 shares to 289,000 shares.On September 29, 2022, the Compensation Committee of the Company approved grants of restricted share awards under the Company’s 2017 EquityIncentive Plan to Ronen Luzon (CEO), Or Kles (CFO), Billy Pardo (COO), Ilia Turchinsky (CTO) and Ezequiel Javier Brandwain (CCO), pursuant towhich were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000 restricted shares and 12,000 restricted shares,respectively. Each restricted share awarded under section 102 Capital Gain Restricted Stock Award Agreement (the “Agreement”). The restrictedshares shall vest in three equal installments on January 1, 2023, January 1, 2024 and January 1, 2025 for Ronen Luzon, Or Kles, Billy Pardo and IliaTurchinsky and on January 27, 2023, January 27, 2024 and January 27, 2025 for Ezequiel Javier Brandwain, conditioned upon continuous employmentwith the Company, and subject to accelerated vesting upon a change in control of the Company.On the same day, the Company granted fiveyears options to purchase up to 10,000 ordinary shares to other employees of the Company at an exerciseprice of $0.21 per share. The options vesting period is over three years in three equal portions from the vesting commencement date.F26MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The total stock option compensation expense in the year ended December 31, 2022 amounted to $448as follows: Research and development expensesamounted to $151, sales and marketing expenses amounted to $119and general and administrative expenses amounted to $178.The total stock option compensation expense in the year ended December 31, 2021 amounted to $252 as follows: Research and development expensesamounted to $94, sales and marketing expenses amounted to $97 and general and administrative expenses amounted to $61.As of December 31, 2022, there was a total of $530 unrecognized compensation cost relating to nonvested sharebased compensation arrangements.That cost is expected to be recognized over a weightedaverage period of 2.0 years.Share option activity during 2022 is as follows:2022Number ofoptionsWeightedaverageexerciseprice US$Outstanding as of January 135,74226.5Granted10,0005.25ExercisedExpired(4,136)Outstanding as of year end41,60622.48Vested as of year end33,20825.17Share option activity during 2021 is as follows:2021Number ofoptionsWeightedaverageExerciseprice US$Outstanding as of January 139,094$26.0Granted3,90032.0Exercised(751)Expired(6,501)Outstanding as of year end35,74226.5Vested as of year end27,06326.5F27MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 15 CONTINGENCIES AND COMMITMENTSa.On August 7, 2018, the Company commenced an action against North Empire LLC (“North Empire”) in the Supreme Court of the State of New York,County of New York for breach of a Securities Purchase Agreement (the “Agreement”) in which it is seeking damages in an amount to bedetermined at trial, but in no event less than $616. On August 2, 2018, North Empire filed a Summons with Notice against the Company, also in thesame Court, in which they allege damages in an amount of $11.4 million arising from an alleged breach of the Agreement. On September 6, 2018North Empire filed a Notice of Discontinuance of the action it had filed on August 2, 2018. On September 27, 2018, North Empire filed an answerand asserted counterclaims in the action commenced by the Company against them, alleging that the Company failed to deliver stock certificatesto North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against theCompany’s CEO and now former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018,the Company filed a reply to North Empire’s counterclaims. On November 15, 2018, the Company’s CEO and now former Chairman of the Boardfiled a motion to dismiss North Empire’s thirdparty complaint. On January 6, 2020, the Court granted the motion and dismissed the thirdpartycomplaint. Discovery has been completed and both parties have filed motions for summary judgment in connection with the claims andcounterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summary judgment, arguing there werefactual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision. The appealmust be fully perfected and filed by July 26, 2022. On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying theCompany’s motion for summary judgment. North Empire will file its opposition papers on or before March 31, 2022, and the Company will file replypapers on April 29, 2022. On or about September 12, 2022, the Court issued its Decision and Order denying the Company’s motion to reargue.North Empire filed its opposing brief on December 7, 2022. Both sides were given an opportunity to file a reply brief. The Company filed our replybrief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. The Appellate Court has scheduled oral argument for the appealfor February 7, 2023. Oral argument was held before the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Courtfiled its Decision and Order, which affirmed the lower court’s decisions regarding both My Size and North Empire’s motions for summary judgmentand sent the case back to the Supreme Court.On or about March 13, 2023, the Supreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date forthe mediation has not yet been set. The Company intends to vigorously defend any claims made by North Empire.The Company believes it is more likely than not that the counterclaims will be denied.b.In May 2021, the Company received notice from Custodian Ventures, LLC (“Custodian”) of its intention to nominate four candidates to stand forelection to our Board of Directors at the Company’s 2021 annual meeting of stockholders. Custodian subsequently made a book and recordsrequest and has made public statements calling for changes to our management.On September 22, 2021, Custodian commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v.MySize, Inc. (the “Delaware Action”). In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting.On October 19, 2021, the Company commenced an action in the United States District Court for the Southern District of New York againstCustodian, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, and certain rulespromulgated thereunder (the “SDNY Action”). The complaint sought, among other things, declaratory and injunctive relief related to defendants’efforts to nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed“group” for purposes of Section 13(d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. Inaddition, the complaint alleged that the defendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules inconnection with their efforts to elect a slate of directors to the Company’s Board of Directors. On October 20, 2021, the Court signed an ordergranting a hearing on an anticipated motion for a preliminary injunction and expedited scheduling and discovery in aid thereof, and scheduled thathearing for December 2, 2021.On November 4, 2021, the Company entered into the Settlement Agreement with the Lazar Parties. Pursuant to the Settlement Agreement, theCompany and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the SettlementAgreement, the Company agreed to reimburse Custodian for out of pocket expenses and in consideration for the dismissal and release of claimsagainst the Company an aggregate amount equal to $275, to be paid within three business days of the effective date of the Settlement Agreement.With respect to the Company’s 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) its May 12,2021 notice of stockholder nominations of four director candidates with respect to the Company’s 2021 annual meeting of stockholders, (ii) thenotice dated October 28, 2021 submitted by Custodian to the Company notifying the Company of Custodian’s continued intent to bring itsnomination of four director candidates before the Company’s stockholders at the 2021 annual meeting, and (iii) any and all related materials andnotices submitted to the Company in connection therewith or related thereto and to not take any further action in connection with the solicitationof any proxies in connection with the Company. Custodian also agreed to cease any and all solicitation and other activities in connection with the2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effectivedate of the Agreement (the “Standstill Period”). The Settlement Agreement also provides that during the Standstill Period, the Lazar Parties willvote all shares of common stock of the Company it beneficially owns in in accordance with any proposal or recommendation made by theCompany or the Board of Directors of the Company that is submitted to the stockholders of the Company, unless to do so would violateapplicable law and except with respect to certain extraordinary transactions. The Settlement Agreement also contains nondisparagement andconfidentiality provisions, subject to certain exceptions.On December 9, 2021, the Company subsequently entered into a Settlement Agreement (the “Ault Settlement Agreement”), with Milton C. Ault III,Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed towithdraw the SDNY Action against the Ault Parties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that actionagainst the Company. In addition, pursuant to the Settlement Agreement, the Company paid $70 to the Ault Parties in consideration for thereleases and other good and valuable consideration as set forth in the Ault Settlement Agreement.c.On July 5, 2021, the Company was served with a legal complaint filed by Fidelity Venture Capital Ltd. and Dror Atzmon in the Magistrate’s Court inTel Aviv for a monetary award in an amount of NIS 1,436,679 (approximately $450) and a declaratory relief. The plaintiffs allege that the Companybreached its contractual obligations to pay them for services allegedly rendered to the Company by the plaintiffs under a certain consultingagreement dated July 2, 2014, in an amount of NIS 819,000 (approximately $256). Additionally, the plaintiffs allege that the Company shouldcompensate them for losses allegedly incurred by them following their investment in the Company’s shares issued under a certain private offering.In the alternative, the plaintiffs move that the court will declare the investment agreement void with full restitution of plaintiffs’ original investmentin an amount of NIS 1,329,650(approximately $415). The Company filed its statement of defense on October 25, 2021. The first preliminary courthearing of the case is scheduled for January 23, 2022.The first court preliminary hearing was held on March 1, 2022.Following the first preliminary hearing and the Court’s comments and recommendation, the Plaintiffs filed a motion to strike out the claim withoutprejudice.On March 8, 2022 the Court ordered dismissal without prejudice of the claim.F28MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATIONAcquisition of OrgadOn February 7, 2022, the Company acquired 100% of the shares and voting interests in Orgad an omnichannel ecommerce platform. The acquisitionwas designed to create an additional revenue stream for the Company by becoming a direct ecommerce seller while leveraging the synergies betweenMySizeID and Orgad’s ecommerce platform.Unaudited proforma informationThe results of operations of Orgad have been included in the consolidated financial statements since the acquisition date of February 7, 2022. Orgadrevenues included in the Company’s consolidated statement of operations from February 7, 2022 through December 31, 2022 were $4,132. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,662 and $2,850 respectively, and the net loss after tax would have been $8,519 and $10,149 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash (*)300Issuance of shares of common stock (69,752 shares) (**)457Total consideration transferred757(*)The cash payment is subject to working capital adjustments.(**)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Orgad, on the twoyear and the threeyear anniversary of the closing, $350in each ofthese years provided that in the case of the second and third instalments certain revenue targets are met and subject further to certain downward postclosing adjustment. Furthermore, 69,752shares of common stock will be issued in eight equal quarterly instalments until the lapse of two years fromclosing. Additional earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023 will also be paid. All of these payments aresubject to the former owners being actively engaged with Orgad at the date such payment is due, and therefore were not taken as part of theconsideration for the business combination.During the year ended December 31, 2022 an amount of $456and $319was recorded in respect of the cash instalments and in respect of stocksissuance, respectively in Cost Of Goods, Sales and Marketing and General and Administrative expenses as shown in the following table:2022Stockbased compensation expense – Cost of goods194Stockbased compensation expense Sales and marketing271Stockbased compensation expense General and administrative310775(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the preliminary estimates of their fair values, which were determined using generally accepted valuation techniques based onestimates and assumptions made by management at the time of the acquisition. Such estimates are subject to change during the measurement periodwhich is not expected to exceed one year. The purchase price allocation was not finalized duo to examination of the net working capital of Orgad at theacquisition date. Any adjustments to the preliminary purchase price allocation identified during the measurement period will be recognized in theperiod in which the adjustments are determined.The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and Cash EquivalentTrade receivables364PP&E55Inventory864Longterm financial investment31Selling platform378Goodwill152Shortterm accruals and deferrals(181)Trade payables(668)Long term provision(13)Longterm debt(138)Deferred Taxes(87)Total net assets acquired757F29MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)(c)Acquisitionrelated costsThe Company incurred transaction costs of approximately $40and none during twelvemonth period ended December 31, 2022 which were included ingeneral and administrative expenses in the consolidated statements of income (loss).Acquisition of Naiz Bespoke Technologies, S.L. (“Naiz”)On October 11, 2022, the Company acquired 100% of the shares and voting interests in Naiz a provider of SaaS technology solutions that solve sizeand fit issues for fashion ecommerce companies. The acquisition was designed to allow Naiz’s customers benefit from MySize’s deep understanding ofthe fashion ecommerce retail landscape, while creating an additional revenue stream for the Company.Unaudited proforma informationThe results of operations of Naiz have been included in the consolidated financial statements since the acquisition date of October 11, 2022. Naizrevenues included in the Company’s consolidated statement of operations from October 11, 2022 through December 31, 2022 were $103. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,738 and $379 respectively and the net loss after tax would have been $8,695 and $10,717 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash503Issuance of shares of common stock (240,000 shares) (*)1,008Total consideration transferred1,511(*)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Naiz, additional cash consideration (up to $1,550) in four instalments subject to thefollowing conditions:(i)Continuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result ofa Good Reason; and(ii)Naiz’s Revenues reaching or exceeding the respective Target Revenues defined in the agreement. The revenues will be calculated in four periods:(1) January 1, 2022 – December 31, 2022; (2) January 1, 2023 – June 30, 2023; (3) July 1, 2023 – December 31, 2023; (4) January 1, 2024 – December31, 2024.Former owners of Naiz are entitled to additional cash consideration following December 31, 2025 (up to $1,650) in an event when the actual value of theequity consideration is less than $1,650, subject to completion of a Target Revenue for the period of January 1, 2025 – December 31, 2025 andcontinuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result of aGood Reason;F30MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)During the year ended December 31, 2022 an amount of $283 was recorded in respect of the additional cash consideration.(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the estimates of their fair values, which were determined using generally accepted valuation techniques based on estimates andassumptions made by management at the time of the acquisition.The following table summarizes the fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and cash equivalent36Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Total net assets acquired1,511(c)Acquisitionrelated costsDuring 2022, the Company incurred transaction costs of approximately $75 which were included in general and administrative expenses in theconsolidated statements of income (loss).F31MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)Note 17 – Operating SegmentsDuring the year ended December 31, 2021, the Company had one reportable segment. As a result of the business combinations in the reporting period(see note 13), the Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificialintelligence driven measurement solutions and (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions and. The fashionand equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. Orgad has onecustomer that is responsible for 37.9% of the Company consolidated revenues. The SaaS based innovative artificial intelligence driven measurementsolutions, or SaaS Solutions operating segment consists of My Size Inc and My Size Israel and My Size LLC.Information related to the operations of the Company’s reportable operating segments is set forth below:Fashion andequipment ecommerce platformSaaSSolutionsNaizTotalAs of the year ended December 31, 2022Revenues from external customers4,1322241034,459Operating (loss) income(591)(7,181)(338)(8,110)Financial income (expense), net(236)Net loss before tax(8,346)Fashion andequipment ecommerce platformSaasSolutionNaizAs of December 31, 2022:Assets2,0225,9661,691Amortization of intangible assets(114)(34)(46)The Company elected to present geographic information in respect with revenues generated from external customers based on the location of the selling entity:All the revenues of the fashion and equipment ecommerce platform segment are generated by Orgad, located in Israel.All the revenues of the Naiz segment are generated by Naiz, located in Spain.The revenues of the Saas Solutions segment are generated by My Size Ltd. located in Israel (approximately 75% of the segment revenues) and by My Size Inc.located in the U.S. (approximately 25% of the segment revenues).NOTE 18 SALES AND MARKETINGYear endedDecember 31,20222021Salaries836574Consultants and subcontractors5831,086Marketing481283Selling fees489Share based payments post Orgad acquisition (*)271Share based payments for consultants and employees127180Travel21142Other1451713,1432,336(*) See note 16.NOTE 19 GENERAL AND ADMINISTRATIVE EXPENSESYear endedDecember 31,20222021Salaries1,007461Professional services7051,832Share based payments for consultants, directors and employees18098Rent, office expenses and communication442372Insurance564627cash liability and equity liability expenses related to Orgad acquisition310cash liability expenses related to Naiz acquisition217Settlement fees (*)345Directors8259Other3933303,9004,124(*)See note 15(b)F32MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 20 FINANCIAL INCOME (EXPENSE), NETA.Financial incomeYear endedDecember 31,20222021Revaluation investment in marketable securities49Other26172666B.Financial expenseYear endedDecember 31,20222021Exchange rate differences33Revaluation of loan granted100Revaluation investment in marketable securities62Other6792629NOTE 21 EVENTS SUBSEQUENT TO THE BALANCE SHEET DATEa.On January 2, 2023, Orgad experienced a fire at its warehouse in Israel. The Company is not aware of any casualties or injuries associated with thefire. The Company shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450.The Company believes that this incident did not affect the future sales results of Orgad for the year 2023. The inventory was not insured and it istoo early to determine the potential impact of this incident on the other parties that were involved in the incident (lessor and others that leasedproperties near the warehouse).b.On January 10, 2023, the Company entered into a securities purchase agreement pursuant to which the Company sold an aggregate of 162,000ofthe Company’s shares of common stock and prefunded warrants to purchase up to 278,899shares of common stock and, in a concurrent privateplacement, unregistered warrants to purchase up to883,798 shares of common stock, consisting of Series A warrants to purchase up to 441,899shares of common stock and Series B warrants to purchase up to 441,899shares of common stock, at an offering price of $3.055per share ofcommon stock and associated Series A and Series B warrants and an offering price of $3.054per prefunded warrant and associated Series A andSeries B warrants.In addition, the Company entered into a securities purchase agreement pursuant to which the Company agreed to sell and issue in a privateplacement an aggregate of up to 540,098 unregistered prefunded warrants and unregistered warrants to purchase up to an aggregate of 1,080,196shares of common stock, consisting of Series A warrants to purchase up to 540,098 shares of common stock and Series B warrants to purchase upto 540,098 shares of common stock at an offering price of $3.054 per prefunded warrant and associated Series A and Series B warrants.As of March 31,2023 all the pre funded warrants were exercised by the investor.F33ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSUREThere were no disagreements with accountants on accounting and financial disclosure of a type described in Item 304 (a)(1)(iv) or any reportable event asdescribed in Item 304 (a)(1)(v) of Regulation SK.ITEM 9A. CONTROLS AND PROCEDURESDisclosure ControlsWe carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief FinancialOfficer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) as of December 31, 2022. Basedupon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this Annual Report on Form10K, our disclosure controls and procedures were effective to ensure that information required to be disclosed in reports filed under the Exchange Act, as amended,is recorded, processed, summarized and reported within the required time periods specified in the SEC’s rules and forms and is accumulated and communicated toour management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.Management’s Report on Internal Control Over Financial ReportingOur internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records, that, in reasonable detail,accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only inaccordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition, use or disposition of our assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance withthe policies or procedures may deteriorate.Our management, including our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financialreporting at December 31, 2022. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the TreadwayCommission (COSO) in Internal Control—Integrated Framework (2013). Based on that assessment under those criteria, management has determined that, as ofDecember 31, 2022, our internal control over financial reporting was effective.This Annual Report on Form 10K does not include an attestation report of our registered public accounting firm regarding internal control over financialreporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to the exemption provided to issuersthat are not “large accelerated filers” nor “accelerated filers” under the DoddFrank Wall Street Reform and Consumer Protection Act.Changes in Internal Control Over Financial ReportingDuring the year ended December 31, 2022, we made two acquisitions, as discussed in Note 1a and Note 16 of the audited consolidated financial statementsfor the year ended December 31, 2022 included in this Annual Report on Form 10K. As a result, we made additions and/or modifications to policies, procedures,systems and controls that have materially affected our internal control over financial reporting from the acquisitions, including new controls for consolidationprocess that relates to accounting policies and procedures, operational processes and documentation practices. Management excluded the acquired businessesfrom management’s report on internal control over financial reporting. ITEM 9B. OTHER INFORMATIONNone.ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNot applicable.51PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe following table sets forth the name, age and positions of our executive officers and directors.NAMEAgePOSITIONRonen Luzon52Chief Executive Officer and Class III DirectorOr Kles40Chief Financial OfficerBilly Pardo47Chief Operating Officer and Chief Product OfficerIlia Turchinsky35Chief Technology OfficerEzequiel Javier Brandwain53Chief Commercial OfficerOron Branitzky (1)(2)(3)*63Class II DirectorOren Elmaliah (1)(2)(3)*38Class I DirectorArik Kaufman (1)(2)(3)*41Class I DirectorGuy Zimmerman*53Class II Director(1)Member of our audit committee(2)Member of our nominating and corporate governance committee(3)Member of our compensation committee* Independent as that term is defined by the rules of the Nasdaq Stock Market.The business background and certain other information about our directors and executive officers is set forth below:Ronen Luzon has served as our Chief Executive Officer and a member of our board of directors since September 2013. Since 2006, Mr. Luzon hasadditionally served as Chief Executive Officer and founder of Malers Ltd., a company in the global security solutions market which provides technological solutionsfor integrated communication infrastructures, security and control systems. Prior to Malers, he held several senior marketing, sales management and professionalservices positions in a variety of international high tech companies including VP marketing of GA Tech and Professional Services Manager of Eldat Communication.Mr. Luzon graduated from Middlesex University in London with a B.S. in IT and Business Information Systems. We believe that Mr. Luzon is qualified to serve as amember of our board of directors because of his more than 20 years of experience in the technology sector.Or Kles has served as our Chief Financial Officer since May 2016. He is a certified public accountant with a broad, diverse financial background. From May2013 until April 2016 he served as Assistant Controller of Shikun and BinuiSolel Boneh Infrastructure Ltd. and from December 2010 until May 2013 he served as anAssociate at KPMG. Mr. Kles holds an MBA and a B.A. in Business Management and Accounting (specializing in financing) from The College of ManagementAcademic Studies. Mr. Kles is a certified public accountant in Israel.Billy Pardo has served as our Chief Product Officer since May 2014 and Chief Operating Officer since April 2019. From April 2010 until August 2013, Ms.Pardo served as Senior Director of Product Management of Fourier Education. Among her areas of expertise are launching products from concept to successfuldelivery in various methodologies, including Fourier Education’s awardwinning einstein™ Science Tablet. Prior to that Ms. Pardo served in various productmanagement positions including, Project Manager of Time to Know, Product Marketing Manager of RiT Technologies, Product Manager of Pricer AB and R&DTeam Leader at Pricer AB. Ms. Pardo previously served as Software Engineer at Eldat Communication Ltd., and QA Engineer at NICE Systems. Ms. Pardo receivedan MBA from The Interdisciplinary Center and a B.A. in Computer Science from The Academic College of TelAvivYaffo.Ilia Turchinsky has served as our Chief Technology Officer since April 2019 and from July 2018 until April 2019 as our Director of Technology. Prior tojoining us, from 2013 until 2018, Mr. Turchinsky served in various roles, most recently Chief Technology Officer, at MonkeyTech Ltd., a company that providesdesign, development and characterization of mobile applications. Prior to that, Mr. Turchinsky served in various roles including development course instructor atIQLine, was a founder of Arnavsoft and was a software developer for MintLab and a political party. Mr. Turchinsky holds a B.Sc. from the Ben Gurion University inComputer Science and an M.Sc. from the Open University of Israel in Computer Science.52Ezequiel Javier Brandwain has served as our Chief Commercial Officer since February 2022. Mr. Brandwain brings more than two decades of globalexperience in retail and the fashion industry, mainly in business development, operations, and international markets. Before joining the Company, Mr. Brandwainheld positions of increasing responsibility at several companies, including between June 2017 and November 2020, at 7 For All Mankind International, where heserved as Director, Latin America and Caribbean, managing business development and operations across Latin America and the Caribbean. Before that, betweenMay 2016 and June 2017, Mr. Brandwain served as Chief Business Development Officer at Replay – Fashion Box SPA, where he oversaw business development andoperations, expansion and control in the Americas, the Caribbean, and NorthEast Asia. Prior this role, between September 2015 and May 2016, he served as theReplay’s Managing Director in Latin America and the Caribbean, leading the company’s international expansion in these regions. Prior to that, between April 2015and September 2015, Mr. Brandwain served as Managing Director, Latin America and Caribbean at Authentic Brands Group LLC, where he led that company’soperations, business developments and international expansion within these regions, and served as the direct liaison with the company’s headquarters in New York.Prior to that, between April 2015 and September 2015, Mr. Brandwain served as Chief Operating Officer, Latin America and Caribbean at Flemingo International Ltd.,overseeing operations, as well as projected operations in the travel retail field across these regions. Prior to that, between December 2010 and February 2014, Mr.Brandwain served as Regional Director, Southern Hemisphere at Calvin Klein, where he was responsible for defining and implementing the operational andcommercial strategy for Southern Hemisphere, as well as overseeing the retail, travel retail, concession, and wholesale businesses of the company. During his tenureat Calvin Klein, Mr. Brandwain also served as Travel Retail Director, Latin America, where he built the travel retail business and developed operations. Prior to that,between July 2010 and November 2010, Mr. Brandwain served as Business Director, Latin America and Caribbean at Givenchy Latin America, and between January2010 and June 2010 he served as Commercial Director, Latin America and Caribbean at Nautica Latin America. During December 2004 and December 2009, Mr.Brandwain served as Vice President, International Business Development at Report Collection/Modextil, Inc., where he was in charge of business and operationalexpansion, global growth, and brand extensions. Prior to that, between 2003 and October 2004, Mr. Brandwain served as General Manager at Andrew KoenigInternational, Inc. Between September 2019 and November 2020, Mr. Brandwain served as a member of the Board of Directors of 7 For All Mankind BrazilImportacao, Comercio E Distribuicao S.A. Mr. Brandwain earned a Bachelor degree in architecture from the University of the Republic (Uruguay).Oron Branitzky has served as a member of our board of directors since March 2017. Mr. Barnitzky has vast experience in retail technology. SinceNovember 2017, Mr. Branitzky has served as Global Retail Business Development at Superup, and from January 2007 until December 2014 he served as VicePresident of Sales and Marketing at Pricer AB. Prior to that, Mr. Branitzky has served as VP Marketing and Sales at Eldat Communication and Sarin TechnologiesLtd. Since January 2015, Mr. Branitzky has served as chairman of the board of directors of WiseShelf Ltd. and from May 2015 until March 2016, Mr. Branitzky servedas an advisory board member of ciValue. Mr. Branitzky received a B.S. from the Hebrew University of Jerusalem and an MBA in International Marketing from TelAviv University. We believe that Mr. Branitzky is qualified to serve as a member of our board of directors because of his more than 20 years of experience inmanaging the sales of hitech solutions to retailers across the globe.Oren Elmaliah, has served as a member of our board of directors since May 2017. In September 2015, Oren Elmaliah founded Accounting Team IL and hasacted as Account Manager since then. Accounting Team IL is a financial consultancy and service provider to public companies traded in Israel and abroad. SinceFebruary 2017, Mr. Elmaliah has served as controller of Enlivex Therapeutics Ltd., and since January 2017 he has served as Chief Financial Officer of Presstek Israel.In addition, since September 2015, Mr. Elmaliah has served as an Israel Authorities Reporting Officer of LG Electronics Israel and since September 2015 he hasserved as Local Financial Report Consultant of Chiasma. From July 2011 until August 2015, Mr. Elmaliah served as CPA, Financial Director of CFO Director Ltd andfrom June 2010 until July 2011 he served as Risk Management Consultant of RSM International Limited. Mr. Elmaliah holds a B.A. in Accounting/Economics and aMsc. in Finance/Accounting from Tel Aviv University, Israel. He is a licensed Certified Public Accountant in Israel. We believe that Mr. Elmaliah is qualified to serveas a member of our board of directors because of his vast finance experience and public company management and administration in the fields of finance,accounting, and financial regulation.53Arik Kaufman has served as a member of our board of directors since June 2017. Mr. Kaufman is an attorney specializing in the fields of commercial law,corporate law and capital markets and since 2016 runs his own law office in Israel. He has vast experience in the fields of financial reporting and financial regulation.Mr. Kaufman serves as the Chief Executive Officer of Steakholder Foods since January 2022. From September 2017 until January 2022, Mr. Kaufman served as VPBusiness Development of Mor Research Applications. Mr. Kaufman holds an LLB in Law from the Interdisciplinary Center, Herzliya, and is admitted to the IsraeliBar. We believe that Mr. Kaufman is qualified to serve as a member of our board of directors based upon his experience of assisting with the completion of numerousventure capital financings, mergers, acquisitions, and strategic relationships. In addition, he has served as a member of the board of various publicly tradedcompanies, including companies that operate in the same industry as us.Guy Zimmerman has served as a member of our board of directors since August 2021. Previously, Mr. Zimmerman served as Founder and CEO ofManuFuture, an online b2b engineering market place, since February 2021. Prior to that from 2017 to 2021, Mr. Zimmerman acted as a consultant to severaltechnology startups and was a founding partner of a business travel online platform. From 2013 to 2017, Mr. Zimmerman served as EVP of Marketing and BusinessDevelopment of Kornit Digital and was part of the IPO leadership. Prior to that, Mr. Zimmerman served as VP of Global Sales and Business Development at TefronLtd., a provider of seamless garment technology, where he led the $100m sales and sales support organization serving global retail and fashion brands. Prior to thathe served as Vice President of Strategy and Business Development at Tnuva Group, Israel’s largest food manufacturer and spent eight years at McKinsey &Company. Mr. Zimmerman previously led a software startup in the field of operational healthcare management systems. Mr. Zimmerman holds a B.Sc. in IndustrialEngineering from Tel Aviv University in Israel. We believe that Mr. Zimmerman is qualified to serve as a member of our board of directors because of his experiencein business development in the technology and retail sectors.Board Diversity MatrixThe table below provides certain information regarding the diversity of our board of directors as of the date of this annual report.Board Diversity Matrix (As of March 31, 2023)Total Number of Directors5FemaleMaleNonBinaryDid Not DiscloseGenderPart I: Gender IdentityDirectors#5##Part II: Demographic BackgroundAfrican American or Black####Alaskan Native or Native American####Asian####Hispanic or Latinx####Native Hawaiian or Pacific Islander####White#1##Two or More Races or Ethnicities#2##LGBTQ+0Did Not Disclose Demographic Background2Family RelationshipsRonen Luzon, the Chief Executive Officer and a member of our board of directors, and Billy Pardo, the Chief Product Officer and Chief Operating Officer, arehusband and wife. There are no other family relationships among any of our current or former directors or executive officers.Involvement in Certain Legal ProceedingsWe are not aware of any of our directors or officers being involved in any legal proceedings in the past ten years relating to any matters in bankruptcy,insolvency, criminal proceedings (other than traffic and other minor offenses), or being subject to any of the items set forth under Item 401(f) of Regulation SK.Arrangements between Officers and DirectorsTo our knowledge, there is no arrangement or understanding between any of our officers and any other person, including directors, pursuant to which theofficer was selected to serve as an officer.Board of DirectorsThere are no agreements with respect to the election of directors.On January 6, 2022, we filed with the Secretary of State of Delaware a Certificate of Amendment to our Amended and Restated Certificate of Incorporationproviding for a classified Board. Following filing of the Certificate of Amendment, members of our board are now classified into three classes with staggered threeyear terms (with the exception of the expiration of the initial Class I and Class II directors), as follows:●Class I, comprised of two directors, initially Arik Kaufman and Oren Elmaliah (with their initial terms expiring at our 2022 annual meeting of stockholders andmembers of such class serving successive threeyear terms);●Class II, comprised of two directors, initially Oron Branitzky and Guy Zimmerman (with their initial terms expiring at our 2023 annual meeting of stockholdersand members of such class serving successive threeyear terms); and●Class III, comprised of one director, initially Ronen Luzon (with his initial term expiring at our 2024 annual meeting of stockholders and members of suchclass serving successive threeyear terms).54To preserve the classified Board structure, a director elected by the Board of Directors to fill a vacancy holds office until the next election of the class forwhich such director has been chosen, and until that director’s successor has been elected and qualified or until his or her earlier death, resignation, retirement orremoval.Our board of directors has reviewed the materiality of any relationship that each of our directors has with us, either directly or indirectly. Based upon thisreview, we believe that Arik Kaufman, Oren Elmaliach, Oron Branitzky and Guy Zimmerman qualify as independent directors in accordance with the standards set bythe Nasdaq and Rule 10A3 promulgated under the Exchange Act.Committees of the BoardAudit CommitteeOur audit committee is comprised of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Elmaliah serves as chairman of the audit committee. The auditcommittee is responsible for retaining and overseeing our independent registered public accounting firm, approving the services performed by our independentregistered public accounting firm and reviewing our annual financial statements, accounting policies and our system of internal controls. The audit committee actsunder a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the audit committee’s composition and meetings.The audit committee charter is available on our website www.mysizeid.com.The Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by applicable SEC rules. Inaddition, the Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by the rules of the Nasdaq StockMarket.The Board of Directors has determined that Oren Elmaliah is an “audit committee financial expert” serving on its audit committee, and is independent, as theSEC has defined that term in Item 407 of Regulation SK.Compensation CommitteeOur compensation committee consists of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Branitzky serves as chairman of the compensationcommittee.The compensation committee’s roles and responsibilities include making recommendations to the Board of Directors regarding the compensation for ourexecutives, the role and performance of our executive officers, and appropriate compensation levels for our CEO, which are determined without the CEO present, andother executives. Our compensation committee also administers our 2017 Equity Incentive Plan and our 2017 Consultant Equity Incentive Plan. The compensationcommittee acts under a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the compensation committee’scomposition and meetings. The compensation committee charter is available on our website www.mysizeid.com.Our Board of Directors has determined that all of the members of the compensation committee are “independent” as that term is defined by the rules of theNasdaq Stock Market.Nominating and Corporate Governance CommitteeThe members of the nominating and corporate governance committee are Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Kaufman serves aschairman of the corporate governance and nominations committee. The nominating and corporate governance committee acts under a written charter, which morespecifically sets forth its responsibilities and duties, as well as requirements for the nominating and corporate governance committee’s composition and meetings.The nominating and corporate governance committee charter is available on our website www.mysizeid.com.The nominating and corporate governance committee develops, recommends and oversees implementation of corporate governance principles for us andconsiders recommendations for director nominees. The nominating and corporate governance committee also considers stockholder recommendations for directornominees that are properly received in accordance with applicable rules and regulations of the SEC. Our stockholders that wish to nominate a director for election tothe Board of Directors should follow the procedures set forth in our bylaws.55The nominating and corporate governance committee will consider persons identified by its members, management, stockholders, investment bankers andothers. The guidelines for selecting nominees, which are specified in the nominating committee charter, generally provide that persons to be nominated:●should be accomplished in his or her field and have a reputation, both personal and professional, that is consistent with our image and reputation;●should have relevant experience and expertise and would be able to provide insights and practical wisdom based upon that experience and expertise; and●should be of high moral and ethical character and would be willing to apply sound, objective and independent business judgment, and to assume broadfiduciary responsibility.The nominating and corporate governance committee will consider a number of qualifications relating to management and leadership experience,background and integrity and professionalism in evaluating a person’s candidacy for membership on the Board of Directors. The nominating and corporategovernance committee may require certain skills or attributes, such as financial or accounting experience, to meet specific Board needs that arise from time to timeand will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of Board of Directors members. The nominating andcorporate governance committee will not distinguish among nominees recommended by stockholders and other persons.Our Board of Directors has determined that all of the members of the nominating and corporate governance committee are “independent” as that term isdefined by the rules of the Nasdaq Stock Market.Code of Conduct and EthicsWe have a Code of Business Conduct and Ethics that applies to all our employees. The text of the Code of Business Conduct and Ethics is publiclyavailable on our website at www.mysizeid.com. Information contained on, or that can be accessed through, our website does not constitute a part of this report andis not incorporated by reference herein. Disclosure regarding any amendments to, or waivers from, provisions of the code of conduct and ethics that apply to ourdirectors, principal executive and financial officers will be posted on the “InvestorsCorporate Governance” section of our website at www.mysizeid.com or will beincluded in a Current Report on Form 8K, which we will file within four business days following the date of the amendment or waiver.Change in Procedures for Recommending DirectorsThere have been no material changes to the procedures by which our stockholders may recommend nominees to our Board of Directors from thoseprocedures set forth in our Proxy Statement for our 2021 Annual Meeting of Stockholders, filed with the SEC on December 7, 2022.56ITEM 11. EXECUTIVE COMPENSATIONSummary Compensation TableThe following sets forth the compensation paid by us to our named executive officers, during the years ended December 31, 2022 and December 31, 2021.Name and Principal PositionYearSalary($) (1)Bonus($)StockAwards($)OptionAwards($) (2)All OtherCompensation($)Total($)Ronen Luzon2022173,000223,0008,000126,000530,000Chief Executive Officer2021194,0005,00023,00097,000319,000Or Kles2022123,00053,0007,00071,000254,000Chief Financial Officer2021123,0008,00030,00061,000222,000Billy Pardo2022134,00053,0007,000100,00294,000Chief Operating Officer2021162,0007,00018,00074,000261,000(1) Salary for the years 2022 and 2021 are based on average US$/NIS representative exchange rates of NIS 3.358 and NIS 3.11 respectively.(2) Amounts in this column represent the grant date fair value of options granted to the named executive officers during 2022 and 2021, computed in accordance withFASB ASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the named executive officers. The assumptionsmade in valuing the options reported in this column are discussed in Note 11 to our audited financial statements for the year ended December 31, 2021 and Note 4 toour condensed consolidated interim financial statements for the quarterly period ended September 30, 2022.All Other Compensation TableThe “All Other Compensation” amounts set forth in the Summary Compensation Table above consist of the following:NameYearAutomobileRelatedExpenses($)Manager’sInsurance*($)EducationFund*($)Othersocialbenefits**($)Total($)Ronen Luzon202232,00031,00015,00048,000126,000202133,00033,00015,00016,00097,000Or Kles202215,00021,00010,00025,00071,000202114,00019,0009,00019,00061,000Billy Pardo202216,00025,00013,00046,000100,000202117,00024,00012,00021,00074,000* Manager’s insurance and education funds are customary benefits provided to employees based in Israel. Manager’s insurance is a combination of severancesavings (in accordance with Israeli law), defined contribution taxqualified pension savings and disability insurance premiums. An education fund is a savings fundof pretax contributions to be used after a specified period of time for educational or other permitted purposes.** Other social benefits for 2022 and 2021 for all named individuals includes tax payments in respect of social benefits.57Agreements with Named Executive OfficersRonen LuzonOn November 18, 2018, My Size Israel, our wholly owned subsidiary, entered into an employment agreement with Ronen Luzon, or the Luzon EmploymentAgreement, pursuant to which Mr. Luzon will serve as our Chief Executive Officer. Pursuant to the terms of the Luzon Employment Agreement, Mr. Luzon receivesNIS 55,000 per month as his base salary and shall be eligible to receive such bonus as determined by us. In addition, Mr. Luzon shall be entitled social benefits andto other benefits, including, but not limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, includinginsurance in case of disability, annual vacation days, sick leave and expense reimbursement. Pursuant to the terms of the Luzon Employment Agreement and subjectto certain conditions, payments made by the Company to the pension fund or manager’s insurance fund shall be made in lieu of severance payments due to Mr.Luzon. The term of the Luzon Employment Agreement shall be effective as of September 1, 2018 and shall continue until such time either party provides writtennotice to the other party at least 75 days in advance of the termination of such agreement. We may also terminate Mr. Luzon’s employment without prior writtennotice (or payment in lieu of such notice) for Cause (as defined in the Luzon Employment Agreement).Or KlesOn November 18, 2018, My Size Israel entered into an employment agreement with Or Kles, or the Kles Employment Agreement, pursuant to which Mr. Kleswill serve as our Chief Financial Officer. Pursuant to the terms of the Kles Employment Agreement, Mr. Kles receives NIS 38,000 per month as his base salary andshall be eligible to receive such bonus as determined by us. In addition, Mr. Kles shall be entitled to social benefits and other benefits, including, but not limited to,contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annual vacation days,sick leave and expense reimbursement. Pursuant to the terms of the Kles Employment Agreement and subject to certain conditions, payments made by us to thepension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Mr. Kles. The term of the Kles Employment Agreement shall beeffective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days in advance of thetermination of such agreement. We may also terminate Mr. Kles’s employment without prior written notice (or payment in lieu of such notice) for Cause (as defined inthe Kles Employment Agreement).Billy PardoOn November 18, 2018, My Size Israel entered into an employment agreement with Billy Pardo, or the Pardo Employment Agreement, pursuant to which Ms.Pardo will serve as our Chief Product Officer. Pursuant to the terms of the Pardo Employment Agreement, Ms. Pardo receives NIS 47,500 per month as her basesalary and shall be eligible to receive such bonus as determined by us. In addition, Ms. Pardo shall be entitled to social benefits and other benefits, including, butnot limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annualvacation days, sick leave and expense reimbursement. Pursuant to the terms of the Pardo Employment Agreement and subject to certain conditions, payments madeby us to the pension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Ms. Pardo. The term of the Pardo EmploymentAgreement shall be effective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days inadvance of the termination of such agreement. We may also terminate Ms. Pardo’s employment without prior written notice (or payment in lieu of such notice) forCause (as defined in the Pardo Employment Agreement).58Outstanding Equity Awards at Fiscal YearEndThe following table provides information regarding options held by each of our named executive officers that were outstanding as of December 31, 2022.Option AwardsStock AwardsName and Principal PositionNumber ofSecuritiesUnderlyingUnexercisedOptionsExercisableNumber ofSecuritiesUnderlyingUnexercisedOptionsUnexercisableOptionExercisePriceOptionExpirationDateEquityincentiveplan awards:Number ofUnearnedShares that HaveNot VestedEquityincentiveplan awards:Market Value ofUnearnedShares, That Have Not VestedRonen Luzon Chief Executive Officer400(1)$26(8)7/24/20231,601(2)$26(8)5/29/20256,400(3)$268/10/2025100,000(9)100,000$511,250Or Kles – Chief Financial Officer227(4)$26(8)7/24/2023427(5)$26(8)5/29/20255,200(6)$268/10/202524,000(10)24,000$122,700Billy Pardo Chief Operating Officer400(1)$26(8)7/24/2023894(7)$26(8)5/29/20255,200(6)$268/10/202524,000(11)24,000$122,700(1) The option has a grant date of July 24, 2017 and vested in full on January 24, 2018.(2) The option has a grant date of May 29, 2019. 267 options vested immediately upon grant, 445 options vested on January 24, 2019, 445 options vested on January24, 2020 and 444 options vested on January 24, 2021.(3) The option has a grant date of October 8, 2020, 1,600 options vested on November 26, 2020, 1,600 options vested on May 26, 2021, 1,600 options vested onNovember 26, 2021, and 1,600 options vested on May 26, 2022.(4) The option has a grant date of July 24, 2017. 76 options vested immediately upon grant, 76 options vested on May 1, 2018 and 75 options vested on May 1, 2019.(5) The option has a grant date of May 29, 2019. 160 options vested immediately upon grant, 445 options vested on May 1, 2020, 445 options vested on May 21, 2021and 444 options vested on May 1, 2022.(6) The option has a grant date of October 8, 2020, 1,300 options vested on November 26, 2020, 1,300 options vested on May 26, 2021, 1,300 options vested onNovember 26, 2021, and 1,300 options vested on May 26, 2022.(7) The option has a grant date of May 29, 2019. 214 options vested immediately upon grant, 227 options vested on January 24, 2019, 227 options vested on January24, 2020 and 226 options vested on January 24, 2021.(8) On May 25, 2020, the compensation committee of the Board of Directors of the Company reduced the exercise price of outstanding options of employees anddirectors of the Company for the purchase of an aggregate of 5,610 shares of common stock of the Company (with exercise prices ranging between $453.75 and$228.75) to $26 per share, which was the closing price for the Company’s common stock on May 22, 2020, and extended the term of the foregoing options for anadditional one year from the original date of expiration.(9) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(10) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(11) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.59Director CompensationThe following table sets forth compensation information for our nonemployee directors for the year ended December 31, 2022.NameFees earned orpaid incash ($)(1)Optionawards($)(1)(2)Total($)Oren Elmalih15,078 15,078Oron Barnitzky15,34715,347Arik Kaufman14,44114,441Guy Zimmerman13,03313,033(1)Fees for the year 2022 are based on average US$/NIS representative exchange rates of NIS 3.519.(2)Amounts in this column represent the grant date fair value of options granted to the nonemployee directors during 2022 computed in accordance with FASBASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the nonemployee directors. The assumptions made invaluing the options reported in this column are discussed in Note 11 to our financial statements for the year ended December 31, 2022.We compensate our nonemployee directors for their service as a member of our board. Mr. Luzon received no separate compensation for board service. Mr.Luzon’s compensation is set forth above in the Summary Compensation Table.Each nonemployee director is entitled to receive a per meeting fee of $318. Nonemployee directors are also reimbursed for their travel and reasonable outofpocket expenses incurred in connection with attending board and committee meetings, to the extent that attendance is required by the board or the committee(s)on which that director serves.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurity Ownership of Certain Beneficial Holders and ManagementThe following table sets forth certain information regarding beneficial ownership of shares of our common stock as of March 31, 2023 by (i) each personknown to beneficially own more than 5% of our outstanding common stock, (ii) each of our directors, (iii) each of our executive officers, and (iv) all of our directorsand executive officers as a group. Except as otherwise indicated, the persons named in the table below have sole voting and investment power with respect to allshares beneficially owned, subject to community property laws, where applicable.Beneficial Owner(1)Shares ofCommon StockBeneficiallyOwnedPercentage(2)Executive officers and directors:Ronen Luzon143,578(3)5.8%Or Kles29,854(4)1.2%Billy Pardo143,578(5)5.8%Ezequiel Javier Brandwain12,000(6)*Ilia Turchinsky18,313(7)*Arik Kaufman1,294(8)*Oren Elmaliah1,294(9)*Oron Branitzky1,294(10)*Guy ZimmermanAll Executive Officers and Directors as a Group (9 persons)207,6268.4%*Less than 1%(1) The address of each person is c/o My Size, Inc., 4 HaYarden St., P.O.B. 1026, Airport City, Israel 7010000 unless otherwise indicated herein.60(2) The calculation in this column is based upon 2,446,780 shares of common stock outstanding on March 31, 2023. Beneficial ownership is determined in accordancewith the rules of the SEC and generally includes voting or investment power with respect to the subject securities. Shares of common stock that are currentlyexercisable or exercisable within 60 days of March 31, 2023 are deemed to be beneficially owned by the person holding such securities for the purpose of computingthe percentage beneficial ownership of such person, but are not treated as outstanding for the purpose of computing the percentage beneficial ownership of anyother person(3) Consists of (i) 100,000 shares of restricted stock granted under the 2017 Plan, (ii) 4,683 shares of common stock, (iii) options to purchase up to 8,401 shares of ourcommon stock, and (iv) 24,000 shares of restricted stock and options to purchase up to 6,494 shares of our common stock which are held by Billy Pardo, RonenLuzon’s spouse. Mr. Luzon may be deemed to beneficially hold the securities of us held by Ms. Pardo.(4) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, and (ii) an option to purchase 5,854 shares of our common stock. Does not includean aggregate of 119,760 shares of restricted stock over which Mr. Kles has been designated the initial proxy to vote such shares pursuant to a voting agreemententered into between Whitehole S.L., Twinbel S.L. and EGI Acceleration, S.L.(5) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, (ii) options to purchase up to 6,494 shares of our common stock, (iii) 100,000 sharesof restricted stock which are held by Ronen Luzon, Billy Pardo’s spouse (iii) 8,401 shares of common stock which are held by Mr. Luzon, and (iii) options to purchaseup to 4,683 shares of our common stock which are held by Mr. Luzon. Ms. Pardo may be deemed to beneficially hold the securities of the Company held by Mr.Luzon.(6) Consists of 12,000 shares of restricted stock granted under the 2017 Plan.(7) Consists of (i) 16,000 shares of restricted stock granted under the 2017 Plan, and (ii) options to purchase up to 2,313 shares of our common stock.(8) Consists of options to purchase up to 1,294 shares of our common stock.(9) Consists of options to purchase up to 1,294 shares of our common stock.(10) Consists of options to purchase up to 1,294 shares of our common stock.Change in ControlWe are not aware of any arrangement that might result in a change in control in the future. We have no knowledge of any arrangements, including anypledge by any person of our securities, the operation of which may at a subsequent date result in a change in the Company’s control.Securities Authorized for Issuance Under Equity Compensation PlansOn January 29, 2017, our Board of Directors approved the 2017 Equity Incentive Plan and the 2017 Consultant Equity Incentive Plan, which were approvedby our stockholders on March 21, 2017. In addition, on January 29, 2017, our Board of Directors approved the Stock Option Plan Israel Grantees SubPlan. The 2017Equity Incentive Plan initially authorized the issuance of up to 5,334 shares of common stock under the plan and the 2017 Consultant Equity Incentive Plan initiallyauthorized the issuance of up to 8,000 shares of common stock under the plan.On February 12, 2018, our stockholders approved an amendment to the 2017 Consultant Equity Incentive Plan to increase the maximum number of shares ofour common stock available for issuance under the plan from 8,000 to 12,000. On July 3, 2018, our stockholders approved an amendment to the 2017 Equity IncentivePlan to increase the maximum number of shares of our common stock available for issuance under the plan from 5,334 to 8,000 and an amendment to the 2017Consultant Equity Incentive Plan to increase the maximum number of shares of our common stock available for issuance under the plan from 12,000 to 18,667.On May 25, 2020, our Board reduced the exercise price of outstanding options of our employees and directors for the purchase of an aggregate of 140,237of our common stock (with exercise prices ranging between $453.75 and $228.75) to $26.0 per share, and extended the term of the foregoing options for an additionalone year from the original date of expiration.61On August 10, 2020, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 80,000 to 58,000shares, and a decrease of the numbers of shares available for issuance under the 2017 Consultant Incentive Plan to 8,667 shares from 18,667 shares.On December 30, 2021, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 58,000 sharesto 230,800 shares.On December 7, 2022, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Plan from 230,800 shares to 289,000shares.The following table summarizes information about our equity compensation plans and individual compensation arrangements as of December 31, 2022.Number of securities to be issued upon exercise of outstanding options, warrants and rights(a)Weighted average exercise price of outstandingoptions, warrants and rights (b)Number of securities remaining availablefor future issuanceunder equity compensationplans (excludingsecurities reflected in column (a) (c)Equity compensation plans approved by security holders43,49724.7477,455Equity compensation plans not approved by security holdersTotal43,49724.7477,455ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEDuring years ended December 31, 2022 and 2021, except for compensation arrangements described elsewhere herein and the transactions described below,we did not participate in any transaction, and we are not currently participating in any proposed transaction, or series of transactions, in which the amount involvedexceeded the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years, and in which, to our knowledge,any of our directors, officers, five percent beneficial security holders, or any member of the immediate family of the foregoing persons had, or will have, a direct orindirect material interest.Compensation arrangements for our named executive officers and directors are described in the section entitled “Executive Compensation.”Employment AgreementsWe have entered into written employment agreements with each of our executive officers. These agreements generally provide for notice periods of varyingduration for termination of the agreement by us or by the relevant executive officer, during which time the executive officer will continue to receive base salary andbenefits. We have also entered into customary noncompetition, confidentiality of information and ownership of inventions arrangements with our executiveofficers. However, the enforceability of the noncompetition provisions may be limited under applicable law.OptionsSince our inception we have granted options to purchase our common stock to our officers and directors. Such option agreements may contain accelerationprovisions upon certain merger, acquisition, or change of control transactions.62Restricted Stock GrantsOn September 29, 2022, our compensation committee approved grants of restricted share awards under our 2017 Plan to Ronen Luzon, Or Kles, Billy Pardo,Ilia Turchinsky and Ezequiel Javier Brandwain, pursuant to which they were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000restricted shares and 12,000 restricted shares, respectively. The restricted shares shall vest in three equal installments on January 1, 2023, January 1, 2024 andJanuary 1, 2025, conditioned upon continuous employment with us, and subject to accelerated vesting upon a change in control of the Company.Shareholder ActivismIn May 2021, we received notice from Custodian Ventures, LLC, or Custodian, of its intention to nominate four candidates to stand for election to our Boardof Directors at our 2021 annual meeting of stockholders. Custodian subsequently made a book and records request and has made public statements calling forchanges to our management.On September 22, 2021, Custodian, commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v. Mysize,Inc., C.A. No. 20210817LWW, or the Delaware Action. In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting. As further described below, on November 4, 2021, we entered into asettlement agreement, or the Settlement Agreement, with Custodian, Activist Investing LLC, David Aboudi, Partick Loney and David Natan, collectively, the LazarParties, settling and dismissing the Delaware Action.On October 19, 2021, we commenced an action in the United States District Court for the Southern District of New York captioned My Size, Inc. v. DavidLazar, Custodian Ventures LLC, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, Civil Action No, 1:21cv08585, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, andcertain rules promulgated thereunder, or the SDNY Action. The complaint sought, among other things, declaratory and injunctive relief related to defendants’ effortsto nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed “group” for purposes ofSection 13 (d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. In addition, the complaint alleged that thedefendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules in connection with their efforts to elect a slate of directorsto our Board of Directors. On October 20, 2021, the Court signed an order granting a hearing on an anticipated motion for a preliminary injunction and expeditedscheduling and discovery in aid thereof, and scheduled that hearing for December 2, 2021. As further described below, on November 4, 2021, we entered into theSettlement Agreement with the Lazar Parties settling and dismissing the claims asserted in the SDNY Action and the Delaware Action against one another. OnNovember 8, 2021, the remaining defendants in the SDNY Action filed and answer and counterclaim asserting a claim against us pursuant to New York Civil RightsLaw Section 70a, also known as New York’s antiSLAPP statute.On November 4, 2021, we entered into the Settlement Agreement, or the Lazar Settlement Agreement, with the Lazar Parties. Pursuant to the LazarSettlement Agreement, we and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the LazarSettlement Agreement, we reimbursed Custodian for out of pocket expenses and in consideration for the dismissal and release of claims against the Company anaggregate amount equal to $275,000. With respect to our 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) itsMay 12, 2021 notice of stockholder nominations of four director candidates with respect to our 2021 annual meeting of stockholders, (ii) the notice dated October 28,2021 submitted by Custodian to us notifying us of Custodian’s continued intent to bring its nomination of four director candidates before our stockholders at the2021 annual meeting, and (iii) any and all related materials and notices submitted to us in connection therewith or related thereto and to not take any further action inconnection with the solicitation of any proxies in connection with us. Custodian also agreed to cease any and all solicitation and other activities in connection withthe 2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effective date of theAgreement, or the Standstill Period. The Lazar Settlement Agreement also provides that during the Standstill Period, the Lazar Parties will vote all shares of ourcommon stock it beneficially owns in accordance with any proposal or recommendation made by us or our Board of Directors that is submitted to our stockholders,unless to do so would violate applicable law and except with respect to certain extraordinary transactions. The Lazar Settlement Agreement also contains nondisparagement and confidentiality provisions, subject to certain exceptions.63On December 9, 2021, we subsequently entered into a Settlement Agreement, or the Ault Settlement Agreement, with Milton C. Ault III, Ault Alpha LP, AultAlpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed to withdraw the SDNY Action against the AultParties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that action against the Company. In addition, pursuant to the SettlementAgreement, we paid $70,000 to the Ault Parties in consideration for the releases and other good and valuable consideration as set forth in the Ault SettlementAgreement.Naiz Bespoke Technologies AcquisitionOn October 7, 2022, we entered into the Naiz Agreement with the Naiz Sellers, pursuant to which the Naiz Sellers agreed to sell to us all of the issued andoutstanding equity of Naiz. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) ) the Naiz EquityConsideration and (ii) up the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the Equity Value Averaging Period) is less than $1,650,000, My Size shall pay the Shortfall Value to the Naiz Sellers within 45days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period, it wasdetermined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement)).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers will be subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into the LockUp Agreement with My Size, (ii) Whitehole, Twinbel and EGIentered into the Voting Agreement with My Size and (iii) each of the Key Persons entered into employment agreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonth period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonth “dribbleout” provisionthat provides following the expiration of the initial sixmonth lockup period, without My Size’s prior written consent (which My Size shall be permitted to withholdat its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than the average dailytrading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.64The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Indemnification Agreements and Directors’ and Officers’ Liability InsuranceWe have entered into indemnification agreements with each of our directors and executive officers. These agreements, among other things, require us toindemnify these individuals and, in certain cases, affiliates of such individuals, to the fullest extent permitted by Delaware law against liabilities that may arise byreason of their service to us or at our direction, and to advance expenses incurred as a result of any proceedings against them as to which they could beindemnified. We also maintain an insurance policy that insures our directors and officers against certain liabilities, including liabilities arising under applicablesecurities laws.Director IndependenceSee “Item 10. Directors, Executive Officers and Corporate Governance; Corporate Governance, Board Composition” above for a discussion regarding theindependence of the members of our board of directors.ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICESSomekh Chaikin, a member firm of KPMG International, located in Tel Aviv, Israel, PCAOB ID 1057, has served as our independent registered publicaccounting firm for 2022 and 2021. The following are Somekh Chaikin’s fees for professional services in each of the respective fiscal years:Fee Category20222021Audit Fees198,910298,300Tax Fees30,66729,300Auditrelated Fees18,000Total Fees247,577327,600Audit Fees:Audit Fees consist of fees billed for professional services performed by Somekh Chaikin for the audit of our annual financial statements, thereview of interim consolidated financial statements, and related services that are normally provided in connection with registration statements, including theregistration statement for S1 and S3.Tax Fees: Tax Fees may consist of fees for professional services, including tax and VAT consulting and compliance performed by an independent registeredpublic accounting provided during the period.PreApproval Policies and ProceduresIn accordance with the SarbanesOxley Act of 2002, as amended, our audit committee charter requires the audit committee to preapprove all audit andpermitted nonaudit services provided by our independent registered public accounting firm, including the review and approval in advance of our independentregistered public accounting firm’s annual engagement letter and the proposed fees contained therein. The audit committee has the ability to delegate the authorityto preapprove nonaudit services to one or more designated members of the audit committee. If such authority is delegated, such delegated members of the auditcommittee must report to the full audit committee at the next audit committee meeting all items preapproved by such delegated members. In the fiscal years endedDecember 31, 2022 and December 31, 2021 all of the services performed by our independent registered public accounting firm were preapproved by the auditcommittee.65PART IVITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES(a)Financial StatementsThe financial statements required by this Item are included beginning at page F1.(b)ExhibitsSee Exhibit IndexITEM 16. FORM 10K SUMMARYNot applicableEXHIBIT INDEXExhibitNumberDescription3.1Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Form on Form8K filed on March 23, 2017)3.2Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10K filed onMarch 4, 2016)3.3Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’s Current Report onForm 8K filed on February 20, 2018)3.4Second Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8K filedon April 24, 2018)3.5Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’sCurrent Report on Form 8K filed on November 18, 2019)3.6Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on January 7, 2022)3.7Amendment No. 1 to Second Amended and Restated ByLaws (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8K filed on January 7, 2022)3.8Certificate of Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on December 7, 2022)4.1Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S3/A filed onNovember 14, 2016)4.2Form of Warrant to Purchase Common Stock issued on February 2, 2018 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report onForm 10K filed on March 27, 2019)4.3Description of Securities Registered under Section 12 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report on Form 10K filedon March 19, 2020)4.4Form of Warrant (incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S1, Amendment No. 1, filed with the SECon May 5, 2020.)4.5Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)4.6Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.1My Size, Inc. 2017 Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement on Schedule DEF 14Afiled on March 2, 2017)10.2My Size, Inc. 2017 Consultant Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement onSchedule DEF 14A filed on March 2, 2017)10.3My Size, Inc. 2017 Stock Option Plan Israel Grantees SubPlan (incorporated by reference to Exhibit 10.3 to the Company’s Annual Report on Form10K filed on March 27, 2019)6610.4Purchase Agreement between My Size, Inc. and Shoshana Zigdon dated as of February 16, 2014 (incorporated by reference to Exhibit 10.2 to theCompany’s Annual Report on Form 10K filed on March 4, 2016)10.5 +Employment Agreement between My Size Israel 2014 Ltd. and Ronen Luzon dated November 18, 2018 (incorporated by reference to Exhibit 10.1 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.6 +Employment Agreement between My Size Israel 2014 Ltd. and Or Kles dated November 18, 2018 (incorporated by reference to Exhibit 10.2 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.7 +Employment Agreement between My Size Israel 2014 Ltd. and Billy Pardo dated November 18, 2018 (incorporated by reference to Exhibit 10.3 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.8Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on January 15,2020)10.9Form of Warrant (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.10Form of Placement Agent Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.11Securities Purchase Agreement (incorporated by reference to Exhibit 10.30 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.12Underwriting Agreement, dated January 5, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on January 7, 2021)10.13Underwriting Agreement, dated March 22, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on March 25, 2021)10.14Amendment to Purchase Agreement between My Size Israel 2014 Ltd., My Size, Inc. and Shoshana Zigdon (incorporated by reference to Exhibit 10.1to the Company’s Quarterly Report on Form 10Q on August 16, 2021)10.15Form of Registered Direct Offering Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.16Form of PIPE Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.17Form of Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.18Form of Placement Agent Warrant issued by the Company on October 28, 2021 (incorporated by reference to Exhibit 10.22 to the Company’s Form S1filed on November 12, 2021)10.19Form of Registration Rights Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.4 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.20Engagement Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference to Exhibit 10.5 to theCompany’s Current Report on Form 8K filed on October 28, 2021)10.21Settlement Agreement dated November 4, 2021, among My Size, Inc., David Lazar and certain of his affiliates (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on November 5, 2021)10.22Share Purchase Agreement dated as of February 7, 2022 between My Size Israel 2014 Ltd. and Amar Guy Shalom and Elad Bretfeld (incorporated byreference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SEC on February 8, 2022)10.23Employment Agreement between My Size Israel 2014 Ltd. and Ezequiel Javier Brandwain dated January 27, 2022 (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on February 1, 2022)10.24Form of Section 102 Capital Gain Restricted Stock Award Agreement under the Company’s 2017 Equity Incentive Plan (incorporated by reference toExhibit 10.1 to the Company’s Quarterly Report on Form 10Q, filed with the SEC on November 14, 2022)10.25Share Purchase Agreement, dated as of October 6, 2022, by and among My Size, Inc., Borja Cembrero Saralegui, Artiz Toree Garcia, Whitehold, S.L.,Twinbel, S.L., and EGI Acceleration, S.L. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SECon October 12, 2022)10.26Form of LockUp Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)10.27Form of Voting Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.3 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)6710.28My Size, Inc. Amendment to the My Size, Inc. 2017 Equity Plan (incorporated by reference to Appendix B to the Company’s definitive proxystatement filed with the SEC on November 4, 2022)10.29Form of Registered Direct Offering Securities Purchase Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.1 to theCompany’s Current Report on Form 8K filed with the SEC on January 12, 2023)10.30Form of PIPE Securities Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8Kfiled with the SEC on January 12, 2023)10.31Form of Registered Direct PreFunded Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.32Form of Series A and Series B Warrant (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8K filed with the SEC onJanuary 12, 2023)10.33Form of Private Placement PreFunded Warrant (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.34Form of Registration Rights Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form8K filed with the SEC on January 12, 2023)10.35Engagement Agreement, dated December 5, 2022 (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8K filed withthe SEC on January 12, 2023)10.36*Form of Placement Agent Warrant21.1*List of Subsidiaries23.1*Consent of Somekh Chaikin, a member firm of KPMG International, registered public accounting firm31.1*Certification of the Chief Executive Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200231.2*Certification of the Chief Financial Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200232.1*Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a14(b) of the Exchange Act and 18 U.S.C. Section 1350, asadopted pursuant to Section 906 of the SarbanesOxley Act of 2002101.INS*Inline XBRL Instance Document101.SCH*Inline XBRL Taxonomy Schema101.CAL*Inline XBRL Taxonomy Calculation Linkbase101.DEF*Inline XBRL Taxonomy Definition Linkbase101.LAB*Inline XBRL Taxonomy Label Linkbase101.PRE*Inline XBRL Taxonomy Presentation Linkbase104Cover Page Interactive Data File (formatted as Inline XBRL document and contained in Exhibit 101)*Filed herewith.+Indicates a management contract or any compensatory plan, contract or arrangement68SIGNATURESPursuant to the requirements of Section 13 and 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10K to be signed on its behalf by the undersigned, thereunto duly authorized on this 14th day of April, 2023.MY SIZE, INC./s/ Ronen LuzonRonen LuzonChief Executive Officer (Principle Executive Officer)/s/ Or KlesOr KlesChief Financial Officer(Principal Financial and Accounting Officer)Pursuant to the requirements of the Securities Act of 1934, this annual report on Form 10K has been signed below by the following persons on behalf ofthe registrant and in the capacities and on the dates indicated.SignatureTitleDate/s/ Ronen LuzonChief Executive Officer and DirectorApril 14, 2023Ronen Luzon(Principle Executive Officer)/s/ Or KlesChief Financial OfficerApril 14, 2023Or Kles(Principal Financial and Accounting Officer)/s/ Oren ElmaliahDirectorApril 14, 2023Oren Elmaliah/s/ Arik KaufmanDirectorApril 14, 2023Arik Kaufman/s/ Oron BranitzkyDirectorApril 14, 2023Oron Branitzky/s/ Guy ZimmermanDirectorApril 14, 2023Guy Zimmerman69EX10.36 2 ex1036.htmExhibit 10.36NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES ANDEXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THESECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO ANEFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTIONNOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGINACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.PLACEMENT AGENT COMMON STOCK PURCHASE WARRANTMY SIZE, INC.Warrant Shares: _______Issue Date: January 12, 2023Initial Exercise Date: January 12, 2023THIS PLACEMENT AGENT COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _____________ or itsassigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the dateset forth above (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on January 10, 2028 (the “Termination Date”) but not thereafter, tosubscribe for and purchase from My Size, Inc., a Delaware corporation (the “Company”), up to ______ shares (as subject to adjustment hereunder, the “WarrantShares”) of the Company’s Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined inSection 2(b). This Warrant is issued pursuant to that certain engagement letter, dated as of December 5, 2022, by and between the Company and H.C. Wainwright &Co., LLC.Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities PurchaseAgreement (the “Purchase Agreement”), dated January 10, 2023, among the Company and the purchasers signatory thereto.1Section 2. Exercise.a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or afterthe Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted by email (or emailattachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the numberof Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shalldeliver the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on aUnited States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No inkoriginalNotice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required.Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder haspurchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrantto the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercisesof this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering theoutstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder andthe Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver anyobjection to any Notice of Exercise within one (1) Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant,acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, thenumber of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.b) Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $3.8188, subject to adjustment hereunder (the“Exercise Price”).c) Cashless Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein isnot available for the issuance or resale of the Warrant Shares to or by the Holder, then this Warrant may also be exercised, in whole or in part, at such timeby means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing[(AB) (X)] by (A), where:(A) =as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice ofExercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed anddelivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) ofRegulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAPon the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on theprincipal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s execution of the applicable Notice ofExercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hoursthereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii)the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice ofExercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;(B) =the Exercise Price of this Warrant, as adjusted hereunder; and(X) =the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if suchexercise were by means of a cash exercise rather than a cashless exercise.2“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which theCommon Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York Citytime)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest precedingdate) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for theCommon Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the mostrecent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by anindependent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to theCompany, the fees and expenses of which shall be paid by the Company.“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the TradingMarket on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or thenearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and ifprices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reportingprices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock asdetermined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonablyacceptable to the Company, the fees and expenses of which shall be paid by the Company.If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of theSecurities Act, the Warrant Shares shall take on the characteristics of the Warrants being exercised, and the holding period of the Warrant Shares beingissued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section 2(c).3d) Mechanics of Exercise.i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to betransmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with TheDepository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant insuch system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of theWarrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or mannerofsale limitationspursuant to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, registered in theCompany’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitledpursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2)Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate ExercisePrice to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Companyof the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall bedeemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant hasbeen exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (otherthan in the case of a cashless exercise) is received by the Warrant Share Delivery Date. If the Company fails for any reason to deliver tothe Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder,in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP ofthe Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifthTrading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share Delivery Date until such WarrantShares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FASTprogram so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standardsettlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stockas in effect on the date of delivery of the Notice of Exercise.4ii.Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the requestof a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a newWarrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrantshall in all other respects be identical with this Warrant; provided, however, that the Holder shall be required to return any WarrantShares subject to any such rescinded exercise notice concurrently with the return to Holder of the aggregate Exercise Price paid to theCompany for such Warrant Shares and the restoration of Holder’s right to acquire such Warrant Shares pursuant to this Warrant(including, issuance of a replacement warrant certificate evidencing such restored right).iii. Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant toSection 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.iv. Compensation for BuyIn on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights availableto the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with theprovisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date theHolder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwisepurchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipatedreceiving upon such exercise (a “BuyIn”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) theHolder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) theamount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connectionwith the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at theoption of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was nothonored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock thatwould have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holderpurchases Common Stock having a total purchase price of $11,000 to cover a BuyIn with respect to an attempted exercise of shares ofCommon Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediatelypreceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written noticeindicating the amounts payable to the Holder in respect of the BuyIn and, upon request of the Company, evidence of the amount of suchloss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including,without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver sharesof Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.5v. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise ofthis Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Companyshall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by theExercise Price or round up to the next whole share.vi. Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue ortransfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paidby the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by theHolder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, thisWarrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder andthe Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.The Company shall pay all Transfer Agent fees required for sameday processing of any Notice of Exercise and all fees to the DepositoryTrust Company (or another established clearing corporation performing similar functions) required for sameday electronic delivery of theWarrant Shares.vii. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timelyexercise of this Warrant, pursuant to the terms hereof.6e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise anyportion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicableNotice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of theHolder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). Forpurposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Partiesshall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, butshall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrantbeneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion ofany other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exerciseanalogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in thepreceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act andthe rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that suchcalculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed inaccordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (inrelation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisableshall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether thisWarrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of thisWarrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm theaccuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number ofoutstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s mostrecent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recentwritten notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request ofa Holder, the Company shall within one (1) Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock thenoutstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise ofsecurities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number ofoutstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stockoutstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice tothe Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial OwnershipLimitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares ofCommon Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in theBeneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shallbe construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portionhereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplementsnecessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of thisWarrant.7Section 3. Certain Adjustments.a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes adistribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which,for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstandingshares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into asmaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case theExercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any)outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately aftersuch event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of thisWarrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for thedetermination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case ofa subdivision, combination or reclassification.b) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sellsany Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares ofCommon Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregatePurchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise ofthis Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before thedate on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the recordholders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that to the extent that theHolder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall notbe entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Rightto such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not resultin the Holder exceeding the Beneficial Ownership Limitation).c) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend (other than cash) orother distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including,without limitation, any distribution of stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement,scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holdershall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number ofshares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including withoutlimitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken,the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, thatto the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, thenthe Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a resultof such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as itsright thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).8d) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more relatedtransactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease,license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, director indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of CommonStock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more ofthe outstanding Common Stock or 50% or more of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in oneor more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchangepursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly orindirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, withoutlimitation, a reorganization, recapitalization, spinoff, merger or scheme of arrangement) with another Person or group of Persons whereby such otherPerson or group acquires more than 50% of the outstanding shares of Common Stock or 50% or more of the voting power of the common equity of theCompany (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for eachWarrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of theHolder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor oracquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as aresult of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior tosuch Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, thedetermination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of AlternateConsideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Priceamong the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. Ifholders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall begiven the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at theHolder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date ofthe public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cashequal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of suchFundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company’s control, including not approved by theCompany’s Board of Directors, the Holder shall only be entitled to receive from the Company or any Successor Entity the same type or form ofconsideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to theholders of Common Stock of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, stock or anycombination thereof, or whether the holders of Common Stock are given the choice to receive from among alternative forms of consideration in connectionwith the Fundamental Transaction; provided, further, that if holders of Common Stock of the Company are not offered or paid any consideration in suchFundamental Transaction, such holders of Common Stock will be deemed to have received common stock of the Successor Entity (which Entity may be theCompany following such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on theBlackScholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day of consummation of the applicableFundamental Transaction for pricing purposes and reflecting (A) a riskfree interest rate corresponding to the U.S. Treasury rate for a period equal to thetime between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expectedvolatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualizationfactor) as of the Trading Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlyingprice per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any noncashconsideration, if any, being offered in such Fundamental Transaction and (ii) the highest VWAP during the period beginning on the Trading Dayimmediately preceding the public announcement of the applicable contemplated Fundamental Transaction (or the consummation of the applicableFundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant to this Section 3(e) and (D) a remaining option timeequal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date and (E) azero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds (or such other consideration)within the later of (i) five Business Days of the Holder’s election and (ii) the date of consummation of the Fundamental Transaction. The Company shallcause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of theobligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant towritten agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to suchFundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entityevidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares ofcapital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of thisWarrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which appliesthe exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to suchFundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for thepurpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which isreasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall beadded to the term “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction, each andevery provision of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to each of the Company and theSuccessor Entity or Successor Entities, jointly and severally), and the Successor Entity or Successor Entities, jointly and severally with the Company, mayexercise every right and power of the Company prior thereto and the Successor Entity or Successor Entities shall assume all of the obligations of theCompany prior thereto under this Warrant and the other Transaction Documents with the same effect as if the Company and such Successor Entity orSuccessor Entities, jointly and severally, had been named as the Company herein.e) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. Forpurposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the numberof shares of Common Stock (excluding treasury shares, if any) issued and outstanding.9f) Notice to Holder.i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, theCompany shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resultingadjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form)on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C)the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any sharesof capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection withany reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all orsubstantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into othersecurities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of theaffairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as itshall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective datehereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to beentitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification,consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expectedthat holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or otherproperty deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure todeliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to bespecified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, nonpublic informationregarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to aCurrent Report on Form 8K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of suchnotice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.10Section 4. Transfer of Warrant.a) Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and to theprovisions of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights) aretransferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a writtenassignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay anytransfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a newWarrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument ofassignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly becancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unlessthe Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of thedate on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordanceherewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company,together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent orattorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute anddeliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issuedon transfers or exchanges shall be dated the Issue Date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Sharesissuable pursuant thereto.c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “WarrantRegister”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as theabsolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to thecontrary.d) Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrantshall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue skylaws or (ii) eligible for resale without volume or mannerofsale restrictions or current public information requirements pursuant to Rule 144, the Companymay require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, comply with the provisions ofSection 5.7 of the Purchase Agreement.11e) Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon anyexercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling suchWarrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exemptedunder the Securities Act.Section 5. Miscellaneous.a) No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends orother rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Withoutlimiting the rights of a Holder to receive Warrant Shares on a “cashless exercise,” and to receive the cash payments contemplated pursuant to Sections 2(d)(i) and 2(d)(iv), in no event will the Company be required to net cash settle an exercise of this Warrant.a.In July 2019, the Company entered into a threeyear agreement with a consultant (“Consultant14”) to provide services to the Company includingassisting the Company to promote, market and sell the Company’s technology to potential customers. Pursuant to such agreement and in partialconsideration for such consulting services, the Company agreed to issue to Consultant14 options to purchase up to 107 shares of the Company’scommon stock upon execution of the agreement. The options are exercisable at $375.00 per share and shall vest in 3 equal instalments every twelvemonths starting July 2019. Unexercised options shall expire 4 years from the effective date.In addition, the Company agreed to issue to Consultant14 options to purchase up to 890 shares of the Company’s common stock upon executionof the agreement. The options are exercisable at $27.00 per share and shall vest in 4 equal instalments every six months starting September 2020.Unexercised options shall expire 5 years from the effective date.During 2022 and 2021, an amount of $7 and $14 respectively, were recorded by the Company as stockbased equity awards with respect to Consultant14.F24MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The Company’s outstanding options granted to consultants as of December 31, 2022 are as follows:Issuance dateOptions forCommon stockWeightedAverageexercise priceper shareOptionsexercisableExpirationdateFebruary 201815USD528.7515February 2023August 2018December 2018531USD352.38264August 2023 December 2023July 2020107USD375107July 2023SeptemberOctober 20201,488USD27.201,288October 2024 September 2025Total2,1411,674The Company uses the Black Scholes model to measure the fair value of the stock options with the assistance of a third party valuation.No stock options were granted during 2022 to consultants.The fair value of the Company’s stock options granted to nonemployees was calculated using the following weighted average assumptions:20222021GrantsGrantsDividend yield0%Expected volatility125.15%Riskfree interest0.16%Contractual term of up to (years)1.52F25MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Stock Option Plan for employeesIn March 2017, the Company adopted a stock option plan (the “Plan”) pursuant to which the Company’s Board of Directors may grant stock options toofficers and key employees. The total number of options which may be granted to directors, officers, employees under this plan, is limited to 289,000options. Stock options can be granted with an exercise price equal to or less than the stock’s fair market value at the date of grant.The fair value of each option award is estimated on the date of grant using the Binomial optionpricing model that used the weighted averageassumptions in the following table. The risk free rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the timeof grant.2022Grants2021GrantsDividend yield0%0%Expected volatility96.52%98.47%Riskfree interest4.06%0.96%expected life522.27In the years ended December 31, 2022 and 2021, 10,000 and 3,900 options, respectively, were granted.On December 7, 2022, the Company’s stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from230,800 shares to 289,000 shares.On September 29, 2022, the Compensation Committee of the Company approved grants of restricted share awards under the Company’s 2017 EquityIncentive Plan to Ronen Luzon (CEO), Or Kles (CFO), Billy Pardo (COO), Ilia Turchinsky (CTO) and Ezequiel Javier Brandwain (CCO), pursuant towhich were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000 restricted shares and 12,000 restricted shares,respectively. Each restricted share awarded under section 102 Capital Gain Restricted Stock Award Agreement (the “Agreement”). The restrictedshares shall vest in three equal installments on January 1, 2023, January 1, 2024 and January 1, 2025 for Ronen Luzon, Or Kles, Billy Pardo and IliaTurchinsky and on January 27, 2023, January 27, 2024 and January 27, 2025 for Ezequiel Javier Brandwain, conditioned upon continuous employmentwith the Company, and subject to accelerated vesting upon a change in control of the Company.On the same day, the Company granted fiveyears options to purchase up to 10,000 ordinary shares to other employees of the Company at an exerciseprice of $0.21 per share. The options vesting period is over three years in three equal portions from the vesting commencement date.F26MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The total stock option compensation expense in the year ended December 31, 2022 amounted to $448as follows: Research and development expensesamounted to $151, sales and marketing expenses amounted to $119and general and administrative expenses amounted to $178.The total stock option compensation expense in the year ended December 31, 2021 amounted to $252 as follows: Research and development expensesamounted to $94, sales and marketing expenses amounted to $97 and general and administrative expenses amounted to $61.As of December 31, 2022, there was a total of $530 unrecognized compensation cost relating to nonvested sharebased compensation arrangements.That cost is expected to be recognized over a weightedaverage period of 2.0 years.Share option activity during 2022 is as follows:2022Number ofoptionsWeightedaverageexerciseprice US$Outstanding as of January 135,74226.5Granted10,0005.25ExercisedExpired(4,136)Outstanding as of year end41,60622.48Vested as of year end33,20825.17Share option activity during 2021 is as follows:2021Number ofoptionsWeightedaverageExerciseprice US$Outstanding as of January 139,094$26.0Granted3,90032.0Exercised(751)Expired(6,501)Outstanding as of year end35,74226.5Vested as of year end27,06326.5F27MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 15 CONTINGENCIES AND COMMITMENTSa.On August 7, 2018, the Company commenced an action against North Empire LLC (“North Empire”) in the Supreme Court of the State of New York,County of New York for breach of a Securities Purchase Agreement (the “Agreement”) in which it is seeking damages in an amount to bedetermined at trial, but in no event less than $616. On August 2, 2018, North Empire filed a Summons with Notice against the Company, also in thesame Court, in which they allege damages in an amount of $11.4 million arising from an alleged breach of the Agreement. On September 6, 2018North Empire filed a Notice of Discontinuance of the action it had filed on August 2, 2018. On September 27, 2018, North Empire filed an answerand asserted counterclaims in the action commenced by the Company against them, alleging that the Company failed to deliver stock certificatesto North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against theCompany’s CEO and now former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018,the Company filed a reply to North Empire’s counterclaims. On November 15, 2018, the Company’s CEO and now former Chairman of the Boardfiled a motion to dismiss North Empire’s thirdparty complaint. On January 6, 2020, the Court granted the motion and dismissed the thirdpartycomplaint. Discovery has been completed and both parties have filed motions for summary judgment in connection with the claims andcounterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summary judgment, arguing there werefactual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision. The appealmust be fully perfected and filed by July 26, 2022. On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying theCompany’s motion for summary judgment. North Empire will file its opposition papers on or before March 31, 2022, and the Company will file replypapers on April 29, 2022. On or about September 12, 2022, the Court issued its Decision and Order denying the Company’s motion to reargue.North Empire filed its opposing brief on December 7, 2022. Both sides were given an opportunity to file a reply brief. The Company filed our replybrief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. The Appellate Court has scheduled oral argument for the appealfor February 7, 2023. Oral argument was held before the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Courtfiled its Decision and Order, which affirmed the lower court’s decisions regarding both My Size and North Empire’s motions for summary judgmentand sent the case back to the Supreme Court.On or about March 13, 2023, the Supreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date forthe mediation has not yet been set. The Company intends to vigorously defend any claims made by North Empire.The Company believes it is more likely than not that the counterclaims will be denied.b.In May 2021, the Company received notice from Custodian Ventures, LLC (“Custodian”) of its intention to nominate four candidates to stand forelection to our Board of Directors at the Company’s 2021 annual meeting of stockholders. Custodian subsequently made a book and recordsrequest and has made public statements calling for changes to our management.On September 22, 2021, Custodian commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v.MySize, Inc. (the “Delaware Action”). In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting.On October 19, 2021, the Company commenced an action in the United States District Court for the Southern District of New York againstCustodian, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, and certain rulespromulgated thereunder (the “SDNY Action”). The complaint sought, among other things, declaratory and injunctive relief related to defendants’efforts to nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed“group” for purposes of Section 13(d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. Inaddition, the complaint alleged that the defendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules inconnection with their efforts to elect a slate of directors to the Company’s Board of Directors. On October 20, 2021, the Court signed an ordergranting a hearing on an anticipated motion for a preliminary injunction and expedited scheduling and discovery in aid thereof, and scheduled thathearing for December 2, 2021.On November 4, 2021, the Company entered into the Settlement Agreement with the Lazar Parties. Pursuant to the Settlement Agreement, theCompany and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the SettlementAgreement, the Company agreed to reimburse Custodian for out of pocket expenses and in consideration for the dismissal and release of claimsagainst the Company an aggregate amount equal to $275, to be paid within three business days of the effective date of the Settlement Agreement.With respect to the Company’s 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) its May 12,2021 notice of stockholder nominations of four director candidates with respect to the Company’s 2021 annual meeting of stockholders, (ii) thenotice dated October 28, 2021 submitted by Custodian to the Company notifying the Company of Custodian’s continued intent to bring itsnomination of four director candidates before the Company’s stockholders at the 2021 annual meeting, and (iii) any and all related materials andnotices submitted to the Company in connection therewith or related thereto and to not take any further action in connection with the solicitationof any proxies in connection with the Company. Custodian also agreed to cease any and all solicitation and other activities in connection with the2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effectivedate of the Agreement (the “Standstill Period”). The Settlement Agreement also provides that during the Standstill Period, the Lazar Parties willvote all shares of common stock of the Company it beneficially owns in in accordance with any proposal or recommendation made by theCompany or the Board of Directors of the Company that is submitted to the stockholders of the Company, unless to do so would violateapplicable law and except with respect to certain extraordinary transactions. The Settlement Agreement also contains nondisparagement andconfidentiality provisions, subject to certain exceptions.On December 9, 2021, the Company subsequently entered into a Settlement Agreement (the “Ault Settlement Agreement”), with Milton C. Ault III,Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed towithdraw the SDNY Action against the Ault Parties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that actionagainst the Company. In addition, pursuant to the Settlement Agreement, the Company paid $70 to the Ault Parties in consideration for thereleases and other good and valuable consideration as set forth in the Ault Settlement Agreement.c.On July 5, 2021, the Company was served with a legal complaint filed by Fidelity Venture Capital Ltd. and Dror Atzmon in the Magistrate’s Court inTel Aviv for a monetary award in an amount of NIS 1,436,679 (approximately $450) and a declaratory relief. The plaintiffs allege that the Companybreached its contractual obligations to pay them for services allegedly rendered to the Company by the plaintiffs under a certain consultingagreement dated July 2, 2014, in an amount of NIS 819,000 (approximately $256). Additionally, the plaintiffs allege that the Company shouldcompensate them for losses allegedly incurred by them following their investment in the Company’s shares issued under a certain private offering.In the alternative, the plaintiffs move that the court will declare the investment agreement void with full restitution of plaintiffs’ original investmentin an amount of NIS 1,329,650(approximately $415). The Company filed its statement of defense on October 25, 2021. The first preliminary courthearing of the case is scheduled for January 23, 2022.The first court preliminary hearing was held on March 1, 2022.Following the first preliminary hearing and the Court’s comments and recommendation, the Plaintiffs filed a motion to strike out the claim withoutprejudice.On March 8, 2022 the Court ordered dismissal without prejudice of the claim.F28MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATIONAcquisition of OrgadOn February 7, 2022, the Company acquired 100% of the shares and voting interests in Orgad an omnichannel ecommerce platform. The acquisitionwas designed to create an additional revenue stream for the Company by becoming a direct ecommerce seller while leveraging the synergies betweenMySizeID and Orgad’s ecommerce platform.Unaudited proforma informationThe results of operations of Orgad have been included in the consolidated financial statements since the acquisition date of February 7, 2022. Orgadrevenues included in the Company’s consolidated statement of operations from February 7, 2022 through December 31, 2022 were $4,132. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,662 and $2,850 respectively, and the net loss after tax would have been $8,519 and $10,149 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash (*)300Issuance of shares of common stock (69,752 shares) (**)457Total consideration transferred757(*)The cash payment is subject to working capital adjustments.(**)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Orgad, on the twoyear and the threeyear anniversary of the closing, $350in each ofthese years provided that in the case of the second and third instalments certain revenue targets are met and subject further to certain downward postclosing adjustment. Furthermore, 69,752shares of common stock will be issued in eight equal quarterly instalments until the lapse of two years fromclosing. Additional earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023 will also be paid. All of these payments aresubject to the former owners being actively engaged with Orgad at the date such payment is due, and therefore were not taken as part of theconsideration for the business combination.During the year ended December 31, 2022 an amount of $456and $319was recorded in respect of the cash instalments and in respect of stocksissuance, respectively in Cost Of Goods, Sales and Marketing and General and Administrative expenses as shown in the following table:2022Stockbased compensation expense – Cost of goods194Stockbased compensation expense Sales and marketing271Stockbased compensation expense General and administrative310775(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the preliminary estimates of their fair values, which were determined using generally accepted valuation techniques based onestimates and assumptions made by management at the time of the acquisition. Such estimates are subject to change during the measurement periodwhich is not expected to exceed one year. The purchase price allocation was not finalized duo to examination of the net working capital of Orgad at theacquisition date. Any adjustments to the preliminary purchase price allocation identified during the measurement period will be recognized in theperiod in which the adjustments are determined.The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and Cash EquivalentTrade receivables364PP&E55Inventory864Longterm financial investment31Selling platform378Goodwill152Shortterm accruals and deferrals(181)Trade payables(668)Long term provision(13)Longterm debt(138)Deferred Taxes(87)Total net assets acquired757F29MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)(c)Acquisitionrelated costsThe Company incurred transaction costs of approximately $40and none during twelvemonth period ended December 31, 2022 which were included ingeneral and administrative expenses in the consolidated statements of income (loss).Acquisition of Naiz Bespoke Technologies, S.L. (“Naiz”)On October 11, 2022, the Company acquired 100% of the shares and voting interests in Naiz a provider of SaaS technology solutions that solve sizeand fit issues for fashion ecommerce companies. The acquisition was designed to allow Naiz’s customers benefit from MySize’s deep understanding ofthe fashion ecommerce retail landscape, while creating an additional revenue stream for the Company.Unaudited proforma informationThe results of operations of Naiz have been included in the consolidated financial statements since the acquisition date of October 11, 2022. Naizrevenues included in the Company’s consolidated statement of operations from October 11, 2022 through December 31, 2022 were $103. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,738 and $379 respectively and the net loss after tax would have been $8,695 and $10,717 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash503Issuance of shares of common stock (240,000 shares) (*)1,008Total consideration transferred1,511(*)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Naiz, additional cash consideration (up to $1,550) in four instalments subject to thefollowing conditions:(i)Continuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result ofa Good Reason; and(ii)Naiz’s Revenues reaching or exceeding the respective Target Revenues defined in the agreement. The revenues will be calculated in four periods:(1) January 1, 2022 – December 31, 2022; (2) January 1, 2023 – June 30, 2023; (3) July 1, 2023 – December 31, 2023; (4) January 1, 2024 – December31, 2024.Former owners of Naiz are entitled to additional cash consideration following December 31, 2025 (up to $1,650) in an event when the actual value of theequity consideration is less than $1,650, subject to completion of a Target Revenue for the period of January 1, 2025 – December 31, 2025 andcontinuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result of aGood Reason;F30MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)During the year ended December 31, 2022 an amount of $283 was recorded in respect of the additional cash consideration.(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the estimates of their fair values, which were determined using generally accepted valuation techniques based on estimates andassumptions made by management at the time of the acquisition.The following table summarizes the fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and cash equivalent36Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Total net assets acquired1,511(c)Acquisitionrelated costsDuring 2022, the Company incurred transaction costs of approximately $75 which were included in general and administrative expenses in theconsolidated statements of income (loss).F31MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)Note 17 – Operating SegmentsDuring the year ended December 31, 2021, the Company had one reportable segment. As a result of the business combinations in the reporting period(see note 13), the Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificialintelligence driven measurement solutions and (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions and. The fashionand equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. Orgad has onecustomer that is responsible for 37.9% of the Company consolidated revenues. The SaaS based innovative artificial intelligence driven measurementsolutions, or SaaS Solutions operating segment consists of My Size Inc and My Size Israel and My Size LLC.Information related to the operations of the Company’s reportable operating segments is set forth below:Fashion andequipment ecommerce platformSaaSSolutionsNaizTotalAs of the year ended December 31, 2022Revenues from external customers4,1322241034,459Operating (loss) income(591)(7,181)(338)(8,110)Financial income (expense), net(236)Net loss before tax(8,346)Fashion andequipment ecommerce platformSaasSolutionNaizAs of December 31, 2022:Assets2,0225,9661,691Amortization of intangible assets(114)(34)(46)The Company elected to present geographic information in respect with revenues generated from external customers based on the location of the selling entity:All the revenues of the fashion and equipment ecommerce platform segment are generated by Orgad, located in Israel.All the revenues of the Naiz segment are generated by Naiz, located in Spain.The revenues of the Saas Solutions segment are generated by My Size Ltd. located in Israel (approximately 75% of the segment revenues) and by My Size Inc.located in the U.S. (approximately 25% of the segment revenues).NOTE 18 SALES AND MARKETINGYear endedDecember 31,20222021Salaries836574Consultants and subcontractors5831,086Marketing481283Selling fees489Share based payments post Orgad acquisition (*)271Share based payments for consultants and employees127180Travel21142Other1451713,1432,336(*) See note 16.NOTE 19 GENERAL AND ADMINISTRATIVE EXPENSESYear endedDecember 31,20222021Salaries1,007461Professional services7051,832Share based payments for consultants, directors and employees18098Rent, office expenses and communication442372Insurance564627cash liability and equity liability expenses related to Orgad acquisition310cash liability expenses related to Naiz acquisition217Settlement fees (*)345Directors8259Other3933303,9004,124(*)See note 15(b)F32MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 20 FINANCIAL INCOME (EXPENSE), NETA.Financial incomeYear endedDecember 31,20222021Revaluation investment in marketable securities49Other26172666B.Financial expenseYear endedDecember 31,20222021Exchange rate differences33Revaluation of loan granted100Revaluation investment in marketable securities62Other6792629NOTE 21 EVENTS SUBSEQUENT TO THE BALANCE SHEET DATEa.On January 2, 2023, Orgad experienced a fire at its warehouse in Israel. The Company is not aware of any casualties or injuries associated with thefire. The Company shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450.The Company believes that this incident did not affect the future sales results of Orgad for the year 2023. The inventory was not insured and it istoo early to determine the potential impact of this incident on the other parties that were involved in the incident (lessor and others that leasedproperties near the warehouse).b.On January 10, 2023, the Company entered into a securities purchase agreement pursuant to which the Company sold an aggregate of 162,000ofthe Company’s shares of common stock and prefunded warrants to purchase up to 278,899shares of common stock and, in a concurrent privateplacement, unregistered warrants to purchase up to883,798 shares of common stock, consisting of Series A warrants to purchase up to 441,899shares of common stock and Series B warrants to purchase up to 441,899shares of common stock, at an offering price of $3.055per share ofcommon stock and associated Series A and Series B warrants and an offering price of $3.054per prefunded warrant and associated Series A andSeries B warrants.In addition, the Company entered into a securities purchase agreement pursuant to which the Company agreed to sell and issue in a privateplacement an aggregate of up to 540,098 unregistered prefunded warrants and unregistered warrants to purchase up to an aggregate of 1,080,196shares of common stock, consisting of Series A warrants to purchase up to 540,098 shares of common stock and Series B warrants to purchase upto 540,098 shares of common stock at an offering price of $3.054 per prefunded warrant and associated Series A and Series B warrants.As of March 31,2023 all the pre funded warrants were exercised by the investor.F33ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSUREThere were no disagreements with accountants on accounting and financial disclosure of a type described in Item 304 (a)(1)(iv) or any reportable event asdescribed in Item 304 (a)(1)(v) of Regulation SK.ITEM 9A. CONTROLS AND PROCEDURESDisclosure ControlsWe carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief FinancialOfficer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) as of December 31, 2022. Basedupon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this Annual Report on Form10K, our disclosure controls and procedures were effective to ensure that information required to be disclosed in reports filed under the Exchange Act, as amended,is recorded, processed, summarized and reported within the required time periods specified in the SEC’s rules and forms and is accumulated and communicated toour management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.Management’s Report on Internal Control Over Financial ReportingOur internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records, that, in reasonable detail,accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only inaccordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition, use or disposition of our assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance withthe policies or procedures may deteriorate.Our management, including our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financialreporting at December 31, 2022. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the TreadwayCommission (COSO) in Internal Control—Integrated Framework (2013). Based on that assessment under those criteria, management has determined that, as ofDecember 31, 2022, our internal control over financial reporting was effective.This Annual Report on Form 10K does not include an attestation report of our registered public accounting firm regarding internal control over financialreporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to the exemption provided to issuersthat are not “large accelerated filers” nor “accelerated filers” under the DoddFrank Wall Street Reform and Consumer Protection Act.Changes in Internal Control Over Financial ReportingDuring the year ended December 31, 2022, we made two acquisitions, as discussed in Note 1a and Note 16 of the audited consolidated financial statementsfor the year ended December 31, 2022 included in this Annual Report on Form 10K. As a result, we made additions and/or modifications to policies, procedures,systems and controls that have materially affected our internal control over financial reporting from the acquisitions, including new controls for consolidationprocess that relates to accounting policies and procedures, operational processes and documentation practices. Management excluded the acquired businessesfrom management’s report on internal control over financial reporting. ITEM 9B. OTHER INFORMATIONNone.ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNot applicable.51PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe following table sets forth the name, age and positions of our executive officers and directors.NAMEAgePOSITIONRonen Luzon52Chief Executive Officer and Class III DirectorOr Kles40Chief Financial OfficerBilly Pardo47Chief Operating Officer and Chief Product OfficerIlia Turchinsky35Chief Technology OfficerEzequiel Javier Brandwain53Chief Commercial OfficerOron Branitzky (1)(2)(3)*63Class II DirectorOren Elmaliah (1)(2)(3)*38Class I DirectorArik Kaufman (1)(2)(3)*41Class I DirectorGuy Zimmerman*53Class II Director(1)Member of our audit committee(2)Member of our nominating and corporate governance committee(3)Member of our compensation committee* Independent as that term is defined by the rules of the Nasdaq Stock Market.The business background and certain other information about our directors and executive officers is set forth below:Ronen Luzon has served as our Chief Executive Officer and a member of our board of directors since September 2013. Since 2006, Mr. Luzon hasadditionally served as Chief Executive Officer and founder of Malers Ltd., a company in the global security solutions market which provides technological solutionsfor integrated communication infrastructures, security and control systems. Prior to Malers, he held several senior marketing, sales management and professionalservices positions in a variety of international high tech companies including VP marketing of GA Tech and Professional Services Manager of Eldat Communication.Mr. Luzon graduated from Middlesex University in London with a B.S. in IT and Business Information Systems. We believe that Mr. Luzon is qualified to serve as amember of our board of directors because of his more than 20 years of experience in the technology sector.Or Kles has served as our Chief Financial Officer since May 2016. He is a certified public accountant with a broad, diverse financial background. From May2013 until April 2016 he served as Assistant Controller of Shikun and BinuiSolel Boneh Infrastructure Ltd. and from December 2010 until May 2013 he served as anAssociate at KPMG. Mr. Kles holds an MBA and a B.A. in Business Management and Accounting (specializing in financing) from The College of ManagementAcademic Studies. Mr. Kles is a certified public accountant in Israel.Billy Pardo has served as our Chief Product Officer since May 2014 and Chief Operating Officer since April 2019. From April 2010 until August 2013, Ms.Pardo served as Senior Director of Product Management of Fourier Education. Among her areas of expertise are launching products from concept to successfuldelivery in various methodologies, including Fourier Education’s awardwinning einstein™ Science Tablet. Prior to that Ms. Pardo served in various productmanagement positions including, Project Manager of Time to Know, Product Marketing Manager of RiT Technologies, Product Manager of Pricer AB and R&DTeam Leader at Pricer AB. Ms. Pardo previously served as Software Engineer at Eldat Communication Ltd., and QA Engineer at NICE Systems. Ms. Pardo receivedan MBA from The Interdisciplinary Center and a B.A. in Computer Science from The Academic College of TelAvivYaffo.Ilia Turchinsky has served as our Chief Technology Officer since April 2019 and from July 2018 until April 2019 as our Director of Technology. Prior tojoining us, from 2013 until 2018, Mr. Turchinsky served in various roles, most recently Chief Technology Officer, at MonkeyTech Ltd., a company that providesdesign, development and characterization of mobile applications. Prior to that, Mr. Turchinsky served in various roles including development course instructor atIQLine, was a founder of Arnavsoft and was a software developer for MintLab and a political party. Mr. Turchinsky holds a B.Sc. from the Ben Gurion University inComputer Science and an M.Sc. from the Open University of Israel in Computer Science.52Ezequiel Javier Brandwain has served as our Chief Commercial Officer since February 2022. Mr. Brandwain brings more than two decades of globalexperience in retail and the fashion industry, mainly in business development, operations, and international markets. Before joining the Company, Mr. Brandwainheld positions of increasing responsibility at several companies, including between June 2017 and November 2020, at 7 For All Mankind International, where heserved as Director, Latin America and Caribbean, managing business development and operations across Latin America and the Caribbean. Before that, betweenMay 2016 and June 2017, Mr. Brandwain served as Chief Business Development Officer at Replay – Fashion Box SPA, where he oversaw business development andoperations, expansion and control in the Americas, the Caribbean, and NorthEast Asia. Prior this role, between September 2015 and May 2016, he served as theReplay’s Managing Director in Latin America and the Caribbean, leading the company’s international expansion in these regions. Prior to that, between April 2015and September 2015, Mr. Brandwain served as Managing Director, Latin America and Caribbean at Authentic Brands Group LLC, where he led that company’soperations, business developments and international expansion within these regions, and served as the direct liaison with the company’s headquarters in New York.Prior to that, between April 2015 and September 2015, Mr. Brandwain served as Chief Operating Officer, Latin America and Caribbean at Flemingo International Ltd.,overseeing operations, as well as projected operations in the travel retail field across these regions. Prior to that, between December 2010 and February 2014, Mr.Brandwain served as Regional Director, Southern Hemisphere at Calvin Klein, where he was responsible for defining and implementing the operational andcommercial strategy for Southern Hemisphere, as well as overseeing the retail, travel retail, concession, and wholesale businesses of the company. During his tenureat Calvin Klein, Mr. Brandwain also served as Travel Retail Director, Latin America, where he built the travel retail business and developed operations. Prior to that,between July 2010 and November 2010, Mr. Brandwain served as Business Director, Latin America and Caribbean at Givenchy Latin America, and between January2010 and June 2010 he served as Commercial Director, Latin America and Caribbean at Nautica Latin America. During December 2004 and December 2009, Mr.Brandwain served as Vice President, International Business Development at Report Collection/Modextil, Inc., where he was in charge of business and operationalexpansion, global growth, and brand extensions. Prior to that, between 2003 and October 2004, Mr. Brandwain served as General Manager at Andrew KoenigInternational, Inc. Between September 2019 and November 2020, Mr. Brandwain served as a member of the Board of Directors of 7 For All Mankind BrazilImportacao, Comercio E Distribuicao S.A. Mr. Brandwain earned a Bachelor degree in architecture from the University of the Republic (Uruguay).Oron Branitzky has served as a member of our board of directors since March 2017. Mr. Barnitzky has vast experience in retail technology. SinceNovember 2017, Mr. Branitzky has served as Global Retail Business Development at Superup, and from January 2007 until December 2014 he served as VicePresident of Sales and Marketing at Pricer AB. Prior to that, Mr. Branitzky has served as VP Marketing and Sales at Eldat Communication and Sarin TechnologiesLtd. Since January 2015, Mr. Branitzky has served as chairman of the board of directors of WiseShelf Ltd. and from May 2015 until March 2016, Mr. Branitzky servedas an advisory board member of ciValue. Mr. Branitzky received a B.S. from the Hebrew University of Jerusalem and an MBA in International Marketing from TelAviv University. We believe that Mr. Branitzky is qualified to serve as a member of our board of directors because of his more than 20 years of experience inmanaging the sales of hitech solutions to retailers across the globe.Oren Elmaliah, has served as a member of our board of directors since May 2017. In September 2015, Oren Elmaliah founded Accounting Team IL and hasacted as Account Manager since then. Accounting Team IL is a financial consultancy and service provider to public companies traded in Israel and abroad. SinceFebruary 2017, Mr. Elmaliah has served as controller of Enlivex Therapeutics Ltd., and since January 2017 he has served as Chief Financial Officer of Presstek Israel.In addition, since September 2015, Mr. Elmaliah has served as an Israel Authorities Reporting Officer of LG Electronics Israel and since September 2015 he hasserved as Local Financial Report Consultant of Chiasma. From July 2011 until August 2015, Mr. Elmaliah served as CPA, Financial Director of CFO Director Ltd andfrom June 2010 until July 2011 he served as Risk Management Consultant of RSM International Limited. Mr. Elmaliah holds a B.A. in Accounting/Economics and aMsc. in Finance/Accounting from Tel Aviv University, Israel. He is a licensed Certified Public Accountant in Israel. We believe that Mr. Elmaliah is qualified to serveas a member of our board of directors because of his vast finance experience and public company management and administration in the fields of finance,accounting, and financial regulation.53Arik Kaufman has served as a member of our board of directors since June 2017. Mr. Kaufman is an attorney specializing in the fields of commercial law,corporate law and capital markets and since 2016 runs his own law office in Israel. He has vast experience in the fields of financial reporting and financial regulation.Mr. Kaufman serves as the Chief Executive Officer of Steakholder Foods since January 2022. From September 2017 until January 2022, Mr. Kaufman served as VPBusiness Development of Mor Research Applications. Mr. Kaufman holds an LLB in Law from the Interdisciplinary Center, Herzliya, and is admitted to the IsraeliBar. We believe that Mr. Kaufman is qualified to serve as a member of our board of directors based upon his experience of assisting with the completion of numerousventure capital financings, mergers, acquisitions, and strategic relationships. In addition, he has served as a member of the board of various publicly tradedcompanies, including companies that operate in the same industry as us.Guy Zimmerman has served as a member of our board of directors since August 2021. Previously, Mr. Zimmerman served as Founder and CEO ofManuFuture, an online b2b engineering market place, since February 2021. Prior to that from 2017 to 2021, Mr. Zimmerman acted as a consultant to severaltechnology startups and was a founding partner of a business travel online platform. From 2013 to 2017, Mr. Zimmerman served as EVP of Marketing and BusinessDevelopment of Kornit Digital and was part of the IPO leadership. Prior to that, Mr. Zimmerman served as VP of Global Sales and Business Development at TefronLtd., a provider of seamless garment technology, where he led the $100m sales and sales support organization serving global retail and fashion brands. Prior to thathe served as Vice President of Strategy and Business Development at Tnuva Group, Israel’s largest food manufacturer and spent eight years at McKinsey &Company. Mr. Zimmerman previously led a software startup in the field of operational healthcare management systems. Mr. Zimmerman holds a B.Sc. in IndustrialEngineering from Tel Aviv University in Israel. We believe that Mr. Zimmerman is qualified to serve as a member of our board of directors because of his experiencein business development in the technology and retail sectors.Board Diversity MatrixThe table below provides certain information regarding the diversity of our board of directors as of the date of this annual report.Board Diversity Matrix (As of March 31, 2023)Total Number of Directors5FemaleMaleNonBinaryDid Not DiscloseGenderPart I: Gender IdentityDirectors#5##Part II: Demographic BackgroundAfrican American or Black####Alaskan Native or Native American####Asian####Hispanic or Latinx####Native Hawaiian or Pacific Islander####White#1##Two or More Races or Ethnicities#2##LGBTQ+0Did Not Disclose Demographic Background2Family RelationshipsRonen Luzon, the Chief Executive Officer and a member of our board of directors, and Billy Pardo, the Chief Product Officer and Chief Operating Officer, arehusband and wife. There are no other family relationships among any of our current or former directors or executive officers.Involvement in Certain Legal ProceedingsWe are not aware of any of our directors or officers being involved in any legal proceedings in the past ten years relating to any matters in bankruptcy,insolvency, criminal proceedings (other than traffic and other minor offenses), or being subject to any of the items set forth under Item 401(f) of Regulation SK.Arrangements between Officers and DirectorsTo our knowledge, there is no arrangement or understanding between any of our officers and any other person, including directors, pursuant to which theofficer was selected to serve as an officer.Board of DirectorsThere are no agreements with respect to the election of directors.On January 6, 2022, we filed with the Secretary of State of Delaware a Certificate of Amendment to our Amended and Restated Certificate of Incorporationproviding for a classified Board. Following filing of the Certificate of Amendment, members of our board are now classified into three classes with staggered threeyear terms (with the exception of the expiration of the initial Class I and Class II directors), as follows:●Class I, comprised of two directors, initially Arik Kaufman and Oren Elmaliah (with their initial terms expiring at our 2022 annual meeting of stockholders andmembers of such class serving successive threeyear terms);●Class II, comprised of two directors, initially Oron Branitzky and Guy Zimmerman (with their initial terms expiring at our 2023 annual meeting of stockholdersand members of such class serving successive threeyear terms); and●Class III, comprised of one director, initially Ronen Luzon (with his initial term expiring at our 2024 annual meeting of stockholders and members of suchclass serving successive threeyear terms).54To preserve the classified Board structure, a director elected by the Board of Directors to fill a vacancy holds office until the next election of the class forwhich such director has been chosen, and until that director’s successor has been elected and qualified or until his or her earlier death, resignation, retirement orremoval.Our board of directors has reviewed the materiality of any relationship that each of our directors has with us, either directly or indirectly. Based upon thisreview, we believe that Arik Kaufman, Oren Elmaliach, Oron Branitzky and Guy Zimmerman qualify as independent directors in accordance with the standards set bythe Nasdaq and Rule 10A3 promulgated under the Exchange Act.Committees of the BoardAudit CommitteeOur audit committee is comprised of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Elmaliah serves as chairman of the audit committee. The auditcommittee is responsible for retaining and overseeing our independent registered public accounting firm, approving the services performed by our independentregistered public accounting firm and reviewing our annual financial statements, accounting policies and our system of internal controls. The audit committee actsunder a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the audit committee’s composition and meetings.The audit committee charter is available on our website www.mysizeid.com.The Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by applicable SEC rules. Inaddition, the Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by the rules of the Nasdaq StockMarket.The Board of Directors has determined that Oren Elmaliah is an “audit committee financial expert” serving on its audit committee, and is independent, as theSEC has defined that term in Item 407 of Regulation SK.Compensation CommitteeOur compensation committee consists of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Branitzky serves as chairman of the compensationcommittee.The compensation committee’s roles and responsibilities include making recommendations to the Board of Directors regarding the compensation for ourexecutives, the role and performance of our executive officers, and appropriate compensation levels for our CEO, which are determined without the CEO present, andother executives. Our compensation committee also administers our 2017 Equity Incentive Plan and our 2017 Consultant Equity Incentive Plan. The compensationcommittee acts under a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the compensation committee’scomposition and meetings. The compensation committee charter is available on our website www.mysizeid.com.Our Board of Directors has determined that all of the members of the compensation committee are “independent” as that term is defined by the rules of theNasdaq Stock Market.Nominating and Corporate Governance CommitteeThe members of the nominating and corporate governance committee are Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Kaufman serves aschairman of the corporate governance and nominations committee. The nominating and corporate governance committee acts under a written charter, which morespecifically sets forth its responsibilities and duties, as well as requirements for the nominating and corporate governance committee’s composition and meetings.The nominating and corporate governance committee charter is available on our website www.mysizeid.com.The nominating and corporate governance committee develops, recommends and oversees implementation of corporate governance principles for us andconsiders recommendations for director nominees. The nominating and corporate governance committee also considers stockholder recommendations for directornominees that are properly received in accordance with applicable rules and regulations of the SEC. Our stockholders that wish to nominate a director for election tothe Board of Directors should follow the procedures set forth in our bylaws.55The nominating and corporate governance committee will consider persons identified by its members, management, stockholders, investment bankers andothers. The guidelines for selecting nominees, which are specified in the nominating committee charter, generally provide that persons to be nominated:●should be accomplished in his or her field and have a reputation, both personal and professional, that is consistent with our image and reputation;●should have relevant experience and expertise and would be able to provide insights and practical wisdom based upon that experience and expertise; and●should be of high moral and ethical character and would be willing to apply sound, objective and independent business judgment, and to assume broadfiduciary responsibility.The nominating and corporate governance committee will consider a number of qualifications relating to management and leadership experience,background and integrity and professionalism in evaluating a person’s candidacy for membership on the Board of Directors. The nominating and corporategovernance committee may require certain skills or attributes, such as financial or accounting experience, to meet specific Board needs that arise from time to timeand will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of Board of Directors members. The nominating andcorporate governance committee will not distinguish among nominees recommended by stockholders and other persons.Our Board of Directors has determined that all of the members of the nominating and corporate governance committee are “independent” as that term isdefined by the rules of the Nasdaq Stock Market.Code of Conduct and EthicsWe have a Code of Business Conduct and Ethics that applies to all our employees. The text of the Code of Business Conduct and Ethics is publiclyavailable on our website at www.mysizeid.com. Information contained on, or that can be accessed through, our website does not constitute a part of this report andis not incorporated by reference herein. Disclosure regarding any amendments to, or waivers from, provisions of the code of conduct and ethics that apply to ourdirectors, principal executive and financial officers will be posted on the “InvestorsCorporate Governance” section of our website at www.mysizeid.com or will beincluded in a Current Report on Form 8K, which we will file within four business days following the date of the amendment or waiver.Change in Procedures for Recommending DirectorsThere have been no material changes to the procedures by which our stockholders may recommend nominees to our Board of Directors from thoseprocedures set forth in our Proxy Statement for our 2021 Annual Meeting of Stockholders, filed with the SEC on December 7, 2022.56ITEM 11. EXECUTIVE COMPENSATIONSummary Compensation TableThe following sets forth the compensation paid by us to our named executive officers, during the years ended December 31, 2022 and December 31, 2021.Name and Principal PositionYearSalary($) (1)Bonus($)StockAwards($)OptionAwards($) (2)All OtherCompensation($)Total($)Ronen Luzon2022173,000223,0008,000126,000530,000Chief Executive Officer2021194,0005,00023,00097,000319,000Or Kles2022123,00053,0007,00071,000254,000Chief Financial Officer2021123,0008,00030,00061,000222,000Billy Pardo2022134,00053,0007,000100,00294,000Chief Operating Officer2021162,0007,00018,00074,000261,000(1) Salary for the years 2022 and 2021 are based on average US$/NIS representative exchange rates of NIS 3.358 and NIS 3.11 respectively.(2) Amounts in this column represent the grant date fair value of options granted to the named executive officers during 2022 and 2021, computed in accordance withFASB ASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the named executive officers. The assumptionsmade in valuing the options reported in this column are discussed in Note 11 to our audited financial statements for the year ended December 31, 2021 and Note 4 toour condensed consolidated interim financial statements for the quarterly period ended September 30, 2022.All Other Compensation TableThe “All Other Compensation” amounts set forth in the Summary Compensation Table above consist of the following:NameYearAutomobileRelatedExpenses($)Manager’sInsurance*($)EducationFund*($)Othersocialbenefits**($)Total($)Ronen Luzon202232,00031,00015,00048,000126,000202133,00033,00015,00016,00097,000Or Kles202215,00021,00010,00025,00071,000202114,00019,0009,00019,00061,000Billy Pardo202216,00025,00013,00046,000100,000202117,00024,00012,00021,00074,000* Manager’s insurance and education funds are customary benefits provided to employees based in Israel. Manager’s insurance is a combination of severancesavings (in accordance with Israeli law), defined contribution taxqualified pension savings and disability insurance premiums. An education fund is a savings fundof pretax contributions to be used after a specified period of time for educational or other permitted purposes.** Other social benefits for 2022 and 2021 for all named individuals includes tax payments in respect of social benefits.57Agreements with Named Executive OfficersRonen LuzonOn November 18, 2018, My Size Israel, our wholly owned subsidiary, entered into an employment agreement with Ronen Luzon, or the Luzon EmploymentAgreement, pursuant to which Mr. Luzon will serve as our Chief Executive Officer. Pursuant to the terms of the Luzon Employment Agreement, Mr. Luzon receivesNIS 55,000 per month as his base salary and shall be eligible to receive such bonus as determined by us. In addition, Mr. Luzon shall be entitled social benefits andto other benefits, including, but not limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, includinginsurance in case of disability, annual vacation days, sick leave and expense reimbursement. Pursuant to the terms of the Luzon Employment Agreement and subjectto certain conditions, payments made by the Company to the pension fund or manager’s insurance fund shall be made in lieu of severance payments due to Mr.Luzon. The term of the Luzon Employment Agreement shall be effective as of September 1, 2018 and shall continue until such time either party provides writtennotice to the other party at least 75 days in advance of the termination of such agreement. We may also terminate Mr. Luzon’s employment without prior writtennotice (or payment in lieu of such notice) for Cause (as defined in the Luzon Employment Agreement).Or KlesOn November 18, 2018, My Size Israel entered into an employment agreement with Or Kles, or the Kles Employment Agreement, pursuant to which Mr. Kleswill serve as our Chief Financial Officer. Pursuant to the terms of the Kles Employment Agreement, Mr. Kles receives NIS 38,000 per month as his base salary andshall be eligible to receive such bonus as determined by us. In addition, Mr. Kles shall be entitled to social benefits and other benefits, including, but not limited to,contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annual vacation days,sick leave and expense reimbursement. Pursuant to the terms of the Kles Employment Agreement and subject to certain conditions, payments made by us to thepension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Mr. Kles. The term of the Kles Employment Agreement shall beeffective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days in advance of thetermination of such agreement. We may also terminate Mr. Kles’s employment without prior written notice (or payment in lieu of such notice) for Cause (as defined inthe Kles Employment Agreement).Billy PardoOn November 18, 2018, My Size Israel entered into an employment agreement with Billy Pardo, or the Pardo Employment Agreement, pursuant to which Ms.Pardo will serve as our Chief Product Officer. Pursuant to the terms of the Pardo Employment Agreement, Ms. Pardo receives NIS 47,500 per month as her basesalary and shall be eligible to receive such bonus as determined by us. In addition, Ms. Pardo shall be entitled to social benefits and other benefits, including, butnot limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annualvacation days, sick leave and expense reimbursement. Pursuant to the terms of the Pardo Employment Agreement and subject to certain conditions, payments madeby us to the pension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Ms. Pardo. The term of the Pardo EmploymentAgreement shall be effective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days inadvance of the termination of such agreement. We may also terminate Ms. Pardo’s employment without prior written notice (or payment in lieu of such notice) forCause (as defined in the Pardo Employment Agreement).58Outstanding Equity Awards at Fiscal YearEndThe following table provides information regarding options held by each of our named executive officers that were outstanding as of December 31, 2022.Option AwardsStock AwardsName and Principal PositionNumber ofSecuritiesUnderlyingUnexercisedOptionsExercisableNumber ofSecuritiesUnderlyingUnexercisedOptionsUnexercisableOptionExercisePriceOptionExpirationDateEquityincentiveplan awards:Number ofUnearnedShares that HaveNot VestedEquityincentiveplan awards:Market Value ofUnearnedShares, That Have Not VestedRonen Luzon Chief Executive Officer400(1)$26(8)7/24/20231,601(2)$26(8)5/29/20256,400(3)$268/10/2025100,000(9)100,000$511,250Or Kles – Chief Financial Officer227(4)$26(8)7/24/2023427(5)$26(8)5/29/20255,200(6)$268/10/202524,000(10)24,000$122,700Billy Pardo Chief Operating Officer400(1)$26(8)7/24/2023894(7)$26(8)5/29/20255,200(6)$268/10/202524,000(11)24,000$122,700(1) The option has a grant date of July 24, 2017 and vested in full on January 24, 2018.(2) The option has a grant date of May 29, 2019. 267 options vested immediately upon grant, 445 options vested on January 24, 2019, 445 options vested on January24, 2020 and 444 options vested on January 24, 2021.(3) The option has a grant date of October 8, 2020, 1,600 options vested on November 26, 2020, 1,600 options vested on May 26, 2021, 1,600 options vested onNovember 26, 2021, and 1,600 options vested on May 26, 2022.(4) The option has a grant date of July 24, 2017. 76 options vested immediately upon grant, 76 options vested on May 1, 2018 and 75 options vested on May 1, 2019.(5) The option has a grant date of May 29, 2019. 160 options vested immediately upon grant, 445 options vested on May 1, 2020, 445 options vested on May 21, 2021and 444 options vested on May 1, 2022.(6) The option has a grant date of October 8, 2020, 1,300 options vested on November 26, 2020, 1,300 options vested on May 26, 2021, 1,300 options vested onNovember 26, 2021, and 1,300 options vested on May 26, 2022.(7) The option has a grant date of May 29, 2019. 214 options vested immediately upon grant, 227 options vested on January 24, 2019, 227 options vested on January24, 2020 and 226 options vested on January 24, 2021.(8) On May 25, 2020, the compensation committee of the Board of Directors of the Company reduced the exercise price of outstanding options of employees anddirectors of the Company for the purchase of an aggregate of 5,610 shares of common stock of the Company (with exercise prices ranging between $453.75 and$228.75) to $26 per share, which was the closing price for the Company’s common stock on May 22, 2020, and extended the term of the foregoing options for anadditional one year from the original date of expiration.(9) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(10) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(11) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.59Director CompensationThe following table sets forth compensation information for our nonemployee directors for the year ended December 31, 2022.NameFees earned orpaid incash ($)(1)Optionawards($)(1)(2)Total($)Oren Elmalih15,078 15,078Oron Barnitzky15,34715,347Arik Kaufman14,44114,441Guy Zimmerman13,03313,033(1)Fees for the year 2022 are based on average US$/NIS representative exchange rates of NIS 3.519.(2)Amounts in this column represent the grant date fair value of options granted to the nonemployee directors during 2022 computed in accordance with FASBASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the nonemployee directors. The assumptions made invaluing the options reported in this column are discussed in Note 11 to our financial statements for the year ended December 31, 2022.We compensate our nonemployee directors for their service as a member of our board. Mr. Luzon received no separate compensation for board service. Mr.Luzon’s compensation is set forth above in the Summary Compensation Table.Each nonemployee director is entitled to receive a per meeting fee of $318. Nonemployee directors are also reimbursed for their travel and reasonable outofpocket expenses incurred in connection with attending board and committee meetings, to the extent that attendance is required by the board or the committee(s)on which that director serves.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurity Ownership of Certain Beneficial Holders and ManagementThe following table sets forth certain information regarding beneficial ownership of shares of our common stock as of March 31, 2023 by (i) each personknown to beneficially own more than 5% of our outstanding common stock, (ii) each of our directors, (iii) each of our executive officers, and (iv) all of our directorsand executive officers as a group. Except as otherwise indicated, the persons named in the table below have sole voting and investment power with respect to allshares beneficially owned, subject to community property laws, where applicable.Beneficial Owner(1)Shares ofCommon StockBeneficiallyOwnedPercentage(2)Executive officers and directors:Ronen Luzon143,578(3)5.8%Or Kles29,854(4)1.2%Billy Pardo143,578(5)5.8%Ezequiel Javier Brandwain12,000(6)*Ilia Turchinsky18,313(7)*Arik Kaufman1,294(8)*Oren Elmaliah1,294(9)*Oron Branitzky1,294(10)*Guy ZimmermanAll Executive Officers and Directors as a Group (9 persons)207,6268.4%*Less than 1%(1) The address of each person is c/o My Size, Inc., 4 HaYarden St., P.O.B. 1026, Airport City, Israel 7010000 unless otherwise indicated herein.60(2) The calculation in this column is based upon 2,446,780 shares of common stock outstanding on March 31, 2023. Beneficial ownership is determined in accordancewith the rules of the SEC and generally includes voting or investment power with respect to the subject securities. Shares of common stock that are currentlyexercisable or exercisable within 60 days of March 31, 2023 are deemed to be beneficially owned by the person holding such securities for the purpose of computingthe percentage beneficial ownership of such person, but are not treated as outstanding for the purpose of computing the percentage beneficial ownership of anyother person(3) Consists of (i) 100,000 shares of restricted stock granted under the 2017 Plan, (ii) 4,683 shares of common stock, (iii) options to purchase up to 8,401 shares of ourcommon stock, and (iv) 24,000 shares of restricted stock and options to purchase up to 6,494 shares of our common stock which are held by Billy Pardo, RonenLuzon’s spouse. Mr. Luzon may be deemed to beneficially hold the securities of us held by Ms. Pardo.(4) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, and (ii) an option to purchase 5,854 shares of our common stock. Does not includean aggregate of 119,760 shares of restricted stock over which Mr. Kles has been designated the initial proxy to vote such shares pursuant to a voting agreemententered into between Whitehole S.L., Twinbel S.L. and EGI Acceleration, S.L.(5) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, (ii) options to purchase up to 6,494 shares of our common stock, (iii) 100,000 sharesof restricted stock which are held by Ronen Luzon, Billy Pardo’s spouse (iii) 8,401 shares of common stock which are held by Mr. Luzon, and (iii) options to purchaseup to 4,683 shares of our common stock which are held by Mr. Luzon. Ms. Pardo may be deemed to beneficially hold the securities of the Company held by Mr.Luzon.(6) Consists of 12,000 shares of restricted stock granted under the 2017 Plan.(7) Consists of (i) 16,000 shares of restricted stock granted under the 2017 Plan, and (ii) options to purchase up to 2,313 shares of our common stock.(8) Consists of options to purchase up to 1,294 shares of our common stock.(9) Consists of options to purchase up to 1,294 shares of our common stock.(10) Consists of options to purchase up to 1,294 shares of our common stock.Change in ControlWe are not aware of any arrangement that might result in a change in control in the future. We have no knowledge of any arrangements, including anypledge by any person of our securities, the operation of which may at a subsequent date result in a change in the Company’s control.Securities Authorized for Issuance Under Equity Compensation PlansOn January 29, 2017, our Board of Directors approved the 2017 Equity Incentive Plan and the 2017 Consultant Equity Incentive Plan, which were approvedby our stockholders on March 21, 2017. In addition, on January 29, 2017, our Board of Directors approved the Stock Option Plan Israel Grantees SubPlan. The 2017Equity Incentive Plan initially authorized the issuance of up to 5,334 shares of common stock under the plan and the 2017 Consultant Equity Incentive Plan initiallyauthorized the issuance of up to 8,000 shares of common stock under the plan.On February 12, 2018, our stockholders approved an amendment to the 2017 Consultant Equity Incentive Plan to increase the maximum number of shares ofour common stock available for issuance under the plan from 8,000 to 12,000. On July 3, 2018, our stockholders approved an amendment to the 2017 Equity IncentivePlan to increase the maximum number of shares of our common stock available for issuance under the plan from 5,334 to 8,000 and an amendment to the 2017Consultant Equity Incentive Plan to increase the maximum number of shares of our common stock available for issuance under the plan from 12,000 to 18,667.On May 25, 2020, our Board reduced the exercise price of outstanding options of our employees and directors for the purchase of an aggregate of 140,237of our common stock (with exercise prices ranging between $453.75 and $228.75) to $26.0 per share, and extended the term of the foregoing options for an additionalone year from the original date of expiration.61On August 10, 2020, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 80,000 to 58,000shares, and a decrease of the numbers of shares available for issuance under the 2017 Consultant Incentive Plan to 8,667 shares from 18,667 shares.On December 30, 2021, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 58,000 sharesto 230,800 shares.On December 7, 2022, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Plan from 230,800 shares to 289,000shares.The following table summarizes information about our equity compensation plans and individual compensation arrangements as of December 31, 2022.Number of securities to be issued upon exercise of outstanding options, warrants and rights(a)Weighted average exercise price of outstandingoptions, warrants and rights (b)Number of securities remaining availablefor future issuanceunder equity compensationplans (excludingsecurities reflected in column (a) (c)Equity compensation plans approved by security holders43,49724.7477,455Equity compensation plans not approved by security holdersTotal43,49724.7477,455ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEDuring years ended December 31, 2022 and 2021, except for compensation arrangements described elsewhere herein and the transactions described below,we did not participate in any transaction, and we are not currently participating in any proposed transaction, or series of transactions, in which the amount involvedexceeded the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years, and in which, to our knowledge,any of our directors, officers, five percent beneficial security holders, or any member of the immediate family of the foregoing persons had, or will have, a direct orindirect material interest.Compensation arrangements for our named executive officers and directors are described in the section entitled “Executive Compensation.”Employment AgreementsWe have entered into written employment agreements with each of our executive officers. These agreements generally provide for notice periods of varyingduration for termination of the agreement by us or by the relevant executive officer, during which time the executive officer will continue to receive base salary andbenefits. We have also entered into customary noncompetition, confidentiality of information and ownership of inventions arrangements with our executiveofficers. However, the enforceability of the noncompetition provisions may be limited under applicable law.OptionsSince our inception we have granted options to purchase our common stock to our officers and directors. Such option agreements may contain accelerationprovisions upon certain merger, acquisition, or change of control transactions.62Restricted Stock GrantsOn September 29, 2022, our compensation committee approved grants of restricted share awards under our 2017 Plan to Ronen Luzon, Or Kles, Billy Pardo,Ilia Turchinsky and Ezequiel Javier Brandwain, pursuant to which they were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000restricted shares and 12,000 restricted shares, respectively. The restricted shares shall vest in three equal installments on January 1, 2023, January 1, 2024 andJanuary 1, 2025, conditioned upon continuous employment with us, and subject to accelerated vesting upon a change in control of the Company.Shareholder ActivismIn May 2021, we received notice from Custodian Ventures, LLC, or Custodian, of its intention to nominate four candidates to stand for election to our Boardof Directors at our 2021 annual meeting of stockholders. Custodian subsequently made a book and records request and has made public statements calling forchanges to our management.On September 22, 2021, Custodian, commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v. Mysize,Inc., C.A. No. 20210817LWW, or the Delaware Action. In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting. As further described below, on November 4, 2021, we entered into asettlement agreement, or the Settlement Agreement, with Custodian, Activist Investing LLC, David Aboudi, Partick Loney and David Natan, collectively, the LazarParties, settling and dismissing the Delaware Action.On October 19, 2021, we commenced an action in the United States District Court for the Southern District of New York captioned My Size, Inc. v. DavidLazar, Custodian Ventures LLC, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, Civil Action No, 1:21cv08585, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, andcertain rules promulgated thereunder, or the SDNY Action. The complaint sought, among other things, declaratory and injunctive relief related to defendants’ effortsto nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed “group” for purposes ofSection 13 (d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. In addition, the complaint alleged that thedefendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules in connection with their efforts to elect a slate of directorsto our Board of Directors. On October 20, 2021, the Court signed an order granting a hearing on an anticipated motion for a preliminary injunction and expeditedscheduling and discovery in aid thereof, and scheduled that hearing for December 2, 2021. As further described below, on November 4, 2021, we entered into theSettlement Agreement with the Lazar Parties settling and dismissing the claims asserted in the SDNY Action and the Delaware Action against one another. OnNovember 8, 2021, the remaining defendants in the SDNY Action filed and answer and counterclaim asserting a claim against us pursuant to New York Civil RightsLaw Section 70a, also known as New York’s antiSLAPP statute.On November 4, 2021, we entered into the Settlement Agreement, or the Lazar Settlement Agreement, with the Lazar Parties. Pursuant to the LazarSettlement Agreement, we and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the LazarSettlement Agreement, we reimbursed Custodian for out of pocket expenses and in consideration for the dismissal and release of claims against the Company anaggregate amount equal to $275,000. With respect to our 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) itsMay 12, 2021 notice of stockholder nominations of four director candidates with respect to our 2021 annual meeting of stockholders, (ii) the notice dated October 28,2021 submitted by Custodian to us notifying us of Custodian’s continued intent to bring its nomination of four director candidates before our stockholders at the2021 annual meeting, and (iii) any and all related materials and notices submitted to us in connection therewith or related thereto and to not take any further action inconnection with the solicitation of any proxies in connection with us. Custodian also agreed to cease any and all solicitation and other activities in connection withthe 2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effective date of theAgreement, or the Standstill Period. The Lazar Settlement Agreement also provides that during the Standstill Period, the Lazar Parties will vote all shares of ourcommon stock it beneficially owns in accordance with any proposal or recommendation made by us or our Board of Directors that is submitted to our stockholders,unless to do so would violate applicable law and except with respect to certain extraordinary transactions. The Lazar Settlement Agreement also contains nondisparagement and confidentiality provisions, subject to certain exceptions.63On December 9, 2021, we subsequently entered into a Settlement Agreement, or the Ault Settlement Agreement, with Milton C. Ault III, Ault Alpha LP, AultAlpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed to withdraw the SDNY Action against the AultParties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that action against the Company. In addition, pursuant to the SettlementAgreement, we paid $70,000 to the Ault Parties in consideration for the releases and other good and valuable consideration as set forth in the Ault SettlementAgreement.Naiz Bespoke Technologies AcquisitionOn October 7, 2022, we entered into the Naiz Agreement with the Naiz Sellers, pursuant to which the Naiz Sellers agreed to sell to us all of the issued andoutstanding equity of Naiz. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) ) the Naiz EquityConsideration and (ii) up the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the Equity Value Averaging Period) is less than $1,650,000, My Size shall pay the Shortfall Value to the Naiz Sellers within 45days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period, it wasdetermined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement)).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers will be subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into the LockUp Agreement with My Size, (ii) Whitehole, Twinbel and EGIentered into the Voting Agreement with My Size and (iii) each of the Key Persons entered into employment agreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonth period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonth “dribbleout” provisionthat provides following the expiration of the initial sixmonth lockup period, without My Size’s prior written consent (which My Size shall be permitted to withholdat its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than the average dailytrading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.64The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Indemnification Agreements and Directors’ and Officers’ Liability InsuranceWe have entered into indemnification agreements with each of our directors and executive officers. These agreements, among other things, require us toindemnify these individuals and, in certain cases, affiliates of such individuals, to the fullest extent permitted by Delaware law against liabilities that may arise byreason of their service to us or at our direction, and to advance expenses incurred as a result of any proceedings against them as to which they could beindemnified. We also maintain an insurance policy that insures our directors and officers against certain liabilities, including liabilities arising under applicablesecurities laws.Director IndependenceSee “Item 10. Directors, Executive Officers and Corporate Governance; Corporate Governance, Board Composition” above for a discussion regarding theindependence of the members of our board of directors.ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICESSomekh Chaikin, a member firm of KPMG International, located in Tel Aviv, Israel, PCAOB ID 1057, has served as our independent registered publicaccounting firm for 2022 and 2021. The following are Somekh Chaikin’s fees for professional services in each of the respective fiscal years:Fee Category20222021Audit Fees198,910298,300Tax Fees30,66729,300Auditrelated Fees18,000Total Fees247,577327,600Audit Fees:Audit Fees consist of fees billed for professional services performed by Somekh Chaikin for the audit of our annual financial statements, thereview of interim consolidated financial statements, and related services that are normally provided in connection with registration statements, including theregistration statement for S1 and S3.Tax Fees: Tax Fees may consist of fees for professional services, including tax and VAT consulting and compliance performed by an independent registeredpublic accounting provided during the period.PreApproval Policies and ProceduresIn accordance with the SarbanesOxley Act of 2002, as amended, our audit committee charter requires the audit committee to preapprove all audit andpermitted nonaudit services provided by our independent registered public accounting firm, including the review and approval in advance of our independentregistered public accounting firm’s annual engagement letter and the proposed fees contained therein. The audit committee has the ability to delegate the authorityto preapprove nonaudit services to one or more designated members of the audit committee. If such authority is delegated, such delegated members of the auditcommittee must report to the full audit committee at the next audit committee meeting all items preapproved by such delegated members. In the fiscal years endedDecember 31, 2022 and December 31, 2021 all of the services performed by our independent registered public accounting firm were preapproved by the auditcommittee.65PART IVITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES(a)Financial StatementsThe financial statements required by this Item are included beginning at page F1.(b)ExhibitsSee Exhibit IndexITEM 16. FORM 10K SUMMARYNot applicableEXHIBIT INDEXExhibitNumberDescription3.1Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Form on Form8K filed on March 23, 2017)3.2Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10K filed onMarch 4, 2016)3.3Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’s Current Report onForm 8K filed on February 20, 2018)3.4Second Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8K filedon April 24, 2018)3.5Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’sCurrent Report on Form 8K filed on November 18, 2019)3.6Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on January 7, 2022)3.7Amendment No. 1 to Second Amended and Restated ByLaws (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8K filed on January 7, 2022)3.8Certificate of Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on December 7, 2022)4.1Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S3/A filed onNovember 14, 2016)4.2Form of Warrant to Purchase Common Stock issued on February 2, 2018 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report onForm 10K filed on March 27, 2019)4.3Description of Securities Registered under Section 12 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report on Form 10K filedon March 19, 2020)4.4Form of Warrant (incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S1, Amendment No. 1, filed with the SECon May 5, 2020.)4.5Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)4.6Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.1My Size, Inc. 2017 Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement on Schedule DEF 14Afiled on March 2, 2017)10.2My Size, Inc. 2017 Consultant Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement onSchedule DEF 14A filed on March 2, 2017)10.3My Size, Inc. 2017 Stock Option Plan Israel Grantees SubPlan (incorporated by reference to Exhibit 10.3 to the Company’s Annual Report on Form10K filed on March 27, 2019)6610.4Purchase Agreement between My Size, Inc. and Shoshana Zigdon dated as of February 16, 2014 (incorporated by reference to Exhibit 10.2 to theCompany’s Annual Report on Form 10K filed on March 4, 2016)10.5 +Employment Agreement between My Size Israel 2014 Ltd. and Ronen Luzon dated November 18, 2018 (incorporated by reference to Exhibit 10.1 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.6 +Employment Agreement between My Size Israel 2014 Ltd. and Or Kles dated November 18, 2018 (incorporated by reference to Exhibit 10.2 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.7 +Employment Agreement between My Size Israel 2014 Ltd. and Billy Pardo dated November 18, 2018 (incorporated by reference to Exhibit 10.3 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.8Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on January 15,2020)10.9Form of Warrant (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.10Form of Placement Agent Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.11Securities Purchase Agreement (incorporated by reference to Exhibit 10.30 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.12Underwriting Agreement, dated January 5, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on January 7, 2021)10.13Underwriting Agreement, dated March 22, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on March 25, 2021)10.14Amendment to Purchase Agreement between My Size Israel 2014 Ltd., My Size, Inc. and Shoshana Zigdon (incorporated by reference to Exhibit 10.1to the Company’s Quarterly Report on Form 10Q on August 16, 2021)10.15Form of Registered Direct Offering Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.16Form of PIPE Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.17Form of Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.18Form of Placement Agent Warrant issued by the Company on October 28, 2021 (incorporated by reference to Exhibit 10.22 to the Company’s Form S1filed on November 12, 2021)10.19Form of Registration Rights Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.4 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.20Engagement Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference to Exhibit 10.5 to theCompany’s Current Report on Form 8K filed on October 28, 2021)10.21Settlement Agreement dated November 4, 2021, among My Size, Inc., David Lazar and certain of his affiliates (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on November 5, 2021)10.22Share Purchase Agreement dated as of February 7, 2022 between My Size Israel 2014 Ltd. and Amar Guy Shalom and Elad Bretfeld (incorporated byreference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SEC on February 8, 2022)10.23Employment Agreement between My Size Israel 2014 Ltd. and Ezequiel Javier Brandwain dated January 27, 2022 (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on February 1, 2022)10.24Form of Section 102 Capital Gain Restricted Stock Award Agreement under the Company’s 2017 Equity Incentive Plan (incorporated by reference toExhibit 10.1 to the Company’s Quarterly Report on Form 10Q, filed with the SEC on November 14, 2022)10.25Share Purchase Agreement, dated as of October 6, 2022, by and among My Size, Inc., Borja Cembrero Saralegui, Artiz Toree Garcia, Whitehold, S.L.,Twinbel, S.L., and EGI Acceleration, S.L. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SECon October 12, 2022)10.26Form of LockUp Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)10.27Form of Voting Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.3 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)6710.28My Size, Inc. Amendment to the My Size, Inc. 2017 Equity Plan (incorporated by reference to Appendix B to the Company’s definitive proxystatement filed with the SEC on November 4, 2022)10.29Form of Registered Direct Offering Securities Purchase Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.1 to theCompany’s Current Report on Form 8K filed with the SEC on January 12, 2023)10.30Form of PIPE Securities Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8Kfiled with the SEC on January 12, 2023)10.31Form of Registered Direct PreFunded Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.32Form of Series A and Series B Warrant (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8K filed with the SEC onJanuary 12, 2023)10.33Form of Private Placement PreFunded Warrant (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.34Form of Registration Rights Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form8K filed with the SEC on January 12, 2023)10.35Engagement Agreement, dated December 5, 2022 (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8K filed withthe SEC on January 12, 2023)10.36*Form of Placement Agent Warrant21.1*List of Subsidiaries23.1*Consent of Somekh Chaikin, a member firm of KPMG International, registered public accounting firm31.1*Certification of the Chief Executive Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200231.2*Certification of the Chief Financial Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200232.1*Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a14(b) of the Exchange Act and 18 U.S.C. Section 1350, asadopted pursuant to Section 906 of the SarbanesOxley Act of 2002101.INS*Inline XBRL Instance Document101.SCH*Inline XBRL Taxonomy Schema101.CAL*Inline XBRL Taxonomy Calculation Linkbase101.DEF*Inline XBRL Taxonomy Definition Linkbase101.LAB*Inline XBRL Taxonomy Label Linkbase101.PRE*Inline XBRL Taxonomy Presentation Linkbase104Cover Page Interactive Data File (formatted as Inline XBRL document and contained in Exhibit 101)*Filed herewith.+Indicates a management contract or any compensatory plan, contract or arrangement68SIGNATURESPursuant to the requirements of Section 13 and 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10K to be signed on its behalf by the undersigned, thereunto duly authorized on this 14th day of April, 2023.MY SIZE, INC./s/ Ronen LuzonRonen LuzonChief Executive Officer (Principle Executive Officer)/s/ Or KlesOr KlesChief Financial Officer(Principal Financial and Accounting Officer)Pursuant to the requirements of the Securities Act of 1934, this annual report on Form 10K has been signed below by the following persons on behalf ofthe registrant and in the capacities and on the dates indicated.SignatureTitleDate/s/ Ronen LuzonChief Executive Officer and DirectorApril 14, 2023Ronen Luzon(Principle Executive Officer)/s/ Or KlesChief Financial OfficerApril 14, 2023Or Kles(Principal Financial and Accounting Officer)/s/ Oren ElmaliahDirectorApril 14, 2023Oren Elmaliah/s/ Arik KaufmanDirectorApril 14, 2023Arik Kaufman/s/ Oron BranitzkyDirectorApril 14, 2023Oron Branitzky/s/ Guy ZimmermanDirectorApril 14, 2023Guy Zimmerman69EX10.36 2 ex1036.htmExhibit 10.36NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES ANDEXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THESECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO ANEFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTIONNOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGINACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.PLACEMENT AGENT COMMON STOCK PURCHASE WARRANTMY SIZE, INC.Warrant Shares: _______Issue Date: January 12, 2023Initial Exercise Date: January 12, 2023THIS PLACEMENT AGENT COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _____________ or itsassigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the dateset forth above (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on January 10, 2028 (the “Termination Date”) but not thereafter, tosubscribe for and purchase from My Size, Inc., a Delaware corporation (the “Company”), up to ______ shares (as subject to adjustment hereunder, the “WarrantShares”) of the Company’s Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined inSection 2(b). This Warrant is issued pursuant to that certain engagement letter, dated as of December 5, 2022, by and between the Company and H.C. Wainwright &Co., LLC.Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities PurchaseAgreement (the “Purchase Agreement”), dated January 10, 2023, among the Company and the purchasers signatory thereto.1Section 2. Exercise.a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or afterthe Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted by email (or emailattachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the numberof Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shalldeliver the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on aUnited States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No inkoriginalNotice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required.Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder haspurchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrantto the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercisesof this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering theoutstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder andthe Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver anyobjection to any Notice of Exercise within one (1) Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant,acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, thenumber of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.b) Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $3.8188, subject to adjustment hereunder (the“Exercise Price”).c) Cashless Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein isnot available for the issuance or resale of the Warrant Shares to or by the Holder, then this Warrant may also be exercised, in whole or in part, at such timeby means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing[(AB) (X)] by (A), where:(A) =as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice ofExercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed anddelivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) ofRegulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAPon the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on theprincipal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s execution of the applicable Notice ofExercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hoursthereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii)the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice ofExercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;(B) =the Exercise Price of this Warrant, as adjusted hereunder; and(X) =the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if suchexercise were by means of a cash exercise rather than a cashless exercise.2“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which theCommon Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York Citytime)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest precedingdate) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for theCommon Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the mostrecent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by anindependent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to theCompany, the fees and expenses of which shall be paid by the Company.“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the TradingMarket on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or thenearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and ifprices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reportingprices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock asdetermined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonablyacceptable to the Company, the fees and expenses of which shall be paid by the Company.If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of theSecurities Act, the Warrant Shares shall take on the characteristics of the Warrants being exercised, and the holding period of the Warrant Shares beingissued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section 2(c).3d) Mechanics of Exercise.i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to betransmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with TheDepository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant insuch system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of theWarrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or mannerofsale limitationspursuant to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, registered in theCompany’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitledpursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2)Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate ExercisePrice to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Companyof the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall bedeemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant hasbeen exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (otherthan in the case of a cashless exercise) is received by the Warrant Share Delivery Date. If the Company fails for any reason to deliver tothe Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder,in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP ofthe Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifthTrading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share Delivery Date until such WarrantShares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FASTprogram so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standardsettlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stockas in effect on the date of delivery of the Notice of Exercise.4ii.Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the requestof a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a newWarrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrantshall in all other respects be identical with this Warrant; provided, however, that the Holder shall be required to return any WarrantShares subject to any such rescinded exercise notice concurrently with the return to Holder of the aggregate Exercise Price paid to theCompany for such Warrant Shares and the restoration of Holder’s right to acquire such Warrant Shares pursuant to this Warrant(including, issuance of a replacement warrant certificate evidencing such restored right).iii. Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant toSection 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.iv. Compensation for BuyIn on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights availableto the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with theprovisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date theHolder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwisepurchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipatedreceiving upon such exercise (a “BuyIn”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) theHolder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) theamount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connectionwith the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at theoption of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was nothonored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock thatwould have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holderpurchases Common Stock having a total purchase price of $11,000 to cover a BuyIn with respect to an attempted exercise of shares ofCommon Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediatelypreceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written noticeindicating the amounts payable to the Holder in respect of the BuyIn and, upon request of the Company, evidence of the amount of suchloss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including,without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver sharesof Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.5v. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise ofthis Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Companyshall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by theExercise Price or round up to the next whole share.vi. Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue ortransfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paidby the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by theHolder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, thisWarrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder andthe Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.The Company shall pay all Transfer Agent fees required for sameday processing of any Notice of Exercise and all fees to the DepositoryTrust Company (or another established clearing corporation performing similar functions) required for sameday electronic delivery of theWarrant Shares.vii. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timelyexercise of this Warrant, pursuant to the terms hereof.6e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise anyportion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicableNotice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of theHolder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). Forpurposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Partiesshall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, butshall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrantbeneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion ofany other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exerciseanalogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in thepreceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act andthe rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that suchcalculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed inaccordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (inrelation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisableshall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether thisWarrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of thisWarrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm theaccuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number ofoutstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s mostrecent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recentwritten notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request ofa Holder, the Company shall within one (1) Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock thenoutstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise ofsecurities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number ofoutstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stockoutstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice tothe Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial OwnershipLimitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares ofCommon Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in theBeneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shallbe construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portionhereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplementsnecessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of thisWarrant.7Section 3. Certain Adjustments.a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes adistribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which,for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstandingshares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into asmaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case theExercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any)outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately aftersuch event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of thisWarrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for thedetermination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case ofa subdivision, combination or reclassification.b) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sellsany Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares ofCommon Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregatePurchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise ofthis Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before thedate on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the recordholders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that to the extent that theHolder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall notbe entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Rightto such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not resultin the Holder exceeding the Beneficial Ownership Limitation).c) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend (other than cash) orother distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including,without limitation, any distribution of stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement,scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holdershall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number ofshares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including withoutlimitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken,the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, thatto the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, thenthe Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a resultof such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as itsright thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).8d) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more relatedtransactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease,license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, director indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of CommonStock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more ofthe outstanding Common Stock or 50% or more of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in oneor more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchangepursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly orindirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, withoutlimitation, a reorganization, recapitalization, spinoff, merger or scheme of arrangement) with another Person or group of Persons whereby such otherPerson or group acquires more than 50% of the outstanding shares of Common Stock or 50% or more of the voting power of the common equity of theCompany (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for eachWarrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of theHolder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor oracquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as aresult of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior tosuch Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, thedetermination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of AlternateConsideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Priceamong the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. Ifholders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall begiven the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at theHolder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date ofthe public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cashequal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of suchFundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company’s control, including not approved by theCompany’s Board of Directors, the Holder shall only be entitled to receive from the Company or any Successor Entity the same type or form ofconsideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to theholders of Common Stock of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, stock or anycombination thereof, or whether the holders of Common Stock are given the choice to receive from among alternative forms of consideration in connectionwith the Fundamental Transaction; provided, further, that if holders of Common Stock of the Company are not offered or paid any consideration in suchFundamental Transaction, such holders of Common Stock will be deemed to have received common stock of the Successor Entity (which Entity may be theCompany following such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on theBlackScholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day of consummation of the applicableFundamental Transaction for pricing purposes and reflecting (A) a riskfree interest rate corresponding to the U.S. Treasury rate for a period equal to thetime between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expectedvolatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualizationfactor) as of the Trading Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlyingprice per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any noncashconsideration, if any, being offered in such Fundamental Transaction and (ii) the highest VWAP during the period beginning on the Trading Dayimmediately preceding the public announcement of the applicable contemplated Fundamental Transaction (or the consummation of the applicableFundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant to this Section 3(e) and (D) a remaining option timeequal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date and (E) azero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds (or such other consideration)within the later of (i) five Business Days of the Holder’s election and (ii) the date of consummation of the Fundamental Transaction. The Company shallcause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of theobligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant towritten agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to suchFundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entityevidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares ofcapital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of thisWarrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which appliesthe exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to suchFundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for thepurpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which isreasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall beadded to the term “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction, each andevery provision of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to each of the Company and theSuccessor Entity or Successor Entities, jointly and severally), and the Successor Entity or Successor Entities, jointly and severally with the Company, mayexercise every right and power of the Company prior thereto and the Successor Entity or Successor Entities shall assume all of the obligations of theCompany prior thereto under this Warrant and the other Transaction Documents with the same effect as if the Company and such Successor Entity orSuccessor Entities, jointly and severally, had been named as the Company herein.e) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. Forpurposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the numberof shares of Common Stock (excluding treasury shares, if any) issued and outstanding.9f) Notice to Holder.i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, theCompany shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resultingadjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form)on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C)the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any sharesof capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection withany reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all orsubstantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into othersecurities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of theaffairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as itshall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective datehereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to beentitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification,consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expectedthat holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or otherproperty deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure todeliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to bespecified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, nonpublic informationregarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to aCurrent Report on Form 8K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of suchnotice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.10Section 4. Transfer of Warrant.a) Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and to theprovisions of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights) aretransferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a writtenassignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay anytransfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a newWarrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument ofassignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly becancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unlessthe Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of thedate on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordanceherewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company,together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent orattorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute anddeliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issuedon transfers or exchanges shall be dated the Issue Date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Sharesissuable pursuant thereto.c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “WarrantRegister”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as theabsolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to thecontrary.d) Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrantshall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue skylaws or (ii) eligible for resale without volume or mannerofsale restrictions or current public information requirements pursuant to Rule 144, the Companymay require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, comply with the provisions ofSection 5.7 of the Purchase Agreement.11e) Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon anyexercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling suchWarrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exemptedunder the Securities Act.Section 5. Miscellaneous.a) No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends orother rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Withoutlimiting the rights of a Holder to receive Warrant Shares on a “cashless exercise,” and to receive the cash payments contemplated pursuant to Sections 2(d)(i) and 2(d)(iv), in no event will the Company be required to net cash settle an exercise of this Warrant.a.In July 2019, the Company entered into a threeyear agreement with a consultant (“Consultant14”) to provide services to the Company includingassisting the Company to promote, market and sell the Company’s technology to potential customers. Pursuant to such agreement and in partialconsideration for such consulting services, the Company agreed to issue to Consultant14 options to purchase up to 107 shares of the Company’scommon stock upon execution of the agreement. The options are exercisable at $375.00 per share and shall vest in 3 equal instalments every twelvemonths starting July 2019. Unexercised options shall expire 4 years from the effective date.In addition, the Company agreed to issue to Consultant14 options to purchase up to 890 shares of the Company’s common stock upon executionof the agreement. The options are exercisable at $27.00 per share and shall vest in 4 equal instalments every six months starting September 2020.Unexercised options shall expire 5 years from the effective date.During 2022 and 2021, an amount of $7 and $14 respectively, were recorded by the Company as stockbased equity awards with respect to Consultant14.F24MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The Company’s outstanding options granted to consultants as of December 31, 2022 are as follows:Issuance dateOptions forCommon stockWeightedAverageexercise priceper shareOptionsexercisableExpirationdateFebruary 201815USD528.7515February 2023August 2018December 2018531USD352.38264August 2023 December 2023July 2020107USD375107July 2023SeptemberOctober 20201,488USD27.201,288October 2024 September 2025Total2,1411,674The Company uses the Black Scholes model to measure the fair value of the stock options with the assistance of a third party valuation.No stock options were granted during 2022 to consultants.The fair value of the Company’s stock options granted to nonemployees was calculated using the following weighted average assumptions:20222021GrantsGrantsDividend yield0%Expected volatility125.15%Riskfree interest0.16%Contractual term of up to (years)1.52F25MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Stock Option Plan for employeesIn March 2017, the Company adopted a stock option plan (the “Plan”) pursuant to which the Company’s Board of Directors may grant stock options toofficers and key employees. The total number of options which may be granted to directors, officers, employees under this plan, is limited to 289,000options. Stock options can be granted with an exercise price equal to or less than the stock’s fair market value at the date of grant.The fair value of each option award is estimated on the date of grant using the Binomial optionpricing model that used the weighted averageassumptions in the following table. The risk free rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the timeof grant.2022Grants2021GrantsDividend yield0%0%Expected volatility96.52%98.47%Riskfree interest4.06%0.96%expected life522.27In the years ended December 31, 2022 and 2021, 10,000 and 3,900 options, respectively, were granted.On December 7, 2022, the Company’s stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from230,800 shares to 289,000 shares.On September 29, 2022, the Compensation Committee of the Company approved grants of restricted share awards under the Company’s 2017 EquityIncentive Plan to Ronen Luzon (CEO), Or Kles (CFO), Billy Pardo (COO), Ilia Turchinsky (CTO) and Ezequiel Javier Brandwain (CCO), pursuant towhich were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000 restricted shares and 12,000 restricted shares,respectively. Each restricted share awarded under section 102 Capital Gain Restricted Stock Award Agreement (the “Agreement”). The restrictedshares shall vest in three equal installments on January 1, 2023, January 1, 2024 and January 1, 2025 for Ronen Luzon, Or Kles, Billy Pardo and IliaTurchinsky and on January 27, 2023, January 27, 2024 and January 27, 2025 for Ezequiel Javier Brandwain, conditioned upon continuous employmentwith the Company, and subject to accelerated vesting upon a change in control of the Company.On the same day, the Company granted fiveyears options to purchase up to 10,000 ordinary shares to other employees of the Company at an exerciseprice of $0.21 per share. The options vesting period is over three years in three equal portions from the vesting commencement date.F26MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The total stock option compensation expense in the year ended December 31, 2022 amounted to $448as follows: Research and development expensesamounted to $151, sales and marketing expenses amounted to $119and general and administrative expenses amounted to $178.The total stock option compensation expense in the year ended December 31, 2021 amounted to $252 as follows: Research and development expensesamounted to $94, sales and marketing expenses amounted to $97 and general and administrative expenses amounted to $61.As of December 31, 2022, there was a total of $530 unrecognized compensation cost relating to nonvested sharebased compensation arrangements.That cost is expected to be recognized over a weightedaverage period of 2.0 years.Share option activity during 2022 is as follows:2022Number ofoptionsWeightedaverageexerciseprice US$Outstanding as of January 135,74226.5Granted10,0005.25ExercisedExpired(4,136)Outstanding as of year end41,60622.48Vested as of year end33,20825.17Share option activity during 2021 is as follows:2021Number ofoptionsWeightedaverageExerciseprice US$Outstanding as of January 139,094$26.0Granted3,90032.0Exercised(751)Expired(6,501)Outstanding as of year end35,74226.5Vested as of year end27,06326.5F27MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 15 CONTINGENCIES AND COMMITMENTSa.On August 7, 2018, the Company commenced an action against North Empire LLC (“North Empire”) in the Supreme Court of the State of New York,County of New York for breach of a Securities Purchase Agreement (the “Agreement”) in which it is seeking damages in an amount to bedetermined at trial, but in no event less than $616. On August 2, 2018, North Empire filed a Summons with Notice against the Company, also in thesame Court, in which they allege damages in an amount of $11.4 million arising from an alleged breach of the Agreement. On September 6, 2018North Empire filed a Notice of Discontinuance of the action it had filed on August 2, 2018. On September 27, 2018, North Empire filed an answerand asserted counterclaims in the action commenced by the Company against them, alleging that the Company failed to deliver stock certificatesto North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against theCompany’s CEO and now former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018,the Company filed a reply to North Empire’s counterclaims. On November 15, 2018, the Company’s CEO and now former Chairman of the Boardfiled a motion to dismiss North Empire’s thirdparty complaint. On January 6, 2020, the Court granted the motion and dismissed the thirdpartycomplaint. Discovery has been completed and both parties have filed motions for summary judgment in connection with the claims andcounterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summary judgment, arguing there werefactual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision. The appealmust be fully perfected and filed by July 26, 2022. On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying theCompany’s motion for summary judgment. North Empire will file its opposition papers on or before March 31, 2022, and the Company will file replypapers on April 29, 2022. On or about September 12, 2022, the Court issued its Decision and Order denying the Company’s motion to reargue.North Empire filed its opposing brief on December 7, 2022. Both sides were given an opportunity to file a reply brief. The Company filed our replybrief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. The Appellate Court has scheduled oral argument for the appealfor February 7, 2023. Oral argument was held before the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Courtfiled its Decision and Order, which affirmed the lower court’s decisions regarding both My Size and North Empire’s motions for summary judgmentand sent the case back to the Supreme Court.On or about March 13, 2023, the Supreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date forthe mediation has not yet been set. The Company intends to vigorously defend any claims made by North Empire.The Company believes it is more likely than not that the counterclaims will be denied.b.In May 2021, the Company received notice from Custodian Ventures, LLC (“Custodian”) of its intention to nominate four candidates to stand forelection to our Board of Directors at the Company’s 2021 annual meeting of stockholders. Custodian subsequently made a book and recordsrequest and has made public statements calling for changes to our management.On September 22, 2021, Custodian commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v.MySize, Inc. (the “Delaware Action”). In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting.On October 19, 2021, the Company commenced an action in the United States District Court for the Southern District of New York againstCustodian, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, and certain rulespromulgated thereunder (the “SDNY Action”). The complaint sought, among other things, declaratory and injunctive relief related to defendants’efforts to nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed“group” for purposes of Section 13(d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. Inaddition, the complaint alleged that the defendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules inconnection with their efforts to elect a slate of directors to the Company’s Board of Directors. On October 20, 2021, the Court signed an ordergranting a hearing on an anticipated motion for a preliminary injunction and expedited scheduling and discovery in aid thereof, and scheduled thathearing for December 2, 2021.On November 4, 2021, the Company entered into the Settlement Agreement with the Lazar Parties. Pursuant to the Settlement Agreement, theCompany and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the SettlementAgreement, the Company agreed to reimburse Custodian for out of pocket expenses and in consideration for the dismissal and release of claimsagainst the Company an aggregate amount equal to $275, to be paid within three business days of the effective date of the Settlement Agreement.With respect to the Company’s 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) its May 12,2021 notice of stockholder nominations of four director candidates with respect to the Company’s 2021 annual meeting of stockholders, (ii) thenotice dated October 28, 2021 submitted by Custodian to the Company notifying the Company of Custodian’s continued intent to bring itsnomination of four director candidates before the Company’s stockholders at the 2021 annual meeting, and (iii) any and all related materials andnotices submitted to the Company in connection therewith or related thereto and to not take any further action in connection with the solicitationof any proxies in connection with the Company. Custodian also agreed to cease any and all solicitation and other activities in connection with the2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effectivedate of the Agreement (the “Standstill Period”). The Settlement Agreement also provides that during the Standstill Period, the Lazar Parties willvote all shares of common stock of the Company it beneficially owns in in accordance with any proposal or recommendation made by theCompany or the Board of Directors of the Company that is submitted to the stockholders of the Company, unless to do so would violateapplicable law and except with respect to certain extraordinary transactions. The Settlement Agreement also contains nondisparagement andconfidentiality provisions, subject to certain exceptions.On December 9, 2021, the Company subsequently entered into a Settlement Agreement (the “Ault Settlement Agreement”), with Milton C. Ault III,Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed towithdraw the SDNY Action against the Ault Parties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that actionagainst the Company. In addition, pursuant to the Settlement Agreement, the Company paid $70 to the Ault Parties in consideration for thereleases and other good and valuable consideration as set forth in the Ault Settlement Agreement.c.On July 5, 2021, the Company was served with a legal complaint filed by Fidelity Venture Capital Ltd. and Dror Atzmon in the Magistrate’s Court inTel Aviv for a monetary award in an amount of NIS 1,436,679 (approximately $450) and a declaratory relief. The plaintiffs allege that the Companybreached its contractual obligations to pay them for services allegedly rendered to the Company by the plaintiffs under a certain consultingagreement dated July 2, 2014, in an amount of NIS 819,000 (approximately $256). Additionally, the plaintiffs allege that the Company shouldcompensate them for losses allegedly incurred by them following their investment in the Company’s shares issued under a certain private offering.In the alternative, the plaintiffs move that the court will declare the investment agreement void with full restitution of plaintiffs’ original investmentin an amount of NIS 1,329,650(approximately $415). The Company filed its statement of defense on October 25, 2021. The first preliminary courthearing of the case is scheduled for January 23, 2022.The first court preliminary hearing was held on March 1, 2022.Following the first preliminary hearing and the Court’s comments and recommendation, the Plaintiffs filed a motion to strike out the claim withoutprejudice.On March 8, 2022 the Court ordered dismissal without prejudice of the claim.F28MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATIONAcquisition of OrgadOn February 7, 2022, the Company acquired 100% of the shares and voting interests in Orgad an omnichannel ecommerce platform. The acquisitionwas designed to create an additional revenue stream for the Company by becoming a direct ecommerce seller while leveraging the synergies betweenMySizeID and Orgad’s ecommerce platform.Unaudited proforma informationThe results of operations of Orgad have been included in the consolidated financial statements since the acquisition date of February 7, 2022. Orgadrevenues included in the Company’s consolidated statement of operations from February 7, 2022 through December 31, 2022 were $4,132. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,662 and $2,850 respectively, and the net loss after tax would have been $8,519 and $10,149 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash (*)300Issuance of shares of common stock (69,752 shares) (**)457Total consideration transferred757(*)The cash payment is subject to working capital adjustments.(**)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Orgad, on the twoyear and the threeyear anniversary of the closing, $350in each ofthese years provided that in the case of the second and third instalments certain revenue targets are met and subject further to certain downward postclosing adjustment. Furthermore, 69,752shares of common stock will be issued in eight equal quarterly instalments until the lapse of two years fromclosing. Additional earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023 will also be paid. All of these payments aresubject to the former owners being actively engaged with Orgad at the date such payment is due, and therefore were not taken as part of theconsideration for the business combination.During the year ended December 31, 2022 an amount of $456and $319was recorded in respect of the cash instalments and in respect of stocksissuance, respectively in Cost Of Goods, Sales and Marketing and General and Administrative expenses as shown in the following table:2022Stockbased compensation expense – Cost of goods194Stockbased compensation expense Sales and marketing271Stockbased compensation expense General and administrative310775(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the preliminary estimates of their fair values, which were determined using generally accepted valuation techniques based onestimates and assumptions made by management at the time of the acquisition. Such estimates are subject to change during the measurement periodwhich is not expected to exceed one year. The purchase price allocation was not finalized duo to examination of the net working capital of Orgad at theacquisition date. Any adjustments to the preliminary purchase price allocation identified during the measurement period will be recognized in theperiod in which the adjustments are determined.The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and Cash EquivalentTrade receivables364PP&E55Inventory864Longterm financial investment31Selling platform378Goodwill152Shortterm accruals and deferrals(181)Trade payables(668)Long term provision(13)Longterm debt(138)Deferred Taxes(87)Total net assets acquired757F29MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)(c)Acquisitionrelated costsThe Company incurred transaction costs of approximately $40and none during twelvemonth period ended December 31, 2022 which were included ingeneral and administrative expenses in the consolidated statements of income (loss).Acquisition of Naiz Bespoke Technologies, S.L. (“Naiz”)On October 11, 2022, the Company acquired 100% of the shares and voting interests in Naiz a provider of SaaS technology solutions that solve sizeand fit issues for fashion ecommerce companies. The acquisition was designed to allow Naiz’s customers benefit from MySize’s deep understanding ofthe fashion ecommerce retail landscape, while creating an additional revenue stream for the Company.Unaudited proforma informationThe results of operations of Naiz have been included in the consolidated financial statements since the acquisition date of October 11, 2022. Naizrevenues included in the Company’s consolidated statement of operations from October 11, 2022 through December 31, 2022 were $103. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,738 and $379 respectively and the net loss after tax would have been $8,695 and $10,717 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash503Issuance of shares of common stock (240,000 shares) (*)1,008Total consideration transferred1,511(*)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Naiz, additional cash consideration (up to $1,550) in four instalments subject to thefollowing conditions:(i)Continuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result ofa Good Reason; and(ii)Naiz’s Revenues reaching or exceeding the respective Target Revenues defined in the agreement. The revenues will be calculated in four periods:(1) January 1, 2022 – December 31, 2022; (2) January 1, 2023 – June 30, 2023; (3) July 1, 2023 – December 31, 2023; (4) January 1, 2024 – December31, 2024.Former owners of Naiz are entitled to additional cash consideration following December 31, 2025 (up to $1,650) in an event when the actual value of theequity consideration is less than $1,650, subject to completion of a Target Revenue for the period of January 1, 2025 – December 31, 2025 andcontinuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result of aGood Reason;F30MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)During the year ended December 31, 2022 an amount of $283 was recorded in respect of the additional cash consideration.(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the estimates of their fair values, which were determined using generally accepted valuation techniques based on estimates andassumptions made by management at the time of the acquisition.The following table summarizes the fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and cash equivalent36Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Total net assets acquired1,511(c)Acquisitionrelated costsDuring 2022, the Company incurred transaction costs of approximately $75 which were included in general and administrative expenses in theconsolidated statements of income (loss).F31MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)Note 17 – Operating SegmentsDuring the year ended December 31, 2021, the Company had one reportable segment. As a result of the business combinations in the reporting period(see note 13), the Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificialintelligence driven measurement solutions and (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions and. The fashionand equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. Orgad has onecustomer that is responsible for 37.9% of the Company consolidated revenues. The SaaS based innovative artificial intelligence driven measurementsolutions, or SaaS Solutions operating segment consists of My Size Inc and My Size Israel and My Size LLC.Information related to the operations of the Company’s reportable operating segments is set forth below:Fashion andequipment ecommerce platformSaaSSolutionsNaizTotalAs of the year ended December 31, 2022Revenues from external customers4,1322241034,459Operating (loss) income(591)(7,181)(338)(8,110)Financial income (expense), net(236)Net loss before tax(8,346)Fashion andequipment ecommerce platformSaasSolutionNaizAs of December 31, 2022:Assets2,0225,9661,691Amortization of intangible assets(114)(34)(46)The Company elected to present geographic information in respect with revenues generated from external customers based on the location of the selling entity:All the revenues of the fashion and equipment ecommerce platform segment are generated by Orgad, located in Israel.All the revenues of the Naiz segment are generated by Naiz, located in Spain.The revenues of the Saas Solutions segment are generated by My Size Ltd. located in Israel (approximately 75% of the segment revenues) and by My Size Inc.located in the U.S. (approximately 25% of the segment revenues).NOTE 18 SALES AND MARKETINGYear endedDecember 31,20222021Salaries836574Consultants and subcontractors5831,086Marketing481283Selling fees489Share based payments post Orgad acquisition (*)271Share based payments for consultants and employees127180Travel21142Other1451713,1432,336(*) See note 16.NOTE 19 GENERAL AND ADMINISTRATIVE EXPENSESYear endedDecember 31,20222021Salaries1,007461Professional services7051,832Share based payments for consultants, directors and employees18098Rent, office expenses and communication442372Insurance564627cash liability and equity liability expenses related to Orgad acquisition310cash liability expenses related to Naiz acquisition217Settlement fees (*)345Directors8259Other3933303,9004,124(*)See note 15(b)F32MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 20 FINANCIAL INCOME (EXPENSE), NETA.Financial incomeYear endedDecember 31,20222021Revaluation investment in marketable securities49Other26172666B.Financial expenseYear endedDecember 31,20222021Exchange rate differences33Revaluation of loan granted100Revaluation investment in marketable securities62Other6792629NOTE 21 EVENTS SUBSEQUENT TO THE BALANCE SHEET DATEa.On January 2, 2023, Orgad experienced a fire at its warehouse in Israel. The Company is not aware of any casualties or injuries associated with thefire. The Company shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450.The Company believes that this incident did not affect the future sales results of Orgad for the year 2023. The inventory was not insured and it istoo early to determine the potential impact of this incident on the other parties that were involved in the incident (lessor and others that leasedproperties near the warehouse).b.On January 10, 2023, the Company entered into a securities purchase agreement pursuant to which the Company sold an aggregate of 162,000ofthe Company’s shares of common stock and prefunded warrants to purchase up to 278,899shares of common stock and, in a concurrent privateplacement, unregistered warrants to purchase up to883,798 shares of common stock, consisting of Series A warrants to purchase up to 441,899shares of common stock and Series B warrants to purchase up to 441,899shares of common stock, at an offering price of $3.055per share ofcommon stock and associated Series A and Series B warrants and an offering price of $3.054per prefunded warrant and associated Series A andSeries B warrants.In addition, the Company entered into a securities purchase agreement pursuant to which the Company agreed to sell and issue in a privateplacement an aggregate of up to 540,098 unregistered prefunded warrants and unregistered warrants to purchase up to an aggregate of 1,080,196shares of common stock, consisting of Series A warrants to purchase up to 540,098 shares of common stock and Series B warrants to purchase upto 540,098 shares of common stock at an offering price of $3.054 per prefunded warrant and associated Series A and Series B warrants.As of March 31,2023 all the pre funded warrants were exercised by the investor.F33ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSUREThere were no disagreements with accountants on accounting and financial disclosure of a type described in Item 304 (a)(1)(iv) or any reportable event asdescribed in Item 304 (a)(1)(v) of Regulation SK.ITEM 9A. CONTROLS AND PROCEDURESDisclosure ControlsWe carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief FinancialOfficer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) as of December 31, 2022. Basedupon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this Annual Report on Form10K, our disclosure controls and procedures were effective to ensure that information required to be disclosed in reports filed under the Exchange Act, as amended,is recorded, processed, summarized and reported within the required time periods specified in the SEC’s rules and forms and is accumulated and communicated toour management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.Management’s Report on Internal Control Over Financial ReportingOur internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records, that, in reasonable detail,accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only inaccordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition, use or disposition of our assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance withthe policies or procedures may deteriorate.Our management, including our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financialreporting at December 31, 2022. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the TreadwayCommission (COSO) in Internal Control—Integrated Framework (2013). Based on that assessment under those criteria, management has determined that, as ofDecember 31, 2022, our internal control over financial reporting was effective.This Annual Report on Form 10K does not include an attestation report of our registered public accounting firm regarding internal control over financialreporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to the exemption provided to issuersthat are not “large accelerated filers” nor “accelerated filers” under the DoddFrank Wall Street Reform and Consumer Protection Act.Changes in Internal Control Over Financial ReportingDuring the year ended December 31, 2022, we made two acquisitions, as discussed in Note 1a and Note 16 of the audited consolidated financial statementsfor the year ended December 31, 2022 included in this Annual Report on Form 10K. As a result, we made additions and/or modifications to policies, procedures,systems and controls that have materially affected our internal control over financial reporting from the acquisitions, including new controls for consolidationprocess that relates to accounting policies and procedures, operational processes and documentation practices. Management excluded the acquired businessesfrom management’s report on internal control over financial reporting. ITEM 9B. OTHER INFORMATIONNone.ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNot applicable.51PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe following table sets forth the name, age and positions of our executive officers and directors.NAMEAgePOSITIONRonen Luzon52Chief Executive Officer and Class III DirectorOr Kles40Chief Financial OfficerBilly Pardo47Chief Operating Officer and Chief Product OfficerIlia Turchinsky35Chief Technology OfficerEzequiel Javier Brandwain53Chief Commercial OfficerOron Branitzky (1)(2)(3)*63Class II DirectorOren Elmaliah (1)(2)(3)*38Class I DirectorArik Kaufman (1)(2)(3)*41Class I DirectorGuy Zimmerman*53Class II Director(1)Member of our audit committee(2)Member of our nominating and corporate governance committee(3)Member of our compensation committee* Independent as that term is defined by the rules of the Nasdaq Stock Market.The business background and certain other information about our directors and executive officers is set forth below:Ronen Luzon has served as our Chief Executive Officer and a member of our board of directors since September 2013. Since 2006, Mr. Luzon hasadditionally served as Chief Executive Officer and founder of Malers Ltd., a company in the global security solutions market which provides technological solutionsfor integrated communication infrastructures, security and control systems. Prior to Malers, he held several senior marketing, sales management and professionalservices positions in a variety of international high tech companies including VP marketing of GA Tech and Professional Services Manager of Eldat Communication.Mr. Luzon graduated from Middlesex University in London with a B.S. in IT and Business Information Systems. We believe that Mr. Luzon is qualified to serve as amember of our board of directors because of his more than 20 years of experience in the technology sector.Or Kles has served as our Chief Financial Officer since May 2016. He is a certified public accountant with a broad, diverse financial background. From May2013 until April 2016 he served as Assistant Controller of Shikun and BinuiSolel Boneh Infrastructure Ltd. and from December 2010 until May 2013 he served as anAssociate at KPMG. Mr. Kles holds an MBA and a B.A. in Business Management and Accounting (specializing in financing) from The College of ManagementAcademic Studies. Mr. Kles is a certified public accountant in Israel.Billy Pardo has served as our Chief Product Officer since May 2014 and Chief Operating Officer since April 2019. From April 2010 until August 2013, Ms.Pardo served as Senior Director of Product Management of Fourier Education. Among her areas of expertise are launching products from concept to successfuldelivery in various methodologies, including Fourier Education’s awardwinning einstein™ Science Tablet. Prior to that Ms. Pardo served in various productmanagement positions including, Project Manager of Time to Know, Product Marketing Manager of RiT Technologies, Product Manager of Pricer AB and R&DTeam Leader at Pricer AB. Ms. Pardo previously served as Software Engineer at Eldat Communication Ltd., and QA Engineer at NICE Systems. Ms. Pardo receivedan MBA from The Interdisciplinary Center and a B.A. in Computer Science from The Academic College of TelAvivYaffo.Ilia Turchinsky has served as our Chief Technology Officer since April 2019 and from July 2018 until April 2019 as our Director of Technology. Prior tojoining us, from 2013 until 2018, Mr. Turchinsky served in various roles, most recently Chief Technology Officer, at MonkeyTech Ltd., a company that providesdesign, development and characterization of mobile applications. Prior to that, Mr. Turchinsky served in various roles including development course instructor atIQLine, was a founder of Arnavsoft and was a software developer for MintLab and a political party. Mr. Turchinsky holds a B.Sc. from the Ben Gurion University inComputer Science and an M.Sc. from the Open University of Israel in Computer Science.52Ezequiel Javier Brandwain has served as our Chief Commercial Officer since February 2022. Mr. Brandwain brings more than two decades of globalexperience in retail and the fashion industry, mainly in business development, operations, and international markets. Before joining the Company, Mr. Brandwainheld positions of increasing responsibility at several companies, including between June 2017 and November 2020, at 7 For All Mankind International, where heserved as Director, Latin America and Caribbean, managing business development and operations across Latin America and the Caribbean. Before that, betweenMay 2016 and June 2017, Mr. Brandwain served as Chief Business Development Officer at Replay – Fashion Box SPA, where he oversaw business development andoperations, expansion and control in the Americas, the Caribbean, and NorthEast Asia. Prior this role, between September 2015 and May 2016, he served as theReplay’s Managing Director in Latin America and the Caribbean, leading the company’s international expansion in these regions. Prior to that, between April 2015and September 2015, Mr. Brandwain served as Managing Director, Latin America and Caribbean at Authentic Brands Group LLC, where he led that company’soperations, business developments and international expansion within these regions, and served as the direct liaison with the company’s headquarters in New York.Prior to that, between April 2015 and September 2015, Mr. Brandwain served as Chief Operating Officer, Latin America and Caribbean at Flemingo International Ltd.,overseeing operations, as well as projected operations in the travel retail field across these regions. Prior to that, between December 2010 and February 2014, Mr.Brandwain served as Regional Director, Southern Hemisphere at Calvin Klein, where he was responsible for defining and implementing the operational andcommercial strategy for Southern Hemisphere, as well as overseeing the retail, travel retail, concession, and wholesale businesses of the company. During his tenureat Calvin Klein, Mr. Brandwain also served as Travel Retail Director, Latin America, where he built the travel retail business and developed operations. Prior to that,between July 2010 and November 2010, Mr. Brandwain served as Business Director, Latin America and Caribbean at Givenchy Latin America, and between January2010 and June 2010 he served as Commercial Director, Latin America and Caribbean at Nautica Latin America. During December 2004 and December 2009, Mr.Brandwain served as Vice President, International Business Development at Report Collection/Modextil, Inc., where he was in charge of business and operationalexpansion, global growth, and brand extensions. Prior to that, between 2003 and October 2004, Mr. Brandwain served as General Manager at Andrew KoenigInternational, Inc. Between September 2019 and November 2020, Mr. Brandwain served as a member of the Board of Directors of 7 For All Mankind BrazilImportacao, Comercio E Distribuicao S.A. Mr. Brandwain earned a Bachelor degree in architecture from the University of the Republic (Uruguay).Oron Branitzky has served as a member of our board of directors since March 2017. Mr. Barnitzky has vast experience in retail technology. SinceNovember 2017, Mr. Branitzky has served as Global Retail Business Development at Superup, and from January 2007 until December 2014 he served as VicePresident of Sales and Marketing at Pricer AB. Prior to that, Mr. Branitzky has served as VP Marketing and Sales at Eldat Communication and Sarin TechnologiesLtd. Since January 2015, Mr. Branitzky has served as chairman of the board of directors of WiseShelf Ltd. and from May 2015 until March 2016, Mr. Branitzky servedas an advisory board member of ciValue. Mr. Branitzky received a B.S. from the Hebrew University of Jerusalem and an MBA in International Marketing from TelAviv University. We believe that Mr. Branitzky is qualified to serve as a member of our board of directors because of his more than 20 years of experience inmanaging the sales of hitech solutions to retailers across the globe.Oren Elmaliah, has served as a member of our board of directors since May 2017. In September 2015, Oren Elmaliah founded Accounting Team IL and hasacted as Account Manager since then. Accounting Team IL is a financial consultancy and service provider to public companies traded in Israel and abroad. SinceFebruary 2017, Mr. Elmaliah has served as controller of Enlivex Therapeutics Ltd., and since January 2017 he has served as Chief Financial Officer of Presstek Israel.In addition, since September 2015, Mr. Elmaliah has served as an Israel Authorities Reporting Officer of LG Electronics Israel and since September 2015 he hasserved as Local Financial Report Consultant of Chiasma. From July 2011 until August 2015, Mr. Elmaliah served as CPA, Financial Director of CFO Director Ltd andfrom June 2010 until July 2011 he served as Risk Management Consultant of RSM International Limited. Mr. Elmaliah holds a B.A. in Accounting/Economics and aMsc. in Finance/Accounting from Tel Aviv University, Israel. He is a licensed Certified Public Accountant in Israel. We believe that Mr. Elmaliah is qualified to serveas a member of our board of directors because of his vast finance experience and public company management and administration in the fields of finance,accounting, and financial regulation.53Arik Kaufman has served as a member of our board of directors since June 2017. Mr. Kaufman is an attorney specializing in the fields of commercial law,corporate law and capital markets and since 2016 runs his own law office in Israel. He has vast experience in the fields of financial reporting and financial regulation.Mr. Kaufman serves as the Chief Executive Officer of Steakholder Foods since January 2022. From September 2017 until January 2022, Mr. Kaufman served as VPBusiness Development of Mor Research Applications. Mr. Kaufman holds an LLB in Law from the Interdisciplinary Center, Herzliya, and is admitted to the IsraeliBar. We believe that Mr. Kaufman is qualified to serve as a member of our board of directors based upon his experience of assisting with the completion of numerousventure capital financings, mergers, acquisitions, and strategic relationships. In addition, he has served as a member of the board of various publicly tradedcompanies, including companies that operate in the same industry as us.Guy Zimmerman has served as a member of our board of directors since August 2021. Previously, Mr. Zimmerman served as Founder and CEO ofManuFuture, an online b2b engineering market place, since February 2021. Prior to that from 2017 to 2021, Mr. Zimmerman acted as a consultant to severaltechnology startups and was a founding partner of a business travel online platform. From 2013 to 2017, Mr. Zimmerman served as EVP of Marketing and BusinessDevelopment of Kornit Digital and was part of the IPO leadership. Prior to that, Mr. Zimmerman served as VP of Global Sales and Business Development at TefronLtd., a provider of seamless garment technology, where he led the $100m sales and sales support organization serving global retail and fashion brands. Prior to thathe served as Vice President of Strategy and Business Development at Tnuva Group, Israel’s largest food manufacturer and spent eight years at McKinsey &Company. Mr. Zimmerman previously led a software startup in the field of operational healthcare management systems. Mr. Zimmerman holds a B.Sc. in IndustrialEngineering from Tel Aviv University in Israel. We believe that Mr. Zimmerman is qualified to serve as a member of our board of directors because of his experiencein business development in the technology and retail sectors.Board Diversity MatrixThe table below provides certain information regarding the diversity of our board of directors as of the date of this annual report.Board Diversity Matrix (As of March 31, 2023)Total Number of Directors5FemaleMaleNonBinaryDid Not DiscloseGenderPart I: Gender IdentityDirectors#5##Part II: Demographic BackgroundAfrican American or Black####Alaskan Native or Native American####Asian####Hispanic or Latinx####Native Hawaiian or Pacific Islander####White#1##Two or More Races or Ethnicities#2##LGBTQ+0Did Not Disclose Demographic Background2Family RelationshipsRonen Luzon, the Chief Executive Officer and a member of our board of directors, and Billy Pardo, the Chief Product Officer and Chief Operating Officer, arehusband and wife. There are no other family relationships among any of our current or former directors or executive officers.Involvement in Certain Legal ProceedingsWe are not aware of any of our directors or officers being involved in any legal proceedings in the past ten years relating to any matters in bankruptcy,insolvency, criminal proceedings (other than traffic and other minor offenses), or being subject to any of the items set forth under Item 401(f) of Regulation SK.Arrangements between Officers and DirectorsTo our knowledge, there is no arrangement or understanding between any of our officers and any other person, including directors, pursuant to which theofficer was selected to serve as an officer.Board of DirectorsThere are no agreements with respect to the election of directors.On January 6, 2022, we filed with the Secretary of State of Delaware a Certificate of Amendment to our Amended and Restated Certificate of Incorporationproviding for a classified Board. Following filing of the Certificate of Amendment, members of our board are now classified into three classes with staggered threeyear terms (with the exception of the expiration of the initial Class I and Class II directors), as follows:●Class I, comprised of two directors, initially Arik Kaufman and Oren Elmaliah (with their initial terms expiring at our 2022 annual meeting of stockholders andmembers of such class serving successive threeyear terms);●Class II, comprised of two directors, initially Oron Branitzky and Guy Zimmerman (with their initial terms expiring at our 2023 annual meeting of stockholdersand members of such class serving successive threeyear terms); and●Class III, comprised of one director, initially Ronen Luzon (with his initial term expiring at our 2024 annual meeting of stockholders and members of suchclass serving successive threeyear terms).54To preserve the classified Board structure, a director elected by the Board of Directors to fill a vacancy holds office until the next election of the class forwhich such director has been chosen, and until that director’s successor has been elected and qualified or until his or her earlier death, resignation, retirement orremoval.Our board of directors has reviewed the materiality of any relationship that each of our directors has with us, either directly or indirectly. Based upon thisreview, we believe that Arik Kaufman, Oren Elmaliach, Oron Branitzky and Guy Zimmerman qualify as independent directors in accordance with the standards set bythe Nasdaq and Rule 10A3 promulgated under the Exchange Act.Committees of the BoardAudit CommitteeOur audit committee is comprised of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Elmaliah serves as chairman of the audit committee. The auditcommittee is responsible for retaining and overseeing our independent registered public accounting firm, approving the services performed by our independentregistered public accounting firm and reviewing our annual financial statements, accounting policies and our system of internal controls. The audit committee actsunder a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the audit committee’s composition and meetings.The audit committee charter is available on our website www.mysizeid.com.The Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by applicable SEC rules. Inaddition, the Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by the rules of the Nasdaq StockMarket.The Board of Directors has determined that Oren Elmaliah is an “audit committee financial expert” serving on its audit committee, and is independent, as theSEC has defined that term in Item 407 of Regulation SK.Compensation CommitteeOur compensation committee consists of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Branitzky serves as chairman of the compensationcommittee.The compensation committee’s roles and responsibilities include making recommendations to the Board of Directors regarding the compensation for ourexecutives, the role and performance of our executive officers, and appropriate compensation levels for our CEO, which are determined without the CEO present, andother executives. Our compensation committee also administers our 2017 Equity Incentive Plan and our 2017 Consultant Equity Incentive Plan. The compensationcommittee acts under a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the compensation committee’scomposition and meetings. The compensation committee charter is available on our website www.mysizeid.com.Our Board of Directors has determined that all of the members of the compensation committee are “independent” as that term is defined by the rules of theNasdaq Stock Market.Nominating and Corporate Governance CommitteeThe members of the nominating and corporate governance committee are Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Kaufman serves aschairman of the corporate governance and nominations committee. The nominating and corporate governance committee acts under a written charter, which morespecifically sets forth its responsibilities and duties, as well as requirements for the nominating and corporate governance committee’s composition and meetings.The nominating and corporate governance committee charter is available on our website www.mysizeid.com.The nominating and corporate governance committee develops, recommends and oversees implementation of corporate governance principles for us andconsiders recommendations for director nominees. The nominating and corporate governance committee also considers stockholder recommendations for directornominees that are properly received in accordance with applicable rules and regulations of the SEC. Our stockholders that wish to nominate a director for election tothe Board of Directors should follow the procedures set forth in our bylaws.55The nominating and corporate governance committee will consider persons identified by its members, management, stockholders, investment bankers andothers. The guidelines for selecting nominees, which are specified in the nominating committee charter, generally provide that persons to be nominated:●should be accomplished in his or her field and have a reputation, both personal and professional, that is consistent with our image and reputation;●should have relevant experience and expertise and would be able to provide insights and practical wisdom based upon that experience and expertise; and●should be of high moral and ethical character and would be willing to apply sound, objective and independent business judgment, and to assume broadfiduciary responsibility.The nominating and corporate governance committee will consider a number of qualifications relating to management and leadership experience,background and integrity and professionalism in evaluating a person’s candidacy for membership on the Board of Directors. The nominating and corporategovernance committee may require certain skills or attributes, such as financial or accounting experience, to meet specific Board needs that arise from time to timeand will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of Board of Directors members. The nominating andcorporate governance committee will not distinguish among nominees recommended by stockholders and other persons.Our Board of Directors has determined that all of the members of the nominating and corporate governance committee are “independent” as that term isdefined by the rules of the Nasdaq Stock Market.Code of Conduct and EthicsWe have a Code of Business Conduct and Ethics that applies to all our employees. The text of the Code of Business Conduct and Ethics is publiclyavailable on our website at www.mysizeid.com. Information contained on, or that can be accessed through, our website does not constitute a part of this report andis not incorporated by reference herein. Disclosure regarding any amendments to, or waivers from, provisions of the code of conduct and ethics that apply to ourdirectors, principal executive and financial officers will be posted on the “InvestorsCorporate Governance” section of our website at www.mysizeid.com or will beincluded in a Current Report on Form 8K, which we will file within four business days following the date of the amendment or waiver.Change in Procedures for Recommending DirectorsThere have been no material changes to the procedures by which our stockholders may recommend nominees to our Board of Directors from thoseprocedures set forth in our Proxy Statement for our 2021 Annual Meeting of Stockholders, filed with the SEC on December 7, 2022.56ITEM 11. EXECUTIVE COMPENSATIONSummary Compensation TableThe following sets forth the compensation paid by us to our named executive officers, during the years ended December 31, 2022 and December 31, 2021.Name and Principal PositionYearSalary($) (1)Bonus($)StockAwards($)OptionAwards($) (2)All OtherCompensation($)Total($)Ronen Luzon2022173,000223,0008,000126,000530,000Chief Executive Officer2021194,0005,00023,00097,000319,000Or Kles2022123,00053,0007,00071,000254,000Chief Financial Officer2021123,0008,00030,00061,000222,000Billy Pardo2022134,00053,0007,000100,00294,000Chief Operating Officer2021162,0007,00018,00074,000261,000(1) Salary for the years 2022 and 2021 are based on average US$/NIS representative exchange rates of NIS 3.358 and NIS 3.11 respectively.(2) Amounts in this column represent the grant date fair value of options granted to the named executive officers during 2022 and 2021, computed in accordance withFASB ASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the named executive officers. The assumptionsmade in valuing the options reported in this column are discussed in Note 11 to our audited financial statements for the year ended December 31, 2021 and Note 4 toour condensed consolidated interim financial statements for the quarterly period ended September 30, 2022.All Other Compensation TableThe “All Other Compensation” amounts set forth in the Summary Compensation Table above consist of the following:NameYearAutomobileRelatedExpenses($)Manager’sInsurance*($)EducationFund*($)Othersocialbenefits**($)Total($)Ronen Luzon202232,00031,00015,00048,000126,000202133,00033,00015,00016,00097,000Or Kles202215,00021,00010,00025,00071,000202114,00019,0009,00019,00061,000Billy Pardo202216,00025,00013,00046,000100,000202117,00024,00012,00021,00074,000* Manager’s insurance and education funds are customary benefits provided to employees based in Israel. Manager’s insurance is a combination of severancesavings (in accordance with Israeli law), defined contribution taxqualified pension savings and disability insurance premiums. An education fund is a savings fundof pretax contributions to be used after a specified period of time for educational or other permitted purposes.** Other social benefits for 2022 and 2021 for all named individuals includes tax payments in respect of social benefits.57Agreements with Named Executive OfficersRonen LuzonOn November 18, 2018, My Size Israel, our wholly owned subsidiary, entered into an employment agreement with Ronen Luzon, or the Luzon EmploymentAgreement, pursuant to which Mr. Luzon will serve as our Chief Executive Officer. Pursuant to the terms of the Luzon Employment Agreement, Mr. Luzon receivesNIS 55,000 per month as his base salary and shall be eligible to receive such bonus as determined by us. In addition, Mr. Luzon shall be entitled social benefits andto other benefits, including, but not limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, includinginsurance in case of disability, annual vacation days, sick leave and expense reimbursement. Pursuant to the terms of the Luzon Employment Agreement and subjectto certain conditions, payments made by the Company to the pension fund or manager’s insurance fund shall be made in lieu of severance payments due to Mr.Luzon. The term of the Luzon Employment Agreement shall be effective as of September 1, 2018 and shall continue until such time either party provides writtennotice to the other party at least 75 days in advance of the termination of such agreement. We may also terminate Mr. Luzon’s employment without prior writtennotice (or payment in lieu of such notice) for Cause (as defined in the Luzon Employment Agreement).Or KlesOn November 18, 2018, My Size Israel entered into an employment agreement with Or Kles, or the Kles Employment Agreement, pursuant to which Mr. Kleswill serve as our Chief Financial Officer. Pursuant to the terms of the Kles Employment Agreement, Mr. Kles receives NIS 38,000 per month as his base salary andshall be eligible to receive such bonus as determined by us. In addition, Mr. Kles shall be entitled to social benefits and other benefits, including, but not limited to,contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annual vacation days,sick leave and expense reimbursement. Pursuant to the terms of the Kles Employment Agreement and subject to certain conditions, payments made by us to thepension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Mr. Kles. The term of the Kles Employment Agreement shall beeffective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days in advance of thetermination of such agreement. We may also terminate Mr. Kles’s employment without prior written notice (or payment in lieu of such notice) for Cause (as defined inthe Kles Employment Agreement).Billy PardoOn November 18, 2018, My Size Israel entered into an employment agreement with Billy Pardo, or the Pardo Employment Agreement, pursuant to which Ms.Pardo will serve as our Chief Product Officer. Pursuant to the terms of the Pardo Employment Agreement, Ms. Pardo receives NIS 47,500 per month as her basesalary and shall be eligible to receive such bonus as determined by us. In addition, Ms. Pardo shall be entitled to social benefits and other benefits, including, butnot limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annualvacation days, sick leave and expense reimbursement. Pursuant to the terms of the Pardo Employment Agreement and subject to certain conditions, payments madeby us to the pension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Ms. Pardo. The term of the Pardo EmploymentAgreement shall be effective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days inadvance of the termination of such agreement. We may also terminate Ms. Pardo’s employment without prior written notice (or payment in lieu of such notice) forCause (as defined in the Pardo Employment Agreement).58Outstanding Equity Awards at Fiscal YearEndThe following table provides information regarding options held by each of our named executive officers that were outstanding as of December 31, 2022.Option AwardsStock AwardsName and Principal PositionNumber ofSecuritiesUnderlyingUnexercisedOptionsExercisableNumber ofSecuritiesUnderlyingUnexercisedOptionsUnexercisableOptionExercisePriceOptionExpirationDateEquityincentiveplan awards:Number ofUnearnedShares that HaveNot VestedEquityincentiveplan awards:Market Value ofUnearnedShares, That Have Not VestedRonen Luzon Chief Executive Officer400(1)$26(8)7/24/20231,601(2)$26(8)5/29/20256,400(3)$268/10/2025100,000(9)100,000$511,250Or Kles – Chief Financial Officer227(4)$26(8)7/24/2023427(5)$26(8)5/29/20255,200(6)$268/10/202524,000(10)24,000$122,700Billy Pardo Chief Operating Officer400(1)$26(8)7/24/2023894(7)$26(8)5/29/20255,200(6)$268/10/202524,000(11)24,000$122,700(1) The option has a grant date of July 24, 2017 and vested in full on January 24, 2018.(2) The option has a grant date of May 29, 2019. 267 options vested immediately upon grant, 445 options vested on January 24, 2019, 445 options vested on January24, 2020 and 444 options vested on January 24, 2021.(3) The option has a grant date of October 8, 2020, 1,600 options vested on November 26, 2020, 1,600 options vested on May 26, 2021, 1,600 options vested onNovember 26, 2021, and 1,600 options vested on May 26, 2022.(4) The option has a grant date of July 24, 2017. 76 options vested immediately upon grant, 76 options vested on May 1, 2018 and 75 options vested on May 1, 2019.(5) The option has a grant date of May 29, 2019. 160 options vested immediately upon grant, 445 options vested on May 1, 2020, 445 options vested on May 21, 2021and 444 options vested on May 1, 2022.(6) The option has a grant date of October 8, 2020, 1,300 options vested on November 26, 2020, 1,300 options vested on May 26, 2021, 1,300 options vested onNovember 26, 2021, and 1,300 options vested on May 26, 2022.(7) The option has a grant date of May 29, 2019. 214 options vested immediately upon grant, 227 options vested on January 24, 2019, 227 options vested on January24, 2020 and 226 options vested on January 24, 2021.(8) On May 25, 2020, the compensation committee of the Board of Directors of the Company reduced the exercise price of outstanding options of employees anddirectors of the Company for the purchase of an aggregate of 5,610 shares of common stock of the Company (with exercise prices ranging between $453.75 and$228.75) to $26 per share, which was the closing price for the Company’s common stock on May 22, 2020, and extended the term of the foregoing options for anadditional one year from the original date of expiration.(9) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(10) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(11) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.59Director CompensationThe following table sets forth compensation information for our nonemployee directors for the year ended December 31, 2022.NameFees earned orpaid incash ($)(1)Optionawards($)(1)(2)Total($)Oren Elmalih15,078 15,078Oron Barnitzky15,34715,347Arik Kaufman14,44114,441Guy Zimmerman13,03313,033(1)Fees for the year 2022 are based on average US$/NIS representative exchange rates of NIS 3.519.(2)Amounts in this column represent the grant date fair value of options granted to the nonemployee directors during 2022 computed in accordance with FASBASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the nonemployee directors. The assumptions made invaluing the options reported in this column are discussed in Note 11 to our financial statements for the year ended December 31, 2022.We compensate our nonemployee directors for their service as a member of our board. Mr. Luzon received no separate compensation for board service. Mr.Luzon’s compensation is set forth above in the Summary Compensation Table.Each nonemployee director is entitled to receive a per meeting fee of $318. Nonemployee directors are also reimbursed for their travel and reasonable outofpocket expenses incurred in connection with attending board and committee meetings, to the extent that attendance is required by the board or the committee(s)on which that director serves.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurity Ownership of Certain Beneficial Holders and ManagementThe following table sets forth certain information regarding beneficial ownership of shares of our common stock as of March 31, 2023 by (i) each personknown to beneficially own more than 5% of our outstanding common stock, (ii) each of our directors, (iii) each of our executive officers, and (iv) all of our directorsand executive officers as a group. Except as otherwise indicated, the persons named in the table below have sole voting and investment power with respect to allshares beneficially owned, subject to community property laws, where applicable.Beneficial Owner(1)Shares ofCommon StockBeneficiallyOwnedPercentage(2)Executive officers and directors:Ronen Luzon143,578(3)5.8%Or Kles29,854(4)1.2%Billy Pardo143,578(5)5.8%Ezequiel Javier Brandwain12,000(6)*Ilia Turchinsky18,313(7)*Arik Kaufman1,294(8)*Oren Elmaliah1,294(9)*Oron Branitzky1,294(10)*Guy ZimmermanAll Executive Officers and Directors as a Group (9 persons)207,6268.4%*Less than 1%(1) The address of each person is c/o My Size, Inc., 4 HaYarden St., P.O.B. 1026, Airport City, Israel 7010000 unless otherwise indicated herein.60(2) The calculation in this column is based upon 2,446,780 shares of common stock outstanding on March 31, 2023. Beneficial ownership is determined in accordancewith the rules of the SEC and generally includes voting or investment power with respect to the subject securities. Shares of common stock that are currentlyexercisable or exercisable within 60 days of March 31, 2023 are deemed to be beneficially owned by the person holding such securities for the purpose of computingthe percentage beneficial ownership of such person, but are not treated as outstanding for the purpose of computing the percentage beneficial ownership of anyother person(3) Consists of (i) 100,000 shares of restricted stock granted under the 2017 Plan, (ii) 4,683 shares of common stock, (iii) options to purchase up to 8,401 shares of ourcommon stock, and (iv) 24,000 shares of restricted stock and options to purchase up to 6,494 shares of our common stock which are held by Billy Pardo, RonenLuzon’s spouse. Mr. Luzon may be deemed to beneficially hold the securities of us held by Ms. Pardo.(4) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, and (ii) an option to purchase 5,854 shares of our common stock. Does not includean aggregate of 119,760 shares of restricted stock over which Mr. Kles has been designated the initial proxy to vote such shares pursuant to a voting agreemententered into between Whitehole S.L., Twinbel S.L. and EGI Acceleration, S.L.(5) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, (ii) options to purchase up to 6,494 shares of our common stock, (iii) 100,000 sharesof restricted stock which are held by Ronen Luzon, Billy Pardo’s spouse (iii) 8,401 shares of common stock which are held by Mr. Luzon, and (iii) options to purchaseup to 4,683 shares of our common stock which are held by Mr. Luzon. Ms. Pardo may be deemed to beneficially hold the securities of the Company held by Mr.Luzon.(6) Consists of 12,000 shares of restricted stock granted under the 2017 Plan.(7) Consists of (i) 16,000 shares of restricted stock granted under the 2017 Plan, and (ii) options to purchase up to 2,313 shares of our common stock.(8) Consists of options to purchase up to 1,294 shares of our common stock.(9) Consists of options to purchase up to 1,294 shares of our common stock.(10) Consists of options to purchase up to 1,294 shares of our common stock.Change in ControlWe are not aware of any arrangement that might result in a change in control in the future. We have no knowledge of any arrangements, including anypledge by any person of our securities, the operation of which may at a subsequent date result in a change in the Company’s control.Securities Authorized for Issuance Under Equity Compensation PlansOn January 29, 2017, our Board of Directors approved the 2017 Equity Incentive Plan and the 2017 Consultant Equity Incentive Plan, which were approvedby our stockholders on March 21, 2017. In addition, on January 29, 2017, our Board of Directors approved the Stock Option Plan Israel Grantees SubPlan. The 2017Equity Incentive Plan initially authorized the issuance of up to 5,334 shares of common stock under the plan and the 2017 Consultant Equity Incentive Plan initiallyauthorized the issuance of up to 8,000 shares of common stock under the plan.On February 12, 2018, our stockholders approved an amendment to the 2017 Consultant Equity Incentive Plan to increase the maximum number of shares ofour common stock available for issuance under the plan from 8,000 to 12,000. On July 3, 2018, our stockholders approved an amendment to the 2017 Equity IncentivePlan to increase the maximum number of shares of our common stock available for issuance under the plan from 5,334 to 8,000 and an amendment to the 2017Consultant Equity Incentive Plan to increase the maximum number of shares of our common stock available for issuance under the plan from 12,000 to 18,667.On May 25, 2020, our Board reduced the exercise price of outstanding options of our employees and directors for the purchase of an aggregate of 140,237of our common stock (with exercise prices ranging between $453.75 and $228.75) to $26.0 per share, and extended the term of the foregoing options for an additionalone year from the original date of expiration.61On August 10, 2020, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 80,000 to 58,000shares, and a decrease of the numbers of shares available for issuance under the 2017 Consultant Incentive Plan to 8,667 shares from 18,667 shares.On December 30, 2021, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 58,000 sharesto 230,800 shares.On December 7, 2022, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Plan from 230,800 shares to 289,000shares.The following table summarizes information about our equity compensation plans and individual compensation arrangements as of December 31, 2022.Number of securities to be issued upon exercise of outstanding options, warrants and rights(a)Weighted average exercise price of outstandingoptions, warrants and rights (b)Number of securities remaining availablefor future issuanceunder equity compensationplans (excludingsecurities reflected in column (a) (c)Equity compensation plans approved by security holders43,49724.7477,455Equity compensation plans not approved by security holdersTotal43,49724.7477,455ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEDuring years ended December 31, 2022 and 2021, except for compensation arrangements described elsewhere herein and the transactions described below,we did not participate in any transaction, and we are not currently participating in any proposed transaction, or series of transactions, in which the amount involvedexceeded the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years, and in which, to our knowledge,any of our directors, officers, five percent beneficial security holders, or any member of the immediate family of the foregoing persons had, or will have, a direct orindirect material interest.Compensation arrangements for our named executive officers and directors are described in the section entitled “Executive Compensation.”Employment AgreementsWe have entered into written employment agreements with each of our executive officers. These agreements generally provide for notice periods of varyingduration for termination of the agreement by us or by the relevant executive officer, during which time the executive officer will continue to receive base salary andbenefits. We have also entered into customary noncompetition, confidentiality of information and ownership of inventions arrangements with our executiveofficers. However, the enforceability of the noncompetition provisions may be limited under applicable law.OptionsSince our inception we have granted options to purchase our common stock to our officers and directors. Such option agreements may contain accelerationprovisions upon certain merger, acquisition, or change of control transactions.62Restricted Stock GrantsOn September 29, 2022, our compensation committee approved grants of restricted share awards under our 2017 Plan to Ronen Luzon, Or Kles, Billy Pardo,Ilia Turchinsky and Ezequiel Javier Brandwain, pursuant to which they were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000restricted shares and 12,000 restricted shares, respectively. The restricted shares shall vest in three equal installments on January 1, 2023, January 1, 2024 andJanuary 1, 2025, conditioned upon continuous employment with us, and subject to accelerated vesting upon a change in control of the Company.Shareholder ActivismIn May 2021, we received notice from Custodian Ventures, LLC, or Custodian, of its intention to nominate four candidates to stand for election to our Boardof Directors at our 2021 annual meeting of stockholders. Custodian subsequently made a book and records request and has made public statements calling forchanges to our management.On September 22, 2021, Custodian, commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v. Mysize,Inc., C.A. No. 20210817LWW, or the Delaware Action. In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting. As further described below, on November 4, 2021, we entered into asettlement agreement, or the Settlement Agreement, with Custodian, Activist Investing LLC, David Aboudi, Partick Loney and David Natan, collectively, the LazarParties, settling and dismissing the Delaware Action.On October 19, 2021, we commenced an action in the United States District Court for the Southern District of New York captioned My Size, Inc. v. DavidLazar, Custodian Ventures LLC, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, Civil Action No, 1:21cv08585, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, andcertain rules promulgated thereunder, or the SDNY Action. The complaint sought, among other things, declaratory and injunctive relief related to defendants’ effortsto nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed “group” for purposes ofSection 13 (d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. In addition, the complaint alleged that thedefendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules in connection with their efforts to elect a slate of directorsto our Board of Directors. On October 20, 2021, the Court signed an order granting a hearing on an anticipated motion for a preliminary injunction and expeditedscheduling and discovery in aid thereof, and scheduled that hearing for December 2, 2021. As further described below, on November 4, 2021, we entered into theSettlement Agreement with the Lazar Parties settling and dismissing the claims asserted in the SDNY Action and the Delaware Action against one another. OnNovember 8, 2021, the remaining defendants in the SDNY Action filed and answer and counterclaim asserting a claim against us pursuant to New York Civil RightsLaw Section 70a, also known as New York’s antiSLAPP statute.On November 4, 2021, we entered into the Settlement Agreement, or the Lazar Settlement Agreement, with the Lazar Parties. Pursuant to the LazarSettlement Agreement, we and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the LazarSettlement Agreement, we reimbursed Custodian for out of pocket expenses and in consideration for the dismissal and release of claims against the Company anaggregate amount equal to $275,000. With respect to our 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) itsMay 12, 2021 notice of stockholder nominations of four director candidates with respect to our 2021 annual meeting of stockholders, (ii) the notice dated October 28,2021 submitted by Custodian to us notifying us of Custodian’s continued intent to bring its nomination of four director candidates before our stockholders at the2021 annual meeting, and (iii) any and all related materials and notices submitted to us in connection therewith or related thereto and to not take any further action inconnection with the solicitation of any proxies in connection with us. Custodian also agreed to cease any and all solicitation and other activities in connection withthe 2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effective date of theAgreement, or the Standstill Period. The Lazar Settlement Agreement also provides that during the Standstill Period, the Lazar Parties will vote all shares of ourcommon stock it beneficially owns in accordance with any proposal or recommendation made by us or our Board of Directors that is submitted to our stockholders,unless to do so would violate applicable law and except with respect to certain extraordinary transactions. The Lazar Settlement Agreement also contains nondisparagement and confidentiality provisions, subject to certain exceptions.63On December 9, 2021, we subsequently entered into a Settlement Agreement, or the Ault Settlement Agreement, with Milton C. Ault III, Ault Alpha LP, AultAlpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed to withdraw the SDNY Action against the AultParties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that action against the Company. In addition, pursuant to the SettlementAgreement, we paid $70,000 to the Ault Parties in consideration for the releases and other good and valuable consideration as set forth in the Ault SettlementAgreement.Naiz Bespoke Technologies AcquisitionOn October 7, 2022, we entered into the Naiz Agreement with the Naiz Sellers, pursuant to which the Naiz Sellers agreed to sell to us all of the issued andoutstanding equity of Naiz. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) ) the Naiz EquityConsideration and (ii) up the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the Equity Value Averaging Period) is less than $1,650,000, My Size shall pay the Shortfall Value to the Naiz Sellers within 45days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period, it wasdetermined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement)).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers will be subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into the LockUp Agreement with My Size, (ii) Whitehole, Twinbel and EGIentered into the Voting Agreement with My Size and (iii) each of the Key Persons entered into employment agreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonth period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonth “dribbleout” provisionthat provides following the expiration of the initial sixmonth lockup period, without My Size’s prior written consent (which My Size shall be permitted to withholdat its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than the average dailytrading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.64The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Indemnification Agreements and Directors’ and Officers’ Liability InsuranceWe have entered into indemnification agreements with each of our directors and executive officers. These agreements, among other things, require us toindemnify these individuals and, in certain cases, affiliates of such individuals, to the fullest extent permitted by Delaware law against liabilities that may arise byreason of their service to us or at our direction, and to advance expenses incurred as a result of any proceedings against them as to which they could beindemnified. We also maintain an insurance policy that insures our directors and officers against certain liabilities, including liabilities arising under applicablesecurities laws.Director IndependenceSee “Item 10. Directors, Executive Officers and Corporate Governance; Corporate Governance, Board Composition” above for a discussion regarding theindependence of the members of our board of directors.ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICESSomekh Chaikin, a member firm of KPMG International, located in Tel Aviv, Israel, PCAOB ID 1057, has served as our independent registered publicaccounting firm for 2022 and 2021. The following are Somekh Chaikin’s fees for professional services in each of the respective fiscal years:Fee Category20222021Audit Fees198,910298,300Tax Fees30,66729,300Auditrelated Fees18,000Total Fees247,577327,600Audit Fees:Audit Fees consist of fees billed for professional services performed by Somekh Chaikin for the audit of our annual financial statements, thereview of interim consolidated financial statements, and related services that are normally provided in connection with registration statements, including theregistration statement for S1 and S3.Tax Fees: Tax Fees may consist of fees for professional services, including tax and VAT consulting and compliance performed by an independent registeredpublic accounting provided during the period.PreApproval Policies and ProceduresIn accordance with the SarbanesOxley Act of 2002, as amended, our audit committee charter requires the audit committee to preapprove all audit andpermitted nonaudit services provided by our independent registered public accounting firm, including the review and approval in advance of our independentregistered public accounting firm’s annual engagement letter and the proposed fees contained therein. The audit committee has the ability to delegate the authorityto preapprove nonaudit services to one or more designated members of the audit committee. If such authority is delegated, such delegated members of the auditcommittee must report to the full audit committee at the next audit committee meeting all items preapproved by such delegated members. In the fiscal years endedDecember 31, 2022 and December 31, 2021 all of the services performed by our independent registered public accounting firm were preapproved by the auditcommittee.65PART IVITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES(a)Financial StatementsThe financial statements required by this Item are included beginning at page F1.(b)ExhibitsSee Exhibit IndexITEM 16. FORM 10K SUMMARYNot applicableEXHIBIT INDEXExhibitNumberDescription3.1Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Form on Form8K filed on March 23, 2017)3.2Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10K filed onMarch 4, 2016)3.3Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’s Current Report onForm 8K filed on February 20, 2018)3.4Second Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8K filedon April 24, 2018)3.5Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’sCurrent Report on Form 8K filed on November 18, 2019)3.6Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on January 7, 2022)3.7Amendment No. 1 to Second Amended and Restated ByLaws (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8K filed on January 7, 2022)3.8Certificate of Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on December 7, 2022)4.1Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S3/A filed onNovember 14, 2016)4.2Form of Warrant to Purchase Common Stock issued on February 2, 2018 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report onForm 10K filed on March 27, 2019)4.3Description of Securities Registered under Section 12 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report on Form 10K filedon March 19, 2020)4.4Form of Warrant (incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S1, Amendment No. 1, filed with the SECon May 5, 2020.)4.5Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)4.6Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.1My Size, Inc. 2017 Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement on Schedule DEF 14Afiled on March 2, 2017)10.2My Size, Inc. 2017 Consultant Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement onSchedule DEF 14A filed on March 2, 2017)10.3My Size, Inc. 2017 Stock Option Plan Israel Grantees SubPlan (incorporated by reference to Exhibit 10.3 to the Company’s Annual Report on Form10K filed on March 27, 2019)6610.4Purchase Agreement between My Size, Inc. and Shoshana Zigdon dated as of February 16, 2014 (incorporated by reference to Exhibit 10.2 to theCompany’s Annual Report on Form 10K filed on March 4, 2016)10.5 +Employment Agreement between My Size Israel 2014 Ltd. and Ronen Luzon dated November 18, 2018 (incorporated by reference to Exhibit 10.1 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.6 +Employment Agreement between My Size Israel 2014 Ltd. and Or Kles dated November 18, 2018 (incorporated by reference to Exhibit 10.2 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.7 +Employment Agreement between My Size Israel 2014 Ltd. and Billy Pardo dated November 18, 2018 (incorporated by reference to Exhibit 10.3 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.8Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on January 15,2020)10.9Form of Warrant (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.10Form of Placement Agent Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.11Securities Purchase Agreement (incorporated by reference to Exhibit 10.30 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.12Underwriting Agreement, dated January 5, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on January 7, 2021)10.13Underwriting Agreement, dated March 22, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on March 25, 2021)10.14Amendment to Purchase Agreement between My Size Israel 2014 Ltd., My Size, Inc. and Shoshana Zigdon (incorporated by reference to Exhibit 10.1to the Company’s Quarterly Report on Form 10Q on August 16, 2021)10.15Form of Registered Direct Offering Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.16Form of PIPE Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.17Form of Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.18Form of Placement Agent Warrant issued by the Company on October 28, 2021 (incorporated by reference to Exhibit 10.22 to the Company’s Form S1filed on November 12, 2021)10.19Form of Registration Rights Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.4 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.20Engagement Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference to Exhibit 10.5 to theCompany’s Current Report on Form 8K filed on October 28, 2021)10.21Settlement Agreement dated November 4, 2021, among My Size, Inc., David Lazar and certain of his affiliates (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on November 5, 2021)10.22Share Purchase Agreement dated as of February 7, 2022 between My Size Israel 2014 Ltd. and Amar Guy Shalom and Elad Bretfeld (incorporated byreference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SEC on February 8, 2022)10.23Employment Agreement between My Size Israel 2014 Ltd. and Ezequiel Javier Brandwain dated January 27, 2022 (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on February 1, 2022)10.24Form of Section 102 Capital Gain Restricted Stock Award Agreement under the Company’s 2017 Equity Incentive Plan (incorporated by reference toExhibit 10.1 to the Company’s Quarterly Report on Form 10Q, filed with the SEC on November 14, 2022)10.25Share Purchase Agreement, dated as of October 6, 2022, by and among My Size, Inc., Borja Cembrero Saralegui, Artiz Toree Garcia, Whitehold, S.L.,Twinbel, S.L., and EGI Acceleration, S.L. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SECon October 12, 2022)10.26Form of LockUp Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)10.27Form of Voting Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.3 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)6710.28My Size, Inc. Amendment to the My Size, Inc. 2017 Equity Plan (incorporated by reference to Appendix B to the Company’s definitive proxystatement filed with the SEC on November 4, 2022)10.29Form of Registered Direct Offering Securities Purchase Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.1 to theCompany’s Current Report on Form 8K filed with the SEC on January 12, 2023)10.30Form of PIPE Securities Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8Kfiled with the SEC on January 12, 2023)10.31Form of Registered Direct PreFunded Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.32Form of Series A and Series B Warrant (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8K filed with the SEC onJanuary 12, 2023)10.33Form of Private Placement PreFunded Warrant (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.34Form of Registration Rights Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form8K filed with the SEC on January 12, 2023)10.35Engagement Agreement, dated December 5, 2022 (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8K filed withthe SEC on January 12, 2023)10.36*Form of Placement Agent Warrant21.1*List of Subsidiaries23.1*Consent of Somekh Chaikin, a member firm of KPMG International, registered public accounting firm31.1*Certification of the Chief Executive Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200231.2*Certification of the Chief Financial Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200232.1*Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a14(b) of the Exchange Act and 18 U.S.C. Section 1350, asadopted pursuant to Section 906 of the SarbanesOxley Act of 2002101.INS*Inline XBRL Instance Document101.SCH*Inline XBRL Taxonomy Schema101.CAL*Inline XBRL Taxonomy Calculation Linkbase101.DEF*Inline XBRL Taxonomy Definition Linkbase101.LAB*Inline XBRL Taxonomy Label Linkbase101.PRE*Inline XBRL Taxonomy Presentation Linkbase104Cover Page Interactive Data File (formatted as Inline XBRL document and contained in Exhibit 101)*Filed herewith.+Indicates a management contract or any compensatory plan, contract or arrangement68SIGNATURESPursuant to the requirements of Section 13 and 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10K to be signed on its behalf by the undersigned, thereunto duly authorized on this 14th day of April, 2023.MY SIZE, INC./s/ Ronen LuzonRonen LuzonChief Executive Officer (Principle Executive Officer)/s/ Or KlesOr KlesChief Financial Officer(Principal Financial and Accounting Officer)Pursuant to the requirements of the Securities Act of 1934, this annual report on Form 10K has been signed below by the following persons on behalf ofthe registrant and in the capacities and on the dates indicated.SignatureTitleDate/s/ Ronen LuzonChief Executive Officer and DirectorApril 14, 2023Ronen Luzon(Principle Executive Officer)/s/ Or KlesChief Financial OfficerApril 14, 2023Or Kles(Principal Financial and Accounting Officer)/s/ Oren ElmaliahDirectorApril 14, 2023Oren Elmaliah/s/ Arik KaufmanDirectorApril 14, 2023Arik Kaufman/s/ Oron BranitzkyDirectorApril 14, 2023Oron Branitzky/s/ Guy ZimmermanDirectorApril 14, 2023Guy Zimmerman69EX10.36 2 ex1036.htmExhibit 10.36NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES ANDEXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THESECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO ANEFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTIONNOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGINACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.PLACEMENT AGENT COMMON STOCK PURCHASE WARRANTMY SIZE, INC.Warrant Shares: _______Issue Date: January 12, 2023Initial Exercise Date: January 12, 2023THIS PLACEMENT AGENT COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _____________ or itsassigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the dateset forth above (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on January 10, 2028 (the “Termination Date”) but not thereafter, tosubscribe for and purchase from My Size, Inc., a Delaware corporation (the “Company”), up to ______ shares (as subject to adjustment hereunder, the “WarrantShares”) of the Company’s Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined inSection 2(b). This Warrant is issued pursuant to that certain engagement letter, dated as of December 5, 2022, by and between the Company and H.C. Wainwright &Co., LLC.Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities PurchaseAgreement (the “Purchase Agreement”), dated January 10, 2023, among the Company and the purchasers signatory thereto.1Section 2. Exercise.a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or afterthe Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted by email (or emailattachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the numberof Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shalldeliver the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on aUnited States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No inkoriginalNotice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required.Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder haspurchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrantto the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercisesof this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering theoutstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder andthe Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver anyobjection to any Notice of Exercise within one (1) Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant,acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, thenumber of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.b) Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $3.8188, subject to adjustment hereunder (the“Exercise Price”).c) Cashless Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein isnot available for the issuance or resale of the Warrant Shares to or by the Holder, then this Warrant may also be exercised, in whole or in part, at such timeby means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing[(AB) (X)] by (A), where:(A) =as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice ofExercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed anddelivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) ofRegulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAPon the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on theprincipal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s execution of the applicable Notice ofExercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hoursthereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii)the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice ofExercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;(B) =the Exercise Price of this Warrant, as adjusted hereunder; and(X) =the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if suchexercise were by means of a cash exercise rather than a cashless exercise.2“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which theCommon Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York Citytime)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest precedingdate) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for theCommon Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the mostrecent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by anindependent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to theCompany, the fees and expenses of which shall be paid by the Company.“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the TradingMarket on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or thenearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and ifprices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reportingprices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock asdetermined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonablyacceptable to the Company, the fees and expenses of which shall be paid by the Company.If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of theSecurities Act, the Warrant Shares shall take on the characteristics of the Warrants being exercised, and the holding period of the Warrant Shares beingissued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section 2(c).3d) Mechanics of Exercise.i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to betransmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with TheDepository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant insuch system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of theWarrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or mannerofsale limitationspursuant to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, registered in theCompany’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitledpursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2)Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate ExercisePrice to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Companyof the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall bedeemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant hasbeen exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (otherthan in the case of a cashless exercise) is received by the Warrant Share Delivery Date. If the Company fails for any reason to deliver tothe Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder,in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP ofthe Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifthTrading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share Delivery Date until such WarrantShares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FASTprogram so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standardsettlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stockas in effect on the date of delivery of the Notice of Exercise.4ii.Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the requestof a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a newWarrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrantshall in all other respects be identical with this Warrant; provided, however, that the Holder shall be required to return any WarrantShares subject to any such rescinded exercise notice concurrently with the return to Holder of the aggregate Exercise Price paid to theCompany for such Warrant Shares and the restoration of Holder’s right to acquire such Warrant Shares pursuant to this Warrant(including, issuance of a replacement warrant certificate evidencing such restored right).iii. Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant toSection 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.iv. Compensation for BuyIn on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights availableto the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with theprovisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date theHolder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwisepurchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipatedreceiving upon such exercise (a “BuyIn”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) theHolder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) theamount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connectionwith the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at theoption of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was nothonored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock thatwould have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holderpurchases Common Stock having a total purchase price of $11,000 to cover a BuyIn with respect to an attempted exercise of shares ofCommon Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediatelypreceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written noticeindicating the amounts payable to the Holder in respect of the BuyIn and, upon request of the Company, evidence of the amount of suchloss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including,without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver sharesof Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.5v. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise ofthis Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Companyshall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by theExercise Price or round up to the next whole share.vi. Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue ortransfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paidby the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by theHolder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, thisWarrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder andthe Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.The Company shall pay all Transfer Agent fees required for sameday processing of any Notice of Exercise and all fees to the DepositoryTrust Company (or another established clearing corporation performing similar functions) required for sameday electronic delivery of theWarrant Shares.vii. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timelyexercise of this Warrant, pursuant to the terms hereof.6e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise anyportion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicableNotice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of theHolder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). Forpurposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Partiesshall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, butshall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrantbeneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion ofany other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exerciseanalogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in thepreceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act andthe rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that suchcalculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed inaccordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (inrelation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisableshall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether thisWarrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of thisWarrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm theaccuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number ofoutstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s mostrecent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recentwritten notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request ofa Holder, the Company shall within one (1) Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock thenoutstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise ofsecurities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number ofoutstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stockoutstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice tothe Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial OwnershipLimitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares ofCommon Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in theBeneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shallbe construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portionhereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplementsnecessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of thisWarrant.7Section 3. Certain Adjustments.a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes adistribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which,for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstandingshares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into asmaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case theExercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any)outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately aftersuch event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of thisWarrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for thedetermination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case ofa subdivision, combination or reclassification.b) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sellsany Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares ofCommon Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregatePurchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise ofthis Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before thedate on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the recordholders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that to the extent that theHolder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall notbe entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Rightto such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not resultin the Holder exceeding the Beneficial Ownership Limitation).c) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend (other than cash) orother distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including,without limitation, any distribution of stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement,scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holdershall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number ofshares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including withoutlimitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken,the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, thatto the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, thenthe Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a resultof such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as itsright thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).8d) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more relatedtransactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease,license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, director indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of CommonStock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more ofthe outstanding Common Stock or 50% or more of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in oneor more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchangepursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly orindirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, withoutlimitation, a reorganization, recapitalization, spinoff, merger or scheme of arrangement) with another Person or group of Persons whereby such otherPerson or group acquires more than 50% of the outstanding shares of Common Stock or 50% or more of the voting power of the common equity of theCompany (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for eachWarrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of theHolder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor oracquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as aresult of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior tosuch Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, thedetermination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of AlternateConsideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Priceamong the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. Ifholders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall begiven the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at theHolder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date ofthe public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cashequal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of suchFundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company’s control, including not approved by theCompany’s Board of Directors, the Holder shall only be entitled to receive from the Company or any Successor Entity the same type or form ofconsideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to theholders of Common Stock of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, stock or anycombination thereof, or whether the holders of Common Stock are given the choice to receive from among alternative forms of consideration in connectionwith the Fundamental Transaction; provided, further, that if holders of Common Stock of the Company are not offered or paid any consideration in suchFundamental Transaction, such holders of Common Stock will be deemed to have received common stock of the Successor Entity (which Entity may be theCompany following such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on theBlackScholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day of consummation of the applicableFundamental Transaction for pricing purposes and reflecting (A) a riskfree interest rate corresponding to the U.S. Treasury rate for a period equal to thetime between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expectedvolatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualizationfactor) as of the Trading Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlyingprice per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any noncashconsideration, if any, being offered in such Fundamental Transaction and (ii) the highest VWAP during the period beginning on the Trading Dayimmediately preceding the public announcement of the applicable contemplated Fundamental Transaction (or the consummation of the applicableFundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant to this Section 3(e) and (D) a remaining option timeequal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date and (E) azero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds (or such other consideration)within the later of (i) five Business Days of the Holder’s election and (ii) the date of consummation of the Fundamental Transaction. The Company shallcause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of theobligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant towritten agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to suchFundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entityevidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares ofcapital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of thisWarrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which appliesthe exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to suchFundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for thepurpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which isreasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall beadded to the term “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction, each andevery provision of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to each of the Company and theSuccessor Entity or Successor Entities, jointly and severally), and the Successor Entity or Successor Entities, jointly and severally with the Company, mayexercise every right and power of the Company prior thereto and the Successor Entity or Successor Entities shall assume all of the obligations of theCompany prior thereto under this Warrant and the other Transaction Documents with the same effect as if the Company and such Successor Entity orSuccessor Entities, jointly and severally, had been named as the Company herein.e) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. Forpurposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the numberof shares of Common Stock (excluding treasury shares, if any) issued and outstanding.9f) Notice to Holder.i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, theCompany shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resultingadjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form)on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C)the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any sharesof capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection withany reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all orsubstantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into othersecurities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of theaffairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as itshall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective datehereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to beentitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification,consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expectedthat holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or otherproperty deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure todeliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to bespecified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, nonpublic informationregarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to aCurrent Report on Form 8K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of suchnotice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.10Section 4. Transfer of Warrant.a) Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and to theprovisions of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights) aretransferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a writtenassignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay anytransfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a newWarrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument ofassignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly becancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unlessthe Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of thedate on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordanceherewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company,together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent orattorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute anddeliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issuedon transfers or exchanges shall be dated the Issue Date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Sharesissuable pursuant thereto.c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “WarrantRegister”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as theabsolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to thecontrary.d) Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrantshall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue skylaws or (ii) eligible for resale without volume or mannerofsale restrictions or current public information requirements pursuant to Rule 144, the Companymay require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, comply with the provisions ofSection 5.7 of the Purchase Agreement.11e) Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon anyexercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling suchWarrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exemptedunder the Securities Act.Section 5. Miscellaneous.a) No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends orother rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Withoutlimiting the rights of a Holder to receive Warrant Shares on a “cashless exercise,” and to receive the cash payments contemplated pursuant to Sections 2(d)(i) and 2(d)(iv), in no event will the Company be required to net cash settle an exercise of this Warrant.a.In July 2019, the Company entered into a threeyear agreement with a consultant (“Consultant14”) to provide services to the Company includingassisting the Company to promote, market and sell the Company’s technology to potential customers. Pursuant to such agreement and in partialconsideration for such consulting services, the Company agreed to issue to Consultant14 options to purchase up to 107 shares of the Company’scommon stock upon execution of the agreement. The options are exercisable at $375.00 per share and shall vest in 3 equal instalments every twelvemonths starting July 2019. Unexercised options shall expire 4 years from the effective date.In addition, the Company agreed to issue to Consultant14 options to purchase up to 890 shares of the Company’s common stock upon executionof the agreement. The options are exercisable at $27.00 per share and shall vest in 4 equal instalments every six months starting September 2020.Unexercised options shall expire 5 years from the effective date.During 2022 and 2021, an amount of $7 and $14 respectively, were recorded by the Company as stockbased equity awards with respect to Consultant14.F24MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The Company’s outstanding options granted to consultants as of December 31, 2022 are as follows:Issuance dateOptions forCommon stockWeightedAverageexercise priceper shareOptionsexercisableExpirationdateFebruary 201815USD528.7515February 2023August 2018December 2018531USD352.38264August 2023 December 2023July 2020107USD375107July 2023SeptemberOctober 20201,488USD27.201,288October 2024 September 2025Total2,1411,674The Company uses the Black Scholes model to measure the fair value of the stock options with the assistance of a third party valuation.No stock options were granted during 2022 to consultants.The fair value of the Company’s stock options granted to nonemployees was calculated using the following weighted average assumptions:20222021GrantsGrantsDividend yield0%Expected volatility125.15%Riskfree interest0.16%Contractual term of up to (years)1.52F25MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Stock Option Plan for employeesIn March 2017, the Company adopted a stock option plan (the “Plan”) pursuant to which the Company’s Board of Directors may grant stock options toofficers and key employees. The total number of options which may be granted to directors, officers, employees under this plan, is limited to 289,000options. Stock options can be granted with an exercise price equal to or less than the stock’s fair market value at the date of grant.The fair value of each option award is estimated on the date of grant using the Binomial optionpricing model that used the weighted averageassumptions in the following table. The risk free rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the timeof grant.2022Grants2021GrantsDividend yield0%0%Expected volatility96.52%98.47%Riskfree interest4.06%0.96%expected life522.27In the years ended December 31, 2022 and 2021, 10,000 and 3,900 options, respectively, were granted.On December 7, 2022, the Company’s stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from230,800 shares to 289,000 shares.On September 29, 2022, the Compensation Committee of the Company approved grants of restricted share awards under the Company’s 2017 EquityIncentive Plan to Ronen Luzon (CEO), Or Kles (CFO), Billy Pardo (COO), Ilia Turchinsky (CTO) and Ezequiel Javier Brandwain (CCO), pursuant towhich were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000 restricted shares and 12,000 restricted shares,respectively. Each restricted share awarded under section 102 Capital Gain Restricted Stock Award Agreement (the “Agreement”). The restrictedshares shall vest in three equal installments on January 1, 2023, January 1, 2024 and January 1, 2025 for Ronen Luzon, Or Kles, Billy Pardo and IliaTurchinsky and on January 27, 2023, January 27, 2024 and January 27, 2025 for Ezequiel Javier Brandwain, conditioned upon continuous employmentwith the Company, and subject to accelerated vesting upon a change in control of the Company.On the same day, the Company granted fiveyears options to purchase up to 10,000 ordinary shares to other employees of the Company at an exerciseprice of $0.21 per share. The options vesting period is over three years in three equal portions from the vesting commencement date.F26MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The total stock option compensation expense in the year ended December 31, 2022 amounted to $448as follows: Research and development expensesamounted to $151, sales and marketing expenses amounted to $119and general and administrative expenses amounted to $178.The total stock option compensation expense in the year ended December 31, 2021 amounted to $252 as follows: Research and development expensesamounted to $94, sales and marketing expenses amounted to $97 and general and administrative expenses amounted to $61.As of December 31, 2022, there was a total of $530 unrecognized compensation cost relating to nonvested sharebased compensation arrangements.That cost is expected to be recognized over a weightedaverage period of 2.0 years.Share option activity during 2022 is as follows:2022Number ofoptionsWeightedaverageexerciseprice US$Outstanding as of January 135,74226.5Granted10,0005.25ExercisedExpired(4,136)Outstanding as of year end41,60622.48Vested as of year end33,20825.17Share option activity during 2021 is as follows:2021Number ofoptionsWeightedaverageExerciseprice US$Outstanding as of January 139,094$26.0Granted3,90032.0Exercised(751)Expired(6,501)Outstanding as of year end35,74226.5Vested as of year end27,06326.5F27MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 15 CONTINGENCIES AND COMMITMENTSa.On August 7, 2018, the Company commenced an action against North Empire LLC (“North Empire”) in the Supreme Court of the State of New York,County of New York for breach of a Securities Purchase Agreement (the “Agreement”) in which it is seeking damages in an amount to bedetermined at trial, but in no event less than $616. On August 2, 2018, North Empire filed a Summons with Notice against the Company, also in thesame Court, in which they allege damages in an amount of $11.4 million arising from an alleged breach of the Agreement. On September 6, 2018North Empire filed a Notice of Discontinuance of the action it had filed on August 2, 2018. On September 27, 2018, North Empire filed an answerand asserted counterclaims in the action commenced by the Company against them, alleging that the Company failed to deliver stock certificatesto North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against theCompany’s CEO and now former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018,the Company filed a reply to North Empire’s counterclaims. On November 15, 2018, the Company’s CEO and now former Chairman of the Boardfiled a motion to dismiss North Empire’s thirdparty complaint. On January 6, 2020, the Court granted the motion and dismissed the thirdpartycomplaint. Discovery has been completed and both parties have filed motions for summary judgment in connection with the claims andcounterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summary judgment, arguing there werefactual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision. The appealmust be fully perfected and filed by July 26, 2022. On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying theCompany’s motion for summary judgment. North Empire will file its opposition papers on or before March 31, 2022, and the Company will file replypapers on April 29, 2022. On or about September 12, 2022, the Court issued its Decision and Order denying the Company’s motion to reargue.North Empire filed its opposing brief on December 7, 2022. Both sides were given an opportunity to file a reply brief. The Company filed our replybrief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. The Appellate Court has scheduled oral argument for the appealfor February 7, 2023. Oral argument was held before the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Courtfiled its Decision and Order, which affirmed the lower court’s decisions regarding both My Size and North Empire’s motions for summary judgmentand sent the case back to the Supreme Court.On or about March 13, 2023, the Supreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date forthe mediation has not yet been set. The Company intends to vigorously defend any claims made by North Empire.The Company believes it is more likely than not that the counterclaims will be denied.b.In May 2021, the Company received notice from Custodian Ventures, LLC (“Custodian”) of its intention to nominate four candidates to stand forelection to our Board of Directors at the Company’s 2021 annual meeting of stockholders. Custodian subsequently made a book and recordsrequest and has made public statements calling for changes to our management.On September 22, 2021, Custodian commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v.MySize, Inc. (the “Delaware Action”). In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting.On October 19, 2021, the Company commenced an action in the United States District Court for the Southern District of New York againstCustodian, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, and certain rulespromulgated thereunder (the “SDNY Action”). The complaint sought, among other things, declaratory and injunctive relief related to defendants’efforts to nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed“group” for purposes of Section 13(d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. Inaddition, the complaint alleged that the defendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules inconnection with their efforts to elect a slate of directors to the Company’s Board of Directors. On October 20, 2021, the Court signed an ordergranting a hearing on an anticipated motion for a preliminary injunction and expedited scheduling and discovery in aid thereof, and scheduled thathearing for December 2, 2021.On November 4, 2021, the Company entered into the Settlement Agreement with the Lazar Parties. Pursuant to the Settlement Agreement, theCompany and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the SettlementAgreement, the Company agreed to reimburse Custodian for out of pocket expenses and in consideration for the dismissal and release of claimsagainst the Company an aggregate amount equal to $275, to be paid within three business days of the effective date of the Settlement Agreement.With respect to the Company’s 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) its May 12,2021 notice of stockholder nominations of four director candidates with respect to the Company’s 2021 annual meeting of stockholders, (ii) thenotice dated October 28, 2021 submitted by Custodian to the Company notifying the Company of Custodian’s continued intent to bring itsnomination of four director candidates before the Company’s stockholders at the 2021 annual meeting, and (iii) any and all related materials andnotices submitted to the Company in connection therewith or related thereto and to not take any further action in connection with the solicitationof any proxies in connection with the Company. Custodian also agreed to cease any and all solicitation and other activities in connection with the2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effectivedate of the Agreement (the “Standstill Period”). The Settlement Agreement also provides that during the Standstill Period, the Lazar Parties willvote all shares of common stock of the Company it beneficially owns in in accordance with any proposal or recommendation made by theCompany or the Board of Directors of the Company that is submitted to the stockholders of the Company, unless to do so would violateapplicable law and except with respect to certain extraordinary transactions. The Settlement Agreement also contains nondisparagement andconfidentiality provisions, subject to certain exceptions.On December 9, 2021, the Company subsequently entered into a Settlement Agreement (the “Ault Settlement Agreement”), with Milton C. Ault III,Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed towithdraw the SDNY Action against the Ault Parties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that actionagainst the Company. In addition, pursuant to the Settlement Agreement, the Company paid $70 to the Ault Parties in consideration for thereleases and other good and valuable consideration as set forth in the Ault Settlement Agreement.c.On July 5, 2021, the Company was served with a legal complaint filed by Fidelity Venture Capital Ltd. and Dror Atzmon in the Magistrate’s Court inTel Aviv for a monetary award in an amount of NIS 1,436,679 (approximately $450) and a declaratory relief. The plaintiffs allege that the Companybreached its contractual obligations to pay them for services allegedly rendered to the Company by the plaintiffs under a certain consultingagreement dated July 2, 2014, in an amount of NIS 819,000 (approximately $256). Additionally, the plaintiffs allege that the Company shouldcompensate them for losses allegedly incurred by them following their investment in the Company’s shares issued under a certain private offering.In the alternative, the plaintiffs move that the court will declare the investment agreement void with full restitution of plaintiffs’ original investmentin an amount of NIS 1,329,650(approximately $415). The Company filed its statement of defense on October 25, 2021. The first preliminary courthearing of the case is scheduled for January 23, 2022.The first court preliminary hearing was held on March 1, 2022.Following the first preliminary hearing and the Court’s comments and recommendation, the Plaintiffs filed a motion to strike out the claim withoutprejudice.On March 8, 2022 the Court ordered dismissal without prejudice of the claim.F28MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATIONAcquisition of OrgadOn February 7, 2022, the Company acquired 100% of the shares and voting interests in Orgad an omnichannel ecommerce platform. The acquisitionwas designed to create an additional revenue stream for the Company by becoming a direct ecommerce seller while leveraging the synergies betweenMySizeID and Orgad’s ecommerce platform.Unaudited proforma informationThe results of operations of Orgad have been included in the consolidated financial statements since the acquisition date of February 7, 2022. Orgadrevenues included in the Company’s consolidated statement of operations from February 7, 2022 through December 31, 2022 were $4,132. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,662 and $2,850 respectively, and the net loss after tax would have been $8,519 and $10,149 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash (*)300Issuance of shares of common stock (69,752 shares) (**)457Total consideration transferred757(*)The cash payment is subject to working capital adjustments.(**)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Orgad, on the twoyear and the threeyear anniversary of the closing, $350in each ofthese years provided that in the case of the second and third instalments certain revenue targets are met and subject further to certain downward postclosing adjustment. Furthermore, 69,752shares of common stock will be issued in eight equal quarterly instalments until the lapse of two years fromclosing. Additional earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023 will also be paid. All of these payments aresubject to the former owners being actively engaged with Orgad at the date such payment is due, and therefore were not taken as part of theconsideration for the business combination.During the year ended December 31, 2022 an amount of $456and $319was recorded in respect of the cash instalments and in respect of stocksissuance, respectively in Cost Of Goods, Sales and Marketing and General and Administrative expenses as shown in the following table:2022Stockbased compensation expense – Cost of goods194Stockbased compensation expense Sales and marketing271Stockbased compensation expense General and administrative310775(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the preliminary estimates of their fair values, which were determined using generally accepted valuation techniques based onestimates and assumptions made by management at the time of the acquisition. Such estimates are subject to change during the measurement periodwhich is not expected to exceed one year. The purchase price allocation was not finalized duo to examination of the net working capital of Orgad at theacquisition date. Any adjustments to the preliminary purchase price allocation identified during the measurement period will be recognized in theperiod in which the adjustments are determined.The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and Cash EquivalentTrade receivables364PP&E55Inventory864Longterm financial investment31Selling platform378Goodwill152Shortterm accruals and deferrals(181)Trade payables(668)Long term provision(13)Longterm debt(138)Deferred Taxes(87)Total net assets acquired757F29MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)(c)Acquisitionrelated costsThe Company incurred transaction costs of approximately $40and none during twelvemonth period ended December 31, 2022 which were included ingeneral and administrative expenses in the consolidated statements of income (loss).Acquisition of Naiz Bespoke Technologies, S.L. (“Naiz”)On October 11, 2022, the Company acquired 100% of the shares and voting interests in Naiz a provider of SaaS technology solutions that solve sizeand fit issues for fashion ecommerce companies. The acquisition was designed to allow Naiz’s customers benefit from MySize’s deep understanding ofthe fashion ecommerce retail landscape, while creating an additional revenue stream for the Company.Unaudited proforma informationThe results of operations of Naiz have been included in the consolidated financial statements since the acquisition date of October 11, 2022. Naizrevenues included in the Company’s consolidated statement of operations from October 11, 2022 through December 31, 2022 were $103. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,738 and $379 respectively and the net loss after tax would have been $8,695 and $10,717 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash503Issuance of shares of common stock (240,000 shares) (*)1,008Total consideration transferred1,511(*)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Naiz, additional cash consideration (up to $1,550) in four instalments subject to thefollowing conditions:(i)Continuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result ofa Good Reason; and(ii)Naiz’s Revenues reaching or exceeding the respective Target Revenues defined in the agreement. The revenues will be calculated in four periods:(1) January 1, 2022 – December 31, 2022; (2) January 1, 2023 – June 30, 2023; (3) July 1, 2023 – December 31, 2023; (4) January 1, 2024 – December31, 2024.Former owners of Naiz are entitled to additional cash consideration following December 31, 2025 (up to $1,650) in an event when the actual value of theequity consideration is less than $1,650, subject to completion of a Target Revenue for the period of January 1, 2025 – December 31, 2025 andcontinuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result of aGood Reason;F30MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)During the year ended December 31, 2022 an amount of $283 was recorded in respect of the additional cash consideration.(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the estimates of their fair values, which were determined using generally accepted valuation techniques based on estimates andassumptions made by management at the time of the acquisition.The following table summarizes the fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and cash equivalent36Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Total net assets acquired1,511(c)Acquisitionrelated costsDuring 2022, the Company incurred transaction costs of approximately $75 which were included in general and administrative expenses in theconsolidated statements of income (loss).F31MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)Note 17 – Operating SegmentsDuring the year ended December 31, 2021, the Company had one reportable segment. As a result of the business combinations in the reporting period(see note 13), the Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificialintelligence driven measurement solutions and (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions and. The fashionand equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. Orgad has onecustomer that is responsible for 37.9% of the Company consolidated revenues. The SaaS based innovative artificial intelligence driven measurementsolutions, or SaaS Solutions operating segment consists of My Size Inc and My Size Israel and My Size LLC.Information related to the operations of the Company’s reportable operating segments is set forth below:Fashion andequipment ecommerce platformSaaSSolutionsNaizTotalAs of the year ended December 31, 2022Revenues from external customers4,1322241034,459Operating (loss) income(591)(7,181)(338)(8,110)Financial income (expense), net(236)Net loss before tax(8,346)Fashion andequipment ecommerce platformSaasSolutionNaizAs of December 31, 2022:Assets2,0225,9661,691Amortization of intangible assets(114)(34)(46)The Company elected to present geographic information in respect with revenues generated from external customers based on the location of the selling entity:All the revenues of the fashion and equipment ecommerce platform segment are generated by Orgad, located in Israel.All the revenues of the Naiz segment are generated by Naiz, located in Spain.The revenues of the Saas Solutions segment are generated by My Size Ltd. located in Israel (approximately 75% of the segment revenues) and by My Size Inc.located in the U.S. (approximately 25% of the segment revenues).NOTE 18 SALES AND MARKETINGYear endedDecember 31,20222021Salaries836574Consultants and subcontractors5831,086Marketing481283Selling fees489Share based payments post Orgad acquisition (*)271Share based payments for consultants and employees127180Travel21142Other1451713,1432,336(*) See note 16.NOTE 19 GENERAL AND ADMINISTRATIVE EXPENSESYear endedDecember 31,20222021Salaries1,007461Professional services7051,832Share based payments for consultants, directors and employees18098Rent, office expenses and communication442372Insurance564627cash liability and equity liability expenses related to Orgad acquisition310cash liability expenses related to Naiz acquisition217Settlement fees (*)345Directors8259Other3933303,9004,124(*)See note 15(b)F32MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 20 FINANCIAL INCOME (EXPENSE), NETA.Financial incomeYear endedDecember 31,20222021Revaluation investment in marketable securities49Other26172666B.Financial expenseYear endedDecember 31,20222021Exchange rate differences33Revaluation of loan granted100Revaluation investment in marketable securities62Other6792629NOTE 21 EVENTS SUBSEQUENT TO THE BALANCE SHEET DATEa.On January 2, 2023, Orgad experienced a fire at its warehouse in Israel. The Company is not aware of any casualties or injuries associated with thefire. The Company shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450.The Company believes that this incident did not affect the future sales results of Orgad for the year 2023. The inventory was not insured and it istoo early to determine the potential impact of this incident on the other parties that were involved in the incident (lessor and others that leasedproperties near the warehouse).b.On January 10, 2023, the Company entered into a securities purchase agreement pursuant to which the Company sold an aggregate of 162,000ofthe Company’s shares of common stock and prefunded warrants to purchase up to 278,899shares of common stock and, in a concurrent privateplacement, unregistered warrants to purchase up to883,798 shares of common stock, consisting of Series A warrants to purchase up to 441,899shares of common stock and Series B warrants to purchase up to 441,899shares of common stock, at an offering price of $3.055per share ofcommon stock and associated Series A and Series B warrants and an offering price of $3.054per prefunded warrant and associated Series A andSeries B warrants.In addition, the Company entered into a securities purchase agreement pursuant to which the Company agreed to sell and issue in a privateplacement an aggregate of up to 540,098 unregistered prefunded warrants and unregistered warrants to purchase up to an aggregate of 1,080,196shares of common stock, consisting of Series A warrants to purchase up to 540,098 shares of common stock and Series B warrants to purchase upto 540,098 shares of common stock at an offering price of $3.054 per prefunded warrant and associated Series A and Series B warrants.As of March 31,2023 all the pre funded warrants were exercised by the investor.F33ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSUREThere were no disagreements with accountants on accounting and financial disclosure of a type described in Item 304 (a)(1)(iv) or any reportable event asdescribed in Item 304 (a)(1)(v) of Regulation SK.ITEM 9A. CONTROLS AND PROCEDURESDisclosure ControlsWe carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief FinancialOfficer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) as of December 31, 2022. Basedupon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this Annual Report on Form10K, our disclosure controls and procedures were effective to ensure that information required to be disclosed in reports filed under the Exchange Act, as amended,is recorded, processed, summarized and reported within the required time periods specified in the SEC’s rules and forms and is accumulated and communicated toour management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.Management’s Report on Internal Control Over Financial ReportingOur internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records, that, in reasonable detail,accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only inaccordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition, use or disposition of our assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance withthe policies or procedures may deteriorate.Our management, including our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financialreporting at December 31, 2022. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the TreadwayCommission (COSO) in Internal Control—Integrated Framework (2013). Based on that assessment under those criteria, management has determined that, as ofDecember 31, 2022, our internal control over financial reporting was effective.This Annual Report on Form 10K does not include an attestation report of our registered public accounting firm regarding internal control over financialreporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to the exemption provided to issuersthat are not “large accelerated filers” nor “accelerated filers” under the DoddFrank Wall Street Reform and Consumer Protection Act.Changes in Internal Control Over Financial ReportingDuring the year ended December 31, 2022, we made two acquisitions, as discussed in Note 1a and Note 16 of the audited consolidated financial statementsfor the year ended December 31, 2022 included in this Annual Report on Form 10K. As a result, we made additions and/or modifications to policies, procedures,systems and controls that have materially affected our internal control over financial reporting from the acquisitions, including new controls for consolidationprocess that relates to accounting policies and procedures, operational processes and documentation practices. Management excluded the acquired businessesfrom management’s report on internal control over financial reporting. ITEM 9B. OTHER INFORMATIONNone.ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNot applicable.51PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe following table sets forth the name, age and positions of our executive officers and directors.NAMEAgePOSITIONRonen Luzon52Chief Executive Officer and Class III DirectorOr Kles40Chief Financial OfficerBilly Pardo47Chief Operating Officer and Chief Product OfficerIlia Turchinsky35Chief Technology OfficerEzequiel Javier Brandwain53Chief Commercial OfficerOron Branitzky (1)(2)(3)*63Class II DirectorOren Elmaliah (1)(2)(3)*38Class I DirectorArik Kaufman (1)(2)(3)*41Class I DirectorGuy Zimmerman*53Class II Director(1)Member of our audit committee(2)Member of our nominating and corporate governance committee(3)Member of our compensation committee* Independent as that term is defined by the rules of the Nasdaq Stock Market.The business background and certain other information about our directors and executive officers is set forth below:Ronen Luzon has served as our Chief Executive Officer and a member of our board of directors since September 2013. Since 2006, Mr. Luzon hasadditionally served as Chief Executive Officer and founder of Malers Ltd., a company in the global security solutions market which provides technological solutionsfor integrated communication infrastructures, security and control systems. Prior to Malers, he held several senior marketing, sales management and professionalservices positions in a variety of international high tech companies including VP marketing of GA Tech and Professional Services Manager of Eldat Communication.Mr. Luzon graduated from Middlesex University in London with a B.S. in IT and Business Information Systems. We believe that Mr. Luzon is qualified to serve as amember of our board of directors because of his more than 20 years of experience in the technology sector.Or Kles has served as our Chief Financial Officer since May 2016. He is a certified public accountant with a broad, diverse financial background. From May2013 until April 2016 he served as Assistant Controller of Shikun and BinuiSolel Boneh Infrastructure Ltd. and from December 2010 until May 2013 he served as anAssociate at KPMG. Mr. Kles holds an MBA and a B.A. in Business Management and Accounting (specializing in financing) from The College of ManagementAcademic Studies. Mr. Kles is a certified public accountant in Israel.Billy Pardo has served as our Chief Product Officer since May 2014 and Chief Operating Officer since April 2019. From April 2010 until August 2013, Ms.Pardo served as Senior Director of Product Management of Fourier Education. Among her areas of expertise are launching products from concept to successfuldelivery in various methodologies, including Fourier Education’s awardwinning einstein™ Science Tablet. Prior to that Ms. Pardo served in various productmanagement positions including, Project Manager of Time to Know, Product Marketing Manager of RiT Technologies, Product Manager of Pricer AB and R&DTeam Leader at Pricer AB. Ms. Pardo previously served as Software Engineer at Eldat Communication Ltd., and QA Engineer at NICE Systems. Ms. Pardo receivedan MBA from The Interdisciplinary Center and a B.A. in Computer Science from The Academic College of TelAvivYaffo.Ilia Turchinsky has served as our Chief Technology Officer since April 2019 and from July 2018 until April 2019 as our Director of Technology. Prior tojoining us, from 2013 until 2018, Mr. Turchinsky served in various roles, most recently Chief Technology Officer, at MonkeyTech Ltd., a company that providesdesign, development and characterization of mobile applications. Prior to that, Mr. Turchinsky served in various roles including development course instructor atIQLine, was a founder of Arnavsoft and was a software developer for MintLab and a political party. Mr. Turchinsky holds a B.Sc. from the Ben Gurion University inComputer Science and an M.Sc. from the Open University of Israel in Computer Science.52Ezequiel Javier Brandwain has served as our Chief Commercial Officer since February 2022. Mr. Brandwain brings more than two decades of globalexperience in retail and the fashion industry, mainly in business development, operations, and international markets. Before joining the Company, Mr. Brandwainheld positions of increasing responsibility at several companies, including between June 2017 and November 2020, at 7 For All Mankind International, where heserved as Director, Latin America and Caribbean, managing business development and operations across Latin America and the Caribbean. Before that, betweenMay 2016 and June 2017, Mr. Brandwain served as Chief Business Development Officer at Replay – Fashion Box SPA, where he oversaw business development andoperations, expansion and control in the Americas, the Caribbean, and NorthEast Asia. Prior this role, between September 2015 and May 2016, he served as theReplay’s Managing Director in Latin America and the Caribbean, leading the company’s international expansion in these regions. Prior to that, between April 2015and September 2015, Mr. Brandwain served as Managing Director, Latin America and Caribbean at Authentic Brands Group LLC, where he led that company’soperations, business developments and international expansion within these regions, and served as the direct liaison with the company’s headquarters in New York.Prior to that, between April 2015 and September 2015, Mr. Brandwain served as Chief Operating Officer, Latin America and Caribbean at Flemingo International Ltd.,overseeing operations, as well as projected operations in the travel retail field across these regions. Prior to that, between December 2010 and February 2014, Mr.Brandwain served as Regional Director, Southern Hemisphere at Calvin Klein, where he was responsible for defining and implementing the operational andcommercial strategy for Southern Hemisphere, as well as overseeing the retail, travel retail, concession, and wholesale businesses of the company. During his tenureat Calvin Klein, Mr. Brandwain also served as Travel Retail Director, Latin America, where he built the travel retail business and developed operations. Prior to that,between July 2010 and November 2010, Mr. Brandwain served as Business Director, Latin America and Caribbean at Givenchy Latin America, and between January2010 and June 2010 he served as Commercial Director, Latin America and Caribbean at Nautica Latin America. During December 2004 and December 2009, Mr.Brandwain served as Vice President, International Business Development at Report Collection/Modextil, Inc., where he was in charge of business and operationalexpansion, global growth, and brand extensions. Prior to that, between 2003 and October 2004, Mr. Brandwain served as General Manager at Andrew KoenigInternational, Inc. Between September 2019 and November 2020, Mr. Brandwain served as a member of the Board of Directors of 7 For All Mankind BrazilImportacao, Comercio E Distribuicao S.A. Mr. Brandwain earned a Bachelor degree in architecture from the University of the Republic (Uruguay).Oron Branitzky has served as a member of our board of directors since March 2017. Mr. Barnitzky has vast experience in retail technology. SinceNovember 2017, Mr. Branitzky has served as Global Retail Business Development at Superup, and from January 2007 until December 2014 he served as VicePresident of Sales and Marketing at Pricer AB. Prior to that, Mr. Branitzky has served as VP Marketing and Sales at Eldat Communication and Sarin TechnologiesLtd. Since January 2015, Mr. Branitzky has served as chairman of the board of directors of WiseShelf Ltd. and from May 2015 until March 2016, Mr. Branitzky servedas an advisory board member of ciValue. Mr. Branitzky received a B.S. from the Hebrew University of Jerusalem and an MBA in International Marketing from TelAviv University. We believe that Mr. Branitzky is qualified to serve as a member of our board of directors because of his more than 20 years of experience inmanaging the sales of hitech solutions to retailers across the globe.Oren Elmaliah, has served as a member of our board of directors since May 2017. In September 2015, Oren Elmaliah founded Accounting Team IL and hasacted as Account Manager since then. Accounting Team IL is a financial consultancy and service provider to public companies traded in Israel and abroad. SinceFebruary 2017, Mr. Elmaliah has served as controller of Enlivex Therapeutics Ltd., and since January 2017 he has served as Chief Financial Officer of Presstek Israel.In addition, since September 2015, Mr. Elmaliah has served as an Israel Authorities Reporting Officer of LG Electronics Israel and since September 2015 he hasserved as Local Financial Report Consultant of Chiasma. From July 2011 until August 2015, Mr. Elmaliah served as CPA, Financial Director of CFO Director Ltd andfrom June 2010 until July 2011 he served as Risk Management Consultant of RSM International Limited. Mr. Elmaliah holds a B.A. in Accounting/Economics and aMsc. in Finance/Accounting from Tel Aviv University, Israel. He is a licensed Certified Public Accountant in Israel. We believe that Mr. Elmaliah is qualified to serveas a member of our board of directors because of his vast finance experience and public company management and administration in the fields of finance,accounting, and financial regulation.53Arik Kaufman has served as a member of our board of directors since June 2017. Mr. Kaufman is an attorney specializing in the fields of commercial law,corporate law and capital markets and since 2016 runs his own law office in Israel. He has vast experience in the fields of financial reporting and financial regulation.Mr. Kaufman serves as the Chief Executive Officer of Steakholder Foods since January 2022. From September 2017 until January 2022, Mr. Kaufman served as VPBusiness Development of Mor Research Applications. Mr. Kaufman holds an LLB in Law from the Interdisciplinary Center, Herzliya, and is admitted to the IsraeliBar. We believe that Mr. Kaufman is qualified to serve as a member of our board of directors based upon his experience of assisting with the completion of numerousventure capital financings, mergers, acquisitions, and strategic relationships. In addition, he has served as a member of the board of various publicly tradedcompanies, including companies that operate in the same industry as us.Guy Zimmerman has served as a member of our board of directors since August 2021. Previously, Mr. Zimmerman served as Founder and CEO ofManuFuture, an online b2b engineering market place, since February 2021. Prior to that from 2017 to 2021, Mr. Zimmerman acted as a consultant to severaltechnology startups and was a founding partner of a business travel online platform. From 2013 to 2017, Mr. Zimmerman served as EVP of Marketing and BusinessDevelopment of Kornit Digital and was part of the IPO leadership. Prior to that, Mr. Zimmerman served as VP of Global Sales and Business Development at TefronLtd., a provider of seamless garment technology, where he led the $100m sales and sales support organization serving global retail and fashion brands. Prior to thathe served as Vice President of Strategy and Business Development at Tnuva Group, Israel’s largest food manufacturer and spent eight years at McKinsey &Company. Mr. Zimmerman previously led a software startup in the field of operational healthcare management systems. Mr. Zimmerman holds a B.Sc. in IndustrialEngineering from Tel Aviv University in Israel. We believe that Mr. Zimmerman is qualified to serve as a member of our board of directors because of his experiencein business development in the technology and retail sectors.Board Diversity MatrixThe table below provides certain information regarding the diversity of our board of directors as of the date of this annual report.Board Diversity Matrix (As of March 31, 2023)Total Number of Directors5FemaleMaleNonBinaryDid Not DiscloseGenderPart I: Gender IdentityDirectors#5##Part II: Demographic BackgroundAfrican American or Black####Alaskan Native or Native American####Asian####Hispanic or Latinx####Native Hawaiian or Pacific Islander####White#1##Two or More Races or Ethnicities#2##LGBTQ+0Did Not Disclose Demographic Background2Family RelationshipsRonen Luzon, the Chief Executive Officer and a member of our board of directors, and Billy Pardo, the Chief Product Officer and Chief Operating Officer, arehusband and wife. There are no other family relationships among any of our current or former directors or executive officers.Involvement in Certain Legal ProceedingsWe are not aware of any of our directors or officers being involved in any legal proceedings in the past ten years relating to any matters in bankruptcy,insolvency, criminal proceedings (other than traffic and other minor offenses), or being subject to any of the items set forth under Item 401(f) of Regulation SK.Arrangements between Officers and DirectorsTo our knowledge, there is no arrangement or understanding between any of our officers and any other person, including directors, pursuant to which theofficer was selected to serve as an officer.Board of DirectorsThere are no agreements with respect to the election of directors.On January 6, 2022, we filed with the Secretary of State of Delaware a Certificate of Amendment to our Amended and Restated Certificate of Incorporationproviding for a classified Board. Following filing of the Certificate of Amendment, members of our board are now classified into three classes with staggered threeyear terms (with the exception of the expiration of the initial Class I and Class II directors), as follows:●Class I, comprised of two directors, initially Arik Kaufman and Oren Elmaliah (with their initial terms expiring at our 2022 annual meeting of stockholders andmembers of such class serving successive threeyear terms);●Class II, comprised of two directors, initially Oron Branitzky and Guy Zimmerman (with their initial terms expiring at our 2023 annual meeting of stockholdersand members of such class serving successive threeyear terms); and●Class III, comprised of one director, initially Ronen Luzon (with his initial term expiring at our 2024 annual meeting of stockholders and members of suchclass serving successive threeyear terms).54To preserve the classified Board structure, a director elected by the Board of Directors to fill a vacancy holds office until the next election of the class forwhich such director has been chosen, and until that director’s successor has been elected and qualified or until his or her earlier death, resignation, retirement orremoval.Our board of directors has reviewed the materiality of any relationship that each of our directors has with us, either directly or indirectly. Based upon thisreview, we believe that Arik Kaufman, Oren Elmaliach, Oron Branitzky and Guy Zimmerman qualify as independent directors in accordance with the standards set bythe Nasdaq and Rule 10A3 promulgated under the Exchange Act.Committees of the BoardAudit CommitteeOur audit committee is comprised of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Elmaliah serves as chairman of the audit committee. The auditcommittee is responsible for retaining and overseeing our independent registered public accounting firm, approving the services performed by our independentregistered public accounting firm and reviewing our annual financial statements, accounting policies and our system of internal controls. The audit committee actsunder a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the audit committee’s composition and meetings.The audit committee charter is available on our website www.mysizeid.com.The Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by applicable SEC rules. Inaddition, the Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by the rules of the Nasdaq StockMarket.The Board of Directors has determined that Oren Elmaliah is an “audit committee financial expert” serving on its audit committee, and is independent, as theSEC has defined that term in Item 407 of Regulation SK.Compensation CommitteeOur compensation committee consists of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Branitzky serves as chairman of the compensationcommittee.The compensation committee’s roles and responsibilities include making recommendations to the Board of Directors regarding the compensation for ourexecutives, the role and performance of our executive officers, and appropriate compensation levels for our CEO, which are determined without the CEO present, andother executives. Our compensation committee also administers our 2017 Equity Incentive Plan and our 2017 Consultant Equity Incentive Plan. The compensationcommittee acts under a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the compensation committee’scomposition and meetings. The compensation committee charter is available on our website www.mysizeid.com.Our Board of Directors has determined that all of the members of the compensation committee are “independent” as that term is defined by the rules of theNasdaq Stock Market.Nominating and Corporate Governance CommitteeThe members of the nominating and corporate governance committee are Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Kaufman serves aschairman of the corporate governance and nominations committee. The nominating and corporate governance committee acts under a written charter, which morespecifically sets forth its responsibilities and duties, as well as requirements for the nominating and corporate governance committee’s composition and meetings.The nominating and corporate governance committee charter is available on our website www.mysizeid.com.The nominating and corporate governance committee develops, recommends and oversees implementation of corporate governance principles for us andconsiders recommendations for director nominees. The nominating and corporate governance committee also considers stockholder recommendations for directornominees that are properly received in accordance with applicable rules and regulations of the SEC. Our stockholders that wish to nominate a director for election tothe Board of Directors should follow the procedures set forth in our bylaws.55The nominating and corporate governance committee will consider persons identified by its members, management, stockholders, investment bankers andothers. The guidelines for selecting nominees, which are specified in the nominating committee charter, generally provide that persons to be nominated:●should be accomplished in his or her field and have a reputation, both personal and professional, that is consistent with our image and reputation;●should have relevant experience and expertise and would be able to provide insights and practical wisdom based upon that experience and expertise; and●should be of high moral and ethical character and would be willing to apply sound, objective and independent business judgment, and to assume broadfiduciary responsibility.The nominating and corporate governance committee will consider a number of qualifications relating to management and leadership experience,background and integrity and professionalism in evaluating a person’s candidacy for membership on the Board of Directors. The nominating and corporategovernance committee may require certain skills or attributes, such as financial or accounting experience, to meet specific Board needs that arise from time to timeand will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of Board of Directors members. The nominating andcorporate governance committee will not distinguish among nominees recommended by stockholders and other persons.Our Board of Directors has determined that all of the members of the nominating and corporate governance committee are “independent” as that term isdefined by the rules of the Nasdaq Stock Market.Code of Conduct and EthicsWe have a Code of Business Conduct and Ethics that applies to all our employees. The text of the Code of Business Conduct and Ethics is publiclyavailable on our website at www.mysizeid.com. Information contained on, or that can be accessed through, our website does not constitute a part of this report andis not incorporated by reference herein. Disclosure regarding any amendments to, or waivers from, provisions of the code of conduct and ethics that apply to ourdirectors, principal executive and financial officers will be posted on the “InvestorsCorporate Governance” section of our website at www.mysizeid.com or will beincluded in a Current Report on Form 8K, which we will file within four business days following the date of the amendment or waiver.Change in Procedures for Recommending DirectorsThere have been no material changes to the procedures by which our stockholders may recommend nominees to our Board of Directors from thoseprocedures set forth in our Proxy Statement for our 2021 Annual Meeting of Stockholders, filed with the SEC on December 7, 2022.56ITEM 11. EXECUTIVE COMPENSATIONSummary Compensation TableThe following sets forth the compensation paid by us to our named executive officers, during the years ended December 31, 2022 and December 31, 2021.Name and Principal PositionYearSalary($) (1)Bonus($)StockAwards($)OptionAwards($) (2)All OtherCompensation($)Total($)Ronen Luzon2022173,000223,0008,000126,000530,000Chief Executive Officer2021194,0005,00023,00097,000319,000Or Kles2022123,00053,0007,00071,000254,000Chief Financial Officer2021123,0008,00030,00061,000222,000Billy Pardo2022134,00053,0007,000100,00294,000Chief Operating Officer2021162,0007,00018,00074,000261,000(1) Salary for the years 2022 and 2021 are based on average US$/NIS representative exchange rates of NIS 3.358 and NIS 3.11 respectively.(2) Amounts in this column represent the grant date fair value of options granted to the named executive officers during 2022 and 2021, computed in accordance withFASB ASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the named executive officers. The assumptionsmade in valuing the options reported in this column are discussed in Note 11 to our audited financial statements for the year ended December 31, 2021 and Note 4 toour condensed consolidated interim financial statements for the quarterly period ended September 30, 2022.All Other Compensation TableThe “All Other Compensation” amounts set forth in the Summary Compensation Table above consist of the following:NameYearAutomobileRelatedExpenses($)Manager’sInsurance*($)EducationFund*($)Othersocialbenefits**($)Total($)Ronen Luzon202232,00031,00015,00048,000126,000202133,00033,00015,00016,00097,000Or Kles202215,00021,00010,00025,00071,000202114,00019,0009,00019,00061,000Billy Pardo202216,00025,00013,00046,000100,000202117,00024,00012,00021,00074,000* Manager’s insurance and education funds are customary benefits provided to employees based in Israel. Manager’s insurance is a combination of severancesavings (in accordance with Israeli law), defined contribution taxqualified pension savings and disability insurance premiums. An education fund is a savings fundof pretax contributions to be used after a specified period of time for educational or other permitted purposes.** Other social benefits for 2022 and 2021 for all named individuals includes tax payments in respect of social benefits.57Agreements with Named Executive OfficersRonen LuzonOn November 18, 2018, My Size Israel, our wholly owned subsidiary, entered into an employment agreement with Ronen Luzon, or the Luzon EmploymentAgreement, pursuant to which Mr. Luzon will serve as our Chief Executive Officer. Pursuant to the terms of the Luzon Employment Agreement, Mr. Luzon receivesNIS 55,000 per month as his base salary and shall be eligible to receive such bonus as determined by us. In addition, Mr. Luzon shall be entitled social benefits andto other benefits, including, but not limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, includinginsurance in case of disability, annual vacation days, sick leave and expense reimbursement. Pursuant to the terms of the Luzon Employment Agreement and subjectto certain conditions, payments made by the Company to the pension fund or manager’s insurance fund shall be made in lieu of severance payments due to Mr.Luzon. The term of the Luzon Employment Agreement shall be effective as of September 1, 2018 and shall continue until such time either party provides writtennotice to the other party at least 75 days in advance of the termination of such agreement. We may also terminate Mr. Luzon’s employment without prior writtennotice (or payment in lieu of such notice) for Cause (as defined in the Luzon Employment Agreement).Or KlesOn November 18, 2018, My Size Israel entered into an employment agreement with Or Kles, or the Kles Employment Agreement, pursuant to which Mr. Kleswill serve as our Chief Financial Officer. Pursuant to the terms of the Kles Employment Agreement, Mr. Kles receives NIS 38,000 per month as his base salary andshall be eligible to receive such bonus as determined by us. In addition, Mr. Kles shall be entitled to social benefits and other benefits, including, but not limited to,contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annual vacation days,sick leave and expense reimbursement. Pursuant to the terms of the Kles Employment Agreement and subject to certain conditions, payments made by us to thepension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Mr. Kles. The term of the Kles Employment Agreement shall beeffective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days in advance of thetermination of such agreement. We may also terminate Mr. Kles’s employment without prior written notice (or payment in lieu of such notice) for Cause (as defined inthe Kles Employment Agreement).Billy PardoOn November 18, 2018, My Size Israel entered into an employment agreement with Billy Pardo, or the Pardo Employment Agreement, pursuant to which Ms.Pardo will serve as our Chief Product Officer. Pursuant to the terms of the Pardo Employment Agreement, Ms. Pardo receives NIS 47,500 per month as her basesalary and shall be eligible to receive such bonus as determined by us. In addition, Ms. Pardo shall be entitled to social benefits and other benefits, including, butnot limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annualvacation days, sick leave and expense reimbursement. Pursuant to the terms of the Pardo Employment Agreement and subject to certain conditions, payments madeby us to the pension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Ms. Pardo. The term of the Pardo EmploymentAgreement shall be effective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days inadvance of the termination of such agreement. We may also terminate Ms. Pardo’s employment without prior written notice (or payment in lieu of such notice) forCause (as defined in the Pardo Employment Agreement).58Outstanding Equity Awards at Fiscal YearEndThe following table provides information regarding options held by each of our named executive officers that were outstanding as of December 31, 2022.Option AwardsStock AwardsName and Principal PositionNumber ofSecuritiesUnderlyingUnexercisedOptionsExercisableNumber ofSecuritiesUnderlyingUnexercisedOptionsUnexercisableOptionExercisePriceOptionExpirationDateEquityincentiveplan awards:Number ofUnearnedShares that HaveNot VestedEquityincentiveplan awards:Market Value ofUnearnedShares, That Have Not VestedRonen Luzon Chief Executive Officer400(1)$26(8)7/24/20231,601(2)$26(8)5/29/20256,400(3)$268/10/2025100,000(9)100,000$511,250Or Kles – Chief Financial Officer227(4)$26(8)7/24/2023427(5)$26(8)5/29/20255,200(6)$268/10/202524,000(10)24,000$122,700Billy Pardo Chief Operating Officer400(1)$26(8)7/24/2023894(7)$26(8)5/29/20255,200(6)$268/10/202524,000(11)24,000$122,700(1) The option has a grant date of July 24, 2017 and vested in full on January 24, 2018.(2) The option has a grant date of May 29, 2019. 267 options vested immediately upon grant, 445 options vested on January 24, 2019, 445 options vested on January24, 2020 and 444 options vested on January 24, 2021.(3) The option has a grant date of October 8, 2020, 1,600 options vested on November 26, 2020, 1,600 options vested on May 26, 2021, 1,600 options vested onNovember 26, 2021, and 1,600 options vested on May 26, 2022.(4) The option has a grant date of July 24, 2017. 76 options vested immediately upon grant, 76 options vested on May 1, 2018 and 75 options vested on May 1, 2019.(5) The option has a grant date of May 29, 2019. 160 options vested immediately upon grant, 445 options vested on May 1, 2020, 445 options vested on May 21, 2021and 444 options vested on May 1, 2022.(6) The option has a grant date of October 8, 2020, 1,300 options vested on November 26, 2020, 1,300 options vested on May 26, 2021, 1,300 options vested onNovember 26, 2021, and 1,300 options vested on May 26, 2022.(7) The option has a grant date of May 29, 2019. 214 options vested immediately upon grant, 227 options vested on January 24, 2019, 227 options vested on January24, 2020 and 226 options vested on January 24, 2021.(8) On May 25, 2020, the compensation committee of the Board of Directors of the Company reduced the exercise price of outstanding options of employees anddirectors of the Company for the purchase of an aggregate of 5,610 shares of common stock of the Company (with exercise prices ranging between $453.75 and$228.75) to $26 per share, which was the closing price for the Company’s common stock on May 22, 2020, and extended the term of the foregoing options for anadditional one year from the original date of expiration.(9) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(10) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(11) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.59Director CompensationThe following table sets forth compensation information for our nonemployee directors for the year ended December 31, 2022.NameFees earned orpaid incash ($)(1)Optionawards($)(1)(2)Total($)Oren Elmalih15,078 15,078Oron Barnitzky15,34715,347Arik Kaufman14,44114,441Guy Zimmerman13,03313,033(1)Fees for the year 2022 are based on average US$/NIS representative exchange rates of NIS 3.519.(2)Amounts in this column represent the grant date fair value of options granted to the nonemployee directors during 2022 computed in accordance with FASBASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the nonemployee directors. The assumptions made invaluing the options reported in this column are discussed in Note 11 to our financial statements for the year ended December 31, 2022.We compensate our nonemployee directors for their service as a member of our board. Mr. Luzon received no separate compensation for board service. Mr.Luzon’s compensation is set forth above in the Summary Compensation Table.Each nonemployee director is entitled to receive a per meeting fee of $318. Nonemployee directors are also reimbursed for their travel and reasonable outofpocket expenses incurred in connection with attending board and committee meetings, to the extent that attendance is required by the board or the committee(s)on which that director serves.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurity Ownership of Certain Beneficial Holders and ManagementThe following table sets forth certain information regarding beneficial ownership of shares of our common stock as of March 31, 2023 by (i) each personknown to beneficially own more than 5% of our outstanding common stock, (ii) each of our directors, (iii) each of our executive officers, and (iv) all of our directorsand executive officers as a group. Except as otherwise indicated, the persons named in the table below have sole voting and investment power with respect to allshares beneficially owned, subject to community property laws, where applicable.Beneficial Owner(1)Shares ofCommon StockBeneficiallyOwnedPercentage(2)Executive officers and directors:Ronen Luzon143,578(3)5.8%Or Kles29,854(4)1.2%Billy Pardo143,578(5)5.8%Ezequiel Javier Brandwain12,000(6)*Ilia Turchinsky18,313(7)*Arik Kaufman1,294(8)*Oren Elmaliah1,294(9)*Oron Branitzky1,294(10)*Guy ZimmermanAll Executive Officers and Directors as a Group (9 persons)207,6268.4%*Less than 1%(1) The address of each person is c/o My Size, Inc., 4 HaYarden St., P.O.B. 1026, Airport City, Israel 7010000 unless otherwise indicated herein.60(2) The calculation in this column is based upon 2,446,780 shares of common stock outstanding on March 31, 2023. Beneficial ownership is determined in accordancewith the rules of the SEC and generally includes voting or investment power with respect to the subject securities. Shares of common stock that are currentlyexercisable or exercisable within 60 days of March 31, 2023 are deemed to be beneficially owned by the person holding such securities for the purpose of computingthe percentage beneficial ownership of such person, but are not treated as outstanding for the purpose of computing the percentage beneficial ownership of anyother person(3) Consists of (i) 100,000 shares of restricted stock granted under the 2017 Plan, (ii) 4,683 shares of common stock, (iii) options to purchase up to 8,401 shares of ourcommon stock, and (iv) 24,000 shares of restricted stock and options to purchase up to 6,494 shares of our common stock which are held by Billy Pardo, RonenLuzon’s spouse. Mr. Luzon may be deemed to beneficially hold the securities of us held by Ms. Pardo.(4) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, and (ii) an option to purchase 5,854 shares of our common stock. Does not includean aggregate of 119,760 shares of restricted stock over which Mr. Kles has been designated the initial proxy to vote such shares pursuant to a voting agreemententered into between Whitehole S.L., Twinbel S.L. and EGI Acceleration, S.L.(5) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, (ii) options to purchase up to 6,494 shares of our common stock, (iii) 100,000 sharesof restricted stock which are held by Ronen Luzon, Billy Pardo’s spouse (iii) 8,401 shares of common stock which are held by Mr. Luzon, and (iii) options to purchaseup to 4,683 shares of our common stock which are held by Mr. Luzon. Ms. Pardo may be deemed to beneficially hold the securities of the Company held by Mr.Luzon.(6) Consists of 12,000 shares of restricted stock granted under the 2017 Plan.(7) Consists of (i) 16,000 shares of restricted stock granted under the 2017 Plan, and (ii) options to purchase up to 2,313 shares of our common stock.(8) Consists of options to purchase up to 1,294 shares of our common stock.(9) Consists of options to purchase up to 1,294 shares of our common stock.(10) Consists of options to purchase up to 1,294 shares of our common stock.Change in ControlWe are not aware of any arrangement that might result in a change in control in the future. We have no knowledge of any arrangements, including anypledge by any person of our securities, the operation of which may at a subsequent date result in a change in the Company’s control.Securities Authorized for Issuance Under Equity Compensation PlansOn January 29, 2017, our Board of Directors approved the 2017 Equity Incentive Plan and the 2017 Consultant Equity Incentive Plan, which were approvedby our stockholders on March 21, 2017. In addition, on January 29, 2017, our Board of Directors approved the Stock Option Plan Israel Grantees SubPlan. The 2017Equity Incentive Plan initially authorized the issuance of up to 5,334 shares of common stock under the plan and the 2017 Consultant Equity Incentive Plan initiallyauthorized the issuance of up to 8,000 shares of common stock under the plan.On February 12, 2018, our stockholders approved an amendment to the 2017 Consultant Equity Incentive Plan to increase the maximum number of shares ofour common stock available for issuance under the plan from 8,000 to 12,000. On July 3, 2018, our stockholders approved an amendment to the 2017 Equity IncentivePlan to increase the maximum number of shares of our common stock available for issuance under the plan from 5,334 to 8,000 and an amendment to the 2017Consultant Equity Incentive Plan to increase the maximum number of shares of our common stock available for issuance under the plan from 12,000 to 18,667.On May 25, 2020, our Board reduced the exercise price of outstanding options of our employees and directors for the purchase of an aggregate of 140,237of our common stock (with exercise prices ranging between $453.75 and $228.75) to $26.0 per share, and extended the term of the foregoing options for an additionalone year from the original date of expiration.61On August 10, 2020, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 80,000 to 58,000shares, and a decrease of the numbers of shares available for issuance under the 2017 Consultant Incentive Plan to 8,667 shares from 18,667 shares.On December 30, 2021, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 58,000 sharesto 230,800 shares.On December 7, 2022, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Plan from 230,800 shares to 289,000shares.The following table summarizes information about our equity compensation plans and individual compensation arrangements as of December 31, 2022.Number of securities to be issued upon exercise of outstanding options, warrants and rights(a)Weighted average exercise price of outstandingoptions, warrants and rights (b)Number of securities remaining availablefor future issuanceunder equity compensationplans (excludingsecurities reflected in column (a) (c)Equity compensation plans approved by security holders43,49724.7477,455Equity compensation plans not approved by security holdersTotal43,49724.7477,455ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEDuring years ended December 31, 2022 and 2021, except for compensation arrangements described elsewhere herein and the transactions described below,we did not participate in any transaction, and we are not currently participating in any proposed transaction, or series of transactions, in which the amount involvedexceeded the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years, and in which, to our knowledge,any of our directors, officers, five percent beneficial security holders, or any member of the immediate family of the foregoing persons had, or will have, a direct orindirect material interest.Compensation arrangements for our named executive officers and directors are described in the section entitled “Executive Compensation.”Employment AgreementsWe have entered into written employment agreements with each of our executive officers. These agreements generally provide for notice periods of varyingduration for termination of the agreement by us or by the relevant executive officer, during which time the executive officer will continue to receive base salary andbenefits. We have also entered into customary noncompetition, confidentiality of information and ownership of inventions arrangements with our executiveofficers. However, the enforceability of the noncompetition provisions may be limited under applicable law.OptionsSince our inception we have granted options to purchase our common stock to our officers and directors. Such option agreements may contain accelerationprovisions upon certain merger, acquisition, or change of control transactions.62Restricted Stock GrantsOn September 29, 2022, our compensation committee approved grants of restricted share awards under our 2017 Plan to Ronen Luzon, Or Kles, Billy Pardo,Ilia Turchinsky and Ezequiel Javier Brandwain, pursuant to which they were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000restricted shares and 12,000 restricted shares, respectively. The restricted shares shall vest in three equal installments on January 1, 2023, January 1, 2024 andJanuary 1, 2025, conditioned upon continuous employment with us, and subject to accelerated vesting upon a change in control of the Company.Shareholder ActivismIn May 2021, we received notice from Custodian Ventures, LLC, or Custodian, of its intention to nominate four candidates to stand for election to our Boardof Directors at our 2021 annual meeting of stockholders. Custodian subsequently made a book and records request and has made public statements calling forchanges to our management.On September 22, 2021, Custodian, commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v. Mysize,Inc., C.A. No. 20210817LWW, or the Delaware Action. In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting. As further described below, on November 4, 2021, we entered into asettlement agreement, or the Settlement Agreement, with Custodian, Activist Investing LLC, David Aboudi, Partick Loney and David Natan, collectively, the LazarParties, settling and dismissing the Delaware Action.On October 19, 2021, we commenced an action in the United States District Court for the Southern District of New York captioned My Size, Inc. v. DavidLazar, Custodian Ventures LLC, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, Civil Action No, 1:21cv08585, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, andcertain rules promulgated thereunder, or the SDNY Action. The complaint sought, among other things, declaratory and injunctive relief related to defendants’ effortsto nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed “group” for purposes ofSection 13 (d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. In addition, the complaint alleged that thedefendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules in connection with their efforts to elect a slate of directorsto our Board of Directors. On October 20, 2021, the Court signed an order granting a hearing on an anticipated motion for a preliminary injunction and expeditedscheduling and discovery in aid thereof, and scheduled that hearing for December 2, 2021. As further described below, on November 4, 2021, we entered into theSettlement Agreement with the Lazar Parties settling and dismissing the claims asserted in the SDNY Action and the Delaware Action against one another. OnNovember 8, 2021, the remaining defendants in the SDNY Action filed and answer and counterclaim asserting a claim against us pursuant to New York Civil RightsLaw Section 70a, also known as New York’s antiSLAPP statute.On November 4, 2021, we entered into the Settlement Agreement, or the Lazar Settlement Agreement, with the Lazar Parties. Pursuant to the LazarSettlement Agreement, we and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the LazarSettlement Agreement, we reimbursed Custodian for out of pocket expenses and in consideration for the dismissal and release of claims against the Company anaggregate amount equal to $275,000. With respect to our 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) itsMay 12, 2021 notice of stockholder nominations of four director candidates with respect to our 2021 annual meeting of stockholders, (ii) the notice dated October 28,2021 submitted by Custodian to us notifying us of Custodian’s continued intent to bring its nomination of four director candidates before our stockholders at the2021 annual meeting, and (iii) any and all related materials and notices submitted to us in connection therewith or related thereto and to not take any further action inconnection with the solicitation of any proxies in connection with us. Custodian also agreed to cease any and all solicitation and other activities in connection withthe 2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effective date of theAgreement, or the Standstill Period. The Lazar Settlement Agreement also provides that during the Standstill Period, the Lazar Parties will vote all shares of ourcommon stock it beneficially owns in accordance with any proposal or recommendation made by us or our Board of Directors that is submitted to our stockholders,unless to do so would violate applicable law and except with respect to certain extraordinary transactions. The Lazar Settlement Agreement also contains nondisparagement and confidentiality provisions, subject to certain exceptions.63On December 9, 2021, we subsequently entered into a Settlement Agreement, or the Ault Settlement Agreement, with Milton C. Ault III, Ault Alpha LP, AultAlpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed to withdraw the SDNY Action against the AultParties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that action against the Company. In addition, pursuant to the SettlementAgreement, we paid $70,000 to the Ault Parties in consideration for the releases and other good and valuable consideration as set forth in the Ault SettlementAgreement.Naiz Bespoke Technologies AcquisitionOn October 7, 2022, we entered into the Naiz Agreement with the Naiz Sellers, pursuant to which the Naiz Sellers agreed to sell to us all of the issued andoutstanding equity of Naiz. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) ) the Naiz EquityConsideration and (ii) up the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the Equity Value Averaging Period) is less than $1,650,000, My Size shall pay the Shortfall Value to the Naiz Sellers within 45days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period, it wasdetermined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement)).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers will be subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into the LockUp Agreement with My Size, (ii) Whitehole, Twinbel and EGIentered into the Voting Agreement with My Size and (iii) each of the Key Persons entered into employment agreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonth period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonth “dribbleout” provisionthat provides following the expiration of the initial sixmonth lockup period, without My Size’s prior written consent (which My Size shall be permitted to withholdat its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than the average dailytrading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.64The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Indemnification Agreements and Directors’ and Officers’ Liability InsuranceWe have entered into indemnification agreements with each of our directors and executive officers. These agreements, among other things, require us toindemnify these individuals and, in certain cases, affiliates of such individuals, to the fullest extent permitted by Delaware law against liabilities that may arise byreason of their service to us or at our direction, and to advance expenses incurred as a result of any proceedings against them as to which they could beindemnified. We also maintain an insurance policy that insures our directors and officers against certain liabilities, including liabilities arising under applicablesecurities laws.Director IndependenceSee “Item 10. Directors, Executive Officers and Corporate Governance; Corporate Governance, Board Composition” above for a discussion regarding theindependence of the members of our board of directors.ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICESSomekh Chaikin, a member firm of KPMG International, located in Tel Aviv, Israel, PCAOB ID 1057, has served as our independent registered publicaccounting firm for 2022 and 2021. The following are Somekh Chaikin’s fees for professional services in each of the respective fiscal years:Fee Category20222021Audit Fees198,910298,300Tax Fees30,66729,300Auditrelated Fees18,000Total Fees247,577327,600Audit Fees:Audit Fees consist of fees billed for professional services performed by Somekh Chaikin for the audit of our annual financial statements, thereview of interim consolidated financial statements, and related services that are normally provided in connection with registration statements, including theregistration statement for S1 and S3.Tax Fees: Tax Fees may consist of fees for professional services, including tax and VAT consulting and compliance performed by an independent registeredpublic accounting provided during the period.PreApproval Policies and ProceduresIn accordance with the SarbanesOxley Act of 2002, as amended, our audit committee charter requires the audit committee to preapprove all audit andpermitted nonaudit services provided by our independent registered public accounting firm, including the review and approval in advance of our independentregistered public accounting firm’s annual engagement letter and the proposed fees contained therein. The audit committee has the ability to delegate the authorityto preapprove nonaudit services to one or more designated members of the audit committee. If such authority is delegated, such delegated members of the auditcommittee must report to the full audit committee at the next audit committee meeting all items preapproved by such delegated members. In the fiscal years endedDecember 31, 2022 and December 31, 2021 all of the services performed by our independent registered public accounting firm were preapproved by the auditcommittee.65PART IVITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES(a)Financial StatementsThe financial statements required by this Item are included beginning at page F1.(b)ExhibitsSee Exhibit IndexITEM 16. FORM 10K SUMMARYNot applicableEXHIBIT INDEXExhibitNumberDescription3.1Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Form on Form8K filed on March 23, 2017)3.2Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10K filed onMarch 4, 2016)3.3Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’s Current Report onForm 8K filed on February 20, 2018)3.4Second Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8K filedon April 24, 2018)3.5Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’sCurrent Report on Form 8K filed on November 18, 2019)3.6Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on January 7, 2022)3.7Amendment No. 1 to Second Amended and Restated ByLaws (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8K filed on January 7, 2022)3.8Certificate of Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on December 7, 2022)4.1Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S3/A filed onNovember 14, 2016)4.2Form of Warrant to Purchase Common Stock issued on February 2, 2018 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report onForm 10K filed on March 27, 2019)4.3Description of Securities Registered under Section 12 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report on Form 10K filedon March 19, 2020)4.4Form of Warrant (incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S1, Amendment No. 1, filed with the SECon May 5, 2020.)4.5Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)4.6Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.1My Size, Inc. 2017 Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement on Schedule DEF 14Afiled on March 2, 2017)10.2My Size, Inc. 2017 Consultant Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement onSchedule DEF 14A filed on March 2, 2017)10.3My Size, Inc. 2017 Stock Option Plan Israel Grantees SubPlan (incorporated by reference to Exhibit 10.3 to the Company’s Annual Report on Form10K filed on March 27, 2019)6610.4Purchase Agreement between My Size, Inc. and Shoshana Zigdon dated as of February 16, 2014 (incorporated by reference to Exhibit 10.2 to theCompany’s Annual Report on Form 10K filed on March 4, 2016)10.5 +Employment Agreement between My Size Israel 2014 Ltd. and Ronen Luzon dated November 18, 2018 (incorporated by reference to Exhibit 10.1 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.6 +Employment Agreement between My Size Israel 2014 Ltd. and Or Kles dated November 18, 2018 (incorporated by reference to Exhibit 10.2 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.7 +Employment Agreement between My Size Israel 2014 Ltd. and Billy Pardo dated November 18, 2018 (incorporated by reference to Exhibit 10.3 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.8Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on January 15,2020)10.9Form of Warrant (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.10Form of Placement Agent Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.11Securities Purchase Agreement (incorporated by reference to Exhibit 10.30 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.12Underwriting Agreement, dated January 5, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on January 7, 2021)10.13Underwriting Agreement, dated March 22, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on March 25, 2021)10.14Amendment to Purchase Agreement between My Size Israel 2014 Ltd., My Size, Inc. and Shoshana Zigdon (incorporated by reference to Exhibit 10.1to the Company’s Quarterly Report on Form 10Q on August 16, 2021)10.15Form of Registered Direct Offering Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.16Form of PIPE Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.17Form of Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.18Form of Placement Agent Warrant issued by the Company on October 28, 2021 (incorporated by reference to Exhibit 10.22 to the Company’s Form S1filed on November 12, 2021)10.19Form of Registration Rights Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.4 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.20Engagement Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference to Exhibit 10.5 to theCompany’s Current Report on Form 8K filed on October 28, 2021)10.21Settlement Agreement dated November 4, 2021, among My Size, Inc., David Lazar and certain of his affiliates (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on November 5, 2021)10.22Share Purchase Agreement dated as of February 7, 2022 between My Size Israel 2014 Ltd. and Amar Guy Shalom and Elad Bretfeld (incorporated byreference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SEC on February 8, 2022)10.23Employment Agreement between My Size Israel 2014 Ltd. and Ezequiel Javier Brandwain dated January 27, 2022 (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on February 1, 2022)10.24Form of Section 102 Capital Gain Restricted Stock Award Agreement under the Company’s 2017 Equity Incentive Plan (incorporated by reference toExhibit 10.1 to the Company’s Quarterly Report on Form 10Q, filed with the SEC on November 14, 2022)10.25Share Purchase Agreement, dated as of October 6, 2022, by and among My Size, Inc., Borja Cembrero Saralegui, Artiz Toree Garcia, Whitehold, S.L.,Twinbel, S.L., and EGI Acceleration, S.L. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SECon October 12, 2022)10.26Form of LockUp Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)10.27Form of Voting Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.3 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)6710.28My Size, Inc. Amendment to the My Size, Inc. 2017 Equity Plan (incorporated by reference to Appendix B to the Company’s definitive proxystatement filed with the SEC on November 4, 2022)10.29Form of Registered Direct Offering Securities Purchase Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.1 to theCompany’s Current Report on Form 8K filed with the SEC on January 12, 2023)10.30Form of PIPE Securities Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8Kfiled with the SEC on January 12, 2023)10.31Form of Registered Direct PreFunded Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.32Form of Series A and Series B Warrant (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8K filed with the SEC onJanuary 12, 2023)10.33Form of Private Placement PreFunded Warrant (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.34Form of Registration Rights Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form8K filed with the SEC on January 12, 2023)10.35Engagement Agreement, dated December 5, 2022 (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8K filed withthe SEC on January 12, 2023)10.36*Form of Placement Agent Warrant21.1*List of Subsidiaries23.1*Consent of Somekh Chaikin, a member firm of KPMG International, registered public accounting firm31.1*Certification of the Chief Executive Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200231.2*Certification of the Chief Financial Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200232.1*Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a14(b) of the Exchange Act and 18 U.S.C. Section 1350, asadopted pursuant to Section 906 of the SarbanesOxley Act of 2002101.INS*Inline XBRL Instance Document101.SCH*Inline XBRL Taxonomy Schema101.CAL*Inline XBRL Taxonomy Calculation Linkbase101.DEF*Inline XBRL Taxonomy Definition Linkbase101.LAB*Inline XBRL Taxonomy Label Linkbase101.PRE*Inline XBRL Taxonomy Presentation Linkbase104Cover Page Interactive Data File (formatted as Inline XBRL document and contained in Exhibit 101)*Filed herewith.+Indicates a management contract or any compensatory plan, contract or arrangement68SIGNATURESPursuant to the requirements of Section 13 and 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10K to be signed on its behalf by the undersigned, thereunto duly authorized on this 14th day of April, 2023.MY SIZE, INC./s/ Ronen LuzonRonen LuzonChief Executive Officer (Principle Executive Officer)/s/ Or KlesOr KlesChief Financial Officer(Principal Financial and Accounting Officer)Pursuant to the requirements of the Securities Act of 1934, this annual report on Form 10K has been signed below by the following persons on behalf ofthe registrant and in the capacities and on the dates indicated.SignatureTitleDate/s/ Ronen LuzonChief Executive Officer and DirectorApril 14, 2023Ronen Luzon(Principle Executive Officer)/s/ Or KlesChief Financial OfficerApril 14, 2023Or Kles(Principal Financial and Accounting Officer)/s/ Oren ElmaliahDirectorApril 14, 2023Oren Elmaliah/s/ Arik KaufmanDirectorApril 14, 2023Arik Kaufman/s/ Oron BranitzkyDirectorApril 14, 2023Oron Branitzky/s/ Guy ZimmermanDirectorApril 14, 2023Guy Zimmerman69EX10.36 2 ex1036.htmExhibit 10.36NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES ANDEXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THESECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO ANEFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTIONNOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGINACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.PLACEMENT AGENT COMMON STOCK PURCHASE WARRANTMY SIZE, INC.Warrant Shares: _______Issue Date: January 12, 2023Initial Exercise Date: January 12, 2023THIS PLACEMENT AGENT COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _____________ or itsassigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the dateset forth above (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on January 10, 2028 (the “Termination Date”) but not thereafter, tosubscribe for and purchase from My Size, Inc., a Delaware corporation (the “Company”), up to ______ shares (as subject to adjustment hereunder, the “WarrantShares”) of the Company’s Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined inSection 2(b). This Warrant is issued pursuant to that certain engagement letter, dated as of December 5, 2022, by and between the Company and H.C. Wainwright &Co., LLC.Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities PurchaseAgreement (the “Purchase Agreement”), dated January 10, 2023, among the Company and the purchasers signatory thereto.1Section 2. Exercise.a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or afterthe Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted by email (or emailattachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the numberof Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shalldeliver the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on aUnited States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No inkoriginalNotice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required.Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder haspurchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrantto the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercisesof this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering theoutstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder andthe Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver anyobjection to any Notice of Exercise within one (1) Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant,acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, thenumber of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.b) Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $3.8188, subject to adjustment hereunder (the“Exercise Price”).c) Cashless Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein isnot available for the issuance or resale of the Warrant Shares to or by the Holder, then this Warrant may also be exercised, in whole or in part, at such timeby means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing[(AB) (X)] by (A), where:(A) =as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice ofExercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed anddelivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) ofRegulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAPon the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on theprincipal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s execution of the applicable Notice ofExercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hoursthereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii)the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice ofExercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;(B) =the Exercise Price of this Warrant, as adjusted hereunder; and(X) =the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if suchexercise were by means of a cash exercise rather than a cashless exercise.2“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which theCommon Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York Citytime)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest precedingdate) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for theCommon Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the mostrecent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by anindependent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to theCompany, the fees and expenses of which shall be paid by the Company.“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the TradingMarket on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or thenearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and ifprices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reportingprices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock asdetermined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonablyacceptable to the Company, the fees and expenses of which shall be paid by the Company.If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of theSecurities Act, the Warrant Shares shall take on the characteristics of the Warrants being exercised, and the holding period of the Warrant Shares beingissued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section 2(c).3d) Mechanics of Exercise.i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to betransmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with TheDepository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant insuch system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of theWarrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or mannerofsale limitationspursuant to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, registered in theCompany’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitledpursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2)Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate ExercisePrice to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Companyof the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall bedeemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant hasbeen exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (otherthan in the case of a cashless exercise) is received by the Warrant Share Delivery Date. If the Company fails for any reason to deliver tothe Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder,in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP ofthe Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifthTrading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share Delivery Date until such WarrantShares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FASTprogram so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standardsettlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stockas in effect on the date of delivery of the Notice of Exercise.4ii.Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the requestof a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a newWarrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrantshall in all other respects be identical with this Warrant; provided, however, that the Holder shall be required to return any WarrantShares subject to any such rescinded exercise notice concurrently with the return to Holder of the aggregate Exercise Price paid to theCompany for such Warrant Shares and the restoration of Holder’s right to acquire such Warrant Shares pursuant to this Warrant(including, issuance of a replacement warrant certificate evidencing such restored right).iii. Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant toSection 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.iv. Compensation for BuyIn on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights availableto the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with theprovisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date theHolder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwisepurchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipatedreceiving upon such exercise (a “BuyIn”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) theHolder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) theamount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connectionwith the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at theoption of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was nothonored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock thatwould have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holderpurchases Common Stock having a total purchase price of $11,000 to cover a BuyIn with respect to an attempted exercise of shares ofCommon Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediatelypreceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written noticeindicating the amounts payable to the Holder in respect of the BuyIn and, upon request of the Company, evidence of the amount of suchloss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including,without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver sharesof Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.5v. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise ofthis Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Companyshall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by theExercise Price or round up to the next whole share.vi. Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue ortransfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paidby the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by theHolder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, thisWarrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder andthe Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.The Company shall pay all Transfer Agent fees required for sameday processing of any Notice of Exercise and all fees to the DepositoryTrust Company (or another established clearing corporation performing similar functions) required for sameday electronic delivery of theWarrant Shares.vii. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timelyexercise of this Warrant, pursuant to the terms hereof.6e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise anyportion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicableNotice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of theHolder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). Forpurposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Partiesshall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, butshall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrantbeneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion ofany other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exerciseanalogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in thepreceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act andthe rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that suchcalculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed inaccordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (inrelation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisableshall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether thisWarrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of thisWarrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm theaccuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number ofoutstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s mostrecent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recentwritten notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request ofa Holder, the Company shall within one (1) Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock thenoutstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise ofsecurities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number ofoutstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stockoutstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice tothe Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial OwnershipLimitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares ofCommon Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in theBeneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shallbe construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portionhereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplementsnecessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of thisWarrant.7Section 3. Certain Adjustments.a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes adistribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which,for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstandingshares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into asmaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case theExercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any)outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately aftersuch event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of thisWarrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for thedetermination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case ofa subdivision, combination or reclassification.b) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sellsany Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares ofCommon Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregatePurchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise ofthis Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before thedate on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the recordholders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that to the extent that theHolder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall notbe entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Rightto such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not resultin the Holder exceeding the Beneficial Ownership Limitation).c) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend (other than cash) orother distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including,without limitation, any distribution of stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement,scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holdershall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number ofshares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including withoutlimitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken,the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, thatto the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, thenthe Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a resultof such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as itsright thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).8d) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more relatedtransactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease,license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, director indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of CommonStock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more ofthe outstanding Common Stock or 50% or more of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in oneor more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchangepursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly orindirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, withoutlimitation, a reorganization, recapitalization, spinoff, merger or scheme of arrangement) with another Person or group of Persons whereby such otherPerson or group acquires more than 50% of the outstanding shares of Common Stock or 50% or more of the voting power of the common equity of theCompany (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for eachWarrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of theHolder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor oracquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as aresult of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior tosuch Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, thedetermination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of AlternateConsideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Priceamong the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. Ifholders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall begiven the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at theHolder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date ofthe public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cashequal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of suchFundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company’s control, including not approved by theCompany’s Board of Directors, the Holder shall only be entitled to receive from the Company or any Successor Entity the same type or form ofconsideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to theholders of Common Stock of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, stock or anycombination thereof, or whether the holders of Common Stock are given the choice to receive from among alternative forms of consideration in connectionwith the Fundamental Transaction; provided, further, that if holders of Common Stock of the Company are not offered or paid any consideration in suchFundamental Transaction, such holders of Common Stock will be deemed to have received common stock of the Successor Entity (which Entity may be theCompany following such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on theBlackScholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day of consummation of the applicableFundamental Transaction for pricing purposes and reflecting (A) a riskfree interest rate corresponding to the U.S. Treasury rate for a period equal to thetime between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expectedvolatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualizationfactor) as of the Trading Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlyingprice per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any noncashconsideration, if any, being offered in such Fundamental Transaction and (ii) the highest VWAP during the period beginning on the Trading Dayimmediately preceding the public announcement of the applicable contemplated Fundamental Transaction (or the consummation of the applicableFundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant to this Section 3(e) and (D) a remaining option timeequal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date and (E) azero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds (or such other consideration)within the later of (i) five Business Days of the Holder’s election and (ii) the date of consummation of the Fundamental Transaction. The Company shallcause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of theobligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant towritten agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to suchFundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entityevidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares ofcapital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of thisWarrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which appliesthe exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to suchFundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for thepurpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which isreasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall beadded to the term “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction, each andevery provision of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to each of the Company and theSuccessor Entity or Successor Entities, jointly and severally), and the Successor Entity or Successor Entities, jointly and severally with the Company, mayexercise every right and power of the Company prior thereto and the Successor Entity or Successor Entities shall assume all of the obligations of theCompany prior thereto under this Warrant and the other Transaction Documents with the same effect as if the Company and such Successor Entity orSuccessor Entities, jointly and severally, had been named as the Company herein.e) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. Forpurposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the numberof shares of Common Stock (excluding treasury shares, if any) issued and outstanding.9f) Notice to Holder.i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, theCompany shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resultingadjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form)on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C)the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any sharesof capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection withany reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all orsubstantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into othersecurities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of theaffairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as itshall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective datehereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to beentitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification,consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expectedthat holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or otherproperty deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure todeliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to bespecified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, nonpublic informationregarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to aCurrent Report on Form 8K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of suchnotice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.10Section 4. Transfer of Warrant.a) Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and to theprovisions of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights) aretransferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a writtenassignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay anytransfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a newWarrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument ofassignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly becancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unlessthe Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of thedate on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordanceherewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company,together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent orattorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute anddeliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issuedon transfers or exchanges shall be dated the Issue Date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Sharesissuable pursuant thereto.c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “WarrantRegister”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as theabsolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to thecontrary.d) Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrantshall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue skylaws or (ii) eligible for resale without volume or mannerofsale restrictions or current public information requirements pursuant to Rule 144, the Companymay require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, comply with the provisions ofSection 5.7 of the Purchase Agreement.11e) Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon anyexercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling suchWarrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exemptedunder the Securities Act.Section 5. Miscellaneous.a) No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends orother rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Withoutlimiting the rights of a Holder to receive Warrant Shares on a “cashless exercise,” and to receive the cash payments contemplated pursuant to Sections 2(d)(i) and 2(d)(iv), in no event will the Company be required to net cash settle an exercise of this Warrant.a.In July 2019, the Company entered into a threeyear agreement with a consultant (“Consultant14”) to provide services to the Company includingassisting the Company to promote, market and sell the Company’s technology to potential customers. Pursuant to such agreement and in partialconsideration for such consulting services, the Company agreed to issue to Consultant14 options to purchase up to 107 shares of the Company’scommon stock upon execution of the agreement. The options are exercisable at $375.00 per share and shall vest in 3 equal instalments every twelvemonths starting July 2019. Unexercised options shall expire 4 years from the effective date.In addition, the Company agreed to issue to Consultant14 options to purchase up to 890 shares of the Company’s common stock upon executionof the agreement. The options are exercisable at $27.00 per share and shall vest in 4 equal instalments every six months starting September 2020.Unexercised options shall expire 5 years from the effective date.During 2022 and 2021, an amount of $7 and $14 respectively, were recorded by the Company as stockbased equity awards with respect to Consultant14.F24MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The Company’s outstanding options granted to consultants as of December 31, 2022 are as follows:Issuance dateOptions forCommon stockWeightedAverageexercise priceper shareOptionsexercisableExpirationdateFebruary 201815USD528.7515February 2023August 2018December 2018531USD352.38264August 2023 December 2023July 2020107USD375107July 2023SeptemberOctober 20201,488USD27.201,288October 2024 September 2025Total2,1411,674The Company uses the Black Scholes model to measure the fair value of the stock options with the assistance of a third party valuation.No stock options were granted during 2022 to consultants.The fair value of the Company’s stock options granted to nonemployees was calculated using the following weighted average assumptions:20222021GrantsGrantsDividend yield0%Expected volatility125.15%Riskfree interest0.16%Contractual term of up to (years)1.52F25MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Stock Option Plan for employeesIn March 2017, the Company adopted a stock option plan (the “Plan”) pursuant to which the Company’s Board of Directors may grant stock options toofficers and key employees. The total number of options which may be granted to directors, officers, employees under this plan, is limited to 289,000options. Stock options can be granted with an exercise price equal to or less than the stock’s fair market value at the date of grant.The fair value of each option award is estimated on the date of grant using the Binomial optionpricing model that used the weighted averageassumptions in the following table. The risk free rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the timeof grant.2022Grants2021GrantsDividend yield0%0%Expected volatility96.52%98.47%Riskfree interest4.06%0.96%expected life522.27In the years ended December 31, 2022 and 2021, 10,000 and 3,900 options, respectively, were granted.On December 7, 2022, the Company’s stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from230,800 shares to 289,000 shares.On September 29, 2022, the Compensation Committee of the Company approved grants of restricted share awards under the Company’s 2017 EquityIncentive Plan to Ronen Luzon (CEO), Or Kles (CFO), Billy Pardo (COO), Ilia Turchinsky (CTO) and Ezequiel Javier Brandwain (CCO), pursuant towhich were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000 restricted shares and 12,000 restricted shares,respectively. Each restricted share awarded under section 102 Capital Gain Restricted Stock Award Agreement (the “Agreement”). The restrictedshares shall vest in three equal installments on January 1, 2023, January 1, 2024 and January 1, 2025 for Ronen Luzon, Or Kles, Billy Pardo and IliaTurchinsky and on January 27, 2023, January 27, 2024 and January 27, 2025 for Ezequiel Javier Brandwain, conditioned upon continuous employmentwith the Company, and subject to accelerated vesting upon a change in control of the Company.On the same day, the Company granted fiveyears options to purchase up to 10,000 ordinary shares to other employees of the Company at an exerciseprice of $0.21 per share. The options vesting period is over three years in three equal portions from the vesting commencement date.F26MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The total stock option compensation expense in the year ended December 31, 2022 amounted to $448as follows: Research and development expensesamounted to $151, sales and marketing expenses amounted to $119and general and administrative expenses amounted to $178.The total stock option compensation expense in the year ended December 31, 2021 amounted to $252 as follows: Research and development expensesamounted to $94, sales and marketing expenses amounted to $97 and general and administrative expenses amounted to $61.As of December 31, 2022, there was a total of $530 unrecognized compensation cost relating to nonvested sharebased compensation arrangements.That cost is expected to be recognized over a weightedaverage period of 2.0 years.Share option activity during 2022 is as follows:2022Number ofoptionsWeightedaverageexerciseprice US$Outstanding as of January 135,74226.5Granted10,0005.25ExercisedExpired(4,136)Outstanding as of year end41,60622.48Vested as of year end33,20825.17Share option activity during 2021 is as follows:2021Number ofoptionsWeightedaverageExerciseprice US$Outstanding as of January 139,094$26.0Granted3,90032.0Exercised(751)Expired(6,501)Outstanding as of year end35,74226.5Vested as of year end27,06326.5F27MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 15 CONTINGENCIES AND COMMITMENTSa.On August 7, 2018, the Company commenced an action against North Empire LLC (“North Empire”) in the Supreme Court of the State of New York,County of New York for breach of a Securities Purchase Agreement (the “Agreement”) in which it is seeking damages in an amount to bedetermined at trial, but in no event less than $616. On August 2, 2018, North Empire filed a Summons with Notice against the Company, also in thesame Court, in which they allege damages in an amount of $11.4 million arising from an alleged breach of the Agreement. On September 6, 2018North Empire filed a Notice of Discontinuance of the action it had filed on August 2, 2018. On September 27, 2018, North Empire filed an answerand asserted counterclaims in the action commenced by the Company against them, alleging that the Company failed to deliver stock certificatesto North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against theCompany’s CEO and now former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018,the Company filed a reply to North Empire’s counterclaims. On November 15, 2018, the Company’s CEO and now former Chairman of the Boardfiled a motion to dismiss North Empire’s thirdparty complaint. On January 6, 2020, the Court granted the motion and dismissed the thirdpartycomplaint. Discovery has been completed and both parties have filed motions for summary judgment in connection with the claims andcounterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summary judgment, arguing there werefactual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision. The appealmust be fully perfected and filed by July 26, 2022. On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying theCompany’s motion for summary judgment. North Empire will file its opposition papers on or before March 31, 2022, and the Company will file replypapers on April 29, 2022. On or about September 12, 2022, the Court issued its Decision and Order denying the Company’s motion to reargue.North Empire filed its opposing brief on December 7, 2022. Both sides were given an opportunity to file a reply brief. The Company filed our replybrief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. The Appellate Court has scheduled oral argument for the appealfor February 7, 2023. Oral argument was held before the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Courtfiled its Decision and Order, which affirmed the lower court’s decisions regarding both My Size and North Empire’s motions for summary judgmentand sent the case back to the Supreme Court.On or about March 13, 2023, the Supreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date forthe mediation has not yet been set. The Company intends to vigorously defend any claims made by North Empire.The Company believes it is more likely than not that the counterclaims will be denied.b.In May 2021, the Company received notice from Custodian Ventures, LLC (“Custodian”) of its intention to nominate four candidates to stand forelection to our Board of Directors at the Company’s 2021 annual meeting of stockholders. Custodian subsequently made a book and recordsrequest and has made public statements calling for changes to our management.On September 22, 2021, Custodian commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v.MySize, Inc. (the “Delaware Action”). In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting.On October 19, 2021, the Company commenced an action in the United States District Court for the Southern District of New York againstCustodian, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, and certain rulespromulgated thereunder (the “SDNY Action”). The complaint sought, among other things, declaratory and injunctive relief related to defendants’efforts to nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed“group” for purposes of Section 13(d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. Inaddition, the complaint alleged that the defendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules inconnection with their efforts to elect a slate of directors to the Company’s Board of Directors. On October 20, 2021, the Court signed an ordergranting a hearing on an anticipated motion for a preliminary injunction and expedited scheduling and discovery in aid thereof, and scheduled thathearing for December 2, 2021.On November 4, 2021, the Company entered into the Settlement Agreement with the Lazar Parties. Pursuant to the Settlement Agreement, theCompany and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the SettlementAgreement, the Company agreed to reimburse Custodian for out of pocket expenses and in consideration for the dismissal and release of claimsagainst the Company an aggregate amount equal to $275, to be paid within three business days of the effective date of the Settlement Agreement.With respect to the Company’s 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) its May 12,2021 notice of stockholder nominations of four director candidates with respect to the Company’s 2021 annual meeting of stockholders, (ii) thenotice dated October 28, 2021 submitted by Custodian to the Company notifying the Company of Custodian’s continued intent to bring itsnomination of four director candidates before the Company’s stockholders at the 2021 annual meeting, and (iii) any and all related materials andnotices submitted to the Company in connection therewith or related thereto and to not take any further action in connection with the solicitationof any proxies in connection with the Company. Custodian also agreed to cease any and all solicitation and other activities in connection with the2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effectivedate of the Agreement (the “Standstill Period”). The Settlement Agreement also provides that during the Standstill Period, the Lazar Parties willvote all shares of common stock of the Company it beneficially owns in in accordance with any proposal or recommendation made by theCompany or the Board of Directors of the Company that is submitted to the stockholders of the Company, unless to do so would violateapplicable law and except with respect to certain extraordinary transactions. The Settlement Agreement also contains nondisparagement andconfidentiality provisions, subject to certain exceptions.On December 9, 2021, the Company subsequently entered into a Settlement Agreement (the “Ault Settlement Agreement”), with Milton C. Ault III,Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed towithdraw the SDNY Action against the Ault Parties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that actionagainst the Company. In addition, pursuant to the Settlement Agreement, the Company paid $70 to the Ault Parties in consideration for thereleases and other good and valuable consideration as set forth in the Ault Settlement Agreement.c.On July 5, 2021, the Company was served with a legal complaint filed by Fidelity Venture Capital Ltd. and Dror Atzmon in the Magistrate’s Court inTel Aviv for a monetary award in an amount of NIS 1,436,679 (approximately $450) and a declaratory relief. The plaintiffs allege that the Companybreached its contractual obligations to pay them for services allegedly rendered to the Company by the plaintiffs under a certain consultingagreement dated July 2, 2014, in an amount of NIS 819,000 (approximately $256). Additionally, the plaintiffs allege that the Company shouldcompensate them for losses allegedly incurred by them following their investment in the Company’s shares issued under a certain private offering.In the alternative, the plaintiffs move that the court will declare the investment agreement void with full restitution of plaintiffs’ original investmentin an amount of NIS 1,329,650(approximately $415). The Company filed its statement of defense on October 25, 2021. The first preliminary courthearing of the case is scheduled for January 23, 2022.The first court preliminary hearing was held on March 1, 2022.Following the first preliminary hearing and the Court’s comments and recommendation, the Plaintiffs filed a motion to strike out the claim withoutprejudice.On March 8, 2022 the Court ordered dismissal without prejudice of the claim.F28MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATIONAcquisition of OrgadOn February 7, 2022, the Company acquired 100% of the shares and voting interests in Orgad an omnichannel ecommerce platform. The acquisitionwas designed to create an additional revenue stream for the Company by becoming a direct ecommerce seller while leveraging the synergies betweenMySizeID and Orgad’s ecommerce platform.Unaudited proforma informationThe results of operations of Orgad have been included in the consolidated financial statements since the acquisition date of February 7, 2022. Orgadrevenues included in the Company’s consolidated statement of operations from February 7, 2022 through December 31, 2022 were $4,132. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,662 and $2,850 respectively, and the net loss after tax would have been $8,519 and $10,149 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash (*)300Issuance of shares of common stock (69,752 shares) (**)457Total consideration transferred757(*)The cash payment is subject to working capital adjustments.(**)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Orgad, on the twoyear and the threeyear anniversary of the closing, $350in each ofthese years provided that in the case of the second and third instalments certain revenue targets are met and subject further to certain downward postclosing adjustment. Furthermore, 69,752shares of common stock will be issued in eight equal quarterly instalments until the lapse of two years fromclosing. Additional earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023 will also be paid. All of these payments aresubject to the former owners being actively engaged with Orgad at the date such payment is due, and therefore were not taken as part of theconsideration for the business combination.During the year ended December 31, 2022 an amount of $456and $319was recorded in respect of the cash instalments and in respect of stocksissuance, respectively in Cost Of Goods, Sales and Marketing and General and Administrative expenses as shown in the following table:2022Stockbased compensation expense – Cost of goods194Stockbased compensation expense Sales and marketing271Stockbased compensation expense General and administrative310775(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the preliminary estimates of their fair values, which were determined using generally accepted valuation techniques based onestimates and assumptions made by management at the time of the acquisition. Such estimates are subject to change during the measurement periodwhich is not expected to exceed one year. The purchase price allocation was not finalized duo to examination of the net working capital of Orgad at theacquisition date. Any adjustments to the preliminary purchase price allocation identified during the measurement period will be recognized in theperiod in which the adjustments are determined.The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and Cash EquivalentTrade receivables364PP&E55Inventory864Longterm financial investment31Selling platform378Goodwill152Shortterm accruals and deferrals(181)Trade payables(668)Long term provision(13)Longterm debt(138)Deferred Taxes(87)Total net assets acquired757F29MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)(c)Acquisitionrelated costsThe Company incurred transaction costs of approximately $40and none during twelvemonth period ended December 31, 2022 which were included ingeneral and administrative expenses in the consolidated statements of income (loss).Acquisition of Naiz Bespoke Technologies, S.L. (“Naiz”)On October 11, 2022, the Company acquired 100% of the shares and voting interests in Naiz a provider of SaaS technology solutions that solve sizeand fit issues for fashion ecommerce companies. The acquisition was designed to allow Naiz’s customers benefit from MySize’s deep understanding ofthe fashion ecommerce retail landscape, while creating an additional revenue stream for the Company.Unaudited proforma informationThe results of operations of Naiz have been included in the consolidated financial statements since the acquisition date of October 11, 2022. Naizrevenues included in the Company’s consolidated statement of operations from October 11, 2022 through December 31, 2022 were $103. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,738 and $379 respectively and the net loss after tax would have been $8,695 and $10,717 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash503Issuance of shares of common stock (240,000 shares) (*)1,008Total consideration transferred1,511(*)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Naiz, additional cash consideration (up to $1,550) in four instalments subject to thefollowing conditions:(i)Continuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result ofa Good Reason; and(ii)Naiz’s Revenues reaching or exceeding the respective Target Revenues defined in the agreement. The revenues will be calculated in four periods:(1) January 1, 2022 – December 31, 2022; (2) January 1, 2023 – June 30, 2023; (3) July 1, 2023 – December 31, 2023; (4) January 1, 2024 – December31, 2024.Former owners of Naiz are entitled to additional cash consideration following December 31, 2025 (up to $1,650) in an event when the actual value of theequity consideration is less than $1,650, subject to completion of a Target Revenue for the period of January 1, 2025 – December 31, 2025 andcontinuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result of aGood Reason;F30MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)During the year ended December 31, 2022 an amount of $283 was recorded in respect of the additional cash consideration.(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the estimates of their fair values, which were determined using generally accepted valuation techniques based on estimates andassumptions made by management at the time of the acquisition.The following table summarizes the fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and cash equivalent36Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Total net assets acquired1,511(c)Acquisitionrelated costsDuring 2022, the Company incurred transaction costs of approximately $75 which were included in general and administrative expenses in theconsolidated statements of income (loss).F31MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)Note 17 – Operating SegmentsDuring the year ended December 31, 2021, the Company had one reportable segment. As a result of the business combinations in the reporting period(see note 13), the Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificialintelligence driven measurement solutions and (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions and. The fashionand equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. Orgad has onecustomer that is responsible for 37.9% of the Company consolidated revenues. The SaaS based innovative artificial intelligence driven measurementsolutions, or SaaS Solutions operating segment consists of My Size Inc and My Size Israel and My Size LLC.Information related to the operations of the Company’s reportable operating segments is set forth below:Fashion andequipment ecommerce platformSaaSSolutionsNaizTotalAs of the year ended December 31, 2022Revenues from external customers4,1322241034,459Operating (loss) income(591)(7,181)(338)(8,110)Financial income (expense), net(236)Net loss before tax(8,346)Fashion andequipment ecommerce platformSaasSolutionNaizAs of December 31, 2022:Assets2,0225,9661,691Amortization of intangible assets(114)(34)(46)The Company elected to present geographic information in respect with revenues generated from external customers based on the location of the selling entity:All the revenues of the fashion and equipment ecommerce platform segment are generated by Orgad, located in Israel.All the revenues of the Naiz segment are generated by Naiz, located in Spain.The revenues of the Saas Solutions segment are generated by My Size Ltd. located in Israel (approximately 75% of the segment revenues) and by My Size Inc.located in the U.S. (approximately 25% of the segment revenues).NOTE 18 SALES AND MARKETINGYear endedDecember 31,20222021Salaries836574Consultants and subcontractors5831,086Marketing481283Selling fees489Share based payments post Orgad acquisition (*)271Share based payments for consultants and employees127180Travel21142Other1451713,1432,336(*) See note 16.NOTE 19 GENERAL AND ADMINISTRATIVE EXPENSESYear endedDecember 31,20222021Salaries1,007461Professional services7051,832Share based payments for consultants, directors and employees18098Rent, office expenses and communication442372Insurance564627cash liability and equity liability expenses related to Orgad acquisition310cash liability expenses related to Naiz acquisition217Settlement fees (*)345Directors8259Other3933303,9004,124(*)See note 15(b)F32MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 20 FINANCIAL INCOME (EXPENSE), NETA.Financial incomeYear endedDecember 31,20222021Revaluation investment in marketable securities49Other26172666B.Financial expenseYear endedDecember 31,20222021Exchange rate differences33Revaluation of loan granted100Revaluation investment in marketable securities62Other6792629NOTE 21 EVENTS SUBSEQUENT TO THE BALANCE SHEET DATEa.On January 2, 2023, Orgad experienced a fire at its warehouse in Israel. The Company is not aware of any casualties or injuries associated with thefire. The Company shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450.The Company believes that this incident did not affect the future sales results of Orgad for the year 2023. The inventory was not insured and it istoo early to determine the potential impact of this incident on the other parties that were involved in the incident (lessor and others that leasedproperties near the warehouse).b.On January 10, 2023, the Company entered into a securities purchase agreement pursuant to which the Company sold an aggregate of 162,000ofthe Company’s shares of common stock and prefunded warrants to purchase up to 278,899shares of common stock and, in a concurrent privateplacement, unregistered warrants to purchase up to883,798 shares of common stock, consisting of Series A warrants to purchase up to 441,899shares of common stock and Series B warrants to purchase up to 441,899shares of common stock, at an offering price of $3.055per share ofcommon stock and associated Series A and Series B warrants and an offering price of $3.054per prefunded warrant and associated Series A andSeries B warrants.In addition, the Company entered into a securities purchase agreement pursuant to which the Company agreed to sell and issue in a privateplacement an aggregate of up to 540,098 unregistered prefunded warrants and unregistered warrants to purchase up to an aggregate of 1,080,196shares of common stock, consisting of Series A warrants to purchase up to 540,098 shares of common stock and Series B warrants to purchase upto 540,098 shares of common stock at an offering price of $3.054 per prefunded warrant and associated Series A and Series B warrants.As of March 31,2023 all the pre funded warrants were exercised by the investor.F33ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSUREThere were no disagreements with accountants on accounting and financial disclosure of a type described in Item 304 (a)(1)(iv) or any reportable event asdescribed in Item 304 (a)(1)(v) of Regulation SK.ITEM 9A. CONTROLS AND PROCEDURESDisclosure ControlsWe carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief FinancialOfficer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) as of December 31, 2022. Basedupon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this Annual Report on Form10K, our disclosure controls and procedures were effective to ensure that information required to be disclosed in reports filed under the Exchange Act, as amended,is recorded, processed, summarized and reported within the required time periods specified in the SEC’s rules and forms and is accumulated and communicated toour management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.Management’s Report on Internal Control Over Financial ReportingOur internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records, that, in reasonable detail,accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only inaccordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition, use or disposition of our assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance withthe policies or procedures may deteriorate.Our management, including our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financialreporting at December 31, 2022. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the TreadwayCommission (COSO) in Internal Control—Integrated Framework (2013). Based on that assessment under those criteria, management has determined that, as ofDecember 31, 2022, our internal control over financial reporting was effective.This Annual Report on Form 10K does not include an attestation report of our registered public accounting firm regarding internal control over financialreporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to the exemption provided to issuersthat are not “large accelerated filers” nor “accelerated filers” under the DoddFrank Wall Street Reform and Consumer Protection Act.Changes in Internal Control Over Financial ReportingDuring the year ended December 31, 2022, we made two acquisitions, as discussed in Note 1a and Note 16 of the audited consolidated financial statementsfor the year ended December 31, 2022 included in this Annual Report on Form 10K. As a result, we made additions and/or modifications to policies, procedures,systems and controls that have materially affected our internal control over financial reporting from the acquisitions, including new controls for consolidationprocess that relates to accounting policies and procedures, operational processes and documentation practices. Management excluded the acquired businessesfrom management’s report on internal control over financial reporting. ITEM 9B. OTHER INFORMATIONNone.ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNot applicable.51PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe following table sets forth the name, age and positions of our executive officers and directors.NAMEAgePOSITIONRonen Luzon52Chief Executive Officer and Class III DirectorOr Kles40Chief Financial OfficerBilly Pardo47Chief Operating Officer and Chief Product OfficerIlia Turchinsky35Chief Technology OfficerEzequiel Javier Brandwain53Chief Commercial OfficerOron Branitzky (1)(2)(3)*63Class II DirectorOren Elmaliah (1)(2)(3)*38Class I DirectorArik Kaufman (1)(2)(3)*41Class I DirectorGuy Zimmerman*53Class II Director(1)Member of our audit committee(2)Member of our nominating and corporate governance committee(3)Member of our compensation committee* Independent as that term is defined by the rules of the Nasdaq Stock Market.The business background and certain other information about our directors and executive officers is set forth below:Ronen Luzon has served as our Chief Executive Officer and a member of our board of directors since September 2013. Since 2006, Mr. Luzon hasadditionally served as Chief Executive Officer and founder of Malers Ltd., a company in the global security solutions market which provides technological solutionsfor integrated communication infrastructures, security and control systems. Prior to Malers, he held several senior marketing, sales management and professionalservices positions in a variety of international high tech companies including VP marketing of GA Tech and Professional Services Manager of Eldat Communication.Mr. Luzon graduated from Middlesex University in London with a B.S. in IT and Business Information Systems. We believe that Mr. Luzon is qualified to serve as amember of our board of directors because of his more than 20 years of experience in the technology sector.Or Kles has served as our Chief Financial Officer since May 2016. He is a certified public accountant with a broad, diverse financial background. From May2013 until April 2016 he served as Assistant Controller of Shikun and BinuiSolel Boneh Infrastructure Ltd. and from December 2010 until May 2013 he served as anAssociate at KPMG. Mr. Kles holds an MBA and a B.A. in Business Management and Accounting (specializing in financing) from The College of ManagementAcademic Studies. Mr. Kles is a certified public accountant in Israel.Billy Pardo has served as our Chief Product Officer since May 2014 and Chief Operating Officer since April 2019. From April 2010 until August 2013, Ms.Pardo served as Senior Director of Product Management of Fourier Education. Among her areas of expertise are launching products from concept to successfuldelivery in various methodologies, including Fourier Education’s awardwinning einstein™ Science Tablet. Prior to that Ms. Pardo served in various productmanagement positions including, Project Manager of Time to Know, Product Marketing Manager of RiT Technologies, Product Manager of Pricer AB and R&DTeam Leader at Pricer AB. Ms. Pardo previously served as Software Engineer at Eldat Communication Ltd., and QA Engineer at NICE Systems. Ms. Pardo receivedan MBA from The Interdisciplinary Center and a B.A. in Computer Science from The Academic College of TelAvivYaffo.Ilia Turchinsky has served as our Chief Technology Officer since April 2019 and from July 2018 until April 2019 as our Director of Technology. Prior tojoining us, from 2013 until 2018, Mr. Turchinsky served in various roles, most recently Chief Technology Officer, at MonkeyTech Ltd., a company that providesdesign, development and characterization of mobile applications. Prior to that, Mr. Turchinsky served in various roles including development course instructor atIQLine, was a founder of Arnavsoft and was a software developer for MintLab and a political party. Mr. Turchinsky holds a B.Sc. from the Ben Gurion University inComputer Science and an M.Sc. from the Open University of Israel in Computer Science.52Ezequiel Javier Brandwain has served as our Chief Commercial Officer since February 2022. Mr. Brandwain brings more than two decades of globalexperience in retail and the fashion industry, mainly in business development, operations, and international markets. Before joining the Company, Mr. Brandwainheld positions of increasing responsibility at several companies, including between June 2017 and November 2020, at 7 For All Mankind International, where heserved as Director, Latin America and Caribbean, managing business development and operations across Latin America and the Caribbean. Before that, betweenMay 2016 and June 2017, Mr. Brandwain served as Chief Business Development Officer at Replay – Fashion Box SPA, where he oversaw business development andoperations, expansion and control in the Americas, the Caribbean, and NorthEast Asia. Prior this role, between September 2015 and May 2016, he served as theReplay’s Managing Director in Latin America and the Caribbean, leading the company’s international expansion in these regions. Prior to that, between April 2015and September 2015, Mr. Brandwain served as Managing Director, Latin America and Caribbean at Authentic Brands Group LLC, where he led that company’soperations, business developments and international expansion within these regions, and served as the direct liaison with the company’s headquarters in New York.Prior to that, between April 2015 and September 2015, Mr. Brandwain served as Chief Operating Officer, Latin America and Caribbean at Flemingo International Ltd.,overseeing operations, as well as projected operations in the travel retail field across these regions. Prior to that, between December 2010 and February 2014, Mr.Brandwain served as Regional Director, Southern Hemisphere at Calvin Klein, where he was responsible for defining and implementing the operational andcommercial strategy for Southern Hemisphere, as well as overseeing the retail, travel retail, concession, and wholesale businesses of the company. During his tenureat Calvin Klein, Mr. Brandwain also served as Travel Retail Director, Latin America, where he built the travel retail business and developed operations. Prior to that,between July 2010 and November 2010, Mr. Brandwain served as Business Director, Latin America and Caribbean at Givenchy Latin America, and between January2010 and June 2010 he served as Commercial Director, Latin America and Caribbean at Nautica Latin America. During December 2004 and December 2009, Mr.Brandwain served as Vice President, International Business Development at Report Collection/Modextil, Inc., where he was in charge of business and operationalexpansion, global growth, and brand extensions. Prior to that, between 2003 and October 2004, Mr. Brandwain served as General Manager at Andrew KoenigInternational, Inc. Between September 2019 and November 2020, Mr. Brandwain served as a member of the Board of Directors of 7 For All Mankind BrazilImportacao, Comercio E Distribuicao S.A. Mr. Brandwain earned a Bachelor degree in architecture from the University of the Republic (Uruguay).Oron Branitzky has served as a member of our board of directors since March 2017. Mr. Barnitzky has vast experience in retail technology. SinceNovember 2017, Mr. Branitzky has served as Global Retail Business Development at Superup, and from January 2007 until December 2014 he served as VicePresident of Sales and Marketing at Pricer AB. Prior to that, Mr. Branitzky has served as VP Marketing and Sales at Eldat Communication and Sarin TechnologiesLtd. Since January 2015, Mr. Branitzky has served as chairman of the board of directors of WiseShelf Ltd. and from May 2015 until March 2016, Mr. Branitzky servedas an advisory board member of ciValue. Mr. Branitzky received a B.S. from the Hebrew University of Jerusalem and an MBA in International Marketing from TelAviv University. We believe that Mr. Branitzky is qualified to serve as a member of our board of directors because of his more than 20 years of experience inmanaging the sales of hitech solutions to retailers across the globe.Oren Elmaliah, has served as a member of our board of directors since May 2017. In September 2015, Oren Elmaliah founded Accounting Team IL and hasacted as Account Manager since then. Accounting Team IL is a financial consultancy and service provider to public companies traded in Israel and abroad. SinceFebruary 2017, Mr. Elmaliah has served as controller of Enlivex Therapeutics Ltd., and since January 2017 he has served as Chief Financial Officer of Presstek Israel.In addition, since September 2015, Mr. Elmaliah has served as an Israel Authorities Reporting Officer of LG Electronics Israel and since September 2015 he hasserved as Local Financial Report Consultant of Chiasma. From July 2011 until August 2015, Mr. Elmaliah served as CPA, Financial Director of CFO Director Ltd andfrom June 2010 until July 2011 he served as Risk Management Consultant of RSM International Limited. Mr. Elmaliah holds a B.A. in Accounting/Economics and aMsc. in Finance/Accounting from Tel Aviv University, Israel. He is a licensed Certified Public Accountant in Israel. We believe that Mr. Elmaliah is qualified to serveas a member of our board of directors because of his vast finance experience and public company management and administration in the fields of finance,accounting, and financial regulation.53Arik Kaufman has served as a member of our board of directors since June 2017. Mr. Kaufman is an attorney specializing in the fields of commercial law,corporate law and capital markets and since 2016 runs his own law office in Israel. He has vast experience in the fields of financial reporting and financial regulation.Mr. Kaufman serves as the Chief Executive Officer of Steakholder Foods since January 2022. From September 2017 until January 2022, Mr. Kaufman served as VPBusiness Development of Mor Research Applications. Mr. Kaufman holds an LLB in Law from the Interdisciplinary Center, Herzliya, and is admitted to the IsraeliBar. We believe that Mr. Kaufman is qualified to serve as a member of our board of directors based upon his experience of assisting with the completion of numerousventure capital financings, mergers, acquisitions, and strategic relationships. In addition, he has served as a member of the board of various publicly tradedcompanies, including companies that operate in the same industry as us.Guy Zimmerman has served as a member of our board of directors since August 2021. Previously, Mr. Zimmerman served as Founder and CEO ofManuFuture, an online b2b engineering market place, since February 2021. Prior to that from 2017 to 2021, Mr. Zimmerman acted as a consultant to severaltechnology startups and was a founding partner of a business travel online platform. From 2013 to 2017, Mr. Zimmerman served as EVP of Marketing and BusinessDevelopment of Kornit Digital and was part of the IPO leadership. Prior to that, Mr. Zimmerman served as VP of Global Sales and Business Development at TefronLtd., a provider of seamless garment technology, where he led the $100m sales and sales support organization serving global retail and fashion brands. Prior to thathe served as Vice President of Strategy and Business Development at Tnuva Group, Israel’s largest food manufacturer and spent eight years at McKinsey &Company. Mr. Zimmerman previously led a software startup in the field of operational healthcare management systems. Mr. Zimmerman holds a B.Sc. in IndustrialEngineering from Tel Aviv University in Israel. We believe that Mr. Zimmerman is qualified to serve as a member of our board of directors because of his experiencein business development in the technology and retail sectors.Board Diversity MatrixThe table below provides certain information regarding the diversity of our board of directors as of the date of this annual report.Board Diversity Matrix (As of March 31, 2023)Total Number of Directors5FemaleMaleNonBinaryDid Not DiscloseGenderPart I: Gender IdentityDirectors#5##Part II: Demographic BackgroundAfrican American or Black####Alaskan Native or Native American####Asian####Hispanic or Latinx####Native Hawaiian or Pacific Islander####White#1##Two or More Races or Ethnicities#2##LGBTQ+0Did Not Disclose Demographic Background2Family RelationshipsRonen Luzon, the Chief Executive Officer and a member of our board of directors, and Billy Pardo, the Chief Product Officer and Chief Operating Officer, arehusband and wife. There are no other family relationships among any of our current or former directors or executive officers.Involvement in Certain Legal ProceedingsWe are not aware of any of our directors or officers being involved in any legal proceedings in the past ten years relating to any matters in bankruptcy,insolvency, criminal proceedings (other than traffic and other minor offenses), or being subject to any of the items set forth under Item 401(f) of Regulation SK.Arrangements between Officers and DirectorsTo our knowledge, there is no arrangement or understanding between any of our officers and any other person, including directors, pursuant to which theofficer was selected to serve as an officer.Board of DirectorsThere are no agreements with respect to the election of directors.On January 6, 2022, we filed with the Secretary of State of Delaware a Certificate of Amendment to our Amended and Restated Certificate of Incorporationproviding for a classified Board. Following filing of the Certificate of Amendment, members of our board are now classified into three classes with staggered threeyear terms (with the exception of the expiration of the initial Class I and Class II directors), as follows:●Class I, comprised of two directors, initially Arik Kaufman and Oren Elmaliah (with their initial terms expiring at our 2022 annual meeting of stockholders andmembers of such class serving successive threeyear terms);●Class II, comprised of two directors, initially Oron Branitzky and Guy Zimmerman (with their initial terms expiring at our 2023 annual meeting of stockholdersand members of such class serving successive threeyear terms); and●Class III, comprised of one director, initially Ronen Luzon (with his initial term expiring at our 2024 annual meeting of stockholders and members of suchclass serving successive threeyear terms).54To preserve the classified Board structure, a director elected by the Board of Directors to fill a vacancy holds office until the next election of the class forwhich such director has been chosen, and until that director’s successor has been elected and qualified or until his or her earlier death, resignation, retirement orremoval.Our board of directors has reviewed the materiality of any relationship that each of our directors has with us, either directly or indirectly. Based upon thisreview, we believe that Arik Kaufman, Oren Elmaliach, Oron Branitzky and Guy Zimmerman qualify as independent directors in accordance with the standards set bythe Nasdaq and Rule 10A3 promulgated under the Exchange Act.Committees of the BoardAudit CommitteeOur audit committee is comprised of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Elmaliah serves as chairman of the audit committee. The auditcommittee is responsible for retaining and overseeing our independent registered public accounting firm, approving the services performed by our independentregistered public accounting firm and reviewing our annual financial statements, accounting policies and our system of internal controls. The audit committee actsunder a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the audit committee’s composition and meetings.The audit committee charter is available on our website www.mysizeid.com.The Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by applicable SEC rules. Inaddition, the Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by the rules of the Nasdaq StockMarket.The Board of Directors has determined that Oren Elmaliah is an “audit committee financial expert” serving on its audit committee, and is independent, as theSEC has defined that term in Item 407 of Regulation SK.Compensation CommitteeOur compensation committee consists of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Branitzky serves as chairman of the compensationcommittee.The compensation committee’s roles and responsibilities include making recommendations to the Board of Directors regarding the compensation for ourexecutives, the role and performance of our executive officers, and appropriate compensation levels for our CEO, which are determined without the CEO present, andother executives. Our compensation committee also administers our 2017 Equity Incentive Plan and our 2017 Consultant Equity Incentive Plan. The compensationcommittee acts under a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the compensation committee’scomposition and meetings. The compensation committee charter is available on our website www.mysizeid.com.Our Board of Directors has determined that all of the members of the compensation committee are “independent” as that term is defined by the rules of theNasdaq Stock Market.Nominating and Corporate Governance CommitteeThe members of the nominating and corporate governance committee are Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Kaufman serves aschairman of the corporate governance and nominations committee. The nominating and corporate governance committee acts under a written charter, which morespecifically sets forth its responsibilities and duties, as well as requirements for the nominating and corporate governance committee’s composition and meetings.The nominating and corporate governance committee charter is available on our website www.mysizeid.com.The nominating and corporate governance committee develops, recommends and oversees implementation of corporate governance principles for us andconsiders recommendations for director nominees. The nominating and corporate governance committee also considers stockholder recommendations for directornominees that are properly received in accordance with applicable rules and regulations of the SEC. Our stockholders that wish to nominate a director for election tothe Board of Directors should follow the procedures set forth in our bylaws.55The nominating and corporate governance committee will consider persons identified by its members, management, stockholders, investment bankers andothers. The guidelines for selecting nominees, which are specified in the nominating committee charter, generally provide that persons to be nominated:●should be accomplished in his or her field and have a reputation, both personal and professional, that is consistent with our image and reputation;●should have relevant experience and expertise and would be able to provide insights and practical wisdom based upon that experience and expertise; and●should be of high moral and ethical character and would be willing to apply sound, objective and independent business judgment, and to assume broadfiduciary responsibility.The nominating and corporate governance committee will consider a number of qualifications relating to management and leadership experience,background and integrity and professionalism in evaluating a person’s candidacy for membership on the Board of Directors. The nominating and corporategovernance committee may require certain skills or attributes, such as financial or accounting experience, to meet specific Board needs that arise from time to timeand will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of Board of Directors members. The nominating andcorporate governance committee will not distinguish among nominees recommended by stockholders and other persons.Our Board of Directors has determined that all of the members of the nominating and corporate governance committee are “independent” as that term isdefined by the rules of the Nasdaq Stock Market.Code of Conduct and EthicsWe have a Code of Business Conduct and Ethics that applies to all our employees. The text of the Code of Business Conduct and Ethics is publiclyavailable on our website at www.mysizeid.com. Information contained on, or that can be accessed through, our website does not constitute a part of this report andis not incorporated by reference herein. Disclosure regarding any amendments to, or waivers from, provisions of the code of conduct and ethics that apply to ourdirectors, principal executive and financial officers will be posted on the “InvestorsCorporate Governance” section of our website at www.mysizeid.com or will beincluded in a Current Report on Form 8K, which we will file within four business days following the date of the amendment or waiver.Change in Procedures for Recommending DirectorsThere have been no material changes to the procedures by which our stockholders may recommend nominees to our Board of Directors from thoseprocedures set forth in our Proxy Statement for our 2021 Annual Meeting of Stockholders, filed with the SEC on December 7, 2022.56ITEM 11. EXECUTIVE COMPENSATIONSummary Compensation TableThe following sets forth the compensation paid by us to our named executive officers, during the years ended December 31, 2022 and December 31, 2021.Name and Principal PositionYearSalary($) (1)Bonus($)StockAwards($)OptionAwards($) (2)All OtherCompensation($)Total($)Ronen Luzon2022173,000223,0008,000126,000530,000Chief Executive Officer2021194,0005,00023,00097,000319,000Or Kles2022123,00053,0007,00071,000254,000Chief Financial Officer2021123,0008,00030,00061,000222,000Billy Pardo2022134,00053,0007,000100,00294,000Chief Operating Officer2021162,0007,00018,00074,000261,000(1) Salary for the years 2022 and 2021 are based on average US$/NIS representative exchange rates of NIS 3.358 and NIS 3.11 respectively.(2) Amounts in this column represent the grant date fair value of options granted to the named executive officers during 2022 and 2021, computed in accordance withFASB ASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the named executive officers. The assumptionsmade in valuing the options reported in this column are discussed in Note 11 to our audited financial statements for the year ended December 31, 2021 and Note 4 toour condensed consolidated interim financial statements for the quarterly period ended September 30, 2022.All Other Compensation TableThe “All Other Compensation” amounts set forth in the Summary Compensation Table above consist of the following:NameYearAutomobileRelatedExpenses($)Manager’sInsurance*($)EducationFund*($)Othersocialbenefits**($)Total($)Ronen Luzon202232,00031,00015,00048,000126,000202133,00033,00015,00016,00097,000Or Kles202215,00021,00010,00025,00071,000202114,00019,0009,00019,00061,000Billy Pardo202216,00025,00013,00046,000100,000202117,00024,00012,00021,00074,000* Manager’s insurance and education funds are customary benefits provided to employees based in Israel. Manager’s insurance is a combination of severancesavings (in accordance with Israeli law), defined contribution taxqualified pension savings and disability insurance premiums. An education fund is a savings fundof pretax contributions to be used after a specified period of time for educational or other permitted purposes.** Other social benefits for 2022 and 2021 for all named individuals includes tax payments in respect of social benefits.57Agreements with Named Executive OfficersRonen LuzonOn November 18, 2018, My Size Israel, our wholly owned subsidiary, entered into an employment agreement with Ronen Luzon, or the Luzon EmploymentAgreement, pursuant to which Mr. Luzon will serve as our Chief Executive Officer. Pursuant to the terms of the Luzon Employment Agreement, Mr. Luzon receivesNIS 55,000 per month as his base salary and shall be eligible to receive such bonus as determined by us. In addition, Mr. Luzon shall be entitled social benefits andto other benefits, including, but not limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, includinginsurance in case of disability, annual vacation days, sick leave and expense reimbursement. Pursuant to the terms of the Luzon Employment Agreement and subjectto certain conditions, payments made by the Company to the pension fund or manager’s insurance fund shall be made in lieu of severance payments due to Mr.Luzon. The term of the Luzon Employment Agreement shall be effective as of September 1, 2018 and shall continue until such time either party provides writtennotice to the other party at least 75 days in advance of the termination of such agreement. We may also terminate Mr. Luzon’s employment without prior writtennotice (or payment in lieu of such notice) for Cause (as defined in the Luzon Employment Agreement).Or KlesOn November 18, 2018, My Size Israel entered into an employment agreement with Or Kles, or the Kles Employment Agreement, pursuant to which Mr. Kleswill serve as our Chief Financial Officer. Pursuant to the terms of the Kles Employment Agreement, Mr. Kles receives NIS 38,000 per month as his base salary andshall be eligible to receive such bonus as determined by us. In addition, Mr. Kles shall be entitled to social benefits and other benefits, including, but not limited to,contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annual vacation days,sick leave and expense reimbursement. Pursuant to the terms of the Kles Employment Agreement and subject to certain conditions, payments made by us to thepension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Mr. Kles. The term of the Kles Employment Agreement shall beeffective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days in advance of thetermination of such agreement. We may also terminate Mr. Kles’s employment without prior written notice (or payment in lieu of such notice) for Cause (as defined inthe Kles Employment Agreement).Billy PardoOn November 18, 2018, My Size Israel entered into an employment agreement with Billy Pardo, or the Pardo Employment Agreement, pursuant to which Ms.Pardo will serve as our Chief Product Officer. Pursuant to the terms of the Pardo Employment Agreement, Ms. Pardo receives NIS 47,500 per month as her basesalary and shall be eligible to receive such bonus as determined by us. In addition, Ms. Pardo shall be entitled to social benefits and other benefits, including, butnot limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annualvacation days, sick leave and expense reimbursement. Pursuant to the terms of the Pardo Employment Agreement and subject to certain conditions, payments madeby us to the pension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Ms. Pardo. The term of the Pardo EmploymentAgreement shall be effective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days inadvance of the termination of such agreement. We may also terminate Ms. Pardo’s employment without prior written notice (or payment in lieu of such notice) forCause (as defined in the Pardo Employment Agreement).58Outstanding Equity Awards at Fiscal YearEndThe following table provides information regarding options held by each of our named executive officers that were outstanding as of December 31, 2022.Option AwardsStock AwardsName and Principal PositionNumber ofSecuritiesUnderlyingUnexercisedOptionsExercisableNumber ofSecuritiesUnderlyingUnexercisedOptionsUnexercisableOptionExercisePriceOptionExpirationDateEquityincentiveplan awards:Number ofUnearnedShares that HaveNot VestedEquityincentiveplan awards:Market Value ofUnearnedShares, That Have Not VestedRonen Luzon Chief Executive Officer400(1)$26(8)7/24/20231,601(2)$26(8)5/29/20256,400(3)$268/10/2025100,000(9)100,000$511,250Or Kles – Chief Financial Officer227(4)$26(8)7/24/2023427(5)$26(8)5/29/20255,200(6)$268/10/202524,000(10)24,000$122,700Billy Pardo Chief Operating Officer400(1)$26(8)7/24/2023894(7)$26(8)5/29/20255,200(6)$268/10/202524,000(11)24,000$122,700(1) The option has a grant date of July 24, 2017 and vested in full on January 24, 2018.(2) The option has a grant date of May 29, 2019. 267 options vested immediately upon grant, 445 options vested on January 24, 2019, 445 options vested on January24, 2020 and 444 options vested on January 24, 2021.(3) The option has a grant date of October 8, 2020, 1,600 options vested on November 26, 2020, 1,600 options vested on May 26, 2021, 1,600 options vested onNovember 26, 2021, and 1,600 options vested on May 26, 2022.(4) The option has a grant date of July 24, 2017. 76 options vested immediately upon grant, 76 options vested on May 1, 2018 and 75 options vested on May 1, 2019.(5) The option has a grant date of May 29, 2019. 160 options vested immediately upon grant, 445 options vested on May 1, 2020, 445 options vested on May 21, 2021and 444 options vested on May 1, 2022.(6) The option has a grant date of October 8, 2020, 1,300 options vested on November 26, 2020, 1,300 options vested on May 26, 2021, 1,300 options vested onNovember 26, 2021, and 1,300 options vested on May 26, 2022.(7) The option has a grant date of May 29, 2019. 214 options vested immediately upon grant, 227 options vested on January 24, 2019, 227 options vested on January24, 2020 and 226 options vested on January 24, 2021.(8) On May 25, 2020, the compensation committee of the Board of Directors of the Company reduced the exercise price of outstanding options of employees anddirectors of the Company for the purchase of an aggregate of 5,610 shares of common stock of the Company (with exercise prices ranging between $453.75 and$228.75) to $26 per share, which was the closing price for the Company’s common stock on May 22, 2020, and extended the term of the foregoing options for anadditional one year from the original date of expiration.(9) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(10) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(11) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.59Director CompensationThe following table sets forth compensation information for our nonemployee directors for the year ended December 31, 2022.NameFees earned orpaid incash ($)(1)Optionawards($)(1)(2)Total($)Oren Elmalih15,078 15,078Oron Barnitzky15,34715,347Arik Kaufman14,44114,441Guy Zimmerman13,03313,033(1)Fees for the year 2022 are based on average US$/NIS representative exchange rates of NIS 3.519.(2)Amounts in this column represent the grant date fair value of options granted to the nonemployee directors during 2022 computed in accordance with FASBASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the nonemployee directors. The assumptions made invaluing the options reported in this column are discussed in Note 11 to our financial statements for the year ended December 31, 2022.We compensate our nonemployee directors for their service as a member of our board. Mr. Luzon received no separate compensation for board service. Mr.Luzon’s compensation is set forth above in the Summary Compensation Table.Each nonemployee director is entitled to receive a per meeting fee of $318. Nonemployee directors are also reimbursed for their travel and reasonable outofpocket expenses incurred in connection with attending board and committee meetings, to the extent that attendance is required by the board or the committee(s)on which that director serves.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurity Ownership of Certain Beneficial Holders and ManagementThe following table sets forth certain information regarding beneficial ownership of shares of our common stock as of March 31, 2023 by (i) each personknown to beneficially own more than 5% of our outstanding common stock, (ii) each of our directors, (iii) each of our executive officers, and (iv) all of our directorsand executive officers as a group. Except as otherwise indicated, the persons named in the table below have sole voting and investment power with respect to allshares beneficially owned, subject to community property laws, where applicable.Beneficial Owner(1)Shares ofCommon StockBeneficiallyOwnedPercentage(2)Executive officers and directors:Ronen Luzon143,578(3)5.8%Or Kles29,854(4)1.2%Billy Pardo143,578(5)5.8%Ezequiel Javier Brandwain12,000(6)*Ilia Turchinsky18,313(7)*Arik Kaufman1,294(8)*Oren Elmaliah1,294(9)*Oron Branitzky1,294(10)*Guy ZimmermanAll Executive Officers and Directors as a Group (9 persons)207,6268.4%*Less than 1%(1) The address of each person is c/o My Size, Inc., 4 HaYarden St., P.O.B. 1026, Airport City, Israel 7010000 unless otherwise indicated herein.60(2) The calculation in this column is based upon 2,446,780 shares of common stock outstanding on March 31, 2023. Beneficial ownership is determined in accordancewith the rules of the SEC and generally includes voting or investment power with respect to the subject securities. Shares of common stock that are currentlyexercisable or exercisable within 60 days of March 31, 2023 are deemed to be beneficially owned by the person holding such securities for the purpose of computingthe percentage beneficial ownership of such person, but are not treated as outstanding for the purpose of computing the percentage beneficial ownership of anyother person(3) Consists of (i) 100,000 shares of restricted stock granted under the 2017 Plan, (ii) 4,683 shares of common stock, (iii) options to purchase up to 8,401 shares of ourcommon stock, and (iv) 24,000 shares of restricted stock and options to purchase up to 6,494 shares of our common stock which are held by Billy Pardo, RonenLuzon’s spouse. Mr. Luzon may be deemed to beneficially hold the securities of us held by Ms. Pardo.(4) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, and (ii) an option to purchase 5,854 shares of our common stock. Does not includean aggregate of 119,760 shares of restricted stock over which Mr. Kles has been designated the initial proxy to vote such shares pursuant to a voting agreemententered into between Whitehole S.L., Twinbel S.L. and EGI Acceleration, S.L.(5) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, (ii) options to purchase up to 6,494 shares of our common stock, (iii) 100,000 sharesof restricted stock which are held by Ronen Luzon, Billy Pardo’s spouse (iii) 8,401 shares of common stock which are held by Mr. Luzon, and (iii) options to purchaseup to 4,683 shares of our common stock which are held by Mr. Luzon. Ms. Pardo may be deemed to beneficially hold the securities of the Company held by Mr.Luzon.(6) Consists of 12,000 shares of restricted stock granted under the 2017 Plan.(7) Consists of (i) 16,000 shares of restricted stock granted under the 2017 Plan, and (ii) options to purchase up to 2,313 shares of our common stock.(8) Consists of options to purchase up to 1,294 shares of our common stock.(9) Consists of options to purchase up to 1,294 shares of our common stock.(10) Consists of options to purchase up to 1,294 shares of our common stock.Change in ControlWe are not aware of any arrangement that might result in a change in control in the future. We have no knowledge of any arrangements, including anypledge by any person of our securities, the operation of which may at a subsequent date result in a change in the Company’s control.Securities Authorized for Issuance Under Equity Compensation PlansOn January 29, 2017, our Board of Directors approved the 2017 Equity Incentive Plan and the 2017 Consultant Equity Incentive Plan, which were approvedby our stockholders on March 21, 2017. In addition, on January 29, 2017, our Board of Directors approved the Stock Option Plan Israel Grantees SubPlan. The 2017Equity Incentive Plan initially authorized the issuance of up to 5,334 shares of common stock under the plan and the 2017 Consultant Equity Incentive Plan initiallyauthorized the issuance of up to 8,000 shares of common stock under the plan.On February 12, 2018, our stockholders approved an amendment to the 2017 Consultant Equity Incentive Plan to increase the maximum number of shares ofour common stock available for issuance under the plan from 8,000 to 12,000. On July 3, 2018, our stockholders approved an amendment to the 2017 Equity IncentivePlan to increase the maximum number of shares of our common stock available for issuance under the plan from 5,334 to 8,000 and an amendment to the 2017Consultant Equity Incentive Plan to increase the maximum number of shares of our common stock available for issuance under the plan from 12,000 to 18,667.On May 25, 2020, our Board reduced the exercise price of outstanding options of our employees and directors for the purchase of an aggregate of 140,237of our common stock (with exercise prices ranging between $453.75 and $228.75) to $26.0 per share, and extended the term of the foregoing options for an additionalone year from the original date of expiration.61On August 10, 2020, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 80,000 to 58,000shares, and a decrease of the numbers of shares available for issuance under the 2017 Consultant Incentive Plan to 8,667 shares from 18,667 shares.On December 30, 2021, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 58,000 sharesto 230,800 shares.On December 7, 2022, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Plan from 230,800 shares to 289,000shares.The following table summarizes information about our equity compensation plans and individual compensation arrangements as of December 31, 2022.Number of securities to be issued upon exercise of outstanding options, warrants and rights(a)Weighted average exercise price of outstandingoptions, warrants and rights (b)Number of securities remaining availablefor future issuanceunder equity compensationplans (excludingsecurities reflected in column (a) (c)Equity compensation plans approved by security holders43,49724.7477,455Equity compensation plans not approved by security holdersTotal43,49724.7477,455ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEDuring years ended December 31, 2022 and 2021, except for compensation arrangements described elsewhere herein and the transactions described below,we did not participate in any transaction, and we are not currently participating in any proposed transaction, or series of transactions, in which the amount involvedexceeded the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years, and in which, to our knowledge,any of our directors, officers, five percent beneficial security holders, or any member of the immediate family of the foregoing persons had, or will have, a direct orindirect material interest.Compensation arrangements for our named executive officers and directors are described in the section entitled “Executive Compensation.”Employment AgreementsWe have entered into written employment agreements with each of our executive officers. These agreements generally provide for notice periods of varyingduration for termination of the agreement by us or by the relevant executive officer, during which time the executive officer will continue to receive base salary andbenefits. We have also entered into customary noncompetition, confidentiality of information and ownership of inventions arrangements with our executiveofficers. However, the enforceability of the noncompetition provisions may be limited under applicable law.OptionsSince our inception we have granted options to purchase our common stock to our officers and directors. Such option agreements may contain accelerationprovisions upon certain merger, acquisition, or change of control transactions.62Restricted Stock GrantsOn September 29, 2022, our compensation committee approved grants of restricted share awards under our 2017 Plan to Ronen Luzon, Or Kles, Billy Pardo,Ilia Turchinsky and Ezequiel Javier Brandwain, pursuant to which they were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000restricted shares and 12,000 restricted shares, respectively. The restricted shares shall vest in three equal installments on January 1, 2023, January 1, 2024 andJanuary 1, 2025, conditioned upon continuous employment with us, and subject to accelerated vesting upon a change in control of the Company.Shareholder ActivismIn May 2021, we received notice from Custodian Ventures, LLC, or Custodian, of its intention to nominate four candidates to stand for election to our Boardof Directors at our 2021 annual meeting of stockholders. Custodian subsequently made a book and records request and has made public statements calling forchanges to our management.On September 22, 2021, Custodian, commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v. Mysize,Inc., C.A. No. 20210817LWW, or the Delaware Action. In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting. As further described below, on November 4, 2021, we entered into asettlement agreement, or the Settlement Agreement, with Custodian, Activist Investing LLC, David Aboudi, Partick Loney and David Natan, collectively, the LazarParties, settling and dismissing the Delaware Action.On October 19, 2021, we commenced an action in the United States District Court for the Southern District of New York captioned My Size, Inc. v. DavidLazar, Custodian Ventures LLC, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, Civil Action No, 1:21cv08585, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, andcertain rules promulgated thereunder, or the SDNY Action. The complaint sought, among other things, declaratory and injunctive relief related to defendants’ effortsto nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed “group” for purposes ofSection 13 (d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. In addition, the complaint alleged that thedefendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules in connection with their efforts to elect a slate of directorsto our Board of Directors. On October 20, 2021, the Court signed an order granting a hearing on an anticipated motion for a preliminary injunction and expeditedscheduling and discovery in aid thereof, and scheduled that hearing for December 2, 2021. As further described below, on November 4, 2021, we entered into theSettlement Agreement with the Lazar Parties settling and dismissing the claims asserted in the SDNY Action and the Delaware Action against one another. OnNovember 8, 2021, the remaining defendants in the SDNY Action filed and answer and counterclaim asserting a claim against us pursuant to New York Civil RightsLaw Section 70a, also known as New York’s antiSLAPP statute.On November 4, 2021, we entered into the Settlement Agreement, or the Lazar Settlement Agreement, with the Lazar Parties. Pursuant to the LazarSettlement Agreement, we and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the LazarSettlement Agreement, we reimbursed Custodian for out of pocket expenses and in consideration for the dismissal and release of claims against the Company anaggregate amount equal to $275,000. With respect to our 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) itsMay 12, 2021 notice of stockholder nominations of four director candidates with respect to our 2021 annual meeting of stockholders, (ii) the notice dated October 28,2021 submitted by Custodian to us notifying us of Custodian’s continued intent to bring its nomination of four director candidates before our stockholders at the2021 annual meeting, and (iii) any and all related materials and notices submitted to us in connection therewith or related thereto and to not take any further action inconnection with the solicitation of any proxies in connection with us. Custodian also agreed to cease any and all solicitation and other activities in connection withthe 2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effective date of theAgreement, or the Standstill Period. The Lazar Settlement Agreement also provides that during the Standstill Period, the Lazar Parties will vote all shares of ourcommon stock it beneficially owns in accordance with any proposal or recommendation made by us or our Board of Directors that is submitted to our stockholders,unless to do so would violate applicable law and except with respect to certain extraordinary transactions. The Lazar Settlement Agreement also contains nondisparagement and confidentiality provisions, subject to certain exceptions.63On December 9, 2021, we subsequently entered into a Settlement Agreement, or the Ault Settlement Agreement, with Milton C. Ault III, Ault Alpha LP, AultAlpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed to withdraw the SDNY Action against the AultParties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that action against the Company. In addition, pursuant to the SettlementAgreement, we paid $70,000 to the Ault Parties in consideration for the releases and other good and valuable consideration as set forth in the Ault SettlementAgreement.Naiz Bespoke Technologies AcquisitionOn October 7, 2022, we entered into the Naiz Agreement with the Naiz Sellers, pursuant to which the Naiz Sellers agreed to sell to us all of the issued andoutstanding equity of Naiz. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) ) the Naiz EquityConsideration and (ii) up the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the Equity Value Averaging Period) is less than $1,650,000, My Size shall pay the Shortfall Value to the Naiz Sellers within 45days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period, it wasdetermined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement)).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers will be subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into the LockUp Agreement with My Size, (ii) Whitehole, Twinbel and EGIentered into the Voting Agreement with My Size and (iii) each of the Key Persons entered into employment agreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonth period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonth “dribbleout” provisionthat provides following the expiration of the initial sixmonth lockup period, without My Size’s prior written consent (which My Size shall be permitted to withholdat its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than the average dailytrading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.64The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Indemnification Agreements and Directors’ and Officers’ Liability InsuranceWe have entered into indemnification agreements with each of our directors and executive officers. These agreements, among other things, require us toindemnify these individuals and, in certain cases, affiliates of such individuals, to the fullest extent permitted by Delaware law against liabilities that may arise byreason of their service to us or at our direction, and to advance expenses incurred as a result of any proceedings against them as to which they could beindemnified. We also maintain an insurance policy that insures our directors and officers against certain liabilities, including liabilities arising under applicablesecurities laws.Director IndependenceSee “Item 10. Directors, Executive Officers and Corporate Governance; Corporate Governance, Board Composition” above for a discussion regarding theindependence of the members of our board of directors.ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICESSomekh Chaikin, a member firm of KPMG International, located in Tel Aviv, Israel, PCAOB ID 1057, has served as our independent registered publicaccounting firm for 2022 and 2021. The following are Somekh Chaikin’s fees for professional services in each of the respective fiscal years:Fee Category20222021Audit Fees198,910298,300Tax Fees30,66729,300Auditrelated Fees18,000Total Fees247,577327,600Audit Fees:Audit Fees consist of fees billed for professional services performed by Somekh Chaikin for the audit of our annual financial statements, thereview of interim consolidated financial statements, and related services that are normally provided in connection with registration statements, including theregistration statement for S1 and S3.Tax Fees: Tax Fees may consist of fees for professional services, including tax and VAT consulting and compliance performed by an independent registeredpublic accounting provided during the period.PreApproval Policies and ProceduresIn accordance with the SarbanesOxley Act of 2002, as amended, our audit committee charter requires the audit committee to preapprove all audit andpermitted nonaudit services provided by our independent registered public accounting firm, including the review and approval in advance of our independentregistered public accounting firm’s annual engagement letter and the proposed fees contained therein. The audit committee has the ability to delegate the authorityto preapprove nonaudit services to one or more designated members of the audit committee. If such authority is delegated, such delegated members of the auditcommittee must report to the full audit committee at the next audit committee meeting all items preapproved by such delegated members. In the fiscal years endedDecember 31, 2022 and December 31, 2021 all of the services performed by our independent registered public accounting firm were preapproved by the auditcommittee.65PART IVITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES(a)Financial StatementsThe financial statements required by this Item are included beginning at page F1.(b)ExhibitsSee Exhibit IndexITEM 16. FORM 10K SUMMARYNot applicableEXHIBIT INDEXExhibitNumberDescription3.1Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Form on Form8K filed on March 23, 2017)3.2Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10K filed onMarch 4, 2016)3.3Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’s Current Report onForm 8K filed on February 20, 2018)3.4Second Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8K filedon April 24, 2018)3.5Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’sCurrent Report on Form 8K filed on November 18, 2019)3.6Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on January 7, 2022)3.7Amendment No. 1 to Second Amended and Restated ByLaws (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8K filed on January 7, 2022)3.8Certificate of Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on December 7, 2022)4.1Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S3/A filed onNovember 14, 2016)4.2Form of Warrant to Purchase Common Stock issued on February 2, 2018 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report onForm 10K filed on March 27, 2019)4.3Description of Securities Registered under Section 12 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report on Form 10K filedon March 19, 2020)4.4Form of Warrant (incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S1, Amendment No. 1, filed with the SECon May 5, 2020.)4.5Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)4.6Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.1My Size, Inc. 2017 Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement on Schedule DEF 14Afiled on March 2, 2017)10.2My Size, Inc. 2017 Consultant Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement onSchedule DEF 14A filed on March 2, 2017)10.3My Size, Inc. 2017 Stock Option Plan Israel Grantees SubPlan (incorporated by reference to Exhibit 10.3 to the Company’s Annual Report on Form10K filed on March 27, 2019)6610.4Purchase Agreement between My Size, Inc. and Shoshana Zigdon dated as of February 16, 2014 (incorporated by reference to Exhibit 10.2 to theCompany’s Annual Report on Form 10K filed on March 4, 2016)10.5 +Employment Agreement between My Size Israel 2014 Ltd. and Ronen Luzon dated November 18, 2018 (incorporated by reference to Exhibit 10.1 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.6 +Employment Agreement between My Size Israel 2014 Ltd. and Or Kles dated November 18, 2018 (incorporated by reference to Exhibit 10.2 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.7 +Employment Agreement between My Size Israel 2014 Ltd. and Billy Pardo dated November 18, 2018 (incorporated by reference to Exhibit 10.3 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.8Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on January 15,2020)10.9Form of Warrant (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.10Form of Placement Agent Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.11Securities Purchase Agreement (incorporated by reference to Exhibit 10.30 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.12Underwriting Agreement, dated January 5, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on January 7, 2021)10.13Underwriting Agreement, dated March 22, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on March 25, 2021)10.14Amendment to Purchase Agreement between My Size Israel 2014 Ltd., My Size, Inc. and Shoshana Zigdon (incorporated by reference to Exhibit 10.1to the Company’s Quarterly Report on Form 10Q on August 16, 2021)10.15Form of Registered Direct Offering Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.16Form of PIPE Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.17Form of Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.18Form of Placement Agent Warrant issued by the Company on October 28, 2021 (incorporated by reference to Exhibit 10.22 to the Company’s Form S1filed on November 12, 2021)10.19Form of Registration Rights Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.4 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.20Engagement Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference to Exhibit 10.5 to theCompany’s Current Report on Form 8K filed on October 28, 2021)10.21Settlement Agreement dated November 4, 2021, among My Size, Inc., David Lazar and certain of his affiliates (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on November 5, 2021)10.22Share Purchase Agreement dated as of February 7, 2022 between My Size Israel 2014 Ltd. and Amar Guy Shalom and Elad Bretfeld (incorporated byreference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SEC on February 8, 2022)10.23Employment Agreement between My Size Israel 2014 Ltd. and Ezequiel Javier Brandwain dated January 27, 2022 (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on February 1, 2022)10.24Form of Section 102 Capital Gain Restricted Stock Award Agreement under the Company’s 2017 Equity Incentive Plan (incorporated by reference toExhibit 10.1 to the Company’s Quarterly Report on Form 10Q, filed with the SEC on November 14, 2022)10.25Share Purchase Agreement, dated as of October 6, 2022, by and among My Size, Inc., Borja Cembrero Saralegui, Artiz Toree Garcia, Whitehold, S.L.,Twinbel, S.L., and EGI Acceleration, S.L. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SECon October 12, 2022)10.26Form of LockUp Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)10.27Form of Voting Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.3 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)6710.28My Size, Inc. Amendment to the My Size, Inc. 2017 Equity Plan (incorporated by reference to Appendix B to the Company’s definitive proxystatement filed with the SEC on November 4, 2022)10.29Form of Registered Direct Offering Securities Purchase Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.1 to theCompany’s Current Report on Form 8K filed with the SEC on January 12, 2023)10.30Form of PIPE Securities Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8Kfiled with the SEC on January 12, 2023)10.31Form of Registered Direct PreFunded Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.32Form of Series A and Series B Warrant (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8K filed with the SEC onJanuary 12, 2023)10.33Form of Private Placement PreFunded Warrant (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.34Form of Registration Rights Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form8K filed with the SEC on January 12, 2023)10.35Engagement Agreement, dated December 5, 2022 (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8K filed withthe SEC on January 12, 2023)10.36*Form of Placement Agent Warrant21.1*List of Subsidiaries23.1*Consent of Somekh Chaikin, a member firm of KPMG International, registered public accounting firm31.1*Certification of the Chief Executive Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200231.2*Certification of the Chief Financial Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200232.1*Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a14(b) of the Exchange Act and 18 U.S.C. Section 1350, asadopted pursuant to Section 906 of the SarbanesOxley Act of 2002101.INS*Inline XBRL Instance Document101.SCH*Inline XBRL Taxonomy Schema101.CAL*Inline XBRL Taxonomy Calculation Linkbase101.DEF*Inline XBRL Taxonomy Definition Linkbase101.LAB*Inline XBRL Taxonomy Label Linkbase101.PRE*Inline XBRL Taxonomy Presentation Linkbase104Cover Page Interactive Data File (formatted as Inline XBRL document and contained in Exhibit 101)*Filed herewith.+Indicates a management contract or any compensatory plan, contract or arrangement68SIGNATURESPursuant to the requirements of Section 13 and 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10K to be signed on its behalf by the undersigned, thereunto duly authorized on this 14th day of April, 2023.MY SIZE, INC./s/ Ronen LuzonRonen LuzonChief Executive Officer (Principle Executive Officer)/s/ Or KlesOr KlesChief Financial Officer(Principal Financial and Accounting Officer)Pursuant to the requirements of the Securities Act of 1934, this annual report on Form 10K has been signed below by the following persons on behalf ofthe registrant and in the capacities and on the dates indicated.SignatureTitleDate/s/ Ronen LuzonChief Executive Officer and DirectorApril 14, 2023Ronen Luzon(Principle Executive Officer)/s/ Or KlesChief Financial OfficerApril 14, 2023Or Kles(Principal Financial and Accounting Officer)/s/ Oren ElmaliahDirectorApril 14, 2023Oren Elmaliah/s/ Arik KaufmanDirectorApril 14, 2023Arik Kaufman/s/ Oron BranitzkyDirectorApril 14, 2023Oron Branitzky/s/ Guy ZimmermanDirectorApril 14, 2023Guy Zimmerman69EX10.36 2 ex1036.htmExhibit 10.36NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES ANDEXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THESECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO ANEFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTIONNOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGINACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.PLACEMENT AGENT COMMON STOCK PURCHASE WARRANTMY SIZE, INC.Warrant Shares: _______Issue Date: January 12, 2023Initial Exercise Date: January 12, 2023THIS PLACEMENT AGENT COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _____________ or itsassigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the dateset forth above (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on January 10, 2028 (the “Termination Date”) but not thereafter, tosubscribe for and purchase from My Size, Inc., a Delaware corporation (the “Company”), up to ______ shares (as subject to adjustment hereunder, the “WarrantShares”) of the Company’s Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined inSection 2(b). This Warrant is issued pursuant to that certain engagement letter, dated as of December 5, 2022, by and between the Company and H.C. Wainwright &Co., LLC.Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities PurchaseAgreement (the “Purchase Agreement”), dated January 10, 2023, among the Company and the purchasers signatory thereto.1Section 2. Exercise.a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or afterthe Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted by email (or emailattachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the numberof Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shalldeliver the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on aUnited States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No inkoriginalNotice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required.Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder haspurchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrantto the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercisesof this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering theoutstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder andthe Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver anyobjection to any Notice of Exercise within one (1) Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant,acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, thenumber of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.b) Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $3.8188, subject to adjustment hereunder (the“Exercise Price”).c) Cashless Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein isnot available for the issuance or resale of the Warrant Shares to or by the Holder, then this Warrant may also be exercised, in whole or in part, at such timeby means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing[(AB) (X)] by (A), where:(A) =as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice ofExercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed anddelivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) ofRegulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAPon the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on theprincipal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s execution of the applicable Notice ofExercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hoursthereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii)the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice ofExercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;(B) =the Exercise Price of this Warrant, as adjusted hereunder; and(X) =the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if suchexercise were by means of a cash exercise rather than a cashless exercise.2“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which theCommon Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York Citytime)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest precedingdate) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for theCommon Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the mostrecent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by anindependent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to theCompany, the fees and expenses of which shall be paid by the Company.“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the TradingMarket on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or thenearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and ifprices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reportingprices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock asdetermined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonablyacceptable to the Company, the fees and expenses of which shall be paid by the Company.If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of theSecurities Act, the Warrant Shares shall take on the characteristics of the Warrants being exercised, and the holding period of the Warrant Shares beingissued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section 2(c).3d) Mechanics of Exercise.i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to betransmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with TheDepository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant insuch system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of theWarrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or mannerofsale limitationspursuant to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, registered in theCompany’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitledpursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2)Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate ExercisePrice to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Companyof the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall bedeemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant hasbeen exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (otherthan in the case of a cashless exercise) is received by the Warrant Share Delivery Date. If the Company fails for any reason to deliver tothe Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder,in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP ofthe Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifthTrading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share Delivery Date until such WarrantShares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FASTprogram so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standardsettlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stockas in effect on the date of delivery of the Notice of Exercise.4ii.Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the requestof a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a newWarrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrantshall in all other respects be identical with this Warrant; provided, however, that the Holder shall be required to return any WarrantShares subject to any such rescinded exercise notice concurrently with the return to Holder of the aggregate Exercise Price paid to theCompany for such Warrant Shares and the restoration of Holder’s right to acquire such Warrant Shares pursuant to this Warrant(including, issuance of a replacement warrant certificate evidencing such restored right).iii. Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant toSection 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.iv. Compensation for BuyIn on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights availableto the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with theprovisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date theHolder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwisepurchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipatedreceiving upon such exercise (a “BuyIn”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) theHolder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) theamount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connectionwith the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at theoption of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was nothonored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock thatwould have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holderpurchases Common Stock having a total purchase price of $11,000 to cover a BuyIn with respect to an attempted exercise of shares ofCommon Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediatelypreceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written noticeindicating the amounts payable to the Holder in respect of the BuyIn and, upon request of the Company, evidence of the amount of suchloss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including,without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver sharesof Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.5v. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise ofthis Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Companyshall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by theExercise Price or round up to the next whole share.vi. Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue ortransfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paidby the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by theHolder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, thisWarrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder andthe Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.The Company shall pay all Transfer Agent fees required for sameday processing of any Notice of Exercise and all fees to the DepositoryTrust Company (or another established clearing corporation performing similar functions) required for sameday electronic delivery of theWarrant Shares.vii. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timelyexercise of this Warrant, pursuant to the terms hereof.6e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise anyportion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicableNotice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of theHolder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). Forpurposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Partiesshall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, butshall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrantbeneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion ofany other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exerciseanalogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in thepreceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act andthe rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that suchcalculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed inaccordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (inrelation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisableshall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether thisWarrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of thisWarrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm theaccuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number ofoutstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s mostrecent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recentwritten notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request ofa Holder, the Company shall within one (1) Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock thenoutstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise ofsecurities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number ofoutstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stockoutstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice tothe Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial OwnershipLimitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares ofCommon Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in theBeneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shallbe construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portionhereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplementsnecessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of thisWarrant.7Section 3. Certain Adjustments.a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes adistribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which,for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstandingshares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into asmaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case theExercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any)outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately aftersuch event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of thisWarrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for thedetermination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case ofa subdivision, combination or reclassification.b) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sellsany Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares ofCommon Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregatePurchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise ofthis Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before thedate on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the recordholders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that to the extent that theHolder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall notbe entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Rightto such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not resultin the Holder exceeding the Beneficial Ownership Limitation).c) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend (other than cash) orother distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including,without limitation, any distribution of stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement,scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holdershall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number ofshares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including withoutlimitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken,the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, thatto the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, thenthe Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a resultof such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as itsright thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).8d) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more relatedtransactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease,license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, director indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of CommonStock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more ofthe outstanding Common Stock or 50% or more of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in oneor more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchangepursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly orindirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, withoutlimitation, a reorganization, recapitalization, spinoff, merger or scheme of arrangement) with another Person or group of Persons whereby such otherPerson or group acquires more than 50% of the outstanding shares of Common Stock or 50% or more of the voting power of the common equity of theCompany (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for eachWarrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of theHolder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor oracquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as aresult of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior tosuch Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, thedetermination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of AlternateConsideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Priceamong the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. Ifholders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall begiven the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at theHolder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date ofthe public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cashequal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of suchFundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company’s control, including not approved by theCompany’s Board of Directors, the Holder shall only be entitled to receive from the Company or any Successor Entity the same type or form ofconsideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to theholders of Common Stock of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, stock or anycombination thereof, or whether the holders of Common Stock are given the choice to receive from among alternative forms of consideration in connectionwith the Fundamental Transaction; provided, further, that if holders of Common Stock of the Company are not offered or paid any consideration in suchFundamental Transaction, such holders of Common Stock will be deemed to have received common stock of the Successor Entity (which Entity may be theCompany following such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on theBlackScholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day of consummation of the applicableFundamental Transaction for pricing purposes and reflecting (A) a riskfree interest rate corresponding to the U.S. Treasury rate for a period equal to thetime between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expectedvolatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualizationfactor) as of the Trading Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlyingprice per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any noncashconsideration, if any, being offered in such Fundamental Transaction and (ii) the highest VWAP during the period beginning on the Trading Dayimmediately preceding the public announcement of the applicable contemplated Fundamental Transaction (or the consummation of the applicableFundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant to this Section 3(e) and (D) a remaining option timeequal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date and (E) azero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds (or such other consideration)within the later of (i) five Business Days of the Holder’s election and (ii) the date of consummation of the Fundamental Transaction. The Company shallcause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of theobligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant towritten agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to suchFundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entityevidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares ofcapital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of thisWarrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which appliesthe exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to suchFundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for thepurpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which isreasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall beadded to the term “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction, each andevery provision of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to each of the Company and theSuccessor Entity or Successor Entities, jointly and severally), and the Successor Entity or Successor Entities, jointly and severally with the Company, mayexercise every right and power of the Company prior thereto and the Successor Entity or Successor Entities shall assume all of the obligations of theCompany prior thereto under this Warrant and the other Transaction Documents with the same effect as if the Company and such Successor Entity orSuccessor Entities, jointly and severally, had been named as the Company herein.e) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. Forpurposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the numberof shares of Common Stock (excluding treasury shares, if any) issued and outstanding.9f) Notice to Holder.i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, theCompany shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resultingadjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form)on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C)the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any sharesof capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection withany reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all orsubstantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into othersecurities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of theaffairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as itshall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective datehereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to beentitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification,consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expectedthat holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or otherproperty deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure todeliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to bespecified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, nonpublic informationregarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to aCurrent Report on Form 8K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of suchnotice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.10Section 4. Transfer of Warrant.a) Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and to theprovisions of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights) aretransferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a writtenassignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay anytransfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a newWarrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument ofassignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly becancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unlessthe Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of thedate on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordanceherewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company,together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent orattorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute anddeliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issuedon transfers or exchanges shall be dated the Issue Date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Sharesissuable pursuant thereto.c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “WarrantRegister”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as theabsolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to thecontrary.d) Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrantshall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue skylaws or (ii) eligible for resale without volume or mannerofsale restrictions or current public information requirements pursuant to Rule 144, the Companymay require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, comply with the provisions ofSection 5.7 of the Purchase Agreement.11e) Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon anyexercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling suchWarrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exemptedunder the Securities Act.Section 5. Miscellaneous.a) No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends orother rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Withoutlimiting the rights of a Holder to receive Warrant Shares on a “cashless exercise,” and to receive the cash payments contemplated pursuant to Sections 2(d)(i) and 2(d)(iv), in no event will the Company be required to net cash settle an exercise of this Warrant.a.In July 2019, the Company entered into a threeyear agreement with a consultant (“Consultant14”) to provide services to the Company includingassisting the Company to promote, market and sell the Company’s technology to potential customers. Pursuant to such agreement and in partialconsideration for such consulting services, the Company agreed to issue to Consultant14 options to purchase up to 107 shares of the Company’scommon stock upon execution of the agreement. The options are exercisable at $375.00 per share and shall vest in 3 equal instalments every twelvemonths starting July 2019. Unexercised options shall expire 4 years from the effective date.In addition, the Company agreed to issue to Consultant14 options to purchase up to 890 shares of the Company’s common stock upon executionof the agreement. The options are exercisable at $27.00 per share and shall vest in 4 equal instalments every six months starting September 2020.Unexercised options shall expire 5 years from the effective date.During 2022 and 2021, an amount of $7 and $14 respectively, were recorded by the Company as stockbased equity awards with respect to Consultant14.F24MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The Company’s outstanding options granted to consultants as of December 31, 2022 are as follows:Issuance dateOptions forCommon stockWeightedAverageexercise priceper shareOptionsexercisableExpirationdateFebruary 201815USD528.7515February 2023August 2018December 2018531USD352.38264August 2023 December 2023July 2020107USD375107July 2023SeptemberOctober 20201,488USD27.201,288October 2024 September 2025Total2,1411,674The Company uses the Black Scholes model to measure the fair value of the stock options with the assistance of a third party valuation.No stock options were granted during 2022 to consultants.The fair value of the Company’s stock options granted to nonemployees was calculated using the following weighted average assumptions:20222021GrantsGrantsDividend yield0%Expected volatility125.15%Riskfree interest0.16%Contractual term of up to (years)1.52F25MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Stock Option Plan for employeesIn March 2017, the Company adopted a stock option plan (the “Plan”) pursuant to which the Company’s Board of Directors may grant stock options toofficers and key employees. The total number of options which may be granted to directors, officers, employees under this plan, is limited to 289,000options. Stock options can be granted with an exercise price equal to or less than the stock’s fair market value at the date of grant.The fair value of each option award is estimated on the date of grant using the Binomial optionpricing model that used the weighted averageassumptions in the following table. The risk free rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the timeof grant.2022Grants2021GrantsDividend yield0%0%Expected volatility96.52%98.47%Riskfree interest4.06%0.96%expected life522.27In the years ended December 31, 2022 and 2021, 10,000 and 3,900 options, respectively, were granted.On December 7, 2022, the Company’s stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from230,800 shares to 289,000 shares.On September 29, 2022, the Compensation Committee of the Company approved grants of restricted share awards under the Company’s 2017 EquityIncentive Plan to Ronen Luzon (CEO), Or Kles (CFO), Billy Pardo (COO), Ilia Turchinsky (CTO) and Ezequiel Javier Brandwain (CCO), pursuant towhich were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000 restricted shares and 12,000 restricted shares,respectively. Each restricted share awarded under section 102 Capital Gain Restricted Stock Award Agreement (the “Agreement”). The restrictedshares shall vest in three equal installments on January 1, 2023, January 1, 2024 and January 1, 2025 for Ronen Luzon, Or Kles, Billy Pardo and IliaTurchinsky and on January 27, 2023, January 27, 2024 and January 27, 2025 for Ezequiel Javier Brandwain, conditioned upon continuous employmentwith the Company, and subject to accelerated vesting upon a change in control of the Company.On the same day, the Company granted fiveyears options to purchase up to 10,000 ordinary shares to other employees of the Company at an exerciseprice of $0.21 per share. The options vesting period is over three years in three equal portions from the vesting commencement date.F26MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The total stock option compensation expense in the year ended December 31, 2022 amounted to $448as follows: Research and development expensesamounted to $151, sales and marketing expenses amounted to $119and general and administrative expenses amounted to $178.The total stock option compensation expense in the year ended December 31, 2021 amounted to $252 as follows: Research and development expensesamounted to $94, sales and marketing expenses amounted to $97 and general and administrative expenses amounted to $61.As of December 31, 2022, there was a total of $530 unrecognized compensation cost relating to nonvested sharebased compensation arrangements.That cost is expected to be recognized over a weightedaverage period of 2.0 years.Share option activity during 2022 is as follows:2022Number ofoptionsWeightedaverageexerciseprice US$Outstanding as of January 135,74226.5Granted10,0005.25ExercisedExpired(4,136)Outstanding as of year end41,60622.48Vested as of year end33,20825.17Share option activity during 2021 is as follows:2021Number ofoptionsWeightedaverageExerciseprice US$Outstanding as of January 139,094$26.0Granted3,90032.0Exercised(751)Expired(6,501)Outstanding as of year end35,74226.5Vested as of year end27,06326.5F27MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 15 CONTINGENCIES AND COMMITMENTSa.On August 7, 2018, the Company commenced an action against North Empire LLC (“North Empire”) in the Supreme Court of the State of New York,County of New York for breach of a Securities Purchase Agreement (the “Agreement”) in which it is seeking damages in an amount to bedetermined at trial, but in no event less than $616. On August 2, 2018, North Empire filed a Summons with Notice against the Company, also in thesame Court, in which they allege damages in an amount of $11.4 million arising from an alleged breach of the Agreement. On September 6, 2018North Empire filed a Notice of Discontinuance of the action it had filed on August 2, 2018. On September 27, 2018, North Empire filed an answerand asserted counterclaims in the action commenced by the Company against them, alleging that the Company failed to deliver stock certificatesto North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against theCompany’s CEO and now former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018,the Company filed a reply to North Empire’s counterclaims. On November 15, 2018, the Company’s CEO and now former Chairman of the Boardfiled a motion to dismiss North Empire’s thirdparty complaint. On January 6, 2020, the Court granted the motion and dismissed the thirdpartycomplaint. Discovery has been completed and both parties have filed motions for summary judgment in connection with the claims andcounterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summary judgment, arguing there werefactual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision. The appealmust be fully perfected and filed by July 26, 2022. On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying theCompany’s motion for summary judgment. North Empire will file its opposition papers on or before March 31, 2022, and the Company will file replypapers on April 29, 2022. On or about September 12, 2022, the Court issued its Decision and Order denying the Company’s motion to reargue.North Empire filed its opposing brief on December 7, 2022. Both sides were given an opportunity to file a reply brief. The Company filed our replybrief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. The Appellate Court has scheduled oral argument for the appealfor February 7, 2023. Oral argument was held before the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Courtfiled its Decision and Order, which affirmed the lower court’s decisions regarding both My Size and North Empire’s motions for summary judgmentand sent the case back to the Supreme Court.On or about March 13, 2023, the Supreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date forthe mediation has not yet been set. The Company intends to vigorously defend any claims made by North Empire.The Company believes it is more likely than not that the counterclaims will be denied.b.In May 2021, the Company received notice from Custodian Ventures, LLC (“Custodian”) of its intention to nominate four candidates to stand forelection to our Board of Directors at the Company’s 2021 annual meeting of stockholders. Custodian subsequently made a book and recordsrequest and has made public statements calling for changes to our management.On September 22, 2021, Custodian commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v.MySize, Inc. (the “Delaware Action”). In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting.On October 19, 2021, the Company commenced an action in the United States District Court for the Southern District of New York againstCustodian, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, and certain rulespromulgated thereunder (the “SDNY Action”). The complaint sought, among other things, declaratory and injunctive relief related to defendants’efforts to nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed“group” for purposes of Section 13(d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. Inaddition, the complaint alleged that the defendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules inconnection with their efforts to elect a slate of directors to the Company’s Board of Directors. On October 20, 2021, the Court signed an ordergranting a hearing on an anticipated motion for a preliminary injunction and expedited scheduling and discovery in aid thereof, and scheduled thathearing for December 2, 2021.On November 4, 2021, the Company entered into the Settlement Agreement with the Lazar Parties. Pursuant to the Settlement Agreement, theCompany and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the SettlementAgreement, the Company agreed to reimburse Custodian for out of pocket expenses and in consideration for the dismissal and release of claimsagainst the Company an aggregate amount equal to $275, to be paid within three business days of the effective date of the Settlement Agreement.With respect to the Company’s 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) its May 12,2021 notice of stockholder nominations of four director candidates with respect to the Company’s 2021 annual meeting of stockholders, (ii) thenotice dated October 28, 2021 submitted by Custodian to the Company notifying the Company of Custodian’s continued intent to bring itsnomination of four director candidates before the Company’s stockholders at the 2021 annual meeting, and (iii) any and all related materials andnotices submitted to the Company in connection therewith or related thereto and to not take any further action in connection with the solicitationof any proxies in connection with the Company. Custodian also agreed to cease any and all solicitation and other activities in connection with the2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effectivedate of the Agreement (the “Standstill Period”). The Settlement Agreement also provides that during the Standstill Period, the Lazar Parties willvote all shares of common stock of the Company it beneficially owns in in accordance with any proposal or recommendation made by theCompany or the Board of Directors of the Company that is submitted to the stockholders of the Company, unless to do so would violateapplicable law and except with respect to certain extraordinary transactions. The Settlement Agreement also contains nondisparagement andconfidentiality provisions, subject to certain exceptions.On December 9, 2021, the Company subsequently entered into a Settlement Agreement (the “Ault Settlement Agreement”), with Milton C. Ault III,Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed towithdraw the SDNY Action against the Ault Parties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that actionagainst the Company. In addition, pursuant to the Settlement Agreement, the Company paid $70 to the Ault Parties in consideration for thereleases and other good and valuable consideration as set forth in the Ault Settlement Agreement.c.On July 5, 2021, the Company was served with a legal complaint filed by Fidelity Venture Capital Ltd. and Dror Atzmon in the Magistrate’s Court inTel Aviv for a monetary award in an amount of NIS 1,436,679 (approximately $450) and a declaratory relief. The plaintiffs allege that the Companybreached its contractual obligations to pay them for services allegedly rendered to the Company by the plaintiffs under a certain consultingagreement dated July 2, 2014, in an amount of NIS 819,000 (approximately $256). Additionally, the plaintiffs allege that the Company shouldcompensate them for losses allegedly incurred by them following their investment in the Company’s shares issued under a certain private offering.In the alternative, the plaintiffs move that the court will declare the investment agreement void with full restitution of plaintiffs’ original investmentin an amount of NIS 1,329,650(approximately $415). The Company filed its statement of defense on October 25, 2021. The first preliminary courthearing of the case is scheduled for January 23, 2022.The first court preliminary hearing was held on March 1, 2022.Following the first preliminary hearing and the Court’s comments and recommendation, the Plaintiffs filed a motion to strike out the claim withoutprejudice.On March 8, 2022 the Court ordered dismissal without prejudice of the claim.F28MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATIONAcquisition of OrgadOn February 7, 2022, the Company acquired 100% of the shares and voting interests in Orgad an omnichannel ecommerce platform. The acquisitionwas designed to create an additional revenue stream for the Company by becoming a direct ecommerce seller while leveraging the synergies betweenMySizeID and Orgad’s ecommerce platform.Unaudited proforma informationThe results of operations of Orgad have been included in the consolidated financial statements since the acquisition date of February 7, 2022. Orgadrevenues included in the Company’s consolidated statement of operations from February 7, 2022 through December 31, 2022 were $4,132. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,662 and $2,850 respectively, and the net loss after tax would have been $8,519 and $10,149 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash (*)300Issuance of shares of common stock (69,752 shares) (**)457Total consideration transferred757(*)The cash payment is subject to working capital adjustments.(**)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Orgad, on the twoyear and the threeyear anniversary of the closing, $350in each ofthese years provided that in the case of the second and third instalments certain revenue targets are met and subject further to certain downward postclosing adjustment. Furthermore, 69,752shares of common stock will be issued in eight equal quarterly instalments until the lapse of two years fromclosing. Additional earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023 will also be paid. All of these payments aresubject to the former owners being actively engaged with Orgad at the date such payment is due, and therefore were not taken as part of theconsideration for the business combination.During the year ended December 31, 2022 an amount of $456and $319was recorded in respect of the cash instalments and in respect of stocksissuance, respectively in Cost Of Goods, Sales and Marketing and General and Administrative expenses as shown in the following table:2022Stockbased compensation expense – Cost of goods194Stockbased compensation expense Sales and marketing271Stockbased compensation expense General and administrative310775(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the preliminary estimates of their fair values, which were determined using generally accepted valuation techniques based onestimates and assumptions made by management at the time of the acquisition. Such estimates are subject to change during the measurement periodwhich is not expected to exceed one year. The purchase price allocation was not finalized duo to examination of the net working capital of Orgad at theacquisition date. Any adjustments to the preliminary purchase price allocation identified during the measurement period will be recognized in theperiod in which the adjustments are determined.The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and Cash EquivalentTrade receivables364PP&E55Inventory864Longterm financial investment31Selling platform378Goodwill152Shortterm accruals and deferrals(181)Trade payables(668)Long term provision(13)Longterm debt(138)Deferred Taxes(87)Total net assets acquired757F29MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)(c)Acquisitionrelated costsThe Company incurred transaction costs of approximately $40and none during twelvemonth period ended December 31, 2022 which were included ingeneral and administrative expenses in the consolidated statements of income (loss).Acquisition of Naiz Bespoke Technologies, S.L. (“Naiz”)On October 11, 2022, the Company acquired 100% of the shares and voting interests in Naiz a provider of SaaS technology solutions that solve sizeand fit issues for fashion ecommerce companies. The acquisition was designed to allow Naiz’s customers benefit from MySize’s deep understanding ofthe fashion ecommerce retail landscape, while creating an additional revenue stream for the Company.Unaudited proforma informationThe results of operations of Naiz have been included in the consolidated financial statements since the acquisition date of October 11, 2022. Naizrevenues included in the Company’s consolidated statement of operations from October 11, 2022 through December 31, 2022 were $103. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,738 and $379 respectively and the net loss after tax would have been $8,695 and $10,717 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash503Issuance of shares of common stock (240,000 shares) (*)1,008Total consideration transferred1,511(*)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Naiz, additional cash consideration (up to $1,550) in four instalments subject to thefollowing conditions:(i)Continuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result ofa Good Reason; and(ii)Naiz’s Revenues reaching or exceeding the respective Target Revenues defined in the agreement. The revenues will be calculated in four periods:(1) January 1, 2022 – December 31, 2022; (2) January 1, 2023 – June 30, 2023; (3) July 1, 2023 – December 31, 2023; (4) January 1, 2024 – December31, 2024.Former owners of Naiz are entitled to additional cash consideration following December 31, 2025 (up to $1,650) in an event when the actual value of theequity consideration is less than $1,650, subject to completion of a Target Revenue for the period of January 1, 2025 – December 31, 2025 andcontinuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result of aGood Reason;F30MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)During the year ended December 31, 2022 an amount of $283 was recorded in respect of the additional cash consideration.(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the estimates of their fair values, which were determined using generally accepted valuation techniques based on estimates andassumptions made by management at the time of the acquisition.The following table summarizes the fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and cash equivalent36Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Total net assets acquired1,511(c)Acquisitionrelated costsDuring 2022, the Company incurred transaction costs of approximately $75 which were included in general and administrative expenses in theconsolidated statements of income (loss).F31MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)Note 17 – Operating SegmentsDuring the year ended December 31, 2021, the Company had one reportable segment. As a result of the business combinations in the reporting period(see note 13), the Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificialintelligence driven measurement solutions and (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions and. The fashionand equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. Orgad has onecustomer that is responsible for 37.9% of the Company consolidated revenues. The SaaS based innovative artificial intelligence driven measurementsolutions, or SaaS Solutions operating segment consists of My Size Inc and My Size Israel and My Size LLC.Information related to the operations of the Company’s reportable operating segments is set forth below:Fashion andequipment ecommerce platformSaaSSolutionsNaizTotalAs of the year ended December 31, 2022Revenues from external customers4,1322241034,459Operating (loss) income(591)(7,181)(338)(8,110)Financial income (expense), net(236)Net loss before tax(8,346)Fashion andequipment ecommerce platformSaasSolutionNaizAs of December 31, 2022:Assets2,0225,9661,691Amortization of intangible assets(114)(34)(46)The Company elected to present geographic information in respect with revenues generated from external customers based on the location of the selling entity:All the revenues of the fashion and equipment ecommerce platform segment are generated by Orgad, located in Israel.All the revenues of the Naiz segment are generated by Naiz, located in Spain.The revenues of the Saas Solutions segment are generated by My Size Ltd. located in Israel (approximately 75% of the segment revenues) and by My Size Inc.located in the U.S. (approximately 25% of the segment revenues).NOTE 18 SALES AND MARKETINGYear endedDecember 31,20222021Salaries836574Consultants and subcontractors5831,086Marketing481283Selling fees489Share based payments post Orgad acquisition (*)271Share based payments for consultants and employees127180Travel21142Other1451713,1432,336(*) See note 16.NOTE 19 GENERAL AND ADMINISTRATIVE EXPENSESYear endedDecember 31,20222021Salaries1,007461Professional services7051,832Share based payments for consultants, directors and employees18098Rent, office expenses and communication442372Insurance564627cash liability and equity liability expenses related to Orgad acquisition310cash liability expenses related to Naiz acquisition217Settlement fees (*)345Directors8259Other3933303,9004,124(*)See note 15(b)F32MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 20 FINANCIAL INCOME (EXPENSE), NETA.Financial incomeYear endedDecember 31,20222021Revaluation investment in marketable securities49Other26172666B.Financial expenseYear endedDecember 31,20222021Exchange rate differences33Revaluation of loan granted100Revaluation investment in marketable securities62Other6792629NOTE 21 EVENTS SUBSEQUENT TO THE BALANCE SHEET DATEa.On January 2, 2023, Orgad experienced a fire at its warehouse in Israel. The Company is not aware of any casualties or injuries associated with thefire. The Company shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450.The Company believes that this incident did not affect the future sales results of Orgad for the year 2023. The inventory was not insured and it istoo early to determine the potential impact of this incident on the other parties that were involved in the incident (lessor and others that leasedproperties near the warehouse).b.On January 10, 2023, the Company entered into a securities purchase agreement pursuant to which the Company sold an aggregate of 162,000ofthe Company’s shares of common stock and prefunded warrants to purchase up to 278,899shares of common stock and, in a concurrent privateplacement, unregistered warrants to purchase up to883,798 shares of common stock, consisting of Series A warrants to purchase up to 441,899shares of common stock and Series B warrants to purchase up to 441,899shares of common stock, at an offering price of $3.055per share ofcommon stock and associated Series A and Series B warrants and an offering price of $3.054per prefunded warrant and associated Series A andSeries B warrants.In addition, the Company entered into a securities purchase agreement pursuant to which the Company agreed to sell and issue in a privateplacement an aggregate of up to 540,098 unregistered prefunded warrants and unregistered warrants to purchase up to an aggregate of 1,080,196shares of common stock, consisting of Series A warrants to purchase up to 540,098 shares of common stock and Series B warrants to purchase upto 540,098 shares of common stock at an offering price of $3.054 per prefunded warrant and associated Series A and Series B warrants.As of March 31,2023 all the pre funded warrants were exercised by the investor.F33ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSUREThere were no disagreements with accountants on accounting and financial disclosure of a type described in Item 304 (a)(1)(iv) or any reportable event asdescribed in Item 304 (a)(1)(v) of Regulation SK.ITEM 9A. CONTROLS AND PROCEDURESDisclosure ControlsWe carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief FinancialOfficer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) as of December 31, 2022. Basedupon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this Annual Report on Form10K, our disclosure controls and procedures were effective to ensure that information required to be disclosed in reports filed under the Exchange Act, as amended,is recorded, processed, summarized and reported within the required time periods specified in the SEC’s rules and forms and is accumulated and communicated toour management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.Management’s Report on Internal Control Over Financial ReportingOur internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records, that, in reasonable detail,accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only inaccordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition, use or disposition of our assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance withthe policies or procedures may deteriorate.Our management, including our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financialreporting at December 31, 2022. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the TreadwayCommission (COSO) in Internal Control—Integrated Framework (2013). Based on that assessment under those criteria, management has determined that, as ofDecember 31, 2022, our internal control over financial reporting was effective.This Annual Report on Form 10K does not include an attestation report of our registered public accounting firm regarding internal control over financialreporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to the exemption provided to issuersthat are not “large accelerated filers” nor “accelerated filers” under the DoddFrank Wall Street Reform and Consumer Protection Act.Changes in Internal Control Over Financial ReportingDuring the year ended December 31, 2022, we made two acquisitions, as discussed in Note 1a and Note 16 of the audited consolidated financial statementsfor the year ended December 31, 2022 included in this Annual Report on Form 10K. As a result, we made additions and/or modifications to policies, procedures,systems and controls that have materially affected our internal control over financial reporting from the acquisitions, including new controls for consolidationprocess that relates to accounting policies and procedures, operational processes and documentation practices. Management excluded the acquired businessesfrom management’s report on internal control over financial reporting. ITEM 9B. OTHER INFORMATIONNone.ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNot applicable.51PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe following table sets forth the name, age and positions of our executive officers and directors.NAMEAgePOSITIONRonen Luzon52Chief Executive Officer and Class III DirectorOr Kles40Chief Financial OfficerBilly Pardo47Chief Operating Officer and Chief Product OfficerIlia Turchinsky35Chief Technology OfficerEzequiel Javier Brandwain53Chief Commercial OfficerOron Branitzky (1)(2)(3)*63Class II DirectorOren Elmaliah (1)(2)(3)*38Class I DirectorArik Kaufman (1)(2)(3)*41Class I DirectorGuy Zimmerman*53Class II Director(1)Member of our audit committee(2)Member of our nominating and corporate governance committee(3)Member of our compensation committee* Independent as that term is defined by the rules of the Nasdaq Stock Market.The business background and certain other information about our directors and executive officers is set forth below:Ronen Luzon has served as our Chief Executive Officer and a member of our board of directors since September 2013. Since 2006, Mr. Luzon hasadditionally served as Chief Executive Officer and founder of Malers Ltd., a company in the global security solutions market which provides technological solutionsfor integrated communication infrastructures, security and control systems. Prior to Malers, he held several senior marketing, sales management and professionalservices positions in a variety of international high tech companies including VP marketing of GA Tech and Professional Services Manager of Eldat Communication.Mr. Luzon graduated from Middlesex University in London with a B.S. in IT and Business Information Systems. We believe that Mr. Luzon is qualified to serve as amember of our board of directors because of his more than 20 years of experience in the technology sector.Or Kles has served as our Chief Financial Officer since May 2016. He is a certified public accountant with a broad, diverse financial background. From May2013 until April 2016 he served as Assistant Controller of Shikun and BinuiSolel Boneh Infrastructure Ltd. and from December 2010 until May 2013 he served as anAssociate at KPMG. Mr. Kles holds an MBA and a B.A. in Business Management and Accounting (specializing in financing) from The College of ManagementAcademic Studies. Mr. Kles is a certified public accountant in Israel.Billy Pardo has served as our Chief Product Officer since May 2014 and Chief Operating Officer since April 2019. From April 2010 until August 2013, Ms.Pardo served as Senior Director of Product Management of Fourier Education. Among her areas of expertise are launching products from concept to successfuldelivery in various methodologies, including Fourier Education’s awardwinning einstein™ Science Tablet. Prior to that Ms. Pardo served in various productmanagement positions including, Project Manager of Time to Know, Product Marketing Manager of RiT Technologies, Product Manager of Pricer AB and R&DTeam Leader at Pricer AB. Ms. Pardo previously served as Software Engineer at Eldat Communication Ltd., and QA Engineer at NICE Systems. Ms. Pardo receivedan MBA from The Interdisciplinary Center and a B.A. in Computer Science from The Academic College of TelAvivYaffo.Ilia Turchinsky has served as our Chief Technology Officer since April 2019 and from July 2018 until April 2019 as our Director of Technology. Prior tojoining us, from 2013 until 2018, Mr. Turchinsky served in various roles, most recently Chief Technology Officer, at MonkeyTech Ltd., a company that providesdesign, development and characterization of mobile applications. Prior to that, Mr. Turchinsky served in various roles including development course instructor atIQLine, was a founder of Arnavsoft and was a software developer for MintLab and a political party. Mr. Turchinsky holds a B.Sc. from the Ben Gurion University inComputer Science and an M.Sc. from the Open University of Israel in Computer Science.52Ezequiel Javier Brandwain has served as our Chief Commercial Officer since February 2022. Mr. Brandwain brings more than two decades of globalexperience in retail and the fashion industry, mainly in business development, operations, and international markets. Before joining the Company, Mr. Brandwainheld positions of increasing responsibility at several companies, including between June 2017 and November 2020, at 7 For All Mankind International, where heserved as Director, Latin America and Caribbean, managing business development and operations across Latin America and the Caribbean. Before that, betweenMay 2016 and June 2017, Mr. Brandwain served as Chief Business Development Officer at Replay – Fashion Box SPA, where he oversaw business development andoperations, expansion and control in the Americas, the Caribbean, and NorthEast Asia. Prior this role, between September 2015 and May 2016, he served as theReplay’s Managing Director in Latin America and the Caribbean, leading the company’s international expansion in these regions. Prior to that, between April 2015and September 2015, Mr. Brandwain served as Managing Director, Latin America and Caribbean at Authentic Brands Group LLC, where he led that company’soperations, business developments and international expansion within these regions, and served as the direct liaison with the company’s headquarters in New York.Prior to that, between April 2015 and September 2015, Mr. Brandwain served as Chief Operating Officer, Latin America and Caribbean at Flemingo International Ltd.,overseeing operations, as well as projected operations in the travel retail field across these regions. Prior to that, between December 2010 and February 2014, Mr.Brandwain served as Regional Director, Southern Hemisphere at Calvin Klein, where he was responsible for defining and implementing the operational andcommercial strategy for Southern Hemisphere, as well as overseeing the retail, travel retail, concession, and wholesale businesses of the company. During his tenureat Calvin Klein, Mr. Brandwain also served as Travel Retail Director, Latin America, where he built the travel retail business and developed operations. Prior to that,between July 2010 and November 2010, Mr. Brandwain served as Business Director, Latin America and Caribbean at Givenchy Latin America, and between January2010 and June 2010 he served as Commercial Director, Latin America and Caribbean at Nautica Latin America. During December 2004 and December 2009, Mr.Brandwain served as Vice President, International Business Development at Report Collection/Modextil, Inc., where he was in charge of business and operationalexpansion, global growth, and brand extensions. Prior to that, between 2003 and October 2004, Mr. Brandwain served as General Manager at Andrew KoenigInternational, Inc. Between September 2019 and November 2020, Mr. Brandwain served as a member of the Board of Directors of 7 For All Mankind BrazilImportacao, Comercio E Distribuicao S.A. Mr. Brandwain earned a Bachelor degree in architecture from the University of the Republic (Uruguay).Oron Branitzky has served as a member of our board of directors since March 2017. Mr. Barnitzky has vast experience in retail technology. SinceNovember 2017, Mr. Branitzky has served as Global Retail Business Development at Superup, and from January 2007 until December 2014 he served as VicePresident of Sales and Marketing at Pricer AB. Prior to that, Mr. Branitzky has served as VP Marketing and Sales at Eldat Communication and Sarin TechnologiesLtd. Since January 2015, Mr. Branitzky has served as chairman of the board of directors of WiseShelf Ltd. and from May 2015 until March 2016, Mr. Branitzky servedas an advisory board member of ciValue. Mr. Branitzky received a B.S. from the Hebrew University of Jerusalem and an MBA in International Marketing from TelAviv University. We believe that Mr. Branitzky is qualified to serve as a member of our board of directors because of his more than 20 years of experience inmanaging the sales of hitech solutions to retailers across the globe.Oren Elmaliah, has served as a member of our board of directors since May 2017. In September 2015, Oren Elmaliah founded Accounting Team IL and hasacted as Account Manager since then. Accounting Team IL is a financial consultancy and service provider to public companies traded in Israel and abroad. SinceFebruary 2017, Mr. Elmaliah has served as controller of Enlivex Therapeutics Ltd., and since January 2017 he has served as Chief Financial Officer of Presstek Israel.In addition, since September 2015, Mr. Elmaliah has served as an Israel Authorities Reporting Officer of LG Electronics Israel and since September 2015 he hasserved as Local Financial Report Consultant of Chiasma. From July 2011 until August 2015, Mr. Elmaliah served as CPA, Financial Director of CFO Director Ltd andfrom June 2010 until July 2011 he served as Risk Management Consultant of RSM International Limited. Mr. Elmaliah holds a B.A. in Accounting/Economics and aMsc. in Finance/Accounting from Tel Aviv University, Israel. He is a licensed Certified Public Accountant in Israel. We believe that Mr. Elmaliah is qualified to serveas a member of our board of directors because of his vast finance experience and public company management and administration in the fields of finance,accounting, and financial regulation.53Arik Kaufman has served as a member of our board of directors since June 2017. Mr. Kaufman is an attorney specializing in the fields of commercial law,corporate law and capital markets and since 2016 runs his own law office in Israel. He has vast experience in the fields of financial reporting and financial regulation.Mr. Kaufman serves as the Chief Executive Officer of Steakholder Foods since January 2022. From September 2017 until January 2022, Mr. Kaufman served as VPBusiness Development of Mor Research Applications. Mr. Kaufman holds an LLB in Law from the Interdisciplinary Center, Herzliya, and is admitted to the IsraeliBar. We believe that Mr. Kaufman is qualified to serve as a member of our board of directors based upon his experience of assisting with the completion of numerousventure capital financings, mergers, acquisitions, and strategic relationships. In addition, he has served as a member of the board of various publicly tradedcompanies, including companies that operate in the same industry as us.Guy Zimmerman has served as a member of our board of directors since August 2021. Previously, Mr. Zimmerman served as Founder and CEO ofManuFuture, an online b2b engineering market place, since February 2021. Prior to that from 2017 to 2021, Mr. Zimmerman acted as a consultant to severaltechnology startups and was a founding partner of a business travel online platform. From 2013 to 2017, Mr. Zimmerman served as EVP of Marketing and BusinessDevelopment of Kornit Digital and was part of the IPO leadership. Prior to that, Mr. Zimmerman served as VP of Global Sales and Business Development at TefronLtd., a provider of seamless garment technology, where he led the $100m sales and sales support organization serving global retail and fashion brands. Prior to thathe served as Vice President of Strategy and Business Development at Tnuva Group, Israel’s largest food manufacturer and spent eight years at McKinsey &Company. Mr. Zimmerman previously led a software startup in the field of operational healthcare management systems. Mr. Zimmerman holds a B.Sc. in IndustrialEngineering from Tel Aviv University in Israel. We believe that Mr. Zimmerman is qualified to serve as a member of our board of directors because of his experiencein business development in the technology and retail sectors.Board Diversity MatrixThe table below provides certain information regarding the diversity of our board of directors as of the date of this annual report.Board Diversity Matrix (As of March 31, 2023)Total Number of Directors5FemaleMaleNonBinaryDid Not DiscloseGenderPart I: Gender IdentityDirectors#5##Part II: Demographic BackgroundAfrican American or Black####Alaskan Native or Native American####Asian####Hispanic or Latinx####Native Hawaiian or Pacific Islander####White#1##Two or More Races or Ethnicities#2##LGBTQ+0Did Not Disclose Demographic Background2Family RelationshipsRonen Luzon, the Chief Executive Officer and a member of our board of directors, and Billy Pardo, the Chief Product Officer and Chief Operating Officer, arehusband and wife. There are no other family relationships among any of our current or former directors or executive officers.Involvement in Certain Legal ProceedingsWe are not aware of any of our directors or officers being involved in any legal proceedings in the past ten years relating to any matters in bankruptcy,insolvency, criminal proceedings (other than traffic and other minor offenses), or being subject to any of the items set forth under Item 401(f) of Regulation SK.Arrangements between Officers and DirectorsTo our knowledge, there is no arrangement or understanding between any of our officers and any other person, including directors, pursuant to which theofficer was selected to serve as an officer.Board of DirectorsThere are no agreements with respect to the election of directors.On January 6, 2022, we filed with the Secretary of State of Delaware a Certificate of Amendment to our Amended and Restated Certificate of Incorporationproviding for a classified Board. Following filing of the Certificate of Amendment, members of our board are now classified into three classes with staggered threeyear terms (with the exception of the expiration of the initial Class I and Class II directors), as follows:●Class I, comprised of two directors, initially Arik Kaufman and Oren Elmaliah (with their initial terms expiring at our 2022 annual meeting of stockholders andmembers of such class serving successive threeyear terms);●Class II, comprised of two directors, initially Oron Branitzky and Guy Zimmerman (with their initial terms expiring at our 2023 annual meeting of stockholdersand members of such class serving successive threeyear terms); and●Class III, comprised of one director, initially Ronen Luzon (with his initial term expiring at our 2024 annual meeting of stockholders and members of suchclass serving successive threeyear terms).54To preserve the classified Board structure, a director elected by the Board of Directors to fill a vacancy holds office until the next election of the class forwhich such director has been chosen, and until that director’s successor has been elected and qualified or until his or her earlier death, resignation, retirement orremoval.Our board of directors has reviewed the materiality of any relationship that each of our directors has with us, either directly or indirectly. Based upon thisreview, we believe that Arik Kaufman, Oren Elmaliach, Oron Branitzky and Guy Zimmerman qualify as independent directors in accordance with the standards set bythe Nasdaq and Rule 10A3 promulgated under the Exchange Act.Committees of the BoardAudit CommitteeOur audit committee is comprised of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Elmaliah serves as chairman of the audit committee. The auditcommittee is responsible for retaining and overseeing our independent registered public accounting firm, approving the services performed by our independentregistered public accounting firm and reviewing our annual financial statements, accounting policies and our system of internal controls. The audit committee actsunder a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the audit committee’s composition and meetings.The audit committee charter is available on our website www.mysizeid.com.The Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by applicable SEC rules. Inaddition, the Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by the rules of the Nasdaq StockMarket.The Board of Directors has determined that Oren Elmaliah is an “audit committee financial expert” serving on its audit committee, and is independent, as theSEC has defined that term in Item 407 of Regulation SK.Compensation CommitteeOur compensation committee consists of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Branitzky serves as chairman of the compensationcommittee.The compensation committee’s roles and responsibilities include making recommendations to the Board of Directors regarding the compensation for ourexecutives, the role and performance of our executive officers, and appropriate compensation levels for our CEO, which are determined without the CEO present, andother executives. Our compensation committee also administers our 2017 Equity Incentive Plan and our 2017 Consultant Equity Incentive Plan. The compensationcommittee acts under a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the compensation committee’scomposition and meetings. The compensation committee charter is available on our website www.mysizeid.com.Our Board of Directors has determined that all of the members of the compensation committee are “independent” as that term is defined by the rules of theNasdaq Stock Market.Nominating and Corporate Governance CommitteeThe members of the nominating and corporate governance committee are Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Kaufman serves aschairman of the corporate governance and nominations committee. The nominating and corporate governance committee acts under a written charter, which morespecifically sets forth its responsibilities and duties, as well as requirements for the nominating and corporate governance committee’s composition and meetings.The nominating and corporate governance committee charter is available on our website www.mysizeid.com.The nominating and corporate governance committee develops, recommends and oversees implementation of corporate governance principles for us andconsiders recommendations for director nominees. The nominating and corporate governance committee also considers stockholder recommendations for directornominees that are properly received in accordance with applicable rules and regulations of the SEC. Our stockholders that wish to nominate a director for election tothe Board of Directors should follow the procedures set forth in our bylaws.55The nominating and corporate governance committee will consider persons identified by its members, management, stockholders, investment bankers andothers. The guidelines for selecting nominees, which are specified in the nominating committee charter, generally provide that persons to be nominated:●should be accomplished in his or her field and have a reputation, both personal and professional, that is consistent with our image and reputation;●should have relevant experience and expertise and would be able to provide insights and practical wisdom based upon that experience and expertise; and●should be of high moral and ethical character and would be willing to apply sound, objective and independent business judgment, and to assume broadfiduciary responsibility.The nominating and corporate governance committee will consider a number of qualifications relating to management and leadership experience,background and integrity and professionalism in evaluating a person’s candidacy for membership on the Board of Directors. The nominating and corporategovernance committee may require certain skills or attributes, such as financial or accounting experience, to meet specific Board needs that arise from time to timeand will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of Board of Directors members. The nominating andcorporate governance committee will not distinguish among nominees recommended by stockholders and other persons.Our Board of Directors has determined that all of the members of the nominating and corporate governance committee are “independent” as that term isdefined by the rules of the Nasdaq Stock Market.Code of Conduct and EthicsWe have a Code of Business Conduct and Ethics that applies to all our employees. The text of the Code of Business Conduct and Ethics is publiclyavailable on our website at www.mysizeid.com. Information contained on, or that can be accessed through, our website does not constitute a part of this report andis not incorporated by reference herein. Disclosure regarding any amendments to, or waivers from, provisions of the code of conduct and ethics that apply to ourdirectors, principal executive and financial officers will be posted on the “InvestorsCorporate Governance” section of our website at www.mysizeid.com or will beincluded in a Current Report on Form 8K, which we will file within four business days following the date of the amendment or waiver.Change in Procedures for Recommending DirectorsThere have been no material changes to the procedures by which our stockholders may recommend nominees to our Board of Directors from thoseprocedures set forth in our Proxy Statement for our 2021 Annual Meeting of Stockholders, filed with the SEC on December 7, 2022.56ITEM 11. EXECUTIVE COMPENSATIONSummary Compensation TableThe following sets forth the compensation paid by us to our named executive officers, during the years ended December 31, 2022 and December 31, 2021.Name and Principal PositionYearSalary($) (1)Bonus($)StockAwards($)OptionAwards($) (2)All OtherCompensation($)Total($)Ronen Luzon2022173,000223,0008,000126,000530,000Chief Executive Officer2021194,0005,00023,00097,000319,000Or Kles2022123,00053,0007,00071,000254,000Chief Financial Officer2021123,0008,00030,00061,000222,000Billy Pardo2022134,00053,0007,000100,00294,000Chief Operating Officer2021162,0007,00018,00074,000261,000(1) Salary for the years 2022 and 2021 are based on average US$/NIS representative exchange rates of NIS 3.358 and NIS 3.11 respectively.(2) Amounts in this column represent the grant date fair value of options granted to the named executive officers during 2022 and 2021, computed in accordance withFASB ASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the named executive officers. The assumptionsmade in valuing the options reported in this column are discussed in Note 11 to our audited financial statements for the year ended December 31, 2021 and Note 4 toour condensed consolidated interim financial statements for the quarterly period ended September 30, 2022.All Other Compensation TableThe “All Other Compensation” amounts set forth in the Summary Compensation Table above consist of the following:NameYearAutomobileRelatedExpenses($)Manager’sInsurance*($)EducationFund*($)Othersocialbenefits**($)Total($)Ronen Luzon202232,00031,00015,00048,000126,000202133,00033,00015,00016,00097,000Or Kles202215,00021,00010,00025,00071,000202114,00019,0009,00019,00061,000Billy Pardo202216,00025,00013,00046,000100,000202117,00024,00012,00021,00074,000* Manager’s insurance and education funds are customary benefits provided to employees based in Israel. Manager’s insurance is a combination of severancesavings (in accordance with Israeli law), defined contribution taxqualified pension savings and disability insurance premiums. An education fund is a savings fundof pretax contributions to be used after a specified period of time for educational or other permitted purposes.** Other social benefits for 2022 and 2021 for all named individuals includes tax payments in respect of social benefits.57Agreements with Named Executive OfficersRonen LuzonOn November 18, 2018, My Size Israel, our wholly owned subsidiary, entered into an employment agreement with Ronen Luzon, or the Luzon EmploymentAgreement, pursuant to which Mr. Luzon will serve as our Chief Executive Officer. Pursuant to the terms of the Luzon Employment Agreement, Mr. Luzon receivesNIS 55,000 per month as his base salary and shall be eligible to receive such bonus as determined by us. In addition, Mr. Luzon shall be entitled social benefits andto other benefits, including, but not limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, includinginsurance in case of disability, annual vacation days, sick leave and expense reimbursement. Pursuant to the terms of the Luzon Employment Agreement and subjectto certain conditions, payments made by the Company to the pension fund or manager’s insurance fund shall be made in lieu of severance payments due to Mr.Luzon. The term of the Luzon Employment Agreement shall be effective as of September 1, 2018 and shall continue until such time either party provides writtennotice to the other party at least 75 days in advance of the termination of such agreement. We may also terminate Mr. Luzon’s employment without prior writtennotice (or payment in lieu of such notice) for Cause (as defined in the Luzon Employment Agreement).Or KlesOn November 18, 2018, My Size Israel entered into an employment agreement with Or Kles, or the Kles Employment Agreement, pursuant to which Mr. Kleswill serve as our Chief Financial Officer. Pursuant to the terms of the Kles Employment Agreement, Mr. Kles receives NIS 38,000 per month as his base salary andshall be eligible to receive such bonus as determined by us. In addition, Mr. Kles shall be entitled to social benefits and other benefits, including, but not limited to,contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annual vacation days,sick leave and expense reimbursement. Pursuant to the terms of the Kles Employment Agreement and subject to certain conditions, payments made by us to thepension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Mr. Kles. The term of the Kles Employment Agreement shall beeffective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days in advance of thetermination of such agreement. We may also terminate Mr. Kles’s employment without prior written notice (or payment in lieu of such notice) for Cause (as defined inthe Kles Employment Agreement).Billy PardoOn November 18, 2018, My Size Israel entered into an employment agreement with Billy Pardo, or the Pardo Employment Agreement, pursuant to which Ms.Pardo will serve as our Chief Product Officer. Pursuant to the terms of the Pardo Employment Agreement, Ms. Pardo receives NIS 47,500 per month as her basesalary and shall be eligible to receive such bonus as determined by us. In addition, Ms. Pardo shall be entitled to social benefits and other benefits, including, butnot limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annualvacation days, sick leave and expense reimbursement. Pursuant to the terms of the Pardo Employment Agreement and subject to certain conditions, payments madeby us to the pension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Ms. Pardo. The term of the Pardo EmploymentAgreement shall be effective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days inadvance of the termination of such agreement. We may also terminate Ms. Pardo’s employment without prior written notice (or payment in lieu of such notice) forCause (as defined in the Pardo Employment Agreement).58Outstanding Equity Awards at Fiscal YearEndThe following table provides information regarding options held by each of our named executive officers that were outstanding as of December 31, 2022.Option AwardsStock AwardsName and Principal PositionNumber ofSecuritiesUnderlyingUnexercisedOptionsExercisableNumber ofSecuritiesUnderlyingUnexercisedOptionsUnexercisableOptionExercisePriceOptionExpirationDateEquityincentiveplan awards:Number ofUnearnedShares that HaveNot VestedEquityincentiveplan awards:Market Value ofUnearnedShares, That Have Not VestedRonen Luzon Chief Executive Officer400(1)$26(8)7/24/20231,601(2)$26(8)5/29/20256,400(3)$268/10/2025100,000(9)100,000$511,250Or Kles – Chief Financial Officer227(4)$26(8)7/24/2023427(5)$26(8)5/29/20255,200(6)$268/10/202524,000(10)24,000$122,700Billy Pardo Chief Operating Officer400(1)$26(8)7/24/2023894(7)$26(8)5/29/20255,200(6)$268/10/202524,000(11)24,000$122,700(1) The option has a grant date of July 24, 2017 and vested in full on January 24, 2018.(2) The option has a grant date of May 29, 2019. 267 options vested immediately upon grant, 445 options vested on January 24, 2019, 445 options vested on January24, 2020 and 444 options vested on January 24, 2021.(3) The option has a grant date of October 8, 2020, 1,600 options vested on November 26, 2020, 1,600 options vested on May 26, 2021, 1,600 options vested onNovember 26, 2021, and 1,600 options vested on May 26, 2022.(4) The option has a grant date of July 24, 2017. 76 options vested immediately upon grant, 76 options vested on May 1, 2018 and 75 options vested on May 1, 2019.(5) The option has a grant date of May 29, 2019. 160 options vested immediately upon grant, 445 options vested on May 1, 2020, 445 options vested on May 21, 2021and 444 options vested on May 1, 2022.(6) The option has a grant date of October 8, 2020, 1,300 options vested on November 26, 2020, 1,300 options vested on May 26, 2021, 1,300 options vested onNovember 26, 2021, and 1,300 options vested on May 26, 2022.(7) The option has a grant date of May 29, 2019. 214 options vested immediately upon grant, 227 options vested on January 24, 2019, 227 options vested on January24, 2020 and 226 options vested on January 24, 2021.(8) On May 25, 2020, the compensation committee of the Board of Directors of the Company reduced the exercise price of outstanding options of employees anddirectors of the Company for the purchase of an aggregate of 5,610 shares of common stock of the Company (with exercise prices ranging between $453.75 and$228.75) to $26 per share, which was the closing price for the Company’s common stock on May 22, 2020, and extended the term of the foregoing options for anadditional one year from the original date of expiration.(9) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(10) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(11) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.59Director CompensationThe following table sets forth compensation information for our nonemployee directors for the year ended December 31, 2022.NameFees earned orpaid incash ($)(1)Optionawards($)(1)(2)Total($)Oren Elmalih15,078 15,078Oron Barnitzky15,34715,347Arik Kaufman14,44114,441Guy Zimmerman13,03313,033(1)Fees for the year 2022 are based on average US$/NIS representative exchange rates of NIS 3.519.(2)Amounts in this column represent the grant date fair value of options granted to the nonemployee directors during 2022 computed in accordance with FASBASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the nonemployee directors. The assumptions made invaluing the options reported in this column are discussed in Note 11 to our financial statements for the year ended December 31, 2022.We compensate our nonemployee directors for their service as a member of our board. Mr. Luzon received no separate compensation for board service. Mr.Luzon’s compensation is set forth above in the Summary Compensation Table.Each nonemployee director is entitled to receive a per meeting fee of $318. Nonemployee directors are also reimbursed for their travel and reasonable outofpocket expenses incurred in connection with attending board and committee meetings, to the extent that attendance is required by the board or the committee(s)on which that director serves.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurity Ownership of Certain Beneficial Holders and ManagementThe following table sets forth certain information regarding beneficial ownership of shares of our common stock as of March 31, 2023 by (i) each personknown to beneficially own more than 5% of our outstanding common stock, (ii) each of our directors, (iii) each of our executive officers, and (iv) all of our directorsand executive officers as a group. Except as otherwise indicated, the persons named in the table below have sole voting and investment power with respect to allshares beneficially owned, subject to community property laws, where applicable.Beneficial Owner(1)Shares ofCommon StockBeneficiallyOwnedPercentage(2)Executive officers and directors:Ronen Luzon143,578(3)5.8%Or Kles29,854(4)1.2%Billy Pardo143,578(5)5.8%Ezequiel Javier Brandwain12,000(6)*Ilia Turchinsky18,313(7)*Arik Kaufman1,294(8)*Oren Elmaliah1,294(9)*Oron Branitzky1,294(10)*Guy ZimmermanAll Executive Officers and Directors as a Group (9 persons)207,6268.4%*Less than 1%(1) The address of each person is c/o My Size, Inc., 4 HaYarden St., P.O.B. 1026, Airport City, Israel 7010000 unless otherwise indicated herein.60(2) The calculation in this column is based upon 2,446,780 shares of common stock outstanding on March 31, 2023. Beneficial ownership is determined in accordancewith the rules of the SEC and generally includes voting or investment power with respect to the subject securities. Shares of common stock that are currentlyexercisable or exercisable within 60 days of March 31, 2023 are deemed to be beneficially owned by the person holding such securities for the purpose of computingthe percentage beneficial ownership of such person, but are not treated as outstanding for the purpose of computing the percentage beneficial ownership of anyother person(3) Consists of (i) 100,000 shares of restricted stock granted under the 2017 Plan, (ii) 4,683 shares of common stock, (iii) options to purchase up to 8,401 shares of ourcommon stock, and (iv) 24,000 shares of restricted stock and options to purchase up to 6,494 shares of our common stock which are held by Billy Pardo, RonenLuzon’s spouse. Mr. Luzon may be deemed to beneficially hold the securities of us held by Ms. Pardo.(4) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, and (ii) an option to purchase 5,854 shares of our common stock. Does not includean aggregate of 119,760 shares of restricted stock over which Mr. Kles has been designated the initial proxy to vote such shares pursuant to a voting agreemententered into between Whitehole S.L., Twinbel S.L. and EGI Acceleration, S.L.(5) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, (ii) options to purchase up to 6,494 shares of our common stock, (iii) 100,000 sharesof restricted stock which are held by Ronen Luzon, Billy Pardo’s spouse (iii) 8,401 shares of common stock which are held by Mr. Luzon, and (iii) options to purchaseup to 4,683 shares of our common stock which are held by Mr. Luzon. Ms. Pardo may be deemed to beneficially hold the securities of the Company held by Mr.Luzon.(6) Consists of 12,000 shares of restricted stock granted under the 2017 Plan.(7) Consists of (i) 16,000 shares of restricted stock granted under the 2017 Plan, and (ii) options to purchase up to 2,313 shares of our common stock.(8) Consists of options to purchase up to 1,294 shares of our common stock.(9) Consists of options to purchase up to 1,294 shares of our common stock.(10) Consists of options to purchase up to 1,294 shares of our common stock.Change in ControlWe are not aware of any arrangement that might result in a change in control in the future. We have no knowledge of any arrangements, including anypledge by any person of our securities, the operation of which may at a subsequent date result in a change in the Company’s control.Securities Authorized for Issuance Under Equity Compensation PlansOn January 29, 2017, our Board of Directors approved the 2017 Equity Incentive Plan and the 2017 Consultant Equity Incentive Plan, which were approvedby our stockholders on March 21, 2017. In addition, on January 29, 2017, our Board of Directors approved the Stock Option Plan Israel Grantees SubPlan. The 2017Equity Incentive Plan initially authorized the issuance of up to 5,334 shares of common stock under the plan and the 2017 Consultant Equity Incentive Plan initiallyauthorized the issuance of up to 8,000 shares of common stock under the plan.On February 12, 2018, our stockholders approved an amendment to the 2017 Consultant Equity Incentive Plan to increase the maximum number of shares ofour common stock available for issuance under the plan from 8,000 to 12,000. On July 3, 2018, our stockholders approved an amendment to the 2017 Equity IncentivePlan to increase the maximum number of shares of our common stock available for issuance under the plan from 5,334 to 8,000 and an amendment to the 2017Consultant Equity Incentive Plan to increase the maximum number of shares of our common stock available for issuance under the plan from 12,000 to 18,667.On May 25, 2020, our Board reduced the exercise price of outstanding options of our employees and directors for the purchase of an aggregate of 140,237of our common stock (with exercise prices ranging between $453.75 and $228.75) to $26.0 per share, and extended the term of the foregoing options for an additionalone year from the original date of expiration.61On August 10, 2020, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 80,000 to 58,000shares, and a decrease of the numbers of shares available for issuance under the 2017 Consultant Incentive Plan to 8,667 shares from 18,667 shares.On December 30, 2021, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 58,000 sharesto 230,800 shares.On December 7, 2022, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Plan from 230,800 shares to 289,000shares.The following table summarizes information about our equity compensation plans and individual compensation arrangements as of December 31, 2022.Number of securities to be issued upon exercise of outstanding options, warrants and rights(a)Weighted average exercise price of outstandingoptions, warrants and rights (b)Number of securities remaining availablefor future issuanceunder equity compensationplans (excludingsecurities reflected in column (a) (c)Equity compensation plans approved by security holders43,49724.7477,455Equity compensation plans not approved by security holdersTotal43,49724.7477,455ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEDuring years ended December 31, 2022 and 2021, except for compensation arrangements described elsewhere herein and the transactions described below,we did not participate in any transaction, and we are not currently participating in any proposed transaction, or series of transactions, in which the amount involvedexceeded the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years, and in which, to our knowledge,any of our directors, officers, five percent beneficial security holders, or any member of the immediate family of the foregoing persons had, or will have, a direct orindirect material interest.Compensation arrangements for our named executive officers and directors are described in the section entitled “Executive Compensation.”Employment AgreementsWe have entered into written employment agreements with each of our executive officers. These agreements generally provide for notice periods of varyingduration for termination of the agreement by us or by the relevant executive officer, during which time the executive officer will continue to receive base salary andbenefits. We have also entered into customary noncompetition, confidentiality of information and ownership of inventions arrangements with our executiveofficers. However, the enforceability of the noncompetition provisions may be limited under applicable law.OptionsSince our inception we have granted options to purchase our common stock to our officers and directors. Such option agreements may contain accelerationprovisions upon certain merger, acquisition, or change of control transactions.62Restricted Stock GrantsOn September 29, 2022, our compensation committee approved grants of restricted share awards under our 2017 Plan to Ronen Luzon, Or Kles, Billy Pardo,Ilia Turchinsky and Ezequiel Javier Brandwain, pursuant to which they were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000restricted shares and 12,000 restricted shares, respectively. The restricted shares shall vest in three equal installments on January 1, 2023, January 1, 2024 andJanuary 1, 2025, conditioned upon continuous employment with us, and subject to accelerated vesting upon a change in control of the Company.Shareholder ActivismIn May 2021, we received notice from Custodian Ventures, LLC, or Custodian, of its intention to nominate four candidates to stand for election to our Boardof Directors at our 2021 annual meeting of stockholders. Custodian subsequently made a book and records request and has made public statements calling forchanges to our management.On September 22, 2021, Custodian, commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v. Mysize,Inc., C.A. No. 20210817LWW, or the Delaware Action. In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting. As further described below, on November 4, 2021, we entered into asettlement agreement, or the Settlement Agreement, with Custodian, Activist Investing LLC, David Aboudi, Partick Loney and David Natan, collectively, the LazarParties, settling and dismissing the Delaware Action.On October 19, 2021, we commenced an action in the United States District Court for the Southern District of New York captioned My Size, Inc. v. DavidLazar, Custodian Ventures LLC, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, Civil Action No, 1:21cv08585, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, andcertain rules promulgated thereunder, or the SDNY Action. The complaint sought, among other things, declaratory and injunctive relief related to defendants’ effortsto nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed “group” for purposes ofSection 13 (d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. In addition, the complaint alleged that thedefendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules in connection with their efforts to elect a slate of directorsto our Board of Directors. On October 20, 2021, the Court signed an order granting a hearing on an anticipated motion for a preliminary injunction and expeditedscheduling and discovery in aid thereof, and scheduled that hearing for December 2, 2021. As further described below, on November 4, 2021, we entered into theSettlement Agreement with the Lazar Parties settling and dismissing the claims asserted in the SDNY Action and the Delaware Action against one another. OnNovember 8, 2021, the remaining defendants in the SDNY Action filed and answer and counterclaim asserting a claim against us pursuant to New York Civil RightsLaw Section 70a, also known as New York’s antiSLAPP statute.On November 4, 2021, we entered into the Settlement Agreement, or the Lazar Settlement Agreement, with the Lazar Parties. Pursuant to the LazarSettlement Agreement, we and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the LazarSettlement Agreement, we reimbursed Custodian for out of pocket expenses and in consideration for the dismissal and release of claims against the Company anaggregate amount equal to $275,000. With respect to our 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) itsMay 12, 2021 notice of stockholder nominations of four director candidates with respect to our 2021 annual meeting of stockholders, (ii) the notice dated October 28,2021 submitted by Custodian to us notifying us of Custodian’s continued intent to bring its nomination of four director candidates before our stockholders at the2021 annual meeting, and (iii) any and all related materials and notices submitted to us in connection therewith or related thereto and to not take any further action inconnection with the solicitation of any proxies in connection with us. Custodian also agreed to cease any and all solicitation and other activities in connection withthe 2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effective date of theAgreement, or the Standstill Period. The Lazar Settlement Agreement also provides that during the Standstill Period, the Lazar Parties will vote all shares of ourcommon stock it beneficially owns in accordance with any proposal or recommendation made by us or our Board of Directors that is submitted to our stockholders,unless to do so would violate applicable law and except with respect to certain extraordinary transactions. The Lazar Settlement Agreement also contains nondisparagement and confidentiality provisions, subject to certain exceptions.63On December 9, 2021, we subsequently entered into a Settlement Agreement, or the Ault Settlement Agreement, with Milton C. Ault III, Ault Alpha LP, AultAlpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed to withdraw the SDNY Action against the AultParties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that action against the Company. In addition, pursuant to the SettlementAgreement, we paid $70,000 to the Ault Parties in consideration for the releases and other good and valuable consideration as set forth in the Ault SettlementAgreement.Naiz Bespoke Technologies AcquisitionOn October 7, 2022, we entered into the Naiz Agreement with the Naiz Sellers, pursuant to which the Naiz Sellers agreed to sell to us all of the issued andoutstanding equity of Naiz. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) ) the Naiz EquityConsideration and (ii) up the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the Equity Value Averaging Period) is less than $1,650,000, My Size shall pay the Shortfall Value to the Naiz Sellers within 45days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period, it wasdetermined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement)).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers will be subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into the LockUp Agreement with My Size, (ii) Whitehole, Twinbel and EGIentered into the Voting Agreement with My Size and (iii) each of the Key Persons entered into employment agreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonth period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonth “dribbleout” provisionthat provides following the expiration of the initial sixmonth lockup period, without My Size’s prior written consent (which My Size shall be permitted to withholdat its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than the average dailytrading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.64The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Indemnification Agreements and Directors’ and Officers’ Liability InsuranceWe have entered into indemnification agreements with each of our directors and executive officers. These agreements, among other things, require us toindemnify these individuals and, in certain cases, affiliates of such individuals, to the fullest extent permitted by Delaware law against liabilities that may arise byreason of their service to us or at our direction, and to advance expenses incurred as a result of any proceedings against them as to which they could beindemnified. We also maintain an insurance policy that insures our directors and officers against certain liabilities, including liabilities arising under applicablesecurities laws.Director IndependenceSee “Item 10. Directors, Executive Officers and Corporate Governance; Corporate Governance, Board Composition” above for a discussion regarding theindependence of the members of our board of directors.ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICESSomekh Chaikin, a member firm of KPMG International, located in Tel Aviv, Israel, PCAOB ID 1057, has served as our independent registered publicaccounting firm for 2022 and 2021. The following are Somekh Chaikin’s fees for professional services in each of the respective fiscal years:Fee Category20222021Audit Fees198,910298,300Tax Fees30,66729,300Auditrelated Fees18,000Total Fees247,577327,600Audit Fees:Audit Fees consist of fees billed for professional services performed by Somekh Chaikin for the audit of our annual financial statements, thereview of interim consolidated financial statements, and related services that are normally provided in connection with registration statements, including theregistration statement for S1 and S3.Tax Fees: Tax Fees may consist of fees for professional services, including tax and VAT consulting and compliance performed by an independent registeredpublic accounting provided during the period.PreApproval Policies and ProceduresIn accordance with the SarbanesOxley Act of 2002, as amended, our audit committee charter requires the audit committee to preapprove all audit andpermitted nonaudit services provided by our independent registered public accounting firm, including the review and approval in advance of our independentregistered public accounting firm’s annual engagement letter and the proposed fees contained therein. The audit committee has the ability to delegate the authorityto preapprove nonaudit services to one or more designated members of the audit committee. If such authority is delegated, such delegated members of the auditcommittee must report to the full audit committee at the next audit committee meeting all items preapproved by such delegated members. In the fiscal years endedDecember 31, 2022 and December 31, 2021 all of the services performed by our independent registered public accounting firm were preapproved by the auditcommittee.65PART IVITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES(a)Financial StatementsThe financial statements required by this Item are included beginning at page F1.(b)ExhibitsSee Exhibit IndexITEM 16. FORM 10K SUMMARYNot applicableEXHIBIT INDEXExhibitNumberDescription3.1Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Form on Form8K filed on March 23, 2017)3.2Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10K filed onMarch 4, 2016)3.3Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’s Current Report onForm 8K filed on February 20, 2018)3.4Second Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8K filedon April 24, 2018)3.5Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’sCurrent Report on Form 8K filed on November 18, 2019)3.6Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on January 7, 2022)3.7Amendment No. 1 to Second Amended and Restated ByLaws (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8K filed on January 7, 2022)3.8Certificate of Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on December 7, 2022)4.1Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S3/A filed onNovember 14, 2016)4.2Form of Warrant to Purchase Common Stock issued on February 2, 2018 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report onForm 10K filed on March 27, 2019)4.3Description of Securities Registered under Section 12 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report on Form 10K filedon March 19, 2020)4.4Form of Warrant (incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S1, Amendment No. 1, filed with the SECon May 5, 2020.)4.5Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)4.6Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.1My Size, Inc. 2017 Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement on Schedule DEF 14Afiled on March 2, 2017)10.2My Size, Inc. 2017 Consultant Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement onSchedule DEF 14A filed on March 2, 2017)10.3My Size, Inc. 2017 Stock Option Plan Israel Grantees SubPlan (incorporated by reference to Exhibit 10.3 to the Company’s Annual Report on Form10K filed on March 27, 2019)6610.4Purchase Agreement between My Size, Inc. and Shoshana Zigdon dated as of February 16, 2014 (incorporated by reference to Exhibit 10.2 to theCompany’s Annual Report on Form 10K filed on March 4, 2016)10.5 +Employment Agreement between My Size Israel 2014 Ltd. and Ronen Luzon dated November 18, 2018 (incorporated by reference to Exhibit 10.1 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.6 +Employment Agreement between My Size Israel 2014 Ltd. and Or Kles dated November 18, 2018 (incorporated by reference to Exhibit 10.2 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.7 +Employment Agreement between My Size Israel 2014 Ltd. and Billy Pardo dated November 18, 2018 (incorporated by reference to Exhibit 10.3 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.8Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on January 15,2020)10.9Form of Warrant (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.10Form of Placement Agent Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.11Securities Purchase Agreement (incorporated by reference to Exhibit 10.30 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.12Underwriting Agreement, dated January 5, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on January 7, 2021)10.13Underwriting Agreement, dated March 22, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on March 25, 2021)10.14Amendment to Purchase Agreement between My Size Israel 2014 Ltd., My Size, Inc. and Shoshana Zigdon (incorporated by reference to Exhibit 10.1to the Company’s Quarterly Report on Form 10Q on August 16, 2021)10.15Form of Registered Direct Offering Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.16Form of PIPE Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.17Form of Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.18Form of Placement Agent Warrant issued by the Company on October 28, 2021 (incorporated by reference to Exhibit 10.22 to the Company’s Form S1filed on November 12, 2021)10.19Form of Registration Rights Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.4 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.20Engagement Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference to Exhibit 10.5 to theCompany’s Current Report on Form 8K filed on October 28, 2021)10.21Settlement Agreement dated November 4, 2021, among My Size, Inc., David Lazar and certain of his affiliates (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on November 5, 2021)10.22Share Purchase Agreement dated as of February 7, 2022 between My Size Israel 2014 Ltd. and Amar Guy Shalom and Elad Bretfeld (incorporated byreference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SEC on February 8, 2022)10.23Employment Agreement between My Size Israel 2014 Ltd. and Ezequiel Javier Brandwain dated January 27, 2022 (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on February 1, 2022)10.24Form of Section 102 Capital Gain Restricted Stock Award Agreement under the Company’s 2017 Equity Incentive Plan (incorporated by reference toExhibit 10.1 to the Company’s Quarterly Report on Form 10Q, filed with the SEC on November 14, 2022)10.25Share Purchase Agreement, dated as of October 6, 2022, by and among My Size, Inc., Borja Cembrero Saralegui, Artiz Toree Garcia, Whitehold, S.L.,Twinbel, S.L., and EGI Acceleration, S.L. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SECon October 12, 2022)10.26Form of LockUp Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)10.27Form of Voting Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.3 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)6710.28My Size, Inc. Amendment to the My Size, Inc. 2017 Equity Plan (incorporated by reference to Appendix B to the Company’s definitive proxystatement filed with the SEC on November 4, 2022)10.29Form of Registered Direct Offering Securities Purchase Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.1 to theCompany’s Current Report on Form 8K filed with the SEC on January 12, 2023)10.30Form of PIPE Securities Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8Kfiled with the SEC on January 12, 2023)10.31Form of Registered Direct PreFunded Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.32Form of Series A and Series B Warrant (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8K filed with the SEC onJanuary 12, 2023)10.33Form of Private Placement PreFunded Warrant (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.34Form of Registration Rights Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form8K filed with the SEC on January 12, 2023)10.35Engagement Agreement, dated December 5, 2022 (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8K filed withthe SEC on January 12, 2023)10.36*Form of Placement Agent Warrant21.1*List of Subsidiaries23.1*Consent of Somekh Chaikin, a member firm of KPMG International, registered public accounting firm31.1*Certification of the Chief Executive Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200231.2*Certification of the Chief Financial Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200232.1*Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a14(b) of the Exchange Act and 18 U.S.C. Section 1350, asadopted pursuant to Section 906 of the SarbanesOxley Act of 2002101.INS*Inline XBRL Instance Document101.SCH*Inline XBRL Taxonomy Schema101.CAL*Inline XBRL Taxonomy Calculation Linkbase101.DEF*Inline XBRL Taxonomy Definition Linkbase101.LAB*Inline XBRL Taxonomy Label Linkbase101.PRE*Inline XBRL Taxonomy Presentation Linkbase104Cover Page Interactive Data File (formatted as Inline XBRL document and contained in Exhibit 101)*Filed herewith.+Indicates a management contract or any compensatory plan, contract or arrangement68SIGNATURESPursuant to the requirements of Section 13 and 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10K to be signed on its behalf by the undersigned, thereunto duly authorized on this 14th day of April, 2023.MY SIZE, INC./s/ Ronen LuzonRonen LuzonChief Executive Officer (Principle Executive Officer)/s/ Or KlesOr KlesChief Financial Officer(Principal Financial and Accounting Officer)Pursuant to the requirements of the Securities Act of 1934, this annual report on Form 10K has been signed below by the following persons on behalf ofthe registrant and in the capacities and on the dates indicated.SignatureTitleDate/s/ Ronen LuzonChief Executive Officer and DirectorApril 14, 2023Ronen Luzon(Principle Executive Officer)/s/ Or KlesChief Financial OfficerApril 14, 2023Or Kles(Principal Financial and Accounting Officer)/s/ Oren ElmaliahDirectorApril 14, 2023Oren Elmaliah/s/ Arik KaufmanDirectorApril 14, 2023Arik Kaufman/s/ Oron BranitzkyDirectorApril 14, 2023Oron Branitzky/s/ Guy ZimmermanDirectorApril 14, 2023Guy Zimmerman69EX10.36 2 ex1036.htmExhibit 10.36NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES ANDEXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THESECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO ANEFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTIONNOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGINACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.PLACEMENT AGENT COMMON STOCK PURCHASE WARRANTMY SIZE, INC.Warrant Shares: _______Issue Date: January 12, 2023Initial Exercise Date: January 12, 2023THIS PLACEMENT AGENT COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _____________ or itsassigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the dateset forth above (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on January 10, 2028 (the “Termination Date”) but not thereafter, tosubscribe for and purchase from My Size, Inc., a Delaware corporation (the “Company”), up to ______ shares (as subject to adjustment hereunder, the “WarrantShares”) of the Company’s Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined inSection 2(b). This Warrant is issued pursuant to that certain engagement letter, dated as of December 5, 2022, by and between the Company and H.C. Wainwright &Co., LLC.Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities PurchaseAgreement (the “Purchase Agreement”), dated January 10, 2023, among the Company and the purchasers signatory thereto.1Section 2. Exercise.a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or afterthe Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted by email (or emailattachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the numberof Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shalldeliver the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on aUnited States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No inkoriginalNotice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required.Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder haspurchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrantto the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercisesof this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering theoutstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder andthe Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver anyobjection to any Notice of Exercise within one (1) Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant,acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, thenumber of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.b) Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $3.8188, subject to adjustment hereunder (the“Exercise Price”).c) Cashless Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein isnot available for the issuance or resale of the Warrant Shares to or by the Holder, then this Warrant may also be exercised, in whole or in part, at such timeby means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing[(AB) (X)] by (A), where:(A) =as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice ofExercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed anddelivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) ofRegulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAPon the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on theprincipal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s execution of the applicable Notice ofExercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hoursthereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii)the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice ofExercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;(B) =the Exercise Price of this Warrant, as adjusted hereunder; and(X) =the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if suchexercise were by means of a cash exercise rather than a cashless exercise.2“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which theCommon Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York Citytime)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest precedingdate) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for theCommon Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the mostrecent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by anindependent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to theCompany, the fees and expenses of which shall be paid by the Company.“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the TradingMarket on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or thenearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and ifprices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reportingprices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock asdetermined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonablyacceptable to the Company, the fees and expenses of which shall be paid by the Company.If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of theSecurities Act, the Warrant Shares shall take on the characteristics of the Warrants being exercised, and the holding period of the Warrant Shares beingissued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section 2(c).3d) Mechanics of Exercise.i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to betransmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with TheDepository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant insuch system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of theWarrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or mannerofsale limitationspursuant to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, registered in theCompany’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitledpursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2)Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate ExercisePrice to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Companyof the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall bedeemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant hasbeen exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (otherthan in the case of a cashless exercise) is received by the Warrant Share Delivery Date. If the Company fails for any reason to deliver tothe Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder,in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP ofthe Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifthTrading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share Delivery Date until such WarrantShares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FASTprogram so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standardsettlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stockas in effect on the date of delivery of the Notice of Exercise.4ii.Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the requestof a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a newWarrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrantshall in all other respects be identical with this Warrant; provided, however, that the Holder shall be required to return any WarrantShares subject to any such rescinded exercise notice concurrently with the return to Holder of the aggregate Exercise Price paid to theCompany for such Warrant Shares and the restoration of Holder’s right to acquire such Warrant Shares pursuant to this Warrant(including, issuance of a replacement warrant certificate evidencing such restored right).iii. Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant toSection 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.iv. Compensation for BuyIn on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights availableto the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with theprovisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date theHolder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwisepurchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipatedreceiving upon such exercise (a “BuyIn”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) theHolder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) theamount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connectionwith the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at theoption of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was nothonored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock thatwould have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holderpurchases Common Stock having a total purchase price of $11,000 to cover a BuyIn with respect to an attempted exercise of shares ofCommon Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediatelypreceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written noticeindicating the amounts payable to the Holder in respect of the BuyIn and, upon request of the Company, evidence of the amount of suchloss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including,without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver sharesof Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.5v. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise ofthis Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Companyshall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by theExercise Price or round up to the next whole share.vi. Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue ortransfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paidby the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by theHolder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, thisWarrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder andthe Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.The Company shall pay all Transfer Agent fees required for sameday processing of any Notice of Exercise and all fees to the DepositoryTrust Company (or another established clearing corporation performing similar functions) required for sameday electronic delivery of theWarrant Shares.vii. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timelyexercise of this Warrant, pursuant to the terms hereof.6e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise anyportion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicableNotice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of theHolder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). Forpurposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Partiesshall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, butshall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrantbeneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion ofany other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exerciseanalogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in thepreceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act andthe rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that suchcalculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed inaccordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (inrelation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisableshall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether thisWarrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of thisWarrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm theaccuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number ofoutstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s mostrecent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recentwritten notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request ofa Holder, the Company shall within one (1) Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock thenoutstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise ofsecurities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number ofoutstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stockoutstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice tothe Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial OwnershipLimitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares ofCommon Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in theBeneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shallbe construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portionhereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplementsnecessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of thisWarrant.7Section 3. Certain Adjustments.a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes adistribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which,for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstandingshares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into asmaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case theExercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any)outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately aftersuch event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of thisWarrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for thedetermination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case ofa subdivision, combination or reclassification.b) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sellsany Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares ofCommon Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregatePurchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise ofthis Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before thedate on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the recordholders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that to the extent that theHolder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall notbe entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Rightto such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not resultin the Holder exceeding the Beneficial Ownership Limitation).c) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend (other than cash) orother distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including,without limitation, any distribution of stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement,scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holdershall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number ofshares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including withoutlimitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken,the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, thatto the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, thenthe Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a resultof such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as itsright thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).8d) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more relatedtransactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease,license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, director indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of CommonStock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more ofthe outstanding Common Stock or 50% or more of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in oneor more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchangepursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly orindirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, withoutlimitation, a reorganization, recapitalization, spinoff, merger or scheme of arrangement) with another Person or group of Persons whereby such otherPerson or group acquires more than 50% of the outstanding shares of Common Stock or 50% or more of the voting power of the common equity of theCompany (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for eachWarrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of theHolder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor oracquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as aresult of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior tosuch Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, thedetermination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of AlternateConsideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Priceamong the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. Ifholders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall begiven the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at theHolder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date ofthe public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cashequal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of suchFundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company’s control, including not approved by theCompany’s Board of Directors, the Holder shall only be entitled to receive from the Company or any Successor Entity the same type or form ofconsideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to theholders of Common Stock of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, stock or anycombination thereof, or whether the holders of Common Stock are given the choice to receive from among alternative forms of consideration in connectionwith the Fundamental Transaction; provided, further, that if holders of Common Stock of the Company are not offered or paid any consideration in suchFundamental Transaction, such holders of Common Stock will be deemed to have received common stock of the Successor Entity (which Entity may be theCompany following such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on theBlackScholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day of consummation of the applicableFundamental Transaction for pricing purposes and reflecting (A) a riskfree interest rate corresponding to the U.S. Treasury rate for a period equal to thetime between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expectedvolatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualizationfactor) as of the Trading Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlyingprice per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any noncashconsideration, if any, being offered in such Fundamental Transaction and (ii) the highest VWAP during the period beginning on the Trading Dayimmediately preceding the public announcement of the applicable contemplated Fundamental Transaction (or the consummation of the applicableFundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant to this Section 3(e) and (D) a remaining option timeequal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date and (E) azero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds (or such other consideration)within the later of (i) five Business Days of the Holder’s election and (ii) the date of consummation of the Fundamental Transaction. The Company shallcause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of theobligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant towritten agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to suchFundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entityevidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares ofcapital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of thisWarrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which appliesthe exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to suchFundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for thepurpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which isreasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall beadded to the term “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction, each andevery provision of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to each of the Company and theSuccessor Entity or Successor Entities, jointly and severally), and the Successor Entity or Successor Entities, jointly and severally with the Company, mayexercise every right and power of the Company prior thereto and the Successor Entity or Successor Entities shall assume all of the obligations of theCompany prior thereto under this Warrant and the other Transaction Documents with the same effect as if the Company and such Successor Entity orSuccessor Entities, jointly and severally, had been named as the Company herein.e) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. Forpurposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the numberof shares of Common Stock (excluding treasury shares, if any) issued and outstanding.9f) Notice to Holder.i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, theCompany shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resultingadjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form)on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C)the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any sharesof capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection withany reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all orsubstantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into othersecurities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of theaffairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as itshall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective datehereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to beentitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification,consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expectedthat holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or otherproperty deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure todeliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to bespecified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, nonpublic informationregarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to aCurrent Report on Form 8K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of suchnotice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.10Section 4. Transfer of Warrant.a) Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and to theprovisions of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights) aretransferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a writtenassignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay anytransfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a newWarrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument ofassignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly becancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unlessthe Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of thedate on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordanceherewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company,together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent orattorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute anddeliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issuedon transfers or exchanges shall be dated the Issue Date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Sharesissuable pursuant thereto.c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “WarrantRegister”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as theabsolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to thecontrary.d) Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrantshall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue skylaws or (ii) eligible for resale without volume or mannerofsale restrictions or current public information requirements pursuant to Rule 144, the Companymay require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, comply with the provisions ofSection 5.7 of the Purchase Agreement.11e) Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon anyexercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling suchWarrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exemptedunder the Securities Act.Section 5. Miscellaneous.a) No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends orother rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Withoutlimiting the rights of a Holder to receive Warrant Shares on a “cashless exercise,” and to receive the cash payments contemplated pursuant to Sections 2(d)(i) and 2(d)(iv), in no event will the Company be required to net cash settle an exercise of this Warrant.a.In July 2019, the Company entered into a threeyear agreement with a consultant (“Consultant14”) to provide services to the Company includingassisting the Company to promote, market and sell the Company’s technology to potential customers. Pursuant to such agreement and in partialconsideration for such consulting services, the Company agreed to issue to Consultant14 options to purchase up to 107 shares of the Company’scommon stock upon execution of the agreement. The options are exercisable at $375.00 per share and shall vest in 3 equal instalments every twelvemonths starting July 2019. Unexercised options shall expire 4 years from the effective date.In addition, the Company agreed to issue to Consultant14 options to purchase up to 890 shares of the Company’s common stock upon executionof the agreement. The options are exercisable at $27.00 per share and shall vest in 4 equal instalments every six months starting September 2020.Unexercised options shall expire 5 years from the effective date.During 2022 and 2021, an amount of $7 and $14 respectively, were recorded by the Company as stockbased equity awards with respect to Consultant14.F24MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The Company’s outstanding options granted to consultants as of December 31, 2022 are as follows:Issuance dateOptions forCommon stockWeightedAverageexercise priceper shareOptionsexercisableExpirationdateFebruary 201815USD528.7515February 2023August 2018December 2018531USD352.38264August 2023 December 2023July 2020107USD375107July 2023SeptemberOctober 20201,488USD27.201,288October 2024 September 2025Total2,1411,674The Company uses the Black Scholes model to measure the fair value of the stock options with the assistance of a third party valuation.No stock options were granted during 2022 to consultants.The fair value of the Company’s stock options granted to nonemployees was calculated using the following weighted average assumptions:20222021GrantsGrantsDividend yield0%Expected volatility125.15%Riskfree interest0.16%Contractual term of up to (years)1.52F25MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Stock Option Plan for employeesIn March 2017, the Company adopted a stock option plan (the “Plan”) pursuant to which the Company’s Board of Directors may grant stock options toofficers and key employees. The total number of options which may be granted to directors, officers, employees under this plan, is limited to 289,000options. Stock options can be granted with an exercise price equal to or less than the stock’s fair market value at the date of grant.The fair value of each option award is estimated on the date of grant using the Binomial optionpricing model that used the weighted averageassumptions in the following table. The risk free rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the timeof grant.2022Grants2021GrantsDividend yield0%0%Expected volatility96.52%98.47%Riskfree interest4.06%0.96%expected life522.27In the years ended December 31, 2022 and 2021, 10,000 and 3,900 options, respectively, were granted.On December 7, 2022, the Company’s stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from230,800 shares to 289,000 shares.On September 29, 2022, the Compensation Committee of the Company approved grants of restricted share awards under the Company’s 2017 EquityIncentive Plan to Ronen Luzon (CEO), Or Kles (CFO), Billy Pardo (COO), Ilia Turchinsky (CTO) and Ezequiel Javier Brandwain (CCO), pursuant towhich were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000 restricted shares and 12,000 restricted shares,respectively. Each restricted share awarded under section 102 Capital Gain Restricted Stock Award Agreement (the “Agreement”). The restrictedshares shall vest in three equal installments on January 1, 2023, January 1, 2024 and January 1, 2025 for Ronen Luzon, Or Kles, Billy Pardo and IliaTurchinsky and on January 27, 2023, January 27, 2024 and January 27, 2025 for Ezequiel Javier Brandwain, conditioned upon continuous employmentwith the Company, and subject to accelerated vesting upon a change in control of the Company.On the same day, the Company granted fiveyears options to purchase up to 10,000 ordinary shares to other employees of the Company at an exerciseprice of $0.21 per share. The options vesting period is over three years in three equal portions from the vesting commencement date.F26MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The total stock option compensation expense in the year ended December 31, 2022 amounted to $448as follows: Research and development expensesamounted to $151, sales and marketing expenses amounted to $119and general and administrative expenses amounted to $178.The total stock option compensation expense in the year ended December 31, 2021 amounted to $252 as follows: Research and development expensesamounted to $94, sales and marketing expenses amounted to $97 and general and administrative expenses amounted to $61.As of December 31, 2022, there was a total of $530 unrecognized compensation cost relating to nonvested sharebased compensation arrangements.That cost is expected to be recognized over a weightedaverage period of 2.0 years.Share option activity during 2022 is as follows:2022Number ofoptionsWeightedaverageexerciseprice US$Outstanding as of January 135,74226.5Granted10,0005.25ExercisedExpired(4,136)Outstanding as of year end41,60622.48Vested as of year end33,20825.17Share option activity during 2021 is as follows:2021Number ofoptionsWeightedaverageExerciseprice US$Outstanding as of January 139,094$26.0Granted3,90032.0Exercised(751)Expired(6,501)Outstanding as of year end35,74226.5Vested as of year end27,06326.5F27MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 15 CONTINGENCIES AND COMMITMENTSa.On August 7, 2018, the Company commenced an action against North Empire LLC (“North Empire”) in the Supreme Court of the State of New York,County of New York for breach of a Securities Purchase Agreement (the “Agreement”) in which it is seeking damages in an amount to bedetermined at trial, but in no event less than $616. On August 2, 2018, North Empire filed a Summons with Notice against the Company, also in thesame Court, in which they allege damages in an amount of $11.4 million arising from an alleged breach of the Agreement. On September 6, 2018North Empire filed a Notice of Discontinuance of the action it had filed on August 2, 2018. On September 27, 2018, North Empire filed an answerand asserted counterclaims in the action commenced by the Company against them, alleging that the Company failed to deliver stock certificatesto North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against theCompany’s CEO and now former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018,the Company filed a reply to North Empire’s counterclaims. On November 15, 2018, the Company’s CEO and now former Chairman of the Boardfiled a motion to dismiss North Empire’s thirdparty complaint. On January 6, 2020, the Court granted the motion and dismissed the thirdpartycomplaint. Discovery has been completed and both parties have filed motions for summary judgment in connection with the claims andcounterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summary judgment, arguing there werefactual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision. The appealmust be fully perfected and filed by July 26, 2022. On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying theCompany’s motion for summary judgment. North Empire will file its opposition papers on or before March 31, 2022, and the Company will file replypapers on April 29, 2022. On or about September 12, 2022, the Court issued its Decision and Order denying the Company’s motion to reargue.North Empire filed its opposing brief on December 7, 2022. Both sides were given an opportunity to file a reply brief. The Company filed our replybrief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. The Appellate Court has scheduled oral argument for the appealfor February 7, 2023. Oral argument was held before the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Courtfiled its Decision and Order, which affirmed the lower court’s decisions regarding both My Size and North Empire’s motions for summary judgmentand sent the case back to the Supreme Court.On or about March 13, 2023, the Supreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date forthe mediation has not yet been set. The Company intends to vigorously defend any claims made by North Empire.The Company believes it is more likely than not that the counterclaims will be denied.b.In May 2021, the Company received notice from Custodian Ventures, LLC (“Custodian”) of its intention to nominate four candidates to stand forelection to our Board of Directors at the Company’s 2021 annual meeting of stockholders. Custodian subsequently made a book and recordsrequest and has made public statements calling for changes to our management.On September 22, 2021, Custodian commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v.MySize, Inc. (the “Delaware Action”). In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting.On October 19, 2021, the Company commenced an action in the United States District Court for the Southern District of New York againstCustodian, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, and certain rulespromulgated thereunder (the “SDNY Action”). The complaint sought, among other things, declaratory and injunctive relief related to defendants’efforts to nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed“group” for purposes of Section 13(d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. Inaddition, the complaint alleged that the defendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules inconnection with their efforts to elect a slate of directors to the Company’s Board of Directors. On October 20, 2021, the Court signed an ordergranting a hearing on an anticipated motion for a preliminary injunction and expedited scheduling and discovery in aid thereof, and scheduled thathearing for December 2, 2021.On November 4, 2021, the Company entered into the Settlement Agreement with the Lazar Parties. Pursuant to the Settlement Agreement, theCompany and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the SettlementAgreement, the Company agreed to reimburse Custodian for out of pocket expenses and in consideration for the dismissal and release of claimsagainst the Company an aggregate amount equal to $275, to be paid within three business days of the effective date of the Settlement Agreement.With respect to the Company’s 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) its May 12,2021 notice of stockholder nominations of four director candidates with respect to the Company’s 2021 annual meeting of stockholders, (ii) thenotice dated October 28, 2021 submitted by Custodian to the Company notifying the Company of Custodian’s continued intent to bring itsnomination of four director candidates before the Company’s stockholders at the 2021 annual meeting, and (iii) any and all related materials andnotices submitted to the Company in connection therewith or related thereto and to not take any further action in connection with the solicitationof any proxies in connection with the Company. Custodian also agreed to cease any and all solicitation and other activities in connection with the2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effectivedate of the Agreement (the “Standstill Period”). The Settlement Agreement also provides that during the Standstill Period, the Lazar Parties willvote all shares of common stock of the Company it beneficially owns in in accordance with any proposal or recommendation made by theCompany or the Board of Directors of the Company that is submitted to the stockholders of the Company, unless to do so would violateapplicable law and except with respect to certain extraordinary transactions. The Settlement Agreement also contains nondisparagement andconfidentiality provisions, subject to certain exceptions.On December 9, 2021, the Company subsequently entered into a Settlement Agreement (the “Ault Settlement Agreement”), with Milton C. Ault III,Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed towithdraw the SDNY Action against the Ault Parties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that actionagainst the Company. In addition, pursuant to the Settlement Agreement, the Company paid $70 to the Ault Parties in consideration for thereleases and other good and valuable consideration as set forth in the Ault Settlement Agreement.c.On July 5, 2021, the Company was served with a legal complaint filed by Fidelity Venture Capital Ltd. and Dror Atzmon in the Magistrate’s Court inTel Aviv for a monetary award in an amount of NIS 1,436,679 (approximately $450) and a declaratory relief. The plaintiffs allege that the Companybreached its contractual obligations to pay them for services allegedly rendered to the Company by the plaintiffs under a certain consultingagreement dated July 2, 2014, in an amount of NIS 819,000 (approximately $256). Additionally, the plaintiffs allege that the Company shouldcompensate them for losses allegedly incurred by them following their investment in the Company’s shares issued under a certain private offering.In the alternative, the plaintiffs move that the court will declare the investment agreement void with full restitution of plaintiffs’ original investmentin an amount of NIS 1,329,650(approximately $415). The Company filed its statement of defense on October 25, 2021. The first preliminary courthearing of the case is scheduled for January 23, 2022.The first court preliminary hearing was held on March 1, 2022.Following the first preliminary hearing and the Court’s comments and recommendation, the Plaintiffs filed a motion to strike out the claim withoutprejudice.On March 8, 2022 the Court ordered dismissal without prejudice of the claim.F28MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATIONAcquisition of OrgadOn February 7, 2022, the Company acquired 100% of the shares and voting interests in Orgad an omnichannel ecommerce platform. The acquisitionwas designed to create an additional revenue stream for the Company by becoming a direct ecommerce seller while leveraging the synergies betweenMySizeID and Orgad’s ecommerce platform.Unaudited proforma informationThe results of operations of Orgad have been included in the consolidated financial statements since the acquisition date of February 7, 2022. Orgadrevenues included in the Company’s consolidated statement of operations from February 7, 2022 through December 31, 2022 were $4,132. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,662 and $2,850 respectively, and the net loss after tax would have been $8,519 and $10,149 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash (*)300Issuance of shares of common stock (69,752 shares) (**)457Total consideration transferred757(*)The cash payment is subject to working capital adjustments.(**)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Orgad, on the twoyear and the threeyear anniversary of the closing, $350in each ofthese years provided that in the case of the second and third instalments certain revenue targets are met and subject further to certain downward postclosing adjustment. Furthermore, 69,752shares of common stock will be issued in eight equal quarterly instalments until the lapse of two years fromclosing. Additional earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023 will also be paid. All of these payments aresubject to the former owners being actively engaged with Orgad at the date such payment is due, and therefore were not taken as part of theconsideration for the business combination.During the year ended December 31, 2022 an amount of $456and $319was recorded in respect of the cash instalments and in respect of stocksissuance, respectively in Cost Of Goods, Sales and Marketing and General and Administrative expenses as shown in the following table:2022Stockbased compensation expense – Cost of goods194Stockbased compensation expense Sales and marketing271Stockbased compensation expense General and administrative310775(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the preliminary estimates of their fair values, which were determined using generally accepted valuation techniques based onestimates and assumptions made by management at the time of the acquisition. Such estimates are subject to change during the measurement periodwhich is not expected to exceed one year. The purchase price allocation was not finalized duo to examination of the net working capital of Orgad at theacquisition date. Any adjustments to the preliminary purchase price allocation identified during the measurement period will be recognized in theperiod in which the adjustments are determined.The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and Cash EquivalentTrade receivables364PP&E55Inventory864Longterm financial investment31Selling platform378Goodwill152Shortterm accruals and deferrals(181)Trade payables(668)Long term provision(13)Longterm debt(138)Deferred Taxes(87)Total net assets acquired757F29MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)(c)Acquisitionrelated costsThe Company incurred transaction costs of approximately $40and none during twelvemonth period ended December 31, 2022 which were included ingeneral and administrative expenses in the consolidated statements of income (loss).Acquisition of Naiz Bespoke Technologies, S.L. (“Naiz”)On October 11, 2022, the Company acquired 100% of the shares and voting interests in Naiz a provider of SaaS technology solutions that solve sizeand fit issues for fashion ecommerce companies. The acquisition was designed to allow Naiz’s customers benefit from MySize’s deep understanding ofthe fashion ecommerce retail landscape, while creating an additional revenue stream for the Company.Unaudited proforma informationThe results of operations of Naiz have been included in the consolidated financial statements since the acquisition date of October 11, 2022. Naizrevenues included in the Company’s consolidated statement of operations from October 11, 2022 through December 31, 2022 were $103. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,738 and $379 respectively and the net loss after tax would have been $8,695 and $10,717 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash503Issuance of shares of common stock (240,000 shares) (*)1,008Total consideration transferred1,511(*)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Naiz, additional cash consideration (up to $1,550) in four instalments subject to thefollowing conditions:(i)Continuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result ofa Good Reason; and(ii)Naiz’s Revenues reaching or exceeding the respective Target Revenues defined in the agreement. The revenues will be calculated in four periods:(1) January 1, 2022 – December 31, 2022; (2) January 1, 2023 – June 30, 2023; (3) July 1, 2023 – December 31, 2023; (4) January 1, 2024 – December31, 2024.Former owners of Naiz are entitled to additional cash consideration following December 31, 2025 (up to $1,650) in an event when the actual value of theequity consideration is less than $1,650, subject to completion of a Target Revenue for the period of January 1, 2025 – December 31, 2025 andcontinuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result of aGood Reason;F30MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)During the year ended December 31, 2022 an amount of $283 was recorded in respect of the additional cash consideration.(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the estimates of their fair values, which were determined using generally accepted valuation techniques based on estimates andassumptions made by management at the time of the acquisition.The following table summarizes the fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and cash equivalent36Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Total net assets acquired1,511(c)Acquisitionrelated costsDuring 2022, the Company incurred transaction costs of approximately $75 which were included in general and administrative expenses in theconsolidated statements of income (loss).F31MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)Note 17 – Operating SegmentsDuring the year ended December 31, 2021, the Company had one reportable segment. As a result of the business combinations in the reporting period(see note 13), the Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificialintelligence driven measurement solutions and (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions and. The fashionand equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. Orgad has onecustomer that is responsible for 37.9% of the Company consolidated revenues. The SaaS based innovative artificial intelligence driven measurementsolutions, or SaaS Solutions operating segment consists of My Size Inc and My Size Israel and My Size LLC.Information related to the operations of the Company’s reportable operating segments is set forth below:Fashion andequipment ecommerce platformSaaSSolutionsNaizTotalAs of the year ended December 31, 2022Revenues from external customers4,1322241034,459Operating (loss) income(591)(7,181)(338)(8,110)Financial income (expense), net(236)Net loss before tax(8,346)Fashion andequipment ecommerce platformSaasSolutionNaizAs of December 31, 2022:Assets2,0225,9661,691Amortization of intangible assets(114)(34)(46)The Company elected to present geographic information in respect with revenues generated from external customers based on the location of the selling entity:All the revenues of the fashion and equipment ecommerce platform segment are generated by Orgad, located in Israel.All the revenues of the Naiz segment are generated by Naiz, located in Spain.The revenues of the Saas Solutions segment are generated by My Size Ltd. located in Israel (approximately 75% of the segment revenues) and by My Size Inc.located in the U.S. (approximately 25% of the segment revenues).NOTE 18 SALES AND MARKETINGYear endedDecember 31,20222021Salaries836574Consultants and subcontractors5831,086Marketing481283Selling fees489Share based payments post Orgad acquisition (*)271Share based payments for consultants and employees127180Travel21142Other1451713,1432,336(*) See note 16.NOTE 19 GENERAL AND ADMINISTRATIVE EXPENSESYear endedDecember 31,20222021Salaries1,007461Professional services7051,832Share based payments for consultants, directors and employees18098Rent, office expenses and communication442372Insurance564627cash liability and equity liability expenses related to Orgad acquisition310cash liability expenses related to Naiz acquisition217Settlement fees (*)345Directors8259Other3933303,9004,124(*)See note 15(b)F32MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 20 FINANCIAL INCOME (EXPENSE), NETA.Financial incomeYear endedDecember 31,20222021Revaluation investment in marketable securities49Other26172666B.Financial expenseYear endedDecember 31,20222021Exchange rate differences33Revaluation of loan granted100Revaluation investment in marketable securities62Other6792629NOTE 21 EVENTS SUBSEQUENT TO THE BALANCE SHEET DATEa.On January 2, 2023, Orgad experienced a fire at its warehouse in Israel. The Company is not aware of any casualties or injuries associated with thefire. The Company shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450.The Company believes that this incident did not affect the future sales results of Orgad for the year 2023. The inventory was not insured and it istoo early to determine the potential impact of this incident on the other parties that were involved in the incident (lessor and others that leasedproperties near the warehouse).b.On January 10, 2023, the Company entered into a securities purchase agreement pursuant to which the Company sold an aggregate of 162,000ofthe Company’s shares of common stock and prefunded warrants to purchase up to 278,899shares of common stock and, in a concurrent privateplacement, unregistered warrants to purchase up to883,798 shares of common stock, consisting of Series A warrants to purchase up to 441,899shares of common stock and Series B warrants to purchase up to 441,899shares of common stock, at an offering price of $3.055per share ofcommon stock and associated Series A and Series B warrants and an offering price of $3.054per prefunded warrant and associated Series A andSeries B warrants.In addition, the Company entered into a securities purchase agreement pursuant to which the Company agreed to sell and issue in a privateplacement an aggregate of up to 540,098 unregistered prefunded warrants and unregistered warrants to purchase up to an aggregate of 1,080,196shares of common stock, consisting of Series A warrants to purchase up to 540,098 shares of common stock and Series B warrants to purchase upto 540,098 shares of common stock at an offering price of $3.054 per prefunded warrant and associated Series A and Series B warrants.As of March 31,2023 all the pre funded warrants were exercised by the investor.F33ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSUREThere were no disagreements with accountants on accounting and financial disclosure of a type described in Item 304 (a)(1)(iv) or any reportable event asdescribed in Item 304 (a)(1)(v) of Regulation SK.ITEM 9A. CONTROLS AND PROCEDURESDisclosure ControlsWe carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief FinancialOfficer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) as of December 31, 2022. Basedupon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this Annual Report on Form10K, our disclosure controls and procedures were effective to ensure that information required to be disclosed in reports filed under the Exchange Act, as amended,is recorded, processed, summarized and reported within the required time periods specified in the SEC’s rules and forms and is accumulated and communicated toour management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.Management’s Report on Internal Control Over Financial ReportingOur internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records, that, in reasonable detail,accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only inaccordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition, use or disposition of our assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance withthe policies or procedures may deteriorate.Our management, including our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financialreporting at December 31, 2022. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the TreadwayCommission (COSO) in Internal Control—Integrated Framework (2013). Based on that assessment under those criteria, management has determined that, as ofDecember 31, 2022, our internal control over financial reporting was effective.This Annual Report on Form 10K does not include an attestation report of our registered public accounting firm regarding internal control over financialreporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to the exemption provided to issuersthat are not “large accelerated filers” nor “accelerated filers” under the DoddFrank Wall Street Reform and Consumer Protection Act.Changes in Internal Control Over Financial ReportingDuring the year ended December 31, 2022, we made two acquisitions, as discussed in Note 1a and Note 16 of the audited consolidated financial statementsfor the year ended December 31, 2022 included in this Annual Report on Form 10K. As a result, we made additions and/or modifications to policies, procedures,systems and controls that have materially affected our internal control over financial reporting from the acquisitions, including new controls for consolidationprocess that relates to accounting policies and procedures, operational processes and documentation practices. Management excluded the acquired businessesfrom management’s report on internal control over financial reporting. ITEM 9B. OTHER INFORMATIONNone.ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNot applicable.51PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe following table sets forth the name, age and positions of our executive officers and directors.NAMEAgePOSITIONRonen Luzon52Chief Executive Officer and Class III DirectorOr Kles40Chief Financial OfficerBilly Pardo47Chief Operating Officer and Chief Product OfficerIlia Turchinsky35Chief Technology OfficerEzequiel Javier Brandwain53Chief Commercial OfficerOron Branitzky (1)(2)(3)*63Class II DirectorOren Elmaliah (1)(2)(3)*38Class I DirectorArik Kaufman (1)(2)(3)*41Class I DirectorGuy Zimmerman*53Class II Director(1)Member of our audit committee(2)Member of our nominating and corporate governance committee(3)Member of our compensation committee* Independent as that term is defined by the rules of the Nasdaq Stock Market.The business background and certain other information about our directors and executive officers is set forth below:Ronen Luzon has served as our Chief Executive Officer and a member of our board of directors since September 2013. Since 2006, Mr. Luzon hasadditionally served as Chief Executive Officer and founder of Malers Ltd., a company in the global security solutions market which provides technological solutionsfor integrated communication infrastructures, security and control systems. Prior to Malers, he held several senior marketing, sales management and professionalservices positions in a variety of international high tech companies including VP marketing of GA Tech and Professional Services Manager of Eldat Communication.Mr. Luzon graduated from Middlesex University in London with a B.S. in IT and Business Information Systems. We believe that Mr. Luzon is qualified to serve as amember of our board of directors because of his more than 20 years of experience in the technology sector.Or Kles has served as our Chief Financial Officer since May 2016. He is a certified public accountant with a broad, diverse financial background. From May2013 until April 2016 he served as Assistant Controller of Shikun and BinuiSolel Boneh Infrastructure Ltd. and from December 2010 until May 2013 he served as anAssociate at KPMG. Mr. Kles holds an MBA and a B.A. in Business Management and Accounting (specializing in financing) from The College of ManagementAcademic Studies. Mr. Kles is a certified public accountant in Israel.Billy Pardo has served as our Chief Product Officer since May 2014 and Chief Operating Officer since April 2019. From April 2010 until August 2013, Ms.Pardo served as Senior Director of Product Management of Fourier Education. Among her areas of expertise are launching products from concept to successfuldelivery in various methodologies, including Fourier Education’s awardwinning einstein™ Science Tablet. Prior to that Ms. Pardo served in various productmanagement positions including, Project Manager of Time to Know, Product Marketing Manager of RiT Technologies, Product Manager of Pricer AB and R&DTeam Leader at Pricer AB. Ms. Pardo previously served as Software Engineer at Eldat Communication Ltd., and QA Engineer at NICE Systems. Ms. Pardo receivedan MBA from The Interdisciplinary Center and a B.A. in Computer Science from The Academic College of TelAvivYaffo.Ilia Turchinsky has served as our Chief Technology Officer since April 2019 and from July 2018 until April 2019 as our Director of Technology. Prior tojoining us, from 2013 until 2018, Mr. Turchinsky served in various roles, most recently Chief Technology Officer, at MonkeyTech Ltd., a company that providesdesign, development and characterization of mobile applications. Prior to that, Mr. Turchinsky served in various roles including development course instructor atIQLine, was a founder of Arnavsoft and was a software developer for MintLab and a political party. Mr. Turchinsky holds a B.Sc. from the Ben Gurion University inComputer Science and an M.Sc. from the Open University of Israel in Computer Science.52Ezequiel Javier Brandwain has served as our Chief Commercial Officer since February 2022. Mr. Brandwain brings more than two decades of globalexperience in retail and the fashion industry, mainly in business development, operations, and international markets. Before joining the Company, Mr. Brandwainheld positions of increasing responsibility at several companies, including between June 2017 and November 2020, at 7 For All Mankind International, where heserved as Director, Latin America and Caribbean, managing business development and operations across Latin America and the Caribbean. Before that, betweenMay 2016 and June 2017, Mr. Brandwain served as Chief Business Development Officer at Replay – Fashion Box SPA, where he oversaw business development andoperations, expansion and control in the Americas, the Caribbean, and NorthEast Asia. Prior this role, between September 2015 and May 2016, he served as theReplay’s Managing Director in Latin America and the Caribbean, leading the company’s international expansion in these regions. Prior to that, between April 2015and September 2015, Mr. Brandwain served as Managing Director, Latin America and Caribbean at Authentic Brands Group LLC, where he led that company’soperations, business developments and international expansion within these regions, and served as the direct liaison with the company’s headquarters in New York.Prior to that, between April 2015 and September 2015, Mr. Brandwain served as Chief Operating Officer, Latin America and Caribbean at Flemingo International Ltd.,overseeing operations, as well as projected operations in the travel retail field across these regions. Prior to that, between December 2010 and February 2014, Mr.Brandwain served as Regional Director, Southern Hemisphere at Calvin Klein, where he was responsible for defining and implementing the operational andcommercial strategy for Southern Hemisphere, as well as overseeing the retail, travel retail, concession, and wholesale businesses of the company. During his tenureat Calvin Klein, Mr. Brandwain also served as Travel Retail Director, Latin America, where he built the travel retail business and developed operations. Prior to that,between July 2010 and November 2010, Mr. Brandwain served as Business Director, Latin America and Caribbean at Givenchy Latin America, and between January2010 and June 2010 he served as Commercial Director, Latin America and Caribbean at Nautica Latin America. During December 2004 and December 2009, Mr.Brandwain served as Vice President, International Business Development at Report Collection/Modextil, Inc., where he was in charge of business and operationalexpansion, global growth, and brand extensions. Prior to that, between 2003 and October 2004, Mr. Brandwain served as General Manager at Andrew KoenigInternational, Inc. Between September 2019 and November 2020, Mr. Brandwain served as a member of the Board of Directors of 7 For All Mankind BrazilImportacao, Comercio E Distribuicao S.A. Mr. Brandwain earned a Bachelor degree in architecture from the University of the Republic (Uruguay).Oron Branitzky has served as a member of our board of directors since March 2017. Mr. Barnitzky has vast experience in retail technology. SinceNovember 2017, Mr. Branitzky has served as Global Retail Business Development at Superup, and from January 2007 until December 2014 he served as VicePresident of Sales and Marketing at Pricer AB. Prior to that, Mr. Branitzky has served as VP Marketing and Sales at Eldat Communication and Sarin TechnologiesLtd. Since January 2015, Mr. Branitzky has served as chairman of the board of directors of WiseShelf Ltd. and from May 2015 until March 2016, Mr. Branitzky servedas an advisory board member of ciValue. Mr. Branitzky received a B.S. from the Hebrew University of Jerusalem and an MBA in International Marketing from TelAviv University. We believe that Mr. Branitzky is qualified to serve as a member of our board of directors because of his more than 20 years of experience inmanaging the sales of hitech solutions to retailers across the globe.Oren Elmaliah, has served as a member of our board of directors since May 2017. In September 2015, Oren Elmaliah founded Accounting Team IL and hasacted as Account Manager since then. Accounting Team IL is a financial consultancy and service provider to public companies traded in Israel and abroad. SinceFebruary 2017, Mr. Elmaliah has served as controller of Enlivex Therapeutics Ltd., and since January 2017 he has served as Chief Financial Officer of Presstek Israel.In addition, since September 2015, Mr. Elmaliah has served as an Israel Authorities Reporting Officer of LG Electronics Israel and since September 2015 he hasserved as Local Financial Report Consultant of Chiasma. From July 2011 until August 2015, Mr. Elmaliah served as CPA, Financial Director of CFO Director Ltd andfrom June 2010 until July 2011 he served as Risk Management Consultant of RSM International Limited. Mr. Elmaliah holds a B.A. in Accounting/Economics and aMsc. in Finance/Accounting from Tel Aviv University, Israel. He is a licensed Certified Public Accountant in Israel. We believe that Mr. Elmaliah is qualified to serveas a member of our board of directors because of his vast finance experience and public company management and administration in the fields of finance,accounting, and financial regulation.53Arik Kaufman has served as a member of our board of directors since June 2017. Mr. Kaufman is an attorney specializing in the fields of commercial law,corporate law and capital markets and since 2016 runs his own law office in Israel. He has vast experience in the fields of financial reporting and financial regulation.Mr. Kaufman serves as the Chief Executive Officer of Steakholder Foods since January 2022. From September 2017 until January 2022, Mr. Kaufman served as VPBusiness Development of Mor Research Applications. Mr. Kaufman holds an LLB in Law from the Interdisciplinary Center, Herzliya, and is admitted to the IsraeliBar. We believe that Mr. Kaufman is qualified to serve as a member of our board of directors based upon his experience of assisting with the completion of numerousventure capital financings, mergers, acquisitions, and strategic relationships. In addition, he has served as a member of the board of various publicly tradedcompanies, including companies that operate in the same industry as us.Guy Zimmerman has served as a member of our board of directors since August 2021. Previously, Mr. Zimmerman served as Founder and CEO ofManuFuture, an online b2b engineering market place, since February 2021. Prior to that from 2017 to 2021, Mr. Zimmerman acted as a consultant to severaltechnology startups and was a founding partner of a business travel online platform. From 2013 to 2017, Mr. Zimmerman served as EVP of Marketing and BusinessDevelopment of Kornit Digital and was part of the IPO leadership. Prior to that, Mr. Zimmerman served as VP of Global Sales and Business Development at TefronLtd., a provider of seamless garment technology, where he led the $100m sales and sales support organization serving global retail and fashion brands. Prior to thathe served as Vice President of Strategy and Business Development at Tnuva Group, Israel’s largest food manufacturer and spent eight years at McKinsey &Company. Mr. Zimmerman previously led a software startup in the field of operational healthcare management systems. Mr. Zimmerman holds a B.Sc. in IndustrialEngineering from Tel Aviv University in Israel. We believe that Mr. Zimmerman is qualified to serve as a member of our board of directors because of his experiencein business development in the technology and retail sectors.Board Diversity MatrixThe table below provides certain information regarding the diversity of our board of directors as of the date of this annual report.Board Diversity Matrix (As of March 31, 2023)Total Number of Directors5FemaleMaleNonBinaryDid Not DiscloseGenderPart I: Gender IdentityDirectors#5##Part II: Demographic BackgroundAfrican American or Black####Alaskan Native or Native American####Asian####Hispanic or Latinx####Native Hawaiian or Pacific Islander####White#1##Two or More Races or Ethnicities#2##LGBTQ+0Did Not Disclose Demographic Background2Family RelationshipsRonen Luzon, the Chief Executive Officer and a member of our board of directors, and Billy Pardo, the Chief Product Officer and Chief Operating Officer, arehusband and wife. There are no other family relationships among any of our current or former directors or executive officers.Involvement in Certain Legal ProceedingsWe are not aware of any of our directors or officers being involved in any legal proceedings in the past ten years relating to any matters in bankruptcy,insolvency, criminal proceedings (other than traffic and other minor offenses), or being subject to any of the items set forth under Item 401(f) of Regulation SK.Arrangements between Officers and DirectorsTo our knowledge, there is no arrangement or understanding between any of our officers and any other person, including directors, pursuant to which theofficer was selected to serve as an officer.Board of DirectorsThere are no agreements with respect to the election of directors.On January 6, 2022, we filed with the Secretary of State of Delaware a Certificate of Amendment to our Amended and Restated Certificate of Incorporationproviding for a classified Board. Following filing of the Certificate of Amendment, members of our board are now classified into three classes with staggered threeyear terms (with the exception of the expiration of the initial Class I and Class II directors), as follows:●Class I, comprised of two directors, initially Arik Kaufman and Oren Elmaliah (with their initial terms expiring at our 2022 annual meeting of stockholders andmembers of such class serving successive threeyear terms);●Class II, comprised of two directors, initially Oron Branitzky and Guy Zimmerman (with their initial terms expiring at our 2023 annual meeting of stockholdersand members of such class serving successive threeyear terms); and●Class III, comprised of one director, initially Ronen Luzon (with his initial term expiring at our 2024 annual meeting of stockholders and members of suchclass serving successive threeyear terms).54To preserve the classified Board structure, a director elected by the Board of Directors to fill a vacancy holds office until the next election of the class forwhich such director has been chosen, and until that director’s successor has been elected and qualified or until his or her earlier death, resignation, retirement orremoval.Our board of directors has reviewed the materiality of any relationship that each of our directors has with us, either directly or indirectly. Based upon thisreview, we believe that Arik Kaufman, Oren Elmaliach, Oron Branitzky and Guy Zimmerman qualify as independent directors in accordance with the standards set bythe Nasdaq and Rule 10A3 promulgated under the Exchange Act.Committees of the BoardAudit CommitteeOur audit committee is comprised of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Elmaliah serves as chairman of the audit committee. The auditcommittee is responsible for retaining and overseeing our independent registered public accounting firm, approving the services performed by our independentregistered public accounting firm and reviewing our annual financial statements, accounting policies and our system of internal controls. The audit committee actsunder a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the audit committee’s composition and meetings.The audit committee charter is available on our website www.mysizeid.com.The Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by applicable SEC rules. Inaddition, the Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by the rules of the Nasdaq StockMarket.The Board of Directors has determined that Oren Elmaliah is an “audit committee financial expert” serving on its audit committee, and is independent, as theSEC has defined that term in Item 407 of Regulation SK.Compensation CommitteeOur compensation committee consists of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Branitzky serves as chairman of the compensationcommittee.The compensation committee’s roles and responsibilities include making recommendations to the Board of Directors regarding the compensation for ourexecutives, the role and performance of our executive officers, and appropriate compensation levels for our CEO, which are determined without the CEO present, andother executives. Our compensation committee also administers our 2017 Equity Incentive Plan and our 2017 Consultant Equity Incentive Plan. The compensationcommittee acts under a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the compensation committee’scomposition and meetings. The compensation committee charter is available on our website www.mysizeid.com.Our Board of Directors has determined that all of the members of the compensation committee are “independent” as that term is defined by the rules of theNasdaq Stock Market.Nominating and Corporate Governance CommitteeThe members of the nominating and corporate governance committee are Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Kaufman serves aschairman of the corporate governance and nominations committee. The nominating and corporate governance committee acts under a written charter, which morespecifically sets forth its responsibilities and duties, as well as requirements for the nominating and corporate governance committee’s composition and meetings.The nominating and corporate governance committee charter is available on our website www.mysizeid.com.The nominating and corporate governance committee develops, recommends and oversees implementation of corporate governance principles for us andconsiders recommendations for director nominees. The nominating and corporate governance committee also considers stockholder recommendations for directornominees that are properly received in accordance with applicable rules and regulations of the SEC. Our stockholders that wish to nominate a director for election tothe Board of Directors should follow the procedures set forth in our bylaws.55The nominating and corporate governance committee will consider persons identified by its members, management, stockholders, investment bankers andothers. The guidelines for selecting nominees, which are specified in the nominating committee charter, generally provide that persons to be nominated:●should be accomplished in his or her field and have a reputation, both personal and professional, that is consistent with our image and reputation;●should have relevant experience and expertise and would be able to provide insights and practical wisdom based upon that experience and expertise; and●should be of high moral and ethical character and would be willing to apply sound, objective and independent business judgment, and to assume broadfiduciary responsibility.The nominating and corporate governance committee will consider a number of qualifications relating to management and leadership experience,background and integrity and professionalism in evaluating a person’s candidacy for membership on the Board of Directors. The nominating and corporategovernance committee may require certain skills or attributes, such as financial or accounting experience, to meet specific Board needs that arise from time to timeand will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of Board of Directors members. The nominating andcorporate governance committee will not distinguish among nominees recommended by stockholders and other persons.Our Board of Directors has determined that all of the members of the nominating and corporate governance committee are “independent” as that term isdefined by the rules of the Nasdaq Stock Market.Code of Conduct and EthicsWe have a Code of Business Conduct and Ethics that applies to all our employees. The text of the Code of Business Conduct and Ethics is publiclyavailable on our website at www.mysizeid.com. Information contained on, or that can be accessed through, our website does not constitute a part of this report andis not incorporated by reference herein. Disclosure regarding any amendments to, or waivers from, provisions of the code of conduct and ethics that apply to ourdirectors, principal executive and financial officers will be posted on the “InvestorsCorporate Governance” section of our website at www.mysizeid.com or will beincluded in a Current Report on Form 8K, which we will file within four business days following the date of the amendment or waiver.Change in Procedures for Recommending DirectorsThere have been no material changes to the procedures by which our stockholders may recommend nominees to our Board of Directors from thoseprocedures set forth in our Proxy Statement for our 2021 Annual Meeting of Stockholders, filed with the SEC on December 7, 2022.56ITEM 11. EXECUTIVE COMPENSATIONSummary Compensation TableThe following sets forth the compensation paid by us to our named executive officers, during the years ended December 31, 2022 and December 31, 2021.Name and Principal PositionYearSalary($) (1)Bonus($)StockAwards($)OptionAwards($) (2)All OtherCompensation($)Total($)Ronen Luzon2022173,000223,0008,000126,000530,000Chief Executive Officer2021194,0005,00023,00097,000319,000Or Kles2022123,00053,0007,00071,000254,000Chief Financial Officer2021123,0008,00030,00061,000222,000Billy Pardo2022134,00053,0007,000100,00294,000Chief Operating Officer2021162,0007,00018,00074,000261,000(1) Salary for the years 2022 and 2021 are based on average US$/NIS representative exchange rates of NIS 3.358 and NIS 3.11 respectively.(2) Amounts in this column represent the grant date fair value of options granted to the named executive officers during 2022 and 2021, computed in accordance withFASB ASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the named executive officers. The assumptionsmade in valuing the options reported in this column are discussed in Note 11 to our audited financial statements for the year ended December 31, 2021 and Note 4 toour condensed consolidated interim financial statements for the quarterly period ended September 30, 2022.All Other Compensation TableThe “All Other Compensation” amounts set forth in the Summary Compensation Table above consist of the following:NameYearAutomobileRelatedExpenses($)Manager’sInsurance*($)EducationFund*($)Othersocialbenefits**($)Total($)Ronen Luzon202232,00031,00015,00048,000126,000202133,00033,00015,00016,00097,000Or Kles202215,00021,00010,00025,00071,000202114,00019,0009,00019,00061,000Billy Pardo202216,00025,00013,00046,000100,000202117,00024,00012,00021,00074,000* Manager’s insurance and education funds are customary benefits provided to employees based in Israel. Manager’s insurance is a combination of severancesavings (in accordance with Israeli law), defined contribution taxqualified pension savings and disability insurance premiums. An education fund is a savings fundof pretax contributions to be used after a specified period of time for educational or other permitted purposes.** Other social benefits for 2022 and 2021 for all named individuals includes tax payments in respect of social benefits.57Agreements with Named Executive OfficersRonen LuzonOn November 18, 2018, My Size Israel, our wholly owned subsidiary, entered into an employment agreement with Ronen Luzon, or the Luzon EmploymentAgreement, pursuant to which Mr. Luzon will serve as our Chief Executive Officer. Pursuant to the terms of the Luzon Employment Agreement, Mr. Luzon receivesNIS 55,000 per month as his base salary and shall be eligible to receive such bonus as determined by us. In addition, Mr. Luzon shall be entitled social benefits andto other benefits, including, but not limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, includinginsurance in case of disability, annual vacation days, sick leave and expense reimbursement. Pursuant to the terms of the Luzon Employment Agreement and subjectto certain conditions, payments made by the Company to the pension fund or manager’s insurance fund shall be made in lieu of severance payments due to Mr.Luzon. The term of the Luzon Employment Agreement shall be effective as of September 1, 2018 and shall continue until such time either party provides writtennotice to the other party at least 75 days in advance of the termination of such agreement. We may also terminate Mr. Luzon’s employment without prior writtennotice (or payment in lieu of such notice) for Cause (as defined in the Luzon Employment Agreement).Or KlesOn November 18, 2018, My Size Israel entered into an employment agreement with Or Kles, or the Kles Employment Agreement, pursuant to which Mr. Kleswill serve as our Chief Financial Officer. Pursuant to the terms of the Kles Employment Agreement, Mr. Kles receives NIS 38,000 per month as his base salary andshall be eligible to receive such bonus as determined by us. In addition, Mr. Kles shall be entitled to social benefits and other benefits, including, but not limited to,contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annual vacation days,sick leave and expense reimbursement. Pursuant to the terms of the Kles Employment Agreement and subject to certain conditions, payments made by us to thepension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Mr. Kles. The term of the Kles Employment Agreement shall beeffective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days in advance of thetermination of such agreement. We may also terminate Mr. Kles’s employment without prior written notice (or payment in lieu of such notice) for Cause (as defined inthe Kles Employment Agreement).Billy PardoOn November 18, 2018, My Size Israel entered into an employment agreement with Billy Pardo, or the Pardo Employment Agreement, pursuant to which Ms.Pardo will serve as our Chief Product Officer. Pursuant to the terms of the Pardo Employment Agreement, Ms. Pardo receives NIS 47,500 per month as her basesalary and shall be eligible to receive such bonus as determined by us. In addition, Ms. Pardo shall be entitled to social benefits and other benefits, including, butnot limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annualvacation days, sick leave and expense reimbursement. Pursuant to the terms of the Pardo Employment Agreement and subject to certain conditions, payments madeby us to the pension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Ms. Pardo. The term of the Pardo EmploymentAgreement shall be effective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days inadvance of the termination of such agreement. We may also terminate Ms. Pardo’s employment without prior written notice (or payment in lieu of such notice) forCause (as defined in the Pardo Employment Agreement).58Outstanding Equity Awards at Fiscal YearEndThe following table provides information regarding options held by each of our named executive officers that were outstanding as of December 31, 2022.Option AwardsStock AwardsName and Principal PositionNumber ofSecuritiesUnderlyingUnexercisedOptionsExercisableNumber ofSecuritiesUnderlyingUnexercisedOptionsUnexercisableOptionExercisePriceOptionExpirationDateEquityincentiveplan awards:Number ofUnearnedShares that HaveNot VestedEquityincentiveplan awards:Market Value ofUnearnedShares, That Have Not VestedRonen Luzon Chief Executive Officer400(1)$26(8)7/24/20231,601(2)$26(8)5/29/20256,400(3)$268/10/2025100,000(9)100,000$511,250Or Kles – Chief Financial Officer227(4)$26(8)7/24/2023427(5)$26(8)5/29/20255,200(6)$268/10/202524,000(10)24,000$122,700Billy Pardo Chief Operating Officer400(1)$26(8)7/24/2023894(7)$26(8)5/29/20255,200(6)$268/10/202524,000(11)24,000$122,700(1) The option has a grant date of July 24, 2017 and vested in full on January 24, 2018.(2) The option has a grant date of May 29, 2019. 267 options vested immediately upon grant, 445 options vested on January 24, 2019, 445 options vested on January24, 2020 and 444 options vested on January 24, 2021.(3) The option has a grant date of October 8, 2020, 1,600 options vested on November 26, 2020, 1,600 options vested on May 26, 2021, 1,600 options vested onNovember 26, 2021, and 1,600 options vested on May 26, 2022.(4) The option has a grant date of July 24, 2017. 76 options vested immediately upon grant, 76 options vested on May 1, 2018 and 75 options vested on May 1, 2019.(5) The option has a grant date of May 29, 2019. 160 options vested immediately upon grant, 445 options vested on May 1, 2020, 445 options vested on May 21, 2021and 444 options vested on May 1, 2022.(6) The option has a grant date of October 8, 2020, 1,300 options vested on November 26, 2020, 1,300 options vested on May 26, 2021, 1,300 options vested onNovember 26, 2021, and 1,300 options vested on May 26, 2022.(7) The option has a grant date of May 29, 2019. 214 options vested immediately upon grant, 227 options vested on January 24, 2019, 227 options vested on January24, 2020 and 226 options vested on January 24, 2021.(8) On May 25, 2020, the compensation committee of the Board of Directors of the Company reduced the exercise price of outstanding options of employees anddirectors of the Company for the purchase of an aggregate of 5,610 shares of common stock of the Company (with exercise prices ranging between $453.75 and$228.75) to $26 per share, which was the closing price for the Company’s common stock on May 22, 2020, and extended the term of the foregoing options for anadditional one year from the original date of expiration.(9) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(10) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(11) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.59Director CompensationThe following table sets forth compensation information for our nonemployee directors for the year ended December 31, 2022.NameFees earned orpaid incash ($)(1)Optionawards($)(1)(2)Total($)Oren Elmalih15,078 15,078Oron Barnitzky15,34715,347Arik Kaufman14,44114,441Guy Zimmerman13,03313,033(1)Fees for the year 2022 are based on average US$/NIS representative exchange rates of NIS 3.519.(2)Amounts in this column represent the grant date fair value of options granted to the nonemployee directors during 2022 computed in accordance with FASBASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the nonemployee directors. The assumptions made invaluing the options reported in this column are discussed in Note 11 to our financial statements for the year ended December 31, 2022.We compensate our nonemployee directors for their service as a member of our board. Mr. Luzon received no separate compensation for board service. Mr.Luzon’s compensation is set forth above in the Summary Compensation Table.Each nonemployee director is entitled to receive a per meeting fee of $318. Nonemployee directors are also reimbursed for their travel and reasonable outofpocket expenses incurred in connection with attending board and committee meetings, to the extent that attendance is required by the board or the committee(s)on which that director serves.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurity Ownership of Certain Beneficial Holders and ManagementThe following table sets forth certain information regarding beneficial ownership of shares of our common stock as of March 31, 2023 by (i) each personknown to beneficially own more than 5% of our outstanding common stock, (ii) each of our directors, (iii) each of our executive officers, and (iv) all of our directorsand executive officers as a group. Except as otherwise indicated, the persons named in the table below have sole voting and investment power with respect to allshares beneficially owned, subject to community property laws, where applicable.Beneficial Owner(1)Shares ofCommon StockBeneficiallyOwnedPercentage(2)Executive officers and directors:Ronen Luzon143,578(3)5.8%Or Kles29,854(4)1.2%Billy Pardo143,578(5)5.8%Ezequiel Javier Brandwain12,000(6)*Ilia Turchinsky18,313(7)*Arik Kaufman1,294(8)*Oren Elmaliah1,294(9)*Oron Branitzky1,294(10)*Guy ZimmermanAll Executive Officers and Directors as a Group (9 persons)207,6268.4%*Less than 1%(1) The address of each person is c/o My Size, Inc., 4 HaYarden St., P.O.B. 1026, Airport City, Israel 7010000 unless otherwise indicated herein.60(2) The calculation in this column is based upon 2,446,780 shares of common stock outstanding on March 31, 2023. Beneficial ownership is determined in accordancewith the rules of the SEC and generally includes voting or investment power with respect to the subject securities. Shares of common stock that are currentlyexercisable or exercisable within 60 days of March 31, 2023 are deemed to be beneficially owned by the person holding such securities for the purpose of computingthe percentage beneficial ownership of such person, but are not treated as outstanding for the purpose of computing the percentage beneficial ownership of anyother person(3) Consists of (i) 100,000 shares of restricted stock granted under the 2017 Plan, (ii) 4,683 shares of common stock, (iii) options to purchase up to 8,401 shares of ourcommon stock, and (iv) 24,000 shares of restricted stock and options to purchase up to 6,494 shares of our common stock which are held by Billy Pardo, RonenLuzon’s spouse. Mr. Luzon may be deemed to beneficially hold the securities of us held by Ms. Pardo.(4) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, and (ii) an option to purchase 5,854 shares of our common stock. Does not includean aggregate of 119,760 shares of restricted stock over which Mr. Kles has been designated the initial proxy to vote such shares pursuant to a voting agreemententered into between Whitehole S.L., Twinbel S.L. and EGI Acceleration, S.L.(5) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, (ii) options to purchase up to 6,494 shares of our common stock, (iii) 100,000 sharesof restricted stock which are held by Ronen Luzon, Billy Pardo’s spouse (iii) 8,401 shares of common stock which are held by Mr. Luzon, and (iii) options to purchaseup to 4,683 shares of our common stock which are held by Mr. Luzon. Ms. Pardo may be deemed to beneficially hold the securities of the Company held by Mr.Luzon.(6) Consists of 12,000 shares of restricted stock granted under the 2017 Plan.(7) Consists of (i) 16,000 shares of restricted stock granted under the 2017 Plan, and (ii) options to purchase up to 2,313 shares of our common stock.(8) Consists of options to purchase up to 1,294 shares of our common stock.(9) Consists of options to purchase up to 1,294 shares of our common stock.(10) Consists of options to purchase up to 1,294 shares of our common stock.Change in ControlWe are not aware of any arrangement that might result in a change in control in the future. We have no knowledge of any arrangements, including anypledge by any person of our securities, the operation of which may at a subsequent date result in a change in the Company’s control.Securities Authorized for Issuance Under Equity Compensation PlansOn January 29, 2017, our Board of Directors approved the 2017 Equity Incentive Plan and the 2017 Consultant Equity Incentive Plan, which were approvedby our stockholders on March 21, 2017. In addition, on January 29, 2017, our Board of Directors approved the Stock Option Plan Israel Grantees SubPlan. The 2017Equity Incentive Plan initially authorized the issuance of up to 5,334 shares of common stock under the plan and the 2017 Consultant Equity Incentive Plan initiallyauthorized the issuance of up to 8,000 shares of common stock under the plan.On February 12, 2018, our stockholders approved an amendment to the 2017 Consultant Equity Incentive Plan to increase the maximum number of shares ofour common stock available for issuance under the plan from 8,000 to 12,000. On July 3, 2018, our stockholders approved an amendment to the 2017 Equity IncentivePlan to increase the maximum number of shares of our common stock available for issuance under the plan from 5,334 to 8,000 and an amendment to the 2017Consultant Equity Incentive Plan to increase the maximum number of shares of our common stock available for issuance under the plan from 12,000 to 18,667.On May 25, 2020, our Board reduced the exercise price of outstanding options of our employees and directors for the purchase of an aggregate of 140,237of our common stock (with exercise prices ranging between $453.75 and $228.75) to $26.0 per share, and extended the term of the foregoing options for an additionalone year from the original date of expiration.61On August 10, 2020, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 80,000 to 58,000shares, and a decrease of the numbers of shares available for issuance under the 2017 Consultant Incentive Plan to 8,667 shares from 18,667 shares.On December 30, 2021, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 58,000 sharesto 230,800 shares.On December 7, 2022, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Plan from 230,800 shares to 289,000shares.The following table summarizes information about our equity compensation plans and individual compensation arrangements as of December 31, 2022.Number of securities to be issued upon exercise of outstanding options, warrants and rights(a)Weighted average exercise price of outstandingoptions, warrants and rights (b)Number of securities remaining availablefor future issuanceunder equity compensationplans (excludingsecurities reflected in column (a) (c)Equity compensation plans approved by security holders43,49724.7477,455Equity compensation plans not approved by security holdersTotal43,49724.7477,455ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEDuring years ended December 31, 2022 and 2021, except for compensation arrangements described elsewhere herein and the transactions described below,we did not participate in any transaction, and we are not currently participating in any proposed transaction, or series of transactions, in which the amount involvedexceeded the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years, and in which, to our knowledge,any of our directors, officers, five percent beneficial security holders, or any member of the immediate family of the foregoing persons had, or will have, a direct orindirect material interest.Compensation arrangements for our named executive officers and directors are described in the section entitled “Executive Compensation.”Employment AgreementsWe have entered into written employment agreements with each of our executive officers. These agreements generally provide for notice periods of varyingduration for termination of the agreement by us or by the relevant executive officer, during which time the executive officer will continue to receive base salary andbenefits. We have also entered into customary noncompetition, confidentiality of information and ownership of inventions arrangements with our executiveofficers. However, the enforceability of the noncompetition provisions may be limited under applicable law.OptionsSince our inception we have granted options to purchase our common stock to our officers and directors. Such option agreements may contain accelerationprovisions upon certain merger, acquisition, or change of control transactions.62Restricted Stock GrantsOn September 29, 2022, our compensation committee approved grants of restricted share awards under our 2017 Plan to Ronen Luzon, Or Kles, Billy Pardo,Ilia Turchinsky and Ezequiel Javier Brandwain, pursuant to which they were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000restricted shares and 12,000 restricted shares, respectively. The restricted shares shall vest in three equal installments on January 1, 2023, January 1, 2024 andJanuary 1, 2025, conditioned upon continuous employment with us, and subject to accelerated vesting upon a change in control of the Company.Shareholder ActivismIn May 2021, we received notice from Custodian Ventures, LLC, or Custodian, of its intention to nominate four candidates to stand for election to our Boardof Directors at our 2021 annual meeting of stockholders. Custodian subsequently made a book and records request and has made public statements calling forchanges to our management.On September 22, 2021, Custodian, commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v. Mysize,Inc., C.A. No. 20210817LWW, or the Delaware Action. In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting. As further described below, on November 4, 2021, we entered into asettlement agreement, or the Settlement Agreement, with Custodian, Activist Investing LLC, David Aboudi, Partick Loney and David Natan, collectively, the LazarParties, settling and dismissing the Delaware Action.On October 19, 2021, we commenced an action in the United States District Court for the Southern District of New York captioned My Size, Inc. v. DavidLazar, Custodian Ventures LLC, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, Civil Action No, 1:21cv08585, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, andcertain rules promulgated thereunder, or the SDNY Action. The complaint sought, among other things, declaratory and injunctive relief related to defendants’ effortsto nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed “group” for purposes ofSection 13 (d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. In addition, the complaint alleged that thedefendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules in connection with their efforts to elect a slate of directorsto our Board of Directors. On October 20, 2021, the Court signed an order granting a hearing on an anticipated motion for a preliminary injunction and expeditedscheduling and discovery in aid thereof, and scheduled that hearing for December 2, 2021. As further described below, on November 4, 2021, we entered into theSettlement Agreement with the Lazar Parties settling and dismissing the claims asserted in the SDNY Action and the Delaware Action against one another. OnNovember 8, 2021, the remaining defendants in the SDNY Action filed and answer and counterclaim asserting a claim against us pursuant to New York Civil RightsLaw Section 70a, also known as New York’s antiSLAPP statute.On November 4, 2021, we entered into the Settlement Agreement, or the Lazar Settlement Agreement, with the Lazar Parties. Pursuant to the LazarSettlement Agreement, we and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the LazarSettlement Agreement, we reimbursed Custodian for out of pocket expenses and in consideration for the dismissal and release of claims against the Company anaggregate amount equal to $275,000. With respect to our 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) itsMay 12, 2021 notice of stockholder nominations of four director candidates with respect to our 2021 annual meeting of stockholders, (ii) the notice dated October 28,2021 submitted by Custodian to us notifying us of Custodian’s continued intent to bring its nomination of four director candidates before our stockholders at the2021 annual meeting, and (iii) any and all related materials and notices submitted to us in connection therewith or related thereto and to not take any further action inconnection with the solicitation of any proxies in connection with us. Custodian also agreed to cease any and all solicitation and other activities in connection withthe 2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effective date of theAgreement, or the Standstill Period. The Lazar Settlement Agreement also provides that during the Standstill Period, the Lazar Parties will vote all shares of ourcommon stock it beneficially owns in accordance with any proposal or recommendation made by us or our Board of Directors that is submitted to our stockholders,unless to do so would violate applicable law and except with respect to certain extraordinary transactions. The Lazar Settlement Agreement also contains nondisparagement and confidentiality provisions, subject to certain exceptions.63On December 9, 2021, we subsequently entered into a Settlement Agreement, or the Ault Settlement Agreement, with Milton C. Ault III, Ault Alpha LP, AultAlpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed to withdraw the SDNY Action against the AultParties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that action against the Company. In addition, pursuant to the SettlementAgreement, we paid $70,000 to the Ault Parties in consideration for the releases and other good and valuable consideration as set forth in the Ault SettlementAgreement.Naiz Bespoke Technologies AcquisitionOn October 7, 2022, we entered into the Naiz Agreement with the Naiz Sellers, pursuant to which the Naiz Sellers agreed to sell to us all of the issued andoutstanding equity of Naiz. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) ) the Naiz EquityConsideration and (ii) up the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the Equity Value Averaging Period) is less than $1,650,000, My Size shall pay the Shortfall Value to the Naiz Sellers within 45days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period, it wasdetermined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement)).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers will be subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into the LockUp Agreement with My Size, (ii) Whitehole, Twinbel and EGIentered into the Voting Agreement with My Size and (iii) each of the Key Persons entered into employment agreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonth period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonth “dribbleout” provisionthat provides following the expiration of the initial sixmonth lockup period, without My Size’s prior written consent (which My Size shall be permitted to withholdat its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than the average dailytrading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.64The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Indemnification Agreements and Directors’ and Officers’ Liability InsuranceWe have entered into indemnification agreements with each of our directors and executive officers. These agreements, among other things, require us toindemnify these individuals and, in certain cases, affiliates of such individuals, to the fullest extent permitted by Delaware law against liabilities that may arise byreason of their service to us or at our direction, and to advance expenses incurred as a result of any proceedings against them as to which they could beindemnified. We also maintain an insurance policy that insures our directors and officers against certain liabilities, including liabilities arising under applicablesecurities laws.Director IndependenceSee “Item 10. Directors, Executive Officers and Corporate Governance; Corporate Governance, Board Composition” above for a discussion regarding theindependence of the members of our board of directors.ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICESSomekh Chaikin, a member firm of KPMG International, located in Tel Aviv, Israel, PCAOB ID 1057, has served as our independent registered publicaccounting firm for 2022 and 2021. The following are Somekh Chaikin’s fees for professional services in each of the respective fiscal years:Fee Category20222021Audit Fees198,910298,300Tax Fees30,66729,300Auditrelated Fees18,000Total Fees247,577327,600Audit Fees:Audit Fees consist of fees billed for professional services performed by Somekh Chaikin for the audit of our annual financial statements, thereview of interim consolidated financial statements, and related services that are normally provided in connection with registration statements, including theregistration statement for S1 and S3.Tax Fees: Tax Fees may consist of fees for professional services, including tax and VAT consulting and compliance performed by an independent registeredpublic accounting provided during the period.PreApproval Policies and ProceduresIn accordance with the SarbanesOxley Act of 2002, as amended, our audit committee charter requires the audit committee to preapprove all audit andpermitted nonaudit services provided by our independent registered public accounting firm, including the review and approval in advance of our independentregistered public accounting firm’s annual engagement letter and the proposed fees contained therein. The audit committee has the ability to delegate the authorityto preapprove nonaudit services to one or more designated members of the audit committee. If such authority is delegated, such delegated members of the auditcommittee must report to the full audit committee at the next audit committee meeting all items preapproved by such delegated members. In the fiscal years endedDecember 31, 2022 and December 31, 2021 all of the services performed by our independent registered public accounting firm were preapproved by the auditcommittee.65PART IVITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES(a)Financial StatementsThe financial statements required by this Item are included beginning at page F1.(b)ExhibitsSee Exhibit IndexITEM 16. FORM 10K SUMMARYNot applicableEXHIBIT INDEXExhibitNumberDescription3.1Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Form on Form8K filed on March 23, 2017)3.2Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10K filed onMarch 4, 2016)3.3Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’s Current Report onForm 8K filed on February 20, 2018)3.4Second Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8K filedon April 24, 2018)3.5Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’sCurrent Report on Form 8K filed on November 18, 2019)3.6Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on January 7, 2022)3.7Amendment No. 1 to Second Amended and Restated ByLaws (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8K filed on January 7, 2022)3.8Certificate of Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on December 7, 2022)4.1Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S3/A filed onNovember 14, 2016)4.2Form of Warrant to Purchase Common Stock issued on February 2, 2018 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report onForm 10K filed on March 27, 2019)4.3Description of Securities Registered under Section 12 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report on Form 10K filedon March 19, 2020)4.4Form of Warrant (incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S1, Amendment No. 1, filed with the SECon May 5, 2020.)4.5Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)4.6Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.1My Size, Inc. 2017 Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement on Schedule DEF 14Afiled on March 2, 2017)10.2My Size, Inc. 2017 Consultant Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement onSchedule DEF 14A filed on March 2, 2017)10.3My Size, Inc. 2017 Stock Option Plan Israel Grantees SubPlan (incorporated by reference to Exhibit 10.3 to the Company’s Annual Report on Form10K filed on March 27, 2019)6610.4Purchase Agreement between My Size, Inc. and Shoshana Zigdon dated as of February 16, 2014 (incorporated by reference to Exhibit 10.2 to theCompany’s Annual Report on Form 10K filed on March 4, 2016)10.5 +Employment Agreement between My Size Israel 2014 Ltd. and Ronen Luzon dated November 18, 2018 (incorporated by reference to Exhibit 10.1 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.6 +Employment Agreement between My Size Israel 2014 Ltd. and Or Kles dated November 18, 2018 (incorporated by reference to Exhibit 10.2 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.7 +Employment Agreement between My Size Israel 2014 Ltd. and Billy Pardo dated November 18, 2018 (incorporated by reference to Exhibit 10.3 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.8Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on January 15,2020)10.9Form of Warrant (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.10Form of Placement Agent Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.11Securities Purchase Agreement (incorporated by reference to Exhibit 10.30 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.12Underwriting Agreement, dated January 5, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on January 7, 2021)10.13Underwriting Agreement, dated March 22, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on March 25, 2021)10.14Amendment to Purchase Agreement between My Size Israel 2014 Ltd., My Size, Inc. and Shoshana Zigdon (incorporated by reference to Exhibit 10.1to the Company’s Quarterly Report on Form 10Q on August 16, 2021)10.15Form of Registered Direct Offering Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.16Form of PIPE Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.17Form of Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.18Form of Placement Agent Warrant issued by the Company on October 28, 2021 (incorporated by reference to Exhibit 10.22 to the Company’s Form S1filed on November 12, 2021)10.19Form of Registration Rights Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.4 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.20Engagement Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference to Exhibit 10.5 to theCompany’s Current Report on Form 8K filed on October 28, 2021)10.21Settlement Agreement dated November 4, 2021, among My Size, Inc., David Lazar and certain of his affiliates (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on November 5, 2021)10.22Share Purchase Agreement dated as of February 7, 2022 between My Size Israel 2014 Ltd. and Amar Guy Shalom and Elad Bretfeld (incorporated byreference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SEC on February 8, 2022)10.23Employment Agreement between My Size Israel 2014 Ltd. and Ezequiel Javier Brandwain dated January 27, 2022 (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on February 1, 2022)10.24Form of Section 102 Capital Gain Restricted Stock Award Agreement under the Company’s 2017 Equity Incentive Plan (incorporated by reference toExhibit 10.1 to the Company’s Quarterly Report on Form 10Q, filed with the SEC on November 14, 2022)10.25Share Purchase Agreement, dated as of October 6, 2022, by and among My Size, Inc., Borja Cembrero Saralegui, Artiz Toree Garcia, Whitehold, S.L.,Twinbel, S.L., and EGI Acceleration, S.L. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SECon October 12, 2022)10.26Form of LockUp Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)10.27Form of Voting Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.3 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)6710.28My Size, Inc. Amendment to the My Size, Inc. 2017 Equity Plan (incorporated by reference to Appendix B to the Company’s definitive proxystatement filed with the SEC on November 4, 2022)10.29Form of Registered Direct Offering Securities Purchase Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.1 to theCompany’s Current Report on Form 8K filed with the SEC on January 12, 2023)10.30Form of PIPE Securities Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8Kfiled with the SEC on January 12, 2023)10.31Form of Registered Direct PreFunded Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.32Form of Series A and Series B Warrant (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8K filed with the SEC onJanuary 12, 2023)10.33Form of Private Placement PreFunded Warrant (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.34Form of Registration Rights Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form8K filed with the SEC on January 12, 2023)10.35Engagement Agreement, dated December 5, 2022 (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8K filed withthe SEC on January 12, 2023)10.36*Form of Placement Agent Warrant21.1*List of Subsidiaries23.1*Consent of Somekh Chaikin, a member firm of KPMG International, registered public accounting firm31.1*Certification of the Chief Executive Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200231.2*Certification of the Chief Financial Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200232.1*Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a14(b) of the Exchange Act and 18 U.S.C. Section 1350, asadopted pursuant to Section 906 of the SarbanesOxley Act of 2002101.INS*Inline XBRL Instance Document101.SCH*Inline XBRL Taxonomy Schema101.CAL*Inline XBRL Taxonomy Calculation Linkbase101.DEF*Inline XBRL Taxonomy Definition Linkbase101.LAB*Inline XBRL Taxonomy Label Linkbase101.PRE*Inline XBRL Taxonomy Presentation Linkbase104Cover Page Interactive Data File (formatted as Inline XBRL document and contained in Exhibit 101)*Filed herewith.+Indicates a management contract or any compensatory plan, contract or arrangement68SIGNATURESPursuant to the requirements of Section 13 and 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10K to be signed on its behalf by the undersigned, thereunto duly authorized on this 14th day of April, 2023.MY SIZE, INC./s/ Ronen LuzonRonen LuzonChief Executive Officer (Principle Executive Officer)/s/ Or KlesOr KlesChief Financial Officer(Principal Financial and Accounting Officer)Pursuant to the requirements of the Securities Act of 1934, this annual report on Form 10K has been signed below by the following persons on behalf ofthe registrant and in the capacities and on the dates indicated.SignatureTitleDate/s/ Ronen LuzonChief Executive Officer and DirectorApril 14, 2023Ronen Luzon(Principle Executive Officer)/s/ Or KlesChief Financial OfficerApril 14, 2023Or Kles(Principal Financial and Accounting Officer)/s/ Oren ElmaliahDirectorApril 14, 2023Oren Elmaliah/s/ Arik KaufmanDirectorApril 14, 2023Arik Kaufman/s/ Oron BranitzkyDirectorApril 14, 2023Oron Branitzky/s/ Guy ZimmermanDirectorApril 14, 2023Guy Zimmerman69EX10.36 2 ex1036.htmExhibit 10.36NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES ANDEXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THESECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO ANEFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTIONNOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGINACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.PLACEMENT AGENT COMMON STOCK PURCHASE WARRANTMY SIZE, INC.Warrant Shares: _______Issue Date: January 12, 2023Initial Exercise Date: January 12, 2023THIS PLACEMENT AGENT COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _____________ or itsassigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the dateset forth above (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on January 10, 2028 (the “Termination Date”) but not thereafter, tosubscribe for and purchase from My Size, Inc., a Delaware corporation (the “Company”), up to ______ shares (as subject to adjustment hereunder, the “WarrantShares”) of the Company’s Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined inSection 2(b). This Warrant is issued pursuant to that certain engagement letter, dated as of December 5, 2022, by and between the Company and H.C. Wainwright &Co., LLC.Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities PurchaseAgreement (the “Purchase Agreement”), dated January 10, 2023, among the Company and the purchasers signatory thereto.1Section 2. Exercise.a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or afterthe Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted by email (or emailattachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the numberof Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shalldeliver the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on aUnited States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No inkoriginalNotice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required.Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder haspurchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrantto the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercisesof this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering theoutstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder andthe Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver anyobjection to any Notice of Exercise within one (1) Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant,acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, thenumber of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.b) Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $3.8188, subject to adjustment hereunder (the“Exercise Price”).c) Cashless Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein isnot available for the issuance or resale of the Warrant Shares to or by the Holder, then this Warrant may also be exercised, in whole or in part, at such timeby means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing[(AB) (X)] by (A), where:(A) =as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice ofExercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed anddelivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) ofRegulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAPon the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on theprincipal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s execution of the applicable Notice ofExercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hoursthereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii)the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice ofExercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;(B) =the Exercise Price of this Warrant, as adjusted hereunder; and(X) =the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if suchexercise were by means of a cash exercise rather than a cashless exercise.2“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which theCommon Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York Citytime)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest precedingdate) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for theCommon Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the mostrecent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by anindependent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to theCompany, the fees and expenses of which shall be paid by the Company.“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the TradingMarket on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or thenearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and ifprices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reportingprices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock asdetermined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonablyacceptable to the Company, the fees and expenses of which shall be paid by the Company.If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of theSecurities Act, the Warrant Shares shall take on the characteristics of the Warrants being exercised, and the holding period of the Warrant Shares beingissued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section 2(c).3d) Mechanics of Exercise.i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to betransmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with TheDepository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant insuch system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of theWarrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or mannerofsale limitationspursuant to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, registered in theCompany’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitledpursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2)Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate ExercisePrice to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Companyof the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall bedeemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant hasbeen exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (otherthan in the case of a cashless exercise) is received by the Warrant Share Delivery Date. If the Company fails for any reason to deliver tothe Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder,in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP ofthe Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifthTrading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share Delivery Date until such WarrantShares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FASTprogram so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standardsettlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stockas in effect on the date of delivery of the Notice of Exercise.4ii.Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the requestof a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a newWarrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrantshall in all other respects be identical with this Warrant; provided, however, that the Holder shall be required to return any WarrantShares subject to any such rescinded exercise notice concurrently with the return to Holder of the aggregate Exercise Price paid to theCompany for such Warrant Shares and the restoration of Holder’s right to acquire such Warrant Shares pursuant to this Warrant(including, issuance of a replacement warrant certificate evidencing such restored right).iii. Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant toSection 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.iv. Compensation for BuyIn on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights availableto the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with theprovisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date theHolder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwisepurchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipatedreceiving upon such exercise (a “BuyIn”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) theHolder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) theamount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connectionwith the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at theoption of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was nothonored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock thatwould have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holderpurchases Common Stock having a total purchase price of $11,000 to cover a BuyIn with respect to an attempted exercise of shares ofCommon Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediatelypreceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written noticeindicating the amounts payable to the Holder in respect of the BuyIn and, upon request of the Company, evidence of the amount of suchloss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including,without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver sharesof Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.5v. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise ofthis Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Companyshall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by theExercise Price or round up to the next whole share.vi. Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue ortransfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paidby the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by theHolder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, thisWarrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder andthe Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.The Company shall pay all Transfer Agent fees required for sameday processing of any Notice of Exercise and all fees to the DepositoryTrust Company (or another established clearing corporation performing similar functions) required for sameday electronic delivery of theWarrant Shares.vii. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timelyexercise of this Warrant, pursuant to the terms hereof.6e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise anyportion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicableNotice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of theHolder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). Forpurposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Partiesshall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, butshall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrantbeneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion ofany other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exerciseanalogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in thepreceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act andthe rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that suchcalculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed inaccordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (inrelation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisableshall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether thisWarrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of thisWarrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm theaccuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number ofoutstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s mostrecent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recentwritten notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request ofa Holder, the Company shall within one (1) Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock thenoutstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise ofsecurities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number ofoutstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stockoutstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice tothe Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial OwnershipLimitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares ofCommon Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in theBeneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shallbe construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portionhereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplementsnecessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of thisWarrant.7Section 3. Certain Adjustments.a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes adistribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which,for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstandingshares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into asmaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case theExercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any)outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately aftersuch event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of thisWarrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for thedetermination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case ofa subdivision, combination or reclassification.b) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sellsany Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares ofCommon Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregatePurchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise ofthis Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before thedate on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the recordholders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that to the extent that theHolder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall notbe entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Rightto such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not resultin the Holder exceeding the Beneficial Ownership Limitation).c) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend (other than cash) orother distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including,without limitation, any distribution of stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement,scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holdershall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number ofshares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including withoutlimitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken,the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, thatto the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, thenthe Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a resultof such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as itsright thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).8d) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more relatedtransactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease,license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, director indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of CommonStock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more ofthe outstanding Common Stock or 50% or more of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in oneor more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchangepursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly orindirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, withoutlimitation, a reorganization, recapitalization, spinoff, merger or scheme of arrangement) with another Person or group of Persons whereby such otherPerson or group acquires more than 50% of the outstanding shares of Common Stock or 50% or more of the voting power of the common equity of theCompany (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for eachWarrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of theHolder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor oracquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as aresult of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior tosuch Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, thedetermination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of AlternateConsideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Priceamong the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. Ifholders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall begiven the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at theHolder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date ofthe public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cashequal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of suchFundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company’s control, including not approved by theCompany’s Board of Directors, the Holder shall only be entitled to receive from the Company or any Successor Entity the same type or form ofconsideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to theholders of Common Stock of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, stock or anycombination thereof, or whether the holders of Common Stock are given the choice to receive from among alternative forms of consideration in connectionwith the Fundamental Transaction; provided, further, that if holders of Common Stock of the Company are not offered or paid any consideration in suchFundamental Transaction, such holders of Common Stock will be deemed to have received common stock of the Successor Entity (which Entity may be theCompany following such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on theBlackScholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day of consummation of the applicableFundamental Transaction for pricing purposes and reflecting (A) a riskfree interest rate corresponding to the U.S. Treasury rate for a period equal to thetime between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expectedvolatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualizationfactor) as of the Trading Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlyingprice per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any noncashconsideration, if any, being offered in such Fundamental Transaction and (ii) the highest VWAP during the period beginning on the Trading Dayimmediately preceding the public announcement of the applicable contemplated Fundamental Transaction (or the consummation of the applicableFundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant to this Section 3(e) and (D) a remaining option timeequal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date and (E) azero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds (or such other consideration)within the later of (i) five Business Days of the Holder’s election and (ii) the date of consummation of the Fundamental Transaction. The Company shallcause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of theobligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant towritten agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to suchFundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entityevidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares ofcapital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of thisWarrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which appliesthe exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to suchFundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for thepurpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which isreasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall beadded to the term “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction, each andevery provision of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to each of the Company and theSuccessor Entity or Successor Entities, jointly and severally), and the Successor Entity or Successor Entities, jointly and severally with the Company, mayexercise every right and power of the Company prior thereto and the Successor Entity or Successor Entities shall assume all of the obligations of theCompany prior thereto under this Warrant and the other Transaction Documents with the same effect as if the Company and such Successor Entity orSuccessor Entities, jointly and severally, had been named as the Company herein.e) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. Forpurposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the numberof shares of Common Stock (excluding treasury shares, if any) issued and outstanding.9f) Notice to Holder.i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, theCompany shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resultingadjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form)on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C)the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any sharesof capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection withany reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all orsubstantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into othersecurities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of theaffairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as itshall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective datehereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to beentitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification,consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expectedthat holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or otherproperty deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure todeliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to bespecified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, nonpublic informationregarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to aCurrent Report on Form 8K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of suchnotice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.10Section 4. Transfer of Warrant.a) Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and to theprovisions of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights) aretransferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a writtenassignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay anytransfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a newWarrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument ofassignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly becancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unlessthe Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of thedate on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordanceherewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company,together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent orattorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute anddeliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issuedon transfers or exchanges shall be dated the Issue Date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Sharesissuable pursuant thereto.c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “WarrantRegister”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as theabsolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to thecontrary.d) Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrantshall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue skylaws or (ii) eligible for resale without volume or mannerofsale restrictions or current public information requirements pursuant to Rule 144, the Companymay require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, comply with the provisions ofSection 5.7 of the Purchase Agreement.11e) Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon anyexercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling suchWarrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exemptedunder the Securities Act.Section 5. Miscellaneous.a) No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends orother rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Withoutlimiting the rights of a Holder to receive Warrant Shares on a “cashless exercise,” and to receive the cash payments contemplated pursuant to Sections 2(d)(i) and 2(d)(iv), in no event will the Company be required to net cash settle an exercise of this Warrant.a.In July 2019, the Company entered into a threeyear agreement with a consultant (“Consultant14”) to provide services to the Company includingassisting the Company to promote, market and sell the Company’s technology to potential customers. Pursuant to such agreement and in partialconsideration for such consulting services, the Company agreed to issue to Consultant14 options to purchase up to 107 shares of the Company’scommon stock upon execution of the agreement. The options are exercisable at $375.00 per share and shall vest in 3 equal instalments every twelvemonths starting July 2019. Unexercised options shall expire 4 years from the effective date.In addition, the Company agreed to issue to Consultant14 options to purchase up to 890 shares of the Company’s common stock upon executionof the agreement. The options are exercisable at $27.00 per share and shall vest in 4 equal instalments every six months starting September 2020.Unexercised options shall expire 5 years from the effective date.During 2022 and 2021, an amount of $7 and $14 respectively, were recorded by the Company as stockbased equity awards with respect to Consultant14.F24MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The Company’s outstanding options granted to consultants as of December 31, 2022 are as follows:Issuance dateOptions forCommon stockWeightedAverageexercise priceper shareOptionsexercisableExpirationdateFebruary 201815USD528.7515February 2023August 2018December 2018531USD352.38264August 2023 December 2023July 2020107USD375107July 2023SeptemberOctober 20201,488USD27.201,288October 2024 September 2025Total2,1411,674The Company uses the Black Scholes model to measure the fair value of the stock options with the assistance of a third party valuation.No stock options were granted during 2022 to consultants.The fair value of the Company’s stock options granted to nonemployees was calculated using the following weighted average assumptions:20222021GrantsGrantsDividend yield0%Expected volatility125.15%Riskfree interest0.16%Contractual term of up to (years)1.52F25MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Stock Option Plan for employeesIn March 2017, the Company adopted a stock option plan (the “Plan”) pursuant to which the Company’s Board of Directors may grant stock options toofficers and key employees. The total number of options which may be granted to directors, officers, employees under this plan, is limited to 289,000options. Stock options can be granted with an exercise price equal to or less than the stock’s fair market value at the date of grant.The fair value of each option award is estimated on the date of grant using the Binomial optionpricing model that used the weighted averageassumptions in the following table. The risk free rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the timeof grant.2022Grants2021GrantsDividend yield0%0%Expected volatility96.52%98.47%Riskfree interest4.06%0.96%expected life522.27In the years ended December 31, 2022 and 2021, 10,000 and 3,900 options, respectively, were granted.On December 7, 2022, the Company’s stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from230,800 shares to 289,000 shares.On September 29, 2022, the Compensation Committee of the Company approved grants of restricted share awards under the Company’s 2017 EquityIncentive Plan to Ronen Luzon (CEO), Or Kles (CFO), Billy Pardo (COO), Ilia Turchinsky (CTO) and Ezequiel Javier Brandwain (CCO), pursuant towhich were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000 restricted shares and 12,000 restricted shares,respectively. Each restricted share awarded under section 102 Capital Gain Restricted Stock Award Agreement (the “Agreement”). The restrictedshares shall vest in three equal installments on January 1, 2023, January 1, 2024 and January 1, 2025 for Ronen Luzon, Or Kles, Billy Pardo and IliaTurchinsky and on January 27, 2023, January 27, 2024 and January 27, 2025 for Ezequiel Javier Brandwain, conditioned upon continuous employmentwith the Company, and subject to accelerated vesting upon a change in control of the Company.On the same day, the Company granted fiveyears options to purchase up to 10,000 ordinary shares to other employees of the Company at an exerciseprice of $0.21 per share. The options vesting period is over three years in three equal portions from the vesting commencement date.F26MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The total stock option compensation expense in the year ended December 31, 2022 amounted to $448as follows: Research and development expensesamounted to $151, sales and marketing expenses amounted to $119and general and administrative expenses amounted to $178.The total stock option compensation expense in the year ended December 31, 2021 amounted to $252 as follows: Research and development expensesamounted to $94, sales and marketing expenses amounted to $97 and general and administrative expenses amounted to $61.As of December 31, 2022, there was a total of $530 unrecognized compensation cost relating to nonvested sharebased compensation arrangements.That cost is expected to be recognized over a weightedaverage period of 2.0 years.Share option activity during 2022 is as follows:2022Number ofoptionsWeightedaverageexerciseprice US$Outstanding as of January 135,74226.5Granted10,0005.25ExercisedExpired(4,136)Outstanding as of year end41,60622.48Vested as of year end33,20825.17Share option activity during 2021 is as follows:2021Number ofoptionsWeightedaverageExerciseprice US$Outstanding as of January 139,094$26.0Granted3,90032.0Exercised(751)Expired(6,501)Outstanding as of year end35,74226.5Vested as of year end27,06326.5F27MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 15 CONTINGENCIES AND COMMITMENTSa.On August 7, 2018, the Company commenced an action against North Empire LLC (“North Empire”) in the Supreme Court of the State of New York,County of New York for breach of a Securities Purchase Agreement (the “Agreement”) in which it is seeking damages in an amount to bedetermined at trial, but in no event less than $616. On August 2, 2018, North Empire filed a Summons with Notice against the Company, also in thesame Court, in which they allege damages in an amount of $11.4 million arising from an alleged breach of the Agreement. On September 6, 2018North Empire filed a Notice of Discontinuance of the action it had filed on August 2, 2018. On September 27, 2018, North Empire filed an answerand asserted counterclaims in the action commenced by the Company against them, alleging that the Company failed to deliver stock certificatesto North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against theCompany’s CEO and now former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018,the Company filed a reply to North Empire’s counterclaims. On November 15, 2018, the Company’s CEO and now former Chairman of the Boardfiled a motion to dismiss North Empire’s thirdparty complaint. On January 6, 2020, the Court granted the motion and dismissed the thirdpartycomplaint. Discovery has been completed and both parties have filed motions for summary judgment in connection with the claims andcounterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summary judgment, arguing there werefactual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision. The appealmust be fully perfected and filed by July 26, 2022. On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying theCompany’s motion for summary judgment. North Empire will file its opposition papers on or before March 31, 2022, and the Company will file replypapers on April 29, 2022. On or about September 12, 2022, the Court issued its Decision and Order denying the Company’s motion to reargue.North Empire filed its opposing brief on December 7, 2022. Both sides were given an opportunity to file a reply brief. The Company filed our replybrief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. The Appellate Court has scheduled oral argument for the appealfor February 7, 2023. Oral argument was held before the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Courtfiled its Decision and Order, which affirmed the lower court’s decisions regarding both My Size and North Empire’s motions for summary judgmentand sent the case back to the Supreme Court.On or about March 13, 2023, the Supreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date forthe mediation has not yet been set. The Company intends to vigorously defend any claims made by North Empire.The Company believes it is more likely than not that the counterclaims will be denied.b.In May 2021, the Company received notice from Custodian Ventures, LLC (“Custodian”) of its intention to nominate four candidates to stand forelection to our Board of Directors at the Company’s 2021 annual meeting of stockholders. Custodian subsequently made a book and recordsrequest and has made public statements calling for changes to our management.On September 22, 2021, Custodian commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v.MySize, Inc. (the “Delaware Action”). In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting.On October 19, 2021, the Company commenced an action in the United States District Court for the Southern District of New York againstCustodian, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, and certain rulespromulgated thereunder (the “SDNY Action”). The complaint sought, among other things, declaratory and injunctive relief related to defendants’efforts to nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed“group” for purposes of Section 13(d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. Inaddition, the complaint alleged that the defendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules inconnection with their efforts to elect a slate of directors to the Company’s Board of Directors. On October 20, 2021, the Court signed an ordergranting a hearing on an anticipated motion for a preliminary injunction and expedited scheduling and discovery in aid thereof, and scheduled thathearing for December 2, 2021.On November 4, 2021, the Company entered into the Settlement Agreement with the Lazar Parties. Pursuant to the Settlement Agreement, theCompany and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the SettlementAgreement, the Company agreed to reimburse Custodian for out of pocket expenses and in consideration for the dismissal and release of claimsagainst the Company an aggregate amount equal to $275, to be paid within three business days of the effective date of the Settlement Agreement.With respect to the Company’s 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) its May 12,2021 notice of stockholder nominations of four director candidates with respect to the Company’s 2021 annual meeting of stockholders, (ii) thenotice dated October 28, 2021 submitted by Custodian to the Company notifying the Company of Custodian’s continued intent to bring itsnomination of four director candidates before the Company’s stockholders at the 2021 annual meeting, and (iii) any and all related materials andnotices submitted to the Company in connection therewith or related thereto and to not take any further action in connection with the solicitationof any proxies in connection with the Company. Custodian also agreed to cease any and all solicitation and other activities in connection with the2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effectivedate of the Agreement (the “Standstill Period”). The Settlement Agreement also provides that during the Standstill Period, the Lazar Parties willvote all shares of common stock of the Company it beneficially owns in in accordance with any proposal or recommendation made by theCompany or the Board of Directors of the Company that is submitted to the stockholders of the Company, unless to do so would violateapplicable law and except with respect to certain extraordinary transactions. The Settlement Agreement also contains nondisparagement andconfidentiality provisions, subject to certain exceptions.On December 9, 2021, the Company subsequently entered into a Settlement Agreement (the “Ault Settlement Agreement”), with Milton C. Ault III,Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed towithdraw the SDNY Action against the Ault Parties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that actionagainst the Company. In addition, pursuant to the Settlement Agreement, the Company paid $70 to the Ault Parties in consideration for thereleases and other good and valuable consideration as set forth in the Ault Settlement Agreement.c.On July 5, 2021, the Company was served with a legal complaint filed by Fidelity Venture Capital Ltd. and Dror Atzmon in the Magistrate’s Court inTel Aviv for a monetary award in an amount of NIS 1,436,679 (approximately $450) and a declaratory relief. The plaintiffs allege that the Companybreached its contractual obligations to pay them for services allegedly rendered to the Company by the plaintiffs under a certain consultingagreement dated July 2, 2014, in an amount of NIS 819,000 (approximately $256). Additionally, the plaintiffs allege that the Company shouldcompensate them for losses allegedly incurred by them following their investment in the Company’s shares issued under a certain private offering.In the alternative, the plaintiffs move that the court will declare the investment agreement void with full restitution of plaintiffs’ original investmentin an amount of NIS 1,329,650(approximately $415). The Company filed its statement of defense on October 25, 2021. The first preliminary courthearing of the case is scheduled for January 23, 2022.The first court preliminary hearing was held on March 1, 2022.Following the first preliminary hearing and the Court’s comments and recommendation, the Plaintiffs filed a motion to strike out the claim withoutprejudice.On March 8, 2022 the Court ordered dismissal without prejudice of the claim.F28MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATIONAcquisition of OrgadOn February 7, 2022, the Company acquired 100% of the shares and voting interests in Orgad an omnichannel ecommerce platform. The acquisitionwas designed to create an additional revenue stream for the Company by becoming a direct ecommerce seller while leveraging the synergies betweenMySizeID and Orgad’s ecommerce platform.Unaudited proforma informationThe results of operations of Orgad have been included in the consolidated financial statements since the acquisition date of February 7, 2022. Orgadrevenues included in the Company’s consolidated statement of operations from February 7, 2022 through December 31, 2022 were $4,132. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,662 and $2,850 respectively, and the net loss after tax would have been $8,519 and $10,149 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash (*)300Issuance of shares of common stock (69,752 shares) (**)457Total consideration transferred757(*)The cash payment is subject to working capital adjustments.(**)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Orgad, on the twoyear and the threeyear anniversary of the closing, $350in each ofthese years provided that in the case of the second and third instalments certain revenue targets are met and subject further to certain downward postclosing adjustment. Furthermore, 69,752shares of common stock will be issued in eight equal quarterly instalments until the lapse of two years fromclosing. Additional earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023 will also be paid. All of these payments aresubject to the former owners being actively engaged with Orgad at the date such payment is due, and therefore were not taken as part of theconsideration for the business combination.During the year ended December 31, 2022 an amount of $456and $319was recorded in respect of the cash instalments and in respect of stocksissuance, respectively in Cost Of Goods, Sales and Marketing and General and Administrative expenses as shown in the following table:2022Stockbased compensation expense – Cost of goods194Stockbased compensation expense Sales and marketing271Stockbased compensation expense General and administrative310775(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the preliminary estimates of their fair values, which were determined using generally accepted valuation techniques based onestimates and assumptions made by management at the time of the acquisition. Such estimates are subject to change during the measurement periodwhich is not expected to exceed one year. The purchase price allocation was not finalized duo to examination of the net working capital of Orgad at theacquisition date. Any adjustments to the preliminary purchase price allocation identified during the measurement period will be recognized in theperiod in which the adjustments are determined.The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and Cash EquivalentTrade receivables364PP&E55Inventory864Longterm financial investment31Selling platform378Goodwill152Shortterm accruals and deferrals(181)Trade payables(668)Long term provision(13)Longterm debt(138)Deferred Taxes(87)Total net assets acquired757F29MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)(c)Acquisitionrelated costsThe Company incurred transaction costs of approximately $40and none during twelvemonth period ended December 31, 2022 which were included ingeneral and administrative expenses in the consolidated statements of income (loss).Acquisition of Naiz Bespoke Technologies, S.L. (“Naiz”)On October 11, 2022, the Company acquired 100% of the shares and voting interests in Naiz a provider of SaaS technology solutions that solve sizeand fit issues for fashion ecommerce companies. The acquisition was designed to allow Naiz’s customers benefit from MySize’s deep understanding ofthe fashion ecommerce retail landscape, while creating an additional revenue stream for the Company.Unaudited proforma informationThe results of operations of Naiz have been included in the consolidated financial statements since the acquisition date of October 11, 2022. Naizrevenues included in the Company’s consolidated statement of operations from October 11, 2022 through December 31, 2022 were $103. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,738 and $379 respectively and the net loss after tax would have been $8,695 and $10,717 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash503Issuance of shares of common stock (240,000 shares) (*)1,008Total consideration transferred1,511(*)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Naiz, additional cash consideration (up to $1,550) in four instalments subject to thefollowing conditions:(i)Continuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result ofa Good Reason; and(ii)Naiz’s Revenues reaching or exceeding the respective Target Revenues defined in the agreement. The revenues will be calculated in four periods:(1) January 1, 2022 – December 31, 2022; (2) January 1, 2023 – June 30, 2023; (3) July 1, 2023 – December 31, 2023; (4) January 1, 2024 – December31, 2024.Former owners of Naiz are entitled to additional cash consideration following December 31, 2025 (up to $1,650) in an event when the actual value of theequity consideration is less than $1,650, subject to completion of a Target Revenue for the period of January 1, 2025 – December 31, 2025 andcontinuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result of aGood Reason;F30MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)During the year ended December 31, 2022 an amount of $283 was recorded in respect of the additional cash consideration.(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the estimates of their fair values, which were determined using generally accepted valuation techniques based on estimates andassumptions made by management at the time of the acquisition.The following table summarizes the fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and cash equivalent36Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Total net assets acquired1,511(c)Acquisitionrelated costsDuring 2022, the Company incurred transaction costs of approximately $75 which were included in general and administrative expenses in theconsolidated statements of income (loss).F31MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)Note 17 – Operating SegmentsDuring the year ended December 31, 2021, the Company had one reportable segment. As a result of the business combinations in the reporting period(see note 13), the Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificialintelligence driven measurement solutions and (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions and. The fashionand equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. Orgad has onecustomer that is responsible for 37.9% of the Company consolidated revenues. The SaaS based innovative artificial intelligence driven measurementsolutions, or SaaS Solutions operating segment consists of My Size Inc and My Size Israel and My Size LLC.Information related to the operations of the Company’s reportable operating segments is set forth below:Fashion andequipment ecommerce platformSaaSSolutionsNaizTotalAs of the year ended December 31, 2022Revenues from external customers4,1322241034,459Operating (loss) income(591)(7,181)(338)(8,110)Financial income (expense), net(236)Net loss before tax(8,346)Fashion andequipment ecommerce platformSaasSolutionNaizAs of December 31, 2022:Assets2,0225,9661,691Amortization of intangible assets(114)(34)(46)The Company elected to present geographic information in respect with revenues generated from external customers based on the location of the selling entity:All the revenues of the fashion and equipment ecommerce platform segment are generated by Orgad, located in Israel.All the revenues of the Naiz segment are generated by Naiz, located in Spain.The revenues of the Saas Solutions segment are generated by My Size Ltd. located in Israel (approximately 75% of the segment revenues) and by My Size Inc.located in the U.S. (approximately 25% of the segment revenues).NOTE 18 SALES AND MARKETINGYear endedDecember 31,20222021Salaries836574Consultants and subcontractors5831,086Marketing481283Selling fees489Share based payments post Orgad acquisition (*)271Share based payments for consultants and employees127180Travel21142Other1451713,1432,336(*) See note 16.NOTE 19 GENERAL AND ADMINISTRATIVE EXPENSESYear endedDecember 31,20222021Salaries1,007461Professional services7051,832Share based payments for consultants, directors and employees18098Rent, office expenses and communication442372Insurance564627cash liability and equity liability expenses related to Orgad acquisition310cash liability expenses related to Naiz acquisition217Settlement fees (*)345Directors8259Other3933303,9004,124(*)See note 15(b)F32MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 20 FINANCIAL INCOME (EXPENSE), NETA.Financial incomeYear endedDecember 31,20222021Revaluation investment in marketable securities49Other26172666B.Financial expenseYear endedDecember 31,20222021Exchange rate differences33Revaluation of loan granted100Revaluation investment in marketable securities62Other6792629NOTE 21 EVENTS SUBSEQUENT TO THE BALANCE SHEET DATEa.On January 2, 2023, Orgad experienced a fire at its warehouse in Israel. The Company is not aware of any casualties or injuries associated with thefire. The Company shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450.The Company believes that this incident did not affect the future sales results of Orgad for the year 2023. The inventory was not insured and it istoo early to determine the potential impact of this incident on the other parties that were involved in the incident (lessor and others that leasedproperties near the warehouse).b.On January 10, 2023, the Company entered into a securities purchase agreement pursuant to which the Company sold an aggregate of 162,000ofthe Company’s shares of common stock and prefunded warrants to purchase up to 278,899shares of common stock and, in a concurrent privateplacement, unregistered warrants to purchase up to883,798 shares of common stock, consisting of Series A warrants to purchase up to 441,899shares of common stock and Series B warrants to purchase up to 441,899shares of common stock, at an offering price of $3.055per share ofcommon stock and associated Series A and Series B warrants and an offering price of $3.054per prefunded warrant and associated Series A andSeries B warrants.In addition, the Company entered into a securities purchase agreement pursuant to which the Company agreed to sell and issue in a privateplacement an aggregate of up to 540,098 unregistered prefunded warrants and unregistered warrants to purchase up to an aggregate of 1,080,196shares of common stock, consisting of Series A warrants to purchase up to 540,098 shares of common stock and Series B warrants to purchase upto 540,098 shares of common stock at an offering price of $3.054 per prefunded warrant and associated Series A and Series B warrants.As of March 31,2023 all the pre funded warrants were exercised by the investor.F33ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSUREThere were no disagreements with accountants on accounting and financial disclosure of a type described in Item 304 (a)(1)(iv) or any reportable event asdescribed in Item 304 (a)(1)(v) of Regulation SK.ITEM 9A. CONTROLS AND PROCEDURESDisclosure ControlsWe carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief FinancialOfficer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) as of December 31, 2022. Basedupon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this Annual Report on Form10K, our disclosure controls and procedures were effective to ensure that information required to be disclosed in reports filed under the Exchange Act, as amended,is recorded, processed, summarized and reported within the required time periods specified in the SEC’s rules and forms and is accumulated and communicated toour management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.Management’s Report on Internal Control Over Financial ReportingOur internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records, that, in reasonable detail,accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only inaccordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition, use or disposition of our assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance withthe policies or procedures may deteriorate.Our management, including our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financialreporting at December 31, 2022. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the TreadwayCommission (COSO) in Internal Control—Integrated Framework (2013). Based on that assessment under those criteria, management has determined that, as ofDecember 31, 2022, our internal control over financial reporting was effective.This Annual Report on Form 10K does not include an attestation report of our registered public accounting firm regarding internal control over financialreporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to the exemption provided to issuersthat are not “large accelerated filers” nor “accelerated filers” under the DoddFrank Wall Street Reform and Consumer Protection Act.Changes in Internal Control Over Financial ReportingDuring the year ended December 31, 2022, we made two acquisitions, as discussed in Note 1a and Note 16 of the audited consolidated financial statementsfor the year ended December 31, 2022 included in this Annual Report on Form 10K. As a result, we made additions and/or modifications to policies, procedures,systems and controls that have materially affected our internal control over financial reporting from the acquisitions, including new controls for consolidationprocess that relates to accounting policies and procedures, operational processes and documentation practices. Management excluded the acquired businessesfrom management’s report on internal control over financial reporting. ITEM 9B. OTHER INFORMATIONNone.ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNot applicable.51PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe following table sets forth the name, age and positions of our executive officers and directors.NAMEAgePOSITIONRonen Luzon52Chief Executive Officer and Class III DirectorOr Kles40Chief Financial OfficerBilly Pardo47Chief Operating Officer and Chief Product OfficerIlia Turchinsky35Chief Technology OfficerEzequiel Javier Brandwain53Chief Commercial OfficerOron Branitzky (1)(2)(3)*63Class II DirectorOren Elmaliah (1)(2)(3)*38Class I DirectorArik Kaufman (1)(2)(3)*41Class I DirectorGuy Zimmerman*53Class II Director(1)Member of our audit committee(2)Member of our nominating and corporate governance committee(3)Member of our compensation committee* Independent as that term is defined by the rules of the Nasdaq Stock Market.The business background and certain other information about our directors and executive officers is set forth below:Ronen Luzon has served as our Chief Executive Officer and a member of our board of directors since September 2013. Since 2006, Mr. Luzon hasadditionally served as Chief Executive Officer and founder of Malers Ltd., a company in the global security solutions market which provides technological solutionsfor integrated communication infrastructures, security and control systems. Prior to Malers, he held several senior marketing, sales management and professionalservices positions in a variety of international high tech companies including VP marketing of GA Tech and Professional Services Manager of Eldat Communication.Mr. Luzon graduated from Middlesex University in London with a B.S. in IT and Business Information Systems. We believe that Mr. Luzon is qualified to serve as amember of our board of directors because of his more than 20 years of experience in the technology sector.Or Kles has served as our Chief Financial Officer since May 2016. He is a certified public accountant with a broad, diverse financial background. From May2013 until April 2016 he served as Assistant Controller of Shikun and BinuiSolel Boneh Infrastructure Ltd. and from December 2010 until May 2013 he served as anAssociate at KPMG. Mr. Kles holds an MBA and a B.A. in Business Management and Accounting (specializing in financing) from The College of ManagementAcademic Studies. Mr. Kles is a certified public accountant in Israel.Billy Pardo has served as our Chief Product Officer since May 2014 and Chief Operating Officer since April 2019. From April 2010 until August 2013, Ms.Pardo served as Senior Director of Product Management of Fourier Education. Among her areas of expertise are launching products from concept to successfuldelivery in various methodologies, including Fourier Education’s awardwinning einstein™ Science Tablet. Prior to that Ms. Pardo served in various productmanagement positions including, Project Manager of Time to Know, Product Marketing Manager of RiT Technologies, Product Manager of Pricer AB and R&DTeam Leader at Pricer AB. Ms. Pardo previously served as Software Engineer at Eldat Communication Ltd., and QA Engineer at NICE Systems. Ms. Pardo receivedan MBA from The Interdisciplinary Center and a B.A. in Computer Science from The Academic College of TelAvivYaffo.Ilia Turchinsky has served as our Chief Technology Officer since April 2019 and from July 2018 until April 2019 as our Director of Technology. Prior tojoining us, from 2013 until 2018, Mr. Turchinsky served in various roles, most recently Chief Technology Officer, at MonkeyTech Ltd., a company that providesdesign, development and characterization of mobile applications. Prior to that, Mr. Turchinsky served in various roles including development course instructor atIQLine, was a founder of Arnavsoft and was a software developer for MintLab and a political party. Mr. Turchinsky holds a B.Sc. from the Ben Gurion University inComputer Science and an M.Sc. from the Open University of Israel in Computer Science.52Ezequiel Javier Brandwain has served as our Chief Commercial Officer since February 2022. Mr. Brandwain brings more than two decades of globalexperience in retail and the fashion industry, mainly in business development, operations, and international markets. Before joining the Company, Mr. Brandwainheld positions of increasing responsibility at several companies, including between June 2017 and November 2020, at 7 For All Mankind International, where heserved as Director, Latin America and Caribbean, managing business development and operations across Latin America and the Caribbean. Before that, betweenMay 2016 and June 2017, Mr. Brandwain served as Chief Business Development Officer at Replay – Fashion Box SPA, where he oversaw business development andoperations, expansion and control in the Americas, the Caribbean, and NorthEast Asia. Prior this role, between September 2015 and May 2016, he served as theReplay’s Managing Director in Latin America and the Caribbean, leading the company’s international expansion in these regions. Prior to that, between April 2015and September 2015, Mr. Brandwain served as Managing Director, Latin America and Caribbean at Authentic Brands Group LLC, where he led that company’soperations, business developments and international expansion within these regions, and served as the direct liaison with the company’s headquarters in New York.Prior to that, between April 2015 and September 2015, Mr. Brandwain served as Chief Operating Officer, Latin America and Caribbean at Flemingo International Ltd.,overseeing operations, as well as projected operations in the travel retail field across these regions. Prior to that, between December 2010 and February 2014, Mr.Brandwain served as Regional Director, Southern Hemisphere at Calvin Klein, where he was responsible for defining and implementing the operational andcommercial strategy for Southern Hemisphere, as well as overseeing the retail, travel retail, concession, and wholesale businesses of the company. During his tenureat Calvin Klein, Mr. Brandwain also served as Travel Retail Director, Latin America, where he built the travel retail business and developed operations. Prior to that,between July 2010 and November 2010, Mr. Brandwain served as Business Director, Latin America and Caribbean at Givenchy Latin America, and between January2010 and June 2010 he served as Commercial Director, Latin America and Caribbean at Nautica Latin America. During December 2004 and December 2009, Mr.Brandwain served as Vice President, International Business Development at Report Collection/Modextil, Inc., where he was in charge of business and operationalexpansion, global growth, and brand extensions. Prior to that, between 2003 and October 2004, Mr. Brandwain served as General Manager at Andrew KoenigInternational, Inc. Between September 2019 and November 2020, Mr. Brandwain served as a member of the Board of Directors of 7 For All Mankind BrazilImportacao, Comercio E Distribuicao S.A. Mr. Brandwain earned a Bachelor degree in architecture from the University of the Republic (Uruguay).Oron Branitzky has served as a member of our board of directors since March 2017. Mr. Barnitzky has vast experience in retail technology. SinceNovember 2017, Mr. Branitzky has served as Global Retail Business Development at Superup, and from January 2007 until December 2014 he served as VicePresident of Sales and Marketing at Pricer AB. Prior to that, Mr. Branitzky has served as VP Marketing and Sales at Eldat Communication and Sarin TechnologiesLtd. Since January 2015, Mr. Branitzky has served as chairman of the board of directors of WiseShelf Ltd. and from May 2015 until March 2016, Mr. Branitzky servedas an advisory board member of ciValue. Mr. Branitzky received a B.S. from the Hebrew University of Jerusalem and an MBA in International Marketing from TelAviv University. We believe that Mr. Branitzky is qualified to serve as a member of our board of directors because of his more than 20 years of experience inmanaging the sales of hitech solutions to retailers across the globe.Oren Elmaliah, has served as a member of our board of directors since May 2017. In September 2015, Oren Elmaliah founded Accounting Team IL and hasacted as Account Manager since then. Accounting Team IL is a financial consultancy and service provider to public companies traded in Israel and abroad. SinceFebruary 2017, Mr. Elmaliah has served as controller of Enlivex Therapeutics Ltd., and since January 2017 he has served as Chief Financial Officer of Presstek Israel.In addition, since September 2015, Mr. Elmaliah has served as an Israel Authorities Reporting Officer of LG Electronics Israel and since September 2015 he hasserved as Local Financial Report Consultant of Chiasma. From July 2011 until August 2015, Mr. Elmaliah served as CPA, Financial Director of CFO Director Ltd andfrom June 2010 until July 2011 he served as Risk Management Consultant of RSM International Limited. Mr. Elmaliah holds a B.A. in Accounting/Economics and aMsc. in Finance/Accounting from Tel Aviv University, Israel. He is a licensed Certified Public Accountant in Israel. We believe that Mr. Elmaliah is qualified to serveas a member of our board of directors because of his vast finance experience and public company management and administration in the fields of finance,accounting, and financial regulation.53Arik Kaufman has served as a member of our board of directors since June 2017. Mr. Kaufman is an attorney specializing in the fields of commercial law,corporate law and capital markets and since 2016 runs his own law office in Israel. He has vast experience in the fields of financial reporting and financial regulation.Mr. Kaufman serves as the Chief Executive Officer of Steakholder Foods since January 2022. From September 2017 until January 2022, Mr. Kaufman served as VPBusiness Development of Mor Research Applications. Mr. Kaufman holds an LLB in Law from the Interdisciplinary Center, Herzliya, and is admitted to the IsraeliBar. We believe that Mr. Kaufman is qualified to serve as a member of our board of directors based upon his experience of assisting with the completion of numerousventure capital financings, mergers, acquisitions, and strategic relationships. In addition, he has served as a member of the board of various publicly tradedcompanies, including companies that operate in the same industry as us.Guy Zimmerman has served as a member of our board of directors since August 2021. Previously, Mr. Zimmerman served as Founder and CEO ofManuFuture, an online b2b engineering market place, since February 2021. Prior to that from 2017 to 2021, Mr. Zimmerman acted as a consultant to severaltechnology startups and was a founding partner of a business travel online platform. From 2013 to 2017, Mr. Zimmerman served as EVP of Marketing and BusinessDevelopment of Kornit Digital and was part of the IPO leadership. Prior to that, Mr. Zimmerman served as VP of Global Sales and Business Development at TefronLtd., a provider of seamless garment technology, where he led the $100m sales and sales support organization serving global retail and fashion brands. Prior to thathe served as Vice President of Strategy and Business Development at Tnuva Group, Israel’s largest food manufacturer and spent eight years at McKinsey &Company. Mr. Zimmerman previously led a software startup in the field of operational healthcare management systems. Mr. Zimmerman holds a B.Sc. in IndustrialEngineering from Tel Aviv University in Israel. We believe that Mr. Zimmerman is qualified to serve as a member of our board of directors because of his experiencein business development in the technology and retail sectors.Board Diversity MatrixThe table below provides certain information regarding the diversity of our board of directors as of the date of this annual report.Board Diversity Matrix (As of March 31, 2023)Total Number of Directors5FemaleMaleNonBinaryDid Not DiscloseGenderPart I: Gender IdentityDirectors#5##Part II: Demographic BackgroundAfrican American or Black####Alaskan Native or Native American####Asian####Hispanic or Latinx####Native Hawaiian or Pacific Islander####White#1##Two or More Races or Ethnicities#2##LGBTQ+0Did Not Disclose Demographic Background2Family RelationshipsRonen Luzon, the Chief Executive Officer and a member of our board of directors, and Billy Pardo, the Chief Product Officer and Chief Operating Officer, arehusband and wife. There are no other family relationships among any of our current or former directors or executive officers.Involvement in Certain Legal ProceedingsWe are not aware of any of our directors or officers being involved in any legal proceedings in the past ten years relating to any matters in bankruptcy,insolvency, criminal proceedings (other than traffic and other minor offenses), or being subject to any of the items set forth under Item 401(f) of Regulation SK.Arrangements between Officers and DirectorsTo our knowledge, there is no arrangement or understanding between any of our officers and any other person, including directors, pursuant to which theofficer was selected to serve as an officer.Board of DirectorsThere are no agreements with respect to the election of directors.On January 6, 2022, we filed with the Secretary of State of Delaware a Certificate of Amendment to our Amended and Restated Certificate of Incorporationproviding for a classified Board. Following filing of the Certificate of Amendment, members of our board are now classified into three classes with staggered threeyear terms (with the exception of the expiration of the initial Class I and Class II directors), as follows:●Class I, comprised of two directors, initially Arik Kaufman and Oren Elmaliah (with their initial terms expiring at our 2022 annual meeting of stockholders andmembers of such class serving successive threeyear terms);●Class II, comprised of two directors, initially Oron Branitzky and Guy Zimmerman (with their initial terms expiring at our 2023 annual meeting of stockholdersand members of such class serving successive threeyear terms); and●Class III, comprised of one director, initially Ronen Luzon (with his initial term expiring at our 2024 annual meeting of stockholders and members of suchclass serving successive threeyear terms).54To preserve the classified Board structure, a director elected by the Board of Directors to fill a vacancy holds office until the next election of the class forwhich such director has been chosen, and until that director’s successor has been elected and qualified or until his or her earlier death, resignation, retirement orremoval.Our board of directors has reviewed the materiality of any relationship that each of our directors has with us, either directly or indirectly. Based upon thisreview, we believe that Arik Kaufman, Oren Elmaliach, Oron Branitzky and Guy Zimmerman qualify as independent directors in accordance with the standards set bythe Nasdaq and Rule 10A3 promulgated under the Exchange Act.Committees of the BoardAudit CommitteeOur audit committee is comprised of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Elmaliah serves as chairman of the audit committee. The auditcommittee is responsible for retaining and overseeing our independent registered public accounting firm, approving the services performed by our independentregistered public accounting firm and reviewing our annual financial statements, accounting policies and our system of internal controls. The audit committee actsunder a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the audit committee’s composition and meetings.The audit committee charter is available on our website www.mysizeid.com.The Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by applicable SEC rules. Inaddition, the Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by the rules of the Nasdaq StockMarket.The Board of Directors has determined that Oren Elmaliah is an “audit committee financial expert” serving on its audit committee, and is independent, as theSEC has defined that term in Item 407 of Regulation SK.Compensation CommitteeOur compensation committee consists of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Branitzky serves as chairman of the compensationcommittee.The compensation committee’s roles and responsibilities include making recommendations to the Board of Directors regarding the compensation for ourexecutives, the role and performance of our executive officers, and appropriate compensation levels for our CEO, which are determined without the CEO present, andother executives. Our compensation committee also administers our 2017 Equity Incentive Plan and our 2017 Consultant Equity Incentive Plan. The compensationcommittee acts under a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the compensation committee’scomposition and meetings. The compensation committee charter is available on our website www.mysizeid.com.Our Board of Directors has determined that all of the members of the compensation committee are “independent” as that term is defined by the rules of theNasdaq Stock Market.Nominating and Corporate Governance CommitteeThe members of the nominating and corporate governance committee are Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Kaufman serves aschairman of the corporate governance and nominations committee. The nominating and corporate governance committee acts under a written charter, which morespecifically sets forth its responsibilities and duties, as well as requirements for the nominating and corporate governance committee’s composition and meetings.The nominating and corporate governance committee charter is available on our website www.mysizeid.com.The nominating and corporate governance committee develops, recommends and oversees implementation of corporate governance principles for us andconsiders recommendations for director nominees. The nominating and corporate governance committee also considers stockholder recommendations for directornominees that are properly received in accordance with applicable rules and regulations of the SEC. Our stockholders that wish to nominate a director for election tothe Board of Directors should follow the procedures set forth in our bylaws.55The nominating and corporate governance committee will consider persons identified by its members, management, stockholders, investment bankers andothers. The guidelines for selecting nominees, which are specified in the nominating committee charter, generally provide that persons to be nominated:●should be accomplished in his or her field and have a reputation, both personal and professional, that is consistent with our image and reputation;●should have relevant experience and expertise and would be able to provide insights and practical wisdom based upon that experience and expertise; and●should be of high moral and ethical character and would be willing to apply sound, objective and independent business judgment, and to assume broadfiduciary responsibility.The nominating and corporate governance committee will consider a number of qualifications relating to management and leadership experience,background and integrity and professionalism in evaluating a person’s candidacy for membership on the Board of Directors. The nominating and corporategovernance committee may require certain skills or attributes, such as financial or accounting experience, to meet specific Board needs that arise from time to timeand will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of Board of Directors members. The nominating andcorporate governance committee will not distinguish among nominees recommended by stockholders and other persons.Our Board of Directors has determined that all of the members of the nominating and corporate governance committee are “independent” as that term isdefined by the rules of the Nasdaq Stock Market.Code of Conduct and EthicsWe have a Code of Business Conduct and Ethics that applies to all our employees. The text of the Code of Business Conduct and Ethics is publiclyavailable on our website at www.mysizeid.com. Information contained on, or that can be accessed through, our website does not constitute a part of this report andis not incorporated by reference herein. Disclosure regarding any amendments to, or waivers from, provisions of the code of conduct and ethics that apply to ourdirectors, principal executive and financial officers will be posted on the “InvestorsCorporate Governance” section of our website at www.mysizeid.com or will beincluded in a Current Report on Form 8K, which we will file within four business days following the date of the amendment or waiver.Change in Procedures for Recommending DirectorsThere have been no material changes to the procedures by which our stockholders may recommend nominees to our Board of Directors from thoseprocedures set forth in our Proxy Statement for our 2021 Annual Meeting of Stockholders, filed with the SEC on December 7, 2022.56ITEM 11. EXECUTIVE COMPENSATIONSummary Compensation TableThe following sets forth the compensation paid by us to our named executive officers, during the years ended December 31, 2022 and December 31, 2021.Name and Principal PositionYearSalary($) (1)Bonus($)StockAwards($)OptionAwards($) (2)All OtherCompensation($)Total($)Ronen Luzon2022173,000223,0008,000126,000530,000Chief Executive Officer2021194,0005,00023,00097,000319,000Or Kles2022123,00053,0007,00071,000254,000Chief Financial Officer2021123,0008,00030,00061,000222,000Billy Pardo2022134,00053,0007,000100,00294,000Chief Operating Officer2021162,0007,00018,00074,000261,000(1) Salary for the years 2022 and 2021 are based on average US$/NIS representative exchange rates of NIS 3.358 and NIS 3.11 respectively.(2) Amounts in this column represent the grant date fair value of options granted to the named executive officers during 2022 and 2021, computed in accordance withFASB ASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the named executive officers. The assumptionsmade in valuing the options reported in this column are discussed in Note 11 to our audited financial statements for the year ended December 31, 2021 and Note 4 toour condensed consolidated interim financial statements for the quarterly period ended September 30, 2022.All Other Compensation TableThe “All Other Compensation” amounts set forth in the Summary Compensation Table above consist of the following:NameYearAutomobileRelatedExpenses($)Manager’sInsurance*($)EducationFund*($)Othersocialbenefits**($)Total($)Ronen Luzon202232,00031,00015,00048,000126,000202133,00033,00015,00016,00097,000Or Kles202215,00021,00010,00025,00071,000202114,00019,0009,00019,00061,000Billy Pardo202216,00025,00013,00046,000100,000202117,00024,00012,00021,00074,000* Manager’s insurance and education funds are customary benefits provided to employees based in Israel. Manager’s insurance is a combination of severancesavings (in accordance with Israeli law), defined contribution taxqualified pension savings and disability insurance premiums. An education fund is a savings fundof pretax contributions to be used after a specified period of time for educational or other permitted purposes.** Other social benefits for 2022 and 2021 for all named individuals includes tax payments in respect of social benefits.57Agreements with Named Executive OfficersRonen LuzonOn November 18, 2018, My Size Israel, our wholly owned subsidiary, entered into an employment agreement with Ronen Luzon, or the Luzon EmploymentAgreement, pursuant to which Mr. Luzon will serve as our Chief Executive Officer. Pursuant to the terms of the Luzon Employment Agreement, Mr. Luzon receivesNIS 55,000 per month as his base salary and shall be eligible to receive such bonus as determined by us. In addition, Mr. Luzon shall be entitled social benefits andto other benefits, including, but not limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, includinginsurance in case of disability, annual vacation days, sick leave and expense reimbursement. Pursuant to the terms of the Luzon Employment Agreement and subjectto certain conditions, payments made by the Company to the pension fund or manager’s insurance fund shall be made in lieu of severance payments due to Mr.Luzon. The term of the Luzon Employment Agreement shall be effective as of September 1, 2018 and shall continue until such time either party provides writtennotice to the other party at least 75 days in advance of the termination of such agreement. We may also terminate Mr. Luzon’s employment without prior writtennotice (or payment in lieu of such notice) for Cause (as defined in the Luzon Employment Agreement).Or KlesOn November 18, 2018, My Size Israel entered into an employment agreement with Or Kles, or the Kles Employment Agreement, pursuant to which Mr. Kleswill serve as our Chief Financial Officer. Pursuant to the terms of the Kles Employment Agreement, Mr. Kles receives NIS 38,000 per month as his base salary andshall be eligible to receive such bonus as determined by us. In addition, Mr. Kles shall be entitled to social benefits and other benefits, including, but not limited to,contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annual vacation days,sick leave and expense reimbursement. Pursuant to the terms of the Kles Employment Agreement and subject to certain conditions, payments made by us to thepension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Mr. Kles. The term of the Kles Employment Agreement shall beeffective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days in advance of thetermination of such agreement. We may also terminate Mr. Kles’s employment without prior written notice (or payment in lieu of such notice) for Cause (as defined inthe Kles Employment Agreement).Billy PardoOn November 18, 2018, My Size Israel entered into an employment agreement with Billy Pardo, or the Pardo Employment Agreement, pursuant to which Ms.Pardo will serve as our Chief Product Officer. Pursuant to the terms of the Pardo Employment Agreement, Ms. Pardo receives NIS 47,500 per month as her basesalary and shall be eligible to receive such bonus as determined by us. In addition, Ms. Pardo shall be entitled to social benefits and other benefits, including, butnot limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annualvacation days, sick leave and expense reimbursement. Pursuant to the terms of the Pardo Employment Agreement and subject to certain conditions, payments madeby us to the pension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Ms. Pardo. The term of the Pardo EmploymentAgreement shall be effective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days inadvance of the termination of such agreement. We may also terminate Ms. Pardo’s employment without prior written notice (or payment in lieu of such notice) forCause (as defined in the Pardo Employment Agreement).58Outstanding Equity Awards at Fiscal YearEndThe following table provides information regarding options held by each of our named executive officers that were outstanding as of December 31, 2022.Option AwardsStock AwardsName and Principal PositionNumber ofSecuritiesUnderlyingUnexercisedOptionsExercisableNumber ofSecuritiesUnderlyingUnexercisedOptionsUnexercisableOptionExercisePriceOptionExpirationDateEquityincentiveplan awards:Number ofUnearnedShares that HaveNot VestedEquityincentiveplan awards:Market Value ofUnearnedShares, That Have Not VestedRonen Luzon Chief Executive Officer400(1)$26(8)7/24/20231,601(2)$26(8)5/29/20256,400(3)$268/10/2025100,000(9)100,000$511,250Or Kles – Chief Financial Officer227(4)$26(8)7/24/2023427(5)$26(8)5/29/20255,200(6)$268/10/202524,000(10)24,000$122,700Billy Pardo Chief Operating Officer400(1)$26(8)7/24/2023894(7)$26(8)5/29/20255,200(6)$268/10/202524,000(11)24,000$122,700(1) The option has a grant date of July 24, 2017 and vested in full on January 24, 2018.(2) The option has a grant date of May 29, 2019. 267 options vested immediately upon grant, 445 options vested on January 24, 2019, 445 options vested on January24, 2020 and 444 options vested on January 24, 2021.(3) The option has a grant date of October 8, 2020, 1,600 options vested on November 26, 2020, 1,600 options vested on May 26, 2021, 1,600 options vested onNovember 26, 2021, and 1,600 options vested on May 26, 2022.(4) The option has a grant date of July 24, 2017. 76 options vested immediately upon grant, 76 options vested on May 1, 2018 and 75 options vested on May 1, 2019.(5) The option has a grant date of May 29, 2019. 160 options vested immediately upon grant, 445 options vested on May 1, 2020, 445 options vested on May 21, 2021and 444 options vested on May 1, 2022.(6) The option has a grant date of October 8, 2020, 1,300 options vested on November 26, 2020, 1,300 options vested on May 26, 2021, 1,300 options vested onNovember 26, 2021, and 1,300 options vested on May 26, 2022.(7) The option has a grant date of May 29, 2019. 214 options vested immediately upon grant, 227 options vested on January 24, 2019, 227 options vested on January24, 2020 and 226 options vested on January 24, 2021.(8) On May 25, 2020, the compensation committee of the Board of Directors of the Company reduced the exercise price of outstanding options of employees anddirectors of the Company for the purchase of an aggregate of 5,610 shares of common stock of the Company (with exercise prices ranging between $453.75 and$228.75) to $26 per share, which was the closing price for the Company’s common stock on May 22, 2020, and extended the term of the foregoing options for anadditional one year from the original date of expiration.(9) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(10) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(11) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.59Director CompensationThe following table sets forth compensation information for our nonemployee directors for the year ended December 31, 2022.NameFees earned orpaid incash ($)(1)Optionawards($)(1)(2)Total($)Oren Elmalih15,078 15,078Oron Barnitzky15,34715,347Arik Kaufman14,44114,441Guy Zimmerman13,03313,033(1)Fees for the year 2022 are based on average US$/NIS representative exchange rates of NIS 3.519.(2)Amounts in this column represent the grant date fair value of options granted to the nonemployee directors during 2022 computed in accordance with FASBASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the nonemployee directors. The assumptions made invaluing the options reported in this column are discussed in Note 11 to our financial statements for the year ended December 31, 2022.We compensate our nonemployee directors for their service as a member of our board. Mr. Luzon received no separate compensation for board service. Mr.Luzon’s compensation is set forth above in the Summary Compensation Table.Each nonemployee director is entitled to receive a per meeting fee of $318. Nonemployee directors are also reimbursed for their travel and reasonable outofpocket expenses incurred in connection with attending board and committee meetings, to the extent that attendance is required by the board or the committee(s)on which that director serves.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurity Ownership of Certain Beneficial Holders and ManagementThe following table sets forth certain information regarding beneficial ownership of shares of our common stock as of March 31, 2023 by (i) each personknown to beneficially own more than 5% of our outstanding common stock, (ii) each of our directors, (iii) each of our executive officers, and (iv) all of our directorsand executive officers as a group. Except as otherwise indicated, the persons named in the table below have sole voting and investment power with respect to allshares beneficially owned, subject to community property laws, where applicable.Beneficial Owner(1)Shares ofCommon StockBeneficiallyOwnedPercentage(2)Executive officers and directors:Ronen Luzon143,578(3)5.8%Or Kles29,854(4)1.2%Billy Pardo143,578(5)5.8%Ezequiel Javier Brandwain12,000(6)*Ilia Turchinsky18,313(7)*Arik Kaufman1,294(8)*Oren Elmaliah1,294(9)*Oron Branitzky1,294(10)*Guy ZimmermanAll Executive Officers and Directors as a Group (9 persons)207,6268.4%*Less than 1%(1) The address of each person is c/o My Size, Inc., 4 HaYarden St., P.O.B. 1026, Airport City, Israel 7010000 unless otherwise indicated herein.60(2) The calculation in this column is based upon 2,446,780 shares of common stock outstanding on March 31, 2023. Beneficial ownership is determined in accordancewith the rules of the SEC and generally includes voting or investment power with respect to the subject securities. Shares of common stock that are currentlyexercisable or exercisable within 60 days of March 31, 2023 are deemed to be beneficially owned by the person holding such securities for the purpose of computingthe percentage beneficial ownership of such person, but are not treated as outstanding for the purpose of computing the percentage beneficial ownership of anyother person(3) Consists of (i) 100,000 shares of restricted stock granted under the 2017 Plan, (ii) 4,683 shares of common stock, (iii) options to purchase up to 8,401 shares of ourcommon stock, and (iv) 24,000 shares of restricted stock and options to purchase up to 6,494 shares of our common stock which are held by Billy Pardo, RonenLuzon’s spouse. Mr. Luzon may be deemed to beneficially hold the securities of us held by Ms. Pardo.(4) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, and (ii) an option to purchase 5,854 shares of our common stock. Does not includean aggregate of 119,760 shares of restricted stock over which Mr. Kles has been designated the initial proxy to vote such shares pursuant to a voting agreemententered into between Whitehole S.L., Twinbel S.L. and EGI Acceleration, S.L.(5) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, (ii) options to purchase up to 6,494 shares of our common stock, (iii) 100,000 sharesof restricted stock which are held by Ronen Luzon, Billy Pardo’s spouse (iii) 8,401 shares of common stock which are held by Mr. Luzon, and (iii) options to purchaseup to 4,683 shares of our common stock which are held by Mr. Luzon. Ms. Pardo may be deemed to beneficially hold the securities of the Company held by Mr.Luzon.(6) Consists of 12,000 shares of restricted stock granted under the 2017 Plan.(7) Consists of (i) 16,000 shares of restricted stock granted under the 2017 Plan, and (ii) options to purchase up to 2,313 shares of our common stock.(8) Consists of options to purchase up to 1,294 shares of our common stock.(9) Consists of options to purchase up to 1,294 shares of our common stock.(10) Consists of options to purchase up to 1,294 shares of our common stock.Change in ControlWe are not aware of any arrangement that might result in a change in control in the future. We have no knowledge of any arrangements, including anypledge by any person of our securities, the operation of which may at a subsequent date result in a change in the Company’s control.Securities Authorized for Issuance Under Equity Compensation PlansOn January 29, 2017, our Board of Directors approved the 2017 Equity Incentive Plan and the 2017 Consultant Equity Incentive Plan, which were approvedby our stockholders on March 21, 2017. In addition, on January 29, 2017, our Board of Directors approved the Stock Option Plan Israel Grantees SubPlan. The 2017Equity Incentive Plan initially authorized the issuance of up to 5,334 shares of common stock under the plan and the 2017 Consultant Equity Incentive Plan initiallyauthorized the issuance of up to 8,000 shares of common stock under the plan.On February 12, 2018, our stockholders approved an amendment to the 2017 Consultant Equity Incentive Plan to increase the maximum number of shares ofour common stock available for issuance under the plan from 8,000 to 12,000. On July 3, 2018, our stockholders approved an amendment to the 2017 Equity IncentivePlan to increase the maximum number of shares of our common stock available for issuance under the plan from 5,334 to 8,000 and an amendment to the 2017Consultant Equity Incentive Plan to increase the maximum number of shares of our common stock available for issuance under the plan from 12,000 to 18,667.On May 25, 2020, our Board reduced the exercise price of outstanding options of our employees and directors for the purchase of an aggregate of 140,237of our common stock (with exercise prices ranging between $453.75 and $228.75) to $26.0 per share, and extended the term of the foregoing options for an additionalone year from the original date of expiration.61On August 10, 2020, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 80,000 to 58,000shares, and a decrease of the numbers of shares available for issuance under the 2017 Consultant Incentive Plan to 8,667 shares from 18,667 shares.On December 30, 2021, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 58,000 sharesto 230,800 shares.On December 7, 2022, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Plan from 230,800 shares to 289,000shares.The following table summarizes information about our equity compensation plans and individual compensation arrangements as of December 31, 2022.Number of securities to be issued upon exercise of outstanding options, warrants and rights(a)Weighted average exercise price of outstandingoptions, warrants and rights (b)Number of securities remaining availablefor future issuanceunder equity compensationplans (excludingsecurities reflected in column (a) (c)Equity compensation plans approved by security holders43,49724.7477,455Equity compensation plans not approved by security holdersTotal43,49724.7477,455ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEDuring years ended December 31, 2022 and 2021, except for compensation arrangements described elsewhere herein and the transactions described below,we did not participate in any transaction, and we are not currently participating in any proposed transaction, or series of transactions, in which the amount involvedexceeded the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years, and in which, to our knowledge,any of our directors, officers, five percent beneficial security holders, or any member of the immediate family of the foregoing persons had, or will have, a direct orindirect material interest.Compensation arrangements for our named executive officers and directors are described in the section entitled “Executive Compensation.”Employment AgreementsWe have entered into written employment agreements with each of our executive officers. These agreements generally provide for notice periods of varyingduration for termination of the agreement by us or by the relevant executive officer, during which time the executive officer will continue to receive base salary andbenefits. We have also entered into customary noncompetition, confidentiality of information and ownership of inventions arrangements with our executiveofficers. However, the enforceability of the noncompetition provisions may be limited under applicable law.OptionsSince our inception we have granted options to purchase our common stock to our officers and directors. Such option agreements may contain accelerationprovisions upon certain merger, acquisition, or change of control transactions.62Restricted Stock GrantsOn September 29, 2022, our compensation committee approved grants of restricted share awards under our 2017 Plan to Ronen Luzon, Or Kles, Billy Pardo,Ilia Turchinsky and Ezequiel Javier Brandwain, pursuant to which they were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000restricted shares and 12,000 restricted shares, respectively. The restricted shares shall vest in three equal installments on January 1, 2023, January 1, 2024 andJanuary 1, 2025, conditioned upon continuous employment with us, and subject to accelerated vesting upon a change in control of the Company.Shareholder ActivismIn May 2021, we received notice from Custodian Ventures, LLC, or Custodian, of its intention to nominate four candidates to stand for election to our Boardof Directors at our 2021 annual meeting of stockholders. Custodian subsequently made a book and records request and has made public statements calling forchanges to our management.On September 22, 2021, Custodian, commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v. Mysize,Inc., C.A. No. 20210817LWW, or the Delaware Action. In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting. As further described below, on November 4, 2021, we entered into asettlement agreement, or the Settlement Agreement, with Custodian, Activist Investing LLC, David Aboudi, Partick Loney and David Natan, collectively, the LazarParties, settling and dismissing the Delaware Action.On October 19, 2021, we commenced an action in the United States District Court for the Southern District of New York captioned My Size, Inc. v. DavidLazar, Custodian Ventures LLC, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, Civil Action No, 1:21cv08585, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, andcertain rules promulgated thereunder, or the SDNY Action. The complaint sought, among other things, declaratory and injunctive relief related to defendants’ effortsto nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed “group” for purposes ofSection 13 (d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. In addition, the complaint alleged that thedefendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules in connection with their efforts to elect a slate of directorsto our Board of Directors. On October 20, 2021, the Court signed an order granting a hearing on an anticipated motion for a preliminary injunction and expeditedscheduling and discovery in aid thereof, and scheduled that hearing for December 2, 2021. As further described below, on November 4, 2021, we entered into theSettlement Agreement with the Lazar Parties settling and dismissing the claims asserted in the SDNY Action and the Delaware Action against one another. OnNovember 8, 2021, the remaining defendants in the SDNY Action filed and answer and counterclaim asserting a claim against us pursuant to New York Civil RightsLaw Section 70a, also known as New York’s antiSLAPP statute.On November 4, 2021, we entered into the Settlement Agreement, or the Lazar Settlement Agreement, with the Lazar Parties. Pursuant to the LazarSettlement Agreement, we and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the LazarSettlement Agreement, we reimbursed Custodian for out of pocket expenses and in consideration for the dismissal and release of claims against the Company anaggregate amount equal to $275,000. With respect to our 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) itsMay 12, 2021 notice of stockholder nominations of four director candidates with respect to our 2021 annual meeting of stockholders, (ii) the notice dated October 28,2021 submitted by Custodian to us notifying us of Custodian’s continued intent to bring its nomination of four director candidates before our stockholders at the2021 annual meeting, and (iii) any and all related materials and notices submitted to us in connection therewith or related thereto and to not take any further action inconnection with the solicitation of any proxies in connection with us. Custodian also agreed to cease any and all solicitation and other activities in connection withthe 2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effective date of theAgreement, or the Standstill Period. The Lazar Settlement Agreement also provides that during the Standstill Period, the Lazar Parties will vote all shares of ourcommon stock it beneficially owns in accordance with any proposal or recommendation made by us or our Board of Directors that is submitted to our stockholders,unless to do so would violate applicable law and except with respect to certain extraordinary transactions. The Lazar Settlement Agreement also contains nondisparagement and confidentiality provisions, subject to certain exceptions.63On December 9, 2021, we subsequently entered into a Settlement Agreement, or the Ault Settlement Agreement, with Milton C. Ault III, Ault Alpha LP, AultAlpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed to withdraw the SDNY Action against the AultParties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that action against the Company. In addition, pursuant to the SettlementAgreement, we paid $70,000 to the Ault Parties in consideration for the releases and other good and valuable consideration as set forth in the Ault SettlementAgreement.Naiz Bespoke Technologies AcquisitionOn October 7, 2022, we entered into the Naiz Agreement with the Naiz Sellers, pursuant to which the Naiz Sellers agreed to sell to us all of the issued andoutstanding equity of Naiz. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) ) the Naiz EquityConsideration and (ii) up the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the Equity Value Averaging Period) is less than $1,650,000, My Size shall pay the Shortfall Value to the Naiz Sellers within 45days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period, it wasdetermined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement)).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers will be subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into the LockUp Agreement with My Size, (ii) Whitehole, Twinbel and EGIentered into the Voting Agreement with My Size and (iii) each of the Key Persons entered into employment agreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonth period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonth “dribbleout” provisionthat provides following the expiration of the initial sixmonth lockup period, without My Size’s prior written consent (which My Size shall be permitted to withholdat its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than the average dailytrading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.64The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Indemnification Agreements and Directors’ and Officers’ Liability InsuranceWe have entered into indemnification agreements with each of our directors and executive officers. These agreements, among other things, require us toindemnify these individuals and, in certain cases, affiliates of such individuals, to the fullest extent permitted by Delaware law against liabilities that may arise byreason of their service to us or at our direction, and to advance expenses incurred as a result of any proceedings against them as to which they could beindemnified. We also maintain an insurance policy that insures our directors and officers against certain liabilities, including liabilities arising under applicablesecurities laws.Director IndependenceSee “Item 10. Directors, Executive Officers and Corporate Governance; Corporate Governance, Board Composition” above for a discussion regarding theindependence of the members of our board of directors.ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICESSomekh Chaikin, a member firm of KPMG International, located in Tel Aviv, Israel, PCAOB ID 1057, has served as our independent registered publicaccounting firm for 2022 and 2021. The following are Somekh Chaikin’s fees for professional services in each of the respective fiscal years:Fee Category20222021Audit Fees198,910298,300Tax Fees30,66729,300Auditrelated Fees18,000Total Fees247,577327,600Audit Fees:Audit Fees consist of fees billed for professional services performed by Somekh Chaikin for the audit of our annual financial statements, thereview of interim consolidated financial statements, and related services that are normally provided in connection with registration statements, including theregistration statement for S1 and S3.Tax Fees: Tax Fees may consist of fees for professional services, including tax and VAT consulting and compliance performed by an independent registeredpublic accounting provided during the period.PreApproval Policies and ProceduresIn accordance with the SarbanesOxley Act of 2002, as amended, our audit committee charter requires the audit committee to preapprove all audit andpermitted nonaudit services provided by our independent registered public accounting firm, including the review and approval in advance of our independentregistered public accounting firm’s annual engagement letter and the proposed fees contained therein. The audit committee has the ability to delegate the authorityto preapprove nonaudit services to one or more designated members of the audit committee. If such authority is delegated, such delegated members of the auditcommittee must report to the full audit committee at the next audit committee meeting all items preapproved by such delegated members. In the fiscal years endedDecember 31, 2022 and December 31, 2021 all of the services performed by our independent registered public accounting firm were preapproved by the auditcommittee.65PART IVITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES(a)Financial StatementsThe financial statements required by this Item are included beginning at page F1.(b)ExhibitsSee Exhibit IndexITEM 16. FORM 10K SUMMARYNot applicableEXHIBIT INDEXExhibitNumberDescription3.1Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Form on Form8K filed on March 23, 2017)3.2Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10K filed onMarch 4, 2016)3.3Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’s Current Report onForm 8K filed on February 20, 2018)3.4Second Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8K filedon April 24, 2018)3.5Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’sCurrent Report on Form 8K filed on November 18, 2019)3.6Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on January 7, 2022)3.7Amendment No. 1 to Second Amended and Restated ByLaws (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8K filed on January 7, 2022)3.8Certificate of Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on December 7, 2022)4.1Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S3/A filed onNovember 14, 2016)4.2Form of Warrant to Purchase Common Stock issued on February 2, 2018 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report onForm 10K filed on March 27, 2019)4.3Description of Securities Registered under Section 12 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report on Form 10K filedon March 19, 2020)4.4Form of Warrant (incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S1, Amendment No. 1, filed with the SECon May 5, 2020.)4.5Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)4.6Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.1My Size, Inc. 2017 Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement on Schedule DEF 14Afiled on March 2, 2017)10.2My Size, Inc. 2017 Consultant Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement onSchedule DEF 14A filed on March 2, 2017)10.3My Size, Inc. 2017 Stock Option Plan Israel Grantees SubPlan (incorporated by reference to Exhibit 10.3 to the Company’s Annual Report on Form10K filed on March 27, 2019)6610.4Purchase Agreement between My Size, Inc. and Shoshana Zigdon dated as of February 16, 2014 (incorporated by reference to Exhibit 10.2 to theCompany’s Annual Report on Form 10K filed on March 4, 2016)10.5 +Employment Agreement between My Size Israel 2014 Ltd. and Ronen Luzon dated November 18, 2018 (incorporated by reference to Exhibit 10.1 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.6 +Employment Agreement between My Size Israel 2014 Ltd. and Or Kles dated November 18, 2018 (incorporated by reference to Exhibit 10.2 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.7 +Employment Agreement between My Size Israel 2014 Ltd. and Billy Pardo dated November 18, 2018 (incorporated by reference to Exhibit 10.3 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.8Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on January 15,2020)10.9Form of Warrant (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.10Form of Placement Agent Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.11Securities Purchase Agreement (incorporated by reference to Exhibit 10.30 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.12Underwriting Agreement, dated January 5, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on January 7, 2021)10.13Underwriting Agreement, dated March 22, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on March 25, 2021)10.14Amendment to Purchase Agreement between My Size Israel 2014 Ltd., My Size, Inc. and Shoshana Zigdon (incorporated by reference to Exhibit 10.1to the Company’s Quarterly Report on Form 10Q on August 16, 2021)10.15Form of Registered Direct Offering Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.16Form of PIPE Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.17Form of Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.18Form of Placement Agent Warrant issued by the Company on October 28, 2021 (incorporated by reference to Exhibit 10.22 to the Company’s Form S1filed on November 12, 2021)10.19Form of Registration Rights Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.4 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.20Engagement Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference to Exhibit 10.5 to theCompany’s Current Report on Form 8K filed on October 28, 2021)10.21Settlement Agreement dated November 4, 2021, among My Size, Inc., David Lazar and certain of his affiliates (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on November 5, 2021)10.22Share Purchase Agreement dated as of February 7, 2022 between My Size Israel 2014 Ltd. and Amar Guy Shalom and Elad Bretfeld (incorporated byreference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SEC on February 8, 2022)10.23Employment Agreement between My Size Israel 2014 Ltd. and Ezequiel Javier Brandwain dated January 27, 2022 (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on February 1, 2022)10.24Form of Section 102 Capital Gain Restricted Stock Award Agreement under the Company’s 2017 Equity Incentive Plan (incorporated by reference toExhibit 10.1 to the Company’s Quarterly Report on Form 10Q, filed with the SEC on November 14, 2022)10.25Share Purchase Agreement, dated as of October 6, 2022, by and among My Size, Inc., Borja Cembrero Saralegui, Artiz Toree Garcia, Whitehold, S.L.,Twinbel, S.L., and EGI Acceleration, S.L. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SECon October 12, 2022)10.26Form of LockUp Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)10.27Form of Voting Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.3 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)6710.28My Size, Inc. Amendment to the My Size, Inc. 2017 Equity Plan (incorporated by reference to Appendix B to the Company’s definitive proxystatement filed with the SEC on November 4, 2022)10.29Form of Registered Direct Offering Securities Purchase Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.1 to theCompany’s Current Report on Form 8K filed with the SEC on January 12, 2023)10.30Form of PIPE Securities Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8Kfiled with the SEC on January 12, 2023)10.31Form of Registered Direct PreFunded Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.32Form of Series A and Series B Warrant (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8K filed with the SEC onJanuary 12, 2023)10.33Form of Private Placement PreFunded Warrant (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.34Form of Registration Rights Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form8K filed with the SEC on January 12, 2023)10.35Engagement Agreement, dated December 5, 2022 (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8K filed withthe SEC on January 12, 2023)10.36*Form of Placement Agent Warrant21.1*List of Subsidiaries23.1*Consent of Somekh Chaikin, a member firm of KPMG International, registered public accounting firm31.1*Certification of the Chief Executive Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200231.2*Certification of the Chief Financial Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200232.1*Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a14(b) of the Exchange Act and 18 U.S.C. Section 1350, asadopted pursuant to Section 906 of the SarbanesOxley Act of 2002101.INS*Inline XBRL Instance Document101.SCH*Inline XBRL Taxonomy Schema101.CAL*Inline XBRL Taxonomy Calculation Linkbase101.DEF*Inline XBRL Taxonomy Definition Linkbase101.LAB*Inline XBRL Taxonomy Label Linkbase101.PRE*Inline XBRL Taxonomy Presentation Linkbase104Cover Page Interactive Data File (formatted as Inline XBRL document and contained in Exhibit 101)*Filed herewith.+Indicates a management contract or any compensatory plan, contract or arrangement68SIGNATURESPursuant to the requirements of Section 13 and 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10K to be signed on its behalf by the undersigned, thereunto duly authorized on this 14th day of April, 2023.MY SIZE, INC./s/ Ronen LuzonRonen LuzonChief Executive Officer (Principle Executive Officer)/s/ Or KlesOr KlesChief Financial Officer(Principal Financial and Accounting Officer)Pursuant to the requirements of the Securities Act of 1934, this annual report on Form 10K has been signed below by the following persons on behalf ofthe registrant and in the capacities and on the dates indicated.SignatureTitleDate/s/ Ronen LuzonChief Executive Officer and DirectorApril 14, 2023Ronen Luzon(Principle Executive Officer)/s/ Or KlesChief Financial OfficerApril 14, 2023Or Kles(Principal Financial and Accounting Officer)/s/ Oren ElmaliahDirectorApril 14, 2023Oren Elmaliah/s/ Arik KaufmanDirectorApril 14, 2023Arik Kaufman/s/ Oron BranitzkyDirectorApril 14, 2023Oron Branitzky/s/ Guy ZimmermanDirectorApril 14, 2023Guy Zimmerman69EX10.36 2 ex1036.htmExhibit 10.36NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES ANDEXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THESECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO ANEFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTIONNOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGINACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.PLACEMENT AGENT COMMON STOCK PURCHASE WARRANTMY SIZE, INC.Warrant Shares: _______Issue Date: January 12, 2023Initial Exercise Date: January 12, 2023THIS PLACEMENT AGENT COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _____________ or itsassigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the dateset forth above (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on January 10, 2028 (the “Termination Date”) but not thereafter, tosubscribe for and purchase from My Size, Inc., a Delaware corporation (the “Company”), up to ______ shares (as subject to adjustment hereunder, the “WarrantShares”) of the Company’s Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined inSection 2(b). This Warrant is issued pursuant to that certain engagement letter, dated as of December 5, 2022, by and between the Company and H.C. Wainwright &Co., LLC.Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities PurchaseAgreement (the “Purchase Agreement”), dated January 10, 2023, among the Company and the purchasers signatory thereto.1Section 2. Exercise.a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or afterthe Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted by email (or emailattachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the numberof Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shalldeliver the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on aUnited States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No inkoriginalNotice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required.Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder haspurchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrantto the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercisesof this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering theoutstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder andthe Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver anyobjection to any Notice of Exercise within one (1) Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant,acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, thenumber of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.b) Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $3.8188, subject to adjustment hereunder (the“Exercise Price”).c) Cashless Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein isnot available for the issuance or resale of the Warrant Shares to or by the Holder, then this Warrant may also be exercised, in whole or in part, at such timeby means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing[(AB) (X)] by (A), where:(A) =as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice ofExercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed anddelivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) ofRegulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAPon the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on theprincipal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s execution of the applicable Notice ofExercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hoursthereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii)the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice ofExercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;(B) =the Exercise Price of this Warrant, as adjusted hereunder; and(X) =the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if suchexercise were by means of a cash exercise rather than a cashless exercise.2“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which theCommon Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York Citytime)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest precedingdate) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for theCommon Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the mostrecent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by anindependent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to theCompany, the fees and expenses of which shall be paid by the Company.“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the TradingMarket on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or thenearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and ifprices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reportingprices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock asdetermined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonablyacceptable to the Company, the fees and expenses of which shall be paid by the Company.If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of theSecurities Act, the Warrant Shares shall take on the characteristics of the Warrants being exercised, and the holding period of the Warrant Shares beingissued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section 2(c).3d) Mechanics of Exercise.i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to betransmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with TheDepository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant insuch system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of theWarrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or mannerofsale limitationspursuant to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, registered in theCompany’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitledpursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2)Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate ExercisePrice to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Companyof the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall bedeemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant hasbeen exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (otherthan in the case of a cashless exercise) is received by the Warrant Share Delivery Date. If the Company fails for any reason to deliver tothe Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder,in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP ofthe Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifthTrading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share Delivery Date until such WarrantShares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FASTprogram so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standardsettlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stockas in effect on the date of delivery of the Notice of Exercise.4ii.Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the requestof a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a newWarrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrantshall in all other respects be identical with this Warrant; provided, however, that the Holder shall be required to return any WarrantShares subject to any such rescinded exercise notice concurrently with the return to Holder of the aggregate Exercise Price paid to theCompany for such Warrant Shares and the restoration of Holder’s right to acquire such Warrant Shares pursuant to this Warrant(including, issuance of a replacement warrant certificate evidencing such restored right).iii. Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant toSection 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.iv. Compensation for BuyIn on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights availableto the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with theprovisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date theHolder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwisepurchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipatedreceiving upon such exercise (a “BuyIn”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) theHolder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) theamount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connectionwith the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at theoption of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was nothonored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock thatwould have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holderpurchases Common Stock having a total purchase price of $11,000 to cover a BuyIn with respect to an attempted exercise of shares ofCommon Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediatelypreceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written noticeindicating the amounts payable to the Holder in respect of the BuyIn and, upon request of the Company, evidence of the amount of suchloss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including,without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver sharesof Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.5v. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise ofthis Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Companyshall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by theExercise Price or round up to the next whole share.vi. Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue ortransfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paidby the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by theHolder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, thisWarrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder andthe Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.The Company shall pay all Transfer Agent fees required for sameday processing of any Notice of Exercise and all fees to the DepositoryTrust Company (or another established clearing corporation performing similar functions) required for sameday electronic delivery of theWarrant Shares.vii. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timelyexercise of this Warrant, pursuant to the terms hereof.6e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise anyportion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicableNotice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of theHolder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). Forpurposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Partiesshall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, butshall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrantbeneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion ofany other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exerciseanalogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in thepreceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act andthe rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that suchcalculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed inaccordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (inrelation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisableshall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether thisWarrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of thisWarrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm theaccuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number ofoutstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s mostrecent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recentwritten notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request ofa Holder, the Company shall within one (1) Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock thenoutstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise ofsecurities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number ofoutstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stockoutstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice tothe Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial OwnershipLimitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares ofCommon Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in theBeneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shallbe construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portionhereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplementsnecessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of thisWarrant.7Section 3. Certain Adjustments.a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes adistribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which,for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstandingshares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into asmaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case theExercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any)outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately aftersuch event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of thisWarrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for thedetermination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case ofa subdivision, combination or reclassification.b) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sellsany Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares ofCommon Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregatePurchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise ofthis Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before thedate on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the recordholders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that to the extent that theHolder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall notbe entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Rightto such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not resultin the Holder exceeding the Beneficial Ownership Limitation).c) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend (other than cash) orother distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including,without limitation, any distribution of stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement,scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holdershall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number ofshares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including withoutlimitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken,the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, thatto the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, thenthe Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a resultof such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as itsright thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).8d) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more relatedtransactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease,license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, director indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of CommonStock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more ofthe outstanding Common Stock or 50% or more of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in oneor more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchangepursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly orindirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, withoutlimitation, a reorganization, recapitalization, spinoff, merger or scheme of arrangement) with another Person or group of Persons whereby such otherPerson or group acquires more than 50% of the outstanding shares of Common Stock or 50% or more of the voting power of the common equity of theCompany (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for eachWarrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of theHolder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor oracquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as aresult of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior tosuch Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, thedetermination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of AlternateConsideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Priceamong the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. Ifholders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall begiven the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at theHolder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date ofthe public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cashequal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of suchFundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company’s control, including not approved by theCompany’s Board of Directors, the Holder shall only be entitled to receive from the Company or any Successor Entity the same type or form ofconsideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to theholders of Common Stock of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, stock or anycombination thereof, or whether the holders of Common Stock are given the choice to receive from among alternative forms of consideration in connectionwith the Fundamental Transaction; provided, further, that if holders of Common Stock of the Company are not offered or paid any consideration in suchFundamental Transaction, such holders of Common Stock will be deemed to have received common stock of the Successor Entity (which Entity may be theCompany following such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on theBlackScholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day of consummation of the applicableFundamental Transaction for pricing purposes and reflecting (A) a riskfree interest rate corresponding to the U.S. Treasury rate for a period equal to thetime between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expectedvolatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualizationfactor) as of the Trading Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlyingprice per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any noncashconsideration, if any, being offered in such Fundamental Transaction and (ii) the highest VWAP during the period beginning on the Trading Dayimmediately preceding the public announcement of the applicable contemplated Fundamental Transaction (or the consummation of the applicableFundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant to this Section 3(e) and (D) a remaining option timeequal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date and (E) azero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds (or such other consideration)within the later of (i) five Business Days of the Holder’s election and (ii) the date of consummation of the Fundamental Transaction. The Company shallcause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of theobligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant towritten agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to suchFundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entityevidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares ofcapital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of thisWarrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which appliesthe exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to suchFundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for thepurpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which isreasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall beadded to the term “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction, each andevery provision of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to each of the Company and theSuccessor Entity or Successor Entities, jointly and severally), and the Successor Entity or Successor Entities, jointly and severally with the Company, mayexercise every right and power of the Company prior thereto and the Successor Entity or Successor Entities shall assume all of the obligations of theCompany prior thereto under this Warrant and the other Transaction Documents with the same effect as if the Company and such Successor Entity orSuccessor Entities, jointly and severally, had been named as the Company herein.e) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. Forpurposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the numberof shares of Common Stock (excluding treasury shares, if any) issued and outstanding.9f) Notice to Holder.i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, theCompany shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resultingadjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form)on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C)the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any sharesof capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection withany reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all orsubstantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into othersecurities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of theaffairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as itshall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective datehereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to beentitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification,consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expectedthat holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or otherproperty deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure todeliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to bespecified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, nonpublic informationregarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to aCurrent Report on Form 8K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of suchnotice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.10Section 4. Transfer of Warrant.a) Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and to theprovisions of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights) aretransferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a writtenassignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay anytransfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a newWarrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument ofassignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly becancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unlessthe Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of thedate on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordanceherewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company,together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent orattorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute anddeliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issuedon transfers or exchanges shall be dated the Issue Date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Sharesissuable pursuant thereto.c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “WarrantRegister”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as theabsolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to thecontrary.d) Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrantshall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue skylaws or (ii) eligible for resale without volume or mannerofsale restrictions or current public information requirements pursuant to Rule 144, the Companymay require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, comply with the provisions ofSection 5.7 of the Purchase Agreement.11e) Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon anyexercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling suchWarrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exemptedunder the Securities Act.Section 5. Miscellaneous.a) No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends orother rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Withoutlimiting the rights of a Holder to receive Warrant Shares on a “cashless exercise,” and to receive the cash payments contemplated pursuant to Sections 2(d)(i) and 2(d)(iv), in no event will the Company be required to net cash settle an exercise of this Warrant.a.In July 2019, the Company entered into a threeyear agreement with a consultant (“Consultant14”) to provide services to the Company includingassisting the Company to promote, market and sell the Company’s technology to potential customers. Pursuant to such agreement and in partialconsideration for such consulting services, the Company agreed to issue to Consultant14 options to purchase up to 107 shares of the Company’scommon stock upon execution of the agreement. The options are exercisable at $375.00 per share and shall vest in 3 equal instalments every twelvemonths starting July 2019. Unexercised options shall expire 4 years from the effective date.In addition, the Company agreed to issue to Consultant14 options to purchase up to 890 shares of the Company’s common stock upon executionof the agreement. The options are exercisable at $27.00 per share and shall vest in 4 equal instalments every six months starting September 2020.Unexercised options shall expire 5 years from the effective date.During 2022 and 2021, an amount of $7 and $14 respectively, were recorded by the Company as stockbased equity awards with respect to Consultant14.F24MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The Company’s outstanding options granted to consultants as of December 31, 2022 are as follows:Issuance dateOptions forCommon stockWeightedAverageexercise priceper shareOptionsexercisableExpirationdateFebruary 201815USD528.7515February 2023August 2018December 2018531USD352.38264August 2023 December 2023July 2020107USD375107July 2023SeptemberOctober 20201,488USD27.201,288October 2024 September 2025Total2,1411,674The Company uses the Black Scholes model to measure the fair value of the stock options with the assistance of a third party valuation.No stock options were granted during 2022 to consultants.The fair value of the Company’s stock options granted to nonemployees was calculated using the following weighted average assumptions:20222021GrantsGrantsDividend yield0%Expected volatility125.15%Riskfree interest0.16%Contractual term of up to (years)1.52F25MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Stock Option Plan for employeesIn March 2017, the Company adopted a stock option plan (the “Plan”) pursuant to which the Company’s Board of Directors may grant stock options toofficers and key employees. The total number of options which may be granted to directors, officers, employees under this plan, is limited to 289,000options. Stock options can be granted with an exercise price equal to or less than the stock’s fair market value at the date of grant.The fair value of each option award is estimated on the date of grant using the Binomial optionpricing model that used the weighted averageassumptions in the following table. The risk free rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the timeof grant.2022Grants2021GrantsDividend yield0%0%Expected volatility96.52%98.47%Riskfree interest4.06%0.96%expected life522.27In the years ended December 31, 2022 and 2021, 10,000 and 3,900 options, respectively, were granted.On December 7, 2022, the Company’s stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from230,800 shares to 289,000 shares.On September 29, 2022, the Compensation Committee of the Company approved grants of restricted share awards under the Company’s 2017 EquityIncentive Plan to Ronen Luzon (CEO), Or Kles (CFO), Billy Pardo (COO), Ilia Turchinsky (CTO) and Ezequiel Javier Brandwain (CCO), pursuant towhich were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000 restricted shares and 12,000 restricted shares,respectively. Each restricted share awarded under section 102 Capital Gain Restricted Stock Award Agreement (the “Agreement”). The restrictedshares shall vest in three equal installments on January 1, 2023, January 1, 2024 and January 1, 2025 for Ronen Luzon, Or Kles, Billy Pardo and IliaTurchinsky and on January 27, 2023, January 27, 2024 and January 27, 2025 for Ezequiel Javier Brandwain, conditioned upon continuous employmentwith the Company, and subject to accelerated vesting upon a change in control of the Company.On the same day, the Company granted fiveyears options to purchase up to 10,000 ordinary shares to other employees of the Company at an exerciseprice of $0.21 per share. The options vesting period is over three years in three equal portions from the vesting commencement date.F26MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The total stock option compensation expense in the year ended December 31, 2022 amounted to $448as follows: Research and development expensesamounted to $151, sales and marketing expenses amounted to $119and general and administrative expenses amounted to $178.The total stock option compensation expense in the year ended December 31, 2021 amounted to $252 as follows: Research and development expensesamounted to $94, sales and marketing expenses amounted to $97 and general and administrative expenses amounted to $61.As of December 31, 2022, there was a total of $530 unrecognized compensation cost relating to nonvested sharebased compensation arrangements.That cost is expected to be recognized over a weightedaverage period of 2.0 years.Share option activity during 2022 is as follows:2022Number ofoptionsWeightedaverageexerciseprice US$Outstanding as of January 135,74226.5Granted10,0005.25ExercisedExpired(4,136)Outstanding as of year end41,60622.48Vested as of year end33,20825.17Share option activity during 2021 is as follows:2021Number ofoptionsWeightedaverageExerciseprice US$Outstanding as of January 139,094$26.0Granted3,90032.0Exercised(751)Expired(6,501)Outstanding as of year end35,74226.5Vested as of year end27,06326.5F27MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 15 CONTINGENCIES AND COMMITMENTSa.On August 7, 2018, the Company commenced an action against North Empire LLC (“North Empire”) in the Supreme Court of the State of New York,County of New York for breach of a Securities Purchase Agreement (the “Agreement”) in which it is seeking damages in an amount to bedetermined at trial, but in no event less than $616. On August 2, 2018, North Empire filed a Summons with Notice against the Company, also in thesame Court, in which they allege damages in an amount of $11.4 million arising from an alleged breach of the Agreement. On September 6, 2018North Empire filed a Notice of Discontinuance of the action it had filed on August 2, 2018. On September 27, 2018, North Empire filed an answerand asserted counterclaims in the action commenced by the Company against them, alleging that the Company failed to deliver stock certificatesto North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against theCompany’s CEO and now former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018,the Company filed a reply to North Empire’s counterclaims. On November 15, 2018, the Company’s CEO and now former Chairman of the Boardfiled a motion to dismiss North Empire’s thirdparty complaint. On January 6, 2020, the Court granted the motion and dismissed the thirdpartycomplaint. Discovery has been completed and both parties have filed motions for summary judgment in connection with the claims andcounterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summary judgment, arguing there werefactual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision. The appealmust be fully perfected and filed by July 26, 2022. On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying theCompany’s motion for summary judgment. North Empire will file its opposition papers on or before March 31, 2022, and the Company will file replypapers on April 29, 2022. On or about September 12, 2022, the Court issued its Decision and Order denying the Company’s motion to reargue.North Empire filed its opposing brief on December 7, 2022. Both sides were given an opportunity to file a reply brief. The Company filed our replybrief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. The Appellate Court has scheduled oral argument for the appealfor February 7, 2023. Oral argument was held before the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Courtfiled its Decision and Order, which affirmed the lower court’s decisions regarding both My Size and North Empire’s motions for summary judgmentand sent the case back to the Supreme Court.On or about March 13, 2023, the Supreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date forthe mediation has not yet been set. The Company intends to vigorously defend any claims made by North Empire.The Company believes it is more likely than not that the counterclaims will be denied.b.In May 2021, the Company received notice from Custodian Ventures, LLC (“Custodian”) of its intention to nominate four candidates to stand forelection to our Board of Directors at the Company’s 2021 annual meeting of stockholders. Custodian subsequently made a book and recordsrequest and has made public statements calling for changes to our management.On September 22, 2021, Custodian commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v.MySize, Inc. (the “Delaware Action”). In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting.On October 19, 2021, the Company commenced an action in the United States District Court for the Southern District of New York againstCustodian, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, and certain rulespromulgated thereunder (the “SDNY Action”). The complaint sought, among other things, declaratory and injunctive relief related to defendants’efforts to nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed“group” for purposes of Section 13(d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. Inaddition, the complaint alleged that the defendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules inconnection with their efforts to elect a slate of directors to the Company’s Board of Directors. On October 20, 2021, the Court signed an ordergranting a hearing on an anticipated motion for a preliminary injunction and expedited scheduling and discovery in aid thereof, and scheduled thathearing for December 2, 2021.On November 4, 2021, the Company entered into the Settlement Agreement with the Lazar Parties. Pursuant to the Settlement Agreement, theCompany and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the SettlementAgreement, the Company agreed to reimburse Custodian for out of pocket expenses and in consideration for the dismissal and release of claimsagainst the Company an aggregate amount equal to $275, to be paid within three business days of the effective date of the Settlement Agreement.With respect to the Company’s 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) its May 12,2021 notice of stockholder nominations of four director candidates with respect to the Company’s 2021 annual meeting of stockholders, (ii) thenotice dated October 28, 2021 submitted by Custodian to the Company notifying the Company of Custodian’s continued intent to bring itsnomination of four director candidates before the Company’s stockholders at the 2021 annual meeting, and (iii) any and all related materials andnotices submitted to the Company in connection therewith or related thereto and to not take any further action in connection with the solicitationof any proxies in connection with the Company. Custodian also agreed to cease any and all solicitation and other activities in connection with the2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effectivedate of the Agreement (the “Standstill Period”). The Settlement Agreement also provides that during the Standstill Period, the Lazar Parties willvote all shares of common stock of the Company it beneficially owns in in accordance with any proposal or recommendation made by theCompany or the Board of Directors of the Company that is submitted to the stockholders of the Company, unless to do so would violateapplicable law and except with respect to certain extraordinary transactions. The Settlement Agreement also contains nondisparagement andconfidentiality provisions, subject to certain exceptions.On December 9, 2021, the Company subsequently entered into a Settlement Agreement (the “Ault Settlement Agreement”), with Milton C. Ault III,Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed towithdraw the SDNY Action against the Ault Parties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that actionagainst the Company. In addition, pursuant to the Settlement Agreement, the Company paid $70 to the Ault Parties in consideration for thereleases and other good and valuable consideration as set forth in the Ault Settlement Agreement.c.On July 5, 2021, the Company was served with a legal complaint filed by Fidelity Venture Capital Ltd. and Dror Atzmon in the Magistrate’s Court inTel Aviv for a monetary award in an amount of NIS 1,436,679 (approximately $450) and a declaratory relief. The plaintiffs allege that the Companybreached its contractual obligations to pay them for services allegedly rendered to the Company by the plaintiffs under a certain consultingagreement dated July 2, 2014, in an amount of NIS 819,000 (approximately $256). Additionally, the plaintiffs allege that the Company shouldcompensate them for losses allegedly incurred by them following their investment in the Company’s shares issued under a certain private offering.In the alternative, the plaintiffs move that the court will declare the investment agreement void with full restitution of plaintiffs’ original investmentin an amount of NIS 1,329,650(approximately $415). The Company filed its statement of defense on October 25, 2021. The first preliminary courthearing of the case is scheduled for January 23, 2022.The first court preliminary hearing was held on March 1, 2022.Following the first preliminary hearing and the Court’s comments and recommendation, the Plaintiffs filed a motion to strike out the claim withoutprejudice.On March 8, 2022 the Court ordered dismissal without prejudice of the claim.F28MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATIONAcquisition of OrgadOn February 7, 2022, the Company acquired 100% of the shares and voting interests in Orgad an omnichannel ecommerce platform. The acquisitionwas designed to create an additional revenue stream for the Company by becoming a direct ecommerce seller while leveraging the synergies betweenMySizeID and Orgad’s ecommerce platform.Unaudited proforma informationThe results of operations of Orgad have been included in the consolidated financial statements since the acquisition date of February 7, 2022. Orgadrevenues included in the Company’s consolidated statement of operations from February 7, 2022 through December 31, 2022 were $4,132. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,662 and $2,850 respectively, and the net loss after tax would have been $8,519 and $10,149 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash (*)300Issuance of shares of common stock (69,752 shares) (**)457Total consideration transferred757(*)The cash payment is subject to working capital adjustments.(**)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Orgad, on the twoyear and the threeyear anniversary of the closing, $350in each ofthese years provided that in the case of the second and third instalments certain revenue targets are met and subject further to certain downward postclosing adjustment. Furthermore, 69,752shares of common stock will be issued in eight equal quarterly instalments until the lapse of two years fromclosing. Additional earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023 will also be paid. All of these payments aresubject to the former owners being actively engaged with Orgad at the date such payment is due, and therefore were not taken as part of theconsideration for the business combination.During the year ended December 31, 2022 an amount of $456and $319was recorded in respect of the cash instalments and in respect of stocksissuance, respectively in Cost Of Goods, Sales and Marketing and General and Administrative expenses as shown in the following table:2022Stockbased compensation expense – Cost of goods194Stockbased compensation expense Sales and marketing271Stockbased compensation expense General and administrative310775(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the preliminary estimates of their fair values, which were determined using generally accepted valuation techniques based onestimates and assumptions made by management at the time of the acquisition. Such estimates are subject to change during the measurement periodwhich is not expected to exceed one year. The purchase price allocation was not finalized duo to examination of the net working capital of Orgad at theacquisition date. Any adjustments to the preliminary purchase price allocation identified during the measurement period will be recognized in theperiod in which the adjustments are determined.The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and Cash EquivalentTrade receivables364PP&E55Inventory864Longterm financial investment31Selling platform378Goodwill152Shortterm accruals and deferrals(181)Trade payables(668)Long term provision(13)Longterm debt(138)Deferred Taxes(87)Total net assets acquired757F29MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)(c)Acquisitionrelated costsThe Company incurred transaction costs of approximately $40and none during twelvemonth period ended December 31, 2022 which were included ingeneral and administrative expenses in the consolidated statements of income (loss).Acquisition of Naiz Bespoke Technologies, S.L. (“Naiz”)On October 11, 2022, the Company acquired 100% of the shares and voting interests in Naiz a provider of SaaS technology solutions that solve sizeand fit issues for fashion ecommerce companies. The acquisition was designed to allow Naiz’s customers benefit from MySize’s deep understanding ofthe fashion ecommerce retail landscape, while creating an additional revenue stream for the Company.Unaudited proforma informationThe results of operations of Naiz have been included in the consolidated financial statements since the acquisition date of October 11, 2022. Naizrevenues included in the Company’s consolidated statement of operations from October 11, 2022 through December 31, 2022 were $103. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,738 and $379 respectively and the net loss after tax would have been $8,695 and $10,717 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash503Issuance of shares of common stock (240,000 shares) (*)1,008Total consideration transferred1,511(*)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Naiz, additional cash consideration (up to $1,550) in four instalments subject to thefollowing conditions:(i)Continuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result ofa Good Reason; and(ii)Naiz’s Revenues reaching or exceeding the respective Target Revenues defined in the agreement. The revenues will be calculated in four periods:(1) January 1, 2022 – December 31, 2022; (2) January 1, 2023 – June 30, 2023; (3) July 1, 2023 – December 31, 2023; (4) January 1, 2024 – December31, 2024.Former owners of Naiz are entitled to additional cash consideration following December 31, 2025 (up to $1,650) in an event when the actual value of theequity consideration is less than $1,650, subject to completion of a Target Revenue for the period of January 1, 2025 – December 31, 2025 andcontinuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result of aGood Reason;F30MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)During the year ended December 31, 2022 an amount of $283 was recorded in respect of the additional cash consideration.(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the estimates of their fair values, which were determined using generally accepted valuation techniques based on estimates andassumptions made by management at the time of the acquisition.The following table summarizes the fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and cash equivalent36Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Total net assets acquired1,511(c)Acquisitionrelated costsDuring 2022, the Company incurred transaction costs of approximately $75 which were included in general and administrative expenses in theconsolidated statements of income (loss).F31MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)Note 17 – Operating SegmentsDuring the year ended December 31, 2021, the Company had one reportable segment. As a result of the business combinations in the reporting period(see note 13), the Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificialintelligence driven measurement solutions and (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions and. The fashionand equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. Orgad has onecustomer that is responsible for 37.9% of the Company consolidated revenues. The SaaS based innovative artificial intelligence driven measurementsolutions, or SaaS Solutions operating segment consists of My Size Inc and My Size Israel and My Size LLC.Information related to the operations of the Company’s reportable operating segments is set forth below:Fashion andequipment ecommerce platformSaaSSolutionsNaizTotalAs of the year ended December 31, 2022Revenues from external customers4,1322241034,459Operating (loss) income(591)(7,181)(338)(8,110)Financial income (expense), net(236)Net loss before tax(8,346)Fashion andequipment ecommerce platformSaasSolutionNaizAs of December 31, 2022:Assets2,0225,9661,691Amortization of intangible assets(114)(34)(46)The Company elected to present geographic information in respect with revenues generated from external customers based on the location of the selling entity:All the revenues of the fashion and equipment ecommerce platform segment are generated by Orgad, located in Israel.All the revenues of the Naiz segment are generated by Naiz, located in Spain.The revenues of the Saas Solutions segment are generated by My Size Ltd. located in Israel (approximately 75% of the segment revenues) and by My Size Inc.located in the U.S. (approximately 25% of the segment revenues).NOTE 18 SALES AND MARKETINGYear endedDecember 31,20222021Salaries836574Consultants and subcontractors5831,086Marketing481283Selling fees489Share based payments post Orgad acquisition (*)271Share based payments for consultants and employees127180Travel21142Other1451713,1432,336(*) See note 16.NOTE 19 GENERAL AND ADMINISTRATIVE EXPENSESYear endedDecember 31,20222021Salaries1,007461Professional services7051,832Share based payments for consultants, directors and employees18098Rent, office expenses and communication442372Insurance564627cash liability and equity liability expenses related to Orgad acquisition310cash liability expenses related to Naiz acquisition217Settlement fees (*)345Directors8259Other3933303,9004,124(*)See note 15(b)F32MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 20 FINANCIAL INCOME (EXPENSE), NETA.Financial incomeYear endedDecember 31,20222021Revaluation investment in marketable securities49Other26172666B.Financial expenseYear endedDecember 31,20222021Exchange rate differences33Revaluation of loan granted100Revaluation investment in marketable securities62Other6792629NOTE 21 EVENTS SUBSEQUENT TO THE BALANCE SHEET DATEa.On January 2, 2023, Orgad experienced a fire at its warehouse in Israel. The Company is not aware of any casualties or injuries associated with thefire. The Company shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450.The Company believes that this incident did not affect the future sales results of Orgad for the year 2023. The inventory was not insured and it istoo early to determine the potential impact of this incident on the other parties that were involved in the incident (lessor and others that leasedproperties near the warehouse).b.On January 10, 2023, the Company entered into a securities purchase agreement pursuant to which the Company sold an aggregate of 162,000ofthe Company’s shares of common stock and prefunded warrants to purchase up to 278,899shares of common stock and, in a concurrent privateplacement, unregistered warrants to purchase up to883,798 shares of common stock, consisting of Series A warrants to purchase up to 441,899shares of common stock and Series B warrants to purchase up to 441,899shares of common stock, at an offering price of $3.055per share ofcommon stock and associated Series A and Series B warrants and an offering price of $3.054per prefunded warrant and associated Series A andSeries B warrants.In addition, the Company entered into a securities purchase agreement pursuant to which the Company agreed to sell and issue in a privateplacement an aggregate of up to 540,098 unregistered prefunded warrants and unregistered warrants to purchase up to an aggregate of 1,080,196shares of common stock, consisting of Series A warrants to purchase up to 540,098 shares of common stock and Series B warrants to purchase upto 540,098 shares of common stock at an offering price of $3.054 per prefunded warrant and associated Series A and Series B warrants.As of March 31,2023 all the pre funded warrants were exercised by the investor.F33ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSUREThere were no disagreements with accountants on accounting and financial disclosure of a type described in Item 304 (a)(1)(iv) or any reportable event asdescribed in Item 304 (a)(1)(v) of Regulation SK.ITEM 9A. CONTROLS AND PROCEDURESDisclosure ControlsWe carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief FinancialOfficer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) as of December 31, 2022. Basedupon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this Annual Report on Form10K, our disclosure controls and procedures were effective to ensure that information required to be disclosed in reports filed under the Exchange Act, as amended,is recorded, processed, summarized and reported within the required time periods specified in the SEC’s rules and forms and is accumulated and communicated toour management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.Management’s Report on Internal Control Over Financial ReportingOur internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records, that, in reasonable detail,accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only inaccordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition, use or disposition of our assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance withthe policies or procedures may deteriorate.Our management, including our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financialreporting at December 31, 2022. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the TreadwayCommission (COSO) in Internal Control—Integrated Framework (2013). Based on that assessment under those criteria, management has determined that, as ofDecember 31, 2022, our internal control over financial reporting was effective.This Annual Report on Form 10K does not include an attestation report of our registered public accounting firm regarding internal control over financialreporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to the exemption provided to issuersthat are not “large accelerated filers” nor “accelerated filers” under the DoddFrank Wall Street Reform and Consumer Protection Act.Changes in Internal Control Over Financial ReportingDuring the year ended December 31, 2022, we made two acquisitions, as discussed in Note 1a and Note 16 of the audited consolidated financial statementsfor the year ended December 31, 2022 included in this Annual Report on Form 10K. As a result, we made additions and/or modifications to policies, procedures,systems and controls that have materially affected our internal control over financial reporting from the acquisitions, including new controls for consolidationprocess that relates to accounting policies and procedures, operational processes and documentation practices. Management excluded the acquired businessesfrom management’s report on internal control over financial reporting. ITEM 9B. OTHER INFORMATIONNone.ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNot applicable.51PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe following table sets forth the name, age and positions of our executive officers and directors.NAMEAgePOSITIONRonen Luzon52Chief Executive Officer and Class III DirectorOr Kles40Chief Financial OfficerBilly Pardo47Chief Operating Officer and Chief Product OfficerIlia Turchinsky35Chief Technology OfficerEzequiel Javier Brandwain53Chief Commercial OfficerOron Branitzky (1)(2)(3)*63Class II DirectorOren Elmaliah (1)(2)(3)*38Class I DirectorArik Kaufman (1)(2)(3)*41Class I DirectorGuy Zimmerman*53Class II Director(1)Member of our audit committee(2)Member of our nominating and corporate governance committee(3)Member of our compensation committee* Independent as that term is defined by the rules of the Nasdaq Stock Market.The business background and certain other information about our directors and executive officers is set forth below:Ronen Luzon has served as our Chief Executive Officer and a member of our board of directors since September 2013. Since 2006, Mr. Luzon hasadditionally served as Chief Executive Officer and founder of Malers Ltd., a company in the global security solutions market which provides technological solutionsfor integrated communication infrastructures, security and control systems. Prior to Malers, he held several senior marketing, sales management and professionalservices positions in a variety of international high tech companies including VP marketing of GA Tech and Professional Services Manager of Eldat Communication.Mr. Luzon graduated from Middlesex University in London with a B.S. in IT and Business Information Systems. We believe that Mr. Luzon is qualified to serve as amember of our board of directors because of his more than 20 years of experience in the technology sector.Or Kles has served as our Chief Financial Officer since May 2016. He is a certified public accountant with a broad, diverse financial background. From May2013 until April 2016 he served as Assistant Controller of Shikun and BinuiSolel Boneh Infrastructure Ltd. and from December 2010 until May 2013 he served as anAssociate at KPMG. Mr. Kles holds an MBA and a B.A. in Business Management and Accounting (specializing in financing) from The College of ManagementAcademic Studies. Mr. Kles is a certified public accountant in Israel.Billy Pardo has served as our Chief Product Officer since May 2014 and Chief Operating Officer since April 2019. From April 2010 until August 2013, Ms.Pardo served as Senior Director of Product Management of Fourier Education. Among her areas of expertise are launching products from concept to successfuldelivery in various methodologies, including Fourier Education’s awardwinning einstein™ Science Tablet. Prior to that Ms. Pardo served in various productmanagement positions including, Project Manager of Time to Know, Product Marketing Manager of RiT Technologies, Product Manager of Pricer AB and R&DTeam Leader at Pricer AB. Ms. Pardo previously served as Software Engineer at Eldat Communication Ltd., and QA Engineer at NICE Systems. Ms. Pardo receivedan MBA from The Interdisciplinary Center and a B.A. in Computer Science from The Academic College of TelAvivYaffo.Ilia Turchinsky has served as our Chief Technology Officer since April 2019 and from July 2018 until April 2019 as our Director of Technology. Prior tojoining us, from 2013 until 2018, Mr. Turchinsky served in various roles, most recently Chief Technology Officer, at MonkeyTech Ltd., a company that providesdesign, development and characterization of mobile applications. Prior to that, Mr. Turchinsky served in various roles including development course instructor atIQLine, was a founder of Arnavsoft and was a software developer for MintLab and a political party. Mr. Turchinsky holds a B.Sc. from the Ben Gurion University inComputer Science and an M.Sc. from the Open University of Israel in Computer Science.52Ezequiel Javier Brandwain has served as our Chief Commercial Officer since February 2022. Mr. Brandwain brings more than two decades of globalexperience in retail and the fashion industry, mainly in business development, operations, and international markets. Before joining the Company, Mr. Brandwainheld positions of increasing responsibility at several companies, including between June 2017 and November 2020, at 7 For All Mankind International, where heserved as Director, Latin America and Caribbean, managing business development and operations across Latin America and the Caribbean. Before that, betweenMay 2016 and June 2017, Mr. Brandwain served as Chief Business Development Officer at Replay – Fashion Box SPA, where he oversaw business development andoperations, expansion and control in the Americas, the Caribbean, and NorthEast Asia. Prior this role, between September 2015 and May 2016, he served as theReplay’s Managing Director in Latin America and the Caribbean, leading the company’s international expansion in these regions. Prior to that, between April 2015and September 2015, Mr. Brandwain served as Managing Director, Latin America and Caribbean at Authentic Brands Group LLC, where he led that company’soperations, business developments and international expansion within these regions, and served as the direct liaison with the company’s headquarters in New York.Prior to that, between April 2015 and September 2015, Mr. Brandwain served as Chief Operating Officer, Latin America and Caribbean at Flemingo International Ltd.,overseeing operations, as well as projected operations in the travel retail field across these regions. Prior to that, between December 2010 and February 2014, Mr.Brandwain served as Regional Director, Southern Hemisphere at Calvin Klein, where he was responsible for defining and implementing the operational andcommercial strategy for Southern Hemisphere, as well as overseeing the retail, travel retail, concession, and wholesale businesses of the company. During his tenureat Calvin Klein, Mr. Brandwain also served as Travel Retail Director, Latin America, where he built the travel retail business and developed operations. Prior to that,between July 2010 and November 2010, Mr. Brandwain served as Business Director, Latin America and Caribbean at Givenchy Latin America, and between January2010 and June 2010 he served as Commercial Director, Latin America and Caribbean at Nautica Latin America. During December 2004 and December 2009, Mr.Brandwain served as Vice President, International Business Development at Report Collection/Modextil, Inc., where he was in charge of business and operationalexpansion, global growth, and brand extensions. Prior to that, between 2003 and October 2004, Mr. Brandwain served as General Manager at Andrew KoenigInternational, Inc. Between September 2019 and November 2020, Mr. Brandwain served as a member of the Board of Directors of 7 For All Mankind BrazilImportacao, Comercio E Distribuicao S.A. Mr. Brandwain earned a Bachelor degree in architecture from the University of the Republic (Uruguay).Oron Branitzky has served as a member of our board of directors since March 2017. Mr. Barnitzky has vast experience in retail technology. SinceNovember 2017, Mr. Branitzky has served as Global Retail Business Development at Superup, and from January 2007 until December 2014 he served as VicePresident of Sales and Marketing at Pricer AB. Prior to that, Mr. Branitzky has served as VP Marketing and Sales at Eldat Communication and Sarin TechnologiesLtd. Since January 2015, Mr. Branitzky has served as chairman of the board of directors of WiseShelf Ltd. and from May 2015 until March 2016, Mr. Branitzky servedas an advisory board member of ciValue. Mr. Branitzky received a B.S. from the Hebrew University of Jerusalem and an MBA in International Marketing from TelAviv University. We believe that Mr. Branitzky is qualified to serve as a member of our board of directors because of his more than 20 years of experience inmanaging the sales of hitech solutions to retailers across the globe.Oren Elmaliah, has served as a member of our board of directors since May 2017. In September 2015, Oren Elmaliah founded Accounting Team IL and hasacted as Account Manager since then. Accounting Team IL is a financial consultancy and service provider to public companies traded in Israel and abroad. SinceFebruary 2017, Mr. Elmaliah has served as controller of Enlivex Therapeutics Ltd., and since January 2017 he has served as Chief Financial Officer of Presstek Israel.In addition, since September 2015, Mr. Elmaliah has served as an Israel Authorities Reporting Officer of LG Electronics Israel and since September 2015 he hasserved as Local Financial Report Consultant of Chiasma. From July 2011 until August 2015, Mr. Elmaliah served as CPA, Financial Director of CFO Director Ltd andfrom June 2010 until July 2011 he served as Risk Management Consultant of RSM International Limited. Mr. Elmaliah holds a B.A. in Accounting/Economics and aMsc. in Finance/Accounting from Tel Aviv University, Israel. He is a licensed Certified Public Accountant in Israel. We believe that Mr. Elmaliah is qualified to serveas a member of our board of directors because of his vast finance experience and public company management and administration in the fields of finance,accounting, and financial regulation.53Arik Kaufman has served as a member of our board of directors since June 2017. Mr. Kaufman is an attorney specializing in the fields of commercial law,corporate law and capital markets and since 2016 runs his own law office in Israel. He has vast experience in the fields of financial reporting and financial regulation.Mr. Kaufman serves as the Chief Executive Officer of Steakholder Foods since January 2022. From September 2017 until January 2022, Mr. Kaufman served as VPBusiness Development of Mor Research Applications. Mr. Kaufman holds an LLB in Law from the Interdisciplinary Center, Herzliya, and is admitted to the IsraeliBar. We believe that Mr. Kaufman is qualified to serve as a member of our board of directors based upon his experience of assisting with the completion of numerousventure capital financings, mergers, acquisitions, and strategic relationships. In addition, he has served as a member of the board of various publicly tradedcompanies, including companies that operate in the same industry as us.Guy Zimmerman has served as a member of our board of directors since August 2021. Previously, Mr. Zimmerman served as Founder and CEO ofManuFuture, an online b2b engineering market place, since February 2021. Prior to that from 2017 to 2021, Mr. Zimmerman acted as a consultant to severaltechnology startups and was a founding partner of a business travel online platform. From 2013 to 2017, Mr. Zimmerman served as EVP of Marketing and BusinessDevelopment of Kornit Digital and was part of the IPO leadership. Prior to that, Mr. Zimmerman served as VP of Global Sales and Business Development at TefronLtd., a provider of seamless garment technology, where he led the $100m sales and sales support organization serving global retail and fashion brands. Prior to thathe served as Vice President of Strategy and Business Development at Tnuva Group, Israel’s largest food manufacturer and spent eight years at McKinsey &Company. Mr. Zimmerman previously led a software startup in the field of operational healthcare management systems. Mr. Zimmerman holds a B.Sc. in IndustrialEngineering from Tel Aviv University in Israel. We believe that Mr. Zimmerman is qualified to serve as a member of our board of directors because of his experiencein business development in the technology and retail sectors.Board Diversity MatrixThe table below provides certain information regarding the diversity of our board of directors as of the date of this annual report.Board Diversity Matrix (As of March 31, 2023)Total Number of Directors5FemaleMaleNonBinaryDid Not DiscloseGenderPart I: Gender IdentityDirectors#5##Part II: Demographic BackgroundAfrican American or Black####Alaskan Native or Native American####Asian####Hispanic or Latinx####Native Hawaiian or Pacific Islander####White#1##Two or More Races or Ethnicities#2##LGBTQ+0Did Not Disclose Demographic Background2Family RelationshipsRonen Luzon, the Chief Executive Officer and a member of our board of directors, and Billy Pardo, the Chief Product Officer and Chief Operating Officer, arehusband and wife. There are no other family relationships among any of our current or former directors or executive officers.Involvement in Certain Legal ProceedingsWe are not aware of any of our directors or officers being involved in any legal proceedings in the past ten years relating to any matters in bankruptcy,insolvency, criminal proceedings (other than traffic and other minor offenses), or being subject to any of the items set forth under Item 401(f) of Regulation SK.Arrangements between Officers and DirectorsTo our knowledge, there is no arrangement or understanding between any of our officers and any other person, including directors, pursuant to which theofficer was selected to serve as an officer.Board of DirectorsThere are no agreements with respect to the election of directors.On January 6, 2022, we filed with the Secretary of State of Delaware a Certificate of Amendment to our Amended and Restated Certificate of Incorporationproviding for a classified Board. Following filing of the Certificate of Amendment, members of our board are now classified into three classes with staggered threeyear terms (with the exception of the expiration of the initial Class I and Class II directors), as follows:●Class I, comprised of two directors, initially Arik Kaufman and Oren Elmaliah (with their initial terms expiring at our 2022 annual meeting of stockholders andmembers of such class serving successive threeyear terms);●Class II, comprised of two directors, initially Oron Branitzky and Guy Zimmerman (with their initial terms expiring at our 2023 annual meeting of stockholdersand members of such class serving successive threeyear terms); and●Class III, comprised of one director, initially Ronen Luzon (with his initial term expiring at our 2024 annual meeting of stockholders and members of suchclass serving successive threeyear terms).54To preserve the classified Board structure, a director elected by the Board of Directors to fill a vacancy holds office until the next election of the class forwhich such director has been chosen, and until that director’s successor has been elected and qualified or until his or her earlier death, resignation, retirement orremoval.Our board of directors has reviewed the materiality of any relationship that each of our directors has with us, either directly or indirectly. Based upon thisreview, we believe that Arik Kaufman, Oren Elmaliach, Oron Branitzky and Guy Zimmerman qualify as independent directors in accordance with the standards set bythe Nasdaq and Rule 10A3 promulgated under the Exchange Act.Committees of the BoardAudit CommitteeOur audit committee is comprised of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Elmaliah serves as chairman of the audit committee. The auditcommittee is responsible for retaining and overseeing our independent registered public accounting firm, approving the services performed by our independentregistered public accounting firm and reviewing our annual financial statements, accounting policies and our system of internal controls. The audit committee actsunder a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the audit committee’s composition and meetings.The audit committee charter is available on our website www.mysizeid.com.The Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by applicable SEC rules. Inaddition, the Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by the rules of the Nasdaq StockMarket.The Board of Directors has determined that Oren Elmaliah is an “audit committee financial expert” serving on its audit committee, and is independent, as theSEC has defined that term in Item 407 of Regulation SK.Compensation CommitteeOur compensation committee consists of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Branitzky serves as chairman of the compensationcommittee.The compensation committee’s roles and responsibilities include making recommendations to the Board of Directors regarding the compensation for ourexecutives, the role and performance of our executive officers, and appropriate compensation levels for our CEO, which are determined without the CEO present, andother executives. Our compensation committee also administers our 2017 Equity Incentive Plan and our 2017 Consultant Equity Incentive Plan. The compensationcommittee acts under a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the compensation committee’scomposition and meetings. The compensation committee charter is available on our website www.mysizeid.com.Our Board of Directors has determined that all of the members of the compensation committee are “independent” as that term is defined by the rules of theNasdaq Stock Market.Nominating and Corporate Governance CommitteeThe members of the nominating and corporate governance committee are Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Kaufman serves aschairman of the corporate governance and nominations committee. The nominating and corporate governance committee acts under a written charter, which morespecifically sets forth its responsibilities and duties, as well as requirements for the nominating and corporate governance committee’s composition and meetings.The nominating and corporate governance committee charter is available on our website www.mysizeid.com.The nominating and corporate governance committee develops, recommends and oversees implementation of corporate governance principles for us andconsiders recommendations for director nominees. The nominating and corporate governance committee also considers stockholder recommendations for directornominees that are properly received in accordance with applicable rules and regulations of the SEC. Our stockholders that wish to nominate a director for election tothe Board of Directors should follow the procedures set forth in our bylaws.55The nominating and corporate governance committee will consider persons identified by its members, management, stockholders, investment bankers andothers. The guidelines for selecting nominees, which are specified in the nominating committee charter, generally provide that persons to be nominated:●should be accomplished in his or her field and have a reputation, both personal and professional, that is consistent with our image and reputation;●should have relevant experience and expertise and would be able to provide insights and practical wisdom based upon that experience and expertise; and●should be of high moral and ethical character and would be willing to apply sound, objective and independent business judgment, and to assume broadfiduciary responsibility.The nominating and corporate governance committee will consider a number of qualifications relating to management and leadership experience,background and integrity and professionalism in evaluating a person’s candidacy for membership on the Board of Directors. The nominating and corporategovernance committee may require certain skills or attributes, such as financial or accounting experience, to meet specific Board needs that arise from time to timeand will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of Board of Directors members. The nominating andcorporate governance committee will not distinguish among nominees recommended by stockholders and other persons.Our Board of Directors has determined that all of the members of the nominating and corporate governance committee are “independent” as that term isdefined by the rules of the Nasdaq Stock Market.Code of Conduct and EthicsWe have a Code of Business Conduct and Ethics that applies to all our employees. The text of the Code of Business Conduct and Ethics is publiclyavailable on our website at www.mysizeid.com. Information contained on, or that can be accessed through, our website does not constitute a part of this report andis not incorporated by reference herein. Disclosure regarding any amendments to, or waivers from, provisions of the code of conduct and ethics that apply to ourdirectors, principal executive and financial officers will be posted on the “InvestorsCorporate Governance” section of our website at www.mysizeid.com or will beincluded in a Current Report on Form 8K, which we will file within four business days following the date of the amendment or waiver.Change in Procedures for Recommending DirectorsThere have been no material changes to the procedures by which our stockholders may recommend nominees to our Board of Directors from thoseprocedures set forth in our Proxy Statement for our 2021 Annual Meeting of Stockholders, filed with the SEC on December 7, 2022.56ITEM 11. EXECUTIVE COMPENSATIONSummary Compensation TableThe following sets forth the compensation paid by us to our named executive officers, during the years ended December 31, 2022 and December 31, 2021.Name and Principal PositionYearSalary($) (1)Bonus($)StockAwards($)OptionAwards($) (2)All OtherCompensation($)Total($)Ronen Luzon2022173,000223,0008,000126,000530,000Chief Executive Officer2021194,0005,00023,00097,000319,000Or Kles2022123,00053,0007,00071,000254,000Chief Financial Officer2021123,0008,00030,00061,000222,000Billy Pardo2022134,00053,0007,000100,00294,000Chief Operating Officer2021162,0007,00018,00074,000261,000(1) Salary for the years 2022 and 2021 are based on average US$/NIS representative exchange rates of NIS 3.358 and NIS 3.11 respectively.(2) Amounts in this column represent the grant date fair value of options granted to the named executive officers during 2022 and 2021, computed in accordance withFASB ASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the named executive officers. The assumptionsmade in valuing the options reported in this column are discussed in Note 11 to our audited financial statements for the year ended December 31, 2021 and Note 4 toour condensed consolidated interim financial statements for the quarterly period ended September 30, 2022.All Other Compensation TableThe “All Other Compensation” amounts set forth in the Summary Compensation Table above consist of the following:NameYearAutomobileRelatedExpenses($)Manager’sInsurance*($)EducationFund*($)Othersocialbenefits**($)Total($)Ronen Luzon202232,00031,00015,00048,000126,000202133,00033,00015,00016,00097,000Or Kles202215,00021,00010,00025,00071,000202114,00019,0009,00019,00061,000Billy Pardo202216,00025,00013,00046,000100,000202117,00024,00012,00021,00074,000* Manager’s insurance and education funds are customary benefits provided to employees based in Israel. Manager’s insurance is a combination of severancesavings (in accordance with Israeli law), defined contribution taxqualified pension savings and disability insurance premiums. An education fund is a savings fundof pretax contributions to be used after a specified period of time for educational or other permitted purposes.** Other social benefits for 2022 and 2021 for all named individuals includes tax payments in respect of social benefits.57Agreements with Named Executive OfficersRonen LuzonOn November 18, 2018, My Size Israel, our wholly owned subsidiary, entered into an employment agreement with Ronen Luzon, or the Luzon EmploymentAgreement, pursuant to which Mr. Luzon will serve as our Chief Executive Officer. Pursuant to the terms of the Luzon Employment Agreement, Mr. Luzon receivesNIS 55,000 per month as his base salary and shall be eligible to receive such bonus as determined by us. In addition, Mr. Luzon shall be entitled social benefits andto other benefits, including, but not limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, includinginsurance in case of disability, annual vacation days, sick leave and expense reimbursement. Pursuant to the terms of the Luzon Employment Agreement and subjectto certain conditions, payments made by the Company to the pension fund or manager’s insurance fund shall be made in lieu of severance payments due to Mr.Luzon. The term of the Luzon Employment Agreement shall be effective as of September 1, 2018 and shall continue until such time either party provides writtennotice to the other party at least 75 days in advance of the termination of such agreement. We may also terminate Mr. Luzon’s employment without prior writtennotice (or payment in lieu of such notice) for Cause (as defined in the Luzon Employment Agreement).Or KlesOn November 18, 2018, My Size Israel entered into an employment agreement with Or Kles, or the Kles Employment Agreement, pursuant to which Mr. Kleswill serve as our Chief Financial Officer. Pursuant to the terms of the Kles Employment Agreement, Mr. Kles receives NIS 38,000 per month as his base salary andshall be eligible to receive such bonus as determined by us. In addition, Mr. Kles shall be entitled to social benefits and other benefits, including, but not limited to,contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annual vacation days,sick leave and expense reimbursement. Pursuant to the terms of the Kles Employment Agreement and subject to certain conditions, payments made by us to thepension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Mr. Kles. The term of the Kles Employment Agreement shall beeffective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days in advance of thetermination of such agreement. We may also terminate Mr. Kles’s employment without prior written notice (or payment in lieu of such notice) for Cause (as defined inthe Kles Employment Agreement).Billy PardoOn November 18, 2018, My Size Israel entered into an employment agreement with Billy Pardo, or the Pardo Employment Agreement, pursuant to which Ms.Pardo will serve as our Chief Product Officer. Pursuant to the terms of the Pardo Employment Agreement, Ms. Pardo receives NIS 47,500 per month as her basesalary and shall be eligible to receive such bonus as determined by us. In addition, Ms. Pardo shall be entitled to social benefits and other benefits, including, butnot limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annualvacation days, sick leave and expense reimbursement. Pursuant to the terms of the Pardo Employment Agreement and subject to certain conditions, payments madeby us to the pension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Ms. Pardo. The term of the Pardo EmploymentAgreement shall be effective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days inadvance of the termination of such agreement. We may also terminate Ms. Pardo’s employment without prior written notice (or payment in lieu of such notice) forCause (as defined in the Pardo Employment Agreement).58Outstanding Equity Awards at Fiscal YearEndThe following table provides information regarding options held by each of our named executive officers that were outstanding as of December 31, 2022.Option AwardsStock AwardsName and Principal PositionNumber ofSecuritiesUnderlyingUnexercisedOptionsExercisableNumber ofSecuritiesUnderlyingUnexercisedOptionsUnexercisableOptionExercisePriceOptionExpirationDateEquityincentiveplan awards:Number ofUnearnedShares that HaveNot VestedEquityincentiveplan awards:Market Value ofUnearnedShares, That Have Not VestedRonen Luzon Chief Executive Officer400(1)$26(8)7/24/20231,601(2)$26(8)5/29/20256,400(3)$268/10/2025100,000(9)100,000$511,250Or Kles – Chief Financial Officer227(4)$26(8)7/24/2023427(5)$26(8)5/29/20255,200(6)$268/10/202524,000(10)24,000$122,700Billy Pardo Chief Operating Officer400(1)$26(8)7/24/2023894(7)$26(8)5/29/20255,200(6)$268/10/202524,000(11)24,000$122,700(1) The option has a grant date of July 24, 2017 and vested in full on January 24, 2018.(2) The option has a grant date of May 29, 2019. 267 options vested immediately upon grant, 445 options vested on January 24, 2019, 445 options vested on January24, 2020 and 444 options vested on January 24, 2021.(3) The option has a grant date of October 8, 2020, 1,600 options vested on November 26, 2020, 1,600 options vested on May 26, 2021, 1,600 options vested onNovember 26, 2021, and 1,600 options vested on May 26, 2022.(4) The option has a grant date of July 24, 2017. 76 options vested immediately upon grant, 76 options vested on May 1, 2018 and 75 options vested on May 1, 2019.(5) The option has a grant date of May 29, 2019. 160 options vested immediately upon grant, 445 options vested on May 1, 2020, 445 options vested on May 21, 2021and 444 options vested on May 1, 2022.(6) The option has a grant date of October 8, 2020, 1,300 options vested on November 26, 2020, 1,300 options vested on May 26, 2021, 1,300 options vested onNovember 26, 2021, and 1,300 options vested on May 26, 2022.(7) The option has a grant date of May 29, 2019. 214 options vested immediately upon grant, 227 options vested on January 24, 2019, 227 options vested on January24, 2020 and 226 options vested on January 24, 2021.(8) On May 25, 2020, the compensation committee of the Board of Directors of the Company reduced the exercise price of outstanding options of employees anddirectors of the Company for the purchase of an aggregate of 5,610 shares of common stock of the Company (with exercise prices ranging between $453.75 and$228.75) to $26 per share, which was the closing price for the Company’s common stock on May 22, 2020, and extended the term of the foregoing options for anadditional one year from the original date of expiration.(9) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(10) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(11) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.59Director CompensationThe following table sets forth compensation information for our nonemployee directors for the year ended December 31, 2022.NameFees earned orpaid incash ($)(1)Optionawards($)(1)(2)Total($)Oren Elmalih15,078 15,078Oron Barnitzky15,34715,347Arik Kaufman14,44114,441Guy Zimmerman13,03313,033(1)Fees for the year 2022 are based on average US$/NIS representative exchange rates of NIS 3.519.(2)Amounts in this column represent the grant date fair value of options granted to the nonemployee directors during 2022 computed in accordance with FASBASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the nonemployee directors. The assumptions made invaluing the options reported in this column are discussed in Note 11 to our financial statements for the year ended December 31, 2022.We compensate our nonemployee directors for their service as a member of our board. Mr. Luzon received no separate compensation for board service. Mr.Luzon’s compensation is set forth above in the Summary Compensation Table.Each nonemployee director is entitled to receive a per meeting fee of $318. Nonemployee directors are also reimbursed for their travel and reasonable outofpocket expenses incurred in connection with attending board and committee meetings, to the extent that attendance is required by the board or the committee(s)on which that director serves.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurity Ownership of Certain Beneficial Holders and ManagementThe following table sets forth certain information regarding beneficial ownership of shares of our common stock as of March 31, 2023 by (i) each personknown to beneficially own more than 5% of our outstanding common stock, (ii) each of our directors, (iii) each of our executive officers, and (iv) all of our directorsand executive officers as a group. Except as otherwise indicated, the persons named in the table below have sole voting and investment power with respect to allshares beneficially owned, subject to community property laws, where applicable.Beneficial Owner(1)Shares ofCommon StockBeneficiallyOwnedPercentage(2)Executive officers and directors:Ronen Luzon143,578(3)5.8%Or Kles29,854(4)1.2%Billy Pardo143,578(5)5.8%Ezequiel Javier Brandwain12,000(6)*Ilia Turchinsky18,313(7)*Arik Kaufman1,294(8)*Oren Elmaliah1,294(9)*Oron Branitzky1,294(10)*Guy ZimmermanAll Executive Officers and Directors as a Group (9 persons)207,6268.4%*Less than 1%(1) The address of each person is c/o My Size, Inc., 4 HaYarden St., P.O.B. 1026, Airport City, Israel 7010000 unless otherwise indicated herein.60(2) The calculation in this column is based upon 2,446,780 shares of common stock outstanding on March 31, 2023. Beneficial ownership is determined in accordancewith the rules of the SEC and generally includes voting or investment power with respect to the subject securities. Shares of common stock that are currentlyexercisable or exercisable within 60 days of March 31, 2023 are deemed to be beneficially owned by the person holding such securities for the purpose of computingthe percentage beneficial ownership of such person, but are not treated as outstanding for the purpose of computing the percentage beneficial ownership of anyother person(3) Consists of (i) 100,000 shares of restricted stock granted under the 2017 Plan, (ii) 4,683 shares of common stock, (iii) options to purchase up to 8,401 shares of ourcommon stock, and (iv) 24,000 shares of restricted stock and options to purchase up to 6,494 shares of our common stock which are held by Billy Pardo, RonenLuzon’s spouse. Mr. Luzon may be deemed to beneficially hold the securities of us held by Ms. Pardo.(4) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, and (ii) an option to purchase 5,854 shares of our common stock. Does not includean aggregate of 119,760 shares of restricted stock over which Mr. Kles has been designated the initial proxy to vote such shares pursuant to a voting agreemententered into between Whitehole S.L., Twinbel S.L. and EGI Acceleration, S.L.(5) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, (ii) options to purchase up to 6,494 shares of our common stock, (iii) 100,000 sharesof restricted stock which are held by Ronen Luzon, Billy Pardo’s spouse (iii) 8,401 shares of common stock which are held by Mr. Luzon, and (iii) options to purchaseup to 4,683 shares of our common stock which are held by Mr. Luzon. Ms. Pardo may be deemed to beneficially hold the securities of the Company held by Mr.Luzon.(6) Consists of 12,000 shares of restricted stock granted under the 2017 Plan.(7) Consists of (i) 16,000 shares of restricted stock granted under the 2017 Plan, and (ii) options to purchase up to 2,313 shares of our common stock.(8) Consists of options to purchase up to 1,294 shares of our common stock.(9) Consists of options to purchase up to 1,294 shares of our common stock.(10) Consists of options to purchase up to 1,294 shares of our common stock.Change in ControlWe are not aware of any arrangement that might result in a change in control in the future. We have no knowledge of any arrangements, including anypledge by any person of our securities, the operation of which may at a subsequent date result in a change in the Company’s control.Securities Authorized for Issuance Under Equity Compensation PlansOn January 29, 2017, our Board of Directors approved the 2017 Equity Incentive Plan and the 2017 Consultant Equity Incentive Plan, which were approvedby our stockholders on March 21, 2017. In addition, on January 29, 2017, our Board of Directors approved the Stock Option Plan Israel Grantees SubPlan. The 2017Equity Incentive Plan initially authorized the issuance of up to 5,334 shares of common stock under the plan and the 2017 Consultant Equity Incentive Plan initiallyauthorized the issuance of up to 8,000 shares of common stock under the plan.On February 12, 2018, our stockholders approved an amendment to the 2017 Consultant Equity Incentive Plan to increase the maximum number of shares ofour common stock available for issuance under the plan from 8,000 to 12,000. On July 3, 2018, our stockholders approved an amendment to the 2017 Equity IncentivePlan to increase the maximum number of shares of our common stock available for issuance under the plan from 5,334 to 8,000 and an amendment to the 2017Consultant Equity Incentive Plan to increase the maximum number of shares of our common stock available for issuance under the plan from 12,000 to 18,667.On May 25, 2020, our Board reduced the exercise price of outstanding options of our employees and directors for the purchase of an aggregate of 140,237of our common stock (with exercise prices ranging between $453.75 and $228.75) to $26.0 per share, and extended the term of the foregoing options for an additionalone year from the original date of expiration.61On August 10, 2020, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 80,000 to 58,000shares, and a decrease of the numbers of shares available for issuance under the 2017 Consultant Incentive Plan to 8,667 shares from 18,667 shares.On December 30, 2021, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 58,000 sharesto 230,800 shares.On December 7, 2022, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Plan from 230,800 shares to 289,000shares.The following table summarizes information about our equity compensation plans and individual compensation arrangements as of December 31, 2022.Number of securities to be issued upon exercise of outstanding options, warrants and rights(a)Weighted average exercise price of outstandingoptions, warrants and rights (b)Number of securities remaining availablefor future issuanceunder equity compensationplans (excludingsecurities reflected in column (a) (c)Equity compensation plans approved by security holders43,49724.7477,455Equity compensation plans not approved by security holdersTotal43,49724.7477,455ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEDuring years ended December 31, 2022 and 2021, except for compensation arrangements described elsewhere herein and the transactions described below,we did not participate in any transaction, and we are not currently participating in any proposed transaction, or series of transactions, in which the amount involvedexceeded the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years, and in which, to our knowledge,any of our directors, officers, five percent beneficial security holders, or any member of the immediate family of the foregoing persons had, or will have, a direct orindirect material interest.Compensation arrangements for our named executive officers and directors are described in the section entitled “Executive Compensation.”Employment AgreementsWe have entered into written employment agreements with each of our executive officers. These agreements generally provide for notice periods of varyingduration for termination of the agreement by us or by the relevant executive officer, during which time the executive officer will continue to receive base salary andbenefits. We have also entered into customary noncompetition, confidentiality of information and ownership of inventions arrangements with our executiveofficers. However, the enforceability of the noncompetition provisions may be limited under applicable law.OptionsSince our inception we have granted options to purchase our common stock to our officers and directors. Such option agreements may contain accelerationprovisions upon certain merger, acquisition, or change of control transactions.62Restricted Stock GrantsOn September 29, 2022, our compensation committee approved grants of restricted share awards under our 2017 Plan to Ronen Luzon, Or Kles, Billy Pardo,Ilia Turchinsky and Ezequiel Javier Brandwain, pursuant to which they were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000restricted shares and 12,000 restricted shares, respectively. The restricted shares shall vest in three equal installments on January 1, 2023, January 1, 2024 andJanuary 1, 2025, conditioned upon continuous employment with us, and subject to accelerated vesting upon a change in control of the Company.Shareholder ActivismIn May 2021, we received notice from Custodian Ventures, LLC, or Custodian, of its intention to nominate four candidates to stand for election to our Boardof Directors at our 2021 annual meeting of stockholders. Custodian subsequently made a book and records request and has made public statements calling forchanges to our management.On September 22, 2021, Custodian, commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v. Mysize,Inc., C.A. No. 20210817LWW, or the Delaware Action. In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting. As further described below, on November 4, 2021, we entered into asettlement agreement, or the Settlement Agreement, with Custodian, Activist Investing LLC, David Aboudi, Partick Loney and David Natan, collectively, the LazarParties, settling and dismissing the Delaware Action.On October 19, 2021, we commenced an action in the United States District Court for the Southern District of New York captioned My Size, Inc. v. DavidLazar, Custodian Ventures LLC, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, Civil Action No, 1:21cv08585, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, andcertain rules promulgated thereunder, or the SDNY Action. The complaint sought, among other things, declaratory and injunctive relief related to defendants’ effortsto nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed “group” for purposes ofSection 13 (d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. In addition, the complaint alleged that thedefendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules in connection with their efforts to elect a slate of directorsto our Board of Directors. On October 20, 2021, the Court signed an order granting a hearing on an anticipated motion for a preliminary injunction and expeditedscheduling and discovery in aid thereof, and scheduled that hearing for December 2, 2021. As further described below, on November 4, 2021, we entered into theSettlement Agreement with the Lazar Parties settling and dismissing the claims asserted in the SDNY Action and the Delaware Action against one another. OnNovember 8, 2021, the remaining defendants in the SDNY Action filed and answer and counterclaim asserting a claim against us pursuant to New York Civil RightsLaw Section 70a, also known as New York’s antiSLAPP statute.On November 4, 2021, we entered into the Settlement Agreement, or the Lazar Settlement Agreement, with the Lazar Parties. Pursuant to the LazarSettlement Agreement, we and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the LazarSettlement Agreement, we reimbursed Custodian for out of pocket expenses and in consideration for the dismissal and release of claims against the Company anaggregate amount equal to $275,000. With respect to our 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) itsMay 12, 2021 notice of stockholder nominations of four director candidates with respect to our 2021 annual meeting of stockholders, (ii) the notice dated October 28,2021 submitted by Custodian to us notifying us of Custodian’s continued intent to bring its nomination of four director candidates before our stockholders at the2021 annual meeting, and (iii) any and all related materials and notices submitted to us in connection therewith or related thereto and to not take any further action inconnection with the solicitation of any proxies in connection with us. Custodian also agreed to cease any and all solicitation and other activities in connection withthe 2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effective date of theAgreement, or the Standstill Period. The Lazar Settlement Agreement also provides that during the Standstill Period, the Lazar Parties will vote all shares of ourcommon stock it beneficially owns in accordance with any proposal or recommendation made by us or our Board of Directors that is submitted to our stockholders,unless to do so would violate applicable law and except with respect to certain extraordinary transactions. The Lazar Settlement Agreement also contains nondisparagement and confidentiality provisions, subject to certain exceptions.63On December 9, 2021, we subsequently entered into a Settlement Agreement, or the Ault Settlement Agreement, with Milton C. Ault III, Ault Alpha LP, AultAlpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed to withdraw the SDNY Action against the AultParties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that action against the Company. In addition, pursuant to the SettlementAgreement, we paid $70,000 to the Ault Parties in consideration for the releases and other good and valuable consideration as set forth in the Ault SettlementAgreement.Naiz Bespoke Technologies AcquisitionOn October 7, 2022, we entered into the Naiz Agreement with the Naiz Sellers, pursuant to which the Naiz Sellers agreed to sell to us all of the issued andoutstanding equity of Naiz. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) ) the Naiz EquityConsideration and (ii) up the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the Equity Value Averaging Period) is less than $1,650,000, My Size shall pay the Shortfall Value to the Naiz Sellers within 45days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period, it wasdetermined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement)).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers will be subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into the LockUp Agreement with My Size, (ii) Whitehole, Twinbel and EGIentered into the Voting Agreement with My Size and (iii) each of the Key Persons entered into employment agreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonth period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonth “dribbleout” provisionthat provides following the expiration of the initial sixmonth lockup period, without My Size’s prior written consent (which My Size shall be permitted to withholdat its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than the average dailytrading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.64The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Indemnification Agreements and Directors’ and Officers’ Liability InsuranceWe have entered into indemnification agreements with each of our directors and executive officers. These agreements, among other things, require us toindemnify these individuals and, in certain cases, affiliates of such individuals, to the fullest extent permitted by Delaware law against liabilities that may arise byreason of their service to us or at our direction, and to advance expenses incurred as a result of any proceedings against them as to which they could beindemnified. We also maintain an insurance policy that insures our directors and officers against certain liabilities, including liabilities arising under applicablesecurities laws.Director IndependenceSee “Item 10. Directors, Executive Officers and Corporate Governance; Corporate Governance, Board Composition” above for a discussion regarding theindependence of the members of our board of directors.ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICESSomekh Chaikin, a member firm of KPMG International, located in Tel Aviv, Israel, PCAOB ID 1057, has served as our independent registered publicaccounting firm for 2022 and 2021. The following are Somekh Chaikin’s fees for professional services in each of the respective fiscal years:Fee Category20222021Audit Fees198,910298,300Tax Fees30,66729,300Auditrelated Fees18,000Total Fees247,577327,600Audit Fees:Audit Fees consist of fees billed for professional services performed by Somekh Chaikin for the audit of our annual financial statements, thereview of interim consolidated financial statements, and related services that are normally provided in connection with registration statements, including theregistration statement for S1 and S3.Tax Fees: Tax Fees may consist of fees for professional services, including tax and VAT consulting and compliance performed by an independent registeredpublic accounting provided during the period.PreApproval Policies and ProceduresIn accordance with the SarbanesOxley Act of 2002, as amended, our audit committee charter requires the audit committee to preapprove all audit andpermitted nonaudit services provided by our independent registered public accounting firm, including the review and approval in advance of our independentregistered public accounting firm’s annual engagement letter and the proposed fees contained therein. The audit committee has the ability to delegate the authorityto preapprove nonaudit services to one or more designated members of the audit committee. If such authority is delegated, such delegated members of the auditcommittee must report to the full audit committee at the next audit committee meeting all items preapproved by such delegated members. In the fiscal years endedDecember 31, 2022 and December 31, 2021 all of the services performed by our independent registered public accounting firm were preapproved by the auditcommittee.65PART IVITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES(a)Financial StatementsThe financial statements required by this Item are included beginning at page F1.(b)ExhibitsSee Exhibit IndexITEM 16. FORM 10K SUMMARYNot applicableEXHIBIT INDEXExhibitNumberDescription3.1Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Form on Form8K filed on March 23, 2017)3.2Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10K filed onMarch 4, 2016)3.3Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’s Current Report onForm 8K filed on February 20, 2018)3.4Second Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8K filedon April 24, 2018)3.5Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’sCurrent Report on Form 8K filed on November 18, 2019)3.6Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on January 7, 2022)3.7Amendment No. 1 to Second Amended and Restated ByLaws (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8K filed on January 7, 2022)3.8Certificate of Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on December 7, 2022)4.1Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S3/A filed onNovember 14, 2016)4.2Form of Warrant to Purchase Common Stock issued on February 2, 2018 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report onForm 10K filed on March 27, 2019)4.3Description of Securities Registered under Section 12 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report on Form 10K filedon March 19, 2020)4.4Form of Warrant (incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S1, Amendment No. 1, filed with the SECon May 5, 2020.)4.5Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)4.6Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.1My Size, Inc. 2017 Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement on Schedule DEF 14Afiled on March 2, 2017)10.2My Size, Inc. 2017 Consultant Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement onSchedule DEF 14A filed on March 2, 2017)10.3My Size, Inc. 2017 Stock Option Plan Israel Grantees SubPlan (incorporated by reference to Exhibit 10.3 to the Company’s Annual Report on Form10K filed on March 27, 2019)6610.4Purchase Agreement between My Size, Inc. and Shoshana Zigdon dated as of February 16, 2014 (incorporated by reference to Exhibit 10.2 to theCompany’s Annual Report on Form 10K filed on March 4, 2016)10.5 +Employment Agreement between My Size Israel 2014 Ltd. and Ronen Luzon dated November 18, 2018 (incorporated by reference to Exhibit 10.1 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.6 +Employment Agreement between My Size Israel 2014 Ltd. and Or Kles dated November 18, 2018 (incorporated by reference to Exhibit 10.2 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.7 +Employment Agreement between My Size Israel 2014 Ltd. and Billy Pardo dated November 18, 2018 (incorporated by reference to Exhibit 10.3 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.8Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on January 15,2020)10.9Form of Warrant (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.10Form of Placement Agent Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.11Securities Purchase Agreement (incorporated by reference to Exhibit 10.30 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.12Underwriting Agreement, dated January 5, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on January 7, 2021)10.13Underwriting Agreement, dated March 22, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on March 25, 2021)10.14Amendment to Purchase Agreement between My Size Israel 2014 Ltd., My Size, Inc. and Shoshana Zigdon (incorporated by reference to Exhibit 10.1to the Company’s Quarterly Report on Form 10Q on August 16, 2021)10.15Form of Registered Direct Offering Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.16Form of PIPE Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.17Form of Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.18Form of Placement Agent Warrant issued by the Company on October 28, 2021 (incorporated by reference to Exhibit 10.22 to the Company’s Form S1filed on November 12, 2021)10.19Form of Registration Rights Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.4 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.20Engagement Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference to Exhibit 10.5 to theCompany’s Current Report on Form 8K filed on October 28, 2021)10.21Settlement Agreement dated November 4, 2021, among My Size, Inc., David Lazar and certain of his affiliates (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on November 5, 2021)10.22Share Purchase Agreement dated as of February 7, 2022 between My Size Israel 2014 Ltd. and Amar Guy Shalom and Elad Bretfeld (incorporated byreference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SEC on February 8, 2022)10.23Employment Agreement between My Size Israel 2014 Ltd. and Ezequiel Javier Brandwain dated January 27, 2022 (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on February 1, 2022)10.24Form of Section 102 Capital Gain Restricted Stock Award Agreement under the Company’s 2017 Equity Incentive Plan (incorporated by reference toExhibit 10.1 to the Company’s Quarterly Report on Form 10Q, filed with the SEC on November 14, 2022)10.25Share Purchase Agreement, dated as of October 6, 2022, by and among My Size, Inc., Borja Cembrero Saralegui, Artiz Toree Garcia, Whitehold, S.L.,Twinbel, S.L., and EGI Acceleration, S.L. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SECon October 12, 2022)10.26Form of LockUp Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)10.27Form of Voting Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.3 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)6710.28My Size, Inc. Amendment to the My Size, Inc. 2017 Equity Plan (incorporated by reference to Appendix B to the Company’s definitive proxystatement filed with the SEC on November 4, 2022)10.29Form of Registered Direct Offering Securities Purchase Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.1 to theCompany’s Current Report on Form 8K filed with the SEC on January 12, 2023)10.30Form of PIPE Securities Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8Kfiled with the SEC on January 12, 2023)10.31Form of Registered Direct PreFunded Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.32Form of Series A and Series B Warrant (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8K filed with the SEC onJanuary 12, 2023)10.33Form of Private Placement PreFunded Warrant (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.34Form of Registration Rights Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form8K filed with the SEC on January 12, 2023)10.35Engagement Agreement, dated December 5, 2022 (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8K filed withthe SEC on January 12, 2023)10.36*Form of Placement Agent Warrant21.1*List of Subsidiaries23.1*Consent of Somekh Chaikin, a member firm of KPMG International, registered public accounting firm31.1*Certification of the Chief Executive Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200231.2*Certification of the Chief Financial Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200232.1*Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a14(b) of the Exchange Act and 18 U.S.C. Section 1350, asadopted pursuant to Section 906 of the SarbanesOxley Act of 2002101.INS*Inline XBRL Instance Document101.SCH*Inline XBRL Taxonomy Schema101.CAL*Inline XBRL Taxonomy Calculation Linkbase101.DEF*Inline XBRL Taxonomy Definition Linkbase101.LAB*Inline XBRL Taxonomy Label Linkbase101.PRE*Inline XBRL Taxonomy Presentation Linkbase104Cover Page Interactive Data File (formatted as Inline XBRL document and contained in Exhibit 101)*Filed herewith.+Indicates a management contract or any compensatory plan, contract or arrangement68SIGNATURESPursuant to the requirements of Section 13 and 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10K to be signed on its behalf by the undersigned, thereunto duly authorized on this 14th day of April, 2023.MY SIZE, INC./s/ Ronen LuzonRonen LuzonChief Executive Officer (Principle Executive Officer)/s/ Or KlesOr KlesChief Financial Officer(Principal Financial and Accounting Officer)Pursuant to the requirements of the Securities Act of 1934, this annual report on Form 10K has been signed below by the following persons on behalf ofthe registrant and in the capacities and on the dates indicated.SignatureTitleDate/s/ Ronen LuzonChief Executive Officer and DirectorApril 14, 2023Ronen Luzon(Principle Executive Officer)/s/ Or KlesChief Financial OfficerApril 14, 2023Or Kles(Principal Financial and Accounting Officer)/s/ Oren ElmaliahDirectorApril 14, 2023Oren Elmaliah/s/ Arik KaufmanDirectorApril 14, 2023Arik Kaufman/s/ Oron BranitzkyDirectorApril 14, 2023Oron Branitzky/s/ Guy ZimmermanDirectorApril 14, 2023Guy Zimmerman69EX10.36 2 ex1036.htmExhibit 10.36NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES ANDEXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THESECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO ANEFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTIONNOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGINACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.PLACEMENT AGENT COMMON STOCK PURCHASE WARRANTMY SIZE, INC.Warrant Shares: _______Issue Date: January 12, 2023Initial Exercise Date: January 12, 2023THIS PLACEMENT AGENT COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _____________ or itsassigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the dateset forth above (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on January 10, 2028 (the “Termination Date”) but not thereafter, tosubscribe for and purchase from My Size, Inc., a Delaware corporation (the “Company”), up to ______ shares (as subject to adjustment hereunder, the “WarrantShares”) of the Company’s Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined inSection 2(b). This Warrant is issued pursuant to that certain engagement letter, dated as of December 5, 2022, by and between the Company and H.C. Wainwright &Co., LLC.Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities PurchaseAgreement (the “Purchase Agreement”), dated January 10, 2023, among the Company and the purchasers signatory thereto.1Section 2. Exercise.a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or afterthe Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted by email (or emailattachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the numberof Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shalldeliver the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on aUnited States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No inkoriginalNotice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required.Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder haspurchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrantto the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercisesof this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering theoutstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder andthe Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver anyobjection to any Notice of Exercise within one (1) Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant,acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, thenumber of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.b) Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $3.8188, subject to adjustment hereunder (the“Exercise Price”).c) Cashless Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein isnot available for the issuance or resale of the Warrant Shares to or by the Holder, then this Warrant may also be exercised, in whole or in part, at such timeby means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing[(AB) (X)] by (A), where:(A) =as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice ofExercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed anddelivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) ofRegulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAPon the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on theprincipal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s execution of the applicable Notice ofExercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hoursthereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii)the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice ofExercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;(B) =the Exercise Price of this Warrant, as adjusted hereunder; and(X) =the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if suchexercise were by means of a cash exercise rather than a cashless exercise.2“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which theCommon Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York Citytime)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest precedingdate) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for theCommon Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the mostrecent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by anindependent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to theCompany, the fees and expenses of which shall be paid by the Company.“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the TradingMarket on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or thenearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and ifprices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reportingprices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock asdetermined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonablyacceptable to the Company, the fees and expenses of which shall be paid by the Company.If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of theSecurities Act, the Warrant Shares shall take on the characteristics of the Warrants being exercised, and the holding period of the Warrant Shares beingissued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section 2(c).3d) Mechanics of Exercise.i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to betransmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with TheDepository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant insuch system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of theWarrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or mannerofsale limitationspursuant to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, registered in theCompany’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitledpursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2)Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate ExercisePrice to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Companyof the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall bedeemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant hasbeen exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (otherthan in the case of a cashless exercise) is received by the Warrant Share Delivery Date. If the Company fails for any reason to deliver tothe Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder,in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP ofthe Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifthTrading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share Delivery Date until such WarrantShares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FASTprogram so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standardsettlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stockas in effect on the date of delivery of the Notice of Exercise.4ii.Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the requestof a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a newWarrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrantshall in all other respects be identical with this Warrant; provided, however, that the Holder shall be required to return any WarrantShares subject to any such rescinded exercise notice concurrently with the return to Holder of the aggregate Exercise Price paid to theCompany for such Warrant Shares and the restoration of Holder’s right to acquire such Warrant Shares pursuant to this Warrant(including, issuance of a replacement warrant certificate evidencing such restored right).iii. Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant toSection 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.iv. Compensation for BuyIn on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights availableto the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with theprovisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date theHolder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwisepurchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipatedreceiving upon such exercise (a “BuyIn”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) theHolder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) theamount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connectionwith the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at theoption of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was nothonored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock thatwould have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holderpurchases Common Stock having a total purchase price of $11,000 to cover a BuyIn with respect to an attempted exercise of shares ofCommon Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediatelypreceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written noticeindicating the amounts payable to the Holder in respect of the BuyIn and, upon request of the Company, evidence of the amount of suchloss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including,without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver sharesof Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.5v. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise ofthis Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Companyshall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by theExercise Price or round up to the next whole share.vi. Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue ortransfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paidby the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by theHolder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, thisWarrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder andthe Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.The Company shall pay all Transfer Agent fees required for sameday processing of any Notice of Exercise and all fees to the DepositoryTrust Company (or another established clearing corporation performing similar functions) required for sameday electronic delivery of theWarrant Shares.vii. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timelyexercise of this Warrant, pursuant to the terms hereof.6e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise anyportion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicableNotice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of theHolder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). Forpurposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Partiesshall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, butshall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrantbeneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion ofany other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exerciseanalogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in thepreceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act andthe rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that suchcalculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed inaccordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (inrelation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisableshall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether thisWarrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of thisWarrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm theaccuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number ofoutstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s mostrecent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recentwritten notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request ofa Holder, the Company shall within one (1) Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock thenoutstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise ofsecurities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number ofoutstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stockoutstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice tothe Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial OwnershipLimitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares ofCommon Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in theBeneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shallbe construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portionhereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplementsnecessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of thisWarrant.7Section 3. Certain Adjustments.a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes adistribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which,for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstandingshares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into asmaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case theExercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any)outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately aftersuch event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of thisWarrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for thedetermination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case ofa subdivision, combination or reclassification.b) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sellsany Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares ofCommon Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregatePurchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise ofthis Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before thedate on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the recordholders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that to the extent that theHolder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall notbe entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Rightto such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not resultin the Holder exceeding the Beneficial Ownership Limitation).c) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend (other than cash) orother distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including,without limitation, any distribution of stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement,scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holdershall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number ofshares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including withoutlimitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken,the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, thatto the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, thenthe Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a resultof such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as itsright thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).8d) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more relatedtransactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease,license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, director indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of CommonStock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more ofthe outstanding Common Stock or 50% or more of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in oneor more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchangepursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly orindirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, withoutlimitation, a reorganization, recapitalization, spinoff, merger or scheme of arrangement) with another Person or group of Persons whereby such otherPerson or group acquires more than 50% of the outstanding shares of Common Stock or 50% or more of the voting power of the common equity of theCompany (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for eachWarrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of theHolder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor oracquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as aresult of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior tosuch Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, thedetermination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of AlternateConsideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Priceamong the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. Ifholders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall begiven the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at theHolder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date ofthe public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cashequal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of suchFundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company’s control, including not approved by theCompany’s Board of Directors, the Holder shall only be entitled to receive from the Company or any Successor Entity the same type or form ofconsideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to theholders of Common Stock of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, stock or anycombination thereof, or whether the holders of Common Stock are given the choice to receive from among alternative forms of consideration in connectionwith the Fundamental Transaction; provided, further, that if holders of Common Stock of the Company are not offered or paid any consideration in suchFundamental Transaction, such holders of Common Stock will be deemed to have received common stock of the Successor Entity (which Entity may be theCompany following such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on theBlackScholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day of consummation of the applicableFundamental Transaction for pricing purposes and reflecting (A) a riskfree interest rate corresponding to the U.S. Treasury rate for a period equal to thetime between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expectedvolatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualizationfactor) as of the Trading Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlyingprice per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any noncashconsideration, if any, being offered in such Fundamental Transaction and (ii) the highest VWAP during the period beginning on the Trading Dayimmediately preceding the public announcement of the applicable contemplated Fundamental Transaction (or the consummation of the applicableFundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant to this Section 3(e) and (D) a remaining option timeequal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date and (E) azero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds (or such other consideration)within the later of (i) five Business Days of the Holder’s election and (ii) the date of consummation of the Fundamental Transaction. The Company shallcause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of theobligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant towritten agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to suchFundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entityevidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares ofcapital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of thisWarrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which appliesthe exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to suchFundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for thepurpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which isreasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall beadded to the term “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction, each andevery provision of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to each of the Company and theSuccessor Entity or Successor Entities, jointly and severally), and the Successor Entity or Successor Entities, jointly and severally with the Company, mayexercise every right and power of the Company prior thereto and the Successor Entity or Successor Entities shall assume all of the obligations of theCompany prior thereto under this Warrant and the other Transaction Documents with the same effect as if the Company and such Successor Entity orSuccessor Entities, jointly and severally, had been named as the Company herein.e) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. Forpurposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the numberof shares of Common Stock (excluding treasury shares, if any) issued and outstanding.9f) Notice to Holder.i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, theCompany shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resultingadjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form)on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C)the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any sharesof capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection withany reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all orsubstantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into othersecurities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of theaffairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as itshall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective datehereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to beentitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification,consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expectedthat holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or otherproperty deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure todeliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to bespecified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, nonpublic informationregarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to aCurrent Report on Form 8K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of suchnotice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.10Section 4. Transfer of Warrant.a) Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and to theprovisions of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights) aretransferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a writtenassignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay anytransfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a newWarrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument ofassignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly becancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unlessthe Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of thedate on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordanceherewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company,together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent orattorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute anddeliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issuedon transfers or exchanges shall be dated the Issue Date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Sharesissuable pursuant thereto.c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “WarrantRegister”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as theabsolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to thecontrary.d) Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrantshall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue skylaws or (ii) eligible for resale without volume or mannerofsale restrictions or current public information requirements pursuant to Rule 144, the Companymay require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, comply with the provisions ofSection 5.7 of the Purchase Agreement.11e) Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon anyexercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling suchWarrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exemptedunder the Securities Act.Section 5. Miscellaneous.a) No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends orother rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Withoutlimiting the rights of a Holder to receive Warrant Shares on a “cashless exercise,” and to receive the cash payments contemplated pursuant to Sections 2(d)(i) and 2(d)(iv), in no event will the Company be required to net cash settle an exercise of this Warrant.a.In July 2019, the Company entered into a threeyear agreement with a consultant (“Consultant14”) to provide services to the Company includingassisting the Company to promote, market and sell the Company’s technology to potential customers. Pursuant to such agreement and in partialconsideration for such consulting services, the Company agreed to issue to Consultant14 options to purchase up to 107 shares of the Company’scommon stock upon execution of the agreement. The options are exercisable at $375.00 per share and shall vest in 3 equal instalments every twelvemonths starting July 2019. Unexercised options shall expire 4 years from the effective date.In addition, the Company agreed to issue to Consultant14 options to purchase up to 890 shares of the Company’s common stock upon executionof the agreement. The options are exercisable at $27.00 per share and shall vest in 4 equal instalments every six months starting September 2020.Unexercised options shall expire 5 years from the effective date.During 2022 and 2021, an amount of $7 and $14 respectively, were recorded by the Company as stockbased equity awards with respect to Consultant14.F24MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The Company’s outstanding options granted to consultants as of December 31, 2022 are as follows:Issuance dateOptions forCommon stockWeightedAverageexercise priceper shareOptionsexercisableExpirationdateFebruary 201815USD528.7515February 2023August 2018December 2018531USD352.38264August 2023 December 2023July 2020107USD375107July 2023SeptemberOctober 20201,488USD27.201,288October 2024 September 2025Total2,1411,674The Company uses the Black Scholes model to measure the fair value of the stock options with the assistance of a third party valuation.No stock options were granted during 2022 to consultants.The fair value of the Company’s stock options granted to nonemployees was calculated using the following weighted average assumptions:20222021GrantsGrantsDividend yield0%Expected volatility125.15%Riskfree interest0.16%Contractual term of up to (years)1.52F25MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Stock Option Plan for employeesIn March 2017, the Company adopted a stock option plan (the “Plan”) pursuant to which the Company’s Board of Directors may grant stock options toofficers and key employees. The total number of options which may be granted to directors, officers, employees under this plan, is limited to 289,000options. Stock options can be granted with an exercise price equal to or less than the stock’s fair market value at the date of grant.The fair value of each option award is estimated on the date of grant using the Binomial optionpricing model that used the weighted averageassumptions in the following table. The risk free rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the timeof grant.2022Grants2021GrantsDividend yield0%0%Expected volatility96.52%98.47%Riskfree interest4.06%0.96%expected life522.27In the years ended December 31, 2022 and 2021, 10,000 and 3,900 options, respectively, were granted.On December 7, 2022, the Company’s stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from230,800 shares to 289,000 shares.On September 29, 2022, the Compensation Committee of the Company approved grants of restricted share awards under the Company’s 2017 EquityIncentive Plan to Ronen Luzon (CEO), Or Kles (CFO), Billy Pardo (COO), Ilia Turchinsky (CTO) and Ezequiel Javier Brandwain (CCO), pursuant towhich were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000 restricted shares and 12,000 restricted shares,respectively. Each restricted share awarded under section 102 Capital Gain Restricted Stock Award Agreement (the “Agreement”). The restrictedshares shall vest in three equal installments on January 1, 2023, January 1, 2024 and January 1, 2025 for Ronen Luzon, Or Kles, Billy Pardo and IliaTurchinsky and on January 27, 2023, January 27, 2024 and January 27, 2025 for Ezequiel Javier Brandwain, conditioned upon continuous employmentwith the Company, and subject to accelerated vesting upon a change in control of the Company.On the same day, the Company granted fiveyears options to purchase up to 10,000 ordinary shares to other employees of the Company at an exerciseprice of $0.21 per share. The options vesting period is over three years in three equal portions from the vesting commencement date.F26MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The total stock option compensation expense in the year ended December 31, 2022 amounted to $448as follows: Research and development expensesamounted to $151, sales and marketing expenses amounted to $119and general and administrative expenses amounted to $178.The total stock option compensation expense in the year ended December 31, 2021 amounted to $252 as follows: Research and development expensesamounted to $94, sales and marketing expenses amounted to $97 and general and administrative expenses amounted to $61.As of December 31, 2022, there was a total of $530 unrecognized compensation cost relating to nonvested sharebased compensation arrangements.That cost is expected to be recognized over a weightedaverage period of 2.0 years.Share option activity during 2022 is as follows:2022Number ofoptionsWeightedaverageexerciseprice US$Outstanding as of January 135,74226.5Granted10,0005.25ExercisedExpired(4,136)Outstanding as of year end41,60622.48Vested as of year end33,20825.17Share option activity during 2021 is as follows:2021Number ofoptionsWeightedaverageExerciseprice US$Outstanding as of January 139,094$26.0Granted3,90032.0Exercised(751)Expired(6,501)Outstanding as of year end35,74226.5Vested as of year end27,06326.5F27MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 15 CONTINGENCIES AND COMMITMENTSa.On August 7, 2018, the Company commenced an action against North Empire LLC (“North Empire”) in the Supreme Court of the State of New York,County of New York for breach of a Securities Purchase Agreement (the “Agreement”) in which it is seeking damages in an amount to bedetermined at trial, but in no event less than $616. On August 2, 2018, North Empire filed a Summons with Notice against the Company, also in thesame Court, in which they allege damages in an amount of $11.4 million arising from an alleged breach of the Agreement. On September 6, 2018North Empire filed a Notice of Discontinuance of the action it had filed on August 2, 2018. On September 27, 2018, North Empire filed an answerand asserted counterclaims in the action commenced by the Company against them, alleging that the Company failed to deliver stock certificatesto North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against theCompany’s CEO and now former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018,the Company filed a reply to North Empire’s counterclaims. On November 15, 2018, the Company’s CEO and now former Chairman of the Boardfiled a motion to dismiss North Empire’s thirdparty complaint. On January 6, 2020, the Court granted the motion and dismissed the thirdpartycomplaint. Discovery has been completed and both parties have filed motions for summary judgment in connection with the claims andcounterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summary judgment, arguing there werefactual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision. The appealmust be fully perfected and filed by July 26, 2022. On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying theCompany’s motion for summary judgment. North Empire will file its opposition papers on or before March 31, 2022, and the Company will file replypapers on April 29, 2022. On or about September 12, 2022, the Court issued its Decision and Order denying the Company’s motion to reargue.North Empire filed its opposing brief on December 7, 2022. Both sides were given an opportunity to file a reply brief. The Company filed our replybrief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. The Appellate Court has scheduled oral argument for the appealfor February 7, 2023. Oral argument was held before the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Courtfiled its Decision and Order, which affirmed the lower court’s decisions regarding both My Size and North Empire’s motions for summary judgmentand sent the case back to the Supreme Court.On or about March 13, 2023, the Supreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date forthe mediation has not yet been set. The Company intends to vigorously defend any claims made by North Empire.The Company believes it is more likely than not that the counterclaims will be denied.b.In May 2021, the Company received notice from Custodian Ventures, LLC (“Custodian”) of its intention to nominate four candidates to stand forelection to our Board of Directors at the Company’s 2021 annual meeting of stockholders. Custodian subsequently made a book and recordsrequest and has made public statements calling for changes to our management.On September 22, 2021, Custodian commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v.MySize, Inc. (the “Delaware Action”). In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting.On October 19, 2021, the Company commenced an action in the United States District Court for the Southern District of New York againstCustodian, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, and certain rulespromulgated thereunder (the “SDNY Action”). The complaint sought, among other things, declaratory and injunctive relief related to defendants’efforts to nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed“group” for purposes of Section 13(d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. Inaddition, the complaint alleged that the defendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules inconnection with their efforts to elect a slate of directors to the Company’s Board of Directors. On October 20, 2021, the Court signed an ordergranting a hearing on an anticipated motion for a preliminary injunction and expedited scheduling and discovery in aid thereof, and scheduled thathearing for December 2, 2021.On November 4, 2021, the Company entered into the Settlement Agreement with the Lazar Parties. Pursuant to the Settlement Agreement, theCompany and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the SettlementAgreement, the Company agreed to reimburse Custodian for out of pocket expenses and in consideration for the dismissal and release of claimsagainst the Company an aggregate amount equal to $275, to be paid within three business days of the effective date of the Settlement Agreement.With respect to the Company’s 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) its May 12,2021 notice of stockholder nominations of four director candidates with respect to the Company’s 2021 annual meeting of stockholders, (ii) thenotice dated October 28, 2021 submitted by Custodian to the Company notifying the Company of Custodian’s continued intent to bring itsnomination of four director candidates before the Company’s stockholders at the 2021 annual meeting, and (iii) any and all related materials andnotices submitted to the Company in connection therewith or related thereto and to not take any further action in connection with the solicitationof any proxies in connection with the Company. Custodian also agreed to cease any and all solicitation and other activities in connection with the2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effectivedate of the Agreement (the “Standstill Period”). The Settlement Agreement also provides that during the Standstill Period, the Lazar Parties willvote all shares of common stock of the Company it beneficially owns in in accordance with any proposal or recommendation made by theCompany or the Board of Directors of the Company that is submitted to the stockholders of the Company, unless to do so would violateapplicable law and except with respect to certain extraordinary transactions. The Settlement Agreement also contains nondisparagement andconfidentiality provisions, subject to certain exceptions.On December 9, 2021, the Company subsequently entered into a Settlement Agreement (the “Ault Settlement Agreement”), with Milton C. Ault III,Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed towithdraw the SDNY Action against the Ault Parties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that actionagainst the Company. In addition, pursuant to the Settlement Agreement, the Company paid $70 to the Ault Parties in consideration for thereleases and other good and valuable consideration as set forth in the Ault Settlement Agreement.c.On July 5, 2021, the Company was served with a legal complaint filed by Fidelity Venture Capital Ltd. and Dror Atzmon in the Magistrate’s Court inTel Aviv for a monetary award in an amount of NIS 1,436,679 (approximately $450) and a declaratory relief. The plaintiffs allege that the Companybreached its contractual obligations to pay them for services allegedly rendered to the Company by the plaintiffs under a certain consultingagreement dated July 2, 2014, in an amount of NIS 819,000 (approximately $256). Additionally, the plaintiffs allege that the Company shouldcompensate them for losses allegedly incurred by them following their investment in the Company’s shares issued under a certain private offering.In the alternative, the plaintiffs move that the court will declare the investment agreement void with full restitution of plaintiffs’ original investmentin an amount of NIS 1,329,650(approximately $415). The Company filed its statement of defense on October 25, 2021. The first preliminary courthearing of the case is scheduled for January 23, 2022.The first court preliminary hearing was held on March 1, 2022.Following the first preliminary hearing and the Court’s comments and recommendation, the Plaintiffs filed a motion to strike out the claim withoutprejudice.On March 8, 2022 the Court ordered dismissal without prejudice of the claim.F28MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATIONAcquisition of OrgadOn February 7, 2022, the Company acquired 100% of the shares and voting interests in Orgad an omnichannel ecommerce platform. The acquisitionwas designed to create an additional revenue stream for the Company by becoming a direct ecommerce seller while leveraging the synergies betweenMySizeID and Orgad’s ecommerce platform.Unaudited proforma informationThe results of operations of Orgad have been included in the consolidated financial statements since the acquisition date of February 7, 2022. Orgadrevenues included in the Company’s consolidated statement of operations from February 7, 2022 through December 31, 2022 were $4,132. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,662 and $2,850 respectively, and the net loss after tax would have been $8,519 and $10,149 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash (*)300Issuance of shares of common stock (69,752 shares) (**)457Total consideration transferred757(*)The cash payment is subject to working capital adjustments.(**)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Orgad, on the twoyear and the threeyear anniversary of the closing, $350in each ofthese years provided that in the case of the second and third instalments certain revenue targets are met and subject further to certain downward postclosing adjustment. Furthermore, 69,752shares of common stock will be issued in eight equal quarterly instalments until the lapse of two years fromclosing. Additional earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023 will also be paid. All of these payments aresubject to the former owners being actively engaged with Orgad at the date such payment is due, and therefore were not taken as part of theconsideration for the business combination.During the year ended December 31, 2022 an amount of $456and $319was recorded in respect of the cash instalments and in respect of stocksissuance, respectively in Cost Of Goods, Sales and Marketing and General and Administrative expenses as shown in the following table:2022Stockbased compensation expense – Cost of goods194Stockbased compensation expense Sales and marketing271Stockbased compensation expense General and administrative310775(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the preliminary estimates of their fair values, which were determined using generally accepted valuation techniques based onestimates and assumptions made by management at the time of the acquisition. Such estimates are subject to change during the measurement periodwhich is not expected to exceed one year. The purchase price allocation was not finalized duo to examination of the net working capital of Orgad at theacquisition date. Any adjustments to the preliminary purchase price allocation identified during the measurement period will be recognized in theperiod in which the adjustments are determined.The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and Cash EquivalentTrade receivables364PP&E55Inventory864Longterm financial investment31Selling platform378Goodwill152Shortterm accruals and deferrals(181)Trade payables(668)Long term provision(13)Longterm debt(138)Deferred Taxes(87)Total net assets acquired757F29MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)(c)Acquisitionrelated costsThe Company incurred transaction costs of approximately $40and none during twelvemonth period ended December 31, 2022 which were included ingeneral and administrative expenses in the consolidated statements of income (loss).Acquisition of Naiz Bespoke Technologies, S.L. (“Naiz”)On October 11, 2022, the Company acquired 100% of the shares and voting interests in Naiz a provider of SaaS technology solutions that solve sizeand fit issues for fashion ecommerce companies. The acquisition was designed to allow Naiz’s customers benefit from MySize’s deep understanding ofthe fashion ecommerce retail landscape, while creating an additional revenue stream for the Company.Unaudited proforma informationThe results of operations of Naiz have been included in the consolidated financial statements since the acquisition date of October 11, 2022. Naizrevenues included in the Company’s consolidated statement of operations from October 11, 2022 through December 31, 2022 were $103. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,738 and $379 respectively and the net loss after tax would have been $8,695 and $10,717 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash503Issuance of shares of common stock (240,000 shares) (*)1,008Total consideration transferred1,511(*)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Naiz, additional cash consideration (up to $1,550) in four instalments subject to thefollowing conditions:(i)Continuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result ofa Good Reason; and(ii)Naiz’s Revenues reaching or exceeding the respective Target Revenues defined in the agreement. The revenues will be calculated in four periods:(1) January 1, 2022 – December 31, 2022; (2) January 1, 2023 – June 30, 2023; (3) July 1, 2023 – December 31, 2023; (4) January 1, 2024 – December31, 2024.Former owners of Naiz are entitled to additional cash consideration following December 31, 2025 (up to $1,650) in an event when the actual value of theequity consideration is less than $1,650, subject to completion of a Target Revenue for the period of January 1, 2025 – December 31, 2025 andcontinuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result of aGood Reason;F30MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)During the year ended December 31, 2022 an amount of $283 was recorded in respect of the additional cash consideration.(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the estimates of their fair values, which were determined using generally accepted valuation techniques based on estimates andassumptions made by management at the time of the acquisition.The following table summarizes the fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and cash equivalent36Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Total net assets acquired1,511(c)Acquisitionrelated costsDuring 2022, the Company incurred transaction costs of approximately $75 which were included in general and administrative expenses in theconsolidated statements of income (loss).F31MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)Note 17 – Operating SegmentsDuring the year ended December 31, 2021, the Company had one reportable segment. As a result of the business combinations in the reporting period(see note 13), the Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificialintelligence driven measurement solutions and (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions and. The fashionand equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. Orgad has onecustomer that is responsible for 37.9% of the Company consolidated revenues. The SaaS based innovative artificial intelligence driven measurementsolutions, or SaaS Solutions operating segment consists of My Size Inc and My Size Israel and My Size LLC.Information related to the operations of the Company’s reportable operating segments is set forth below:Fashion andequipment ecommerce platformSaaSSolutionsNaizTotalAs of the year ended December 31, 2022Revenues from external customers4,1322241034,459Operating (loss) income(591)(7,181)(338)(8,110)Financial income (expense), net(236)Net loss before tax(8,346)Fashion andequipment ecommerce platformSaasSolutionNaizAs of December 31, 2022:Assets2,0225,9661,691Amortization of intangible assets(114)(34)(46)The Company elected to present geographic information in respect with revenues generated from external customers based on the location of the selling entity:All the revenues of the fashion and equipment ecommerce platform segment are generated by Orgad, located in Israel.All the revenues of the Naiz segment are generated by Naiz, located in Spain.The revenues of the Saas Solutions segment are generated by My Size Ltd. located in Israel (approximately 75% of the segment revenues) and by My Size Inc.located in the U.S. (approximately 25% of the segment revenues).NOTE 18 SALES AND MARKETINGYear endedDecember 31,20222021Salaries836574Consultants and subcontractors5831,086Marketing481283Selling fees489Share based payments post Orgad acquisition (*)271Share based payments for consultants and employees127180Travel21142Other1451713,1432,336(*) See note 16.NOTE 19 GENERAL AND ADMINISTRATIVE EXPENSESYear endedDecember 31,20222021Salaries1,007461Professional services7051,832Share based payments for consultants, directors and employees18098Rent, office expenses and communication442372Insurance564627cash liability and equity liability expenses related to Orgad acquisition310cash liability expenses related to Naiz acquisition217Settlement fees (*)345Directors8259Other3933303,9004,124(*)See note 15(b)F32MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 20 FINANCIAL INCOME (EXPENSE), NETA.Financial incomeYear endedDecember 31,20222021Revaluation investment in marketable securities49Other26172666B.Financial expenseYear endedDecember 31,20222021Exchange rate differences33Revaluation of loan granted100Revaluation investment in marketable securities62Other6792629NOTE 21 EVENTS SUBSEQUENT TO THE BALANCE SHEET DATEa.On January 2, 2023, Orgad experienced a fire at its warehouse in Israel. The Company is not aware of any casualties or injuries associated with thefire. The Company shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450.The Company believes that this incident did not affect the future sales results of Orgad for the year 2023. The inventory was not insured and it istoo early to determine the potential impact of this incident on the other parties that were involved in the incident (lessor and others that leasedproperties near the warehouse).b.On January 10, 2023, the Company entered into a securities purchase agreement pursuant to which the Company sold an aggregate of 162,000ofthe Company’s shares of common stock and prefunded warrants to purchase up to 278,899shares of common stock and, in a concurrent privateplacement, unregistered warrants to purchase up to883,798 shares of common stock, consisting of Series A warrants to purchase up to 441,899shares of common stock and Series B warrants to purchase up to 441,899shares of common stock, at an offering price of $3.055per share ofcommon stock and associated Series A and Series B warrants and an offering price of $3.054per prefunded warrant and associated Series A andSeries B warrants.In addition, the Company entered into a securities purchase agreement pursuant to which the Company agreed to sell and issue in a privateplacement an aggregate of up to 540,098 unregistered prefunded warrants and unregistered warrants to purchase up to an aggregate of 1,080,196shares of common stock, consisting of Series A warrants to purchase up to 540,098 shares of common stock and Series B warrants to purchase upto 540,098 shares of common stock at an offering price of $3.054 per prefunded warrant and associated Series A and Series B warrants.As of March 31,2023 all the pre funded warrants were exercised by the investor.F33ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSUREThere were no disagreements with accountants on accounting and financial disclosure of a type described in Item 304 (a)(1)(iv) or any reportable event asdescribed in Item 304 (a)(1)(v) of Regulation SK.ITEM 9A. CONTROLS AND PROCEDURESDisclosure ControlsWe carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief FinancialOfficer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) as of December 31, 2022. Basedupon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this Annual Report on Form10K, our disclosure controls and procedures were effective to ensure that information required to be disclosed in reports filed under the Exchange Act, as amended,is recorded, processed, summarized and reported within the required time periods specified in the SEC’s rules and forms and is accumulated and communicated toour management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.Management’s Report on Internal Control Over Financial ReportingOur internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records, that, in reasonable detail,accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only inaccordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition, use or disposition of our assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance withthe policies or procedures may deteriorate.Our management, including our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financialreporting at December 31, 2022. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the TreadwayCommission (COSO) in Internal Control—Integrated Framework (2013). Based on that assessment under those criteria, management has determined that, as ofDecember 31, 2022, our internal control over financial reporting was effective.This Annual Report on Form 10K does not include an attestation report of our registered public accounting firm regarding internal control over financialreporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to the exemption provided to issuersthat are not “large accelerated filers” nor “accelerated filers” under the DoddFrank Wall Street Reform and Consumer Protection Act.Changes in Internal Control Over Financial ReportingDuring the year ended December 31, 2022, we made two acquisitions, as discussed in Note 1a and Note 16 of the audited consolidated financial statementsfor the year ended December 31, 2022 included in this Annual Report on Form 10K. As a result, we made additions and/or modifications to policies, procedures,systems and controls that have materially affected our internal control over financial reporting from the acquisitions, including new controls for consolidationprocess that relates to accounting policies and procedures, operational processes and documentation practices. Management excluded the acquired businessesfrom management’s report on internal control over financial reporting. ITEM 9B. OTHER INFORMATIONNone.ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNot applicable.51PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe following table sets forth the name, age and positions of our executive officers and directors.NAMEAgePOSITIONRonen Luzon52Chief Executive Officer and Class III DirectorOr Kles40Chief Financial OfficerBilly Pardo47Chief Operating Officer and Chief Product OfficerIlia Turchinsky35Chief Technology OfficerEzequiel Javier Brandwain53Chief Commercial OfficerOron Branitzky (1)(2)(3)*63Class II DirectorOren Elmaliah (1)(2)(3)*38Class I DirectorArik Kaufman (1)(2)(3)*41Class I DirectorGuy Zimmerman*53Class II Director(1)Member of our audit committee(2)Member of our nominating and corporate governance committee(3)Member of our compensation committee* Independent as that term is defined by the rules of the Nasdaq Stock Market.The business background and certain other information about our directors and executive officers is set forth below:Ronen Luzon has served as our Chief Executive Officer and a member of our board of directors since September 2013. Since 2006, Mr. Luzon hasadditionally served as Chief Executive Officer and founder of Malers Ltd., a company in the global security solutions market which provides technological solutionsfor integrated communication infrastructures, security and control systems. Prior to Malers, he held several senior marketing, sales management and professionalservices positions in a variety of international high tech companies including VP marketing of GA Tech and Professional Services Manager of Eldat Communication.Mr. Luzon graduated from Middlesex University in London with a B.S. in IT and Business Information Systems. We believe that Mr. Luzon is qualified to serve as amember of our board of directors because of his more than 20 years of experience in the technology sector.Or Kles has served as our Chief Financial Officer since May 2016. He is a certified public accountant with a broad, diverse financial background. From May2013 until April 2016 he served as Assistant Controller of Shikun and BinuiSolel Boneh Infrastructure Ltd. and from December 2010 until May 2013 he served as anAssociate at KPMG. Mr. Kles holds an MBA and a B.A. in Business Management and Accounting (specializing in financing) from The College of ManagementAcademic Studies. Mr. Kles is a certified public accountant in Israel.Billy Pardo has served as our Chief Product Officer since May 2014 and Chief Operating Officer since April 2019. From April 2010 until August 2013, Ms.Pardo served as Senior Director of Product Management of Fourier Education. Among her areas of expertise are launching products from concept to successfuldelivery in various methodologies, including Fourier Education’s awardwinning einstein™ Science Tablet. Prior to that Ms. Pardo served in various productmanagement positions including, Project Manager of Time to Know, Product Marketing Manager of RiT Technologies, Product Manager of Pricer AB and R&DTeam Leader at Pricer AB. Ms. Pardo previously served as Software Engineer at Eldat Communication Ltd., and QA Engineer at NICE Systems. Ms. Pardo receivedan MBA from The Interdisciplinary Center and a B.A. in Computer Science from The Academic College of TelAvivYaffo.Ilia Turchinsky has served as our Chief Technology Officer since April 2019 and from July 2018 until April 2019 as our Director of Technology. Prior tojoining us, from 2013 until 2018, Mr. Turchinsky served in various roles, most recently Chief Technology Officer, at MonkeyTech Ltd., a company that providesdesign, development and characterization of mobile applications. Prior to that, Mr. Turchinsky served in various roles including development course instructor atIQLine, was a founder of Arnavsoft and was a software developer for MintLab and a political party. Mr. Turchinsky holds a B.Sc. from the Ben Gurion University inComputer Science and an M.Sc. from the Open University of Israel in Computer Science.52Ezequiel Javier Brandwain has served as our Chief Commercial Officer since February 2022. Mr. Brandwain brings more than two decades of globalexperience in retail and the fashion industry, mainly in business development, operations, and international markets. Before joining the Company, Mr. Brandwainheld positions of increasing responsibility at several companies, including between June 2017 and November 2020, at 7 For All Mankind International, where heserved as Director, Latin America and Caribbean, managing business development and operations across Latin America and the Caribbean. Before that, betweenMay 2016 and June 2017, Mr. Brandwain served as Chief Business Development Officer at Replay – Fashion Box SPA, where he oversaw business development andoperations, expansion and control in the Americas, the Caribbean, and NorthEast Asia. Prior this role, between September 2015 and May 2016, he served as theReplay’s Managing Director in Latin America and the Caribbean, leading the company’s international expansion in these regions. Prior to that, between April 2015and September 2015, Mr. Brandwain served as Managing Director, Latin America and Caribbean at Authentic Brands Group LLC, where he led that company’soperations, business developments and international expansion within these regions, and served as the direct liaison with the company’s headquarters in New York.Prior to that, between April 2015 and September 2015, Mr. Brandwain served as Chief Operating Officer, Latin America and Caribbean at Flemingo International Ltd.,overseeing operations, as well as projected operations in the travel retail field across these regions. Prior to that, between December 2010 and February 2014, Mr.Brandwain served as Regional Director, Southern Hemisphere at Calvin Klein, where he was responsible for defining and implementing the operational andcommercial strategy for Southern Hemisphere, as well as overseeing the retail, travel retail, concession, and wholesale businesses of the company. During his tenureat Calvin Klein, Mr. Brandwain also served as Travel Retail Director, Latin America, where he built the travel retail business and developed operations. Prior to that,between July 2010 and November 2010, Mr. Brandwain served as Business Director, Latin America and Caribbean at Givenchy Latin America, and between January2010 and June 2010 he served as Commercial Director, Latin America and Caribbean at Nautica Latin America. During December 2004 and December 2009, Mr.Brandwain served as Vice President, International Business Development at Report Collection/Modextil, Inc., where he was in charge of business and operationalexpansion, global growth, and brand extensions. Prior to that, between 2003 and October 2004, Mr. Brandwain served as General Manager at Andrew KoenigInternational, Inc. Between September 2019 and November 2020, Mr. Brandwain served as a member of the Board of Directors of 7 For All Mankind BrazilImportacao, Comercio E Distribuicao S.A. Mr. Brandwain earned a Bachelor degree in architecture from the University of the Republic (Uruguay).Oron Branitzky has served as a member of our board of directors since March 2017. Mr. Barnitzky has vast experience in retail technology. SinceNovember 2017, Mr. Branitzky has served as Global Retail Business Development at Superup, and from January 2007 until December 2014 he served as VicePresident of Sales and Marketing at Pricer AB. Prior to that, Mr. Branitzky has served as VP Marketing and Sales at Eldat Communication and Sarin TechnologiesLtd. Since January 2015, Mr. Branitzky has served as chairman of the board of directors of WiseShelf Ltd. and from May 2015 until March 2016, Mr. Branitzky servedas an advisory board member of ciValue. Mr. Branitzky received a B.S. from the Hebrew University of Jerusalem and an MBA in International Marketing from TelAviv University. We believe that Mr. Branitzky is qualified to serve as a member of our board of directors because of his more than 20 years of experience inmanaging the sales of hitech solutions to retailers across the globe.Oren Elmaliah, has served as a member of our board of directors since May 2017. In September 2015, Oren Elmaliah founded Accounting Team IL and hasacted as Account Manager since then. Accounting Team IL is a financial consultancy and service provider to public companies traded in Israel and abroad. SinceFebruary 2017, Mr. Elmaliah has served as controller of Enlivex Therapeutics Ltd., and since January 2017 he has served as Chief Financial Officer of Presstek Israel.In addition, since September 2015, Mr. Elmaliah has served as an Israel Authorities Reporting Officer of LG Electronics Israel and since September 2015 he hasserved as Local Financial Report Consultant of Chiasma. From July 2011 until August 2015, Mr. Elmaliah served as CPA, Financial Director of CFO Director Ltd andfrom June 2010 until July 2011 he served as Risk Management Consultant of RSM International Limited. Mr. Elmaliah holds a B.A. in Accounting/Economics and aMsc. in Finance/Accounting from Tel Aviv University, Israel. He is a licensed Certified Public Accountant in Israel. We believe that Mr. Elmaliah is qualified to serveas a member of our board of directors because of his vast finance experience and public company management and administration in the fields of finance,accounting, and financial regulation.53Arik Kaufman has served as a member of our board of directors since June 2017. Mr. Kaufman is an attorney specializing in the fields of commercial law,corporate law and capital markets and since 2016 runs his own law office in Israel. He has vast experience in the fields of financial reporting and financial regulation.Mr. Kaufman serves as the Chief Executive Officer of Steakholder Foods since January 2022. From September 2017 until January 2022, Mr. Kaufman served as VPBusiness Development of Mor Research Applications. Mr. Kaufman holds an LLB in Law from the Interdisciplinary Center, Herzliya, and is admitted to the IsraeliBar. We believe that Mr. Kaufman is qualified to serve as a member of our board of directors based upon his experience of assisting with the completion of numerousventure capital financings, mergers, acquisitions, and strategic relationships. In addition, he has served as a member of the board of various publicly tradedcompanies, including companies that operate in the same industry as us.Guy Zimmerman has served as a member of our board of directors since August 2021. Previously, Mr. Zimmerman served as Founder and CEO ofManuFuture, an online b2b engineering market place, since February 2021. Prior to that from 2017 to 2021, Mr. Zimmerman acted as a consultant to severaltechnology startups and was a founding partner of a business travel online platform. From 2013 to 2017, Mr. Zimmerman served as EVP of Marketing and BusinessDevelopment of Kornit Digital and was part of the IPO leadership. Prior to that, Mr. Zimmerman served as VP of Global Sales and Business Development at TefronLtd., a provider of seamless garment technology, where he led the $100m sales and sales support organization serving global retail and fashion brands. Prior to thathe served as Vice President of Strategy and Business Development at Tnuva Group, Israel’s largest food manufacturer and spent eight years at McKinsey &Company. Mr. Zimmerman previously led a software startup in the field of operational healthcare management systems. Mr. Zimmerman holds a B.Sc. in IndustrialEngineering from Tel Aviv University in Israel. We believe that Mr. Zimmerman is qualified to serve as a member of our board of directors because of his experiencein business development in the technology and retail sectors.Board Diversity MatrixThe table below provides certain information regarding the diversity of our board of directors as of the date of this annual report.Board Diversity Matrix (As of March 31, 2023)Total Number of Directors5FemaleMaleNonBinaryDid Not DiscloseGenderPart I: Gender IdentityDirectors#5##Part II: Demographic BackgroundAfrican American or Black####Alaskan Native or Native American####Asian####Hispanic or Latinx####Native Hawaiian or Pacific Islander####White#1##Two or More Races or Ethnicities#2##LGBTQ+0Did Not Disclose Demographic Background2Family RelationshipsRonen Luzon, the Chief Executive Officer and a member of our board of directors, and Billy Pardo, the Chief Product Officer and Chief Operating Officer, arehusband and wife. There are no other family relationships among any of our current or former directors or executive officers.Involvement in Certain Legal ProceedingsWe are not aware of any of our directors or officers being involved in any legal proceedings in the past ten years relating to any matters in bankruptcy,insolvency, criminal proceedings (other than traffic and other minor offenses), or being subject to any of the items set forth under Item 401(f) of Regulation SK.Arrangements between Officers and DirectorsTo our knowledge, there is no arrangement or understanding between any of our officers and any other person, including directors, pursuant to which theofficer was selected to serve as an officer.Board of DirectorsThere are no agreements with respect to the election of directors.On January 6, 2022, we filed with the Secretary of State of Delaware a Certificate of Amendment to our Amended and Restated Certificate of Incorporationproviding for a classified Board. Following filing of the Certificate of Amendment, members of our board are now classified into three classes with staggered threeyear terms (with the exception of the expiration of the initial Class I and Class II directors), as follows:●Class I, comprised of two directors, initially Arik Kaufman and Oren Elmaliah (with their initial terms expiring at our 2022 annual meeting of stockholders andmembers of such class serving successive threeyear terms);●Class II, comprised of two directors, initially Oron Branitzky and Guy Zimmerman (with their initial terms expiring at our 2023 annual meeting of stockholdersand members of such class serving successive threeyear terms); and●Class III, comprised of one director, initially Ronen Luzon (with his initial term expiring at our 2024 annual meeting of stockholders and members of suchclass serving successive threeyear terms).54To preserve the classified Board structure, a director elected by the Board of Directors to fill a vacancy holds office until the next election of the class forwhich such director has been chosen, and until that director’s successor has been elected and qualified or until his or her earlier death, resignation, retirement orremoval.Our board of directors has reviewed the materiality of any relationship that each of our directors has with us, either directly or indirectly. Based upon thisreview, we believe that Arik Kaufman, Oren Elmaliach, Oron Branitzky and Guy Zimmerman qualify as independent directors in accordance with the standards set bythe Nasdaq and Rule 10A3 promulgated under the Exchange Act.Committees of the BoardAudit CommitteeOur audit committee is comprised of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Elmaliah serves as chairman of the audit committee. The auditcommittee is responsible for retaining and overseeing our independent registered public accounting firm, approving the services performed by our independentregistered public accounting firm and reviewing our annual financial statements, accounting policies and our system of internal controls. The audit committee actsunder a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the audit committee’s composition and meetings.The audit committee charter is available on our website www.mysizeid.com.The Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by applicable SEC rules. Inaddition, the Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by the rules of the Nasdaq StockMarket.The Board of Directors has determined that Oren Elmaliah is an “audit committee financial expert” serving on its audit committee, and is independent, as theSEC has defined that term in Item 407 of Regulation SK.Compensation CommitteeOur compensation committee consists of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Branitzky serves as chairman of the compensationcommittee.The compensation committee’s roles and responsibilities include making recommendations to the Board of Directors regarding the compensation for ourexecutives, the role and performance of our executive officers, and appropriate compensation levels for our CEO, which are determined without the CEO present, andother executives. Our compensation committee also administers our 2017 Equity Incentive Plan and our 2017 Consultant Equity Incentive Plan. The compensationcommittee acts under a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the compensation committee’scomposition and meetings. The compensation committee charter is available on our website www.mysizeid.com.Our Board of Directors has determined that all of the members of the compensation committee are “independent” as that term is defined by the rules of theNasdaq Stock Market.Nominating and Corporate Governance CommitteeThe members of the nominating and corporate governance committee are Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Kaufman serves aschairman of the corporate governance and nominations committee. The nominating and corporate governance committee acts under a written charter, which morespecifically sets forth its responsibilities and duties, as well as requirements for the nominating and corporate governance committee’s composition and meetings.The nominating and corporate governance committee charter is available on our website www.mysizeid.com.The nominating and corporate governance committee develops, recommends and oversees implementation of corporate governance principles for us andconsiders recommendations for director nominees. The nominating and corporate governance committee also considers stockholder recommendations for directornominees that are properly received in accordance with applicable rules and regulations of the SEC. Our stockholders that wish to nominate a director for election tothe Board of Directors should follow the procedures set forth in our bylaws.55The nominating and corporate governance committee will consider persons identified by its members, management, stockholders, investment bankers andothers. The guidelines for selecting nominees, which are specified in the nominating committee charter, generally provide that persons to be nominated:●should be accomplished in his or her field and have a reputation, both personal and professional, that is consistent with our image and reputation;●should have relevant experience and expertise and would be able to provide insights and practical wisdom based upon that experience and expertise; and●should be of high moral and ethical character and would be willing to apply sound, objective and independent business judgment, and to assume broadfiduciary responsibility.The nominating and corporate governance committee will consider a number of qualifications relating to management and leadership experience,background and integrity and professionalism in evaluating a person’s candidacy for membership on the Board of Directors. The nominating and corporategovernance committee may require certain skills or attributes, such as financial or accounting experience, to meet specific Board needs that arise from time to timeand will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of Board of Directors members. The nominating andcorporate governance committee will not distinguish among nominees recommended by stockholders and other persons.Our Board of Directors has determined that all of the members of the nominating and corporate governance committee are “independent” as that term isdefined by the rules of the Nasdaq Stock Market.Code of Conduct and EthicsWe have a Code of Business Conduct and Ethics that applies to all our employees. The text of the Code of Business Conduct and Ethics is publiclyavailable on our website at www.mysizeid.com. Information contained on, or that can be accessed through, our website does not constitute a part of this report andis not incorporated by reference herein. Disclosure regarding any amendments to, or waivers from, provisions of the code of conduct and ethics that apply to ourdirectors, principal executive and financial officers will be posted on the “InvestorsCorporate Governance” section of our website at www.mysizeid.com or will beincluded in a Current Report on Form 8K, which we will file within four business days following the date of the amendment or waiver.Change in Procedures for Recommending DirectorsThere have been no material changes to the procedures by which our stockholders may recommend nominees to our Board of Directors from thoseprocedures set forth in our Proxy Statement for our 2021 Annual Meeting of Stockholders, filed with the SEC on December 7, 2022.56ITEM 11. EXECUTIVE COMPENSATIONSummary Compensation TableThe following sets forth the compensation paid by us to our named executive officers, during the years ended December 31, 2022 and December 31, 2021.Name and Principal PositionYearSalary($) (1)Bonus($)StockAwards($)OptionAwards($) (2)All OtherCompensation($)Total($)Ronen Luzon2022173,000223,0008,000126,000530,000Chief Executive Officer2021194,0005,00023,00097,000319,000Or Kles2022123,00053,0007,00071,000254,000Chief Financial Officer2021123,0008,00030,00061,000222,000Billy Pardo2022134,00053,0007,000100,00294,000Chief Operating Officer2021162,0007,00018,00074,000261,000(1) Salary for the years 2022 and 2021 are based on average US$/NIS representative exchange rates of NIS 3.358 and NIS 3.11 respectively.(2) Amounts in this column represent the grant date fair value of options granted to the named executive officers during 2022 and 2021, computed in accordance withFASB ASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the named executive officers. The assumptionsmade in valuing the options reported in this column are discussed in Note 11 to our audited financial statements for the year ended December 31, 2021 and Note 4 toour condensed consolidated interim financial statements for the quarterly period ended September 30, 2022.All Other Compensation TableThe “All Other Compensation” amounts set forth in the Summary Compensation Table above consist of the following:NameYearAutomobileRelatedExpenses($)Manager’sInsurance*($)EducationFund*($)Othersocialbenefits**($)Total($)Ronen Luzon202232,00031,00015,00048,000126,000202133,00033,00015,00016,00097,000Or Kles202215,00021,00010,00025,00071,000202114,00019,0009,00019,00061,000Billy Pardo202216,00025,00013,00046,000100,000202117,00024,00012,00021,00074,000* Manager’s insurance and education funds are customary benefits provided to employees based in Israel. Manager’s insurance is a combination of severancesavings (in accordance with Israeli law), defined contribution taxqualified pension savings and disability insurance premiums. An education fund is a savings fundof pretax contributions to be used after a specified period of time for educational or other permitted purposes.** Other social benefits for 2022 and 2021 for all named individuals includes tax payments in respect of social benefits.57Agreements with Named Executive OfficersRonen LuzonOn November 18, 2018, My Size Israel, our wholly owned subsidiary, entered into an employment agreement with Ronen Luzon, or the Luzon EmploymentAgreement, pursuant to which Mr. Luzon will serve as our Chief Executive Officer. Pursuant to the terms of the Luzon Employment Agreement, Mr. Luzon receivesNIS 55,000 per month as his base salary and shall be eligible to receive such bonus as determined by us. In addition, Mr. Luzon shall be entitled social benefits andto other benefits, including, but not limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, includinginsurance in case of disability, annual vacation days, sick leave and expense reimbursement. Pursuant to the terms of the Luzon Employment Agreement and subjectto certain conditions, payments made by the Company to the pension fund or manager’s insurance fund shall be made in lieu of severance payments due to Mr.Luzon. The term of the Luzon Employment Agreement shall be effective as of September 1, 2018 and shall continue until such time either party provides writtennotice to the other party at least 75 days in advance of the termination of such agreement. We may also terminate Mr. Luzon’s employment without prior writtennotice (or payment in lieu of such notice) for Cause (as defined in the Luzon Employment Agreement).Or KlesOn November 18, 2018, My Size Israel entered into an employment agreement with Or Kles, or the Kles Employment Agreement, pursuant to which Mr. Kleswill serve as our Chief Financial Officer. Pursuant to the terms of the Kles Employment Agreement, Mr. Kles receives NIS 38,000 per month as his base salary andshall be eligible to receive such bonus as determined by us. In addition, Mr. Kles shall be entitled to social benefits and other benefits, including, but not limited to,contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annual vacation days,sick leave and expense reimbursement. Pursuant to the terms of the Kles Employment Agreement and subject to certain conditions, payments made by us to thepension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Mr. Kles. The term of the Kles Employment Agreement shall beeffective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days in advance of thetermination of such agreement. We may also terminate Mr. Kles’s employment without prior written notice (or payment in lieu of such notice) for Cause (as defined inthe Kles Employment Agreement).Billy PardoOn November 18, 2018, My Size Israel entered into an employment agreement with Billy Pardo, or the Pardo Employment Agreement, pursuant to which Ms.Pardo will serve as our Chief Product Officer. Pursuant to the terms of the Pardo Employment Agreement, Ms. Pardo receives NIS 47,500 per month as her basesalary and shall be eligible to receive such bonus as determined by us. In addition, Ms. Pardo shall be entitled to social benefits and other benefits, including, butnot limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annualvacation days, sick leave and expense reimbursement. Pursuant to the terms of the Pardo Employment Agreement and subject to certain conditions, payments madeby us to the pension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Ms. Pardo. The term of the Pardo EmploymentAgreement shall be effective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days inadvance of the termination of such agreement. We may also terminate Ms. Pardo’s employment without prior written notice (or payment in lieu of such notice) forCause (as defined in the Pardo Employment Agreement).58Outstanding Equity Awards at Fiscal YearEndThe following table provides information regarding options held by each of our named executive officers that were outstanding as of December 31, 2022.Option AwardsStock AwardsName and Principal PositionNumber ofSecuritiesUnderlyingUnexercisedOptionsExercisableNumber ofSecuritiesUnderlyingUnexercisedOptionsUnexercisableOptionExercisePriceOptionExpirationDateEquityincentiveplan awards:Number ofUnearnedShares that HaveNot VestedEquityincentiveplan awards:Market Value ofUnearnedShares, That Have Not VestedRonen Luzon Chief Executive Officer400(1)$26(8)7/24/20231,601(2)$26(8)5/29/20256,400(3)$268/10/2025100,000(9)100,000$511,250Or Kles – Chief Financial Officer227(4)$26(8)7/24/2023427(5)$26(8)5/29/20255,200(6)$268/10/202524,000(10)24,000$122,700Billy Pardo Chief Operating Officer400(1)$26(8)7/24/2023894(7)$26(8)5/29/20255,200(6)$268/10/202524,000(11)24,000$122,700(1) The option has a grant date of July 24, 2017 and vested in full on January 24, 2018.(2) The option has a grant date of May 29, 2019. 267 options vested immediately upon grant, 445 options vested on January 24, 2019, 445 options vested on January24, 2020 and 444 options vested on January 24, 2021.(3) The option has a grant date of October 8, 2020, 1,600 options vested on November 26, 2020, 1,600 options vested on May 26, 2021, 1,600 options vested onNovember 26, 2021, and 1,600 options vested on May 26, 2022.(4) The option has a grant date of July 24, 2017. 76 options vested immediately upon grant, 76 options vested on May 1, 2018 and 75 options vested on May 1, 2019.(5) The option has a grant date of May 29, 2019. 160 options vested immediately upon grant, 445 options vested on May 1, 2020, 445 options vested on May 21, 2021and 444 options vested on May 1, 2022.(6) The option has a grant date of October 8, 2020, 1,300 options vested on November 26, 2020, 1,300 options vested on May 26, 2021, 1,300 options vested onNovember 26, 2021, and 1,300 options vested on May 26, 2022.(7) The option has a grant date of May 29, 2019. 214 options vested immediately upon grant, 227 options vested on January 24, 2019, 227 options vested on January24, 2020 and 226 options vested on January 24, 2021.(8) On May 25, 2020, the compensation committee of the Board of Directors of the Company reduced the exercise price of outstanding options of employees anddirectors of the Company for the purchase of an aggregate of 5,610 shares of common stock of the Company (with exercise prices ranging between $453.75 and$228.75) to $26 per share, which was the closing price for the Company’s common stock on May 22, 2020, and extended the term of the foregoing options for anadditional one year from the original date of expiration.(9) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(10) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(11) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.59Director CompensationThe following table sets forth compensation information for our nonemployee directors for the year ended December 31, 2022.NameFees earned orpaid incash ($)(1)Optionawards($)(1)(2)Total($)Oren Elmalih15,078 15,078Oron Barnitzky15,34715,347Arik Kaufman14,44114,441Guy Zimmerman13,03313,033(1)Fees for the year 2022 are based on average US$/NIS representative exchange rates of NIS 3.519.(2)Amounts in this column represent the grant date fair value of options granted to the nonemployee directors during 2022 computed in accordance with FASBASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the nonemployee directors. The assumptions made invaluing the options reported in this column are discussed in Note 11 to our financial statements for the year ended December 31, 2022.We compensate our nonemployee directors for their service as a member of our board. Mr. Luzon received no separate compensation for board service. Mr.Luzon’s compensation is set forth above in the Summary Compensation Table.Each nonemployee director is entitled to receive a per meeting fee of $318. Nonemployee directors are also reimbursed for their travel and reasonable outofpocket expenses incurred in connection with attending board and committee meetings, to the extent that attendance is required by the board or the committee(s)on which that director serves.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurity Ownership of Certain Beneficial Holders and ManagementThe following table sets forth certain information regarding beneficial ownership of shares of our common stock as of March 31, 2023 by (i) each personknown to beneficially own more than 5% of our outstanding common stock, (ii) each of our directors, (iii) each of our executive officers, and (iv) all of our directorsand executive officers as a group. Except as otherwise indicated, the persons named in the table below have sole voting and investment power with respect to allshares beneficially owned, subject to community property laws, where applicable.Beneficial Owner(1)Shares ofCommon StockBeneficiallyOwnedPercentage(2)Executive officers and directors:Ronen Luzon143,578(3)5.8%Or Kles29,854(4)1.2%Billy Pardo143,578(5)5.8%Ezequiel Javier Brandwain12,000(6)*Ilia Turchinsky18,313(7)*Arik Kaufman1,294(8)*Oren Elmaliah1,294(9)*Oron Branitzky1,294(10)*Guy ZimmermanAll Executive Officers and Directors as a Group (9 persons)207,6268.4%*Less than 1%(1) The address of each person is c/o My Size, Inc., 4 HaYarden St., P.O.B. 1026, Airport City, Israel 7010000 unless otherwise indicated herein.60(2) The calculation in this column is based upon 2,446,780 shares of common stock outstanding on March 31, 2023. Beneficial ownership is determined in accordancewith the rules of the SEC and generally includes voting or investment power with respect to the subject securities. Shares of common stock that are currentlyexercisable or exercisable within 60 days of March 31, 2023 are deemed to be beneficially owned by the person holding such securities for the purpose of computingthe percentage beneficial ownership of such person, but are not treated as outstanding for the purpose of computing the percentage beneficial ownership of anyother person(3) Consists of (i) 100,000 shares of restricted stock granted under the 2017 Plan, (ii) 4,683 shares of common stock, (iii) options to purchase up to 8,401 shares of ourcommon stock, and (iv) 24,000 shares of restricted stock and options to purchase up to 6,494 shares of our common stock which are held by Billy Pardo, RonenLuzon’s spouse. Mr. Luzon may be deemed to beneficially hold the securities of us held by Ms. Pardo.(4) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, and (ii) an option to purchase 5,854 shares of our common stock. Does not includean aggregate of 119,760 shares of restricted stock over which Mr. Kles has been designated the initial proxy to vote such shares pursuant to a voting agreemententered into between Whitehole S.L., Twinbel S.L. and EGI Acceleration, S.L.(5) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, (ii) options to purchase up to 6,494 shares of our common stock, (iii) 100,000 sharesof restricted stock which are held by Ronen Luzon, Billy Pardo’s spouse (iii) 8,401 shares of common stock which are held by Mr. Luzon, and (iii) options to purchaseup to 4,683 shares of our common stock which are held by Mr. Luzon. Ms. Pardo may be deemed to beneficially hold the securities of the Company held by Mr.Luzon.(6) Consists of 12,000 shares of restricted stock granted under the 2017 Plan.(7) Consists of (i) 16,000 shares of restricted stock granted under the 2017 Plan, and (ii) options to purchase up to 2,313 shares of our common stock.(8) Consists of options to purchase up to 1,294 shares of our common stock.(9) Consists of options to purchase up to 1,294 shares of our common stock.(10) Consists of options to purchase up to 1,294 shares of our common stock.Change in ControlWe are not aware of any arrangement that might result in a change in control in the future. We have no knowledge of any arrangements, including anypledge by any person of our securities, the operation of which may at a subsequent date result in a change in the Company’s control.Securities Authorized for Issuance Under Equity Compensation PlansOn January 29, 2017, our Board of Directors approved the 2017 Equity Incentive Plan and the 2017 Consultant Equity Incentive Plan, which were approvedby our stockholders on March 21, 2017. In addition, on January 29, 2017, our Board of Directors approved the Stock Option Plan Israel Grantees SubPlan. The 2017Equity Incentive Plan initially authorized the issuance of up to 5,334 shares of common stock under the plan and the 2017 Consultant Equity Incentive Plan initiallyauthorized the issuance of up to 8,000 shares of common stock under the plan.On February 12, 2018, our stockholders approved an amendment to the 2017 Consultant Equity Incentive Plan to increase the maximum number of shares ofour common stock available for issuance under the plan from 8,000 to 12,000. On July 3, 2018, our stockholders approved an amendment to the 2017 Equity IncentivePlan to increase the maximum number of shares of our common stock available for issuance under the plan from 5,334 to 8,000 and an amendment to the 2017Consultant Equity Incentive Plan to increase the maximum number of shares of our common stock available for issuance under the plan from 12,000 to 18,667.On May 25, 2020, our Board reduced the exercise price of outstanding options of our employees and directors for the purchase of an aggregate of 140,237of our common stock (with exercise prices ranging between $453.75 and $228.75) to $26.0 per share, and extended the term of the foregoing options for an additionalone year from the original date of expiration.61On August 10, 2020, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 80,000 to 58,000shares, and a decrease of the numbers of shares available for issuance under the 2017 Consultant Incentive Plan to 8,667 shares from 18,667 shares.On December 30, 2021, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 58,000 sharesto 230,800 shares.On December 7, 2022, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Plan from 230,800 shares to 289,000shares.The following table summarizes information about our equity compensation plans and individual compensation arrangements as of December 31, 2022.Number of securities to be issued upon exercise of outstanding options, warrants and rights(a)Weighted average exercise price of outstandingoptions, warrants and rights (b)Number of securities remaining availablefor future issuanceunder equity compensationplans (excludingsecurities reflected in column (a) (c)Equity compensation plans approved by security holders43,49724.7477,455Equity compensation plans not approved by security holdersTotal43,49724.7477,455ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEDuring years ended December 31, 2022 and 2021, except for compensation arrangements described elsewhere herein and the transactions described below,we did not participate in any transaction, and we are not currently participating in any proposed transaction, or series of transactions, in which the amount involvedexceeded the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years, and in which, to our knowledge,any of our directors, officers, five percent beneficial security holders, or any member of the immediate family of the foregoing persons had, or will have, a direct orindirect material interest.Compensation arrangements for our named executive officers and directors are described in the section entitled “Executive Compensation.”Employment AgreementsWe have entered into written employment agreements with each of our executive officers. These agreements generally provide for notice periods of varyingduration for termination of the agreement by us or by the relevant executive officer, during which time the executive officer will continue to receive base salary andbenefits. We have also entered into customary noncompetition, confidentiality of information and ownership of inventions arrangements with our executiveofficers. However, the enforceability of the noncompetition provisions may be limited under applicable law.OptionsSince our inception we have granted options to purchase our common stock to our officers and directors. Such option agreements may contain accelerationprovisions upon certain merger, acquisition, or change of control transactions.62Restricted Stock GrantsOn September 29, 2022, our compensation committee approved grants of restricted share awards under our 2017 Plan to Ronen Luzon, Or Kles, Billy Pardo,Ilia Turchinsky and Ezequiel Javier Brandwain, pursuant to which they were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000restricted shares and 12,000 restricted shares, respectively. The restricted shares shall vest in three equal installments on January 1, 2023, January 1, 2024 andJanuary 1, 2025, conditioned upon continuous employment with us, and subject to accelerated vesting upon a change in control of the Company.Shareholder ActivismIn May 2021, we received notice from Custodian Ventures, LLC, or Custodian, of its intention to nominate four candidates to stand for election to our Boardof Directors at our 2021 annual meeting of stockholders. Custodian subsequently made a book and records request and has made public statements calling forchanges to our management.On September 22, 2021, Custodian, commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v. Mysize,Inc., C.A. No. 20210817LWW, or the Delaware Action. In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting. As further described below, on November 4, 2021, we entered into asettlement agreement, or the Settlement Agreement, with Custodian, Activist Investing LLC, David Aboudi, Partick Loney and David Natan, collectively, the LazarParties, settling and dismissing the Delaware Action.On October 19, 2021, we commenced an action in the United States District Court for the Southern District of New York captioned My Size, Inc. v. DavidLazar, Custodian Ventures LLC, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, Civil Action No, 1:21cv08585, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, andcertain rules promulgated thereunder, or the SDNY Action. The complaint sought, among other things, declaratory and injunctive relief related to defendants’ effortsto nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed “group” for purposes ofSection 13 (d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. In addition, the complaint alleged that thedefendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules in connection with their efforts to elect a slate of directorsto our Board of Directors. On October 20, 2021, the Court signed an order granting a hearing on an anticipated motion for a preliminary injunction and expeditedscheduling and discovery in aid thereof, and scheduled that hearing for December 2, 2021. As further described below, on November 4, 2021, we entered into theSettlement Agreement with the Lazar Parties settling and dismissing the claims asserted in the SDNY Action and the Delaware Action against one another. OnNovember 8, 2021, the remaining defendants in the SDNY Action filed and answer and counterclaim asserting a claim against us pursuant to New York Civil RightsLaw Section 70a, also known as New York’s antiSLAPP statute.On November 4, 2021, we entered into the Settlement Agreement, or the Lazar Settlement Agreement, with the Lazar Parties. Pursuant to the LazarSettlement Agreement, we and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the LazarSettlement Agreement, we reimbursed Custodian for out of pocket expenses and in consideration for the dismissal and release of claims against the Company anaggregate amount equal to $275,000. With respect to our 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) itsMay 12, 2021 notice of stockholder nominations of four director candidates with respect to our 2021 annual meeting of stockholders, (ii) the notice dated October 28,2021 submitted by Custodian to us notifying us of Custodian’s continued intent to bring its nomination of four director candidates before our stockholders at the2021 annual meeting, and (iii) any and all related materials and notices submitted to us in connection therewith or related thereto and to not take any further action inconnection with the solicitation of any proxies in connection with us. Custodian also agreed to cease any and all solicitation and other activities in connection withthe 2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effective date of theAgreement, or the Standstill Period. The Lazar Settlement Agreement also provides that during the Standstill Period, the Lazar Parties will vote all shares of ourcommon stock it beneficially owns in accordance with any proposal or recommendation made by us or our Board of Directors that is submitted to our stockholders,unless to do so would violate applicable law and except with respect to certain extraordinary transactions. The Lazar Settlement Agreement also contains nondisparagement and confidentiality provisions, subject to certain exceptions.63On December 9, 2021, we subsequently entered into a Settlement Agreement, or the Ault Settlement Agreement, with Milton C. Ault III, Ault Alpha LP, AultAlpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed to withdraw the SDNY Action against the AultParties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that action against the Company. In addition, pursuant to the SettlementAgreement, we paid $70,000 to the Ault Parties in consideration for the releases and other good and valuable consideration as set forth in the Ault SettlementAgreement.Naiz Bespoke Technologies AcquisitionOn October 7, 2022, we entered into the Naiz Agreement with the Naiz Sellers, pursuant to which the Naiz Sellers agreed to sell to us all of the issued andoutstanding equity of Naiz. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) ) the Naiz EquityConsideration and (ii) up the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the Equity Value Averaging Period) is less than $1,650,000, My Size shall pay the Shortfall Value to the Naiz Sellers within 45days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period, it wasdetermined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement)).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers will be subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into the LockUp Agreement with My Size, (ii) Whitehole, Twinbel and EGIentered into the Voting Agreement with My Size and (iii) each of the Key Persons entered into employment agreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonth period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonth “dribbleout” provisionthat provides following the expiration of the initial sixmonth lockup period, without My Size’s prior written consent (which My Size shall be permitted to withholdat its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than the average dailytrading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.64The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Indemnification Agreements and Directors’ and Officers’ Liability InsuranceWe have entered into indemnification agreements with each of our directors and executive officers. These agreements, among other things, require us toindemnify these individuals and, in certain cases, affiliates of such individuals, to the fullest extent permitted by Delaware law against liabilities that may arise byreason of their service to us or at our direction, and to advance expenses incurred as a result of any proceedings against them as to which they could beindemnified. We also maintain an insurance policy that insures our directors and officers against certain liabilities, including liabilities arising under applicablesecurities laws.Director IndependenceSee “Item 10. Directors, Executive Officers and Corporate Governance; Corporate Governance, Board Composition” above for a discussion regarding theindependence of the members of our board of directors.ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICESSomekh Chaikin, a member firm of KPMG International, located in Tel Aviv, Israel, PCAOB ID 1057, has served as our independent registered publicaccounting firm for 2022 and 2021. The following are Somekh Chaikin’s fees for professional services in each of the respective fiscal years:Fee Category20222021Audit Fees198,910298,300Tax Fees30,66729,300Auditrelated Fees18,000Total Fees247,577327,600Audit Fees:Audit Fees consist of fees billed for professional services performed by Somekh Chaikin for the audit of our annual financial statements, thereview of interim consolidated financial statements, and related services that are normally provided in connection with registration statements, including theregistration statement for S1 and S3.Tax Fees: Tax Fees may consist of fees for professional services, including tax and VAT consulting and compliance performed by an independent registeredpublic accounting provided during the period.PreApproval Policies and ProceduresIn accordance with the SarbanesOxley Act of 2002, as amended, our audit committee charter requires the audit committee to preapprove all audit andpermitted nonaudit services provided by our independent registered public accounting firm, including the review and approval in advance of our independentregistered public accounting firm’s annual engagement letter and the proposed fees contained therein. The audit committee has the ability to delegate the authorityto preapprove nonaudit services to one or more designated members of the audit committee. If such authority is delegated, such delegated members of the auditcommittee must report to the full audit committee at the next audit committee meeting all items preapproved by such delegated members. In the fiscal years endedDecember 31, 2022 and December 31, 2021 all of the services performed by our independent registered public accounting firm were preapproved by the auditcommittee.65PART IVITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES(a)Financial StatementsThe financial statements required by this Item are included beginning at page F1.(b)ExhibitsSee Exhibit IndexITEM 16. FORM 10K SUMMARYNot applicableEXHIBIT INDEXExhibitNumberDescription3.1Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Form on Form8K filed on March 23, 2017)3.2Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10K filed onMarch 4, 2016)3.3Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’s Current Report onForm 8K filed on February 20, 2018)3.4Second Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8K filedon April 24, 2018)3.5Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’sCurrent Report on Form 8K filed on November 18, 2019)3.6Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on January 7, 2022)3.7Amendment No. 1 to Second Amended and Restated ByLaws (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8K filed on January 7, 2022)3.8Certificate of Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on December 7, 2022)4.1Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S3/A filed onNovember 14, 2016)4.2Form of Warrant to Purchase Common Stock issued on February 2, 2018 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report onForm 10K filed on March 27, 2019)4.3Description of Securities Registered under Section 12 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report on Form 10K filedon March 19, 2020)4.4Form of Warrant (incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S1, Amendment No. 1, filed with the SECon May 5, 2020.)4.5Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)4.6Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.1My Size, Inc. 2017 Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement on Schedule DEF 14Afiled on March 2, 2017)10.2My Size, Inc. 2017 Consultant Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement onSchedule DEF 14A filed on March 2, 2017)10.3My Size, Inc. 2017 Stock Option Plan Israel Grantees SubPlan (incorporated by reference to Exhibit 10.3 to the Company’s Annual Report on Form10K filed on March 27, 2019)6610.4Purchase Agreement between My Size, Inc. and Shoshana Zigdon dated as of February 16, 2014 (incorporated by reference to Exhibit 10.2 to theCompany’s Annual Report on Form 10K filed on March 4, 2016)10.5 +Employment Agreement between My Size Israel 2014 Ltd. and Ronen Luzon dated November 18, 2018 (incorporated by reference to Exhibit 10.1 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.6 +Employment Agreement between My Size Israel 2014 Ltd. and Or Kles dated November 18, 2018 (incorporated by reference to Exhibit 10.2 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.7 +Employment Agreement between My Size Israel 2014 Ltd. and Billy Pardo dated November 18, 2018 (incorporated by reference to Exhibit 10.3 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.8Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on January 15,2020)10.9Form of Warrant (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.10Form of Placement Agent Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.11Securities Purchase Agreement (incorporated by reference to Exhibit 10.30 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.12Underwriting Agreement, dated January 5, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on January 7, 2021)10.13Underwriting Agreement, dated March 22, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on March 25, 2021)10.14Amendment to Purchase Agreement between My Size Israel 2014 Ltd., My Size, Inc. and Shoshana Zigdon (incorporated by reference to Exhibit 10.1to the Company’s Quarterly Report on Form 10Q on August 16, 2021)10.15Form of Registered Direct Offering Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.16Form of PIPE Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.17Form of Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.18Form of Placement Agent Warrant issued by the Company on October 28, 2021 (incorporated by reference to Exhibit 10.22 to the Company’s Form S1filed on November 12, 2021)10.19Form of Registration Rights Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.4 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.20Engagement Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference to Exhibit 10.5 to theCompany’s Current Report on Form 8K filed on October 28, 2021)10.21Settlement Agreement dated November 4, 2021, among My Size, Inc., David Lazar and certain of his affiliates (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on November 5, 2021)10.22Share Purchase Agreement dated as of February 7, 2022 between My Size Israel 2014 Ltd. and Amar Guy Shalom and Elad Bretfeld (incorporated byreference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SEC on February 8, 2022)10.23Employment Agreement between My Size Israel 2014 Ltd. and Ezequiel Javier Brandwain dated January 27, 2022 (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on February 1, 2022)10.24Form of Section 102 Capital Gain Restricted Stock Award Agreement under the Company’s 2017 Equity Incentive Plan (incorporated by reference toExhibit 10.1 to the Company’s Quarterly Report on Form 10Q, filed with the SEC on November 14, 2022)10.25Share Purchase Agreement, dated as of October 6, 2022, by and among My Size, Inc., Borja Cembrero Saralegui, Artiz Toree Garcia, Whitehold, S.L.,Twinbel, S.L., and EGI Acceleration, S.L. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SECon October 12, 2022)10.26Form of LockUp Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)10.27Form of Voting Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.3 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)6710.28My Size, Inc. Amendment to the My Size, Inc. 2017 Equity Plan (incorporated by reference to Appendix B to the Company’s definitive proxystatement filed with the SEC on November 4, 2022)10.29Form of Registered Direct Offering Securities Purchase Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.1 to theCompany’s Current Report on Form 8K filed with the SEC on January 12, 2023)10.30Form of PIPE Securities Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8Kfiled with the SEC on January 12, 2023)10.31Form of Registered Direct PreFunded Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.32Form of Series A and Series B Warrant (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8K filed with the SEC onJanuary 12, 2023)10.33Form of Private Placement PreFunded Warrant (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.34Form of Registration Rights Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form8K filed with the SEC on January 12, 2023)10.35Engagement Agreement, dated December 5, 2022 (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8K filed withthe SEC on January 12, 2023)10.36*Form of Placement Agent Warrant21.1*List of Subsidiaries23.1*Consent of Somekh Chaikin, a member firm of KPMG International, registered public accounting firm31.1*Certification of the Chief Executive Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200231.2*Certification of the Chief Financial Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200232.1*Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a14(b) of the Exchange Act and 18 U.S.C. Section 1350, asadopted pursuant to Section 906 of the SarbanesOxley Act of 2002101.INS*Inline XBRL Instance Document101.SCH*Inline XBRL Taxonomy Schema101.CAL*Inline XBRL Taxonomy Calculation Linkbase101.DEF*Inline XBRL Taxonomy Definition Linkbase101.LAB*Inline XBRL Taxonomy Label Linkbase101.PRE*Inline XBRL Taxonomy Presentation Linkbase104Cover Page Interactive Data File (formatted as Inline XBRL document and contained in Exhibit 101)*Filed herewith.+Indicates a management contract or any compensatory plan, contract or arrangement68SIGNATURESPursuant to the requirements of Section 13 and 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10K to be signed on its behalf by the undersigned, thereunto duly authorized on this 14th day of April, 2023.MY SIZE, INC./s/ Ronen LuzonRonen LuzonChief Executive Officer (Principle Executive Officer)/s/ Or KlesOr KlesChief Financial Officer(Principal Financial and Accounting Officer)Pursuant to the requirements of the Securities Act of 1934, this annual report on Form 10K has been signed below by the following persons on behalf ofthe registrant and in the capacities and on the dates indicated.SignatureTitleDate/s/ Ronen LuzonChief Executive Officer and DirectorApril 14, 2023Ronen Luzon(Principle Executive Officer)/s/ Or KlesChief Financial OfficerApril 14, 2023Or Kles(Principal Financial and Accounting Officer)/s/ Oren ElmaliahDirectorApril 14, 2023Oren Elmaliah/s/ Arik KaufmanDirectorApril 14, 2023Arik Kaufman/s/ Oron BranitzkyDirectorApril 14, 2023Oron Branitzky/s/ Guy ZimmermanDirectorApril 14, 2023Guy Zimmerman69EX10.36 2 ex1036.htmExhibit 10.36NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES ANDEXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THESECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO ANEFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTIONNOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGINACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.PLACEMENT AGENT COMMON STOCK PURCHASE WARRANTMY SIZE, INC.Warrant Shares: _______Issue Date: January 12, 2023Initial Exercise Date: January 12, 2023THIS PLACEMENT AGENT COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _____________ or itsassigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the dateset forth above (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on January 10, 2028 (the “Termination Date”) but not thereafter, tosubscribe for and purchase from My Size, Inc., a Delaware corporation (the “Company”), up to ______ shares (as subject to adjustment hereunder, the “WarrantShares”) of the Company’s Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined inSection 2(b). This Warrant is issued pursuant to that certain engagement letter, dated as of December 5, 2022, by and between the Company and H.C. Wainwright &Co., LLC.Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities PurchaseAgreement (the “Purchase Agreement”), dated January 10, 2023, among the Company and the purchasers signatory thereto.1Section 2. Exercise.a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or afterthe Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted by email (or emailattachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the numberof Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shalldeliver the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on aUnited States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No inkoriginalNotice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required.Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder haspurchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrantto the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercisesof this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering theoutstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder andthe Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver anyobjection to any Notice of Exercise within one (1) Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant,acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, thenumber of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.b) Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $3.8188, subject to adjustment hereunder (the“Exercise Price”).c) Cashless Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein isnot available for the issuance or resale of the Warrant Shares to or by the Holder, then this Warrant may also be exercised, in whole or in part, at such timeby means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing[(AB) (X)] by (A), where:(A) =as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice ofExercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed anddelivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) ofRegulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAPon the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on theprincipal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s execution of the applicable Notice ofExercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hoursthereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii)the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice ofExercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;(B) =the Exercise Price of this Warrant, as adjusted hereunder; and(X) =the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if suchexercise were by means of a cash exercise rather than a cashless exercise.2“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which theCommon Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York Citytime)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest precedingdate) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for theCommon Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the mostrecent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by anindependent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to theCompany, the fees and expenses of which shall be paid by the Company.“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the TradingMarket on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or thenearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and ifprices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reportingprices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock asdetermined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonablyacceptable to the Company, the fees and expenses of which shall be paid by the Company.If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of theSecurities Act, the Warrant Shares shall take on the characteristics of the Warrants being exercised, and the holding period of the Warrant Shares beingissued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section 2(c).3d) Mechanics of Exercise.i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to betransmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with TheDepository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant insuch system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of theWarrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or mannerofsale limitationspursuant to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, registered in theCompany’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitledpursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2)Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate ExercisePrice to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Companyof the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall bedeemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant hasbeen exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (otherthan in the case of a cashless exercise) is received by the Warrant Share Delivery Date. If the Company fails for any reason to deliver tothe Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder,in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP ofthe Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifthTrading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share Delivery Date until such WarrantShares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FASTprogram so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standardsettlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stockas in effect on the date of delivery of the Notice of Exercise.4ii.Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the requestof a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a newWarrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrantshall in all other respects be identical with this Warrant; provided, however, that the Holder shall be required to return any WarrantShares subject to any such rescinded exercise notice concurrently with the return to Holder of the aggregate Exercise Price paid to theCompany for such Warrant Shares and the restoration of Holder’s right to acquire such Warrant Shares pursuant to this Warrant(including, issuance of a replacement warrant certificate evidencing such restored right).iii. Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant toSection 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.iv. Compensation for BuyIn on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights availableto the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with theprovisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date theHolder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwisepurchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipatedreceiving upon such exercise (a “BuyIn”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) theHolder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) theamount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connectionwith the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at theoption of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was nothonored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock thatwould have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holderpurchases Common Stock having a total purchase price of $11,000 to cover a BuyIn with respect to an attempted exercise of shares ofCommon Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediatelypreceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written noticeindicating the amounts payable to the Holder in respect of the BuyIn and, upon request of the Company, evidence of the amount of suchloss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including,without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver sharesof Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.5v. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise ofthis Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Companyshall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by theExercise Price or round up to the next whole share.vi. Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue ortransfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paidby the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by theHolder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, thisWarrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder andthe Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.The Company shall pay all Transfer Agent fees required for sameday processing of any Notice of Exercise and all fees to the DepositoryTrust Company (or another established clearing corporation performing similar functions) required for sameday electronic delivery of theWarrant Shares.vii. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timelyexercise of this Warrant, pursuant to the terms hereof.6e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise anyportion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicableNotice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of theHolder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). Forpurposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Partiesshall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, butshall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrantbeneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion ofany other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exerciseanalogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in thepreceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act andthe rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that suchcalculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed inaccordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (inrelation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisableshall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether thisWarrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of thisWarrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm theaccuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number ofoutstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s mostrecent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recentwritten notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request ofa Holder, the Company shall within one (1) Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock thenoutstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise ofsecurities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number ofoutstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stockoutstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice tothe Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial OwnershipLimitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares ofCommon Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in theBeneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shallbe construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portionhereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplementsnecessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of thisWarrant.7Section 3. Certain Adjustments.a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes adistribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which,for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstandingshares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into asmaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case theExercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any)outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately aftersuch event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of thisWarrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for thedetermination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case ofa subdivision, combination or reclassification.b) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sellsany Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares ofCommon Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregatePurchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise ofthis Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before thedate on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the recordholders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that to the extent that theHolder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall notbe entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Rightto such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not resultin the Holder exceeding the Beneficial Ownership Limitation).c) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend (other than cash) orother distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including,without limitation, any distribution of stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement,scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holdershall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number ofshares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including withoutlimitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken,the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, thatto the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, thenthe Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a resultof such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as itsright thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).8d) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more relatedtransactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease,license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, director indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of CommonStock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more ofthe outstanding Common Stock or 50% or more of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in oneor more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchangepursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly orindirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, withoutlimitation, a reorganization, recapitalization, spinoff, merger or scheme of arrangement) with another Person or group of Persons whereby such otherPerson or group acquires more than 50% of the outstanding shares of Common Stock or 50% or more of the voting power of the common equity of theCompany (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for eachWarrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of theHolder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor oracquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as aresult of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior tosuch Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, thedetermination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of AlternateConsideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Priceamong the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. Ifholders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall begiven the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at theHolder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date ofthe public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cashequal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of suchFundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company’s control, including not approved by theCompany’s Board of Directors, the Holder shall only be entitled to receive from the Company or any Successor Entity the same type or form ofconsideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to theholders of Common Stock of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, stock or anycombination thereof, or whether the holders of Common Stock are given the choice to receive from among alternative forms of consideration in connectionwith the Fundamental Transaction; provided, further, that if holders of Common Stock of the Company are not offered or paid any consideration in suchFundamental Transaction, such holders of Common Stock will be deemed to have received common stock of the Successor Entity (which Entity may be theCompany following such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on theBlackScholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day of consummation of the applicableFundamental Transaction for pricing purposes and reflecting (A) a riskfree interest rate corresponding to the U.S. Treasury rate for a period equal to thetime between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expectedvolatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualizationfactor) as of the Trading Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlyingprice per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any noncashconsideration, if any, being offered in such Fundamental Transaction and (ii) the highest VWAP during the period beginning on the Trading Dayimmediately preceding the public announcement of the applicable contemplated Fundamental Transaction (or the consummation of the applicableFundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant to this Section 3(e) and (D) a remaining option timeequal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date and (E) azero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds (or such other consideration)within the later of (i) five Business Days of the Holder’s election and (ii) the date of consummation of the Fundamental Transaction. The Company shallcause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of theobligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant towritten agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to suchFundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entityevidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares ofcapital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of thisWarrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which appliesthe exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to suchFundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for thepurpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which isreasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall beadded to the term “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction, each andevery provision of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to each of the Company and theSuccessor Entity or Successor Entities, jointly and severally), and the Successor Entity or Successor Entities, jointly and severally with the Company, mayexercise every right and power of the Company prior thereto and the Successor Entity or Successor Entities shall assume all of the obligations of theCompany prior thereto under this Warrant and the other Transaction Documents with the same effect as if the Company and such Successor Entity orSuccessor Entities, jointly and severally, had been named as the Company herein.e) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. Forpurposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the numberof shares of Common Stock (excluding treasury shares, if any) issued and outstanding.9f) Notice to Holder.i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, theCompany shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resultingadjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form)on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C)the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any sharesof capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection withany reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all orsubstantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into othersecurities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of theaffairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as itshall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective datehereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to beentitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification,consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expectedthat holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or otherproperty deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure todeliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to bespecified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, nonpublic informationregarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to aCurrent Report on Form 8K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of suchnotice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.10Section 4. Transfer of Warrant.a) Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and to theprovisions of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights) aretransferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a writtenassignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay anytransfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a newWarrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument ofassignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly becancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unlessthe Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of thedate on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordanceherewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company,together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent orattorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute anddeliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issuedon transfers or exchanges shall be dated the Issue Date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Sharesissuable pursuant thereto.c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “WarrantRegister”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as theabsolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to thecontrary.d) Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrantshall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue skylaws or (ii) eligible for resale without volume or mannerofsale restrictions or current public information requirements pursuant to Rule 144, the Companymay require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, comply with the provisions ofSection 5.7 of the Purchase Agreement.11e) Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon anyexercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling suchWarrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exemptedunder the Securities Act.Section 5. Miscellaneous.a) No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends orother rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Withoutlimiting the rights of a Holder to receive Warrant Shares on a “cashless exercise,” and to receive the cash payments contemplated pursuant to Sections 2(d)(i) and 2(d)(iv), in no event will the Company be required to net cash settle an exercise of this Warrant.a.In July 2019, the Company entered into a threeyear agreement with a consultant (“Consultant14”) to provide services to the Company includingassisting the Company to promote, market and sell the Company’s technology to potential customers. Pursuant to such agreement and in partialconsideration for such consulting services, the Company agreed to issue to Consultant14 options to purchase up to 107 shares of the Company’scommon stock upon execution of the agreement. The options are exercisable at $375.00 per share and shall vest in 3 equal instalments every twelvemonths starting July 2019. Unexercised options shall expire 4 years from the effective date.In addition, the Company agreed to issue to Consultant14 options to purchase up to 890 shares of the Company’s common stock upon executionof the agreement. The options are exercisable at $27.00 per share and shall vest in 4 equal instalments every six months starting September 2020.Unexercised options shall expire 5 years from the effective date.During 2022 and 2021, an amount of $7 and $14 respectively, were recorded by the Company as stockbased equity awards with respect to Consultant14.F24MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The Company’s outstanding options granted to consultants as of December 31, 2022 are as follows:Issuance dateOptions forCommon stockWeightedAverageexercise priceper shareOptionsexercisableExpirationdateFebruary 201815USD528.7515February 2023August 2018December 2018531USD352.38264August 2023 December 2023July 2020107USD375107July 2023SeptemberOctober 20201,488USD27.201,288October 2024 September 2025Total2,1411,674The Company uses the Black Scholes model to measure the fair value of the stock options with the assistance of a third party valuation.No stock options were granted during 2022 to consultants.The fair value of the Company’s stock options granted to nonemployees was calculated using the following weighted average assumptions:20222021GrantsGrantsDividend yield0%Expected volatility125.15%Riskfree interest0.16%Contractual term of up to (years)1.52F25MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Stock Option Plan for employeesIn March 2017, the Company adopted a stock option plan (the “Plan”) pursuant to which the Company’s Board of Directors may grant stock options toofficers and key employees. The total number of options which may be granted to directors, officers, employees under this plan, is limited to 289,000options. Stock options can be granted with an exercise price equal to or less than the stock’s fair market value at the date of grant.The fair value of each option award is estimated on the date of grant using the Binomial optionpricing model that used the weighted averageassumptions in the following table. The risk free rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the timeof grant.2022Grants2021GrantsDividend yield0%0%Expected volatility96.52%98.47%Riskfree interest4.06%0.96%expected life522.27In the years ended December 31, 2022 and 2021, 10,000 and 3,900 options, respectively, were granted.On December 7, 2022, the Company’s stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from230,800 shares to 289,000 shares.On September 29, 2022, the Compensation Committee of the Company approved grants of restricted share awards under the Company’s 2017 EquityIncentive Plan to Ronen Luzon (CEO), Or Kles (CFO), Billy Pardo (COO), Ilia Turchinsky (CTO) and Ezequiel Javier Brandwain (CCO), pursuant towhich were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000 restricted shares and 12,000 restricted shares,respectively. Each restricted share awarded under section 102 Capital Gain Restricted Stock Award Agreement (the “Agreement”). The restrictedshares shall vest in three equal installments on January 1, 2023, January 1, 2024 and January 1, 2025 for Ronen Luzon, Or Kles, Billy Pardo and IliaTurchinsky and on January 27, 2023, January 27, 2024 and January 27, 2025 for Ezequiel Javier Brandwain, conditioned upon continuous employmentwith the Company, and subject to accelerated vesting upon a change in control of the Company.On the same day, the Company granted fiveyears options to purchase up to 10,000 ordinary shares to other employees of the Company at an exerciseprice of $0.21 per share. The options vesting period is over three years in three equal portions from the vesting commencement date.F26MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The total stock option compensation expense in the year ended December 31, 2022 amounted to $448as follows: Research and development expensesamounted to $151, sales and marketing expenses amounted to $119and general and administrative expenses amounted to $178.The total stock option compensation expense in the year ended December 31, 2021 amounted to $252 as follows: Research and development expensesamounted to $94, sales and marketing expenses amounted to $97 and general and administrative expenses amounted to $61.As of December 31, 2022, there was a total of $530 unrecognized compensation cost relating to nonvested sharebased compensation arrangements.That cost is expected to be recognized over a weightedaverage period of 2.0 years.Share option activity during 2022 is as follows:2022Number ofoptionsWeightedaverageexerciseprice US$Outstanding as of January 135,74226.5Granted10,0005.25ExercisedExpired(4,136)Outstanding as of year end41,60622.48Vested as of year end33,20825.17Share option activity during 2021 is as follows:2021Number ofoptionsWeightedaverageExerciseprice US$Outstanding as of January 139,094$26.0Granted3,90032.0Exercised(751)Expired(6,501)Outstanding as of year end35,74226.5Vested as of year end27,06326.5F27MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 15 CONTINGENCIES AND COMMITMENTSa.On August 7, 2018, the Company commenced an action against North Empire LLC (“North Empire”) in the Supreme Court of the State of New York,County of New York for breach of a Securities Purchase Agreement (the “Agreement”) in which it is seeking damages in an amount to bedetermined at trial, but in no event less than $616. On August 2, 2018, North Empire filed a Summons with Notice against the Company, also in thesame Court, in which they allege damages in an amount of $11.4 million arising from an alleged breach of the Agreement. On September 6, 2018North Empire filed a Notice of Discontinuance of the action it had filed on August 2, 2018. On September 27, 2018, North Empire filed an answerand asserted counterclaims in the action commenced by the Company against them, alleging that the Company failed to deliver stock certificatesto North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against theCompany’s CEO and now former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018,the Company filed a reply to North Empire’s counterclaims. On November 15, 2018, the Company’s CEO and now former Chairman of the Boardfiled a motion to dismiss North Empire’s thirdparty complaint. On January 6, 2020, the Court granted the motion and dismissed the thirdpartycomplaint. Discovery has been completed and both parties have filed motions for summary judgment in connection with the claims andcounterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summary judgment, arguing there werefactual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision. The appealmust be fully perfected and filed by July 26, 2022. On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying theCompany’s motion for summary judgment. North Empire will file its opposition papers on or before March 31, 2022, and the Company will file replypapers on April 29, 2022. On or about September 12, 2022, the Court issued its Decision and Order denying the Company’s motion to reargue.North Empire filed its opposing brief on December 7, 2022. Both sides were given an opportunity to file a reply brief. The Company filed our replybrief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. The Appellate Court has scheduled oral argument for the appealfor February 7, 2023. Oral argument was held before the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Courtfiled its Decision and Order, which affirmed the lower court’s decisions regarding both My Size and North Empire’s motions for summary judgmentand sent the case back to the Supreme Court.On or about March 13, 2023, the Supreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date forthe mediation has not yet been set. The Company intends to vigorously defend any claims made by North Empire.The Company believes it is more likely than not that the counterclaims will be denied.b.In May 2021, the Company received notice from Custodian Ventures, LLC (“Custodian”) of its intention to nominate four candidates to stand forelection to our Board of Directors at the Company’s 2021 annual meeting of stockholders. Custodian subsequently made a book and recordsrequest and has made public statements calling for changes to our management.On September 22, 2021, Custodian commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v.MySize, Inc. (the “Delaware Action”). In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting.On October 19, 2021, the Company commenced an action in the United States District Court for the Southern District of New York againstCustodian, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, and certain rulespromulgated thereunder (the “SDNY Action”). The complaint sought, among other things, declaratory and injunctive relief related to defendants’efforts to nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed“group” for purposes of Section 13(d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. Inaddition, the complaint alleged that the defendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules inconnection with their efforts to elect a slate of directors to the Company’s Board of Directors. On October 20, 2021, the Court signed an ordergranting a hearing on an anticipated motion for a preliminary injunction and expedited scheduling and discovery in aid thereof, and scheduled thathearing for December 2, 2021.On November 4, 2021, the Company entered into the Settlement Agreement with the Lazar Parties. Pursuant to the Settlement Agreement, theCompany and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the SettlementAgreement, the Company agreed to reimburse Custodian for out of pocket expenses and in consideration for the dismissal and release of claimsagainst the Company an aggregate amount equal to $275, to be paid within three business days of the effective date of the Settlement Agreement.With respect to the Company’s 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) its May 12,2021 notice of stockholder nominations of four director candidates with respect to the Company’s 2021 annual meeting of stockholders, (ii) thenotice dated October 28, 2021 submitted by Custodian to the Company notifying the Company of Custodian’s continued intent to bring itsnomination of four director candidates before the Company’s stockholders at the 2021 annual meeting, and (iii) any and all related materials andnotices submitted to the Company in connection therewith or related thereto and to not take any further action in connection with the solicitationof any proxies in connection with the Company. Custodian also agreed to cease any and all solicitation and other activities in connection with the2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effectivedate of the Agreement (the “Standstill Period”). The Settlement Agreement also provides that during the Standstill Period, the Lazar Parties willvote all shares of common stock of the Company it beneficially owns in in accordance with any proposal or recommendation made by theCompany or the Board of Directors of the Company that is submitted to the stockholders of the Company, unless to do so would violateapplicable law and except with respect to certain extraordinary transactions. The Settlement Agreement also contains nondisparagement andconfidentiality provisions, subject to certain exceptions.On December 9, 2021, the Company subsequently entered into a Settlement Agreement (the “Ault Settlement Agreement”), with Milton C. Ault III,Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed towithdraw the SDNY Action against the Ault Parties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that actionagainst the Company. In addition, pursuant to the Settlement Agreement, the Company paid $70 to the Ault Parties in consideration for thereleases and other good and valuable consideration as set forth in the Ault Settlement Agreement.c.On July 5, 2021, the Company was served with a legal complaint filed by Fidelity Venture Capital Ltd. and Dror Atzmon in the Magistrate’s Court inTel Aviv for a monetary award in an amount of NIS 1,436,679 (approximately $450) and a declaratory relief. The plaintiffs allege that the Companybreached its contractual obligations to pay them for services allegedly rendered to the Company by the plaintiffs under a certain consultingagreement dated July 2, 2014, in an amount of NIS 819,000 (approximately $256). Additionally, the plaintiffs allege that the Company shouldcompensate them for losses allegedly incurred by them following their investment in the Company’s shares issued under a certain private offering.In the alternative, the plaintiffs move that the court will declare the investment agreement void with full restitution of plaintiffs’ original investmentin an amount of NIS 1,329,650(approximately $415). The Company filed its statement of defense on October 25, 2021. The first preliminary courthearing of the case is scheduled for January 23, 2022.The first court preliminary hearing was held on March 1, 2022.Following the first preliminary hearing and the Court’s comments and recommendation, the Plaintiffs filed a motion to strike out the claim withoutprejudice.On March 8, 2022 the Court ordered dismissal without prejudice of the claim.F28MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATIONAcquisition of OrgadOn February 7, 2022, the Company acquired 100% of the shares and voting interests in Orgad an omnichannel ecommerce platform. The acquisitionwas designed to create an additional revenue stream for the Company by becoming a direct ecommerce seller while leveraging the synergies betweenMySizeID and Orgad’s ecommerce platform.Unaudited proforma informationThe results of operations of Orgad have been included in the consolidated financial statements since the acquisition date of February 7, 2022. Orgadrevenues included in the Company’s consolidated statement of operations from February 7, 2022 through December 31, 2022 were $4,132. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,662 and $2,850 respectively, and the net loss after tax would have been $8,519 and $10,149 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash (*)300Issuance of shares of common stock (69,752 shares) (**)457Total consideration transferred757(*)The cash payment is subject to working capital adjustments.(**)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Orgad, on the twoyear and the threeyear anniversary of the closing, $350in each ofthese years provided that in the case of the second and third instalments certain revenue targets are met and subject further to certain downward postclosing adjustment. Furthermore, 69,752shares of common stock will be issued in eight equal quarterly instalments until the lapse of two years fromclosing. Additional earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023 will also be paid. All of these payments aresubject to the former owners being actively engaged with Orgad at the date such payment is due, and therefore were not taken as part of theconsideration for the business combination.During the year ended December 31, 2022 an amount of $456and $319was recorded in respect of the cash instalments and in respect of stocksissuance, respectively in Cost Of Goods, Sales and Marketing and General and Administrative expenses as shown in the following table:2022Stockbased compensation expense – Cost of goods194Stockbased compensation expense Sales and marketing271Stockbased compensation expense General and administrative310775(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the preliminary estimates of their fair values, which were determined using generally accepted valuation techniques based onestimates and assumptions made by management at the time of the acquisition. Such estimates are subject to change during the measurement periodwhich is not expected to exceed one year. The purchase price allocation was not finalized duo to examination of the net working capital of Orgad at theacquisition date. Any adjustments to the preliminary purchase price allocation identified during the measurement period will be recognized in theperiod in which the adjustments are determined.The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and Cash EquivalentTrade receivables364PP&E55Inventory864Longterm financial investment31Selling platform378Goodwill152Shortterm accruals and deferrals(181)Trade payables(668)Long term provision(13)Longterm debt(138)Deferred Taxes(87)Total net assets acquired757F29MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)(c)Acquisitionrelated costsThe Company incurred transaction costs of approximately $40and none during twelvemonth period ended December 31, 2022 which were included ingeneral and administrative expenses in the consolidated statements of income (loss).Acquisition of Naiz Bespoke Technologies, S.L. (“Naiz”)On October 11, 2022, the Company acquired 100% of the shares and voting interests in Naiz a provider of SaaS technology solutions that solve sizeand fit issues for fashion ecommerce companies. The acquisition was designed to allow Naiz’s customers benefit from MySize’s deep understanding ofthe fashion ecommerce retail landscape, while creating an additional revenue stream for the Company.Unaudited proforma informationThe results of operations of Naiz have been included in the consolidated financial statements since the acquisition date of October 11, 2022. Naizrevenues included in the Company’s consolidated statement of operations from October 11, 2022 through December 31, 2022 were $103. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,738 and $379 respectively and the net loss after tax would have been $8,695 and $10,717 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash503Issuance of shares of common stock (240,000 shares) (*)1,008Total consideration transferred1,511(*)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Naiz, additional cash consideration (up to $1,550) in four instalments subject to thefollowing conditions:(i)Continuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result ofa Good Reason; and(ii)Naiz’s Revenues reaching or exceeding the respective Target Revenues defined in the agreement. The revenues will be calculated in four periods:(1) January 1, 2022 – December 31, 2022; (2) January 1, 2023 – June 30, 2023; (3) July 1, 2023 – December 31, 2023; (4) January 1, 2024 – December31, 2024.Former owners of Naiz are entitled to additional cash consideration following December 31, 2025 (up to $1,650) in an event when the actual value of theequity consideration is less than $1,650, subject to completion of a Target Revenue for the period of January 1, 2025 – December 31, 2025 andcontinuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result of aGood Reason;F30MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)During the year ended December 31, 2022 an amount of $283 was recorded in respect of the additional cash consideration.(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the estimates of their fair values, which were determined using generally accepted valuation techniques based on estimates andassumptions made by management at the time of the acquisition.The following table summarizes the fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and cash equivalent36Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Total net assets acquired1,511(c)Acquisitionrelated costsDuring 2022, the Company incurred transaction costs of approximately $75 which were included in general and administrative expenses in theconsolidated statements of income (loss).F31MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)Note 17 – Operating SegmentsDuring the year ended December 31, 2021, the Company had one reportable segment. As a result of the business combinations in the reporting period(see note 13), the Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificialintelligence driven measurement solutions and (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions and. The fashionand equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. Orgad has onecustomer that is responsible for 37.9% of the Company consolidated revenues. The SaaS based innovative artificial intelligence driven measurementsolutions, or SaaS Solutions operating segment consists of My Size Inc and My Size Israel and My Size LLC.Information related to the operations of the Company’s reportable operating segments is set forth below:Fashion andequipment ecommerce platformSaaSSolutionsNaizTotalAs of the year ended December 31, 2022Revenues from external customers4,1322241034,459Operating (loss) income(591)(7,181)(338)(8,110)Financial income (expense), net(236)Net loss before tax(8,346)Fashion andequipment ecommerce platformSaasSolutionNaizAs of December 31, 2022:Assets2,0225,9661,691Amortization of intangible assets(114)(34)(46)The Company elected to present geographic information in respect with revenues generated from external customers based on the location of the selling entity:All the revenues of the fashion and equipment ecommerce platform segment are generated by Orgad, located in Israel.All the revenues of the Naiz segment are generated by Naiz, located in Spain.The revenues of the Saas Solutions segment are generated by My Size Ltd. located in Israel (approximately 75% of the segment revenues) and by My Size Inc.located in the U.S. (approximately 25% of the segment revenues).NOTE 18 SALES AND MARKETINGYear endedDecember 31,20222021Salaries836574Consultants and subcontractors5831,086Marketing481283Selling fees489Share based payments post Orgad acquisition (*)271Share based payments for consultants and employees127180Travel21142Other1451713,1432,336(*) See note 16.NOTE 19 GENERAL AND ADMINISTRATIVE EXPENSESYear endedDecember 31,20222021Salaries1,007461Professional services7051,832Share based payments for consultants, directors and employees18098Rent, office expenses and communication442372Insurance564627cash liability and equity liability expenses related to Orgad acquisition310cash liability expenses related to Naiz acquisition217Settlement fees (*)345Directors8259Other3933303,9004,124(*)See note 15(b)F32MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 20 FINANCIAL INCOME (EXPENSE), NETA.Financial incomeYear endedDecember 31,20222021Revaluation investment in marketable securities49Other26172666B.Financial expenseYear endedDecember 31,20222021Exchange rate differences33Revaluation of loan granted100Revaluation investment in marketable securities62Other6792629NOTE 21 EVENTS SUBSEQUENT TO THE BALANCE SHEET DATEa.On January 2, 2023, Orgad experienced a fire at its warehouse in Israel. The Company is not aware of any casualties or injuries associated with thefire. The Company shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450.The Company believes that this incident did not affect the future sales results of Orgad for the year 2023. The inventory was not insured and it istoo early to determine the potential impact of this incident on the other parties that were involved in the incident (lessor and others that leasedproperties near the warehouse).b.On January 10, 2023, the Company entered into a securities purchase agreement pursuant to which the Company sold an aggregate of 162,000ofthe Company’s shares of common stock and prefunded warrants to purchase up to 278,899shares of common stock and, in a concurrent privateplacement, unregistered warrants to purchase up to883,798 shares of common stock, consisting of Series A warrants to purchase up to 441,899shares of common stock and Series B warrants to purchase up to 441,899shares of common stock, at an offering price of $3.055per share ofcommon stock and associated Series A and Series B warrants and an offering price of $3.054per prefunded warrant and associated Series A andSeries B warrants.In addition, the Company entered into a securities purchase agreement pursuant to which the Company agreed to sell and issue in a privateplacement an aggregate of up to 540,098 unregistered prefunded warrants and unregistered warrants to purchase up to an aggregate of 1,080,196shares of common stock, consisting of Series A warrants to purchase up to 540,098 shares of common stock and Series B warrants to purchase upto 540,098 shares of common stock at an offering price of $3.054 per prefunded warrant and associated Series A and Series B warrants.As of March 31,2023 all the pre funded warrants were exercised by the investor.F33ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSUREThere were no disagreements with accountants on accounting and financial disclosure of a type described in Item 304 (a)(1)(iv) or any reportable event asdescribed in Item 304 (a)(1)(v) of Regulation SK.ITEM 9A. CONTROLS AND PROCEDURESDisclosure ControlsWe carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief FinancialOfficer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) as of December 31, 2022. Basedupon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this Annual Report on Form10K, our disclosure controls and procedures were effective to ensure that information required to be disclosed in reports filed under the Exchange Act, as amended,is recorded, processed, summarized and reported within the required time periods specified in the SEC’s rules and forms and is accumulated and communicated toour management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.Management’s Report on Internal Control Over Financial ReportingOur internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records, that, in reasonable detail,accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only inaccordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition, use or disposition of our assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance withthe policies or procedures may deteriorate.Our management, including our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financialreporting at December 31, 2022. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the TreadwayCommission (COSO) in Internal Control—Integrated Framework (2013). Based on that assessment under those criteria, management has determined that, as ofDecember 31, 2022, our internal control over financial reporting was effective.This Annual Report on Form 10K does not include an attestation report of our registered public accounting firm regarding internal control over financialreporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to the exemption provided to issuersthat are not “large accelerated filers” nor “accelerated filers” under the DoddFrank Wall Street Reform and Consumer Protection Act.Changes in Internal Control Over Financial ReportingDuring the year ended December 31, 2022, we made two acquisitions, as discussed in Note 1a and Note 16 of the audited consolidated financial statementsfor the year ended December 31, 2022 included in this Annual Report on Form 10K. As a result, we made additions and/or modifications to policies, procedures,systems and controls that have materially affected our internal control over financial reporting from the acquisitions, including new controls for consolidationprocess that relates to accounting policies and procedures, operational processes and documentation practices. Management excluded the acquired businessesfrom management’s report on internal control over financial reporting. ITEM 9B. OTHER INFORMATIONNone.ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNot applicable.51PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe following table sets forth the name, age and positions of our executive officers and directors.NAMEAgePOSITIONRonen Luzon52Chief Executive Officer and Class III DirectorOr Kles40Chief Financial OfficerBilly Pardo47Chief Operating Officer and Chief Product OfficerIlia Turchinsky35Chief Technology OfficerEzequiel Javier Brandwain53Chief Commercial OfficerOron Branitzky (1)(2)(3)*63Class II DirectorOren Elmaliah (1)(2)(3)*38Class I DirectorArik Kaufman (1)(2)(3)*41Class I DirectorGuy Zimmerman*53Class II Director(1)Member of our audit committee(2)Member of our nominating and corporate governance committee(3)Member of our compensation committee* Independent as that term is defined by the rules of the Nasdaq Stock Market.The business background and certain other information about our directors and executive officers is set forth below:Ronen Luzon has served as our Chief Executive Officer and a member of our board of directors since September 2013. Since 2006, Mr. Luzon hasadditionally served as Chief Executive Officer and founder of Malers Ltd., a company in the global security solutions market which provides technological solutionsfor integrated communication infrastructures, security and control systems. Prior to Malers, he held several senior marketing, sales management and professionalservices positions in a variety of international high tech companies including VP marketing of GA Tech and Professional Services Manager of Eldat Communication.Mr. Luzon graduated from Middlesex University in London with a B.S. in IT and Business Information Systems. We believe that Mr. Luzon is qualified to serve as amember of our board of directors because of his more than 20 years of experience in the technology sector.Or Kles has served as our Chief Financial Officer since May 2016. He is a certified public accountant with a broad, diverse financial background. From May2013 until April 2016 he served as Assistant Controller of Shikun and BinuiSolel Boneh Infrastructure Ltd. and from December 2010 until May 2013 he served as anAssociate at KPMG. Mr. Kles holds an MBA and a B.A. in Business Management and Accounting (specializing in financing) from The College of ManagementAcademic Studies. Mr. Kles is a certified public accountant in Israel.Billy Pardo has served as our Chief Product Officer since May 2014 and Chief Operating Officer since April 2019. From April 2010 until August 2013, Ms.Pardo served as Senior Director of Product Management of Fourier Education. Among her areas of expertise are launching products from concept to successfuldelivery in various methodologies, including Fourier Education’s awardwinning einstein™ Science Tablet. Prior to that Ms. Pardo served in various productmanagement positions including, Project Manager of Time to Know, Product Marketing Manager of RiT Technologies, Product Manager of Pricer AB and R&DTeam Leader at Pricer AB. Ms. Pardo previously served as Software Engineer at Eldat Communication Ltd., and QA Engineer at NICE Systems. Ms. Pardo receivedan MBA from The Interdisciplinary Center and a B.A. in Computer Science from The Academic College of TelAvivYaffo.Ilia Turchinsky has served as our Chief Technology Officer since April 2019 and from July 2018 until April 2019 as our Director of Technology. Prior tojoining us, from 2013 until 2018, Mr. Turchinsky served in various roles, most recently Chief Technology Officer, at MonkeyTech Ltd., a company that providesdesign, development and characterization of mobile applications. Prior to that, Mr. Turchinsky served in various roles including development course instructor atIQLine, was a founder of Arnavsoft and was a software developer for MintLab and a political party. Mr. Turchinsky holds a B.Sc. from the Ben Gurion University inComputer Science and an M.Sc. from the Open University of Israel in Computer Science.52Ezequiel Javier Brandwain has served as our Chief Commercial Officer since February 2022. Mr. Brandwain brings more than two decades of globalexperience in retail and the fashion industry, mainly in business development, operations, and international markets. Before joining the Company, Mr. Brandwainheld positions of increasing responsibility at several companies, including between June 2017 and November 2020, at 7 For All Mankind International, where heserved as Director, Latin America and Caribbean, managing business development and operations across Latin America and the Caribbean. Before that, betweenMay 2016 and June 2017, Mr. Brandwain served as Chief Business Development Officer at Replay – Fashion Box SPA, where he oversaw business development andoperations, expansion and control in the Americas, the Caribbean, and NorthEast Asia. Prior this role, between September 2015 and May 2016, he served as theReplay’s Managing Director in Latin America and the Caribbean, leading the company’s international expansion in these regions. Prior to that, between April 2015and September 2015, Mr. Brandwain served as Managing Director, Latin America and Caribbean at Authentic Brands Group LLC, where he led that company’soperations, business developments and international expansion within these regions, and served as the direct liaison with the company’s headquarters in New York.Prior to that, between April 2015 and September 2015, Mr. Brandwain served as Chief Operating Officer, Latin America and Caribbean at Flemingo International Ltd.,overseeing operations, as well as projected operations in the travel retail field across these regions. Prior to that, between December 2010 and February 2014, Mr.Brandwain served as Regional Director, Southern Hemisphere at Calvin Klein, where he was responsible for defining and implementing the operational andcommercial strategy for Southern Hemisphere, as well as overseeing the retail, travel retail, concession, and wholesale businesses of the company. During his tenureat Calvin Klein, Mr. Brandwain also served as Travel Retail Director, Latin America, where he built the travel retail business and developed operations. Prior to that,between July 2010 and November 2010, Mr. Brandwain served as Business Director, Latin America and Caribbean at Givenchy Latin America, and between January2010 and June 2010 he served as Commercial Director, Latin America and Caribbean at Nautica Latin America. During December 2004 and December 2009, Mr.Brandwain served as Vice President, International Business Development at Report Collection/Modextil, Inc., where he was in charge of business and operationalexpansion, global growth, and brand extensions. Prior to that, between 2003 and October 2004, Mr. Brandwain served as General Manager at Andrew KoenigInternational, Inc. Between September 2019 and November 2020, Mr. Brandwain served as a member of the Board of Directors of 7 For All Mankind BrazilImportacao, Comercio E Distribuicao S.A. Mr. Brandwain earned a Bachelor degree in architecture from the University of the Republic (Uruguay).Oron Branitzky has served as a member of our board of directors since March 2017. Mr. Barnitzky has vast experience in retail technology. SinceNovember 2017, Mr. Branitzky has served as Global Retail Business Development at Superup, and from January 2007 until December 2014 he served as VicePresident of Sales and Marketing at Pricer AB. Prior to that, Mr. Branitzky has served as VP Marketing and Sales at Eldat Communication and Sarin TechnologiesLtd. Since January 2015, Mr. Branitzky has served as chairman of the board of directors of WiseShelf Ltd. and from May 2015 until March 2016, Mr. Branitzky servedas an advisory board member of ciValue. Mr. Branitzky received a B.S. from the Hebrew University of Jerusalem and an MBA in International Marketing from TelAviv University. We believe that Mr. Branitzky is qualified to serve as a member of our board of directors because of his more than 20 years of experience inmanaging the sales of hitech solutions to retailers across the globe.Oren Elmaliah, has served as a member of our board of directors since May 2017. In September 2015, Oren Elmaliah founded Accounting Team IL and hasacted as Account Manager since then. Accounting Team IL is a financial consultancy and service provider to public companies traded in Israel and abroad. SinceFebruary 2017, Mr. Elmaliah has served as controller of Enlivex Therapeutics Ltd., and since January 2017 he has served as Chief Financial Officer of Presstek Israel.In addition, since September 2015, Mr. Elmaliah has served as an Israel Authorities Reporting Officer of LG Electronics Israel and since September 2015 he hasserved as Local Financial Report Consultant of Chiasma. From July 2011 until August 2015, Mr. Elmaliah served as CPA, Financial Director of CFO Director Ltd andfrom June 2010 until July 2011 he served as Risk Management Consultant of RSM International Limited. Mr. Elmaliah holds a B.A. in Accounting/Economics and aMsc. in Finance/Accounting from Tel Aviv University, Israel. He is a licensed Certified Public Accountant in Israel. We believe that Mr. Elmaliah is qualified to serveas a member of our board of directors because of his vast finance experience and public company management and administration in the fields of finance,accounting, and financial regulation.53Arik Kaufman has served as a member of our board of directors since June 2017. Mr. Kaufman is an attorney specializing in the fields of commercial law,corporate law and capital markets and since 2016 runs his own law office in Israel. He has vast experience in the fields of financial reporting and financial regulation.Mr. Kaufman serves as the Chief Executive Officer of Steakholder Foods since January 2022. From September 2017 until January 2022, Mr. Kaufman served as VPBusiness Development of Mor Research Applications. Mr. Kaufman holds an LLB in Law from the Interdisciplinary Center, Herzliya, and is admitted to the IsraeliBar. We believe that Mr. Kaufman is qualified to serve as a member of our board of directors based upon his experience of assisting with the completion of numerousventure capital financings, mergers, acquisitions, and strategic relationships. In addition, he has served as a member of the board of various publicly tradedcompanies, including companies that operate in the same industry as us.Guy Zimmerman has served as a member of our board of directors since August 2021. Previously, Mr. Zimmerman served as Founder and CEO ofManuFuture, an online b2b engineering market place, since February 2021. Prior to that from 2017 to 2021, Mr. Zimmerman acted as a consultant to severaltechnology startups and was a founding partner of a business travel online platform. From 2013 to 2017, Mr. Zimmerman served as EVP of Marketing and BusinessDevelopment of Kornit Digital and was part of the IPO leadership. Prior to that, Mr. Zimmerman served as VP of Global Sales and Business Development at TefronLtd., a provider of seamless garment technology, where he led the $100m sales and sales support organization serving global retail and fashion brands. Prior to thathe served as Vice President of Strategy and Business Development at Tnuva Group, Israel’s largest food manufacturer and spent eight years at McKinsey &Company. Mr. Zimmerman previously led a software startup in the field of operational healthcare management systems. Mr. Zimmerman holds a B.Sc. in IndustrialEngineering from Tel Aviv University in Israel. We believe that Mr. Zimmerman is qualified to serve as a member of our board of directors because of his experiencein business development in the technology and retail sectors.Board Diversity MatrixThe table below provides certain information regarding the diversity of our board of directors as of the date of this annual report.Board Diversity Matrix (As of March 31, 2023)Total Number of Directors5FemaleMaleNonBinaryDid Not DiscloseGenderPart I: Gender IdentityDirectors#5##Part II: Demographic BackgroundAfrican American or Black####Alaskan Native or Native American####Asian####Hispanic or Latinx####Native Hawaiian or Pacific Islander####White#1##Two or More Races or Ethnicities#2##LGBTQ+0Did Not Disclose Demographic Background2Family RelationshipsRonen Luzon, the Chief Executive Officer and a member of our board of directors, and Billy Pardo, the Chief Product Officer and Chief Operating Officer, arehusband and wife. There are no other family relationships among any of our current or former directors or executive officers.Involvement in Certain Legal ProceedingsWe are not aware of any of our directors or officers being involved in any legal proceedings in the past ten years relating to any matters in bankruptcy,insolvency, criminal proceedings (other than traffic and other minor offenses), or being subject to any of the items set forth under Item 401(f) of Regulation SK.Arrangements between Officers and DirectorsTo our knowledge, there is no arrangement or understanding between any of our officers and any other person, including directors, pursuant to which theofficer was selected to serve as an officer.Board of DirectorsThere are no agreements with respect to the election of directors.On January 6, 2022, we filed with the Secretary of State of Delaware a Certificate of Amendment to our Amended and Restated Certificate of Incorporationproviding for a classified Board. Following filing of the Certificate of Amendment, members of our board are now classified into three classes with staggered threeyear terms (with the exception of the expiration of the initial Class I and Class II directors), as follows:●Class I, comprised of two directors, initially Arik Kaufman and Oren Elmaliah (with their initial terms expiring at our 2022 annual meeting of stockholders andmembers of such class serving successive threeyear terms);●Class II, comprised of two directors, initially Oron Branitzky and Guy Zimmerman (with their initial terms expiring at our 2023 annual meeting of stockholdersand members of such class serving successive threeyear terms); and●Class III, comprised of one director, initially Ronen Luzon (with his initial term expiring at our 2024 annual meeting of stockholders and members of suchclass serving successive threeyear terms).54To preserve the classified Board structure, a director elected by the Board of Directors to fill a vacancy holds office until the next election of the class forwhich such director has been chosen, and until that director’s successor has been elected and qualified or until his or her earlier death, resignation, retirement orremoval.Our board of directors has reviewed the materiality of any relationship that each of our directors has with us, either directly or indirectly. Based upon thisreview, we believe that Arik Kaufman, Oren Elmaliach, Oron Branitzky and Guy Zimmerman qualify as independent directors in accordance with the standards set bythe Nasdaq and Rule 10A3 promulgated under the Exchange Act.Committees of the BoardAudit CommitteeOur audit committee is comprised of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Elmaliah serves as chairman of the audit committee. The auditcommittee is responsible for retaining and overseeing our independent registered public accounting firm, approving the services performed by our independentregistered public accounting firm and reviewing our annual financial statements, accounting policies and our system of internal controls. The audit committee actsunder a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the audit committee’s composition and meetings.The audit committee charter is available on our website www.mysizeid.com.The Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by applicable SEC rules. Inaddition, the Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by the rules of the Nasdaq StockMarket.The Board of Directors has determined that Oren Elmaliah is an “audit committee financial expert” serving on its audit committee, and is independent, as theSEC has defined that term in Item 407 of Regulation SK.Compensation CommitteeOur compensation committee consists of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Branitzky serves as chairman of the compensationcommittee.The compensation committee’s roles and responsibilities include making recommendations to the Board of Directors regarding the compensation for ourexecutives, the role and performance of our executive officers, and appropriate compensation levels for our CEO, which are determined without the CEO present, andother executives. Our compensation committee also administers our 2017 Equity Incentive Plan and our 2017 Consultant Equity Incentive Plan. The compensationcommittee acts under a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the compensation committee’scomposition and meetings. The compensation committee charter is available on our website www.mysizeid.com.Our Board of Directors has determined that all of the members of the compensation committee are “independent” as that term is defined by the rules of theNasdaq Stock Market.Nominating and Corporate Governance CommitteeThe members of the nominating and corporate governance committee are Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Kaufman serves aschairman of the corporate governance and nominations committee. The nominating and corporate governance committee acts under a written charter, which morespecifically sets forth its responsibilities and duties, as well as requirements for the nominating and corporate governance committee’s composition and meetings.The nominating and corporate governance committee charter is available on our website www.mysizeid.com.The nominating and corporate governance committee develops, recommends and oversees implementation of corporate governance principles for us andconsiders recommendations for director nominees. The nominating and corporate governance committee also considers stockholder recommendations for directornominees that are properly received in accordance with applicable rules and regulations of the SEC. Our stockholders that wish to nominate a director for election tothe Board of Directors should follow the procedures set forth in our bylaws.55The nominating and corporate governance committee will consider persons identified by its members, management, stockholders, investment bankers andothers. The guidelines for selecting nominees, which are specified in the nominating committee charter, generally provide that persons to be nominated:●should be accomplished in his or her field and have a reputation, both personal and professional, that is consistent with our image and reputation;●should have relevant experience and expertise and would be able to provide insights and practical wisdom based upon that experience and expertise; and●should be of high moral and ethical character and would be willing to apply sound, objective and independent business judgment, and to assume broadfiduciary responsibility.The nominating and corporate governance committee will consider a number of qualifications relating to management and leadership experience,background and integrity and professionalism in evaluating a person’s candidacy for membership on the Board of Directors. The nominating and corporategovernance committee may require certain skills or attributes, such as financial or accounting experience, to meet specific Board needs that arise from time to timeand will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of Board of Directors members. The nominating andcorporate governance committee will not distinguish among nominees recommended by stockholders and other persons.Our Board of Directors has determined that all of the members of the nominating and corporate governance committee are “independent” as that term isdefined by the rules of the Nasdaq Stock Market.Code of Conduct and EthicsWe have a Code of Business Conduct and Ethics that applies to all our employees. The text of the Code of Business Conduct and Ethics is publiclyavailable on our website at www.mysizeid.com. Information contained on, or that can be accessed through, our website does not constitute a part of this report andis not incorporated by reference herein. Disclosure regarding any amendments to, or waivers from, provisions of the code of conduct and ethics that apply to ourdirectors, principal executive and financial officers will be posted on the “InvestorsCorporate Governance” section of our website at www.mysizeid.com or will beincluded in a Current Report on Form 8K, which we will file within four business days following the date of the amendment or waiver.Change in Procedures for Recommending DirectorsThere have been no material changes to the procedures by which our stockholders may recommend nominees to our Board of Directors from thoseprocedures set forth in our Proxy Statement for our 2021 Annual Meeting of Stockholders, filed with the SEC on December 7, 2022.56ITEM 11. EXECUTIVE COMPENSATIONSummary Compensation TableThe following sets forth the compensation paid by us to our named executive officers, during the years ended December 31, 2022 and December 31, 2021.Name and Principal PositionYearSalary($) (1)Bonus($)StockAwards($)OptionAwards($) (2)All OtherCompensation($)Total($)Ronen Luzon2022173,000223,0008,000126,000530,000Chief Executive Officer2021194,0005,00023,00097,000319,000Or Kles2022123,00053,0007,00071,000254,000Chief Financial Officer2021123,0008,00030,00061,000222,000Billy Pardo2022134,00053,0007,000100,00294,000Chief Operating Officer2021162,0007,00018,00074,000261,000(1) Salary for the years 2022 and 2021 are based on average US$/NIS representative exchange rates of NIS 3.358 and NIS 3.11 respectively.(2) Amounts in this column represent the grant date fair value of options granted to the named executive officers during 2022 and 2021, computed in accordance withFASB ASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the named executive officers. The assumptionsmade in valuing the options reported in this column are discussed in Note 11 to our audited financial statements for the year ended December 31, 2021 and Note 4 toour condensed consolidated interim financial statements for the quarterly period ended September 30, 2022.All Other Compensation TableThe “All Other Compensation” amounts set forth in the Summary Compensation Table above consist of the following:NameYearAutomobileRelatedExpenses($)Manager’sInsurance*($)EducationFund*($)Othersocialbenefits**($)Total($)Ronen Luzon202232,00031,00015,00048,000126,000202133,00033,00015,00016,00097,000Or Kles202215,00021,00010,00025,00071,000202114,00019,0009,00019,00061,000Billy Pardo202216,00025,00013,00046,000100,000202117,00024,00012,00021,00074,000* Manager’s insurance and education funds are customary benefits provided to employees based in Israel. Manager’s insurance is a combination of severancesavings (in accordance with Israeli law), defined contribution taxqualified pension savings and disability insurance premiums. An education fund is a savings fundof pretax contributions to be used after a specified period of time for educational or other permitted purposes.** Other social benefits for 2022 and 2021 for all named individuals includes tax payments in respect of social benefits.57Agreements with Named Executive OfficersRonen LuzonOn November 18, 2018, My Size Israel, our wholly owned subsidiary, entered into an employment agreement with Ronen Luzon, or the Luzon EmploymentAgreement, pursuant to which Mr. Luzon will serve as our Chief Executive Officer. Pursuant to the terms of the Luzon Employment Agreement, Mr. Luzon receivesNIS 55,000 per month as his base salary and shall be eligible to receive such bonus as determined by us. In addition, Mr. Luzon shall be entitled social benefits andto other benefits, including, but not limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, includinginsurance in case of disability, annual vacation days, sick leave and expense reimbursement. Pursuant to the terms of the Luzon Employment Agreement and subjectto certain conditions, payments made by the Company to the pension fund or manager’s insurance fund shall be made in lieu of severance payments due to Mr.Luzon. The term of the Luzon Employment Agreement shall be effective as of September 1, 2018 and shall continue until such time either party provides writtennotice to the other party at least 75 days in advance of the termination of such agreement. We may also terminate Mr. Luzon’s employment without prior writtennotice (or payment in lieu of such notice) for Cause (as defined in the Luzon Employment Agreement).Or KlesOn November 18, 2018, My Size Israel entered into an employment agreement with Or Kles, or the Kles Employment Agreement, pursuant to which Mr. Kleswill serve as our Chief Financial Officer. Pursuant to the terms of the Kles Employment Agreement, Mr. Kles receives NIS 38,000 per month as his base salary andshall be eligible to receive such bonus as determined by us. In addition, Mr. Kles shall be entitled to social benefits and other benefits, including, but not limited to,contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annual vacation days,sick leave and expense reimbursement. Pursuant to the terms of the Kles Employment Agreement and subject to certain conditions, payments made by us to thepension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Mr. Kles. The term of the Kles Employment Agreement shall beeffective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days in advance of thetermination of such agreement. We may also terminate Mr. Kles’s employment without prior written notice (or payment in lieu of such notice) for Cause (as defined inthe Kles Employment Agreement).Billy PardoOn November 18, 2018, My Size Israel entered into an employment agreement with Billy Pardo, or the Pardo Employment Agreement, pursuant to which Ms.Pardo will serve as our Chief Product Officer. Pursuant to the terms of the Pardo Employment Agreement, Ms. Pardo receives NIS 47,500 per month as her basesalary and shall be eligible to receive such bonus as determined by us. In addition, Ms. Pardo shall be entitled to social benefits and other benefits, including, butnot limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annualvacation days, sick leave and expense reimbursement. Pursuant to the terms of the Pardo Employment Agreement and subject to certain conditions, payments madeby us to the pension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Ms. Pardo. The term of the Pardo EmploymentAgreement shall be effective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days inadvance of the termination of such agreement. We may also terminate Ms. Pardo’s employment without prior written notice (or payment in lieu of such notice) forCause (as defined in the Pardo Employment Agreement).58Outstanding Equity Awards at Fiscal YearEndThe following table provides information regarding options held by each of our named executive officers that were outstanding as of December 31, 2022.Option AwardsStock AwardsName and Principal PositionNumber ofSecuritiesUnderlyingUnexercisedOptionsExercisableNumber ofSecuritiesUnderlyingUnexercisedOptionsUnexercisableOptionExercisePriceOptionExpirationDateEquityincentiveplan awards:Number ofUnearnedShares that HaveNot VestedEquityincentiveplan awards:Market Value ofUnearnedShares, That Have Not VestedRonen Luzon Chief Executive Officer400(1)$26(8)7/24/20231,601(2)$26(8)5/29/20256,400(3)$268/10/2025100,000(9)100,000$511,250Or Kles – Chief Financial Officer227(4)$26(8)7/24/2023427(5)$26(8)5/29/20255,200(6)$268/10/202524,000(10)24,000$122,700Billy Pardo Chief Operating Officer400(1)$26(8)7/24/2023894(7)$26(8)5/29/20255,200(6)$268/10/202524,000(11)24,000$122,700(1) The option has a grant date of July 24, 2017 and vested in full on January 24, 2018.(2) The option has a grant date of May 29, 2019. 267 options vested immediately upon grant, 445 options vested on January 24, 2019, 445 options vested on January24, 2020 and 444 options vested on January 24, 2021.(3) The option has a grant date of October 8, 2020, 1,600 options vested on November 26, 2020, 1,600 options vested on May 26, 2021, 1,600 options vested onNovember 26, 2021, and 1,600 options vested on May 26, 2022.(4) The option has a grant date of July 24, 2017. 76 options vested immediately upon grant, 76 options vested on May 1, 2018 and 75 options vested on May 1, 2019.(5) The option has a grant date of May 29, 2019. 160 options vested immediately upon grant, 445 options vested on May 1, 2020, 445 options vested on May 21, 2021and 444 options vested on May 1, 2022.(6) The option has a grant date of October 8, 2020, 1,300 options vested on November 26, 2020, 1,300 options vested on May 26, 2021, 1,300 options vested onNovember 26, 2021, and 1,300 options vested on May 26, 2022.(7) The option has a grant date of May 29, 2019. 214 options vested immediately upon grant, 227 options vested on January 24, 2019, 227 options vested on January24, 2020 and 226 options vested on January 24, 2021.(8) On May 25, 2020, the compensation committee of the Board of Directors of the Company reduced the exercise price of outstanding options of employees anddirectors of the Company for the purchase of an aggregate of 5,610 shares of common stock of the Company (with exercise prices ranging between $453.75 and$228.75) to $26 per share, which was the closing price for the Company’s common stock on May 22, 2020, and extended the term of the foregoing options for anadditional one year from the original date of expiration.(9) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(10) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(11) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.59Director CompensationThe following table sets forth compensation information for our nonemployee directors for the year ended December 31, 2022.NameFees earned orpaid incash ($)(1)Optionawards($)(1)(2)Total($)Oren Elmalih15,078 15,078Oron Barnitzky15,34715,347Arik Kaufman14,44114,441Guy Zimmerman13,03313,033(1)Fees for the year 2022 are based on average US$/NIS representative exchange rates of NIS 3.519.(2)Amounts in this column represent the grant date fair value of options granted to the nonemployee directors during 2022 computed in accordance with FASBASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the nonemployee directors. The assumptions made invaluing the options reported in this column are discussed in Note 11 to our financial statements for the year ended December 31, 2022.We compensate our nonemployee directors for their service as a member of our board. Mr. Luzon received no separate compensation for board service. Mr.Luzon’s compensation is set forth above in the Summary Compensation Table.Each nonemployee director is entitled to receive a per meeting fee of $318. Nonemployee directors are also reimbursed for their travel and reasonable outofpocket expenses incurred in connection with attending board and committee meetings, to the extent that attendance is required by the board or the committee(s)on which that director serves.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurity Ownership of Certain Beneficial Holders and ManagementThe following table sets forth certain information regarding beneficial ownership of shares of our common stock as of March 31, 2023 by (i) each personknown to beneficially own more than 5% of our outstanding common stock, (ii) each of our directors, (iii) each of our executive officers, and (iv) all of our directorsand executive officers as a group. Except as otherwise indicated, the persons named in the table below have sole voting and investment power with respect to allshares beneficially owned, subject to community property laws, where applicable.Beneficial Owner(1)Shares ofCommon StockBeneficiallyOwnedPercentage(2)Executive officers and directors:Ronen Luzon143,578(3)5.8%Or Kles29,854(4)1.2%Billy Pardo143,578(5)5.8%Ezequiel Javier Brandwain12,000(6)*Ilia Turchinsky18,313(7)*Arik Kaufman1,294(8)*Oren Elmaliah1,294(9)*Oron Branitzky1,294(10)*Guy ZimmermanAll Executive Officers and Directors as a Group (9 persons)207,6268.4%*Less than 1%(1) The address of each person is c/o My Size, Inc., 4 HaYarden St., P.O.B. 1026, Airport City, Israel 7010000 unless otherwise indicated herein.60(2) The calculation in this column is based upon 2,446,780 shares of common stock outstanding on March 31, 2023. Beneficial ownership is determined in accordancewith the rules of the SEC and generally includes voting or investment power with respect to the subject securities. Shares of common stock that are currentlyexercisable or exercisable within 60 days of March 31, 2023 are deemed to be beneficially owned by the person holding such securities for the purpose of computingthe percentage beneficial ownership of such person, but are not treated as outstanding for the purpose of computing the percentage beneficial ownership of anyother person(3) Consists of (i) 100,000 shares of restricted stock granted under the 2017 Plan, (ii) 4,683 shares of common stock, (iii) options to purchase up to 8,401 shares of ourcommon stock, and (iv) 24,000 shares of restricted stock and options to purchase up to 6,494 shares of our common stock which are held by Billy Pardo, RonenLuzon’s spouse. Mr. Luzon may be deemed to beneficially hold the securities of us held by Ms. Pardo.(4) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, and (ii) an option to purchase 5,854 shares of our common stock. Does not includean aggregate of 119,760 shares of restricted stock over which Mr. Kles has been designated the initial proxy to vote such shares pursuant to a voting agreemententered into between Whitehole S.L., Twinbel S.L. and EGI Acceleration, S.L.(5) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, (ii) options to purchase up to 6,494 shares of our common stock, (iii) 100,000 sharesof restricted stock which are held by Ronen Luzon, Billy Pardo’s spouse (iii) 8,401 shares of common stock which are held by Mr. Luzon, and (iii) options to purchaseup to 4,683 shares of our common stock which are held by Mr. Luzon. Ms. Pardo may be deemed to beneficially hold the securities of the Company held by Mr.Luzon.(6) Consists of 12,000 shares of restricted stock granted under the 2017 Plan.(7) Consists of (i) 16,000 shares of restricted stock granted under the 2017 Plan, and (ii) options to purchase up to 2,313 shares of our common stock.(8) Consists of options to purchase up to 1,294 shares of our common stock.(9) Consists of options to purchase up to 1,294 shares of our common stock.(10) Consists of options to purchase up to 1,294 shares of our common stock.Change in ControlWe are not aware of any arrangement that might result in a change in control in the future. We have no knowledge of any arrangements, including anypledge by any person of our securities, the operation of which may at a subsequent date result in a change in the Company’s control.Securities Authorized for Issuance Under Equity Compensation PlansOn January 29, 2017, our Board of Directors approved the 2017 Equity Incentive Plan and the 2017 Consultant Equity Incentive Plan, which were approvedby our stockholders on March 21, 2017. In addition, on January 29, 2017, our Board of Directors approved the Stock Option Plan Israel Grantees SubPlan. The 2017Equity Incentive Plan initially authorized the issuance of up to 5,334 shares of common stock under the plan and the 2017 Consultant Equity Incentive Plan initiallyauthorized the issuance of up to 8,000 shares of common stock under the plan.On February 12, 2018, our stockholders approved an amendment to the 2017 Consultant Equity Incentive Plan to increase the maximum number of shares ofour common stock available for issuance under the plan from 8,000 to 12,000. On July 3, 2018, our stockholders approved an amendment to the 2017 Equity IncentivePlan to increase the maximum number of shares of our common stock available for issuance under the plan from 5,334 to 8,000 and an amendment to the 2017Consultant Equity Incentive Plan to increase the maximum number of shares of our common stock available for issuance under the plan from 12,000 to 18,667.On May 25, 2020, our Board reduced the exercise price of outstanding options of our employees and directors for the purchase of an aggregate of 140,237of our common stock (with exercise prices ranging between $453.75 and $228.75) to $26.0 per share, and extended the term of the foregoing options for an additionalone year from the original date of expiration.61On August 10, 2020, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 80,000 to 58,000shares, and a decrease of the numbers of shares available for issuance under the 2017 Consultant Incentive Plan to 8,667 shares from 18,667 shares.On December 30, 2021, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 58,000 sharesto 230,800 shares.On December 7, 2022, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Plan from 230,800 shares to 289,000shares.The following table summarizes information about our equity compensation plans and individual compensation arrangements as of December 31, 2022.Number of securities to be issued upon exercise of outstanding options, warrants and rights(a)Weighted average exercise price of outstandingoptions, warrants and rights (b)Number of securities remaining availablefor future issuanceunder equity compensationplans (excludingsecurities reflected in column (a) (c)Equity compensation plans approved by security holders43,49724.7477,455Equity compensation plans not approved by security holdersTotal43,49724.7477,455ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEDuring years ended December 31, 2022 and 2021, except for compensation arrangements described elsewhere herein and the transactions described below,we did not participate in any transaction, and we are not currently participating in any proposed transaction, or series of transactions, in which the amount involvedexceeded the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years, and in which, to our knowledge,any of our directors, officers, five percent beneficial security holders, or any member of the immediate family of the foregoing persons had, or will have, a direct orindirect material interest.Compensation arrangements for our named executive officers and directors are described in the section entitled “Executive Compensation.”Employment AgreementsWe have entered into written employment agreements with each of our executive officers. These agreements generally provide for notice periods of varyingduration for termination of the agreement by us or by the relevant executive officer, during which time the executive officer will continue to receive base salary andbenefits. We have also entered into customary noncompetition, confidentiality of information and ownership of inventions arrangements with our executiveofficers. However, the enforceability of the noncompetition provisions may be limited under applicable law.OptionsSince our inception we have granted options to purchase our common stock to our officers and directors. Such option agreements may contain accelerationprovisions upon certain merger, acquisition, or change of control transactions.62Restricted Stock GrantsOn September 29, 2022, our compensation committee approved grants of restricted share awards under our 2017 Plan to Ronen Luzon, Or Kles, Billy Pardo,Ilia Turchinsky and Ezequiel Javier Brandwain, pursuant to which they were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000restricted shares and 12,000 restricted shares, respectively. The restricted shares shall vest in three equal installments on January 1, 2023, January 1, 2024 andJanuary 1, 2025, conditioned upon continuous employment with us, and subject to accelerated vesting upon a change in control of the Company.Shareholder ActivismIn May 2021, we received notice from Custodian Ventures, LLC, or Custodian, of its intention to nominate four candidates to stand for election to our Boardof Directors at our 2021 annual meeting of stockholders. Custodian subsequently made a book and records request and has made public statements calling forchanges to our management.On September 22, 2021, Custodian, commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v. Mysize,Inc., C.A. No. 20210817LWW, or the Delaware Action. In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting. As further described below, on November 4, 2021, we entered into asettlement agreement, or the Settlement Agreement, with Custodian, Activist Investing LLC, David Aboudi, Partick Loney and David Natan, collectively, the LazarParties, settling and dismissing the Delaware Action.On October 19, 2021, we commenced an action in the United States District Court for the Southern District of New York captioned My Size, Inc. v. DavidLazar, Custodian Ventures LLC, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, Civil Action No, 1:21cv08585, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, andcertain rules promulgated thereunder, or the SDNY Action. The complaint sought, among other things, declaratory and injunctive relief related to defendants’ effortsto nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed “group” for purposes ofSection 13 (d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. In addition, the complaint alleged that thedefendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules in connection with their efforts to elect a slate of directorsto our Board of Directors. On October 20, 2021, the Court signed an order granting a hearing on an anticipated motion for a preliminary injunction and expeditedscheduling and discovery in aid thereof, and scheduled that hearing for December 2, 2021. As further described below, on November 4, 2021, we entered into theSettlement Agreement with the Lazar Parties settling and dismissing the claims asserted in the SDNY Action and the Delaware Action against one another. OnNovember 8, 2021, the remaining defendants in the SDNY Action filed and answer and counterclaim asserting a claim against us pursuant to New York Civil RightsLaw Section 70a, also known as New York’s antiSLAPP statute.On November 4, 2021, we entered into the Settlement Agreement, or the Lazar Settlement Agreement, with the Lazar Parties. Pursuant to the LazarSettlement Agreement, we and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the LazarSettlement Agreement, we reimbursed Custodian for out of pocket expenses and in consideration for the dismissal and release of claims against the Company anaggregate amount equal to $275,000. With respect to our 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) itsMay 12, 2021 notice of stockholder nominations of four director candidates with respect to our 2021 annual meeting of stockholders, (ii) the notice dated October 28,2021 submitted by Custodian to us notifying us of Custodian’s continued intent to bring its nomination of four director candidates before our stockholders at the2021 annual meeting, and (iii) any and all related materials and notices submitted to us in connection therewith or related thereto and to not take any further action inconnection with the solicitation of any proxies in connection with us. Custodian also agreed to cease any and all solicitation and other activities in connection withthe 2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effective date of theAgreement, or the Standstill Period. The Lazar Settlement Agreement also provides that during the Standstill Period, the Lazar Parties will vote all shares of ourcommon stock it beneficially owns in accordance with any proposal or recommendation made by us or our Board of Directors that is submitted to our stockholders,unless to do so would violate applicable law and except with respect to certain extraordinary transactions. The Lazar Settlement Agreement also contains nondisparagement and confidentiality provisions, subject to certain exceptions.63On December 9, 2021, we subsequently entered into a Settlement Agreement, or the Ault Settlement Agreement, with Milton C. Ault III, Ault Alpha LP, AultAlpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed to withdraw the SDNY Action against the AultParties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that action against the Company. In addition, pursuant to the SettlementAgreement, we paid $70,000 to the Ault Parties in consideration for the releases and other good and valuable consideration as set forth in the Ault SettlementAgreement.Naiz Bespoke Technologies AcquisitionOn October 7, 2022, we entered into the Naiz Agreement with the Naiz Sellers, pursuant to which the Naiz Sellers agreed to sell to us all of the issued andoutstanding equity of Naiz. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) ) the Naiz EquityConsideration and (ii) up the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the Equity Value Averaging Period) is less than $1,650,000, My Size shall pay the Shortfall Value to the Naiz Sellers within 45days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period, it wasdetermined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement)).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers will be subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into the LockUp Agreement with My Size, (ii) Whitehole, Twinbel and EGIentered into the Voting Agreement with My Size and (iii) each of the Key Persons entered into employment agreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonth period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonth “dribbleout” provisionthat provides following the expiration of the initial sixmonth lockup period, without My Size’s prior written consent (which My Size shall be permitted to withholdat its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than the average dailytrading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.64The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Indemnification Agreements and Directors’ and Officers’ Liability InsuranceWe have entered into indemnification agreements with each of our directors and executive officers. These agreements, among other things, require us toindemnify these individuals and, in certain cases, affiliates of such individuals, to the fullest extent permitted by Delaware law against liabilities that may arise byreason of their service to us or at our direction, and to advance expenses incurred as a result of any proceedings against them as to which they could beindemnified. We also maintain an insurance policy that insures our directors and officers against certain liabilities, including liabilities arising under applicablesecurities laws.Director IndependenceSee “Item 10. Directors, Executive Officers and Corporate Governance; Corporate Governance, Board Composition” above for a discussion regarding theindependence of the members of our board of directors.ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICESSomekh Chaikin, a member firm of KPMG International, located in Tel Aviv, Israel, PCAOB ID 1057, has served as our independent registered publicaccounting firm for 2022 and 2021. The following are Somekh Chaikin’s fees for professional services in each of the respective fiscal years:Fee Category20222021Audit Fees198,910298,300Tax Fees30,66729,300Auditrelated Fees18,000Total Fees247,577327,600Audit Fees:Audit Fees consist of fees billed for professional services performed by Somekh Chaikin for the audit of our annual financial statements, thereview of interim consolidated financial statements, and related services that are normally provided in connection with registration statements, including theregistration statement for S1 and S3.Tax Fees: Tax Fees may consist of fees for professional services, including tax and VAT consulting and compliance performed by an independent registeredpublic accounting provided during the period.PreApproval Policies and ProceduresIn accordance with the SarbanesOxley Act of 2002, as amended, our audit committee charter requires the audit committee to preapprove all audit andpermitted nonaudit services provided by our independent registered public accounting firm, including the review and approval in advance of our independentregistered public accounting firm’s annual engagement letter and the proposed fees contained therein. The audit committee has the ability to delegate the authorityto preapprove nonaudit services to one or more designated members of the audit committee. If such authority is delegated, such delegated members of the auditcommittee must report to the full audit committee at the next audit committee meeting all items preapproved by such delegated members. In the fiscal years endedDecember 31, 2022 and December 31, 2021 all of the services performed by our independent registered public accounting firm were preapproved by the auditcommittee.65PART IVITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES(a)Financial StatementsThe financial statements required by this Item are included beginning at page F1.(b)ExhibitsSee Exhibit IndexITEM 16. FORM 10K SUMMARYNot applicableEXHIBIT INDEXExhibitNumberDescription3.1Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Form on Form8K filed on March 23, 2017)3.2Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10K filed onMarch 4, 2016)3.3Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’s Current Report onForm 8K filed on February 20, 2018)3.4Second Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8K filedon April 24, 2018)3.5Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’sCurrent Report on Form 8K filed on November 18, 2019)3.6Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on January 7, 2022)3.7Amendment No. 1 to Second Amended and Restated ByLaws (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8K filed on January 7, 2022)3.8Certificate of Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on December 7, 2022)4.1Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S3/A filed onNovember 14, 2016)4.2Form of Warrant to Purchase Common Stock issued on February 2, 2018 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report onForm 10K filed on March 27, 2019)4.3Description of Securities Registered under Section 12 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report on Form 10K filedon March 19, 2020)4.4Form of Warrant (incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S1, Amendment No. 1, filed with the SECon May 5, 2020.)4.5Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)4.6Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.1My Size, Inc. 2017 Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement on Schedule DEF 14Afiled on March 2, 2017)10.2My Size, Inc. 2017 Consultant Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement onSchedule DEF 14A filed on March 2, 2017)10.3My Size, Inc. 2017 Stock Option Plan Israel Grantees SubPlan (incorporated by reference to Exhibit 10.3 to the Company’s Annual Report on Form10K filed on March 27, 2019)6610.4Purchase Agreement between My Size, Inc. and Shoshana Zigdon dated as of February 16, 2014 (incorporated by reference to Exhibit 10.2 to theCompany’s Annual Report on Form 10K filed on March 4, 2016)10.5 +Employment Agreement between My Size Israel 2014 Ltd. and Ronen Luzon dated November 18, 2018 (incorporated by reference to Exhibit 10.1 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.6 +Employment Agreement between My Size Israel 2014 Ltd. and Or Kles dated November 18, 2018 (incorporated by reference to Exhibit 10.2 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.7 +Employment Agreement between My Size Israel 2014 Ltd. and Billy Pardo dated November 18, 2018 (incorporated by reference to Exhibit 10.3 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.8Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on January 15,2020)10.9Form of Warrant (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.10Form of Placement Agent Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.11Securities Purchase Agreement (incorporated by reference to Exhibit 10.30 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.12Underwriting Agreement, dated January 5, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on January 7, 2021)10.13Underwriting Agreement, dated March 22, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on March 25, 2021)10.14Amendment to Purchase Agreement between My Size Israel 2014 Ltd., My Size, Inc. and Shoshana Zigdon (incorporated by reference to Exhibit 10.1to the Company’s Quarterly Report on Form 10Q on August 16, 2021)10.15Form of Registered Direct Offering Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.16Form of PIPE Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.17Form of Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.18Form of Placement Agent Warrant issued by the Company on October 28, 2021 (incorporated by reference to Exhibit 10.22 to the Company’s Form S1filed on November 12, 2021)10.19Form of Registration Rights Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.4 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.20Engagement Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference to Exhibit 10.5 to theCompany’s Current Report on Form 8K filed on October 28, 2021)10.21Settlement Agreement dated November 4, 2021, among My Size, Inc., David Lazar and certain of his affiliates (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on November 5, 2021)10.22Share Purchase Agreement dated as of February 7, 2022 between My Size Israel 2014 Ltd. and Amar Guy Shalom and Elad Bretfeld (incorporated byreference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SEC on February 8, 2022)10.23Employment Agreement between My Size Israel 2014 Ltd. and Ezequiel Javier Brandwain dated January 27, 2022 (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on February 1, 2022)10.24Form of Section 102 Capital Gain Restricted Stock Award Agreement under the Company’s 2017 Equity Incentive Plan (incorporated by reference toExhibit 10.1 to the Company’s Quarterly Report on Form 10Q, filed with the SEC on November 14, 2022)10.25Share Purchase Agreement, dated as of October 6, 2022, by and among My Size, Inc., Borja Cembrero Saralegui, Artiz Toree Garcia, Whitehold, S.L.,Twinbel, S.L., and EGI Acceleration, S.L. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SECon October 12, 2022)10.26Form of LockUp Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)10.27Form of Voting Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.3 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)6710.28My Size, Inc. Amendment to the My Size, Inc. 2017 Equity Plan (incorporated by reference to Appendix B to the Company’s definitive proxystatement filed with the SEC on November 4, 2022)10.29Form of Registered Direct Offering Securities Purchase Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.1 to theCompany’s Current Report on Form 8K filed with the SEC on January 12, 2023)10.30Form of PIPE Securities Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8Kfiled with the SEC on January 12, 2023)10.31Form of Registered Direct PreFunded Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.32Form of Series A and Series B Warrant (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8K filed with the SEC onJanuary 12, 2023)10.33Form of Private Placement PreFunded Warrant (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.34Form of Registration Rights Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form8K filed with the SEC on January 12, 2023)10.35Engagement Agreement, dated December 5, 2022 (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8K filed withthe SEC on January 12, 2023)10.36*Form of Placement Agent Warrant21.1*List of Subsidiaries23.1*Consent of Somekh Chaikin, a member firm of KPMG International, registered public accounting firm31.1*Certification of the Chief Executive Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200231.2*Certification of the Chief Financial Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200232.1*Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a14(b) of the Exchange Act and 18 U.S.C. Section 1350, asadopted pursuant to Section 906 of the SarbanesOxley Act of 2002101.INS*Inline XBRL Instance Document101.SCH*Inline XBRL Taxonomy Schema101.CAL*Inline XBRL Taxonomy Calculation Linkbase101.DEF*Inline XBRL Taxonomy Definition Linkbase101.LAB*Inline XBRL Taxonomy Label Linkbase101.PRE*Inline XBRL Taxonomy Presentation Linkbase104Cover Page Interactive Data File (formatted as Inline XBRL document and contained in Exhibit 101)*Filed herewith.+Indicates a management contract or any compensatory plan, contract or arrangement68SIGNATURESPursuant to the requirements of Section 13 and 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10K to be signed on its behalf by the undersigned, thereunto duly authorized on this 14th day of April, 2023.MY SIZE, INC./s/ Ronen LuzonRonen LuzonChief Executive Officer (Principle Executive Officer)/s/ Or KlesOr KlesChief Financial Officer(Principal Financial and Accounting Officer)Pursuant to the requirements of the Securities Act of 1934, this annual report on Form 10K has been signed below by the following persons on behalf ofthe registrant and in the capacities and on the dates indicated.SignatureTitleDate/s/ Ronen LuzonChief Executive Officer and DirectorApril 14, 2023Ronen Luzon(Principle Executive Officer)/s/ Or KlesChief Financial OfficerApril 14, 2023Or Kles(Principal Financial and Accounting Officer)/s/ Oren ElmaliahDirectorApril 14, 2023Oren Elmaliah/s/ Arik KaufmanDirectorApril 14, 2023Arik Kaufman/s/ Oron BranitzkyDirectorApril 14, 2023Oron Branitzky/s/ Guy ZimmermanDirectorApril 14, 2023Guy Zimmerman69EX10.36 2 ex1036.htmExhibit 10.36NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES ANDEXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THESECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO ANEFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTIONNOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGINACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.PLACEMENT AGENT COMMON STOCK PURCHASE WARRANTMY SIZE, INC.Warrant Shares: _______Issue Date: January 12, 2023Initial Exercise Date: January 12, 2023THIS PLACEMENT AGENT COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _____________ or itsassigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the dateset forth above (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on January 10, 2028 (the “Termination Date”) but not thereafter, tosubscribe for and purchase from My Size, Inc., a Delaware corporation (the “Company”), up to ______ shares (as subject to adjustment hereunder, the “WarrantShares”) of the Company’s Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined inSection 2(b). This Warrant is issued pursuant to that certain engagement letter, dated as of December 5, 2022, by and between the Company and H.C. Wainwright &Co., LLC.Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities PurchaseAgreement (the “Purchase Agreement”), dated January 10, 2023, among the Company and the purchasers signatory thereto.1Section 2. Exercise.a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or afterthe Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted by email (or emailattachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the numberof Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shalldeliver the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on aUnited States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No inkoriginalNotice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required.Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder haspurchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrantto the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercisesof this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering theoutstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder andthe Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver anyobjection to any Notice of Exercise within one (1) Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant,acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, thenumber of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.b) Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $3.8188, subject to adjustment hereunder (the“Exercise Price”).c) Cashless Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein isnot available for the issuance or resale of the Warrant Shares to or by the Holder, then this Warrant may also be exercised, in whole or in part, at such timeby means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing[(AB) (X)] by (A), where:(A) =as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice ofExercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed anddelivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) ofRegulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAPon the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on theprincipal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s execution of the applicable Notice ofExercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hoursthereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii)the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice ofExercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;(B) =the Exercise Price of this Warrant, as adjusted hereunder; and(X) =the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if suchexercise were by means of a cash exercise rather than a cashless exercise.2“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which theCommon Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York Citytime)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest precedingdate) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for theCommon Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the mostrecent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by anindependent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to theCompany, the fees and expenses of which shall be paid by the Company.“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the TradingMarket on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or thenearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and ifprices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reportingprices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock asdetermined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonablyacceptable to the Company, the fees and expenses of which shall be paid by the Company.If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of theSecurities Act, the Warrant Shares shall take on the characteristics of the Warrants being exercised, and the holding period of the Warrant Shares beingissued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section 2(c).3d) Mechanics of Exercise.i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to betransmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with TheDepository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant insuch system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of theWarrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or mannerofsale limitationspursuant to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, registered in theCompany’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitledpursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2)Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate ExercisePrice to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Companyof the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall bedeemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant hasbeen exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (otherthan in the case of a cashless exercise) is received by the Warrant Share Delivery Date. If the Company fails for any reason to deliver tothe Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder,in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP ofthe Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifthTrading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share Delivery Date until such WarrantShares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FASTprogram so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standardsettlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stockas in effect on the date of delivery of the Notice of Exercise.4ii.Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the requestof a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a newWarrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrantshall in all other respects be identical with this Warrant; provided, however, that the Holder shall be required to return any WarrantShares subject to any such rescinded exercise notice concurrently with the return to Holder of the aggregate Exercise Price paid to theCompany for such Warrant Shares and the restoration of Holder’s right to acquire such Warrant Shares pursuant to this Warrant(including, issuance of a replacement warrant certificate evidencing such restored right).iii. Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant toSection 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.iv. Compensation for BuyIn on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights availableto the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with theprovisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date theHolder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwisepurchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipatedreceiving upon such exercise (a “BuyIn”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) theHolder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) theamount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connectionwith the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at theoption of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was nothonored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock thatwould have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holderpurchases Common Stock having a total purchase price of $11,000 to cover a BuyIn with respect to an attempted exercise of shares ofCommon Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediatelypreceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written noticeindicating the amounts payable to the Holder in respect of the BuyIn and, upon request of the Company, evidence of the amount of suchloss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including,without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver sharesof Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.5v. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise ofthis Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Companyshall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by theExercise Price or round up to the next whole share.vi. Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue ortransfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paidby the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by theHolder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, thisWarrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder andthe Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.The Company shall pay all Transfer Agent fees required for sameday processing of any Notice of Exercise and all fees to the DepositoryTrust Company (or another established clearing corporation performing similar functions) required for sameday electronic delivery of theWarrant Shares.vii. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timelyexercise of this Warrant, pursuant to the terms hereof.6e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise anyportion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicableNotice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of theHolder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). Forpurposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Partiesshall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, butshall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrantbeneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion ofany other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exerciseanalogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in thepreceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act andthe rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that suchcalculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed inaccordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (inrelation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisableshall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether thisWarrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of thisWarrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm theaccuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number ofoutstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s mostrecent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recentwritten notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request ofa Holder, the Company shall within one (1) Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock thenoutstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise ofsecurities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number ofoutstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stockoutstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice tothe Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial OwnershipLimitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares ofCommon Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in theBeneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shallbe construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portionhereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplementsnecessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of thisWarrant.7Section 3. Certain Adjustments.a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes adistribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which,for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstandingshares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into asmaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case theExercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any)outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately aftersuch event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of thisWarrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for thedetermination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case ofa subdivision, combination or reclassification.b) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sellsany Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares ofCommon Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregatePurchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise ofthis Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before thedate on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the recordholders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that to the extent that theHolder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall notbe entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Rightto such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not resultin the Holder exceeding the Beneficial Ownership Limitation).c) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend (other than cash) orother distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including,without limitation, any distribution of stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement,scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holdershall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number ofshares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including withoutlimitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken,the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, thatto the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, thenthe Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a resultof such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as itsright thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).8d) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more relatedtransactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease,license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, director indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of CommonStock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more ofthe outstanding Common Stock or 50% or more of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in oneor more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchangepursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly orindirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, withoutlimitation, a reorganization, recapitalization, spinoff, merger or scheme of arrangement) with another Person or group of Persons whereby such otherPerson or group acquires more than 50% of the outstanding shares of Common Stock or 50% or more of the voting power of the common equity of theCompany (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for eachWarrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of theHolder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor oracquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as aresult of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior tosuch Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, thedetermination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of AlternateConsideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Priceamong the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. Ifholders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall begiven the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at theHolder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date ofthe public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cashequal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of suchFundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company’s control, including not approved by theCompany’s Board of Directors, the Holder shall only be entitled to receive from the Company or any Successor Entity the same type or form ofconsideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to theholders of Common Stock of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, stock or anycombination thereof, or whether the holders of Common Stock are given the choice to receive from among alternative forms of consideration in connectionwith the Fundamental Transaction; provided, further, that if holders of Common Stock of the Company are not offered or paid any consideration in suchFundamental Transaction, such holders of Common Stock will be deemed to have received common stock of the Successor Entity (which Entity may be theCompany following such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on theBlackScholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day of consummation of the applicableFundamental Transaction for pricing purposes and reflecting (A) a riskfree interest rate corresponding to the U.S. Treasury rate for a period equal to thetime between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expectedvolatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualizationfactor) as of the Trading Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlyingprice per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any noncashconsideration, if any, being offered in such Fundamental Transaction and (ii) the highest VWAP during the period beginning on the Trading Dayimmediately preceding the public announcement of the applicable contemplated Fundamental Transaction (or the consummation of the applicableFundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant to this Section 3(e) and (D) a remaining option timeequal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date and (E) azero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds (or such other consideration)within the later of (i) five Business Days of the Holder’s election and (ii) the date of consummation of the Fundamental Transaction. The Company shallcause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of theobligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant towritten agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to suchFundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entityevidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares ofcapital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of thisWarrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which appliesthe exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to suchFundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for thepurpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which isreasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall beadded to the term “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction, each andevery provision of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to each of the Company and theSuccessor Entity or Successor Entities, jointly and severally), and the Successor Entity or Successor Entities, jointly and severally with the Company, mayexercise every right and power of the Company prior thereto and the Successor Entity or Successor Entities shall assume all of the obligations of theCompany prior thereto under this Warrant and the other Transaction Documents with the same effect as if the Company and such Successor Entity orSuccessor Entities, jointly and severally, had been named as the Company herein.e) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. Forpurposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the numberof shares of Common Stock (excluding treasury shares, if any) issued and outstanding.9f) Notice to Holder.i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, theCompany shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resultingadjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form)on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C)the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any sharesof capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection withany reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all orsubstantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into othersecurities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of theaffairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as itshall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective datehereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to beentitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification,consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expectedthat holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or otherproperty deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure todeliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to bespecified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, nonpublic informationregarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to aCurrent Report on Form 8K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of suchnotice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.10Section 4. Transfer of Warrant.a) Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and to theprovisions of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights) aretransferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a writtenassignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay anytransfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a newWarrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument ofassignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly becancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unlessthe Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of thedate on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordanceherewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company,together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent orattorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute anddeliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issuedon transfers or exchanges shall be dated the Issue Date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Sharesissuable pursuant thereto.c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “WarrantRegister”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as theabsolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to thecontrary.d) Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrantshall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue skylaws or (ii) eligible for resale without volume or mannerofsale restrictions or current public information requirements pursuant to Rule 144, the Companymay require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, comply with the provisions ofSection 5.7 of the Purchase Agreement.11e) Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon anyexercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling suchWarrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exemptedunder the Securities Act.Section 5. Miscellaneous.a) No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends orother rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Withoutlimiting the rights of a Holder to receive Warrant Shares on a “cashless exercise,” and to receive the cash payments contemplated pursuant to Sections 2(d)(i) and 2(d)(iv), in no event will the Company be required to net cash settle an exercise of this Warrant.a.In July 2019, the Company entered into a threeyear agreement with a consultant (“Consultant14”) to provide services to the Company includingassisting the Company to promote, market and sell the Company’s technology to potential customers. Pursuant to such agreement and in partialconsideration for such consulting services, the Company agreed to issue to Consultant14 options to purchase up to 107 shares of the Company’scommon stock upon execution of the agreement. The options are exercisable at $375.00 per share and shall vest in 3 equal instalments every twelvemonths starting July 2019. Unexercised options shall expire 4 years from the effective date.In addition, the Company agreed to issue to Consultant14 options to purchase up to 890 shares of the Company’s common stock upon executionof the agreement. The options are exercisable at $27.00 per share and shall vest in 4 equal instalments every six months starting September 2020.Unexercised options shall expire 5 years from the effective date.During 2022 and 2021, an amount of $7 and $14 respectively, were recorded by the Company as stockbased equity awards with respect to Consultant14.F24MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The Company’s outstanding options granted to consultants as of December 31, 2022 are as follows:Issuance dateOptions forCommon stockWeightedAverageexercise priceper shareOptionsexercisableExpirationdateFebruary 201815USD528.7515February 2023August 2018December 2018531USD352.38264August 2023 December 2023July 2020107USD375107July 2023SeptemberOctober 20201,488USD27.201,288October 2024 September 2025Total2,1411,674The Company uses the Black Scholes model to measure the fair value of the stock options with the assistance of a third party valuation.No stock options were granted during 2022 to consultants.The fair value of the Company’s stock options granted to nonemployees was calculated using the following weighted average assumptions:20222021GrantsGrantsDividend yield0%Expected volatility125.15%Riskfree interest0.16%Contractual term of up to (years)1.52F25MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Stock Option Plan for employeesIn March 2017, the Company adopted a stock option plan (the “Plan”) pursuant to which the Company’s Board of Directors may grant stock options toofficers and key employees. The total number of options which may be granted to directors, officers, employees under this plan, is limited to 289,000options. Stock options can be granted with an exercise price equal to or less than the stock’s fair market value at the date of grant.The fair value of each option award is estimated on the date of grant using the Binomial optionpricing model that used the weighted averageassumptions in the following table. The risk free rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the timeof grant.2022Grants2021GrantsDividend yield0%0%Expected volatility96.52%98.47%Riskfree interest4.06%0.96%expected life522.27In the years ended December 31, 2022 and 2021, 10,000 and 3,900 options, respectively, were granted.On December 7, 2022, the Company’s stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from230,800 shares to 289,000 shares.On September 29, 2022, the Compensation Committee of the Company approved grants of restricted share awards under the Company’s 2017 EquityIncentive Plan to Ronen Luzon (CEO), Or Kles (CFO), Billy Pardo (COO), Ilia Turchinsky (CTO) and Ezequiel Javier Brandwain (CCO), pursuant towhich were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000 restricted shares and 12,000 restricted shares,respectively. Each restricted share awarded under section 102 Capital Gain Restricted Stock Award Agreement (the “Agreement”). The restrictedshares shall vest in three equal installments on January 1, 2023, January 1, 2024 and January 1, 2025 for Ronen Luzon, Or Kles, Billy Pardo and IliaTurchinsky and on January 27, 2023, January 27, 2024 and January 27, 2025 for Ezequiel Javier Brandwain, conditioned upon continuous employmentwith the Company, and subject to accelerated vesting upon a change in control of the Company.On the same day, the Company granted fiveyears options to purchase up to 10,000 ordinary shares to other employees of the Company at an exerciseprice of $0.21 per share. The options vesting period is over three years in three equal portions from the vesting commencement date.F26MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The total stock option compensation expense in the year ended December 31, 2022 amounted to $448as follows: Research and development expensesamounted to $151, sales and marketing expenses amounted to $119and general and administrative expenses amounted to $178.The total stock option compensation expense in the year ended December 31, 2021 amounted to $252 as follows: Research and development expensesamounted to $94, sales and marketing expenses amounted to $97 and general and administrative expenses amounted to $61.As of December 31, 2022, there was a total of $530 unrecognized compensation cost relating to nonvested sharebased compensation arrangements.That cost is expected to be recognized over a weightedaverage period of 2.0 years.Share option activity during 2022 is as follows:2022Number ofoptionsWeightedaverageexerciseprice US$Outstanding as of January 135,74226.5Granted10,0005.25ExercisedExpired(4,136)Outstanding as of year end41,60622.48Vested as of year end33,20825.17Share option activity during 2021 is as follows:2021Number ofoptionsWeightedaverageExerciseprice US$Outstanding as of January 139,094$26.0Granted3,90032.0Exercised(751)Expired(6,501)Outstanding as of year end35,74226.5Vested as of year end27,06326.5F27MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 15 CONTINGENCIES AND COMMITMENTSa.On August 7, 2018, the Company commenced an action against North Empire LLC (“North Empire”) in the Supreme Court of the State of New York,County of New York for breach of a Securities Purchase Agreement (the “Agreement”) in which it is seeking damages in an amount to bedetermined at trial, but in no event less than $616. On August 2, 2018, North Empire filed a Summons with Notice against the Company, also in thesame Court, in which they allege damages in an amount of $11.4 million arising from an alleged breach of the Agreement. On September 6, 2018North Empire filed a Notice of Discontinuance of the action it had filed on August 2, 2018. On September 27, 2018, North Empire filed an answerand asserted counterclaims in the action commenced by the Company against them, alleging that the Company failed to deliver stock certificatesto North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against theCompany’s CEO and now former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018,the Company filed a reply to North Empire’s counterclaims. On November 15, 2018, the Company’s CEO and now former Chairman of the Boardfiled a motion to dismiss North Empire’s thirdparty complaint. On January 6, 2020, the Court granted the motion and dismissed the thirdpartycomplaint. Discovery has been completed and both parties have filed motions for summary judgment in connection with the claims andcounterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summary judgment, arguing there werefactual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision. The appealmust be fully perfected and filed by July 26, 2022. On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying theCompany’s motion for summary judgment. North Empire will file its opposition papers on or before March 31, 2022, and the Company will file replypapers on April 29, 2022. On or about September 12, 2022, the Court issued its Decision and Order denying the Company’s motion to reargue.North Empire filed its opposing brief on December 7, 2022. Both sides were given an opportunity to file a reply brief. The Company filed our replybrief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. The Appellate Court has scheduled oral argument for the appealfor February 7, 2023. Oral argument was held before the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Courtfiled its Decision and Order, which affirmed the lower court’s decisions regarding both My Size and North Empire’s motions for summary judgmentand sent the case back to the Supreme Court.On or about March 13, 2023, the Supreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date forthe mediation has not yet been set. The Company intends to vigorously defend any claims made by North Empire.The Company believes it is more likely than not that the counterclaims will be denied.b.In May 2021, the Company received notice from Custodian Ventures, LLC (“Custodian”) of its intention to nominate four candidates to stand forelection to our Board of Directors at the Company’s 2021 annual meeting of stockholders. Custodian subsequently made a book and recordsrequest and has made public statements calling for changes to our management.On September 22, 2021, Custodian commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v.MySize, Inc. (the “Delaware Action”). In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting.On October 19, 2021, the Company commenced an action in the United States District Court for the Southern District of New York againstCustodian, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, and certain rulespromulgated thereunder (the “SDNY Action”). The complaint sought, among other things, declaratory and injunctive relief related to defendants’efforts to nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed“group” for purposes of Section 13(d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. Inaddition, the complaint alleged that the defendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules inconnection with their efforts to elect a slate of directors to the Company’s Board of Directors. On October 20, 2021, the Court signed an ordergranting a hearing on an anticipated motion for a preliminary injunction and expedited scheduling and discovery in aid thereof, and scheduled thathearing for December 2, 2021.On November 4, 2021, the Company entered into the Settlement Agreement with the Lazar Parties. Pursuant to the Settlement Agreement, theCompany and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the SettlementAgreement, the Company agreed to reimburse Custodian for out of pocket expenses and in consideration for the dismissal and release of claimsagainst the Company an aggregate amount equal to $275, to be paid within three business days of the effective date of the Settlement Agreement.With respect to the Company’s 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) its May 12,2021 notice of stockholder nominations of four director candidates with respect to the Company’s 2021 annual meeting of stockholders, (ii) thenotice dated October 28, 2021 submitted by Custodian to the Company notifying the Company of Custodian’s continued intent to bring itsnomination of four director candidates before the Company’s stockholders at the 2021 annual meeting, and (iii) any and all related materials andnotices submitted to the Company in connection therewith or related thereto and to not take any further action in connection with the solicitationof any proxies in connection with the Company. Custodian also agreed to cease any and all solicitation and other activities in connection with the2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effectivedate of the Agreement (the “Standstill Period”). The Settlement Agreement also provides that during the Standstill Period, the Lazar Parties willvote all shares of common stock of the Company it beneficially owns in in accordance with any proposal or recommendation made by theCompany or the Board of Directors of the Company that is submitted to the stockholders of the Company, unless to do so would violateapplicable law and except with respect to certain extraordinary transactions. The Settlement Agreement also contains nondisparagement andconfidentiality provisions, subject to certain exceptions.On December 9, 2021, the Company subsequently entered into a Settlement Agreement (the “Ault Settlement Agreement”), with Milton C. Ault III,Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed towithdraw the SDNY Action against the Ault Parties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that actionagainst the Company. In addition, pursuant to the Settlement Agreement, the Company paid $70 to the Ault Parties in consideration for thereleases and other good and valuable consideration as set forth in the Ault Settlement Agreement.c.On July 5, 2021, the Company was served with a legal complaint filed by Fidelity Venture Capital Ltd. and Dror Atzmon in the Magistrate’s Court inTel Aviv for a monetary award in an amount of NIS 1,436,679 (approximately $450) and a declaratory relief. The plaintiffs allege that the Companybreached its contractual obligations to pay them for services allegedly rendered to the Company by the plaintiffs under a certain consultingagreement dated July 2, 2014, in an amount of NIS 819,000 (approximately $256). Additionally, the plaintiffs allege that the Company shouldcompensate them for losses allegedly incurred by them following their investment in the Company’s shares issued under a certain private offering.In the alternative, the plaintiffs move that the court will declare the investment agreement void with full restitution of plaintiffs’ original investmentin an amount of NIS 1,329,650(approximately $415). The Company filed its statement of defense on October 25, 2021. The first preliminary courthearing of the case is scheduled for January 23, 2022.The first court preliminary hearing was held on March 1, 2022.Following the first preliminary hearing and the Court’s comments and recommendation, the Plaintiffs filed a motion to strike out the claim withoutprejudice.On March 8, 2022 the Court ordered dismissal without prejudice of the claim.F28MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATIONAcquisition of OrgadOn February 7, 2022, the Company acquired 100% of the shares and voting interests in Orgad an omnichannel ecommerce platform. The acquisitionwas designed to create an additional revenue stream for the Company by becoming a direct ecommerce seller while leveraging the synergies betweenMySizeID and Orgad’s ecommerce platform.Unaudited proforma informationThe results of operations of Orgad have been included in the consolidated financial statements since the acquisition date of February 7, 2022. Orgadrevenues included in the Company’s consolidated statement of operations from February 7, 2022 through December 31, 2022 were $4,132. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,662 and $2,850 respectively, and the net loss after tax would have been $8,519 and $10,149 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash (*)300Issuance of shares of common stock (69,752 shares) (**)457Total consideration transferred757(*)The cash payment is subject to working capital adjustments.(**)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Orgad, on the twoyear and the threeyear anniversary of the closing, $350in each ofthese years provided that in the case of the second and third instalments certain revenue targets are met and subject further to certain downward postclosing adjustment. Furthermore, 69,752shares of common stock will be issued in eight equal quarterly instalments until the lapse of two years fromclosing. Additional earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023 will also be paid. All of these payments aresubject to the former owners being actively engaged with Orgad at the date such payment is due, and therefore were not taken as part of theconsideration for the business combination.During the year ended December 31, 2022 an amount of $456and $319was recorded in respect of the cash instalments and in respect of stocksissuance, respectively in Cost Of Goods, Sales and Marketing and General and Administrative expenses as shown in the following table:2022Stockbased compensation expense – Cost of goods194Stockbased compensation expense Sales and marketing271Stockbased compensation expense General and administrative310775(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the preliminary estimates of their fair values, which were determined using generally accepted valuation techniques based onestimates and assumptions made by management at the time of the acquisition. Such estimates are subject to change during the measurement periodwhich is not expected to exceed one year. The purchase price allocation was not finalized duo to examination of the net working capital of Orgad at theacquisition date. Any adjustments to the preliminary purchase price allocation identified during the measurement period will be recognized in theperiod in which the adjustments are determined.The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and Cash EquivalentTrade receivables364PP&E55Inventory864Longterm financial investment31Selling platform378Goodwill152Shortterm accruals and deferrals(181)Trade payables(668)Long term provision(13)Longterm debt(138)Deferred Taxes(87)Total net assets acquired757F29MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)(c)Acquisitionrelated costsThe Company incurred transaction costs of approximately $40and none during twelvemonth period ended December 31, 2022 which were included ingeneral and administrative expenses in the consolidated statements of income (loss).Acquisition of Naiz Bespoke Technologies, S.L. (“Naiz”)On October 11, 2022, the Company acquired 100% of the shares and voting interests in Naiz a provider of SaaS technology solutions that solve sizeand fit issues for fashion ecommerce companies. The acquisition was designed to allow Naiz’s customers benefit from MySize’s deep understanding ofthe fashion ecommerce retail landscape, while creating an additional revenue stream for the Company.Unaudited proforma informationThe results of operations of Naiz have been included in the consolidated financial statements since the acquisition date of October 11, 2022. Naizrevenues included in the Company’s consolidated statement of operations from October 11, 2022 through December 31, 2022 were $103. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,738 and $379 respectively and the net loss after tax would have been $8,695 and $10,717 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash503Issuance of shares of common stock (240,000 shares) (*)1,008Total consideration transferred1,511(*)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Naiz, additional cash consideration (up to $1,550) in four instalments subject to thefollowing conditions:(i)Continuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result ofa Good Reason; and(ii)Naiz’s Revenues reaching or exceeding the respective Target Revenues defined in the agreement. The revenues will be calculated in four periods:(1) January 1, 2022 – December 31, 2022; (2) January 1, 2023 – June 30, 2023; (3) July 1, 2023 – December 31, 2023; (4) January 1, 2024 – December31, 2024.Former owners of Naiz are entitled to additional cash consideration following December 31, 2025 (up to $1,650) in an event when the actual value of theequity consideration is less than $1,650, subject to completion of a Target Revenue for the period of January 1, 2025 – December 31, 2025 andcontinuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result of aGood Reason;F30MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)During the year ended December 31, 2022 an amount of $283 was recorded in respect of the additional cash consideration.(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the estimates of their fair values, which were determined using generally accepted valuation techniques based on estimates andassumptions made by management at the time of the acquisition.The following table summarizes the fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and cash equivalent36Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Total net assets acquired1,511(c)Acquisitionrelated costsDuring 2022, the Company incurred transaction costs of approximately $75 which were included in general and administrative expenses in theconsolidated statements of income (loss).F31MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)Note 17 – Operating SegmentsDuring the year ended December 31, 2021, the Company had one reportable segment. As a result of the business combinations in the reporting period(see note 13), the Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificialintelligence driven measurement solutions and (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions and. The fashionand equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. Orgad has onecustomer that is responsible for 37.9% of the Company consolidated revenues. The SaaS based innovative artificial intelligence driven measurementsolutions, or SaaS Solutions operating segment consists of My Size Inc and My Size Israel and My Size LLC.Information related to the operations of the Company’s reportable operating segments is set forth below:Fashion andequipment ecommerce platformSaaSSolutionsNaizTotalAs of the year ended December 31, 2022Revenues from external customers4,1322241034,459Operating (loss) income(591)(7,181)(338)(8,110)Financial income (expense), net(236)Net loss before tax(8,346)Fashion andequipment ecommerce platformSaasSolutionNaizAs of December 31, 2022:Assets2,0225,9661,691Amortization of intangible assets(114)(34)(46)The Company elected to present geographic information in respect with revenues generated from external customers based on the location of the selling entity:All the revenues of the fashion and equipment ecommerce platform segment are generated by Orgad, located in Israel.All the revenues of the Naiz segment are generated by Naiz, located in Spain.The revenues of the Saas Solutions segment are generated by My Size Ltd. located in Israel (approximately 75% of the segment revenues) and by My Size Inc.located in the U.S. (approximately 25% of the segment revenues).NOTE 18 SALES AND MARKETINGYear endedDecember 31,20222021Salaries836574Consultants and subcontractors5831,086Marketing481283Selling fees489Share based payments post Orgad acquisition (*)271Share based payments for consultants and employees127180Travel21142Other1451713,1432,336(*) See note 16.NOTE 19 GENERAL AND ADMINISTRATIVE EXPENSESYear endedDecember 31,20222021Salaries1,007461Professional services7051,832Share based payments for consultants, directors and employees18098Rent, office expenses and communication442372Insurance564627cash liability and equity liability expenses related to Orgad acquisition310cash liability expenses related to Naiz acquisition217Settlement fees (*)345Directors8259Other3933303,9004,124(*)See note 15(b)F32MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 20 FINANCIAL INCOME (EXPENSE), NETA.Financial incomeYear endedDecember 31,20222021Revaluation investment in marketable securities49Other26172666B.Financial expenseYear endedDecember 31,20222021Exchange rate differences33Revaluation of loan granted100Revaluation investment in marketable securities62Other6792629NOTE 21 EVENTS SUBSEQUENT TO THE BALANCE SHEET DATEa.On January 2, 2023, Orgad experienced a fire at its warehouse in Israel. The Company is not aware of any casualties or injuries associated with thefire. The Company shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450.The Company believes that this incident did not affect the future sales results of Orgad for the year 2023. The inventory was not insured and it istoo early to determine the potential impact of this incident on the other parties that were involved in the incident (lessor and others that leasedproperties near the warehouse).b.On January 10, 2023, the Company entered into a securities purchase agreement pursuant to which the Company sold an aggregate of 162,000ofthe Company’s shares of common stock and prefunded warrants to purchase up to 278,899shares of common stock and, in a concurrent privateplacement, unregistered warrants to purchase up to883,798 shares of common stock, consisting of Series A warrants to purchase up to 441,899shares of common stock and Series B warrants to purchase up to 441,899shares of common stock, at an offering price of $3.055per share ofcommon stock and associated Series A and Series B warrants and an offering price of $3.054per prefunded warrant and associated Series A andSeries B warrants.In addition, the Company entered into a securities purchase agreement pursuant to which the Company agreed to sell and issue in a privateplacement an aggregate of up to 540,098 unregistered prefunded warrants and unregistered warrants to purchase up to an aggregate of 1,080,196shares of common stock, consisting of Series A warrants to purchase up to 540,098 shares of common stock and Series B warrants to purchase upto 540,098 shares of common stock at an offering price of $3.054 per prefunded warrant and associated Series A and Series B warrants.As of March 31,2023 all the pre funded warrants were exercised by the investor.F33ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSUREThere were no disagreements with accountants on accounting and financial disclosure of a type described in Item 304 (a)(1)(iv) or any reportable event asdescribed in Item 304 (a)(1)(v) of Regulation SK.ITEM 9A. CONTROLS AND PROCEDURESDisclosure ControlsWe carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief FinancialOfficer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) as of December 31, 2022. Basedupon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this Annual Report on Form10K, our disclosure controls and procedures were effective to ensure that information required to be disclosed in reports filed under the Exchange Act, as amended,is recorded, processed, summarized and reported within the required time periods specified in the SEC’s rules and forms and is accumulated and communicated toour management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.Management’s Report on Internal Control Over Financial ReportingOur internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records, that, in reasonable detail,accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only inaccordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition, use or disposition of our assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance withthe policies or procedures may deteriorate.Our management, including our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financialreporting at December 31, 2022. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the TreadwayCommission (COSO) in Internal Control—Integrated Framework (2013). Based on that assessment under those criteria, management has determined that, as ofDecember 31, 2022, our internal control over financial reporting was effective.This Annual Report on Form 10K does not include an attestation report of our registered public accounting firm regarding internal control over financialreporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to the exemption provided to issuersthat are not “large accelerated filers” nor “accelerated filers” under the DoddFrank Wall Street Reform and Consumer Protection Act.Changes in Internal Control Over Financial ReportingDuring the year ended December 31, 2022, we made two acquisitions, as discussed in Note 1a and Note 16 of the audited consolidated financial statementsfor the year ended December 31, 2022 included in this Annual Report on Form 10K. As a result, we made additions and/or modifications to policies, procedures,systems and controls that have materially affected our internal control over financial reporting from the acquisitions, including new controls for consolidationprocess that relates to accounting policies and procedures, operational processes and documentation practices. Management excluded the acquired businessesfrom management’s report on internal control over financial reporting. ITEM 9B. OTHER INFORMATIONNone.ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNot applicable.51PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe following table sets forth the name, age and positions of our executive officers and directors.NAMEAgePOSITIONRonen Luzon52Chief Executive Officer and Class III DirectorOr Kles40Chief Financial OfficerBilly Pardo47Chief Operating Officer and Chief Product OfficerIlia Turchinsky35Chief Technology OfficerEzequiel Javier Brandwain53Chief Commercial OfficerOron Branitzky (1)(2)(3)*63Class II DirectorOren Elmaliah (1)(2)(3)*38Class I DirectorArik Kaufman (1)(2)(3)*41Class I DirectorGuy Zimmerman*53Class II Director(1)Member of our audit committee(2)Member of our nominating and corporate governance committee(3)Member of our compensation committee* Independent as that term is defined by the rules of the Nasdaq Stock Market.The business background and certain other information about our directors and executive officers is set forth below:Ronen Luzon has served as our Chief Executive Officer and a member of our board of directors since September 2013. Since 2006, Mr. Luzon hasadditionally served as Chief Executive Officer and founder of Malers Ltd., a company in the global security solutions market which provides technological solutionsfor integrated communication infrastructures, security and control systems. Prior to Malers, he held several senior marketing, sales management and professionalservices positions in a variety of international high tech companies including VP marketing of GA Tech and Professional Services Manager of Eldat Communication.Mr. Luzon graduated from Middlesex University in London with a B.S. in IT and Business Information Systems. We believe that Mr. Luzon is qualified to serve as amember of our board of directors because of his more than 20 years of experience in the technology sector.Or Kles has served as our Chief Financial Officer since May 2016. He is a certified public accountant with a broad, diverse financial background. From May2013 until April 2016 he served as Assistant Controller of Shikun and BinuiSolel Boneh Infrastructure Ltd. and from December 2010 until May 2013 he served as anAssociate at KPMG. Mr. Kles holds an MBA and a B.A. in Business Management and Accounting (specializing in financing) from The College of ManagementAcademic Studies. Mr. Kles is a certified public accountant in Israel.Billy Pardo has served as our Chief Product Officer since May 2014 and Chief Operating Officer since April 2019. From April 2010 until August 2013, Ms.Pardo served as Senior Director of Product Management of Fourier Education. Among her areas of expertise are launching products from concept to successfuldelivery in various methodologies, including Fourier Education’s awardwinning einstein™ Science Tablet. Prior to that Ms. Pardo served in various productmanagement positions including, Project Manager of Time to Know, Product Marketing Manager of RiT Technologies, Product Manager of Pricer AB and R&DTeam Leader at Pricer AB. Ms. Pardo previously served as Software Engineer at Eldat Communication Ltd., and QA Engineer at NICE Systems. Ms. Pardo receivedan MBA from The Interdisciplinary Center and a B.A. in Computer Science from The Academic College of TelAvivYaffo.Ilia Turchinsky has served as our Chief Technology Officer since April 2019 and from July 2018 until April 2019 as our Director of Technology. Prior tojoining us, from 2013 until 2018, Mr. Turchinsky served in various roles, most recently Chief Technology Officer, at MonkeyTech Ltd., a company that providesdesign, development and characterization of mobile applications. Prior to that, Mr. Turchinsky served in various roles including development course instructor atIQLine, was a founder of Arnavsoft and was a software developer for MintLab and a political party. Mr. Turchinsky holds a B.Sc. from the Ben Gurion University inComputer Science and an M.Sc. from the Open University of Israel in Computer Science.52Ezequiel Javier Brandwain has served as our Chief Commercial Officer since February 2022. Mr. Brandwain brings more than two decades of globalexperience in retail and the fashion industry, mainly in business development, operations, and international markets. Before joining the Company, Mr. Brandwainheld positions of increasing responsibility at several companies, including between June 2017 and November 2020, at 7 For All Mankind International, where heserved as Director, Latin America and Caribbean, managing business development and operations across Latin America and the Caribbean. Before that, betweenMay 2016 and June 2017, Mr. Brandwain served as Chief Business Development Officer at Replay – Fashion Box SPA, where he oversaw business development andoperations, expansion and control in the Americas, the Caribbean, and NorthEast Asia. Prior this role, between September 2015 and May 2016, he served as theReplay’s Managing Director in Latin America and the Caribbean, leading the company’s international expansion in these regions. Prior to that, between April 2015and September 2015, Mr. Brandwain served as Managing Director, Latin America and Caribbean at Authentic Brands Group LLC, where he led that company’soperations, business developments and international expansion within these regions, and served as the direct liaison with the company’s headquarters in New York.Prior to that, between April 2015 and September 2015, Mr. Brandwain served as Chief Operating Officer, Latin America and Caribbean at Flemingo International Ltd.,overseeing operations, as well as projected operations in the travel retail field across these regions. Prior to that, between December 2010 and February 2014, Mr.Brandwain served as Regional Director, Southern Hemisphere at Calvin Klein, where he was responsible for defining and implementing the operational andcommercial strategy for Southern Hemisphere, as well as overseeing the retail, travel retail, concession, and wholesale businesses of the company. During his tenureat Calvin Klein, Mr. Brandwain also served as Travel Retail Director, Latin America, where he built the travel retail business and developed operations. Prior to that,between July 2010 and November 2010, Mr. Brandwain served as Business Director, Latin America and Caribbean at Givenchy Latin America, and between January2010 and June 2010 he served as Commercial Director, Latin America and Caribbean at Nautica Latin America. During December 2004 and December 2009, Mr.Brandwain served as Vice President, International Business Development at Report Collection/Modextil, Inc., where he was in charge of business and operationalexpansion, global growth, and brand extensions. Prior to that, between 2003 and October 2004, Mr. Brandwain served as General Manager at Andrew KoenigInternational, Inc. Between September 2019 and November 2020, Mr. Brandwain served as a member of the Board of Directors of 7 For All Mankind BrazilImportacao, Comercio E Distribuicao S.A. Mr. Brandwain earned a Bachelor degree in architecture from the University of the Republic (Uruguay).Oron Branitzky has served as a member of our board of directors since March 2017. Mr. Barnitzky has vast experience in retail technology. SinceNovember 2017, Mr. Branitzky has served as Global Retail Business Development at Superup, and from January 2007 until December 2014 he served as VicePresident of Sales and Marketing at Pricer AB. Prior to that, Mr. Branitzky has served as VP Marketing and Sales at Eldat Communication and Sarin TechnologiesLtd. Since January 2015, Mr. Branitzky has served as chairman of the board of directors of WiseShelf Ltd. and from May 2015 until March 2016, Mr. Branitzky servedas an advisory board member of ciValue. Mr. Branitzky received a B.S. from the Hebrew University of Jerusalem and an MBA in International Marketing from TelAviv University. We believe that Mr. Branitzky is qualified to serve as a member of our board of directors because of his more than 20 years of experience inmanaging the sales of hitech solutions to retailers across the globe.Oren Elmaliah, has served as a member of our board of directors since May 2017. In September 2015, Oren Elmaliah founded Accounting Team IL and hasacted as Account Manager since then. Accounting Team IL is a financial consultancy and service provider to public companies traded in Israel and abroad. SinceFebruary 2017, Mr. Elmaliah has served as controller of Enlivex Therapeutics Ltd., and since January 2017 he has served as Chief Financial Officer of Presstek Israel.In addition, since September 2015, Mr. Elmaliah has served as an Israel Authorities Reporting Officer of LG Electronics Israel and since September 2015 he hasserved as Local Financial Report Consultant of Chiasma. From July 2011 until August 2015, Mr. Elmaliah served as CPA, Financial Director of CFO Director Ltd andfrom June 2010 until July 2011 he served as Risk Management Consultant of RSM International Limited. Mr. Elmaliah holds a B.A. in Accounting/Economics and aMsc. in Finance/Accounting from Tel Aviv University, Israel. He is a licensed Certified Public Accountant in Israel. We believe that Mr. Elmaliah is qualified to serveas a member of our board of directors because of his vast finance experience and public company management and administration in the fields of finance,accounting, and financial regulation.53Arik Kaufman has served as a member of our board of directors since June 2017. Mr. Kaufman is an attorney specializing in the fields of commercial law,corporate law and capital markets and since 2016 runs his own law office in Israel. He has vast experience in the fields of financial reporting and financial regulation.Mr. Kaufman serves as the Chief Executive Officer of Steakholder Foods since January 2022. From September 2017 until January 2022, Mr. Kaufman served as VPBusiness Development of Mor Research Applications. Mr. Kaufman holds an LLB in Law from the Interdisciplinary Center, Herzliya, and is admitted to the IsraeliBar. We believe that Mr. Kaufman is qualified to serve as a member of our board of directors based upon his experience of assisting with the completion of numerousventure capital financings, mergers, acquisitions, and strategic relationships. In addition, he has served as a member of the board of various publicly tradedcompanies, including companies that operate in the same industry as us.Guy Zimmerman has served as a member of our board of directors since August 2021. Previously, Mr. Zimmerman served as Founder and CEO ofManuFuture, an online b2b engineering market place, since February 2021. Prior to that from 2017 to 2021, Mr. Zimmerman acted as a consultant to severaltechnology startups and was a founding partner of a business travel online platform. From 2013 to 2017, Mr. Zimmerman served as EVP of Marketing and BusinessDevelopment of Kornit Digital and was part of the IPO leadership. Prior to that, Mr. Zimmerman served as VP of Global Sales and Business Development at TefronLtd., a provider of seamless garment technology, where he led the $100m sales and sales support organization serving global retail and fashion brands. Prior to thathe served as Vice President of Strategy and Business Development at Tnuva Group, Israel’s largest food manufacturer and spent eight years at McKinsey &Company. Mr. Zimmerman previously led a software startup in the field of operational healthcare management systems. Mr. Zimmerman holds a B.Sc. in IndustrialEngineering from Tel Aviv University in Israel. We believe that Mr. Zimmerman is qualified to serve as a member of our board of directors because of his experiencein business development in the technology and retail sectors.Board Diversity MatrixThe table below provides certain information regarding the diversity of our board of directors as of the date of this annual report.Board Diversity Matrix (As of March 31, 2023)Total Number of Directors5FemaleMaleNonBinaryDid Not DiscloseGenderPart I: Gender IdentityDirectors#5##Part II: Demographic BackgroundAfrican American or Black####Alaskan Native or Native American####Asian####Hispanic or Latinx####Native Hawaiian or Pacific Islander####White#1##Two or More Races or Ethnicities#2##LGBTQ+0Did Not Disclose Demographic Background2Family RelationshipsRonen Luzon, the Chief Executive Officer and a member of our board of directors, and Billy Pardo, the Chief Product Officer and Chief Operating Officer, arehusband and wife. There are no other family relationships among any of our current or former directors or executive officers.Involvement in Certain Legal ProceedingsWe are not aware of any of our directors or officers being involved in any legal proceedings in the past ten years relating to any matters in bankruptcy,insolvency, criminal proceedings (other than traffic and other minor offenses), or being subject to any of the items set forth under Item 401(f) of Regulation SK.Arrangements between Officers and DirectorsTo our knowledge, there is no arrangement or understanding between any of our officers and any other person, including directors, pursuant to which theofficer was selected to serve as an officer.Board of DirectorsThere are no agreements with respect to the election of directors.On January 6, 2022, we filed with the Secretary of State of Delaware a Certificate of Amendment to our Amended and Restated Certificate of Incorporationproviding for a classified Board. Following filing of the Certificate of Amendment, members of our board are now classified into three classes with staggered threeyear terms (with the exception of the expiration of the initial Class I and Class II directors), as follows:●Class I, comprised of two directors, initially Arik Kaufman and Oren Elmaliah (with their initial terms expiring at our 2022 annual meeting of stockholders andmembers of such class serving successive threeyear terms);●Class II, comprised of two directors, initially Oron Branitzky and Guy Zimmerman (with their initial terms expiring at our 2023 annual meeting of stockholdersand members of such class serving successive threeyear terms); and●Class III, comprised of one director, initially Ronen Luzon (with his initial term expiring at our 2024 annual meeting of stockholders and members of suchclass serving successive threeyear terms).54To preserve the classified Board structure, a director elected by the Board of Directors to fill a vacancy holds office until the next election of the class forwhich such director has been chosen, and until that director’s successor has been elected and qualified or until his or her earlier death, resignation, retirement orremoval.Our board of directors has reviewed the materiality of any relationship that each of our directors has with us, either directly or indirectly. Based upon thisreview, we believe that Arik Kaufman, Oren Elmaliach, Oron Branitzky and Guy Zimmerman qualify as independent directors in accordance with the standards set bythe Nasdaq and Rule 10A3 promulgated under the Exchange Act.Committees of the BoardAudit CommitteeOur audit committee is comprised of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Elmaliah serves as chairman of the audit committee. The auditcommittee is responsible for retaining and overseeing our independent registered public accounting firm, approving the services performed by our independentregistered public accounting firm and reviewing our annual financial statements, accounting policies and our system of internal controls. The audit committee actsunder a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the audit committee’s composition and meetings.The audit committee charter is available on our website www.mysizeid.com.The Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by applicable SEC rules. Inaddition, the Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by the rules of the Nasdaq StockMarket.The Board of Directors has determined that Oren Elmaliah is an “audit committee financial expert” serving on its audit committee, and is independent, as theSEC has defined that term in Item 407 of Regulation SK.Compensation CommitteeOur compensation committee consists of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Branitzky serves as chairman of the compensationcommittee.The compensation committee’s roles and responsibilities include making recommendations to the Board of Directors regarding the compensation for ourexecutives, the role and performance of our executive officers, and appropriate compensation levels for our CEO, which are determined without the CEO present, andother executives. Our compensation committee also administers our 2017 Equity Incentive Plan and our 2017 Consultant Equity Incentive Plan. The compensationcommittee acts under a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the compensation committee’scomposition and meetings. The compensation committee charter is available on our website www.mysizeid.com.Our Board of Directors has determined that all of the members of the compensation committee are “independent” as that term is defined by the rules of theNasdaq Stock Market.Nominating and Corporate Governance CommitteeThe members of the nominating and corporate governance committee are Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Kaufman serves aschairman of the corporate governance and nominations committee. The nominating and corporate governance committee acts under a written charter, which morespecifically sets forth its responsibilities and duties, as well as requirements for the nominating and corporate governance committee’s composition and meetings.The nominating and corporate governance committee charter is available on our website www.mysizeid.com.The nominating and corporate governance committee develops, recommends and oversees implementation of corporate governance principles for us andconsiders recommendations for director nominees. The nominating and corporate governance committee also considers stockholder recommendations for directornominees that are properly received in accordance with applicable rules and regulations of the SEC. Our stockholders that wish to nominate a director for election tothe Board of Directors should follow the procedures set forth in our bylaws.55The nominating and corporate governance committee will consider persons identified by its members, management, stockholders, investment bankers andothers. The guidelines for selecting nominees, which are specified in the nominating committee charter, generally provide that persons to be nominated:●should be accomplished in his or her field and have a reputation, both personal and professional, that is consistent with our image and reputation;●should have relevant experience and expertise and would be able to provide insights and practical wisdom based upon that experience and expertise; and●should be of high moral and ethical character and would be willing to apply sound, objective and independent business judgment, and to assume broadfiduciary responsibility.The nominating and corporate governance committee will consider a number of qualifications relating to management and leadership experience,background and integrity and professionalism in evaluating a person’s candidacy for membership on the Board of Directors. The nominating and corporategovernance committee may require certain skills or attributes, such as financial or accounting experience, to meet specific Board needs that arise from time to timeand will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of Board of Directors members. The nominating andcorporate governance committee will not distinguish among nominees recommended by stockholders and other persons.Our Board of Directors has determined that all of the members of the nominating and corporate governance committee are “independent” as that term isdefined by the rules of the Nasdaq Stock Market.Code of Conduct and EthicsWe have a Code of Business Conduct and Ethics that applies to all our employees. The text of the Code of Business Conduct and Ethics is publiclyavailable on our website at www.mysizeid.com. Information contained on, or that can be accessed through, our website does not constitute a part of this report andis not incorporated by reference herein. Disclosure regarding any amendments to, or waivers from, provisions of the code of conduct and ethics that apply to ourdirectors, principal executive and financial officers will be posted on the “InvestorsCorporate Governance” section of our website at www.mysizeid.com or will beincluded in a Current Report on Form 8K, which we will file within four business days following the date of the amendment or waiver.Change in Procedures for Recommending DirectorsThere have been no material changes to the procedures by which our stockholders may recommend nominees to our Board of Directors from thoseprocedures set forth in our Proxy Statement for our 2021 Annual Meeting of Stockholders, filed with the SEC on December 7, 2022.56ITEM 11. EXECUTIVE COMPENSATIONSummary Compensation TableThe following sets forth the compensation paid by us to our named executive officers, during the years ended December 31, 2022 and December 31, 2021.Name and Principal PositionYearSalary($) (1)Bonus($)StockAwards($)OptionAwards($) (2)All OtherCompensation($)Total($)Ronen Luzon2022173,000223,0008,000126,000530,000Chief Executive Officer2021194,0005,00023,00097,000319,000Or Kles2022123,00053,0007,00071,000254,000Chief Financial Officer2021123,0008,00030,00061,000222,000Billy Pardo2022134,00053,0007,000100,00294,000Chief Operating Officer2021162,0007,00018,00074,000261,000(1) Salary for the years 2022 and 2021 are based on average US$/NIS representative exchange rates of NIS 3.358 and NIS 3.11 respectively.(2) Amounts in this column represent the grant date fair value of options granted to the named executive officers during 2022 and 2021, computed in accordance withFASB ASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the named executive officers. The assumptionsmade in valuing the options reported in this column are discussed in Note 11 to our audited financial statements for the year ended December 31, 2021 and Note 4 toour condensed consolidated interim financial statements for the quarterly period ended September 30, 2022.All Other Compensation TableThe “All Other Compensation” amounts set forth in the Summary Compensation Table above consist of the following:NameYearAutomobileRelatedExpenses($)Manager’sInsurance*($)EducationFund*($)Othersocialbenefits**($)Total($)Ronen Luzon202232,00031,00015,00048,000126,000202133,00033,00015,00016,00097,000Or Kles202215,00021,00010,00025,00071,000202114,00019,0009,00019,00061,000Billy Pardo202216,00025,00013,00046,000100,000202117,00024,00012,00021,00074,000* Manager’s insurance and education funds are customary benefits provided to employees based in Israel. Manager’s insurance is a combination of severancesavings (in accordance with Israeli law), defined contribution taxqualified pension savings and disability insurance premiums. An education fund is a savings fundof pretax contributions to be used after a specified period of time for educational or other permitted purposes.** Other social benefits for 2022 and 2021 for all named individuals includes tax payments in respect of social benefits.57Agreements with Named Executive OfficersRonen LuzonOn November 18, 2018, My Size Israel, our wholly owned subsidiary, entered into an employment agreement with Ronen Luzon, or the Luzon EmploymentAgreement, pursuant to which Mr. Luzon will serve as our Chief Executive Officer. Pursuant to the terms of the Luzon Employment Agreement, Mr. Luzon receivesNIS 55,000 per month as his base salary and shall be eligible to receive such bonus as determined by us. In addition, Mr. Luzon shall be entitled social benefits andto other benefits, including, but not limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, includinginsurance in case of disability, annual vacation days, sick leave and expense reimbursement. Pursuant to the terms of the Luzon Employment Agreement and subjectto certain conditions, payments made by the Company to the pension fund or manager’s insurance fund shall be made in lieu of severance payments due to Mr.Luzon. The term of the Luzon Employment Agreement shall be effective as of September 1, 2018 and shall continue until such time either party provides writtennotice to the other party at least 75 days in advance of the termination of such agreement. We may also terminate Mr. Luzon’s employment without prior writtennotice (or payment in lieu of such notice) for Cause (as defined in the Luzon Employment Agreement).Or KlesOn November 18, 2018, My Size Israel entered into an employment agreement with Or Kles, or the Kles Employment Agreement, pursuant to which Mr. Kleswill serve as our Chief Financial Officer. Pursuant to the terms of the Kles Employment Agreement, Mr. Kles receives NIS 38,000 per month as his base salary andshall be eligible to receive such bonus as determined by us. In addition, Mr. Kles shall be entitled to social benefits and other benefits, including, but not limited to,contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annual vacation days,sick leave and expense reimbursement. Pursuant to the terms of the Kles Employment Agreement and subject to certain conditions, payments made by us to thepension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Mr. Kles. The term of the Kles Employment Agreement shall beeffective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days in advance of thetermination of such agreement. We may also terminate Mr. Kles’s employment without prior written notice (or payment in lieu of such notice) for Cause (as defined inthe Kles Employment Agreement).Billy PardoOn November 18, 2018, My Size Israel entered into an employment agreement with Billy Pardo, or the Pardo Employment Agreement, pursuant to which Ms.Pardo will serve as our Chief Product Officer. Pursuant to the terms of the Pardo Employment Agreement, Ms. Pardo receives NIS 47,500 per month as her basesalary and shall be eligible to receive such bonus as determined by us. In addition, Ms. Pardo shall be entitled to social benefits and other benefits, including, butnot limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annualvacation days, sick leave and expense reimbursement. Pursuant to the terms of the Pardo Employment Agreement and subject to certain conditions, payments madeby us to the pension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Ms. Pardo. The term of the Pardo EmploymentAgreement shall be effective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days inadvance of the termination of such agreement. We may also terminate Ms. Pardo’s employment without prior written notice (or payment in lieu of such notice) forCause (as defined in the Pardo Employment Agreement).58Outstanding Equity Awards at Fiscal YearEndThe following table provides information regarding options held by each of our named executive officers that were outstanding as of December 31, 2022.Option AwardsStock AwardsName and Principal PositionNumber ofSecuritiesUnderlyingUnexercisedOptionsExercisableNumber ofSecuritiesUnderlyingUnexercisedOptionsUnexercisableOptionExercisePriceOptionExpirationDateEquityincentiveplan awards:Number ofUnearnedShares that HaveNot VestedEquityincentiveplan awards:Market Value ofUnearnedShares, That Have Not VestedRonen Luzon Chief Executive Officer400(1)$26(8)7/24/20231,601(2)$26(8)5/29/20256,400(3)$268/10/2025100,000(9)100,000$511,250Or Kles – Chief Financial Officer227(4)$26(8)7/24/2023427(5)$26(8)5/29/20255,200(6)$268/10/202524,000(10)24,000$122,700Billy Pardo Chief Operating Officer400(1)$26(8)7/24/2023894(7)$26(8)5/29/20255,200(6)$268/10/202524,000(11)24,000$122,700(1) The option has a grant date of July 24, 2017 and vested in full on January 24, 2018.(2) The option has a grant date of May 29, 2019. 267 options vested immediately upon grant, 445 options vested on January 24, 2019, 445 options vested on January24, 2020 and 444 options vested on January 24, 2021.(3) The option has a grant date of October 8, 2020, 1,600 options vested on November 26, 2020, 1,600 options vested on May 26, 2021, 1,600 options vested onNovember 26, 2021, and 1,600 options vested on May 26, 2022.(4) The option has a grant date of July 24, 2017. 76 options vested immediately upon grant, 76 options vested on May 1, 2018 and 75 options vested on May 1, 2019.(5) The option has a grant date of May 29, 2019. 160 options vested immediately upon grant, 445 options vested on May 1, 2020, 445 options vested on May 21, 2021and 444 options vested on May 1, 2022.(6) The option has a grant date of October 8, 2020, 1,300 options vested on November 26, 2020, 1,300 options vested on May 26, 2021, 1,300 options vested onNovember 26, 2021, and 1,300 options vested on May 26, 2022.(7) The option has a grant date of May 29, 2019. 214 options vested immediately upon grant, 227 options vested on January 24, 2019, 227 options vested on January24, 2020 and 226 options vested on January 24, 2021.(8) On May 25, 2020, the compensation committee of the Board of Directors of the Company reduced the exercise price of outstanding options of employees anddirectors of the Company for the purchase of an aggregate of 5,610 shares of common stock of the Company (with exercise prices ranging between $453.75 and$228.75) to $26 per share, which was the closing price for the Company’s common stock on May 22, 2020, and extended the term of the foregoing options for anadditional one year from the original date of expiration.(9) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(10) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(11) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.59Director CompensationThe following table sets forth compensation information for our nonemployee directors for the year ended December 31, 2022.NameFees earned orpaid incash ($)(1)Optionawards($)(1)(2)Total($)Oren Elmalih15,078 15,078Oron Barnitzky15,34715,347Arik Kaufman14,44114,441Guy Zimmerman13,03313,033(1)Fees for the year 2022 are based on average US$/NIS representative exchange rates of NIS 3.519.(2)Amounts in this column represent the grant date fair value of options granted to the nonemployee directors during 2022 computed in accordance with FASBASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the nonemployee directors. The assumptions made invaluing the options reported in this column are discussed in Note 11 to our financial statements for the year ended December 31, 2022.We compensate our nonemployee directors for their service as a member of our board. Mr. Luzon received no separate compensation for board service. Mr.Luzon’s compensation is set forth above in the Summary Compensation Table.Each nonemployee director is entitled to receive a per meeting fee of $318. Nonemployee directors are also reimbursed for their travel and reasonable outofpocket expenses incurred in connection with attending board and committee meetings, to the extent that attendance is required by the board or the committee(s)on which that director serves.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurity Ownership of Certain Beneficial Holders and ManagementThe following table sets forth certain information regarding beneficial ownership of shares of our common stock as of March 31, 2023 by (i) each personknown to beneficially own more than 5% of our outstanding common stock, (ii) each of our directors, (iii) each of our executive officers, and (iv) all of our directorsand executive officers as a group. Except as otherwise indicated, the persons named in the table below have sole voting and investment power with respect to allshares beneficially owned, subject to community property laws, where applicable.Beneficial Owner(1)Shares ofCommon StockBeneficiallyOwnedPercentage(2)Executive officers and directors:Ronen Luzon143,578(3)5.8%Or Kles29,854(4)1.2%Billy Pardo143,578(5)5.8%Ezequiel Javier Brandwain12,000(6)*Ilia Turchinsky18,313(7)*Arik Kaufman1,294(8)*Oren Elmaliah1,294(9)*Oron Branitzky1,294(10)*Guy ZimmermanAll Executive Officers and Directors as a Group (9 persons)207,6268.4%*Less than 1%(1) The address of each person is c/o My Size, Inc., 4 HaYarden St., P.O.B. 1026, Airport City, Israel 7010000 unless otherwise indicated herein.60(2) The calculation in this column is based upon 2,446,780 shares of common stock outstanding on March 31, 2023. Beneficial ownership is determined in accordancewith the rules of the SEC and generally includes voting or investment power with respect to the subject securities. Shares of common stock that are currentlyexercisable or exercisable within 60 days of March 31, 2023 are deemed to be beneficially owned by the person holding such securities for the purpose of computingthe percentage beneficial ownership of such person, but are not treated as outstanding for the purpose of computing the percentage beneficial ownership of anyother person(3) Consists of (i) 100,000 shares of restricted stock granted under the 2017 Plan, (ii) 4,683 shares of common stock, (iii) options to purchase up to 8,401 shares of ourcommon stock, and (iv) 24,000 shares of restricted stock and options to purchase up to 6,494 shares of our common stock which are held by Billy Pardo, RonenLuzon’s spouse. Mr. Luzon may be deemed to beneficially hold the securities of us held by Ms. Pardo.(4) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, and (ii) an option to purchase 5,854 shares of our common stock. Does not includean aggregate of 119,760 shares of restricted stock over which Mr. Kles has been designated the initial proxy to vote such shares pursuant to a voting agreemententered into between Whitehole S.L., Twinbel S.L. and EGI Acceleration, S.L.(5) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, (ii) options to purchase up to 6,494 shares of our common stock, (iii) 100,000 sharesof restricted stock which are held by Ronen Luzon, Billy Pardo’s spouse (iii) 8,401 shares of common stock which are held by Mr. Luzon, and (iii) options to purchaseup to 4,683 shares of our common stock which are held by Mr. Luzon. Ms. Pardo may be deemed to beneficially hold the securities of the Company held by Mr.Luzon.(6) Consists of 12,000 shares of restricted stock granted under the 2017 Plan.(7) Consists of (i) 16,000 shares of restricted stock granted under the 2017 Plan, and (ii) options to purchase up to 2,313 shares of our common stock.(8) Consists of options to purchase up to 1,294 shares of our common stock.(9) Consists of options to purchase up to 1,294 shares of our common stock.(10) Consists of options to purchase up to 1,294 shares of our common stock.Change in ControlWe are not aware of any arrangement that might result in a change in control in the future. We have no knowledge of any arrangements, including anypledge by any person of our securities, the operation of which may at a subsequent date result in a change in the Company’s control.Securities Authorized for Issuance Under Equity Compensation PlansOn January 29, 2017, our Board of Directors approved the 2017 Equity Incentive Plan and the 2017 Consultant Equity Incentive Plan, which were approvedby our stockholders on March 21, 2017. In addition, on January 29, 2017, our Board of Directors approved the Stock Option Plan Israel Grantees SubPlan. The 2017Equity Incentive Plan initially authorized the issuance of up to 5,334 shares of common stock under the plan and the 2017 Consultant Equity Incentive Plan initiallyauthorized the issuance of up to 8,000 shares of common stock under the plan.On February 12, 2018, our stockholders approved an amendment to the 2017 Consultant Equity Incentive Plan to increase the maximum number of shares ofour common stock available for issuance under the plan from 8,000 to 12,000. On July 3, 2018, our stockholders approved an amendment to the 2017 Equity IncentivePlan to increase the maximum number of shares of our common stock available for issuance under the plan from 5,334 to 8,000 and an amendment to the 2017Consultant Equity Incentive Plan to increase the maximum number of shares of our common stock available for issuance under the plan from 12,000 to 18,667.On May 25, 2020, our Board reduced the exercise price of outstanding options of our employees and directors for the purchase of an aggregate of 140,237of our common stock (with exercise prices ranging between $453.75 and $228.75) to $26.0 per share, and extended the term of the foregoing options for an additionalone year from the original date of expiration.61On August 10, 2020, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 80,000 to 58,000shares, and a decrease of the numbers of shares available for issuance under the 2017 Consultant Incentive Plan to 8,667 shares from 18,667 shares.On December 30, 2021, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 58,000 sharesto 230,800 shares.On December 7, 2022, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Plan from 230,800 shares to 289,000shares.The following table summarizes information about our equity compensation plans and individual compensation arrangements as of December 31, 2022.Number of securities to be issued upon exercise of outstanding options, warrants and rights(a)Weighted average exercise price of outstandingoptions, warrants and rights (b)Number of securities remaining availablefor future issuanceunder equity compensationplans (excludingsecurities reflected in column (a) (c)Equity compensation plans approved by security holders43,49724.7477,455Equity compensation plans not approved by security holdersTotal43,49724.7477,455ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEDuring years ended December 31, 2022 and 2021, except for compensation arrangements described elsewhere herein and the transactions described below,we did not participate in any transaction, and we are not currently participating in any proposed transaction, or series of transactions, in which the amount involvedexceeded the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years, and in which, to our knowledge,any of our directors, officers, five percent beneficial security holders, or any member of the immediate family of the foregoing persons had, or will have, a direct orindirect material interest.Compensation arrangements for our named executive officers and directors are described in the section entitled “Executive Compensation.”Employment AgreementsWe have entered into written employment agreements with each of our executive officers. These agreements generally provide for notice periods of varyingduration for termination of the agreement by us or by the relevant executive officer, during which time the executive officer will continue to receive base salary andbenefits. We have also entered into customary noncompetition, confidentiality of information and ownership of inventions arrangements with our executiveofficers. However, the enforceability of the noncompetition provisions may be limited under applicable law.OptionsSince our inception we have granted options to purchase our common stock to our officers and directors. Such option agreements may contain accelerationprovisions upon certain merger, acquisition, or change of control transactions.62Restricted Stock GrantsOn September 29, 2022, our compensation committee approved grants of restricted share awards under our 2017 Plan to Ronen Luzon, Or Kles, Billy Pardo,Ilia Turchinsky and Ezequiel Javier Brandwain, pursuant to which they were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000restricted shares and 12,000 restricted shares, respectively. The restricted shares shall vest in three equal installments on January 1, 2023, January 1, 2024 andJanuary 1, 2025, conditioned upon continuous employment with us, and subject to accelerated vesting upon a change in control of the Company.Shareholder ActivismIn May 2021, we received notice from Custodian Ventures, LLC, or Custodian, of its intention to nominate four candidates to stand for election to our Boardof Directors at our 2021 annual meeting of stockholders. Custodian subsequently made a book and records request and has made public statements calling forchanges to our management.On September 22, 2021, Custodian, commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v. Mysize,Inc., C.A. No. 20210817LWW, or the Delaware Action. In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting. As further described below, on November 4, 2021, we entered into asettlement agreement, or the Settlement Agreement, with Custodian, Activist Investing LLC, David Aboudi, Partick Loney and David Natan, collectively, the LazarParties, settling and dismissing the Delaware Action.On October 19, 2021, we commenced an action in the United States District Court for the Southern District of New York captioned My Size, Inc. v. DavidLazar, Custodian Ventures LLC, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, Civil Action No, 1:21cv08585, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, andcertain rules promulgated thereunder, or the SDNY Action. The complaint sought, among other things, declaratory and injunctive relief related to defendants’ effortsto nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed “group” for purposes ofSection 13 (d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. In addition, the complaint alleged that thedefendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules in connection with their efforts to elect a slate of directorsto our Board of Directors. On October 20, 2021, the Court signed an order granting a hearing on an anticipated motion for a preliminary injunction and expeditedscheduling and discovery in aid thereof, and scheduled that hearing for December 2, 2021. As further described below, on November 4, 2021, we entered into theSettlement Agreement with the Lazar Parties settling and dismissing the claims asserted in the SDNY Action and the Delaware Action against one another. OnNovember 8, 2021, the remaining defendants in the SDNY Action filed and answer and counterclaim asserting a claim against us pursuant to New York Civil RightsLaw Section 70a, also known as New York’s antiSLAPP statute.On November 4, 2021, we entered into the Settlement Agreement, or the Lazar Settlement Agreement, with the Lazar Parties. Pursuant to the LazarSettlement Agreement, we and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the LazarSettlement Agreement, we reimbursed Custodian for out of pocket expenses and in consideration for the dismissal and release of claims against the Company anaggregate amount equal to $275,000. With respect to our 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) itsMay 12, 2021 notice of stockholder nominations of four director candidates with respect to our 2021 annual meeting of stockholders, (ii) the notice dated October 28,2021 submitted by Custodian to us notifying us of Custodian’s continued intent to bring its nomination of four director candidates before our stockholders at the2021 annual meeting, and (iii) any and all related materials and notices submitted to us in connection therewith or related thereto and to not take any further action inconnection with the solicitation of any proxies in connection with us. Custodian also agreed to cease any and all solicitation and other activities in connection withthe 2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effective date of theAgreement, or the Standstill Period. The Lazar Settlement Agreement also provides that during the Standstill Period, the Lazar Parties will vote all shares of ourcommon stock it beneficially owns in accordance with any proposal or recommendation made by us or our Board of Directors that is submitted to our stockholders,unless to do so would violate applicable law and except with respect to certain extraordinary transactions. The Lazar Settlement Agreement also contains nondisparagement and confidentiality provisions, subject to certain exceptions.63On December 9, 2021, we subsequently entered into a Settlement Agreement, or the Ault Settlement Agreement, with Milton C. Ault III, Ault Alpha LP, AultAlpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed to withdraw the SDNY Action against the AultParties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that action against the Company. In addition, pursuant to the SettlementAgreement, we paid $70,000 to the Ault Parties in consideration for the releases and other good and valuable consideration as set forth in the Ault SettlementAgreement.Naiz Bespoke Technologies AcquisitionOn October 7, 2022, we entered into the Naiz Agreement with the Naiz Sellers, pursuant to which the Naiz Sellers agreed to sell to us all of the issued andoutstanding equity of Naiz. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) ) the Naiz EquityConsideration and (ii) up the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the Equity Value Averaging Period) is less than $1,650,000, My Size shall pay the Shortfall Value to the Naiz Sellers within 45days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period, it wasdetermined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement)).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers will be subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into the LockUp Agreement with My Size, (ii) Whitehole, Twinbel and EGIentered into the Voting Agreement with My Size and (iii) each of the Key Persons entered into employment agreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonth period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonth “dribbleout” provisionthat provides following the expiration of the initial sixmonth lockup period, without My Size’s prior written consent (which My Size shall be permitted to withholdat its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than the average dailytrading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.64The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Indemnification Agreements and Directors’ and Officers’ Liability InsuranceWe have entered into indemnification agreements with each of our directors and executive officers. These agreements, among other things, require us toindemnify these individuals and, in certain cases, affiliates of such individuals, to the fullest extent permitted by Delaware law against liabilities that may arise byreason of their service to us or at our direction, and to advance expenses incurred as a result of any proceedings against them as to which they could beindemnified. We also maintain an insurance policy that insures our directors and officers against certain liabilities, including liabilities arising under applicablesecurities laws.Director IndependenceSee “Item 10. Directors, Executive Officers and Corporate Governance; Corporate Governance, Board Composition” above for a discussion regarding theindependence of the members of our board of directors.ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICESSomekh Chaikin, a member firm of KPMG International, located in Tel Aviv, Israel, PCAOB ID 1057, has served as our independent registered publicaccounting firm for 2022 and 2021. The following are Somekh Chaikin’s fees for professional services in each of the respective fiscal years:Fee Category20222021Audit Fees198,910298,300Tax Fees30,66729,300Auditrelated Fees18,000Total Fees247,577327,600Audit Fees:Audit Fees consist of fees billed for professional services performed by Somekh Chaikin for the audit of our annual financial statements, thereview of interim consolidated financial statements, and related services that are normally provided in connection with registration statements, including theregistration statement for S1 and S3.Tax Fees: Tax Fees may consist of fees for professional services, including tax and VAT consulting and compliance performed by an independent registeredpublic accounting provided during the period.PreApproval Policies and ProceduresIn accordance with the SarbanesOxley Act of 2002, as amended, our audit committee charter requires the audit committee to preapprove all audit andpermitted nonaudit services provided by our independent registered public accounting firm, including the review and approval in advance of our independentregistered public accounting firm’s annual engagement letter and the proposed fees contained therein. The audit committee has the ability to delegate the authorityto preapprove nonaudit services to one or more designated members of the audit committee. If such authority is delegated, such delegated members of the auditcommittee must report to the full audit committee at the next audit committee meeting all items preapproved by such delegated members. In the fiscal years endedDecember 31, 2022 and December 31, 2021 all of the services performed by our independent registered public accounting firm were preapproved by the auditcommittee.65PART IVITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES(a)Financial StatementsThe financial statements required by this Item are included beginning at page F1.(b)ExhibitsSee Exhibit IndexITEM 16. FORM 10K SUMMARYNot applicableEXHIBIT INDEXExhibitNumberDescription3.1Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Form on Form8K filed on March 23, 2017)3.2Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10K filed onMarch 4, 2016)3.3Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’s Current Report onForm 8K filed on February 20, 2018)3.4Second Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8K filedon April 24, 2018)3.5Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’sCurrent Report on Form 8K filed on November 18, 2019)3.6Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on January 7, 2022)3.7Amendment No. 1 to Second Amended and Restated ByLaws (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8K filed on January 7, 2022)3.8Certificate of Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on December 7, 2022)4.1Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S3/A filed onNovember 14, 2016)4.2Form of Warrant to Purchase Common Stock issued on February 2, 2018 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report onForm 10K filed on March 27, 2019)4.3Description of Securities Registered under Section 12 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report on Form 10K filedon March 19, 2020)4.4Form of Warrant (incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S1, Amendment No. 1, filed with the SECon May 5, 2020.)4.5Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)4.6Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.1My Size, Inc. 2017 Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement on Schedule DEF 14Afiled on March 2, 2017)10.2My Size, Inc. 2017 Consultant Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement onSchedule DEF 14A filed on March 2, 2017)10.3My Size, Inc. 2017 Stock Option Plan Israel Grantees SubPlan (incorporated by reference to Exhibit 10.3 to the Company’s Annual Report on Form10K filed on March 27, 2019)6610.4Purchase Agreement between My Size, Inc. and Shoshana Zigdon dated as of February 16, 2014 (incorporated by reference to Exhibit 10.2 to theCompany’s Annual Report on Form 10K filed on March 4, 2016)10.5 +Employment Agreement between My Size Israel 2014 Ltd. and Ronen Luzon dated November 18, 2018 (incorporated by reference to Exhibit 10.1 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.6 +Employment Agreement between My Size Israel 2014 Ltd. and Or Kles dated November 18, 2018 (incorporated by reference to Exhibit 10.2 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.7 +Employment Agreement between My Size Israel 2014 Ltd. and Billy Pardo dated November 18, 2018 (incorporated by reference to Exhibit 10.3 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.8Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on January 15,2020)10.9Form of Warrant (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.10Form of Placement Agent Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.11Securities Purchase Agreement (incorporated by reference to Exhibit 10.30 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.12Underwriting Agreement, dated January 5, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on January 7, 2021)10.13Underwriting Agreement, dated March 22, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on March 25, 2021)10.14Amendment to Purchase Agreement between My Size Israel 2014 Ltd., My Size, Inc. and Shoshana Zigdon (incorporated by reference to Exhibit 10.1to the Company’s Quarterly Report on Form 10Q on August 16, 2021)10.15Form of Registered Direct Offering Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.16Form of PIPE Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.17Form of Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.18Form of Placement Agent Warrant issued by the Company on October 28, 2021 (incorporated by reference to Exhibit 10.22 to the Company’s Form S1filed on November 12, 2021)10.19Form of Registration Rights Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.4 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.20Engagement Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference to Exhibit 10.5 to theCompany’s Current Report on Form 8K filed on October 28, 2021)10.21Settlement Agreement dated November 4, 2021, among My Size, Inc., David Lazar and certain of his affiliates (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on November 5, 2021)10.22Share Purchase Agreement dated as of February 7, 2022 between My Size Israel 2014 Ltd. and Amar Guy Shalom and Elad Bretfeld (incorporated byreference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SEC on February 8, 2022)10.23Employment Agreement between My Size Israel 2014 Ltd. and Ezequiel Javier Brandwain dated January 27, 2022 (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on February 1, 2022)10.24Form of Section 102 Capital Gain Restricted Stock Award Agreement under the Company’s 2017 Equity Incentive Plan (incorporated by reference toExhibit 10.1 to the Company’s Quarterly Report on Form 10Q, filed with the SEC on November 14, 2022)10.25Share Purchase Agreement, dated as of October 6, 2022, by and among My Size, Inc., Borja Cembrero Saralegui, Artiz Toree Garcia, Whitehold, S.L.,Twinbel, S.L., and EGI Acceleration, S.L. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SECon October 12, 2022)10.26Form of LockUp Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)10.27Form of Voting Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.3 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)6710.28My Size, Inc. Amendment to the My Size, Inc. 2017 Equity Plan (incorporated by reference to Appendix B to the Company’s definitive proxystatement filed with the SEC on November 4, 2022)10.29Form of Registered Direct Offering Securities Purchase Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.1 to theCompany’s Current Report on Form 8K filed with the SEC on January 12, 2023)10.30Form of PIPE Securities Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8Kfiled with the SEC on January 12, 2023)10.31Form of Registered Direct PreFunded Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.32Form of Series A and Series B Warrant (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8K filed with the SEC onJanuary 12, 2023)10.33Form of Private Placement PreFunded Warrant (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.34Form of Registration Rights Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form8K filed with the SEC on January 12, 2023)10.35Engagement Agreement, dated December 5, 2022 (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8K filed withthe SEC on January 12, 2023)10.36*Form of Placement Agent Warrant21.1*List of Subsidiaries23.1*Consent of Somekh Chaikin, a member firm of KPMG International, registered public accounting firm31.1*Certification of the Chief Executive Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200231.2*Certification of the Chief Financial Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200232.1*Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a14(b) of the Exchange Act and 18 U.S.C. Section 1350, asadopted pursuant to Section 906 of the SarbanesOxley Act of 2002101.INS*Inline XBRL Instance Document101.SCH*Inline XBRL Taxonomy Schema101.CAL*Inline XBRL Taxonomy Calculation Linkbase101.DEF*Inline XBRL Taxonomy Definition Linkbase101.LAB*Inline XBRL Taxonomy Label Linkbase101.PRE*Inline XBRL Taxonomy Presentation Linkbase104Cover Page Interactive Data File (formatted as Inline XBRL document and contained in Exhibit 101)*Filed herewith.+Indicates a management contract or any compensatory plan, contract or arrangement68SIGNATURESPursuant to the requirements of Section 13 and 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10K to be signed on its behalf by the undersigned, thereunto duly authorized on this 14th day of April, 2023.MY SIZE, INC./s/ Ronen LuzonRonen LuzonChief Executive Officer (Principle Executive Officer)/s/ Or KlesOr KlesChief Financial Officer(Principal Financial and Accounting Officer)Pursuant to the requirements of the Securities Act of 1934, this annual report on Form 10K has been signed below by the following persons on behalf ofthe registrant and in the capacities and on the dates indicated.SignatureTitleDate/s/ Ronen LuzonChief Executive Officer and DirectorApril 14, 2023Ronen Luzon(Principle Executive Officer)/s/ Or KlesChief Financial OfficerApril 14, 2023Or Kles(Principal Financial and Accounting Officer)/s/ Oren ElmaliahDirectorApril 14, 2023Oren Elmaliah/s/ Arik KaufmanDirectorApril 14, 2023Arik Kaufman/s/ Oron BranitzkyDirectorApril 14, 2023Oron Branitzky/s/ Guy ZimmermanDirectorApril 14, 2023Guy Zimmerman69EX10.36 2 ex1036.htmExhibit 10.36NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES ANDEXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THESECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO ANEFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTIONNOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGINACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.PLACEMENT AGENT COMMON STOCK PURCHASE WARRANTMY SIZE, INC.Warrant Shares: _______Issue Date: January 12, 2023Initial Exercise Date: January 12, 2023THIS PLACEMENT AGENT COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _____________ or itsassigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the dateset forth above (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on January 10, 2028 (the “Termination Date”) but not thereafter, tosubscribe for and purchase from My Size, Inc., a Delaware corporation (the “Company”), up to ______ shares (as subject to adjustment hereunder, the “WarrantShares”) of the Company’s Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined inSection 2(b). This Warrant is issued pursuant to that certain engagement letter, dated as of December 5, 2022, by and between the Company and H.C. Wainwright &Co., LLC.Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities PurchaseAgreement (the “Purchase Agreement”), dated January 10, 2023, among the Company and the purchasers signatory thereto.1Section 2. Exercise.a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or afterthe Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted by email (or emailattachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the numberof Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shalldeliver the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on aUnited States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No inkoriginalNotice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required.Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder haspurchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrantto the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercisesof this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering theoutstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder andthe Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver anyobjection to any Notice of Exercise within one (1) Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant,acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, thenumber of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.b) Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $3.8188, subject to adjustment hereunder (the“Exercise Price”).c) Cashless Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein isnot available for the issuance or resale of the Warrant Shares to or by the Holder, then this Warrant may also be exercised, in whole or in part, at such timeby means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing[(AB) (X)] by (A), where:(A) =as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice ofExercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed anddelivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) ofRegulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAPon the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on theprincipal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s execution of the applicable Notice ofExercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hoursthereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii)the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice ofExercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;(B) =the Exercise Price of this Warrant, as adjusted hereunder; and(X) =the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if suchexercise were by means of a cash exercise rather than a cashless exercise.2“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which theCommon Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York Citytime)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest precedingdate) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for theCommon Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the mostrecent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by anindependent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to theCompany, the fees and expenses of which shall be paid by the Company.“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the TradingMarket on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or thenearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and ifprices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reportingprices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock asdetermined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonablyacceptable to the Company, the fees and expenses of which shall be paid by the Company.If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of theSecurities Act, the Warrant Shares shall take on the characteristics of the Warrants being exercised, and the holding period of the Warrant Shares beingissued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section 2(c).3d) Mechanics of Exercise.i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to betransmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with TheDepository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant insuch system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of theWarrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or mannerofsale limitationspursuant to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, registered in theCompany’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitledpursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2)Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate ExercisePrice to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Companyof the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall bedeemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant hasbeen exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (otherthan in the case of a cashless exercise) is received by the Warrant Share Delivery Date. If the Company fails for any reason to deliver tothe Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder,in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP ofthe Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifthTrading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share Delivery Date until such WarrantShares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FASTprogram so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standardsettlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stockas in effect on the date of delivery of the Notice of Exercise.4ii.Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the requestof a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a newWarrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrantshall in all other respects be identical with this Warrant; provided, however, that the Holder shall be required to return any WarrantShares subject to any such rescinded exercise notice concurrently with the return to Holder of the aggregate Exercise Price paid to theCompany for such Warrant Shares and the restoration of Holder’s right to acquire such Warrant Shares pursuant to this Warrant(including, issuance of a replacement warrant certificate evidencing such restored right).iii. Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant toSection 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.iv. Compensation for BuyIn on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights availableto the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with theprovisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date theHolder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwisepurchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipatedreceiving upon such exercise (a “BuyIn”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) theHolder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) theamount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connectionwith the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at theoption of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was nothonored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock thatwould have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holderpurchases Common Stock having a total purchase price of $11,000 to cover a BuyIn with respect to an attempted exercise of shares ofCommon Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediatelypreceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written noticeindicating the amounts payable to the Holder in respect of the BuyIn and, upon request of the Company, evidence of the amount of suchloss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including,without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver sharesof Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.5v. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise ofthis Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Companyshall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by theExercise Price or round up to the next whole share.vi. Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue ortransfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paidby the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by theHolder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, thisWarrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder andthe Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.The Company shall pay all Transfer Agent fees required for sameday processing of any Notice of Exercise and all fees to the DepositoryTrust Company (or another established clearing corporation performing similar functions) required for sameday electronic delivery of theWarrant Shares.vii. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timelyexercise of this Warrant, pursuant to the terms hereof.6e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise anyportion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicableNotice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of theHolder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). Forpurposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Partiesshall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, butshall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrantbeneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion ofany other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exerciseanalogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in thepreceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act andthe rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that suchcalculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed inaccordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (inrelation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisableshall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether thisWarrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of thisWarrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm theaccuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number ofoutstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s mostrecent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recentwritten notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request ofa Holder, the Company shall within one (1) Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock thenoutstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise ofsecurities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number ofoutstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stockoutstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice tothe Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial OwnershipLimitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares ofCommon Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in theBeneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shallbe construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portionhereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplementsnecessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of thisWarrant.7Section 3. Certain Adjustments.a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes adistribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which,for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstandingshares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into asmaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case theExercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any)outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately aftersuch event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of thisWarrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for thedetermination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case ofa subdivision, combination or reclassification.b) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sellsany Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares ofCommon Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregatePurchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise ofthis Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before thedate on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the recordholders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that to the extent that theHolder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall notbe entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Rightto such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not resultin the Holder exceeding the Beneficial Ownership Limitation).c) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend (other than cash) orother distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including,without limitation, any distribution of stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement,scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holdershall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number ofshares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including withoutlimitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken,the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, thatto the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, thenthe Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a resultof such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as itsright thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).8d) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more relatedtransactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease,license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, director indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of CommonStock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more ofthe outstanding Common Stock or 50% or more of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in oneor more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchangepursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly orindirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, withoutlimitation, a reorganization, recapitalization, spinoff, merger or scheme of arrangement) with another Person or group of Persons whereby such otherPerson or group acquires more than 50% of the outstanding shares of Common Stock or 50% or more of the voting power of the common equity of theCompany (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for eachWarrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of theHolder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor oracquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as aresult of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior tosuch Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, thedetermination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of AlternateConsideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Priceamong the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. Ifholders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall begiven the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at theHolder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date ofthe public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cashequal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of suchFundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company’s control, including not approved by theCompany’s Board of Directors, the Holder shall only be entitled to receive from the Company or any Successor Entity the same type or form ofconsideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to theholders of Common Stock of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, stock or anycombination thereof, or whether the holders of Common Stock are given the choice to receive from among alternative forms of consideration in connectionwith the Fundamental Transaction; provided, further, that if holders of Common Stock of the Company are not offered or paid any consideration in suchFundamental Transaction, such holders of Common Stock will be deemed to have received common stock of the Successor Entity (which Entity may be theCompany following such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on theBlackScholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day of consummation of the applicableFundamental Transaction for pricing purposes and reflecting (A) a riskfree interest rate corresponding to the U.S. Treasury rate for a period equal to thetime between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expectedvolatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualizationfactor) as of the Trading Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlyingprice per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any noncashconsideration, if any, being offered in such Fundamental Transaction and (ii) the highest VWAP during the period beginning on the Trading Dayimmediately preceding the public announcement of the applicable contemplated Fundamental Transaction (or the consummation of the applicableFundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant to this Section 3(e) and (D) a remaining option timeequal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date and (E) azero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds (or such other consideration)within the later of (i) five Business Days of the Holder’s election and (ii) the date of consummation of the Fundamental Transaction. The Company shallcause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of theobligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant towritten agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to suchFundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entityevidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares ofcapital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of thisWarrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which appliesthe exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to suchFundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for thepurpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which isreasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall beadded to the term “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction, each andevery provision of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to each of the Company and theSuccessor Entity or Successor Entities, jointly and severally), and the Successor Entity or Successor Entities, jointly and severally with the Company, mayexercise every right and power of the Company prior thereto and the Successor Entity or Successor Entities shall assume all of the obligations of theCompany prior thereto under this Warrant and the other Transaction Documents with the same effect as if the Company and such Successor Entity orSuccessor Entities, jointly and severally, had been named as the Company herein.e) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. Forpurposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the numberof shares of Common Stock (excluding treasury shares, if any) issued and outstanding.9f) Notice to Holder.i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, theCompany shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resultingadjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form)on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C)the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any sharesof capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection withany reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all orsubstantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into othersecurities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of theaffairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as itshall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective datehereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to beentitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification,consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expectedthat holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or otherproperty deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure todeliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to bespecified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, nonpublic informationregarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to aCurrent Report on Form 8K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of suchnotice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.10Section 4. Transfer of Warrant.a) Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and to theprovisions of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights) aretransferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a writtenassignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay anytransfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a newWarrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument ofassignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly becancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unlessthe Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of thedate on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordanceherewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company,together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent orattorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute anddeliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issuedon transfers or exchanges shall be dated the Issue Date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Sharesissuable pursuant thereto.c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “WarrantRegister”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as theabsolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to thecontrary.d) Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrantshall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue skylaws or (ii) eligible for resale without volume or mannerofsale restrictions or current public information requirements pursuant to Rule 144, the Companymay require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, comply with the provisions ofSection 5.7 of the Purchase Agreement.11e) Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon anyexercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling suchWarrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exemptedunder the Securities Act.Section 5. Miscellaneous.a) No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends orother rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Withoutlimiting the rights of a Holder to receive Warrant Shares on a “cashless exercise,” and to receive the cash payments contemplated pursuant to Sections 2(d)(i) and 2(d)(iv), in no event will the Company be required to net cash settle an exercise of this Warrant.a.In July 2019, the Company entered into a threeyear agreement with a consultant (“Consultant14”) to provide services to the Company includingassisting the Company to promote, market and sell the Company’s technology to potential customers. Pursuant to such agreement and in partialconsideration for such consulting services, the Company agreed to issue to Consultant14 options to purchase up to 107 shares of the Company’scommon stock upon execution of the agreement. The options are exercisable at $375.00 per share and shall vest in 3 equal instalments every twelvemonths starting July 2019. Unexercised options shall expire 4 years from the effective date.In addition, the Company agreed to issue to Consultant14 options to purchase up to 890 shares of the Company’s common stock upon executionof the agreement. The options are exercisable at $27.00 per share and shall vest in 4 equal instalments every six months starting September 2020.Unexercised options shall expire 5 years from the effective date.During 2022 and 2021, an amount of $7 and $14 respectively, were recorded by the Company as stockbased equity awards with respect to Consultant14.F24MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The Company’s outstanding options granted to consultants as of December 31, 2022 are as follows:Issuance dateOptions forCommon stockWeightedAverageexercise priceper shareOptionsexercisableExpirationdateFebruary 201815USD528.7515February 2023August 2018December 2018531USD352.38264August 2023 December 2023July 2020107USD375107July 2023SeptemberOctober 20201,488USD27.201,288October 2024 September 2025Total2,1411,674The Company uses the Black Scholes model to measure the fair value of the stock options with the assistance of a third party valuation.No stock options were granted during 2022 to consultants.The fair value of the Company’s stock options granted to nonemployees was calculated using the following weighted average assumptions:20222021GrantsGrantsDividend yield0%Expected volatility125.15%Riskfree interest0.16%Contractual term of up to (years)1.52F25MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Stock Option Plan for employeesIn March 2017, the Company adopted a stock option plan (the “Plan”) pursuant to which the Company’s Board of Directors may grant stock options toofficers and key employees. The total number of options which may be granted to directors, officers, employees under this plan, is limited to 289,000options. Stock options can be granted with an exercise price equal to or less than the stock’s fair market value at the date of grant.The fair value of each option award is estimated on the date of grant using the Binomial optionpricing model that used the weighted averageassumptions in the following table. The risk free rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the timeof grant.2022Grants2021GrantsDividend yield0%0%Expected volatility96.52%98.47%Riskfree interest4.06%0.96%expected life522.27In the years ended December 31, 2022 and 2021, 10,000 and 3,900 options, respectively, were granted.On December 7, 2022, the Company’s stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from230,800 shares to 289,000 shares.On September 29, 2022, the Compensation Committee of the Company approved grants of restricted share awards under the Company’s 2017 EquityIncentive Plan to Ronen Luzon (CEO), Or Kles (CFO), Billy Pardo (COO), Ilia Turchinsky (CTO) and Ezequiel Javier Brandwain (CCO), pursuant towhich were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000 restricted shares and 12,000 restricted shares,respectively. Each restricted share awarded under section 102 Capital Gain Restricted Stock Award Agreement (the “Agreement”). The restrictedshares shall vest in three equal installments on January 1, 2023, January 1, 2024 and January 1, 2025 for Ronen Luzon, Or Kles, Billy Pardo and IliaTurchinsky and on January 27, 2023, January 27, 2024 and January 27, 2025 for Ezequiel Javier Brandwain, conditioned upon continuous employmentwith the Company, and subject to accelerated vesting upon a change in control of the Company.On the same day, the Company granted fiveyears options to purchase up to 10,000 ordinary shares to other employees of the Company at an exerciseprice of $0.21 per share. The options vesting period is over three years in three equal portions from the vesting commencement date.F26MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The total stock option compensation expense in the year ended December 31, 2022 amounted to $448as follows: Research and development expensesamounted to $151, sales and marketing expenses amounted to $119and general and administrative expenses amounted to $178.The total stock option compensation expense in the year ended December 31, 2021 amounted to $252 as follows: Research and development expensesamounted to $94, sales and marketing expenses amounted to $97 and general and administrative expenses amounted to $61.As of December 31, 2022, there was a total of $530 unrecognized compensation cost relating to nonvested sharebased compensation arrangements.That cost is expected to be recognized over a weightedaverage period of 2.0 years.Share option activity during 2022 is as follows:2022Number ofoptionsWeightedaverageexerciseprice US$Outstanding as of January 135,74226.5Granted10,0005.25ExercisedExpired(4,136)Outstanding as of year end41,60622.48Vested as of year end33,20825.17Share option activity during 2021 is as follows:2021Number ofoptionsWeightedaverageExerciseprice US$Outstanding as of January 139,094$26.0Granted3,90032.0Exercised(751)Expired(6,501)Outstanding as of year end35,74226.5Vested as of year end27,06326.5F27MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 15 CONTINGENCIES AND COMMITMENTSa.On August 7, 2018, the Company commenced an action against North Empire LLC (“North Empire”) in the Supreme Court of the State of New York,County of New York for breach of a Securities Purchase Agreement (the “Agreement”) in which it is seeking damages in an amount to bedetermined at trial, but in no event less than $616. On August 2, 2018, North Empire filed a Summons with Notice against the Company, also in thesame Court, in which they allege damages in an amount of $11.4 million arising from an alleged breach of the Agreement. On September 6, 2018North Empire filed a Notice of Discontinuance of the action it had filed on August 2, 2018. On September 27, 2018, North Empire filed an answerand asserted counterclaims in the action commenced by the Company against them, alleging that the Company failed to deliver stock certificatesto North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against theCompany’s CEO and now former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018,the Company filed a reply to North Empire’s counterclaims. On November 15, 2018, the Company’s CEO and now former Chairman of the Boardfiled a motion to dismiss North Empire’s thirdparty complaint. On January 6, 2020, the Court granted the motion and dismissed the thirdpartycomplaint. Discovery has been completed and both parties have filed motions for summary judgment in connection with the claims andcounterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summary judgment, arguing there werefactual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision. The appealmust be fully perfected and filed by July 26, 2022. On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying theCompany’s motion for summary judgment. North Empire will file its opposition papers on or before March 31, 2022, and the Company will file replypapers on April 29, 2022. On or about September 12, 2022, the Court issued its Decision and Order denying the Company’s motion to reargue.North Empire filed its opposing brief on December 7, 2022. Both sides were given an opportunity to file a reply brief. The Company filed our replybrief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. The Appellate Court has scheduled oral argument for the appealfor February 7, 2023. Oral argument was held before the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Courtfiled its Decision and Order, which affirmed the lower court’s decisions regarding both My Size and North Empire’s motions for summary judgmentand sent the case back to the Supreme Court.On or about March 13, 2023, the Supreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date forthe mediation has not yet been set. The Company intends to vigorously defend any claims made by North Empire.The Company believes it is more likely than not that the counterclaims will be denied.b.In May 2021, the Company received notice from Custodian Ventures, LLC (“Custodian”) of its intention to nominate four candidates to stand forelection to our Board of Directors at the Company’s 2021 annual meeting of stockholders. Custodian subsequently made a book and recordsrequest and has made public statements calling for changes to our management.On September 22, 2021, Custodian commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v.MySize, Inc. (the “Delaware Action”). In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting.On October 19, 2021, the Company commenced an action in the United States District Court for the Southern District of New York againstCustodian, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, and certain rulespromulgated thereunder (the “SDNY Action”). The complaint sought, among other things, declaratory and injunctive relief related to defendants’efforts to nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed“group” for purposes of Section 13(d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. Inaddition, the complaint alleged that the defendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules inconnection with their efforts to elect a slate of directors to the Company’s Board of Directors. On October 20, 2021, the Court signed an ordergranting a hearing on an anticipated motion for a preliminary injunction and expedited scheduling and discovery in aid thereof, and scheduled thathearing for December 2, 2021.On November 4, 2021, the Company entered into the Settlement Agreement with the Lazar Parties. Pursuant to the Settlement Agreement, theCompany and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the SettlementAgreement, the Company agreed to reimburse Custodian for out of pocket expenses and in consideration for the dismissal and release of claimsagainst the Company an aggregate amount equal to $275, to be paid within three business days of the effective date of the Settlement Agreement.With respect to the Company’s 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) its May 12,2021 notice of stockholder nominations of four director candidates with respect to the Company’s 2021 annual meeting of stockholders, (ii) thenotice dated October 28, 2021 submitted by Custodian to the Company notifying the Company of Custodian’s continued intent to bring itsnomination of four director candidates before the Company’s stockholders at the 2021 annual meeting, and (iii) any and all related materials andnotices submitted to the Company in connection therewith or related thereto and to not take any further action in connection with the solicitationof any proxies in connection with the Company. Custodian also agreed to cease any and all solicitation and other activities in connection with the2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effectivedate of the Agreement (the “Standstill Period”). The Settlement Agreement also provides that during the Standstill Period, the Lazar Parties willvote all shares of common stock of the Company it beneficially owns in in accordance with any proposal or recommendation made by theCompany or the Board of Directors of the Company that is submitted to the stockholders of the Company, unless to do so would violateapplicable law and except with respect to certain extraordinary transactions. The Settlement Agreement also contains nondisparagement andconfidentiality provisions, subject to certain exceptions.On December 9, 2021, the Company subsequently entered into a Settlement Agreement (the “Ault Settlement Agreement”), with Milton C. Ault III,Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed towithdraw the SDNY Action against the Ault Parties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that actionagainst the Company. In addition, pursuant to the Settlement Agreement, the Company paid $70 to the Ault Parties in consideration for thereleases and other good and valuable consideration as set forth in the Ault Settlement Agreement.c.On July 5, 2021, the Company was served with a legal complaint filed by Fidelity Venture Capital Ltd. and Dror Atzmon in the Magistrate’s Court inTel Aviv for a monetary award in an amount of NIS 1,436,679 (approximately $450) and a declaratory relief. The plaintiffs allege that the Companybreached its contractual obligations to pay them for services allegedly rendered to the Company by the plaintiffs under a certain consultingagreement dated July 2, 2014, in an amount of NIS 819,000 (approximately $256). Additionally, the plaintiffs allege that the Company shouldcompensate them for losses allegedly incurred by them following their investment in the Company’s shares issued under a certain private offering.In the alternative, the plaintiffs move that the court will declare the investment agreement void with full restitution of plaintiffs’ original investmentin an amount of NIS 1,329,650(approximately $415). The Company filed its statement of defense on October 25, 2021. The first preliminary courthearing of the case is scheduled for January 23, 2022.The first court preliminary hearing was held on March 1, 2022.Following the first preliminary hearing and the Court’s comments and recommendation, the Plaintiffs filed a motion to strike out the claim withoutprejudice.On March 8, 2022 the Court ordered dismissal without prejudice of the claim.F28MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATIONAcquisition of OrgadOn February 7, 2022, the Company acquired 100% of the shares and voting interests in Orgad an omnichannel ecommerce platform. The acquisitionwas designed to create an additional revenue stream for the Company by becoming a direct ecommerce seller while leveraging the synergies betweenMySizeID and Orgad’s ecommerce platform.Unaudited proforma informationThe results of operations of Orgad have been included in the consolidated financial statements since the acquisition date of February 7, 2022. Orgadrevenues included in the Company’s consolidated statement of operations from February 7, 2022 through December 31, 2022 were $4,132. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,662 and $2,850 respectively, and the net loss after tax would have been $8,519 and $10,149 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash (*)300Issuance of shares of common stock (69,752 shares) (**)457Total consideration transferred757(*)The cash payment is subject to working capital adjustments.(**)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Orgad, on the twoyear and the threeyear anniversary of the closing, $350in each ofthese years provided that in the case of the second and third instalments certain revenue targets are met and subject further to certain downward postclosing adjustment. Furthermore, 69,752shares of common stock will be issued in eight equal quarterly instalments until the lapse of two years fromclosing. Additional earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023 will also be paid. All of these payments aresubject to the former owners being actively engaged with Orgad at the date such payment is due, and therefore were not taken as part of theconsideration for the business combination.During the year ended December 31, 2022 an amount of $456and $319was recorded in respect of the cash instalments and in respect of stocksissuance, respectively in Cost Of Goods, Sales and Marketing and General and Administrative expenses as shown in the following table:2022Stockbased compensation expense – Cost of goods194Stockbased compensation expense Sales and marketing271Stockbased compensation expense General and administrative310775(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the preliminary estimates of their fair values, which were determined using generally accepted valuation techniques based onestimates and assumptions made by management at the time of the acquisition. Such estimates are subject to change during the measurement periodwhich is not expected to exceed one year. The purchase price allocation was not finalized duo to examination of the net working capital of Orgad at theacquisition date. Any adjustments to the preliminary purchase price allocation identified during the measurement period will be recognized in theperiod in which the adjustments are determined.The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and Cash EquivalentTrade receivables364PP&E55Inventory864Longterm financial investment31Selling platform378Goodwill152Shortterm accruals and deferrals(181)Trade payables(668)Long term provision(13)Longterm debt(138)Deferred Taxes(87)Total net assets acquired757F29MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)(c)Acquisitionrelated costsThe Company incurred transaction costs of approximately $40and none during twelvemonth period ended December 31, 2022 which were included ingeneral and administrative expenses in the consolidated statements of income (loss).Acquisition of Naiz Bespoke Technologies, S.L. (“Naiz”)On October 11, 2022, the Company acquired 100% of the shares and voting interests in Naiz a provider of SaaS technology solutions that solve sizeand fit issues for fashion ecommerce companies. The acquisition was designed to allow Naiz’s customers benefit from MySize’s deep understanding ofthe fashion ecommerce retail landscape, while creating an additional revenue stream for the Company.Unaudited proforma informationThe results of operations of Naiz have been included in the consolidated financial statements since the acquisition date of October 11, 2022. Naizrevenues included in the Company’s consolidated statement of operations from October 11, 2022 through December 31, 2022 were $103. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,738 and $379 respectively and the net loss after tax would have been $8,695 and $10,717 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash503Issuance of shares of common stock (240,000 shares) (*)1,008Total consideration transferred1,511(*)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Naiz, additional cash consideration (up to $1,550) in four instalments subject to thefollowing conditions:(i)Continuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result ofa Good Reason; and(ii)Naiz’s Revenues reaching or exceeding the respective Target Revenues defined in the agreement. The revenues will be calculated in four periods:(1) January 1, 2022 – December 31, 2022; (2) January 1, 2023 – June 30, 2023; (3) July 1, 2023 – December 31, 2023; (4) January 1, 2024 – December31, 2024.Former owners of Naiz are entitled to additional cash consideration following December 31, 2025 (up to $1,650) in an event when the actual value of theequity consideration is less than $1,650, subject to completion of a Target Revenue for the period of January 1, 2025 – December 31, 2025 andcontinuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result of aGood Reason;F30MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)During the year ended December 31, 2022 an amount of $283 was recorded in respect of the additional cash consideration.(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the estimates of their fair values, which were determined using generally accepted valuation techniques based on estimates andassumptions made by management at the time of the acquisition.The following table summarizes the fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and cash equivalent36Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Total net assets acquired1,511(c)Acquisitionrelated costsDuring 2022, the Company incurred transaction costs of approximately $75 which were included in general and administrative expenses in theconsolidated statements of income (loss).F31MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)Note 17 – Operating SegmentsDuring the year ended December 31, 2021, the Company had one reportable segment. As a result of the business combinations in the reporting period(see note 13), the Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificialintelligence driven measurement solutions and (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions and. The fashionand equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. Orgad has onecustomer that is responsible for 37.9% of the Company consolidated revenues. The SaaS based innovative artificial intelligence driven measurementsolutions, or SaaS Solutions operating segment consists of My Size Inc and My Size Israel and My Size LLC.Information related to the operations of the Company’s reportable operating segments is set forth below:Fashion andequipment ecommerce platformSaaSSolutionsNaizTotalAs of the year ended December 31, 2022Revenues from external customers4,1322241034,459Operating (loss) income(591)(7,181)(338)(8,110)Financial income (expense), net(236)Net loss before tax(8,346)Fashion andequipment ecommerce platformSaasSolutionNaizAs of December 31, 2022:Assets2,0225,9661,691Amortization of intangible assets(114)(34)(46)The Company elected to present geographic information in respect with revenues generated from external customers based on the location of the selling entity:All the revenues of the fashion and equipment ecommerce platform segment are generated by Orgad, located in Israel.All the revenues of the Naiz segment are generated by Naiz, located in Spain.The revenues of the Saas Solutions segment are generated by My Size Ltd. located in Israel (approximately 75% of the segment revenues) and by My Size Inc.located in the U.S. (approximately 25% of the segment revenues).NOTE 18 SALES AND MARKETINGYear endedDecember 31,20222021Salaries836574Consultants and subcontractors5831,086Marketing481283Selling fees489Share based payments post Orgad acquisition (*)271Share based payments for consultants and employees127180Travel21142Other1451713,1432,336(*) See note 16.NOTE 19 GENERAL AND ADMINISTRATIVE EXPENSESYear endedDecember 31,20222021Salaries1,007461Professional services7051,832Share based payments for consultants, directors and employees18098Rent, office expenses and communication442372Insurance564627cash liability and equity liability expenses related to Orgad acquisition310cash liability expenses related to Naiz acquisition217Settlement fees (*)345Directors8259Other3933303,9004,124(*)See note 15(b)F32MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 20 FINANCIAL INCOME (EXPENSE), NETA.Financial incomeYear endedDecember 31,20222021Revaluation investment in marketable securities49Other26172666B.Financial expenseYear endedDecember 31,20222021Exchange rate differences33Revaluation of loan granted100Revaluation investment in marketable securities62Other6792629NOTE 21 EVENTS SUBSEQUENT TO THE BALANCE SHEET DATEa.On January 2, 2023, Orgad experienced a fire at its warehouse in Israel. The Company is not aware of any casualties or injuries associated with thefire. The Company shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450.The Company believes that this incident did not affect the future sales results of Orgad for the year 2023. The inventory was not insured and it istoo early to determine the potential impact of this incident on the other parties that were involved in the incident (lessor and others that leasedproperties near the warehouse).b.On January 10, 2023, the Company entered into a securities purchase agreement pursuant to which the Company sold an aggregate of 162,000ofthe Company’s shares of common stock and prefunded warrants to purchase up to 278,899shares of common stock and, in a concurrent privateplacement, unregistered warrants to purchase up to883,798 shares of common stock, consisting of Series A warrants to purchase up to 441,899shares of common stock and Series B warrants to purchase up to 441,899shares of common stock, at an offering price of $3.055per share ofcommon stock and associated Series A and Series B warrants and an offering price of $3.054per prefunded warrant and associated Series A andSeries B warrants.In addition, the Company entered into a securities purchase agreement pursuant to which the Company agreed to sell and issue in a privateplacement an aggregate of up to 540,098 unregistered prefunded warrants and unregistered warrants to purchase up to an aggregate of 1,080,196shares of common stock, consisting of Series A warrants to purchase up to 540,098 shares of common stock and Series B warrants to purchase upto 540,098 shares of common stock at an offering price of $3.054 per prefunded warrant and associated Series A and Series B warrants.As of March 31,2023 all the pre funded warrants were exercised by the investor.F33ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSUREThere were no disagreements with accountants on accounting and financial disclosure of a type described in Item 304 (a)(1)(iv) or any reportable event asdescribed in Item 304 (a)(1)(v) of Regulation SK.ITEM 9A. CONTROLS AND PROCEDURESDisclosure ControlsWe carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief FinancialOfficer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) as of December 31, 2022. Basedupon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this Annual Report on Form10K, our disclosure controls and procedures were effective to ensure that information required to be disclosed in reports filed under the Exchange Act, as amended,is recorded, processed, summarized and reported within the required time periods specified in the SEC’s rules and forms and is accumulated and communicated toour management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.Management’s Report on Internal Control Over Financial ReportingOur internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records, that, in reasonable detail,accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only inaccordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition, use or disposition of our assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance withthe policies or procedures may deteriorate.Our management, including our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financialreporting at December 31, 2022. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the TreadwayCommission (COSO) in Internal Control—Integrated Framework (2013). Based on that assessment under those criteria, management has determined that, as ofDecember 31, 2022, our internal control over financial reporting was effective.This Annual Report on Form 10K does not include an attestation report of our registered public accounting firm regarding internal control over financialreporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to the exemption provided to issuersthat are not “large accelerated filers” nor “accelerated filers” under the DoddFrank Wall Street Reform and Consumer Protection Act.Changes in Internal Control Over Financial ReportingDuring the year ended December 31, 2022, we made two acquisitions, as discussed in Note 1a and Note 16 of the audited consolidated financial statementsfor the year ended December 31, 2022 included in this Annual Report on Form 10K. As a result, we made additions and/or modifications to policies, procedures,systems and controls that have materially affected our internal control over financial reporting from the acquisitions, including new controls for consolidationprocess that relates to accounting policies and procedures, operational processes and documentation practices. Management excluded the acquired businessesfrom management’s report on internal control over financial reporting. ITEM 9B. OTHER INFORMATIONNone.ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNot applicable.51PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe following table sets forth the name, age and positions of our executive officers and directors.NAMEAgePOSITIONRonen Luzon52Chief Executive Officer and Class III DirectorOr Kles40Chief Financial OfficerBilly Pardo47Chief Operating Officer and Chief Product OfficerIlia Turchinsky35Chief Technology OfficerEzequiel Javier Brandwain53Chief Commercial OfficerOron Branitzky (1)(2)(3)*63Class II DirectorOren Elmaliah (1)(2)(3)*38Class I DirectorArik Kaufman (1)(2)(3)*41Class I DirectorGuy Zimmerman*53Class II Director(1)Member of our audit committee(2)Member of our nominating and corporate governance committee(3)Member of our compensation committee* Independent as that term is defined by the rules of the Nasdaq Stock Market.The business background and certain other information about our directors and executive officers is set forth below:Ronen Luzon has served as our Chief Executive Officer and a member of our board of directors since September 2013. Since 2006, Mr. Luzon hasadditionally served as Chief Executive Officer and founder of Malers Ltd., a company in the global security solutions market which provides technological solutionsfor integrated communication infrastructures, security and control systems. Prior to Malers, he held several senior marketing, sales management and professionalservices positions in a variety of international high tech companies including VP marketing of GA Tech and Professional Services Manager of Eldat Communication.Mr. Luzon graduated from Middlesex University in London with a B.S. in IT and Business Information Systems. We believe that Mr. Luzon is qualified to serve as amember of our board of directors because of his more than 20 years of experience in the technology sector.Or Kles has served as our Chief Financial Officer since May 2016. He is a certified public accountant with a broad, diverse financial background. From May2013 until April 2016 he served as Assistant Controller of Shikun and BinuiSolel Boneh Infrastructure Ltd. and from December 2010 until May 2013 he served as anAssociate at KPMG. Mr. Kles holds an MBA and a B.A. in Business Management and Accounting (specializing in financing) from The College of ManagementAcademic Studies. Mr. Kles is a certified public accountant in Israel.Billy Pardo has served as our Chief Product Officer since May 2014 and Chief Operating Officer since April 2019. From April 2010 until August 2013, Ms.Pardo served as Senior Director of Product Management of Fourier Education. Among her areas of expertise are launching products from concept to successfuldelivery in various methodologies, including Fourier Education’s awardwinning einstein™ Science Tablet. Prior to that Ms. Pardo served in various productmanagement positions including, Project Manager of Time to Know, Product Marketing Manager of RiT Technologies, Product Manager of Pricer AB and R&DTeam Leader at Pricer AB. Ms. Pardo previously served as Software Engineer at Eldat Communication Ltd., and QA Engineer at NICE Systems. Ms. Pardo receivedan MBA from The Interdisciplinary Center and a B.A. in Computer Science from The Academic College of TelAvivYaffo.Ilia Turchinsky has served as our Chief Technology Officer since April 2019 and from July 2018 until April 2019 as our Director of Technology. Prior tojoining us, from 2013 until 2018, Mr. Turchinsky served in various roles, most recently Chief Technology Officer, at MonkeyTech Ltd., a company that providesdesign, development and characterization of mobile applications. Prior to that, Mr. Turchinsky served in various roles including development course instructor atIQLine, was a founder of Arnavsoft and was a software developer for MintLab and a political party. Mr. Turchinsky holds a B.Sc. from the Ben Gurion University inComputer Science and an M.Sc. from the Open University of Israel in Computer Science.52Ezequiel Javier Brandwain has served as our Chief Commercial Officer since February 2022. Mr. Brandwain brings more than two decades of globalexperience in retail and the fashion industry, mainly in business development, operations, and international markets. Before joining the Company, Mr. Brandwainheld positions of increasing responsibility at several companies, including between June 2017 and November 2020, at 7 For All Mankind International, where heserved as Director, Latin America and Caribbean, managing business development and operations across Latin America and the Caribbean. Before that, betweenMay 2016 and June 2017, Mr. Brandwain served as Chief Business Development Officer at Replay – Fashion Box SPA, where he oversaw business development andoperations, expansion and control in the Americas, the Caribbean, and NorthEast Asia. Prior this role, between September 2015 and May 2016, he served as theReplay’s Managing Director in Latin America and the Caribbean, leading the company’s international expansion in these regions. Prior to that, between April 2015and September 2015, Mr. Brandwain served as Managing Director, Latin America and Caribbean at Authentic Brands Group LLC, where he led that company’soperations, business developments and international expansion within these regions, and served as the direct liaison with the company’s headquarters in New York.Prior to that, between April 2015 and September 2015, Mr. Brandwain served as Chief Operating Officer, Latin America and Caribbean at Flemingo International Ltd.,overseeing operations, as well as projected operations in the travel retail field across these regions. Prior to that, between December 2010 and February 2014, Mr.Brandwain served as Regional Director, Southern Hemisphere at Calvin Klein, where he was responsible for defining and implementing the operational andcommercial strategy for Southern Hemisphere, as well as overseeing the retail, travel retail, concession, and wholesale businesses of the company. During his tenureat Calvin Klein, Mr. Brandwain also served as Travel Retail Director, Latin America, where he built the travel retail business and developed operations. Prior to that,between July 2010 and November 2010, Mr. Brandwain served as Business Director, Latin America and Caribbean at Givenchy Latin America, and between January2010 and June 2010 he served as Commercial Director, Latin America and Caribbean at Nautica Latin America. During December 2004 and December 2009, Mr.Brandwain served as Vice President, International Business Development at Report Collection/Modextil, Inc., where he was in charge of business and operationalexpansion, global growth, and brand extensions. Prior to that, between 2003 and October 2004, Mr. Brandwain served as General Manager at Andrew KoenigInternational, Inc. Between September 2019 and November 2020, Mr. Brandwain served as a member of the Board of Directors of 7 For All Mankind BrazilImportacao, Comercio E Distribuicao S.A. Mr. Brandwain earned a Bachelor degree in architecture from the University of the Republic (Uruguay).Oron Branitzky has served as a member of our board of directors since March 2017. Mr. Barnitzky has vast experience in retail technology. SinceNovember 2017, Mr. Branitzky has served as Global Retail Business Development at Superup, and from January 2007 until December 2014 he served as VicePresident of Sales and Marketing at Pricer AB. Prior to that, Mr. Branitzky has served as VP Marketing and Sales at Eldat Communication and Sarin TechnologiesLtd. Since January 2015, Mr. Branitzky has served as chairman of the board of directors of WiseShelf Ltd. and from May 2015 until March 2016, Mr. Branitzky servedas an advisory board member of ciValue. Mr. Branitzky received a B.S. from the Hebrew University of Jerusalem and an MBA in International Marketing from TelAviv University. We believe that Mr. Branitzky is qualified to serve as a member of our board of directors because of his more than 20 years of experience inmanaging the sales of hitech solutions to retailers across the globe.Oren Elmaliah, has served as a member of our board of directors since May 2017. In September 2015, Oren Elmaliah founded Accounting Team IL and hasacted as Account Manager since then. Accounting Team IL is a financial consultancy and service provider to public companies traded in Israel and abroad. SinceFebruary 2017, Mr. Elmaliah has served as controller of Enlivex Therapeutics Ltd., and since January 2017 he has served as Chief Financial Officer of Presstek Israel.In addition, since September 2015, Mr. Elmaliah has served as an Israel Authorities Reporting Officer of LG Electronics Israel and since September 2015 he hasserved as Local Financial Report Consultant of Chiasma. From July 2011 until August 2015, Mr. Elmaliah served as CPA, Financial Director of CFO Director Ltd andfrom June 2010 until July 2011 he served as Risk Management Consultant of RSM International Limited. Mr. Elmaliah holds a B.A. in Accounting/Economics and aMsc. in Finance/Accounting from Tel Aviv University, Israel. He is a licensed Certified Public Accountant in Israel. We believe that Mr. Elmaliah is qualified to serveas a member of our board of directors because of his vast finance experience and public company management and administration in the fields of finance,accounting, and financial regulation.53Arik Kaufman has served as a member of our board of directors since June 2017. Mr. Kaufman is an attorney specializing in the fields of commercial law,corporate law and capital markets and since 2016 runs his own law office in Israel. He has vast experience in the fields of financial reporting and financial regulation.Mr. Kaufman serves as the Chief Executive Officer of Steakholder Foods since January 2022. From September 2017 until January 2022, Mr. Kaufman served as VPBusiness Development of Mor Research Applications. Mr. Kaufman holds an LLB in Law from the Interdisciplinary Center, Herzliya, and is admitted to the IsraeliBar. We believe that Mr. Kaufman is qualified to serve as a member of our board of directors based upon his experience of assisting with the completion of numerousventure capital financings, mergers, acquisitions, and strategic relationships. In addition, he has served as a member of the board of various publicly tradedcompanies, including companies that operate in the same industry as us.Guy Zimmerman has served as a member of our board of directors since August 2021. Previously, Mr. Zimmerman served as Founder and CEO ofManuFuture, an online b2b engineering market place, since February 2021. Prior to that from 2017 to 2021, Mr. Zimmerman acted as a consultant to severaltechnology startups and was a founding partner of a business travel online platform. From 2013 to 2017, Mr. Zimmerman served as EVP of Marketing and BusinessDevelopment of Kornit Digital and was part of the IPO leadership. Prior to that, Mr. Zimmerman served as VP of Global Sales and Business Development at TefronLtd., a provider of seamless garment technology, where he led the $100m sales and sales support organization serving global retail and fashion brands. Prior to thathe served as Vice President of Strategy and Business Development at Tnuva Group, Israel’s largest food manufacturer and spent eight years at McKinsey &Company. Mr. Zimmerman previously led a software startup in the field of operational healthcare management systems. Mr. Zimmerman holds a B.Sc. in IndustrialEngineering from Tel Aviv University in Israel. We believe that Mr. Zimmerman is qualified to serve as a member of our board of directors because of his experiencein business development in the technology and retail sectors.Board Diversity MatrixThe table below provides certain information regarding the diversity of our board of directors as of the date of this annual report.Board Diversity Matrix (As of March 31, 2023)Total Number of Directors5FemaleMaleNonBinaryDid Not DiscloseGenderPart I: Gender IdentityDirectors#5##Part II: Demographic BackgroundAfrican American or Black####Alaskan Native or Native American####Asian####Hispanic or Latinx####Native Hawaiian or Pacific Islander####White#1##Two or More Races or Ethnicities#2##LGBTQ+0Did Not Disclose Demographic Background2Family RelationshipsRonen Luzon, the Chief Executive Officer and a member of our board of directors, and Billy Pardo, the Chief Product Officer and Chief Operating Officer, arehusband and wife. There are no other family relationships among any of our current or former directors or executive officers.Involvement in Certain Legal ProceedingsWe are not aware of any of our directors or officers being involved in any legal proceedings in the past ten years relating to any matters in bankruptcy,insolvency, criminal proceedings (other than traffic and other minor offenses), or being subject to any of the items set forth under Item 401(f) of Regulation SK.Arrangements between Officers and DirectorsTo our knowledge, there is no arrangement or understanding between any of our officers and any other person, including directors, pursuant to which theofficer was selected to serve as an officer.Board of DirectorsThere are no agreements with respect to the election of directors.On January 6, 2022, we filed with the Secretary of State of Delaware a Certificate of Amendment to our Amended and Restated Certificate of Incorporationproviding for a classified Board. Following filing of the Certificate of Amendment, members of our board are now classified into three classes with staggered threeyear terms (with the exception of the expiration of the initial Class I and Class II directors), as follows:●Class I, comprised of two directors, initially Arik Kaufman and Oren Elmaliah (with their initial terms expiring at our 2022 annual meeting of stockholders andmembers of such class serving successive threeyear terms);●Class II, comprised of two directors, initially Oron Branitzky and Guy Zimmerman (with their initial terms expiring at our 2023 annual meeting of stockholdersand members of such class serving successive threeyear terms); and●Class III, comprised of one director, initially Ronen Luzon (with his initial term expiring at our 2024 annual meeting of stockholders and members of suchclass serving successive threeyear terms).54To preserve the classified Board structure, a director elected by the Board of Directors to fill a vacancy holds office until the next election of the class forwhich such director has been chosen, and until that director’s successor has been elected and qualified or until his or her earlier death, resignation, retirement orremoval.Our board of directors has reviewed the materiality of any relationship that each of our directors has with us, either directly or indirectly. Based upon thisreview, we believe that Arik Kaufman, Oren Elmaliach, Oron Branitzky and Guy Zimmerman qualify as independent directors in accordance with the standards set bythe Nasdaq and Rule 10A3 promulgated under the Exchange Act.Committees of the BoardAudit CommitteeOur audit committee is comprised of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Elmaliah serves as chairman of the audit committee. The auditcommittee is responsible for retaining and overseeing our independent registered public accounting firm, approving the services performed by our independentregistered public accounting firm and reviewing our annual financial statements, accounting policies and our system of internal controls. The audit committee actsunder a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the audit committee’s composition and meetings.The audit committee charter is available on our website www.mysizeid.com.The Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by applicable SEC rules. Inaddition, the Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by the rules of the Nasdaq StockMarket.The Board of Directors has determined that Oren Elmaliah is an “audit committee financial expert” serving on its audit committee, and is independent, as theSEC has defined that term in Item 407 of Regulation SK.Compensation CommitteeOur compensation committee consists of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Branitzky serves as chairman of the compensationcommittee.The compensation committee’s roles and responsibilities include making recommendations to the Board of Directors regarding the compensation for ourexecutives, the role and performance of our executive officers, and appropriate compensation levels for our CEO, which are determined without the CEO present, andother executives. Our compensation committee also administers our 2017 Equity Incentive Plan and our 2017 Consultant Equity Incentive Plan. The compensationcommittee acts under a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the compensation committee’scomposition and meetings. The compensation committee charter is available on our website www.mysizeid.com.Our Board of Directors has determined that all of the members of the compensation committee are “independent” as that term is defined by the rules of theNasdaq Stock Market.Nominating and Corporate Governance CommitteeThe members of the nominating and corporate governance committee are Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Kaufman serves aschairman of the corporate governance and nominations committee. The nominating and corporate governance committee acts under a written charter, which morespecifically sets forth its responsibilities and duties, as well as requirements for the nominating and corporate governance committee’s composition and meetings.The nominating and corporate governance committee charter is available on our website www.mysizeid.com.The nominating and corporate governance committee develops, recommends and oversees implementation of corporate governance principles for us andconsiders recommendations for director nominees. The nominating and corporate governance committee also considers stockholder recommendations for directornominees that are properly received in accordance with applicable rules and regulations of the SEC. Our stockholders that wish to nominate a director for election tothe Board of Directors should follow the procedures set forth in our bylaws.55The nominating and corporate governance committee will consider persons identified by its members, management, stockholders, investment bankers andothers. The guidelines for selecting nominees, which are specified in the nominating committee charter, generally provide that persons to be nominated:●should be accomplished in his or her field and have a reputation, both personal and professional, that is consistent with our image and reputation;●should have relevant experience and expertise and would be able to provide insights and practical wisdom based upon that experience and expertise; and●should be of high moral and ethical character and would be willing to apply sound, objective and independent business judgment, and to assume broadfiduciary responsibility.The nominating and corporate governance committee will consider a number of qualifications relating to management and leadership experience,background and integrity and professionalism in evaluating a person’s candidacy for membership on the Board of Directors. The nominating and corporategovernance committee may require certain skills or attributes, such as financial or accounting experience, to meet specific Board needs that arise from time to timeand will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of Board of Directors members. The nominating andcorporate governance committee will not distinguish among nominees recommended by stockholders and other persons.Our Board of Directors has determined that all of the members of the nominating and corporate governance committee are “independent” as that term isdefined by the rules of the Nasdaq Stock Market.Code of Conduct and EthicsWe have a Code of Business Conduct and Ethics that applies to all our employees. The text of the Code of Business Conduct and Ethics is publiclyavailable on our website at www.mysizeid.com. Information contained on, or that can be accessed through, our website does not constitute a part of this report andis not incorporated by reference herein. Disclosure regarding any amendments to, or waivers from, provisions of the code of conduct and ethics that apply to ourdirectors, principal executive and financial officers will be posted on the “InvestorsCorporate Governance” section of our website at www.mysizeid.com or will beincluded in a Current Report on Form 8K, which we will file within four business days following the date of the amendment or waiver.Change in Procedures for Recommending DirectorsThere have been no material changes to the procedures by which our stockholders may recommend nominees to our Board of Directors from thoseprocedures set forth in our Proxy Statement for our 2021 Annual Meeting of Stockholders, filed with the SEC on December 7, 2022.56ITEM 11. EXECUTIVE COMPENSATIONSummary Compensation TableThe following sets forth the compensation paid by us to our named executive officers, during the years ended December 31, 2022 and December 31, 2021.Name and Principal PositionYearSalary($) (1)Bonus($)StockAwards($)OptionAwards($) (2)All OtherCompensation($)Total($)Ronen Luzon2022173,000223,0008,000126,000530,000Chief Executive Officer2021194,0005,00023,00097,000319,000Or Kles2022123,00053,0007,00071,000254,000Chief Financial Officer2021123,0008,00030,00061,000222,000Billy Pardo2022134,00053,0007,000100,00294,000Chief Operating Officer2021162,0007,00018,00074,000261,000(1) Salary for the years 2022 and 2021 are based on average US$/NIS representative exchange rates of NIS 3.358 and NIS 3.11 respectively.(2) Amounts in this column represent the grant date fair value of options granted to the named executive officers during 2022 and 2021, computed in accordance withFASB ASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the named executive officers. The assumptionsmade in valuing the options reported in this column are discussed in Note 11 to our audited financial statements for the year ended December 31, 2021 and Note 4 toour condensed consolidated interim financial statements for the quarterly period ended September 30, 2022.All Other Compensation TableThe “All Other Compensation” amounts set forth in the Summary Compensation Table above consist of the following:NameYearAutomobileRelatedExpenses($)Manager’sInsurance*($)EducationFund*($)Othersocialbenefits**($)Total($)Ronen Luzon202232,00031,00015,00048,000126,000202133,00033,00015,00016,00097,000Or Kles202215,00021,00010,00025,00071,000202114,00019,0009,00019,00061,000Billy Pardo202216,00025,00013,00046,000100,000202117,00024,00012,00021,00074,000* Manager’s insurance and education funds are customary benefits provided to employees based in Israel. Manager’s insurance is a combination of severancesavings (in accordance with Israeli law), defined contribution taxqualified pension savings and disability insurance premiums. An education fund is a savings fundof pretax contributions to be used after a specified period of time for educational or other permitted purposes.** Other social benefits for 2022 and 2021 for all named individuals includes tax payments in respect of social benefits.57Agreements with Named Executive OfficersRonen LuzonOn November 18, 2018, My Size Israel, our wholly owned subsidiary, entered into an employment agreement with Ronen Luzon, or the Luzon EmploymentAgreement, pursuant to which Mr. Luzon will serve as our Chief Executive Officer. Pursuant to the terms of the Luzon Employment Agreement, Mr. Luzon receivesNIS 55,000 per month as his base salary and shall be eligible to receive such bonus as determined by us. In addition, Mr. Luzon shall be entitled social benefits andto other benefits, including, but not limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, includinginsurance in case of disability, annual vacation days, sick leave and expense reimbursement. Pursuant to the terms of the Luzon Employment Agreement and subjectto certain conditions, payments made by the Company to the pension fund or manager’s insurance fund shall be made in lieu of severance payments due to Mr.Luzon. The term of the Luzon Employment Agreement shall be effective as of September 1, 2018 and shall continue until such time either party provides writtennotice to the other party at least 75 days in advance of the termination of such agreement. We may also terminate Mr. Luzon’s employment without prior writtennotice (or payment in lieu of such notice) for Cause (as defined in the Luzon Employment Agreement).Or KlesOn November 18, 2018, My Size Israel entered into an employment agreement with Or Kles, or the Kles Employment Agreement, pursuant to which Mr. Kleswill serve as our Chief Financial Officer. Pursuant to the terms of the Kles Employment Agreement, Mr. Kles receives NIS 38,000 per month as his base salary andshall be eligible to receive such bonus as determined by us. In addition, Mr. Kles shall be entitled to social benefits and other benefits, including, but not limited to,contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annual vacation days,sick leave and expense reimbursement. Pursuant to the terms of the Kles Employment Agreement and subject to certain conditions, payments made by us to thepension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Mr. Kles. The term of the Kles Employment Agreement shall beeffective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days in advance of thetermination of such agreement. We may also terminate Mr. Kles’s employment without prior written notice (or payment in lieu of such notice) for Cause (as defined inthe Kles Employment Agreement).Billy PardoOn November 18, 2018, My Size Israel entered into an employment agreement with Billy Pardo, or the Pardo Employment Agreement, pursuant to which Ms.Pardo will serve as our Chief Product Officer. Pursuant to the terms of the Pardo Employment Agreement, Ms. Pardo receives NIS 47,500 per month as her basesalary and shall be eligible to receive such bonus as determined by us. In addition, Ms. Pardo shall be entitled to social benefits and other benefits, including, butnot limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annualvacation days, sick leave and expense reimbursement. Pursuant to the terms of the Pardo Employment Agreement and subject to certain conditions, payments madeby us to the pension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Ms. Pardo. The term of the Pardo EmploymentAgreement shall be effective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days inadvance of the termination of such agreement. We may also terminate Ms. Pardo’s employment without prior written notice (or payment in lieu of such notice) forCause (as defined in the Pardo Employment Agreement).58Outstanding Equity Awards at Fiscal YearEndThe following table provides information regarding options held by each of our named executive officers that were outstanding as of December 31, 2022.Option AwardsStock AwardsName and Principal PositionNumber ofSecuritiesUnderlyingUnexercisedOptionsExercisableNumber ofSecuritiesUnderlyingUnexercisedOptionsUnexercisableOptionExercisePriceOptionExpirationDateEquityincentiveplan awards:Number ofUnearnedShares that HaveNot VestedEquityincentiveplan awards:Market Value ofUnearnedShares, That Have Not VestedRonen Luzon Chief Executive Officer400(1)$26(8)7/24/20231,601(2)$26(8)5/29/20256,400(3)$268/10/2025100,000(9)100,000$511,250Or Kles – Chief Financial Officer227(4)$26(8)7/24/2023427(5)$26(8)5/29/20255,200(6)$268/10/202524,000(10)24,000$122,700Billy Pardo Chief Operating Officer400(1)$26(8)7/24/2023894(7)$26(8)5/29/20255,200(6)$268/10/202524,000(11)24,000$122,700(1) The option has a grant date of July 24, 2017 and vested in full on January 24, 2018.(2) The option has a grant date of May 29, 2019. 267 options vested immediately upon grant, 445 options vested on January 24, 2019, 445 options vested on January24, 2020 and 444 options vested on January 24, 2021.(3) The option has a grant date of October 8, 2020, 1,600 options vested on November 26, 2020, 1,600 options vested on May 26, 2021, 1,600 options vested onNovember 26, 2021, and 1,600 options vested on May 26, 2022.(4) The option has a grant date of July 24, 2017. 76 options vested immediately upon grant, 76 options vested on May 1, 2018 and 75 options vested on May 1, 2019.(5) The option has a grant date of May 29, 2019. 160 options vested immediately upon grant, 445 options vested on May 1, 2020, 445 options vested on May 21, 2021and 444 options vested on May 1, 2022.(6) The option has a grant date of October 8, 2020, 1,300 options vested on November 26, 2020, 1,300 options vested on May 26, 2021, 1,300 options vested onNovember 26, 2021, and 1,300 options vested on May 26, 2022.(7) The option has a grant date of May 29, 2019. 214 options vested immediately upon grant, 227 options vested on January 24, 2019, 227 options vested on January24, 2020 and 226 options vested on January 24, 2021.(8) On May 25, 2020, the compensation committee of the Board of Directors of the Company reduced the exercise price of outstanding options of employees anddirectors of the Company for the purchase of an aggregate of 5,610 shares of common stock of the Company (with exercise prices ranging between $453.75 and$228.75) to $26 per share, which was the closing price for the Company’s common stock on May 22, 2020, and extended the term of the foregoing options for anadditional one year from the original date of expiration.(9) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(10) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(11) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.59Director CompensationThe following table sets forth compensation information for our nonemployee directors for the year ended December 31, 2022.NameFees earned orpaid incash ($)(1)Optionawards($)(1)(2)Total($)Oren Elmalih15,078 15,078Oron Barnitzky15,34715,347Arik Kaufman14,44114,441Guy Zimmerman13,03313,033(1)Fees for the year 2022 are based on average US$/NIS representative exchange rates of NIS 3.519.(2)Amounts in this column represent the grant date fair value of options granted to the nonemployee directors during 2022 computed in accordance with FASBASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the nonemployee directors. The assumptions made invaluing the options reported in this column are discussed in Note 11 to our financial statements for the year ended December 31, 2022.We compensate our nonemployee directors for their service as a member of our board. Mr. Luzon received no separate compensation for board service. Mr.Luzon’s compensation is set forth above in the Summary Compensation Table.Each nonemployee director is entitled to receive a per meeting fee of $318. Nonemployee directors are also reimbursed for their travel and reasonable outofpocket expenses incurred in connection with attending board and committee meetings, to the extent that attendance is required by the board or the committee(s)on which that director serves.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurity Ownership of Certain Beneficial Holders and ManagementThe following table sets forth certain information regarding beneficial ownership of shares of our common stock as of March 31, 2023 by (i) each personknown to beneficially own more than 5% of our outstanding common stock, (ii) each of our directors, (iii) each of our executive officers, and (iv) all of our directorsand executive officers as a group. Except as otherwise indicated, the persons named in the table below have sole voting and investment power with respect to allshares beneficially owned, subject to community property laws, where applicable.Beneficial Owner(1)Shares ofCommon StockBeneficiallyOwnedPercentage(2)Executive officers and directors:Ronen Luzon143,578(3)5.8%Or Kles29,854(4)1.2%Billy Pardo143,578(5)5.8%Ezequiel Javier Brandwain12,000(6)*Ilia Turchinsky18,313(7)*Arik Kaufman1,294(8)*Oren Elmaliah1,294(9)*Oron Branitzky1,294(10)*Guy ZimmermanAll Executive Officers and Directors as a Group (9 persons)207,6268.4%*Less than 1%(1) The address of each person is c/o My Size, Inc., 4 HaYarden St., P.O.B. 1026, Airport City, Israel 7010000 unless otherwise indicated herein.60(2) The calculation in this column is based upon 2,446,780 shares of common stock outstanding on March 31, 2023. Beneficial ownership is determined in accordancewith the rules of the SEC and generally includes voting or investment power with respect to the subject securities. Shares of common stock that are currentlyexercisable or exercisable within 60 days of March 31, 2023 are deemed to be beneficially owned by the person holding such securities for the purpose of computingthe percentage beneficial ownership of such person, but are not treated as outstanding for the purpose of computing the percentage beneficial ownership of anyother person(3) Consists of (i) 100,000 shares of restricted stock granted under the 2017 Plan, (ii) 4,683 shares of common stock, (iii) options to purchase up to 8,401 shares of ourcommon stock, and (iv) 24,000 shares of restricted stock and options to purchase up to 6,494 shares of our common stock which are held by Billy Pardo, RonenLuzon’s spouse. Mr. Luzon may be deemed to beneficially hold the securities of us held by Ms. Pardo.(4) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, and (ii) an option to purchase 5,854 shares of our common stock. Does not includean aggregate of 119,760 shares of restricted stock over which Mr. Kles has been designated the initial proxy to vote such shares pursuant to a voting agreemententered into between Whitehole S.L., Twinbel S.L. and EGI Acceleration, S.L.(5) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, (ii) options to purchase up to 6,494 shares of our common stock, (iii) 100,000 sharesof restricted stock which are held by Ronen Luzon, Billy Pardo’s spouse (iii) 8,401 shares of common stock which are held by Mr. Luzon, and (iii) options to purchaseup to 4,683 shares of our common stock which are held by Mr. Luzon. Ms. Pardo may be deemed to beneficially hold the securities of the Company held by Mr.Luzon.(6) Consists of 12,000 shares of restricted stock granted under the 2017 Plan.(7) Consists of (i) 16,000 shares of restricted stock granted under the 2017 Plan, and (ii) options to purchase up to 2,313 shares of our common stock.(8) Consists of options to purchase up to 1,294 shares of our common stock.(9) Consists of options to purchase up to 1,294 shares of our common stock.(10) Consists of options to purchase up to 1,294 shares of our common stock.Change in ControlWe are not aware of any arrangement that might result in a change in control in the future. We have no knowledge of any arrangements, including anypledge by any person of our securities, the operation of which may at a subsequent date result in a change in the Company’s control.Securities Authorized for Issuance Under Equity Compensation PlansOn January 29, 2017, our Board of Directors approved the 2017 Equity Incentive Plan and the 2017 Consultant Equity Incentive Plan, which were approvedby our stockholders on March 21, 2017. In addition, on January 29, 2017, our Board of Directors approved the Stock Option Plan Israel Grantees SubPlan. The 2017Equity Incentive Plan initially authorized the issuance of up to 5,334 shares of common stock under the plan and the 2017 Consultant Equity Incentive Plan initiallyauthorized the issuance of up to 8,000 shares of common stock under the plan.On February 12, 2018, our stockholders approved an amendment to the 2017 Consultant Equity Incentive Plan to increase the maximum number of shares ofour common stock available for issuance under the plan from 8,000 to 12,000. On July 3, 2018, our stockholders approved an amendment to the 2017 Equity IncentivePlan to increase the maximum number of shares of our common stock available for issuance under the plan from 5,334 to 8,000 and an amendment to the 2017Consultant Equity Incentive Plan to increase the maximum number of shares of our common stock available for issuance under the plan from 12,000 to 18,667.On May 25, 2020, our Board reduced the exercise price of outstanding options of our employees and directors for the purchase of an aggregate of 140,237of our common stock (with exercise prices ranging between $453.75 and $228.75) to $26.0 per share, and extended the term of the foregoing options for an additionalone year from the original date of expiration.61On August 10, 2020, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 80,000 to 58,000shares, and a decrease of the numbers of shares available for issuance under the 2017 Consultant Incentive Plan to 8,667 shares from 18,667 shares.On December 30, 2021, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 58,000 sharesto 230,800 shares.On December 7, 2022, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Plan from 230,800 shares to 289,000shares.The following table summarizes information about our equity compensation plans and individual compensation arrangements as of December 31, 2022.Number of securities to be issued upon exercise of outstanding options, warrants and rights(a)Weighted average exercise price of outstandingoptions, warrants and rights (b)Number of securities remaining availablefor future issuanceunder equity compensationplans (excludingsecurities reflected in column (a) (c)Equity compensation plans approved by security holders43,49724.7477,455Equity compensation plans not approved by security holdersTotal43,49724.7477,455ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEDuring years ended December 31, 2022 and 2021, except for compensation arrangements described elsewhere herein and the transactions described below,we did not participate in any transaction, and we are not currently participating in any proposed transaction, or series of transactions, in which the amount involvedexceeded the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years, and in which, to our knowledge,any of our directors, officers, five percent beneficial security holders, or any member of the immediate family of the foregoing persons had, or will have, a direct orindirect material interest.Compensation arrangements for our named executive officers and directors are described in the section entitled “Executive Compensation.”Employment AgreementsWe have entered into written employment agreements with each of our executive officers. These agreements generally provide for notice periods of varyingduration for termination of the agreement by us or by the relevant executive officer, during which time the executive officer will continue to receive base salary andbenefits. We have also entered into customary noncompetition, confidentiality of information and ownership of inventions arrangements with our executiveofficers. However, the enforceability of the noncompetition provisions may be limited under applicable law.OptionsSince our inception we have granted options to purchase our common stock to our officers and directors. Such option agreements may contain accelerationprovisions upon certain merger, acquisition, or change of control transactions.62Restricted Stock GrantsOn September 29, 2022, our compensation committee approved grants of restricted share awards under our 2017 Plan to Ronen Luzon, Or Kles, Billy Pardo,Ilia Turchinsky and Ezequiel Javier Brandwain, pursuant to which they were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000restricted shares and 12,000 restricted shares, respectively. The restricted shares shall vest in three equal installments on January 1, 2023, January 1, 2024 andJanuary 1, 2025, conditioned upon continuous employment with us, and subject to accelerated vesting upon a change in control of the Company.Shareholder ActivismIn May 2021, we received notice from Custodian Ventures, LLC, or Custodian, of its intention to nominate four candidates to stand for election to our Boardof Directors at our 2021 annual meeting of stockholders. Custodian subsequently made a book and records request and has made public statements calling forchanges to our management.On September 22, 2021, Custodian, commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v. Mysize,Inc., C.A. No. 20210817LWW, or the Delaware Action. In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting. As further described below, on November 4, 2021, we entered into asettlement agreement, or the Settlement Agreement, with Custodian, Activist Investing LLC, David Aboudi, Partick Loney and David Natan, collectively, the LazarParties, settling and dismissing the Delaware Action.On October 19, 2021, we commenced an action in the United States District Court for the Southern District of New York captioned My Size, Inc. v. DavidLazar, Custodian Ventures LLC, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, Civil Action No, 1:21cv08585, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, andcertain rules promulgated thereunder, or the SDNY Action. The complaint sought, among other things, declaratory and injunctive relief related to defendants’ effortsto nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed “group” for purposes ofSection 13 (d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. In addition, the complaint alleged that thedefendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules in connection with their efforts to elect a slate of directorsto our Board of Directors. On October 20, 2021, the Court signed an order granting a hearing on an anticipated motion for a preliminary injunction and expeditedscheduling and discovery in aid thereof, and scheduled that hearing for December 2, 2021. As further described below, on November 4, 2021, we entered into theSettlement Agreement with the Lazar Parties settling and dismissing the claims asserted in the SDNY Action and the Delaware Action against one another. OnNovember 8, 2021, the remaining defendants in the SDNY Action filed and answer and counterclaim asserting a claim against us pursuant to New York Civil RightsLaw Section 70a, also known as New York’s antiSLAPP statute.On November 4, 2021, we entered into the Settlement Agreement, or the Lazar Settlement Agreement, with the Lazar Parties. Pursuant to the LazarSettlement Agreement, we and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the LazarSettlement Agreement, we reimbursed Custodian for out of pocket expenses and in consideration for the dismissal and release of claims against the Company anaggregate amount equal to $275,000. With respect to our 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) itsMay 12, 2021 notice of stockholder nominations of four director candidates with respect to our 2021 annual meeting of stockholders, (ii) the notice dated October 28,2021 submitted by Custodian to us notifying us of Custodian’s continued intent to bring its nomination of four director candidates before our stockholders at the2021 annual meeting, and (iii) any and all related materials and notices submitted to us in connection therewith or related thereto and to not take any further action inconnection with the solicitation of any proxies in connection with us. Custodian also agreed to cease any and all solicitation and other activities in connection withthe 2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effective date of theAgreement, or the Standstill Period. The Lazar Settlement Agreement also provides that during the Standstill Period, the Lazar Parties will vote all shares of ourcommon stock it beneficially owns in accordance with any proposal or recommendation made by us or our Board of Directors that is submitted to our stockholders,unless to do so would violate applicable law and except with respect to certain extraordinary transactions. The Lazar Settlement Agreement also contains nondisparagement and confidentiality provisions, subject to certain exceptions.63On December 9, 2021, we subsequently entered into a Settlement Agreement, or the Ault Settlement Agreement, with Milton C. Ault III, Ault Alpha LP, AultAlpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed to withdraw the SDNY Action against the AultParties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that action against the Company. In addition, pursuant to the SettlementAgreement, we paid $70,000 to the Ault Parties in consideration for the releases and other good and valuable consideration as set forth in the Ault SettlementAgreement.Naiz Bespoke Technologies AcquisitionOn October 7, 2022, we entered into the Naiz Agreement with the Naiz Sellers, pursuant to which the Naiz Sellers agreed to sell to us all of the issued andoutstanding equity of Naiz. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) ) the Naiz EquityConsideration and (ii) up the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the Equity Value Averaging Period) is less than $1,650,000, My Size shall pay the Shortfall Value to the Naiz Sellers within 45days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period, it wasdetermined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement)).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers will be subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into the LockUp Agreement with My Size, (ii) Whitehole, Twinbel and EGIentered into the Voting Agreement with My Size and (iii) each of the Key Persons entered into employment agreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonth period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonth “dribbleout” provisionthat provides following the expiration of the initial sixmonth lockup period, without My Size’s prior written consent (which My Size shall be permitted to withholdat its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than the average dailytrading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.64The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Indemnification Agreements and Directors’ and Officers’ Liability InsuranceWe have entered into indemnification agreements with each of our directors and executive officers. These agreements, among other things, require us toindemnify these individuals and, in certain cases, affiliates of such individuals, to the fullest extent permitted by Delaware law against liabilities that may arise byreason of their service to us or at our direction, and to advance expenses incurred as a result of any proceedings against them as to which they could beindemnified. We also maintain an insurance policy that insures our directors and officers against certain liabilities, including liabilities arising under applicablesecurities laws.Director IndependenceSee “Item 10. Directors, Executive Officers and Corporate Governance; Corporate Governance, Board Composition” above for a discussion regarding theindependence of the members of our board of directors.ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICESSomekh Chaikin, a member firm of KPMG International, located in Tel Aviv, Israel, PCAOB ID 1057, has served as our independent registered publicaccounting firm for 2022 and 2021. The following are Somekh Chaikin’s fees for professional services in each of the respective fiscal years:Fee Category20222021Audit Fees198,910298,300Tax Fees30,66729,300Auditrelated Fees18,000Total Fees247,577327,600Audit Fees:Audit Fees consist of fees billed for professional services performed by Somekh Chaikin for the audit of our annual financial statements, thereview of interim consolidated financial statements, and related services that are normally provided in connection with registration statements, including theregistration statement for S1 and S3.Tax Fees: Tax Fees may consist of fees for professional services, including tax and VAT consulting and compliance performed by an independent registeredpublic accounting provided during the period.PreApproval Policies and ProceduresIn accordance with the SarbanesOxley Act of 2002, as amended, our audit committee charter requires the audit committee to preapprove all audit andpermitted nonaudit services provided by our independent registered public accounting firm, including the review and approval in advance of our independentregistered public accounting firm’s annual engagement letter and the proposed fees contained therein. The audit committee has the ability to delegate the authorityto preapprove nonaudit services to one or more designated members of the audit committee. If such authority is delegated, such delegated members of the auditcommittee must report to the full audit committee at the next audit committee meeting all items preapproved by such delegated members. In the fiscal years endedDecember 31, 2022 and December 31, 2021 all of the services performed by our independent registered public accounting firm were preapproved by the auditcommittee.65PART IVITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES(a)Financial StatementsThe financial statements required by this Item are included beginning at page F1.(b)ExhibitsSee Exhibit IndexITEM 16. FORM 10K SUMMARYNot applicableEXHIBIT INDEXExhibitNumberDescription3.1Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Form on Form8K filed on March 23, 2017)3.2Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10K filed onMarch 4, 2016)3.3Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’s Current Report onForm 8K filed on February 20, 2018)3.4Second Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8K filedon April 24, 2018)3.5Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’sCurrent Report on Form 8K filed on November 18, 2019)3.6Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on January 7, 2022)3.7Amendment No. 1 to Second Amended and Restated ByLaws (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8K filed on January 7, 2022)3.8Certificate of Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on December 7, 2022)4.1Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S3/A filed onNovember 14, 2016)4.2Form of Warrant to Purchase Common Stock issued on February 2, 2018 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report onForm 10K filed on March 27, 2019)4.3Description of Securities Registered under Section 12 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report on Form 10K filedon March 19, 2020)4.4Form of Warrant (incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S1, Amendment No. 1, filed with the SECon May 5, 2020.)4.5Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)4.6Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.1My Size, Inc. 2017 Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement on Schedule DEF 14Afiled on March 2, 2017)10.2My Size, Inc. 2017 Consultant Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement onSchedule DEF 14A filed on March 2, 2017)10.3My Size, Inc. 2017 Stock Option Plan Israel Grantees SubPlan (incorporated by reference to Exhibit 10.3 to the Company’s Annual Report on Form10K filed on March 27, 2019)6610.4Purchase Agreement between My Size, Inc. and Shoshana Zigdon dated as of February 16, 2014 (incorporated by reference to Exhibit 10.2 to theCompany’s Annual Report on Form 10K filed on March 4, 2016)10.5 +Employment Agreement between My Size Israel 2014 Ltd. and Ronen Luzon dated November 18, 2018 (incorporated by reference to Exhibit 10.1 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.6 +Employment Agreement between My Size Israel 2014 Ltd. and Or Kles dated November 18, 2018 (incorporated by reference to Exhibit 10.2 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.7 +Employment Agreement between My Size Israel 2014 Ltd. and Billy Pardo dated November 18, 2018 (incorporated by reference to Exhibit 10.3 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.8Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on January 15,2020)10.9Form of Warrant (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.10Form of Placement Agent Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.11Securities Purchase Agreement (incorporated by reference to Exhibit 10.30 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.12Underwriting Agreement, dated January 5, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on January 7, 2021)10.13Underwriting Agreement, dated March 22, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on March 25, 2021)10.14Amendment to Purchase Agreement between My Size Israel 2014 Ltd., My Size, Inc. and Shoshana Zigdon (incorporated by reference to Exhibit 10.1to the Company’s Quarterly Report on Form 10Q on August 16, 2021)10.15Form of Registered Direct Offering Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.16Form of PIPE Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.17Form of Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.18Form of Placement Agent Warrant issued by the Company on October 28, 2021 (incorporated by reference to Exhibit 10.22 to the Company’s Form S1filed on November 12, 2021)10.19Form of Registration Rights Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.4 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.20Engagement Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference to Exhibit 10.5 to theCompany’s Current Report on Form 8K filed on October 28, 2021)10.21Settlement Agreement dated November 4, 2021, among My Size, Inc., David Lazar and certain of his affiliates (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on November 5, 2021)10.22Share Purchase Agreement dated as of February 7, 2022 between My Size Israel 2014 Ltd. and Amar Guy Shalom and Elad Bretfeld (incorporated byreference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SEC on February 8, 2022)10.23Employment Agreement between My Size Israel 2014 Ltd. and Ezequiel Javier Brandwain dated January 27, 2022 (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on February 1, 2022)10.24Form of Section 102 Capital Gain Restricted Stock Award Agreement under the Company’s 2017 Equity Incentive Plan (incorporated by reference toExhibit 10.1 to the Company’s Quarterly Report on Form 10Q, filed with the SEC on November 14, 2022)10.25Share Purchase Agreement, dated as of October 6, 2022, by and among My Size, Inc., Borja Cembrero Saralegui, Artiz Toree Garcia, Whitehold, S.L.,Twinbel, S.L., and EGI Acceleration, S.L. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SECon October 12, 2022)10.26Form of LockUp Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)10.27Form of Voting Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.3 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)6710.28My Size, Inc. Amendment to the My Size, Inc. 2017 Equity Plan (incorporated by reference to Appendix B to the Company’s definitive proxystatement filed with the SEC on November 4, 2022)10.29Form of Registered Direct Offering Securities Purchase Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.1 to theCompany’s Current Report on Form 8K filed with the SEC on January 12, 2023)10.30Form of PIPE Securities Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8Kfiled with the SEC on January 12, 2023)10.31Form of Registered Direct PreFunded Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.32Form of Series A and Series B Warrant (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8K filed with the SEC onJanuary 12, 2023)10.33Form of Private Placement PreFunded Warrant (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.34Form of Registration Rights Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form8K filed with the SEC on January 12, 2023)10.35Engagement Agreement, dated December 5, 2022 (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8K filed withthe SEC on January 12, 2023)10.36*Form of Placement Agent Warrant21.1*List of Subsidiaries23.1*Consent of Somekh Chaikin, a member firm of KPMG International, registered public accounting firm31.1*Certification of the Chief Executive Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200231.2*Certification of the Chief Financial Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200232.1*Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a14(b) of the Exchange Act and 18 U.S.C. Section 1350, asadopted pursuant to Section 906 of the SarbanesOxley Act of 2002101.INS*Inline XBRL Instance Document101.SCH*Inline XBRL Taxonomy Schema101.CAL*Inline XBRL Taxonomy Calculation Linkbase101.DEF*Inline XBRL Taxonomy Definition Linkbase101.LAB*Inline XBRL Taxonomy Label Linkbase101.PRE*Inline XBRL Taxonomy Presentation Linkbase104Cover Page Interactive Data File (formatted as Inline XBRL document and contained in Exhibit 101)*Filed herewith.+Indicates a management contract or any compensatory plan, contract or arrangement68SIGNATURESPursuant to the requirements of Section 13 and 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10K to be signed on its behalf by the undersigned, thereunto duly authorized on this 14th day of April, 2023.MY SIZE, INC./s/ Ronen LuzonRonen LuzonChief Executive Officer (Principle Executive Officer)/s/ Or KlesOr KlesChief Financial Officer(Principal Financial and Accounting Officer)Pursuant to the requirements of the Securities Act of 1934, this annual report on Form 10K has been signed below by the following persons on behalf ofthe registrant and in the capacities and on the dates indicated.SignatureTitleDate/s/ Ronen LuzonChief Executive Officer and DirectorApril 14, 2023Ronen Luzon(Principle Executive Officer)/s/ Or KlesChief Financial OfficerApril 14, 2023Or Kles(Principal Financial and Accounting Officer)/s/ Oren ElmaliahDirectorApril 14, 2023Oren Elmaliah/s/ Arik KaufmanDirectorApril 14, 2023Arik Kaufman/s/ Oron BranitzkyDirectorApril 14, 2023Oron Branitzky/s/ Guy ZimmermanDirectorApril 14, 2023Guy Zimmerman69EX10.36 2 ex1036.htmExhibit 10.36NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES ANDEXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THESECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO ANEFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTIONNOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGINACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.PLACEMENT AGENT COMMON STOCK PURCHASE WARRANTMY SIZE, INC.Warrant Shares: _______Issue Date: January 12, 2023Initial Exercise Date: January 12, 2023THIS PLACEMENT AGENT COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _____________ or itsassigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the dateset forth above (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on January 10, 2028 (the “Termination Date”) but not thereafter, tosubscribe for and purchase from My Size, Inc., a Delaware corporation (the “Company”), up to ______ shares (as subject to adjustment hereunder, the “WarrantShares”) of the Company’s Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined inSection 2(b). This Warrant is issued pursuant to that certain engagement letter, dated as of December 5, 2022, by and between the Company and H.C. Wainwright &Co., LLC.Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities PurchaseAgreement (the “Purchase Agreement”), dated January 10, 2023, among the Company and the purchasers signatory thereto.1Section 2. Exercise.a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or afterthe Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted by email (or emailattachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the numberof Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shalldeliver the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on aUnited States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No inkoriginalNotice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required.Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder haspurchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrantto the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercisesof this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering theoutstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder andthe Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver anyobjection to any Notice of Exercise within one (1) Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant,acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, thenumber of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.b) Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $3.8188, subject to adjustment hereunder (the“Exercise Price”).c) Cashless Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein isnot available for the issuance or resale of the Warrant Shares to or by the Holder, then this Warrant may also be exercised, in whole or in part, at such timeby means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing[(AB) (X)] by (A), where:(A) =as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice ofExercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed anddelivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) ofRegulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAPon the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on theprincipal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s execution of the applicable Notice ofExercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hoursthereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii)the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice ofExercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;(B) =the Exercise Price of this Warrant, as adjusted hereunder; and(X) =the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if suchexercise were by means of a cash exercise rather than a cashless exercise.2“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which theCommon Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York Citytime)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest precedingdate) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for theCommon Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the mostrecent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by anindependent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to theCompany, the fees and expenses of which shall be paid by the Company.“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the TradingMarket on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or thenearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and ifprices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reportingprices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock asdetermined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonablyacceptable to the Company, the fees and expenses of which shall be paid by the Company.If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of theSecurities Act, the Warrant Shares shall take on the characteristics of the Warrants being exercised, and the holding period of the Warrant Shares beingissued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section 2(c).3d) Mechanics of Exercise.i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to betransmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with TheDepository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant insuch system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of theWarrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or mannerofsale limitationspursuant to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, registered in theCompany’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitledpursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2)Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate ExercisePrice to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Companyof the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall bedeemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant hasbeen exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (otherthan in the case of a cashless exercise) is received by the Warrant Share Delivery Date. If the Company fails for any reason to deliver tothe Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder,in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP ofthe Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifthTrading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share Delivery Date until such WarrantShares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FASTprogram so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standardsettlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stockas in effect on the date of delivery of the Notice of Exercise.4ii.Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the requestof a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a newWarrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrantshall in all other respects be identical with this Warrant; provided, however, that the Holder shall be required to return any WarrantShares subject to any such rescinded exercise notice concurrently with the return to Holder of the aggregate Exercise Price paid to theCompany for such Warrant Shares and the restoration of Holder’s right to acquire such Warrant Shares pursuant to this Warrant(including, issuance of a replacement warrant certificate evidencing such restored right).iii. Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant toSection 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.iv. Compensation for BuyIn on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights availableto the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with theprovisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date theHolder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwisepurchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipatedreceiving upon such exercise (a “BuyIn”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) theHolder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) theamount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connectionwith the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at theoption of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was nothonored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock thatwould have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holderpurchases Common Stock having a total purchase price of $11,000 to cover a BuyIn with respect to an attempted exercise of shares ofCommon Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediatelypreceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written noticeindicating the amounts payable to the Holder in respect of the BuyIn and, upon request of the Company, evidence of the amount of suchloss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including,without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver sharesof Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.5v. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise ofthis Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Companyshall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by theExercise Price or round up to the next whole share.vi. Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue ortransfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paidby the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by theHolder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, thisWarrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder andthe Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.The Company shall pay all Transfer Agent fees required for sameday processing of any Notice of Exercise and all fees to the DepositoryTrust Company (or another established clearing corporation performing similar functions) required for sameday electronic delivery of theWarrant Shares.vii. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timelyexercise of this Warrant, pursuant to the terms hereof.6e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise anyportion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicableNotice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of theHolder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). Forpurposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Partiesshall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, butshall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrantbeneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion ofany other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exerciseanalogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in thepreceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act andthe rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that suchcalculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed inaccordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (inrelation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisableshall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether thisWarrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of thisWarrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm theaccuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number ofoutstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s mostrecent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recentwritten notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request ofa Holder, the Company shall within one (1) Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock thenoutstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise ofsecurities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number ofoutstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stockoutstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice tothe Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial OwnershipLimitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares ofCommon Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in theBeneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shallbe construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portionhereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplementsnecessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of thisWarrant.7Section 3. Certain Adjustments.a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes adistribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which,for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstandingshares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into asmaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case theExercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any)outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately aftersuch event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of thisWarrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for thedetermination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case ofa subdivision, combination or reclassification.b) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sellsany Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares ofCommon Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregatePurchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise ofthis Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before thedate on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the recordholders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that to the extent that theHolder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall notbe entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Rightto such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not resultin the Holder exceeding the Beneficial Ownership Limitation).c) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend (other than cash) orother distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including,without limitation, any distribution of stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement,scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holdershall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number ofshares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including withoutlimitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken,the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, thatto the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, thenthe Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a resultof such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as itsright thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).8d) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more relatedtransactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease,license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, director indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of CommonStock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more ofthe outstanding Common Stock or 50% or more of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in oneor more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchangepursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly orindirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, withoutlimitation, a reorganization, recapitalization, spinoff, merger or scheme of arrangement) with another Person or group of Persons whereby such otherPerson or group acquires more than 50% of the outstanding shares of Common Stock or 50% or more of the voting power of the common equity of theCompany (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for eachWarrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of theHolder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor oracquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as aresult of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior tosuch Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, thedetermination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of AlternateConsideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Priceamong the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. Ifholders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall begiven the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at theHolder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date ofthe public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cashequal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of suchFundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company’s control, including not approved by theCompany’s Board of Directors, the Holder shall only be entitled to receive from the Company or any Successor Entity the same type or form ofconsideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to theholders of Common Stock of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, stock or anycombination thereof, or whether the holders of Common Stock are given the choice to receive from among alternative forms of consideration in connectionwith the Fundamental Transaction; provided, further, that if holders of Common Stock of the Company are not offered or paid any consideration in suchFundamental Transaction, such holders of Common Stock will be deemed to have received common stock of the Successor Entity (which Entity may be theCompany following such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on theBlackScholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day of consummation of the applicableFundamental Transaction for pricing purposes and reflecting (A) a riskfree interest rate corresponding to the U.S. Treasury rate for a period equal to thetime between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expectedvolatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualizationfactor) as of the Trading Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlyingprice per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any noncashconsideration, if any, being offered in such Fundamental Transaction and (ii) the highest VWAP during the period beginning on the Trading Dayimmediately preceding the public announcement of the applicable contemplated Fundamental Transaction (or the consummation of the applicableFundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant to this Section 3(e) and (D) a remaining option timeequal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date and (E) azero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds (or such other consideration)within the later of (i) five Business Days of the Holder’s election and (ii) the date of consummation of the Fundamental Transaction. The Company shallcause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of theobligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant towritten agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to suchFundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entityevidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares ofcapital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of thisWarrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which appliesthe exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to suchFundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for thepurpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which isreasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall beadded to the term “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction, each andevery provision of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to each of the Company and theSuccessor Entity or Successor Entities, jointly and severally), and the Successor Entity or Successor Entities, jointly and severally with the Company, mayexercise every right and power of the Company prior thereto and the Successor Entity or Successor Entities shall assume all of the obligations of theCompany prior thereto under this Warrant and the other Transaction Documents with the same effect as if the Company and such Successor Entity orSuccessor Entities, jointly and severally, had been named as the Company herein.e) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. Forpurposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the numberof shares of Common Stock (excluding treasury shares, if any) issued and outstanding.9f) Notice to Holder.i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, theCompany shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resultingadjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form)on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C)the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any sharesof capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection withany reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all orsubstantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into othersecurities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of theaffairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as itshall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective datehereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to beentitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification,consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expectedthat holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or otherproperty deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure todeliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to bespecified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, nonpublic informationregarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to aCurrent Report on Form 8K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of suchnotice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.10Section 4. Transfer of Warrant.a) Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and to theprovisions of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights) aretransferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a writtenassignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay anytransfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a newWarrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument ofassignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly becancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unlessthe Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of thedate on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordanceherewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company,together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent orattorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute anddeliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issuedon transfers or exchanges shall be dated the Issue Date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Sharesissuable pursuant thereto.c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “WarrantRegister”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as theabsolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to thecontrary.d) Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrantshall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue skylaws or (ii) eligible for resale without volume or mannerofsale restrictions or current public information requirements pursuant to Rule 144, the Companymay require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, comply with the provisions ofSection 5.7 of the Purchase Agreement.11e) Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon anyexercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling suchWarrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exemptedunder the Securities Act.Section 5. Miscellaneous.a) No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends orother rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Withoutlimiting the rights of a Holder to receive Warrant Shares on a “cashless exercise,” and to receive the cash payments contemplated pursuant to Sections 2(d)(i) and 2(d)(iv), in no event will the Company be required to net cash settle an exercise of this Warrant.a.In July 2019, the Company entered into a threeyear agreement with a consultant (“Consultant14”) to provide services to the Company includingassisting the Company to promote, market and sell the Company’s technology to potential customers. Pursuant to such agreement and in partialconsideration for such consulting services, the Company agreed to issue to Consultant14 options to purchase up to 107 shares of the Company’scommon stock upon execution of the agreement. The options are exercisable at $375.00 per share and shall vest in 3 equal instalments every twelvemonths starting July 2019. Unexercised options shall expire 4 years from the effective date.In addition, the Company agreed to issue to Consultant14 options to purchase up to 890 shares of the Company’s common stock upon executionof the agreement. The options are exercisable at $27.00 per share and shall vest in 4 equal instalments every six months starting September 2020.Unexercised options shall expire 5 years from the effective date.During 2022 and 2021, an amount of $7 and $14 respectively, were recorded by the Company as stockbased equity awards with respect to Consultant14.F24MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The Company’s outstanding options granted to consultants as of December 31, 2022 are as follows:Issuance dateOptions forCommon stockWeightedAverageexercise priceper shareOptionsexercisableExpirationdateFebruary 201815USD528.7515February 2023August 2018December 2018531USD352.38264August 2023 December 2023July 2020107USD375107July 2023SeptemberOctober 20201,488USD27.201,288October 2024 September 2025Total2,1411,674The Company uses the Black Scholes model to measure the fair value of the stock options with the assistance of a third party valuation.No stock options were granted during 2022 to consultants.The fair value of the Company’s stock options granted to nonemployees was calculated using the following weighted average assumptions:20222021GrantsGrantsDividend yield0%Expected volatility125.15%Riskfree interest0.16%Contractual term of up to (years)1.52F25MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Stock Option Plan for employeesIn March 2017, the Company adopted a stock option plan (the “Plan”) pursuant to which the Company’s Board of Directors may grant stock options toofficers and key employees. The total number of options which may be granted to directors, officers, employees under this plan, is limited to 289,000options. Stock options can be granted with an exercise price equal to or less than the stock’s fair market value at the date of grant.The fair value of each option award is estimated on the date of grant using the Binomial optionpricing model that used the weighted averageassumptions in the following table. The risk free rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the timeof grant.2022Grants2021GrantsDividend yield0%0%Expected volatility96.52%98.47%Riskfree interest4.06%0.96%expected life522.27In the years ended December 31, 2022 and 2021, 10,000 and 3,900 options, respectively, were granted.On December 7, 2022, the Company’s stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from230,800 shares to 289,000 shares.On September 29, 2022, the Compensation Committee of the Company approved grants of restricted share awards under the Company’s 2017 EquityIncentive Plan to Ronen Luzon (CEO), Or Kles (CFO), Billy Pardo (COO), Ilia Turchinsky (CTO) and Ezequiel Javier Brandwain (CCO), pursuant towhich were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000 restricted shares and 12,000 restricted shares,respectively. Each restricted share awarded under section 102 Capital Gain Restricted Stock Award Agreement (the “Agreement”). The restrictedshares shall vest in three equal installments on January 1, 2023, January 1, 2024 and January 1, 2025 for Ronen Luzon, Or Kles, Billy Pardo and IliaTurchinsky and on January 27, 2023, January 27, 2024 and January 27, 2025 for Ezequiel Javier Brandwain, conditioned upon continuous employmentwith the Company, and subject to accelerated vesting upon a change in control of the Company.On the same day, the Company granted fiveyears options to purchase up to 10,000 ordinary shares to other employees of the Company at an exerciseprice of $0.21 per share. The options vesting period is over three years in three equal portions from the vesting commencement date.F26MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The total stock option compensation expense in the year ended December 31, 2022 amounted to $448as follows: Research and development expensesamounted to $151, sales and marketing expenses amounted to $119and general and administrative expenses amounted to $178.The total stock option compensation expense in the year ended December 31, 2021 amounted to $252 as follows: Research and development expensesamounted to $94, sales and marketing expenses amounted to $97 and general and administrative expenses amounted to $61.As of December 31, 2022, there was a total of $530 unrecognized compensation cost relating to nonvested sharebased compensation arrangements.That cost is expected to be recognized over a weightedaverage period of 2.0 years.Share option activity during 2022 is as follows:2022Number ofoptionsWeightedaverageexerciseprice US$Outstanding as of January 135,74226.5Granted10,0005.25ExercisedExpired(4,136)Outstanding as of year end41,60622.48Vested as of year end33,20825.17Share option activity during 2021 is as follows:2021Number ofoptionsWeightedaverageExerciseprice US$Outstanding as of January 139,094$26.0Granted3,90032.0Exercised(751)Expired(6,501)Outstanding as of year end35,74226.5Vested as of year end27,06326.5F27MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 15 CONTINGENCIES AND COMMITMENTSa.On August 7, 2018, the Company commenced an action against North Empire LLC (“North Empire”) in the Supreme Court of the State of New York,County of New York for breach of a Securities Purchase Agreement (the “Agreement”) in which it is seeking damages in an amount to bedetermined at trial, but in no event less than $616. On August 2, 2018, North Empire filed a Summons with Notice against the Company, also in thesame Court, in which they allege damages in an amount of $11.4 million arising from an alleged breach of the Agreement. On September 6, 2018North Empire filed a Notice of Discontinuance of the action it had filed on August 2, 2018. On September 27, 2018, North Empire filed an answerand asserted counterclaims in the action commenced by the Company against them, alleging that the Company failed to deliver stock certificatesto North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against theCompany’s CEO and now former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018,the Company filed a reply to North Empire’s counterclaims. On November 15, 2018, the Company’s CEO and now former Chairman of the Boardfiled a motion to dismiss North Empire’s thirdparty complaint. On January 6, 2020, the Court granted the motion and dismissed the thirdpartycomplaint. Discovery has been completed and both parties have filed motions for summary judgment in connection with the claims andcounterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summary judgment, arguing there werefactual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision. The appealmust be fully perfected and filed by July 26, 2022. On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying theCompany’s motion for summary judgment. North Empire will file its opposition papers on or before March 31, 2022, and the Company will file replypapers on April 29, 2022. On or about September 12, 2022, the Court issued its Decision and Order denying the Company’s motion to reargue.North Empire filed its opposing brief on December 7, 2022. Both sides were given an opportunity to file a reply brief. The Company filed our replybrief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. The Appellate Court has scheduled oral argument for the appealfor February 7, 2023. Oral argument was held before the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Courtfiled its Decision and Order, which affirmed the lower court’s decisions regarding both My Size and North Empire’s motions for summary judgmentand sent the case back to the Supreme Court.On or about March 13, 2023, the Supreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date forthe mediation has not yet been set. The Company intends to vigorously defend any claims made by North Empire.The Company believes it is more likely than not that the counterclaims will be denied.b.In May 2021, the Company received notice from Custodian Ventures, LLC (“Custodian”) of its intention to nominate four candidates to stand forelection to our Board of Directors at the Company’s 2021 annual meeting of stockholders. Custodian subsequently made a book and recordsrequest and has made public statements calling for changes to our management.On September 22, 2021, Custodian commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v.MySize, Inc. (the “Delaware Action”). In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting.On October 19, 2021, the Company commenced an action in the United States District Court for the Southern District of New York againstCustodian, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, and certain rulespromulgated thereunder (the “SDNY Action”). The complaint sought, among other things, declaratory and injunctive relief related to defendants’efforts to nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed“group” for purposes of Section 13(d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. Inaddition, the complaint alleged that the defendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules inconnection with their efforts to elect a slate of directors to the Company’s Board of Directors. On October 20, 2021, the Court signed an ordergranting a hearing on an anticipated motion for a preliminary injunction and expedited scheduling and discovery in aid thereof, and scheduled thathearing for December 2, 2021.On November 4, 2021, the Company entered into the Settlement Agreement with the Lazar Parties. Pursuant to the Settlement Agreement, theCompany and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the SettlementAgreement, the Company agreed to reimburse Custodian for out of pocket expenses and in consideration for the dismissal and release of claimsagainst the Company an aggregate amount equal to $275, to be paid within three business days of the effective date of the Settlement Agreement.With respect to the Company’s 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) its May 12,2021 notice of stockholder nominations of four director candidates with respect to the Company’s 2021 annual meeting of stockholders, (ii) thenotice dated October 28, 2021 submitted by Custodian to the Company notifying the Company of Custodian’s continued intent to bring itsnomination of four director candidates before the Company’s stockholders at the 2021 annual meeting, and (iii) any and all related materials andnotices submitted to the Company in connection therewith or related thereto and to not take any further action in connection with the solicitationof any proxies in connection with the Company. Custodian also agreed to cease any and all solicitation and other activities in connection with the2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effectivedate of the Agreement (the “Standstill Period”). The Settlement Agreement also provides that during the Standstill Period, the Lazar Parties willvote all shares of common stock of the Company it beneficially owns in in accordance with any proposal or recommendation made by theCompany or the Board of Directors of the Company that is submitted to the stockholders of the Company, unless to do so would violateapplicable law and except with respect to certain extraordinary transactions. The Settlement Agreement also contains nondisparagement andconfidentiality provisions, subject to certain exceptions.On December 9, 2021, the Company subsequently entered into a Settlement Agreement (the “Ault Settlement Agreement”), with Milton C. Ault III,Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed towithdraw the SDNY Action against the Ault Parties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that actionagainst the Company. In addition, pursuant to the Settlement Agreement, the Company paid $70 to the Ault Parties in consideration for thereleases and other good and valuable consideration as set forth in the Ault Settlement Agreement.c.On July 5, 2021, the Company was served with a legal complaint filed by Fidelity Venture Capital Ltd. and Dror Atzmon in the Magistrate’s Court inTel Aviv for a monetary award in an amount of NIS 1,436,679 (approximately $450) and a declaratory relief. The plaintiffs allege that the Companybreached its contractual obligations to pay them for services allegedly rendered to the Company by the plaintiffs under a certain consultingagreement dated July 2, 2014, in an amount of NIS 819,000 (approximately $256). Additionally, the plaintiffs allege that the Company shouldcompensate them for losses allegedly incurred by them following their investment in the Company’s shares issued under a certain private offering.In the alternative, the plaintiffs move that the court will declare the investment agreement void with full restitution of plaintiffs’ original investmentin an amount of NIS 1,329,650(approximately $415). The Company filed its statement of defense on October 25, 2021. The first preliminary courthearing of the case is scheduled for January 23, 2022.The first court preliminary hearing was held on March 1, 2022.Following the first preliminary hearing and the Court’s comments and recommendation, the Plaintiffs filed a motion to strike out the claim withoutprejudice.On March 8, 2022 the Court ordered dismissal without prejudice of the claim.F28MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATIONAcquisition of OrgadOn February 7, 2022, the Company acquired 100% of the shares and voting interests in Orgad an omnichannel ecommerce platform. The acquisitionwas designed to create an additional revenue stream for the Company by becoming a direct ecommerce seller while leveraging the synergies betweenMySizeID and Orgad’s ecommerce platform.Unaudited proforma informationThe results of operations of Orgad have been included in the consolidated financial statements since the acquisition date of February 7, 2022. Orgadrevenues included in the Company’s consolidated statement of operations from February 7, 2022 through December 31, 2022 were $4,132. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,662 and $2,850 respectively, and the net loss after tax would have been $8,519 and $10,149 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash (*)300Issuance of shares of common stock (69,752 shares) (**)457Total consideration transferred757(*)The cash payment is subject to working capital adjustments.(**)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Orgad, on the twoyear and the threeyear anniversary of the closing, $350in each ofthese years provided that in the case of the second and third instalments certain revenue targets are met and subject further to certain downward postclosing adjustment. Furthermore, 69,752shares of common stock will be issued in eight equal quarterly instalments until the lapse of two years fromclosing. Additional earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023 will also be paid. All of these payments aresubject to the former owners being actively engaged with Orgad at the date such payment is due, and therefore were not taken as part of theconsideration for the business combination.During the year ended December 31, 2022 an amount of $456and $319was recorded in respect of the cash instalments and in respect of stocksissuance, respectively in Cost Of Goods, Sales and Marketing and General and Administrative expenses as shown in the following table:2022Stockbased compensation expense – Cost of goods194Stockbased compensation expense Sales and marketing271Stockbased compensation expense General and administrative310775(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the preliminary estimates of their fair values, which were determined using generally accepted valuation techniques based onestimates and assumptions made by management at the time of the acquisition. Such estimates are subject to change during the measurement periodwhich is not expected to exceed one year. The purchase price allocation was not finalized duo to examination of the net working capital of Orgad at theacquisition date. Any adjustments to the preliminary purchase price allocation identified during the measurement period will be recognized in theperiod in which the adjustments are determined.The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and Cash EquivalentTrade receivables364PP&E55Inventory864Longterm financial investment31Selling platform378Goodwill152Shortterm accruals and deferrals(181)Trade payables(668)Long term provision(13)Longterm debt(138)Deferred Taxes(87)Total net assets acquired757F29MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)(c)Acquisitionrelated costsThe Company incurred transaction costs of approximately $40and none during twelvemonth period ended December 31, 2022 which were included ingeneral and administrative expenses in the consolidated statements of income (loss).Acquisition of Naiz Bespoke Technologies, S.L. (“Naiz”)On October 11, 2022, the Company acquired 100% of the shares and voting interests in Naiz a provider of SaaS technology solutions that solve sizeand fit issues for fashion ecommerce companies. The acquisition was designed to allow Naiz’s customers benefit from MySize’s deep understanding ofthe fashion ecommerce retail landscape, while creating an additional revenue stream for the Company.Unaudited proforma informationThe results of operations of Naiz have been included in the consolidated financial statements since the acquisition date of October 11, 2022. Naizrevenues included in the Company’s consolidated statement of operations from October 11, 2022 through December 31, 2022 were $103. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,738 and $379 respectively and the net loss after tax would have been $8,695 and $10,717 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash503Issuance of shares of common stock (240,000 shares) (*)1,008Total consideration transferred1,511(*)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Naiz, additional cash consideration (up to $1,550) in four instalments subject to thefollowing conditions:(i)Continuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result ofa Good Reason; and(ii)Naiz’s Revenues reaching or exceeding the respective Target Revenues defined in the agreement. The revenues will be calculated in four periods:(1) January 1, 2022 – December 31, 2022; (2) January 1, 2023 – June 30, 2023; (3) July 1, 2023 – December 31, 2023; (4) January 1, 2024 – December31, 2024.Former owners of Naiz are entitled to additional cash consideration following December 31, 2025 (up to $1,650) in an event when the actual value of theequity consideration is less than $1,650, subject to completion of a Target Revenue for the period of January 1, 2025 – December 31, 2025 andcontinuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result of aGood Reason;F30MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)During the year ended December 31, 2022 an amount of $283 was recorded in respect of the additional cash consideration.(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the estimates of their fair values, which were determined using generally accepted valuation techniques based on estimates andassumptions made by management at the time of the acquisition.The following table summarizes the fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and cash equivalent36Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Total net assets acquired1,511(c)Acquisitionrelated costsDuring 2022, the Company incurred transaction costs of approximately $75 which were included in general and administrative expenses in theconsolidated statements of income (loss).F31MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)Note 17 – Operating SegmentsDuring the year ended December 31, 2021, the Company had one reportable segment. As a result of the business combinations in the reporting period(see note 13), the Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificialintelligence driven measurement solutions and (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions and. The fashionand equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. Orgad has onecustomer that is responsible for 37.9% of the Company consolidated revenues. The SaaS based innovative artificial intelligence driven measurementsolutions, or SaaS Solutions operating segment consists of My Size Inc and My Size Israel and My Size LLC.Information related to the operations of the Company’s reportable operating segments is set forth below:Fashion andequipment ecommerce platformSaaSSolutionsNaizTotalAs of the year ended December 31, 2022Revenues from external customers4,1322241034,459Operating (loss) income(591)(7,181)(338)(8,110)Financial income (expense), net(236)Net loss before tax(8,346)Fashion andequipment ecommerce platformSaasSolutionNaizAs of December 31, 2022:Assets2,0225,9661,691Amortization of intangible assets(114)(34)(46)The Company elected to present geographic information in respect with revenues generated from external customers based on the location of the selling entity:All the revenues of the fashion and equipment ecommerce platform segment are generated by Orgad, located in Israel.All the revenues of the Naiz segment are generated by Naiz, located in Spain.The revenues of the Saas Solutions segment are generated by My Size Ltd. located in Israel (approximately 75% of the segment revenues) and by My Size Inc.located in the U.S. (approximately 25% of the segment revenues).NOTE 18 SALES AND MARKETINGYear endedDecember 31,20222021Salaries836574Consultants and subcontractors5831,086Marketing481283Selling fees489Share based payments post Orgad acquisition (*)271Share based payments for consultants and employees127180Travel21142Other1451713,1432,336(*) See note 16.NOTE 19 GENERAL AND ADMINISTRATIVE EXPENSESYear endedDecember 31,20222021Salaries1,007461Professional services7051,832Share based payments for consultants, directors and employees18098Rent, office expenses and communication442372Insurance564627cash liability and equity liability expenses related to Orgad acquisition310cash liability expenses related to Naiz acquisition217Settlement fees (*)345Directors8259Other3933303,9004,124(*)See note 15(b)F32MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 20 FINANCIAL INCOME (EXPENSE), NETA.Financial incomeYear endedDecember 31,20222021Revaluation investment in marketable securities49Other26172666B.Financial expenseYear endedDecember 31,20222021Exchange rate differences33Revaluation of loan granted100Revaluation investment in marketable securities62Other6792629NOTE 21 EVENTS SUBSEQUENT TO THE BALANCE SHEET DATEa.On January 2, 2023, Orgad experienced a fire at its warehouse in Israel. The Company is not aware of any casualties or injuries associated with thefire. The Company shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450.The Company believes that this incident did not affect the future sales results of Orgad for the year 2023. The inventory was not insured and it istoo early to determine the potential impact of this incident on the other parties that were involved in the incident (lessor and others that leasedproperties near the warehouse).b.On January 10, 2023, the Company entered into a securities purchase agreement pursuant to which the Company sold an aggregate of 162,000ofthe Company’s shares of common stock and prefunded warrants to purchase up to 278,899shares of common stock and, in a concurrent privateplacement, unregistered warrants to purchase up to883,798 shares of common stock, consisting of Series A warrants to purchase up to 441,899shares of common stock and Series B warrants to purchase up to 441,899shares of common stock, at an offering price of $3.055per share ofcommon stock and associated Series A and Series B warrants and an offering price of $3.054per prefunded warrant and associated Series A andSeries B warrants.In addition, the Company entered into a securities purchase agreement pursuant to which the Company agreed to sell and issue in a privateplacement an aggregate of up to 540,098 unregistered prefunded warrants and unregistered warrants to purchase up to an aggregate of 1,080,196shares of common stock, consisting of Series A warrants to purchase up to 540,098 shares of common stock and Series B warrants to purchase upto 540,098 shares of common stock at an offering price of $3.054 per prefunded warrant and associated Series A and Series B warrants.As of March 31,2023 all the pre funded warrants were exercised by the investor.F33ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSUREThere were no disagreements with accountants on accounting and financial disclosure of a type described in Item 304 (a)(1)(iv) or any reportable event asdescribed in Item 304 (a)(1)(v) of Regulation SK.ITEM 9A. CONTROLS AND PROCEDURESDisclosure ControlsWe carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief FinancialOfficer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) as of December 31, 2022. Basedupon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this Annual Report on Form10K, our disclosure controls and procedures were effective to ensure that information required to be disclosed in reports filed under the Exchange Act, as amended,is recorded, processed, summarized and reported within the required time periods specified in the SEC’s rules and forms and is accumulated and communicated toour management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.Management’s Report on Internal Control Over Financial ReportingOur internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records, that, in reasonable detail,accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only inaccordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition, use or disposition of our assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance withthe policies or procedures may deteriorate.Our management, including our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financialreporting at December 31, 2022. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the TreadwayCommission (COSO) in Internal Control—Integrated Framework (2013). Based on that assessment under those criteria, management has determined that, as ofDecember 31, 2022, our internal control over financial reporting was effective.This Annual Report on Form 10K does not include an attestation report of our registered public accounting firm regarding internal control over financialreporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to the exemption provided to issuersthat are not “large accelerated filers” nor “accelerated filers” under the DoddFrank Wall Street Reform and Consumer Protection Act.Changes in Internal Control Over Financial ReportingDuring the year ended December 31, 2022, we made two acquisitions, as discussed in Note 1a and Note 16 of the audited consolidated financial statementsfor the year ended December 31, 2022 included in this Annual Report on Form 10K. As a result, we made additions and/or modifications to policies, procedures,systems and controls that have materially affected our internal control over financial reporting from the acquisitions, including new controls for consolidationprocess that relates to accounting policies and procedures, operational processes and documentation practices. Management excluded the acquired businessesfrom management’s report on internal control over financial reporting. ITEM 9B. OTHER INFORMATIONNone.ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNot applicable.51PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe following table sets forth the name, age and positions of our executive officers and directors.NAMEAgePOSITIONRonen Luzon52Chief Executive Officer and Class III DirectorOr Kles40Chief Financial OfficerBilly Pardo47Chief Operating Officer and Chief Product OfficerIlia Turchinsky35Chief Technology OfficerEzequiel Javier Brandwain53Chief Commercial OfficerOron Branitzky (1)(2)(3)*63Class II DirectorOren Elmaliah (1)(2)(3)*38Class I DirectorArik Kaufman (1)(2)(3)*41Class I DirectorGuy Zimmerman*53Class II Director(1)Member of our audit committee(2)Member of our nominating and corporate governance committee(3)Member of our compensation committee* Independent as that term is defined by the rules of the Nasdaq Stock Market.The business background and certain other information about our directors and executive officers is set forth below:Ronen Luzon has served as our Chief Executive Officer and a member of our board of directors since September 2013. Since 2006, Mr. Luzon hasadditionally served as Chief Executive Officer and founder of Malers Ltd., a company in the global security solutions market which provides technological solutionsfor integrated communication infrastructures, security and control systems. Prior to Malers, he held several senior marketing, sales management and professionalservices positions in a variety of international high tech companies including VP marketing of GA Tech and Professional Services Manager of Eldat Communication.Mr. Luzon graduated from Middlesex University in London with a B.S. in IT and Business Information Systems. We believe that Mr. Luzon is qualified to serve as amember of our board of directors because of his more than 20 years of experience in the technology sector.Or Kles has served as our Chief Financial Officer since May 2016. He is a certified public accountant with a broad, diverse financial background. From May2013 until April 2016 he served as Assistant Controller of Shikun and BinuiSolel Boneh Infrastructure Ltd. and from December 2010 until May 2013 he served as anAssociate at KPMG. Mr. Kles holds an MBA and a B.A. in Business Management and Accounting (specializing in financing) from The College of ManagementAcademic Studies. Mr. Kles is a certified public accountant in Israel.Billy Pardo has served as our Chief Product Officer since May 2014 and Chief Operating Officer since April 2019. From April 2010 until August 2013, Ms.Pardo served as Senior Director of Product Management of Fourier Education. Among her areas of expertise are launching products from concept to successfuldelivery in various methodologies, including Fourier Education’s awardwinning einstein™ Science Tablet. Prior to that Ms. Pardo served in various productmanagement positions including, Project Manager of Time to Know, Product Marketing Manager of RiT Technologies, Product Manager of Pricer AB and R&DTeam Leader at Pricer AB. Ms. Pardo previously served as Software Engineer at Eldat Communication Ltd., and QA Engineer at NICE Systems. Ms. Pardo receivedan MBA from The Interdisciplinary Center and a B.A. in Computer Science from The Academic College of TelAvivYaffo.Ilia Turchinsky has served as our Chief Technology Officer since April 2019 and from July 2018 until April 2019 as our Director of Technology. Prior tojoining us, from 2013 until 2018, Mr. Turchinsky served in various roles, most recently Chief Technology Officer, at MonkeyTech Ltd., a company that providesdesign, development and characterization of mobile applications. Prior to that, Mr. Turchinsky served in various roles including development course instructor atIQLine, was a founder of Arnavsoft and was a software developer for MintLab and a political party. Mr. Turchinsky holds a B.Sc. from the Ben Gurion University inComputer Science and an M.Sc. from the Open University of Israel in Computer Science.52Ezequiel Javier Brandwain has served as our Chief Commercial Officer since February 2022. Mr. Brandwain brings more than two decades of globalexperience in retail and the fashion industry, mainly in business development, operations, and international markets. Before joining the Company, Mr. Brandwainheld positions of increasing responsibility at several companies, including between June 2017 and November 2020, at 7 For All Mankind International, where heserved as Director, Latin America and Caribbean, managing business development and operations across Latin America and the Caribbean. Before that, betweenMay 2016 and June 2017, Mr. Brandwain served as Chief Business Development Officer at Replay – Fashion Box SPA, where he oversaw business development andoperations, expansion and control in the Americas, the Caribbean, and NorthEast Asia. Prior this role, between September 2015 and May 2016, he served as theReplay’s Managing Director in Latin America and the Caribbean, leading the company’s international expansion in these regions. Prior to that, between April 2015and September 2015, Mr. Brandwain served as Managing Director, Latin America and Caribbean at Authentic Brands Group LLC, where he led that company’soperations, business developments and international expansion within these regions, and served as the direct liaison with the company’s headquarters in New York.Prior to that, between April 2015 and September 2015, Mr. Brandwain served as Chief Operating Officer, Latin America and Caribbean at Flemingo International Ltd.,overseeing operations, as well as projected operations in the travel retail field across these regions. Prior to that, between December 2010 and February 2014, Mr.Brandwain served as Regional Director, Southern Hemisphere at Calvin Klein, where he was responsible for defining and implementing the operational andcommercial strategy for Southern Hemisphere, as well as overseeing the retail, travel retail, concession, and wholesale businesses of the company. During his tenureat Calvin Klein, Mr. Brandwain also served as Travel Retail Director, Latin America, where he built the travel retail business and developed operations. Prior to that,between July 2010 and November 2010, Mr. Brandwain served as Business Director, Latin America and Caribbean at Givenchy Latin America, and between January2010 and June 2010 he served as Commercial Director, Latin America and Caribbean at Nautica Latin America. During December 2004 and December 2009, Mr.Brandwain served as Vice President, International Business Development at Report Collection/Modextil, Inc., where he was in charge of business and operationalexpansion, global growth, and brand extensions. Prior to that, between 2003 and October 2004, Mr. Brandwain served as General Manager at Andrew KoenigInternational, Inc. Between September 2019 and November 2020, Mr. Brandwain served as a member of the Board of Directors of 7 For All Mankind BrazilImportacao, Comercio E Distribuicao S.A. Mr. Brandwain earned a Bachelor degree in architecture from the University of the Republic (Uruguay).Oron Branitzky has served as a member of our board of directors since March 2017. Mr. Barnitzky has vast experience in retail technology. SinceNovember 2017, Mr. Branitzky has served as Global Retail Business Development at Superup, and from January 2007 until December 2014 he served as VicePresident of Sales and Marketing at Pricer AB. Prior to that, Mr. Branitzky has served as VP Marketing and Sales at Eldat Communication and Sarin TechnologiesLtd. Since January 2015, Mr. Branitzky has served as chairman of the board of directors of WiseShelf Ltd. and from May 2015 until March 2016, Mr. Branitzky servedas an advisory board member of ciValue. Mr. Branitzky received a B.S. from the Hebrew University of Jerusalem and an MBA in International Marketing from TelAviv University. We believe that Mr. Branitzky is qualified to serve as a member of our board of directors because of his more than 20 years of experience inmanaging the sales of hitech solutions to retailers across the globe.Oren Elmaliah, has served as a member of our board of directors since May 2017. In September 2015, Oren Elmaliah founded Accounting Team IL and hasacted as Account Manager since then. Accounting Team IL is a financial consultancy and service provider to public companies traded in Israel and abroad. SinceFebruary 2017, Mr. Elmaliah has served as controller of Enlivex Therapeutics Ltd., and since January 2017 he has served as Chief Financial Officer of Presstek Israel.In addition, since September 2015, Mr. Elmaliah has served as an Israel Authorities Reporting Officer of LG Electronics Israel and since September 2015 he hasserved as Local Financial Report Consultant of Chiasma. From July 2011 until August 2015, Mr. Elmaliah served as CPA, Financial Director of CFO Director Ltd andfrom June 2010 until July 2011 he served as Risk Management Consultant of RSM International Limited. Mr. Elmaliah holds a B.A. in Accounting/Economics and aMsc. in Finance/Accounting from Tel Aviv University, Israel. He is a licensed Certified Public Accountant in Israel. We believe that Mr. Elmaliah is qualified to serveas a member of our board of directors because of his vast finance experience and public company management and administration in the fields of finance,accounting, and financial regulation.53Arik Kaufman has served as a member of our board of directors since June 2017. Mr. Kaufman is an attorney specializing in the fields of commercial law,corporate law and capital markets and since 2016 runs his own law office in Israel. He has vast experience in the fields of financial reporting and financial regulation.Mr. Kaufman serves as the Chief Executive Officer of Steakholder Foods since January 2022. From September 2017 until January 2022, Mr. Kaufman served as VPBusiness Development of Mor Research Applications. Mr. Kaufman holds an LLB in Law from the Interdisciplinary Center, Herzliya, and is admitted to the IsraeliBar. We believe that Mr. Kaufman is qualified to serve as a member of our board of directors based upon his experience of assisting with the completion of numerousventure capital financings, mergers, acquisitions, and strategic relationships. In addition, he has served as a member of the board of various publicly tradedcompanies, including companies that operate in the same industry as us.Guy Zimmerman has served as a member of our board of directors since August 2021. Previously, Mr. Zimmerman served as Founder and CEO ofManuFuture, an online b2b engineering market place, since February 2021. Prior to that from 2017 to 2021, Mr. Zimmerman acted as a consultant to severaltechnology startups and was a founding partner of a business travel online platform. From 2013 to 2017, Mr. Zimmerman served as EVP of Marketing and BusinessDevelopment of Kornit Digital and was part of the IPO leadership. Prior to that, Mr. Zimmerman served as VP of Global Sales and Business Development at TefronLtd., a provider of seamless garment technology, where he led the $100m sales and sales support organization serving global retail and fashion brands. Prior to thathe served as Vice President of Strategy and Business Development at Tnuva Group, Israel’s largest food manufacturer and spent eight years at McKinsey &Company. Mr. Zimmerman previously led a software startup in the field of operational healthcare management systems. Mr. Zimmerman holds a B.Sc. in IndustrialEngineering from Tel Aviv University in Israel. We believe that Mr. Zimmerman is qualified to serve as a member of our board of directors because of his experiencein business development in the technology and retail sectors.Board Diversity MatrixThe table below provides certain information regarding the diversity of our board of directors as of the date of this annual report.Board Diversity Matrix (As of March 31, 2023)Total Number of Directors5FemaleMaleNonBinaryDid Not DiscloseGenderPart I: Gender IdentityDirectors#5##Part II: Demographic BackgroundAfrican American or Black####Alaskan Native or Native American####Asian####Hispanic or Latinx####Native Hawaiian or Pacific Islander####White#1##Two or More Races or Ethnicities#2##LGBTQ+0Did Not Disclose Demographic Background2Family RelationshipsRonen Luzon, the Chief Executive Officer and a member of our board of directors, and Billy Pardo, the Chief Product Officer and Chief Operating Officer, arehusband and wife. There are no other family relationships among any of our current or former directors or executive officers.Involvement in Certain Legal ProceedingsWe are not aware of any of our directors or officers being involved in any legal proceedings in the past ten years relating to any matters in bankruptcy,insolvency, criminal proceedings (other than traffic and other minor offenses), or being subject to any of the items set forth under Item 401(f) of Regulation SK.Arrangements between Officers and DirectorsTo our knowledge, there is no arrangement or understanding between any of our officers and any other person, including directors, pursuant to which theofficer was selected to serve as an officer.Board of DirectorsThere are no agreements with respect to the election of directors.On January 6, 2022, we filed with the Secretary of State of Delaware a Certificate of Amendment to our Amended and Restated Certificate of Incorporationproviding for a classified Board. Following filing of the Certificate of Amendment, members of our board are now classified into three classes with staggered threeyear terms (with the exception of the expiration of the initial Class I and Class II directors), as follows:●Class I, comprised of two directors, initially Arik Kaufman and Oren Elmaliah (with their initial terms expiring at our 2022 annual meeting of stockholders andmembers of such class serving successive threeyear terms);●Class II, comprised of two directors, initially Oron Branitzky and Guy Zimmerman (with their initial terms expiring at our 2023 annual meeting of stockholdersand members of such class serving successive threeyear terms); and●Class III, comprised of one director, initially Ronen Luzon (with his initial term expiring at our 2024 annual meeting of stockholders and members of suchclass serving successive threeyear terms).54To preserve the classified Board structure, a director elected by the Board of Directors to fill a vacancy holds office until the next election of the class forwhich such director has been chosen, and until that director’s successor has been elected and qualified or until his or her earlier death, resignation, retirement orremoval.Our board of directors has reviewed the materiality of any relationship that each of our directors has with us, either directly or indirectly. Based upon thisreview, we believe that Arik Kaufman, Oren Elmaliach, Oron Branitzky and Guy Zimmerman qualify as independent directors in accordance with the standards set bythe Nasdaq and Rule 10A3 promulgated under the Exchange Act.Committees of the BoardAudit CommitteeOur audit committee is comprised of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Elmaliah serves as chairman of the audit committee. The auditcommittee is responsible for retaining and overseeing our independent registered public accounting firm, approving the services performed by our independentregistered public accounting firm and reviewing our annual financial statements, accounting policies and our system of internal controls. The audit committee actsunder a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the audit committee’s composition and meetings.The audit committee charter is available on our website www.mysizeid.com.The Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by applicable SEC rules. Inaddition, the Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by the rules of the Nasdaq StockMarket.The Board of Directors has determined that Oren Elmaliah is an “audit committee financial expert” serving on its audit committee, and is independent, as theSEC has defined that term in Item 407 of Regulation SK.Compensation CommitteeOur compensation committee consists of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Branitzky serves as chairman of the compensationcommittee.The compensation committee’s roles and responsibilities include making recommendations to the Board of Directors regarding the compensation for ourexecutives, the role and performance of our executive officers, and appropriate compensation levels for our CEO, which are determined without the CEO present, andother executives. Our compensation committee also administers our 2017 Equity Incentive Plan and our 2017 Consultant Equity Incentive Plan. The compensationcommittee acts under a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the compensation committee’scomposition and meetings. The compensation committee charter is available on our website www.mysizeid.com.Our Board of Directors has determined that all of the members of the compensation committee are “independent” as that term is defined by the rules of theNasdaq Stock Market.Nominating and Corporate Governance CommitteeThe members of the nominating and corporate governance committee are Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Kaufman serves aschairman of the corporate governance and nominations committee. The nominating and corporate governance committee acts under a written charter, which morespecifically sets forth its responsibilities and duties, as well as requirements for the nominating and corporate governance committee’s composition and meetings.The nominating and corporate governance committee charter is available on our website www.mysizeid.com.The nominating and corporate governance committee develops, recommends and oversees implementation of corporate governance principles for us andconsiders recommendations for director nominees. The nominating and corporate governance committee also considers stockholder recommendations for directornominees that are properly received in accordance with applicable rules and regulations of the SEC. Our stockholders that wish to nominate a director for election tothe Board of Directors should follow the procedures set forth in our bylaws.55The nominating and corporate governance committee will consider persons identified by its members, management, stockholders, investment bankers andothers. The guidelines for selecting nominees, which are specified in the nominating committee charter, generally provide that persons to be nominated:●should be accomplished in his or her field and have a reputation, both personal and professional, that is consistent with our image and reputation;●should have relevant experience and expertise and would be able to provide insights and practical wisdom based upon that experience and expertise; and●should be of high moral and ethical character and would be willing to apply sound, objective and independent business judgment, and to assume broadfiduciary responsibility.The nominating and corporate governance committee will consider a number of qualifications relating to management and leadership experience,background and integrity and professionalism in evaluating a person’s candidacy for membership on the Board of Directors. The nominating and corporategovernance committee may require certain skills or attributes, such as financial or accounting experience, to meet specific Board needs that arise from time to timeand will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of Board of Directors members. The nominating andcorporate governance committee will not distinguish among nominees recommended by stockholders and other persons.Our Board of Directors has determined that all of the members of the nominating and corporate governance committee are “independent” as that term isdefined by the rules of the Nasdaq Stock Market.Code of Conduct and EthicsWe have a Code of Business Conduct and Ethics that applies to all our employees. The text of the Code of Business Conduct and Ethics is publiclyavailable on our website at www.mysizeid.com. Information contained on, or that can be accessed through, our website does not constitute a part of this report andis not incorporated by reference herein. Disclosure regarding any amendments to, or waivers from, provisions of the code of conduct and ethics that apply to ourdirectors, principal executive and financial officers will be posted on the “InvestorsCorporate Governance” section of our website at www.mysizeid.com or will beincluded in a Current Report on Form 8K, which we will file within four business days following the date of the amendment or waiver.Change in Procedures for Recommending DirectorsThere have been no material changes to the procedures by which our stockholders may recommend nominees to our Board of Directors from thoseprocedures set forth in our Proxy Statement for our 2021 Annual Meeting of Stockholders, filed with the SEC on December 7, 2022.56ITEM 11. EXECUTIVE COMPENSATIONSummary Compensation TableThe following sets forth the compensation paid by us to our named executive officers, during the years ended December 31, 2022 and December 31, 2021.Name and Principal PositionYearSalary($) (1)Bonus($)StockAwards($)OptionAwards($) (2)All OtherCompensation($)Total($)Ronen Luzon2022173,000223,0008,000126,000530,000Chief Executive Officer2021194,0005,00023,00097,000319,000Or Kles2022123,00053,0007,00071,000254,000Chief Financial Officer2021123,0008,00030,00061,000222,000Billy Pardo2022134,00053,0007,000100,00294,000Chief Operating Officer2021162,0007,00018,00074,000261,000(1) Salary for the years 2022 and 2021 are based on average US$/NIS representative exchange rates of NIS 3.358 and NIS 3.11 respectively.(2) Amounts in this column represent the grant date fair value of options granted to the named executive officers during 2022 and 2021, computed in accordance withFASB ASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the named executive officers. The assumptionsmade in valuing the options reported in this column are discussed in Note 11 to our audited financial statements for the year ended December 31, 2021 and Note 4 toour condensed consolidated interim financial statements for the quarterly period ended September 30, 2022.All Other Compensation TableThe “All Other Compensation” amounts set forth in the Summary Compensation Table above consist of the following:NameYearAutomobileRelatedExpenses($)Manager’sInsurance*($)EducationFund*($)Othersocialbenefits**($)Total($)Ronen Luzon202232,00031,00015,00048,000126,000202133,00033,00015,00016,00097,000Or Kles202215,00021,00010,00025,00071,000202114,00019,0009,00019,00061,000Billy Pardo202216,00025,00013,00046,000100,000202117,00024,00012,00021,00074,000* Manager’s insurance and education funds are customary benefits provided to employees based in Israel. Manager’s insurance is a combination of severancesavings (in accordance with Israeli law), defined contribution taxqualified pension savings and disability insurance premiums. An education fund is a savings fundof pretax contributions to be used after a specified period of time for educational or other permitted purposes.** Other social benefits for 2022 and 2021 for all named individuals includes tax payments in respect of social benefits.57Agreements with Named Executive OfficersRonen LuzonOn November 18, 2018, My Size Israel, our wholly owned subsidiary, entered into an employment agreement with Ronen Luzon, or the Luzon EmploymentAgreement, pursuant to which Mr. Luzon will serve as our Chief Executive Officer. Pursuant to the terms of the Luzon Employment Agreement, Mr. Luzon receivesNIS 55,000 per month as his base salary and shall be eligible to receive such bonus as determined by us. In addition, Mr. Luzon shall be entitled social benefits andto other benefits, including, but not limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, includinginsurance in case of disability, annual vacation days, sick leave and expense reimbursement. Pursuant to the terms of the Luzon Employment Agreement and subjectto certain conditions, payments made by the Company to the pension fund or manager’s insurance fund shall be made in lieu of severance payments due to Mr.Luzon. The term of the Luzon Employment Agreement shall be effective as of September 1, 2018 and shall continue until such time either party provides writtennotice to the other party at least 75 days in advance of the termination of such agreement. We may also terminate Mr. Luzon’s employment without prior writtennotice (or payment in lieu of such notice) for Cause (as defined in the Luzon Employment Agreement).Or KlesOn November 18, 2018, My Size Israel entered into an employment agreement with Or Kles, or the Kles Employment Agreement, pursuant to which Mr. Kleswill serve as our Chief Financial Officer. Pursuant to the terms of the Kles Employment Agreement, Mr. Kles receives NIS 38,000 per month as his base salary andshall be eligible to receive such bonus as determined by us. In addition, Mr. Kles shall be entitled to social benefits and other benefits, including, but not limited to,contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annual vacation days,sick leave and expense reimbursement. Pursuant to the terms of the Kles Employment Agreement and subject to certain conditions, payments made by us to thepension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Mr. Kles. The term of the Kles Employment Agreement shall beeffective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days in advance of thetermination of such agreement. We may also terminate Mr. Kles’s employment without prior written notice (or payment in lieu of such notice) for Cause (as defined inthe Kles Employment Agreement).Billy PardoOn November 18, 2018, My Size Israel entered into an employment agreement with Billy Pardo, or the Pardo Employment Agreement, pursuant to which Ms.Pardo will serve as our Chief Product Officer. Pursuant to the terms of the Pardo Employment Agreement, Ms. Pardo receives NIS 47,500 per month as her basesalary and shall be eligible to receive such bonus as determined by us. In addition, Ms. Pardo shall be entitled to social benefits and other benefits, including, butnot limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annualvacation days, sick leave and expense reimbursement. Pursuant to the terms of the Pardo Employment Agreement and subject to certain conditions, payments madeby us to the pension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Ms. Pardo. The term of the Pardo EmploymentAgreement shall be effective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days inadvance of the termination of such agreement. We may also terminate Ms. Pardo’s employment without prior written notice (or payment in lieu of such notice) forCause (as defined in the Pardo Employment Agreement).58Outstanding Equity Awards at Fiscal YearEndThe following table provides information regarding options held by each of our named executive officers that were outstanding as of December 31, 2022.Option AwardsStock AwardsName and Principal PositionNumber ofSecuritiesUnderlyingUnexercisedOptionsExercisableNumber ofSecuritiesUnderlyingUnexercisedOptionsUnexercisableOptionExercisePriceOptionExpirationDateEquityincentiveplan awards:Number ofUnearnedShares that HaveNot VestedEquityincentiveplan awards:Market Value ofUnearnedShares, That Have Not VestedRonen Luzon Chief Executive Officer400(1)$26(8)7/24/20231,601(2)$26(8)5/29/20256,400(3)$268/10/2025100,000(9)100,000$511,250Or Kles – Chief Financial Officer227(4)$26(8)7/24/2023427(5)$26(8)5/29/20255,200(6)$268/10/202524,000(10)24,000$122,700Billy Pardo Chief Operating Officer400(1)$26(8)7/24/2023894(7)$26(8)5/29/20255,200(6)$268/10/202524,000(11)24,000$122,700(1) The option has a grant date of July 24, 2017 and vested in full on January 24, 2018.(2) The option has a grant date of May 29, 2019. 267 options vested immediately upon grant, 445 options vested on January 24, 2019, 445 options vested on January24, 2020 and 444 options vested on January 24, 2021.(3) The option has a grant date of October 8, 2020, 1,600 options vested on November 26, 2020, 1,600 options vested on May 26, 2021, 1,600 options vested onNovember 26, 2021, and 1,600 options vested on May 26, 2022.(4) The option has a grant date of July 24, 2017. 76 options vested immediately upon grant, 76 options vested on May 1, 2018 and 75 options vested on May 1, 2019.(5) The option has a grant date of May 29, 2019. 160 options vested immediately upon grant, 445 options vested on May 1, 2020, 445 options vested on May 21, 2021and 444 options vested on May 1, 2022.(6) The option has a grant date of October 8, 2020, 1,300 options vested on November 26, 2020, 1,300 options vested on May 26, 2021, 1,300 options vested onNovember 26, 2021, and 1,300 options vested on May 26, 2022.(7) The option has a grant date of May 29, 2019. 214 options vested immediately upon grant, 227 options vested on January 24, 2019, 227 options vested on January24, 2020 and 226 options vested on January 24, 2021.(8) On May 25, 2020, the compensation committee of the Board of Directors of the Company reduced the exercise price of outstanding options of employees anddirectors of the Company for the purchase of an aggregate of 5,610 shares of common stock of the Company (with exercise prices ranging between $453.75 and$228.75) to $26 per share, which was the closing price for the Company’s common stock on May 22, 2020, and extended the term of the foregoing options for anadditional one year from the original date of expiration.(9) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(10) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(11) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.59Director CompensationThe following table sets forth compensation information for our nonemployee directors for the year ended December 31, 2022.NameFees earned orpaid incash ($)(1)Optionawards($)(1)(2)Total($)Oren Elmalih15,078 15,078Oron Barnitzky15,34715,347Arik Kaufman14,44114,441Guy Zimmerman13,03313,033(1)Fees for the year 2022 are based on average US$/NIS representative exchange rates of NIS 3.519.(2)Amounts in this column represent the grant date fair value of options granted to the nonemployee directors during 2022 computed in accordance with FASBASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the nonemployee directors. The assumptions made invaluing the options reported in this column are discussed in Note 11 to our financial statements for the year ended December 31, 2022.We compensate our nonemployee directors for their service as a member of our board. Mr. Luzon received no separate compensation for board service. Mr.Luzon’s compensation is set forth above in the Summary Compensation Table.Each nonemployee director is entitled to receive a per meeting fee of $318. Nonemployee directors are also reimbursed for their travel and reasonable outofpocket expenses incurred in connection with attending board and committee meetings, to the extent that attendance is required by the board or the committee(s)on which that director serves.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurity Ownership of Certain Beneficial Holders and ManagementThe following table sets forth certain information regarding beneficial ownership of shares of our common stock as of March 31, 2023 by (i) each personknown to beneficially own more than 5% of our outstanding common stock, (ii) each of our directors, (iii) each of our executive officers, and (iv) all of our directorsand executive officers as a group. Except as otherwise indicated, the persons named in the table below have sole voting and investment power with respect to allshares beneficially owned, subject to community property laws, where applicable.Beneficial Owner(1)Shares ofCommon StockBeneficiallyOwnedPercentage(2)Executive officers and directors:Ronen Luzon143,578(3)5.8%Or Kles29,854(4)1.2%Billy Pardo143,578(5)5.8%Ezequiel Javier Brandwain12,000(6)*Ilia Turchinsky18,313(7)*Arik Kaufman1,294(8)*Oren Elmaliah1,294(9)*Oron Branitzky1,294(10)*Guy ZimmermanAll Executive Officers and Directors as a Group (9 persons)207,6268.4%*Less than 1%(1) The address of each person is c/o My Size, Inc., 4 HaYarden St., P.O.B. 1026, Airport City, Israel 7010000 unless otherwise indicated herein.60(2) The calculation in this column is based upon 2,446,780 shares of common stock outstanding on March 31, 2023. Beneficial ownership is determined in accordancewith the rules of the SEC and generally includes voting or investment power with respect to the subject securities. Shares of common stock that are currentlyexercisable or exercisable within 60 days of March 31, 2023 are deemed to be beneficially owned by the person holding such securities for the purpose of computingthe percentage beneficial ownership of such person, but are not treated as outstanding for the purpose of computing the percentage beneficial ownership of anyother person(3) Consists of (i) 100,000 shares of restricted stock granted under the 2017 Plan, (ii) 4,683 shares of common stock, (iii) options to purchase up to 8,401 shares of ourcommon stock, and (iv) 24,000 shares of restricted stock and options to purchase up to 6,494 shares of our common stock which are held by Billy Pardo, RonenLuzon’s spouse. Mr. Luzon may be deemed to beneficially hold the securities of us held by Ms. Pardo.(4) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, and (ii) an option to purchase 5,854 shares of our common stock. Does not includean aggregate of 119,760 shares of restricted stock over which Mr. Kles has been designated the initial proxy to vote such shares pursuant to a voting agreemententered into between Whitehole S.L., Twinbel S.L. and EGI Acceleration, S.L.(5) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, (ii) options to purchase up to 6,494 shares of our common stock, (iii) 100,000 sharesof restricted stock which are held by Ronen Luzon, Billy Pardo’s spouse (iii) 8,401 shares of common stock which are held by Mr. Luzon, and (iii) options to purchaseup to 4,683 shares of our common stock which are held by Mr. Luzon. Ms. Pardo may be deemed to beneficially hold the securities of the Company held by Mr.Luzon.(6) Consists of 12,000 shares of restricted stock granted under the 2017 Plan.(7) Consists of (i) 16,000 shares of restricted stock granted under the 2017 Plan, and (ii) options to purchase up to 2,313 shares of our common stock.(8) Consists of options to purchase up to 1,294 shares of our common stock.(9) Consists of options to purchase up to 1,294 shares of our common stock.(10) Consists of options to purchase up to 1,294 shares of our common stock.Change in ControlWe are not aware of any arrangement that might result in a change in control in the future. We have no knowledge of any arrangements, including anypledge by any person of our securities, the operation of which may at a subsequent date result in a change in the Company’s control.Securities Authorized for Issuance Under Equity Compensation PlansOn January 29, 2017, our Board of Directors approved the 2017 Equity Incentive Plan and the 2017 Consultant Equity Incentive Plan, which were approvedby our stockholders on March 21, 2017. In addition, on January 29, 2017, our Board of Directors approved the Stock Option Plan Israel Grantees SubPlan. The 2017Equity Incentive Plan initially authorized the issuance of up to 5,334 shares of common stock under the plan and the 2017 Consultant Equity Incentive Plan initiallyauthorized the issuance of up to 8,000 shares of common stock under the plan.On February 12, 2018, our stockholders approved an amendment to the 2017 Consultant Equity Incentive Plan to increase the maximum number of shares ofour common stock available for issuance under the plan from 8,000 to 12,000. On July 3, 2018, our stockholders approved an amendment to the 2017 Equity IncentivePlan to increase the maximum number of shares of our common stock available for issuance under the plan from 5,334 to 8,000 and an amendment to the 2017Consultant Equity Incentive Plan to increase the maximum number of shares of our common stock available for issuance under the plan from 12,000 to 18,667.On May 25, 2020, our Board reduced the exercise price of outstanding options of our employees and directors for the purchase of an aggregate of 140,237of our common stock (with exercise prices ranging between $453.75 and $228.75) to $26.0 per share, and extended the term of the foregoing options for an additionalone year from the original date of expiration.61On August 10, 2020, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 80,000 to 58,000shares, and a decrease of the numbers of shares available for issuance under the 2017 Consultant Incentive Plan to 8,667 shares from 18,667 shares.On December 30, 2021, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 58,000 sharesto 230,800 shares.On December 7, 2022, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Plan from 230,800 shares to 289,000shares.The following table summarizes information about our equity compensation plans and individual compensation arrangements as of December 31, 2022.Number of securities to be issued upon exercise of outstanding options, warrants and rights(a)Weighted average exercise price of outstandingoptions, warrants and rights (b)Number of securities remaining availablefor future issuanceunder equity compensationplans (excludingsecurities reflected in column (a) (c)Equity compensation plans approved by security holders43,49724.7477,455Equity compensation plans not approved by security holdersTotal43,49724.7477,455ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEDuring years ended December 31, 2022 and 2021, except for compensation arrangements described elsewhere herein and the transactions described below,we did not participate in any transaction, and we are not currently participating in any proposed transaction, or series of transactions, in which the amount involvedexceeded the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years, and in which, to our knowledge,any of our directors, officers, five percent beneficial security holders, or any member of the immediate family of the foregoing persons had, or will have, a direct orindirect material interest.Compensation arrangements for our named executive officers and directors are described in the section entitled “Executive Compensation.”Employment AgreementsWe have entered into written employment agreements with each of our executive officers. These agreements generally provide for notice periods of varyingduration for termination of the agreement by us or by the relevant executive officer, during which time the executive officer will continue to receive base salary andbenefits. We have also entered into customary noncompetition, confidentiality of information and ownership of inventions arrangements with our executiveofficers. However, the enforceability of the noncompetition provisions may be limited under applicable law.OptionsSince our inception we have granted options to purchase our common stock to our officers and directors. Such option agreements may contain accelerationprovisions upon certain merger, acquisition, or change of control transactions.62Restricted Stock GrantsOn September 29, 2022, our compensation committee approved grants of restricted share awards under our 2017 Plan to Ronen Luzon, Or Kles, Billy Pardo,Ilia Turchinsky and Ezequiel Javier Brandwain, pursuant to which they were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000restricted shares and 12,000 restricted shares, respectively. The restricted shares shall vest in three equal installments on January 1, 2023, January 1, 2024 andJanuary 1, 2025, conditioned upon continuous employment with us, and subject to accelerated vesting upon a change in control of the Company.Shareholder ActivismIn May 2021, we received notice from Custodian Ventures, LLC, or Custodian, of its intention to nominate four candidates to stand for election to our Boardof Directors at our 2021 annual meeting of stockholders. Custodian subsequently made a book and records request and has made public statements calling forchanges to our management.On September 22, 2021, Custodian, commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v. Mysize,Inc., C.A. No. 20210817LWW, or the Delaware Action. In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting. As further described below, on November 4, 2021, we entered into asettlement agreement, or the Settlement Agreement, with Custodian, Activist Investing LLC, David Aboudi, Partick Loney and David Natan, collectively, the LazarParties, settling and dismissing the Delaware Action.On October 19, 2021, we commenced an action in the United States District Court for the Southern District of New York captioned My Size, Inc. v. DavidLazar, Custodian Ventures LLC, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, Civil Action No, 1:21cv08585, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, andcertain rules promulgated thereunder, or the SDNY Action. The complaint sought, among other things, declaratory and injunctive relief related to defendants’ effortsto nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed “group” for purposes ofSection 13 (d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. In addition, the complaint alleged that thedefendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules in connection with their efforts to elect a slate of directorsto our Board of Directors. On October 20, 2021, the Court signed an order granting a hearing on an anticipated motion for a preliminary injunction and expeditedscheduling and discovery in aid thereof, and scheduled that hearing for December 2, 2021. As further described below, on November 4, 2021, we entered into theSettlement Agreement with the Lazar Parties settling and dismissing the claims asserted in the SDNY Action and the Delaware Action against one another. OnNovember 8, 2021, the remaining defendants in the SDNY Action filed and answer and counterclaim asserting a claim against us pursuant to New York Civil RightsLaw Section 70a, also known as New York’s antiSLAPP statute.On November 4, 2021, we entered into the Settlement Agreement, or the Lazar Settlement Agreement, with the Lazar Parties. Pursuant to the LazarSettlement Agreement, we and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the LazarSettlement Agreement, we reimbursed Custodian for out of pocket expenses and in consideration for the dismissal and release of claims against the Company anaggregate amount equal to $275,000. With respect to our 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) itsMay 12, 2021 notice of stockholder nominations of four director candidates with respect to our 2021 annual meeting of stockholders, (ii) the notice dated October 28,2021 submitted by Custodian to us notifying us of Custodian’s continued intent to bring its nomination of four director candidates before our stockholders at the2021 annual meeting, and (iii) any and all related materials and notices submitted to us in connection therewith or related thereto and to not take any further action inconnection with the solicitation of any proxies in connection with us. Custodian also agreed to cease any and all solicitation and other activities in connection withthe 2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effective date of theAgreement, or the Standstill Period. The Lazar Settlement Agreement also provides that during the Standstill Period, the Lazar Parties will vote all shares of ourcommon stock it beneficially owns in accordance with any proposal or recommendation made by us or our Board of Directors that is submitted to our stockholders,unless to do so would violate applicable law and except with respect to certain extraordinary transactions. The Lazar Settlement Agreement also contains nondisparagement and confidentiality provisions, subject to certain exceptions.63On December 9, 2021, we subsequently entered into a Settlement Agreement, or the Ault Settlement Agreement, with Milton C. Ault III, Ault Alpha LP, AultAlpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed to withdraw the SDNY Action against the AultParties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that action against the Company. In addition, pursuant to the SettlementAgreement, we paid $70,000 to the Ault Parties in consideration for the releases and other good and valuable consideration as set forth in the Ault SettlementAgreement.Naiz Bespoke Technologies AcquisitionOn October 7, 2022, we entered into the Naiz Agreement with the Naiz Sellers, pursuant to which the Naiz Sellers agreed to sell to us all of the issued andoutstanding equity of Naiz. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) ) the Naiz EquityConsideration and (ii) up the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the Equity Value Averaging Period) is less than $1,650,000, My Size shall pay the Shortfall Value to the Naiz Sellers within 45days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period, it wasdetermined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement)).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers will be subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into the LockUp Agreement with My Size, (ii) Whitehole, Twinbel and EGIentered into the Voting Agreement with My Size and (iii) each of the Key Persons entered into employment agreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonth period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonth “dribbleout” provisionthat provides following the expiration of the initial sixmonth lockup period, without My Size’s prior written consent (which My Size shall be permitted to withholdat its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than the average dailytrading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.64The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Indemnification Agreements and Directors’ and Officers’ Liability InsuranceWe have entered into indemnification agreements with each of our directors and executive officers. These agreements, among other things, require us toindemnify these individuals and, in certain cases, affiliates of such individuals, to the fullest extent permitted by Delaware law against liabilities that may arise byreason of their service to us or at our direction, and to advance expenses incurred as a result of any proceedings against them as to which they could beindemnified. We also maintain an insurance policy that insures our directors and officers against certain liabilities, including liabilities arising under applicablesecurities laws.Director IndependenceSee “Item 10. Directors, Executive Officers and Corporate Governance; Corporate Governance, Board Composition” above for a discussion regarding theindependence of the members of our board of directors.ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICESSomekh Chaikin, a member firm of KPMG International, located in Tel Aviv, Israel, PCAOB ID 1057, has served as our independent registered publicaccounting firm for 2022 and 2021. The following are Somekh Chaikin’s fees for professional services in each of the respective fiscal years:Fee Category20222021Audit Fees198,910298,300Tax Fees30,66729,300Auditrelated Fees18,000Total Fees247,577327,600Audit Fees:Audit Fees consist of fees billed for professional services performed by Somekh Chaikin for the audit of our annual financial statements, thereview of interim consolidated financial statements, and related services that are normally provided in connection with registration statements, including theregistration statement for S1 and S3.Tax Fees: Tax Fees may consist of fees for professional services, including tax and VAT consulting and compliance performed by an independent registeredpublic accounting provided during the period.PreApproval Policies and ProceduresIn accordance with the SarbanesOxley Act of 2002, as amended, our audit committee charter requires the audit committee to preapprove all audit andpermitted nonaudit services provided by our independent registered public accounting firm, including the review and approval in advance of our independentregistered public accounting firm’s annual engagement letter and the proposed fees contained therein. The audit committee has the ability to delegate the authorityto preapprove nonaudit services to one or more designated members of the audit committee. If such authority is delegated, such delegated members of the auditcommittee must report to the full audit committee at the next audit committee meeting all items preapproved by such delegated members. In the fiscal years endedDecember 31, 2022 and December 31, 2021 all of the services performed by our independent registered public accounting firm were preapproved by the auditcommittee.65PART IVITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES(a)Financial StatementsThe financial statements required by this Item are included beginning at page F1.(b)ExhibitsSee Exhibit IndexITEM 16. FORM 10K SUMMARYNot applicableEXHIBIT INDEXExhibitNumberDescription3.1Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Form on Form8K filed on March 23, 2017)3.2Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10K filed onMarch 4, 2016)3.3Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’s Current Report onForm 8K filed on February 20, 2018)3.4Second Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8K filedon April 24, 2018)3.5Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’sCurrent Report on Form 8K filed on November 18, 2019)3.6Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on January 7, 2022)3.7Amendment No. 1 to Second Amended and Restated ByLaws (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8K filed on January 7, 2022)3.8Certificate of Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on December 7, 2022)4.1Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S3/A filed onNovember 14, 2016)4.2Form of Warrant to Purchase Common Stock issued on February 2, 2018 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report onForm 10K filed on March 27, 2019)4.3Description of Securities Registered under Section 12 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report on Form 10K filedon March 19, 2020)4.4Form of Warrant (incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S1, Amendment No. 1, filed with the SECon May 5, 2020.)4.5Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)4.6Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.1My Size, Inc. 2017 Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement on Schedule DEF 14Afiled on March 2, 2017)10.2My Size, Inc. 2017 Consultant Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement onSchedule DEF 14A filed on March 2, 2017)10.3My Size, Inc. 2017 Stock Option Plan Israel Grantees SubPlan (incorporated by reference to Exhibit 10.3 to the Company’s Annual Report on Form10K filed on March 27, 2019)6610.4Purchase Agreement between My Size, Inc. and Shoshana Zigdon dated as of February 16, 2014 (incorporated by reference to Exhibit 10.2 to theCompany’s Annual Report on Form 10K filed on March 4, 2016)10.5 +Employment Agreement between My Size Israel 2014 Ltd. and Ronen Luzon dated November 18, 2018 (incorporated by reference to Exhibit 10.1 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.6 +Employment Agreement between My Size Israel 2014 Ltd. and Or Kles dated November 18, 2018 (incorporated by reference to Exhibit 10.2 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.7 +Employment Agreement between My Size Israel 2014 Ltd. and Billy Pardo dated November 18, 2018 (incorporated by reference to Exhibit 10.3 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.8Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on January 15,2020)10.9Form of Warrant (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.10Form of Placement Agent Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.11Securities Purchase Agreement (incorporated by reference to Exhibit 10.30 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.12Underwriting Agreement, dated January 5, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on January 7, 2021)10.13Underwriting Agreement, dated March 22, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on March 25, 2021)10.14Amendment to Purchase Agreement between My Size Israel 2014 Ltd., My Size, Inc. and Shoshana Zigdon (incorporated by reference to Exhibit 10.1to the Company’s Quarterly Report on Form 10Q on August 16, 2021)10.15Form of Registered Direct Offering Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.16Form of PIPE Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.17Form of Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.18Form of Placement Agent Warrant issued by the Company on October 28, 2021 (incorporated by reference to Exhibit 10.22 to the Company’s Form S1filed on November 12, 2021)10.19Form of Registration Rights Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.4 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.20Engagement Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference to Exhibit 10.5 to theCompany’s Current Report on Form 8K filed on October 28, 2021)10.21Settlement Agreement dated November 4, 2021, among My Size, Inc., David Lazar and certain of his affiliates (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on November 5, 2021)10.22Share Purchase Agreement dated as of February 7, 2022 between My Size Israel 2014 Ltd. and Amar Guy Shalom and Elad Bretfeld (incorporated byreference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SEC on February 8, 2022)10.23Employment Agreement between My Size Israel 2014 Ltd. and Ezequiel Javier Brandwain dated January 27, 2022 (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on February 1, 2022)10.24Form of Section 102 Capital Gain Restricted Stock Award Agreement under the Company’s 2017 Equity Incentive Plan (incorporated by reference toExhibit 10.1 to the Company’s Quarterly Report on Form 10Q, filed with the SEC on November 14, 2022)10.25Share Purchase Agreement, dated as of October 6, 2022, by and among My Size, Inc., Borja Cembrero Saralegui, Artiz Toree Garcia, Whitehold, S.L.,Twinbel, S.L., and EGI Acceleration, S.L. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SECon October 12, 2022)10.26Form of LockUp Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)10.27Form of Voting Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.3 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)6710.28My Size, Inc. Amendment to the My Size, Inc. 2017 Equity Plan (incorporated by reference to Appendix B to the Company’s definitive proxystatement filed with the SEC on November 4, 2022)10.29Form of Registered Direct Offering Securities Purchase Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.1 to theCompany’s Current Report on Form 8K filed with the SEC on January 12, 2023)10.30Form of PIPE Securities Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8Kfiled with the SEC on January 12, 2023)10.31Form of Registered Direct PreFunded Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.32Form of Series A and Series B Warrant (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8K filed with the SEC onJanuary 12, 2023)10.33Form of Private Placement PreFunded Warrant (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.34Form of Registration Rights Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form8K filed with the SEC on January 12, 2023)10.35Engagement Agreement, dated December 5, 2022 (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8K filed withthe SEC on January 12, 2023)10.36*Form of Placement Agent Warrant21.1*List of Subsidiaries23.1*Consent of Somekh Chaikin, a member firm of KPMG International, registered public accounting firm31.1*Certification of the Chief Executive Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200231.2*Certification of the Chief Financial Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200232.1*Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a14(b) of the Exchange Act and 18 U.S.C. Section 1350, asadopted pursuant to Section 906 of the SarbanesOxley Act of 2002101.INS*Inline XBRL Instance Document101.SCH*Inline XBRL Taxonomy Schema101.CAL*Inline XBRL Taxonomy Calculation Linkbase101.DEF*Inline XBRL Taxonomy Definition Linkbase101.LAB*Inline XBRL Taxonomy Label Linkbase101.PRE*Inline XBRL Taxonomy Presentation Linkbase104Cover Page Interactive Data File (formatted as Inline XBRL document and contained in Exhibit 101)*Filed herewith.+Indicates a management contract or any compensatory plan, contract or arrangement68SIGNATURESPursuant to the requirements of Section 13 and 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10K to be signed on its behalf by the undersigned, thereunto duly authorized on this 14th day of April, 2023.MY SIZE, INC./s/ Ronen LuzonRonen LuzonChief Executive Officer (Principle Executive Officer)/s/ Or KlesOr KlesChief Financial Officer(Principal Financial and Accounting Officer)Pursuant to the requirements of the Securities Act of 1934, this annual report on Form 10K has been signed below by the following persons on behalf ofthe registrant and in the capacities and on the dates indicated.SignatureTitleDate/s/ Ronen LuzonChief Executive Officer and DirectorApril 14, 2023Ronen Luzon(Principle Executive Officer)/s/ Or KlesChief Financial OfficerApril 14, 2023Or Kles(Principal Financial and Accounting Officer)/s/ Oren ElmaliahDirectorApril 14, 2023Oren Elmaliah/s/ Arik KaufmanDirectorApril 14, 2023Arik Kaufman/s/ Oron BranitzkyDirectorApril 14, 2023Oron Branitzky/s/ Guy ZimmermanDirectorApril 14, 2023Guy Zimmerman69EX10.36 2 ex1036.htmExhibit 10.36NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES ANDEXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THESECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO ANEFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTIONNOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGINACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.PLACEMENT AGENT COMMON STOCK PURCHASE WARRANTMY SIZE, INC.Warrant Shares: _______Issue Date: January 12, 2023Initial Exercise Date: January 12, 2023THIS PLACEMENT AGENT COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _____________ or itsassigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the dateset forth above (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on January 10, 2028 (the “Termination Date”) but not thereafter, tosubscribe for and purchase from My Size, Inc., a Delaware corporation (the “Company”), up to ______ shares (as subject to adjustment hereunder, the “WarrantShares”) of the Company’s Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined inSection 2(b). This Warrant is issued pursuant to that certain engagement letter, dated as of December 5, 2022, by and between the Company and H.C. Wainwright &Co., LLC.Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities PurchaseAgreement (the “Purchase Agreement”), dated January 10, 2023, among the Company and the purchasers signatory thereto.1Section 2. Exercise.a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or afterthe Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted by email (or emailattachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the numberof Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shalldeliver the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on aUnited States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No inkoriginalNotice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required.Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder haspurchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrantto the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercisesof this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering theoutstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder andthe Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver anyobjection to any Notice of Exercise within one (1) Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant,acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, thenumber of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.b) Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $3.8188, subject to adjustment hereunder (the“Exercise Price”).c) Cashless Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein isnot available for the issuance or resale of the Warrant Shares to or by the Holder, then this Warrant may also be exercised, in whole or in part, at such timeby means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing[(AB) (X)] by (A), where:(A) =as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice ofExercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed anddelivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) ofRegulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAPon the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on theprincipal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s execution of the applicable Notice ofExercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hoursthereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii)the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice ofExercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;(B) =the Exercise Price of this Warrant, as adjusted hereunder; and(X) =the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if suchexercise were by means of a cash exercise rather than a cashless exercise.2“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which theCommon Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York Citytime)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest precedingdate) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for theCommon Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the mostrecent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by anindependent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to theCompany, the fees and expenses of which shall be paid by the Company.“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the TradingMarket on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or thenearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and ifprices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reportingprices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock asdetermined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonablyacceptable to the Company, the fees and expenses of which shall be paid by the Company.If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of theSecurities Act, the Warrant Shares shall take on the characteristics of the Warrants being exercised, and the holding period of the Warrant Shares beingissued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section 2(c).3d) Mechanics of Exercise.i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to betransmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with TheDepository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant insuch system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of theWarrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or mannerofsale limitationspursuant to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, registered in theCompany’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitledpursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2)Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate ExercisePrice to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Companyof the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall bedeemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant hasbeen exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (otherthan in the case of a cashless exercise) is received by the Warrant Share Delivery Date. If the Company fails for any reason to deliver tothe Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder,in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP ofthe Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifthTrading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share Delivery Date until such WarrantShares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FASTprogram so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standardsettlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stockas in effect on the date of delivery of the Notice of Exercise.4ii.Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the requestof a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a newWarrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrantshall in all other respects be identical with this Warrant; provided, however, that the Holder shall be required to return any WarrantShares subject to any such rescinded exercise notice concurrently with the return to Holder of the aggregate Exercise Price paid to theCompany for such Warrant Shares and the restoration of Holder’s right to acquire such Warrant Shares pursuant to this Warrant(including, issuance of a replacement warrant certificate evidencing such restored right).iii. Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant toSection 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.iv. Compensation for BuyIn on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights availableto the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with theprovisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date theHolder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwisepurchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipatedreceiving upon such exercise (a “BuyIn”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) theHolder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) theamount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connectionwith the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at theoption of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was nothonored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock thatwould have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holderpurchases Common Stock having a total purchase price of $11,000 to cover a BuyIn with respect to an attempted exercise of shares ofCommon Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediatelypreceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written noticeindicating the amounts payable to the Holder in respect of the BuyIn and, upon request of the Company, evidence of the amount of suchloss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including,without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver sharesof Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.5v. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise ofthis Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Companyshall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by theExercise Price or round up to the next whole share.vi. Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue ortransfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paidby the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by theHolder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, thisWarrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder andthe Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.The Company shall pay all Transfer Agent fees required for sameday processing of any Notice of Exercise and all fees to the DepositoryTrust Company (or another established clearing corporation performing similar functions) required for sameday electronic delivery of theWarrant Shares.vii. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timelyexercise of this Warrant, pursuant to the terms hereof.6e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise anyportion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicableNotice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of theHolder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). Forpurposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Partiesshall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, butshall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrantbeneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion ofany other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exerciseanalogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in thepreceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act andthe rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that suchcalculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed inaccordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (inrelation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisableshall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether thisWarrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of thisWarrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm theaccuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number ofoutstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s mostrecent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recentwritten notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request ofa Holder, the Company shall within one (1) Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock thenoutstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise ofsecurities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number ofoutstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stockoutstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice tothe Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial OwnershipLimitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares ofCommon Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in theBeneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shallbe construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portionhereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplementsnecessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of thisWarrant.7Section 3. Certain Adjustments.a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes adistribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which,for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstandingshares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into asmaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case theExercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any)outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately aftersuch event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of thisWarrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for thedetermination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case ofa subdivision, combination or reclassification.b) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sellsany Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares ofCommon Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregatePurchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise ofthis Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before thedate on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the recordholders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that to the extent that theHolder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall notbe entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Rightto such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not resultin the Holder exceeding the Beneficial Ownership Limitation).c) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend (other than cash) orother distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including,without limitation, any distribution of stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement,scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holdershall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number ofshares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including withoutlimitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken,the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, thatto the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, thenthe Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a resultof such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as itsright thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).8d) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more relatedtransactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease,license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, director indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of CommonStock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more ofthe outstanding Common Stock or 50% or more of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in oneor more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchangepursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly orindirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, withoutlimitation, a reorganization, recapitalization, spinoff, merger or scheme of arrangement) with another Person or group of Persons whereby such otherPerson or group acquires more than 50% of the outstanding shares of Common Stock or 50% or more of the voting power of the common equity of theCompany (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for eachWarrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of theHolder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor oracquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as aresult of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior tosuch Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, thedetermination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of AlternateConsideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Priceamong the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. Ifholders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall begiven the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at theHolder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date ofthe public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cashequal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of suchFundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company’s control, including not approved by theCompany’s Board of Directors, the Holder shall only be entitled to receive from the Company or any Successor Entity the same type or form ofconsideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to theholders of Common Stock of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, stock or anycombination thereof, or whether the holders of Common Stock are given the choice to receive from among alternative forms of consideration in connectionwith the Fundamental Transaction; provided, further, that if holders of Common Stock of the Company are not offered or paid any consideration in suchFundamental Transaction, such holders of Common Stock will be deemed to have received common stock of the Successor Entity (which Entity may be theCompany following such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on theBlackScholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day of consummation of the applicableFundamental Transaction for pricing purposes and reflecting (A) a riskfree interest rate corresponding to the U.S. Treasury rate for a period equal to thetime between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expectedvolatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualizationfactor) as of the Trading Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlyingprice per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any noncashconsideration, if any, being offered in such Fundamental Transaction and (ii) the highest VWAP during the period beginning on the Trading Dayimmediately preceding the public announcement of the applicable contemplated Fundamental Transaction (or the consummation of the applicableFundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant to this Section 3(e) and (D) a remaining option timeequal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date and (E) azero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds (or such other consideration)within the later of (i) five Business Days of the Holder’s election and (ii) the date of consummation of the Fundamental Transaction. The Company shallcause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of theobligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant towritten agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to suchFundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entityevidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares ofcapital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of thisWarrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which appliesthe exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to suchFundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for thepurpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which isreasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall beadded to the term “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction, each andevery provision of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to each of the Company and theSuccessor Entity or Successor Entities, jointly and severally), and the Successor Entity or Successor Entities, jointly and severally with the Company, mayexercise every right and power of the Company prior thereto and the Successor Entity or Successor Entities shall assume all of the obligations of theCompany prior thereto under this Warrant and the other Transaction Documents with the same effect as if the Company and such Successor Entity orSuccessor Entities, jointly and severally, had been named as the Company herein.e) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. Forpurposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the numberof shares of Common Stock (excluding treasury shares, if any) issued and outstanding.9f) Notice to Holder.i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, theCompany shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resultingadjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form)on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C)the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any sharesof capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection withany reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all orsubstantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into othersecurities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of theaffairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as itshall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective datehereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to beentitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification,consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expectedthat holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or otherproperty deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure todeliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to bespecified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, nonpublic informationregarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to aCurrent Report on Form 8K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of suchnotice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.10Section 4. Transfer of Warrant.a) Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and to theprovisions of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights) aretransferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a writtenassignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay anytransfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a newWarrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument ofassignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly becancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unlessthe Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of thedate on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordanceherewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company,together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent orattorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute anddeliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issuedon transfers or exchanges shall be dated the Issue Date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Sharesissuable pursuant thereto.c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “WarrantRegister”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as theabsolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to thecontrary.d) Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrantshall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue skylaws or (ii) eligible for resale without volume or mannerofsale restrictions or current public information requirements pursuant to Rule 144, the Companymay require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, comply with the provisions ofSection 5.7 of the Purchase Agreement.11e) Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon anyexercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling suchWarrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exemptedunder the Securities Act.Section 5. Miscellaneous.a) No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends orother rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Withoutlimiting the rights of a Holder to receive Warrant Shares on a “cashless exercise,” and to receive the cash payments contemplated pursuant to Sections 2(d)(i) and 2(d)(iv), in no event will the Company be required to net cash settle an exercise of this Warrant.a.In July 2019, the Company entered into a threeyear agreement with a consultant (“Consultant14”) to provide services to the Company includingassisting the Company to promote, market and sell the Company’s technology to potential customers. Pursuant to such agreement and in partialconsideration for such consulting services, the Company agreed to issue to Consultant14 options to purchase up to 107 shares of the Company’scommon stock upon execution of the agreement. The options are exercisable at $375.00 per share and shall vest in 3 equal instalments every twelvemonths starting July 2019. Unexercised options shall expire 4 years from the effective date.In addition, the Company agreed to issue to Consultant14 options to purchase up to 890 shares of the Company’s common stock upon executionof the agreement. The options are exercisable at $27.00 per share and shall vest in 4 equal instalments every six months starting September 2020.Unexercised options shall expire 5 years from the effective date.During 2022 and 2021, an amount of $7 and $14 respectively, were recorded by the Company as stockbased equity awards with respect to Consultant14.F24MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The Company’s outstanding options granted to consultants as of December 31, 2022 are as follows:Issuance dateOptions forCommon stockWeightedAverageexercise priceper shareOptionsexercisableExpirationdateFebruary 201815USD528.7515February 2023August 2018December 2018531USD352.38264August 2023 December 2023July 2020107USD375107July 2023SeptemberOctober 20201,488USD27.201,288October 2024 September 2025Total2,1411,674The Company uses the Black Scholes model to measure the fair value of the stock options with the assistance of a third party valuation.No stock options were granted during 2022 to consultants.The fair value of the Company’s stock options granted to nonemployees was calculated using the following weighted average assumptions:20222021GrantsGrantsDividend yield0%Expected volatility125.15%Riskfree interest0.16%Contractual term of up to (years)1.52F25MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Stock Option Plan for employeesIn March 2017, the Company adopted a stock option plan (the “Plan”) pursuant to which the Company’s Board of Directors may grant stock options toofficers and key employees. The total number of options which may be granted to directors, officers, employees under this plan, is limited to 289,000options. Stock options can be granted with an exercise price equal to or less than the stock’s fair market value at the date of grant.The fair value of each option award is estimated on the date of grant using the Binomial optionpricing model that used the weighted averageassumptions in the following table. The risk free rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the timeof grant.2022Grants2021GrantsDividend yield0%0%Expected volatility96.52%98.47%Riskfree interest4.06%0.96%expected life522.27In the years ended December 31, 2022 and 2021, 10,000 and 3,900 options, respectively, were granted.On December 7, 2022, the Company’s stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from230,800 shares to 289,000 shares.On September 29, 2022, the Compensation Committee of the Company approved grants of restricted share awards under the Company’s 2017 EquityIncentive Plan to Ronen Luzon (CEO), Or Kles (CFO), Billy Pardo (COO), Ilia Turchinsky (CTO) and Ezequiel Javier Brandwain (CCO), pursuant towhich were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000 restricted shares and 12,000 restricted shares,respectively. Each restricted share awarded under section 102 Capital Gain Restricted Stock Award Agreement (the “Agreement”). The restrictedshares shall vest in three equal installments on January 1, 2023, January 1, 2024 and January 1, 2025 for Ronen Luzon, Or Kles, Billy Pardo and IliaTurchinsky and on January 27, 2023, January 27, 2024 and January 27, 2025 for Ezequiel Javier Brandwain, conditioned upon continuous employmentwith the Company, and subject to accelerated vesting upon a change in control of the Company.On the same day, the Company granted fiveyears options to purchase up to 10,000 ordinary shares to other employees of the Company at an exerciseprice of $0.21 per share. The options vesting period is over three years in three equal portions from the vesting commencement date.F26MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The total stock option compensation expense in the year ended December 31, 2022 amounted to $448as follows: Research and development expensesamounted to $151, sales and marketing expenses amounted to $119and general and administrative expenses amounted to $178.The total stock option compensation expense in the year ended December 31, 2021 amounted to $252 as follows: Research and development expensesamounted to $94, sales and marketing expenses amounted to $97 and general and administrative expenses amounted to $61.As of December 31, 2022, there was a total of $530 unrecognized compensation cost relating to nonvested sharebased compensation arrangements.That cost is expected to be recognized over a weightedaverage period of 2.0 years.Share option activity during 2022 is as follows:2022Number ofoptionsWeightedaverageexerciseprice US$Outstanding as of January 135,74226.5Granted10,0005.25ExercisedExpired(4,136)Outstanding as of year end41,60622.48Vested as of year end33,20825.17Share option activity during 2021 is as follows:2021Number ofoptionsWeightedaverageExerciseprice US$Outstanding as of January 139,094$26.0Granted3,90032.0Exercised(751)Expired(6,501)Outstanding as of year end35,74226.5Vested as of year end27,06326.5F27MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 15 CONTINGENCIES AND COMMITMENTSa.On August 7, 2018, the Company commenced an action against North Empire LLC (“North Empire”) in the Supreme Court of the State of New York,County of New York for breach of a Securities Purchase Agreement (the “Agreement”) in which it is seeking damages in an amount to bedetermined at trial, but in no event less than $616. On August 2, 2018, North Empire filed a Summons with Notice against the Company, also in thesame Court, in which they allege damages in an amount of $11.4 million arising from an alleged breach of the Agreement. On September 6, 2018North Empire filed a Notice of Discontinuance of the action it had filed on August 2, 2018. On September 27, 2018, North Empire filed an answerand asserted counterclaims in the action commenced by the Company against them, alleging that the Company failed to deliver stock certificatesto North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against theCompany’s CEO and now former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018,the Company filed a reply to North Empire’s counterclaims. On November 15, 2018, the Company’s CEO and now former Chairman of the Boardfiled a motion to dismiss North Empire’s thirdparty complaint. On January 6, 2020, the Court granted the motion and dismissed the thirdpartycomplaint. Discovery has been completed and both parties have filed motions for summary judgment in connection with the claims andcounterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summary judgment, arguing there werefactual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision. The appealmust be fully perfected and filed by July 26, 2022. On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying theCompany’s motion for summary judgment. North Empire will file its opposition papers on or before March 31, 2022, and the Company will file replypapers on April 29, 2022. On or about September 12, 2022, the Court issued its Decision and Order denying the Company’s motion to reargue.North Empire filed its opposing brief on December 7, 2022. Both sides were given an opportunity to file a reply brief. The Company filed our replybrief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. The Appellate Court has scheduled oral argument for the appealfor February 7, 2023. Oral argument was held before the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Courtfiled its Decision and Order, which affirmed the lower court’s decisions regarding both My Size and North Empire’s motions for summary judgmentand sent the case back to the Supreme Court.On or about March 13, 2023, the Supreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date forthe mediation has not yet been set. The Company intends to vigorously defend any claims made by North Empire.The Company believes it is more likely than not that the counterclaims will be denied.b.In May 2021, the Company received notice from Custodian Ventures, LLC (“Custodian”) of its intention to nominate four candidates to stand forelection to our Board of Directors at the Company’s 2021 annual meeting of stockholders. Custodian subsequently made a book and recordsrequest and has made public statements calling for changes to our management.On September 22, 2021, Custodian commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v.MySize, Inc. (the “Delaware Action”). In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting.On October 19, 2021, the Company commenced an action in the United States District Court for the Southern District of New York againstCustodian, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, and certain rulespromulgated thereunder (the “SDNY Action”). The complaint sought, among other things, declaratory and injunctive relief related to defendants’efforts to nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed“group” for purposes of Section 13(d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. Inaddition, the complaint alleged that the defendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules inconnection with their efforts to elect a slate of directors to the Company’s Board of Directors. On October 20, 2021, the Court signed an ordergranting a hearing on an anticipated motion for a preliminary injunction and expedited scheduling and discovery in aid thereof, and scheduled thathearing for December 2, 2021.On November 4, 2021, the Company entered into the Settlement Agreement with the Lazar Parties. Pursuant to the Settlement Agreement, theCompany and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the SettlementAgreement, the Company agreed to reimburse Custodian for out of pocket expenses and in consideration for the dismissal and release of claimsagainst the Company an aggregate amount equal to $275, to be paid within three business days of the effective date of the Settlement Agreement.With respect to the Company’s 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) its May 12,2021 notice of stockholder nominations of four director candidates with respect to the Company’s 2021 annual meeting of stockholders, (ii) thenotice dated October 28, 2021 submitted by Custodian to the Company notifying the Company of Custodian’s continued intent to bring itsnomination of four director candidates before the Company’s stockholders at the 2021 annual meeting, and (iii) any and all related materials andnotices submitted to the Company in connection therewith or related thereto and to not take any further action in connection with the solicitationof any proxies in connection with the Company. Custodian also agreed to cease any and all solicitation and other activities in connection with the2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effectivedate of the Agreement (the “Standstill Period”). The Settlement Agreement also provides that during the Standstill Period, the Lazar Parties willvote all shares of common stock of the Company it beneficially owns in in accordance with any proposal or recommendation made by theCompany or the Board of Directors of the Company that is submitted to the stockholders of the Company, unless to do so would violateapplicable law and except with respect to certain extraordinary transactions. The Settlement Agreement also contains nondisparagement andconfidentiality provisions, subject to certain exceptions.On December 9, 2021, the Company subsequently entered into a Settlement Agreement (the “Ault Settlement Agreement”), with Milton C. Ault III,Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed towithdraw the SDNY Action against the Ault Parties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that actionagainst the Company. In addition, pursuant to the Settlement Agreement, the Company paid $70 to the Ault Parties in consideration for thereleases and other good and valuable consideration as set forth in the Ault Settlement Agreement.c.On July 5, 2021, the Company was served with a legal complaint filed by Fidelity Venture Capital Ltd. and Dror Atzmon in the Magistrate’s Court inTel Aviv for a monetary award in an amount of NIS 1,436,679 (approximately $450) and a declaratory relief. The plaintiffs allege that the Companybreached its contractual obligations to pay them for services allegedly rendered to the Company by the plaintiffs under a certain consultingagreement dated July 2, 2014, in an amount of NIS 819,000 (approximately $256). Additionally, the plaintiffs allege that the Company shouldcompensate them for losses allegedly incurred by them following their investment in the Company’s shares issued under a certain private offering.In the alternative, the plaintiffs move that the court will declare the investment agreement void with full restitution of plaintiffs’ original investmentin an amount of NIS 1,329,650(approximately $415). The Company filed its statement of defense on October 25, 2021. The first preliminary courthearing of the case is scheduled for January 23, 2022.The first court preliminary hearing was held on March 1, 2022.Following the first preliminary hearing and the Court’s comments and recommendation, the Plaintiffs filed a motion to strike out the claim withoutprejudice.On March 8, 2022 the Court ordered dismissal without prejudice of the claim.F28MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATIONAcquisition of OrgadOn February 7, 2022, the Company acquired 100% of the shares and voting interests in Orgad an omnichannel ecommerce platform. The acquisitionwas designed to create an additional revenue stream for the Company by becoming a direct ecommerce seller while leveraging the synergies betweenMySizeID and Orgad’s ecommerce platform.Unaudited proforma informationThe results of operations of Orgad have been included in the consolidated financial statements since the acquisition date of February 7, 2022. Orgadrevenues included in the Company’s consolidated statement of operations from February 7, 2022 through December 31, 2022 were $4,132. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,662 and $2,850 respectively, and the net loss after tax would have been $8,519 and $10,149 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash (*)300Issuance of shares of common stock (69,752 shares) (**)457Total consideration transferred757(*)The cash payment is subject to working capital adjustments.(**)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Orgad, on the twoyear and the threeyear anniversary of the closing, $350in each ofthese years provided that in the case of the second and third instalments certain revenue targets are met and subject further to certain downward postclosing adjustment. Furthermore, 69,752shares of common stock will be issued in eight equal quarterly instalments until the lapse of two years fromclosing. Additional earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023 will also be paid. All of these payments aresubject to the former owners being actively engaged with Orgad at the date such payment is due, and therefore were not taken as part of theconsideration for the business combination.During the year ended December 31, 2022 an amount of $456and $319was recorded in respect of the cash instalments and in respect of stocksissuance, respectively in Cost Of Goods, Sales and Marketing and General and Administrative expenses as shown in the following table:2022Stockbased compensation expense – Cost of goods194Stockbased compensation expense Sales and marketing271Stockbased compensation expense General and administrative310775(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the preliminary estimates of their fair values, which were determined using generally accepted valuation techniques based onestimates and assumptions made by management at the time of the acquisition. Such estimates are subject to change during the measurement periodwhich is not expected to exceed one year. The purchase price allocation was not finalized duo to examination of the net working capital of Orgad at theacquisition date. Any adjustments to the preliminary purchase price allocation identified during the measurement period will be recognized in theperiod in which the adjustments are determined.The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and Cash EquivalentTrade receivables364PP&E55Inventory864Longterm financial investment31Selling platform378Goodwill152Shortterm accruals and deferrals(181)Trade payables(668)Long term provision(13)Longterm debt(138)Deferred Taxes(87)Total net assets acquired757F29MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)(c)Acquisitionrelated costsThe Company incurred transaction costs of approximately $40and none during twelvemonth period ended December 31, 2022 which were included ingeneral and administrative expenses in the consolidated statements of income (loss).Acquisition of Naiz Bespoke Technologies, S.L. (“Naiz”)On October 11, 2022, the Company acquired 100% of the shares and voting interests in Naiz a provider of SaaS technology solutions that solve sizeand fit issues for fashion ecommerce companies. The acquisition was designed to allow Naiz’s customers benefit from MySize’s deep understanding ofthe fashion ecommerce retail landscape, while creating an additional revenue stream for the Company.Unaudited proforma informationThe results of operations of Naiz have been included in the consolidated financial statements since the acquisition date of October 11, 2022. Naizrevenues included in the Company’s consolidated statement of operations from October 11, 2022 through December 31, 2022 were $103. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,738 and $379 respectively and the net loss after tax would have been $8,695 and $10,717 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash503Issuance of shares of common stock (240,000 shares) (*)1,008Total consideration transferred1,511(*)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Naiz, additional cash consideration (up to $1,550) in four instalments subject to thefollowing conditions:(i)Continuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result ofa Good Reason; and(ii)Naiz’s Revenues reaching or exceeding the respective Target Revenues defined in the agreement. The revenues will be calculated in four periods:(1) January 1, 2022 – December 31, 2022; (2) January 1, 2023 – June 30, 2023; (3) July 1, 2023 – December 31, 2023; (4) January 1, 2024 – December31, 2024.Former owners of Naiz are entitled to additional cash consideration following December 31, 2025 (up to $1,650) in an event when the actual value of theequity consideration is less than $1,650, subject to completion of a Target Revenue for the period of January 1, 2025 – December 31, 2025 andcontinuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result of aGood Reason;F30MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)During the year ended December 31, 2022 an amount of $283 was recorded in respect of the additional cash consideration.(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the estimates of their fair values, which were determined using generally accepted valuation techniques based on estimates andassumptions made by management at the time of the acquisition.The following table summarizes the fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and cash equivalent36Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Total net assets acquired1,511(c)Acquisitionrelated costsDuring 2022, the Company incurred transaction costs of approximately $75 which were included in general and administrative expenses in theconsolidated statements of income (loss).F31MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)Note 17 – Operating SegmentsDuring the year ended December 31, 2021, the Company had one reportable segment. As a result of the business combinations in the reporting period(see note 13), the Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificialintelligence driven measurement solutions and (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions and. The fashionand equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. Orgad has onecustomer that is responsible for 37.9% of the Company consolidated revenues. The SaaS based innovative artificial intelligence driven measurementsolutions, or SaaS Solutions operating segment consists of My Size Inc and My Size Israel and My Size LLC.Information related to the operations of the Company’s reportable operating segments is set forth below:Fashion andequipment ecommerce platformSaaSSolutionsNaizTotalAs of the year ended December 31, 2022Revenues from external customers4,1322241034,459Operating (loss) income(591)(7,181)(338)(8,110)Financial income (expense), net(236)Net loss before tax(8,346)Fashion andequipment ecommerce platformSaasSolutionNaizAs of December 31, 2022:Assets2,0225,9661,691Amortization of intangible assets(114)(34)(46)The Company elected to present geographic information in respect with revenues generated from external customers based on the location of the selling entity:All the revenues of the fashion and equipment ecommerce platform segment are generated by Orgad, located in Israel.All the revenues of the Naiz segment are generated by Naiz, located in Spain.The revenues of the Saas Solutions segment are generated by My Size Ltd. located in Israel (approximately 75% of the segment revenues) and by My Size Inc.located in the U.S. (approximately 25% of the segment revenues).NOTE 18 SALES AND MARKETINGYear endedDecember 31,20222021Salaries836574Consultants and subcontractors5831,086Marketing481283Selling fees489Share based payments post Orgad acquisition (*)271Share based payments for consultants and employees127180Travel21142Other1451713,1432,336(*) See note 16.NOTE 19 GENERAL AND ADMINISTRATIVE EXPENSESYear endedDecember 31,20222021Salaries1,007461Professional services7051,832Share based payments for consultants, directors and employees18098Rent, office expenses and communication442372Insurance564627cash liability and equity liability expenses related to Orgad acquisition310cash liability expenses related to Naiz acquisition217Settlement fees (*)345Directors8259Other3933303,9004,124(*)See note 15(b)F32MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 20 FINANCIAL INCOME (EXPENSE), NETA.Financial incomeYear endedDecember 31,20222021Revaluation investment in marketable securities49Other26172666B.Financial expenseYear endedDecember 31,20222021Exchange rate differences33Revaluation of loan granted100Revaluation investment in marketable securities62Other6792629NOTE 21 EVENTS SUBSEQUENT TO THE BALANCE SHEET DATEa.On January 2, 2023, Orgad experienced a fire at its warehouse in Israel. The Company is not aware of any casualties or injuries associated with thefire. The Company shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450.The Company believes that this incident did not affect the future sales results of Orgad for the year 2023. The inventory was not insured and it istoo early to determine the potential impact of this incident on the other parties that were involved in the incident (lessor and others that leasedproperties near the warehouse).b.On January 10, 2023, the Company entered into a securities purchase agreement pursuant to which the Company sold an aggregate of 162,000ofthe Company’s shares of common stock and prefunded warrants to purchase up to 278,899shares of common stock and, in a concurrent privateplacement, unregistered warrants to purchase up to883,798 shares of common stock, consisting of Series A warrants to purchase up to 441,899shares of common stock and Series B warrants to purchase up to 441,899shares of common stock, at an offering price of $3.055per share ofcommon stock and associated Series A and Series B warrants and an offering price of $3.054per prefunded warrant and associated Series A andSeries B warrants.In addition, the Company entered into a securities purchase agreement pursuant to which the Company agreed to sell and issue in a privateplacement an aggregate of up to 540,098 unregistered prefunded warrants and unregistered warrants to purchase up to an aggregate of 1,080,196shares of common stock, consisting of Series A warrants to purchase up to 540,098 shares of common stock and Series B warrants to purchase upto 540,098 shares of common stock at an offering price of $3.054 per prefunded warrant and associated Series A and Series B warrants.As of March 31,2023 all the pre funded warrants were exercised by the investor.F33ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSUREThere were no disagreements with accountants on accounting and financial disclosure of a type described in Item 304 (a)(1)(iv) or any reportable event asdescribed in Item 304 (a)(1)(v) of Regulation SK.ITEM 9A. CONTROLS AND PROCEDURESDisclosure ControlsWe carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief FinancialOfficer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) as of December 31, 2022. Basedupon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this Annual Report on Form10K, our disclosure controls and procedures were effective to ensure that information required to be disclosed in reports filed under the Exchange Act, as amended,is recorded, processed, summarized and reported within the required time periods specified in the SEC’s rules and forms and is accumulated and communicated toour management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.Management’s Report on Internal Control Over Financial ReportingOur internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records, that, in reasonable detail,accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only inaccordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition, use or disposition of our assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance withthe policies or procedures may deteriorate.Our management, including our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financialreporting at December 31, 2022. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the TreadwayCommission (COSO) in Internal Control—Integrated Framework (2013). Based on that assessment under those criteria, management has determined that, as ofDecember 31, 2022, our internal control over financial reporting was effective.This Annual Report on Form 10K does not include an attestation report of our registered public accounting firm regarding internal control over financialreporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to the exemption provided to issuersthat are not “large accelerated filers” nor “accelerated filers” under the DoddFrank Wall Street Reform and Consumer Protection Act.Changes in Internal Control Over Financial ReportingDuring the year ended December 31, 2022, we made two acquisitions, as discussed in Note 1a and Note 16 of the audited consolidated financial statementsfor the year ended December 31, 2022 included in this Annual Report on Form 10K. As a result, we made additions and/or modifications to policies, procedures,systems and controls that have materially affected our internal control over financial reporting from the acquisitions, including new controls for consolidationprocess that relates to accounting policies and procedures, operational processes and documentation practices. Management excluded the acquired businessesfrom management’s report on internal control over financial reporting. ITEM 9B. OTHER INFORMATIONNone.ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNot applicable.51PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe following table sets forth the name, age and positions of our executive officers and directors.NAMEAgePOSITIONRonen Luzon52Chief Executive Officer and Class III DirectorOr Kles40Chief Financial OfficerBilly Pardo47Chief Operating Officer and Chief Product OfficerIlia Turchinsky35Chief Technology OfficerEzequiel Javier Brandwain53Chief Commercial OfficerOron Branitzky (1)(2)(3)*63Class II DirectorOren Elmaliah (1)(2)(3)*38Class I DirectorArik Kaufman (1)(2)(3)*41Class I DirectorGuy Zimmerman*53Class II Director(1)Member of our audit committee(2)Member of our nominating and corporate governance committee(3)Member of our compensation committee* Independent as that term is defined by the rules of the Nasdaq Stock Market.The business background and certain other information about our directors and executive officers is set forth below:Ronen Luzon has served as our Chief Executive Officer and a member of our board of directors since September 2013. Since 2006, Mr. Luzon hasadditionally served as Chief Executive Officer and founder of Malers Ltd., a company in the global security solutions market which provides technological solutionsfor integrated communication infrastructures, security and control systems. Prior to Malers, he held several senior marketing, sales management and professionalservices positions in a variety of international high tech companies including VP marketing of GA Tech and Professional Services Manager of Eldat Communication.Mr. Luzon graduated from Middlesex University in London with a B.S. in IT and Business Information Systems. We believe that Mr. Luzon is qualified to serve as amember of our board of directors because of his more than 20 years of experience in the technology sector.Or Kles has served as our Chief Financial Officer since May 2016. He is a certified public accountant with a broad, diverse financial background. From May2013 until April 2016 he served as Assistant Controller of Shikun and BinuiSolel Boneh Infrastructure Ltd. and from December 2010 until May 2013 he served as anAssociate at KPMG. Mr. Kles holds an MBA and a B.A. in Business Management and Accounting (specializing in financing) from The College of ManagementAcademic Studies. Mr. Kles is a certified public accountant in Israel.Billy Pardo has served as our Chief Product Officer since May 2014 and Chief Operating Officer since April 2019. From April 2010 until August 2013, Ms.Pardo served as Senior Director of Product Management of Fourier Education. Among her areas of expertise are launching products from concept to successfuldelivery in various methodologies, including Fourier Education’s awardwinning einstein™ Science Tablet. Prior to that Ms. Pardo served in various productmanagement positions including, Project Manager of Time to Know, Product Marketing Manager of RiT Technologies, Product Manager of Pricer AB and R&DTeam Leader at Pricer AB. Ms. Pardo previously served as Software Engineer at Eldat Communication Ltd., and QA Engineer at NICE Systems. Ms. Pardo receivedan MBA from The Interdisciplinary Center and a B.A. in Computer Science from The Academic College of TelAvivYaffo.Ilia Turchinsky has served as our Chief Technology Officer since April 2019 and from July 2018 until April 2019 as our Director of Technology. Prior tojoining us, from 2013 until 2018, Mr. Turchinsky served in various roles, most recently Chief Technology Officer, at MonkeyTech Ltd., a company that providesdesign, development and characterization of mobile applications. Prior to that, Mr. Turchinsky served in various roles including development course instructor atIQLine, was a founder of Arnavsoft and was a software developer for MintLab and a political party. Mr. Turchinsky holds a B.Sc. from the Ben Gurion University inComputer Science and an M.Sc. from the Open University of Israel in Computer Science.52Ezequiel Javier Brandwain has served as our Chief Commercial Officer since February 2022. Mr. Brandwain brings more than two decades of globalexperience in retail and the fashion industry, mainly in business development, operations, and international markets. Before joining the Company, Mr. Brandwainheld positions of increasing responsibility at several companies, including between June 2017 and November 2020, at 7 For All Mankind International, where heserved as Director, Latin America and Caribbean, managing business development and operations across Latin America and the Caribbean. Before that, betweenMay 2016 and June 2017, Mr. Brandwain served as Chief Business Development Officer at Replay – Fashion Box SPA, where he oversaw business development andoperations, expansion and control in the Americas, the Caribbean, and NorthEast Asia. Prior this role, between September 2015 and May 2016, he served as theReplay’s Managing Director in Latin America and the Caribbean, leading the company’s international expansion in these regions. Prior to that, between April 2015and September 2015, Mr. Brandwain served as Managing Director, Latin America and Caribbean at Authentic Brands Group LLC, where he led that company’soperations, business developments and international expansion within these regions, and served as the direct liaison with the company’s headquarters in New York.Prior to that, between April 2015 and September 2015, Mr. Brandwain served as Chief Operating Officer, Latin America and Caribbean at Flemingo International Ltd.,overseeing operations, as well as projected operations in the travel retail field across these regions. Prior to that, between December 2010 and February 2014, Mr.Brandwain served as Regional Director, Southern Hemisphere at Calvin Klein, where he was responsible for defining and implementing the operational andcommercial strategy for Southern Hemisphere, as well as overseeing the retail, travel retail, concession, and wholesale businesses of the company. During his tenureat Calvin Klein, Mr. Brandwain also served as Travel Retail Director, Latin America, where he built the travel retail business and developed operations. Prior to that,between July 2010 and November 2010, Mr. Brandwain served as Business Director, Latin America and Caribbean at Givenchy Latin America, and between January2010 and June 2010 he served as Commercial Director, Latin America and Caribbean at Nautica Latin America. During December 2004 and December 2009, Mr.Brandwain served as Vice President, International Business Development at Report Collection/Modextil, Inc., where he was in charge of business and operationalexpansion, global growth, and brand extensions. Prior to that, between 2003 and October 2004, Mr. Brandwain served as General Manager at Andrew KoenigInternational, Inc. Between September 2019 and November 2020, Mr. Brandwain served as a member of the Board of Directors of 7 For All Mankind BrazilImportacao, Comercio E Distribuicao S.A. Mr. Brandwain earned a Bachelor degree in architecture from the University of the Republic (Uruguay).Oron Branitzky has served as a member of our board of directors since March 2017. Mr. Barnitzky has vast experience in retail technology. SinceNovember 2017, Mr. Branitzky has served as Global Retail Business Development at Superup, and from January 2007 until December 2014 he served as VicePresident of Sales and Marketing at Pricer AB. Prior to that, Mr. Branitzky has served as VP Marketing and Sales at Eldat Communication and Sarin TechnologiesLtd. Since January 2015, Mr. Branitzky has served as chairman of the board of directors of WiseShelf Ltd. and from May 2015 until March 2016, Mr. Branitzky servedas an advisory board member of ciValue. Mr. Branitzky received a B.S. from the Hebrew University of Jerusalem and an MBA in International Marketing from TelAviv University. We believe that Mr. Branitzky is qualified to serve as a member of our board of directors because of his more than 20 years of experience inmanaging the sales of hitech solutions to retailers across the globe.Oren Elmaliah, has served as a member of our board of directors since May 2017. In September 2015, Oren Elmaliah founded Accounting Team IL and hasacted as Account Manager since then. Accounting Team IL is a financial consultancy and service provider to public companies traded in Israel and abroad. SinceFebruary 2017, Mr. Elmaliah has served as controller of Enlivex Therapeutics Ltd., and since January 2017 he has served as Chief Financial Officer of Presstek Israel.In addition, since September 2015, Mr. Elmaliah has served as an Israel Authorities Reporting Officer of LG Electronics Israel and since September 2015 he hasserved as Local Financial Report Consultant of Chiasma. From July 2011 until August 2015, Mr. Elmaliah served as CPA, Financial Director of CFO Director Ltd andfrom June 2010 until July 2011 he served as Risk Management Consultant of RSM International Limited. Mr. Elmaliah holds a B.A. in Accounting/Economics and aMsc. in Finance/Accounting from Tel Aviv University, Israel. He is a licensed Certified Public Accountant in Israel. We believe that Mr. Elmaliah is qualified to serveas a member of our board of directors because of his vast finance experience and public company management and administration in the fields of finance,accounting, and financial regulation.53Arik Kaufman has served as a member of our board of directors since June 2017. Mr. Kaufman is an attorney specializing in the fields of commercial law,corporate law and capital markets and since 2016 runs his own law office in Israel. He has vast experience in the fields of financial reporting and financial regulation.Mr. Kaufman serves as the Chief Executive Officer of Steakholder Foods since January 2022. From September 2017 until January 2022, Mr. Kaufman served as VPBusiness Development of Mor Research Applications. Mr. Kaufman holds an LLB in Law from the Interdisciplinary Center, Herzliya, and is admitted to the IsraeliBar. We believe that Mr. Kaufman is qualified to serve as a member of our board of directors based upon his experience of assisting with the completion of numerousventure capital financings, mergers, acquisitions, and strategic relationships. In addition, he has served as a member of the board of various publicly tradedcompanies, including companies that operate in the same industry as us.Guy Zimmerman has served as a member of our board of directors since August 2021. Previously, Mr. Zimmerman served as Founder and CEO ofManuFuture, an online b2b engineering market place, since February 2021. Prior to that from 2017 to 2021, Mr. Zimmerman acted as a consultant to severaltechnology startups and was a founding partner of a business travel online platform. From 2013 to 2017, Mr. Zimmerman served as EVP of Marketing and BusinessDevelopment of Kornit Digital and was part of the IPO leadership. Prior to that, Mr. Zimmerman served as VP of Global Sales and Business Development at TefronLtd., a provider of seamless garment technology, where he led the $100m sales and sales support organization serving global retail and fashion brands. Prior to thathe served as Vice President of Strategy and Business Development at Tnuva Group, Israel’s largest food manufacturer and spent eight years at McKinsey &Company. Mr. Zimmerman previously led a software startup in the field of operational healthcare management systems. Mr. Zimmerman holds a B.Sc. in IndustrialEngineering from Tel Aviv University in Israel. We believe that Mr. Zimmerman is qualified to serve as a member of our board of directors because of his experiencein business development in the technology and retail sectors.Board Diversity MatrixThe table below provides certain information regarding the diversity of our board of directors as of the date of this annual report.Board Diversity Matrix (As of March 31, 2023)Total Number of Directors5FemaleMaleNonBinaryDid Not DiscloseGenderPart I: Gender IdentityDirectors#5##Part II: Demographic BackgroundAfrican American or Black####Alaskan Native or Native American####Asian####Hispanic or Latinx####Native Hawaiian or Pacific Islander####White#1##Two or More Races or Ethnicities#2##LGBTQ+0Did Not Disclose Demographic Background2Family RelationshipsRonen Luzon, the Chief Executive Officer and a member of our board of directors, and Billy Pardo, the Chief Product Officer and Chief Operating Officer, arehusband and wife. There are no other family relationships among any of our current or former directors or executive officers.Involvement in Certain Legal ProceedingsWe are not aware of any of our directors or officers being involved in any legal proceedings in the past ten years relating to any matters in bankruptcy,insolvency, criminal proceedings (other than traffic and other minor offenses), or being subject to any of the items set forth under Item 401(f) of Regulation SK.Arrangements between Officers and DirectorsTo our knowledge, there is no arrangement or understanding between any of our officers and any other person, including directors, pursuant to which theofficer was selected to serve as an officer.Board of DirectorsThere are no agreements with respect to the election of directors.On January 6, 2022, we filed with the Secretary of State of Delaware a Certificate of Amendment to our Amended and Restated Certificate of Incorporationproviding for a classified Board. Following filing of the Certificate of Amendment, members of our board are now classified into three classes with staggered threeyear terms (with the exception of the expiration of the initial Class I and Class II directors), as follows:●Class I, comprised of two directors, initially Arik Kaufman and Oren Elmaliah (with their initial terms expiring at our 2022 annual meeting of stockholders andmembers of such class serving successive threeyear terms);●Class II, comprised of two directors, initially Oron Branitzky and Guy Zimmerman (with their initial terms expiring at our 2023 annual meeting of stockholdersand members of such class serving successive threeyear terms); and●Class III, comprised of one director, initially Ronen Luzon (with his initial term expiring at our 2024 annual meeting of stockholders and members of suchclass serving successive threeyear terms).54To preserve the classified Board structure, a director elected by the Board of Directors to fill a vacancy holds office until the next election of the class forwhich such director has been chosen, and until that director’s successor has been elected and qualified or until his or her earlier death, resignation, retirement orremoval.Our board of directors has reviewed the materiality of any relationship that each of our directors has with us, either directly or indirectly. Based upon thisreview, we believe that Arik Kaufman, Oren Elmaliach, Oron Branitzky and Guy Zimmerman qualify as independent directors in accordance with the standards set bythe Nasdaq and Rule 10A3 promulgated under the Exchange Act.Committees of the BoardAudit CommitteeOur audit committee is comprised of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Elmaliah serves as chairman of the audit committee. The auditcommittee is responsible for retaining and overseeing our independent registered public accounting firm, approving the services performed by our independentregistered public accounting firm and reviewing our annual financial statements, accounting policies and our system of internal controls. The audit committee actsunder a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the audit committee’s composition and meetings.The audit committee charter is available on our website www.mysizeid.com.The Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by applicable SEC rules. Inaddition, the Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by the rules of the Nasdaq StockMarket.The Board of Directors has determined that Oren Elmaliah is an “audit committee financial expert” serving on its audit committee, and is independent, as theSEC has defined that term in Item 407 of Regulation SK.Compensation CommitteeOur compensation committee consists of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Branitzky serves as chairman of the compensationcommittee.The compensation committee’s roles and responsibilities include making recommendations to the Board of Directors regarding the compensation for ourexecutives, the role and performance of our executive officers, and appropriate compensation levels for our CEO, which are determined without the CEO present, andother executives. Our compensation committee also administers our 2017 Equity Incentive Plan and our 2017 Consultant Equity Incentive Plan. The compensationcommittee acts under a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the compensation committee’scomposition and meetings. The compensation committee charter is available on our website www.mysizeid.com.Our Board of Directors has determined that all of the members of the compensation committee are “independent” as that term is defined by the rules of theNasdaq Stock Market.Nominating and Corporate Governance CommitteeThe members of the nominating and corporate governance committee are Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Kaufman serves aschairman of the corporate governance and nominations committee. The nominating and corporate governance committee acts under a written charter, which morespecifically sets forth its responsibilities and duties, as well as requirements for the nominating and corporate governance committee’s composition and meetings.The nominating and corporate governance committee charter is available on our website www.mysizeid.com.The nominating and corporate governance committee develops, recommends and oversees implementation of corporate governance principles for us andconsiders recommendations for director nominees. The nominating and corporate governance committee also considers stockholder recommendations for directornominees that are properly received in accordance with applicable rules and regulations of the SEC. Our stockholders that wish to nominate a director for election tothe Board of Directors should follow the procedures set forth in our bylaws.55The nominating and corporate governance committee will consider persons identified by its members, management, stockholders, investment bankers andothers. The guidelines for selecting nominees, which are specified in the nominating committee charter, generally provide that persons to be nominated:●should be accomplished in his or her field and have a reputation, both personal and professional, that is consistent with our image and reputation;●should have relevant experience and expertise and would be able to provide insights and practical wisdom based upon that experience and expertise; and●should be of high moral and ethical character and would be willing to apply sound, objective and independent business judgment, and to assume broadfiduciary responsibility.The nominating and corporate governance committee will consider a number of qualifications relating to management and leadership experience,background and integrity and professionalism in evaluating a person’s candidacy for membership on the Board of Directors. The nominating and corporategovernance committee may require certain skills or attributes, such as financial or accounting experience, to meet specific Board needs that arise from time to timeand will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of Board of Directors members. The nominating andcorporate governance committee will not distinguish among nominees recommended by stockholders and other persons.Our Board of Directors has determined that all of the members of the nominating and corporate governance committee are “independent” as that term isdefined by the rules of the Nasdaq Stock Market.Code of Conduct and EthicsWe have a Code of Business Conduct and Ethics that applies to all our employees. The text of the Code of Business Conduct and Ethics is publiclyavailable on our website at www.mysizeid.com. Information contained on, or that can be accessed through, our website does not constitute a part of this report andis not incorporated by reference herein. Disclosure regarding any amendments to, or waivers from, provisions of the code of conduct and ethics that apply to ourdirectors, principal executive and financial officers will be posted on the “InvestorsCorporate Governance” section of our website at www.mysizeid.com or will beincluded in a Current Report on Form 8K, which we will file within four business days following the date of the amendment or waiver.Change in Procedures for Recommending DirectorsThere have been no material changes to the procedures by which our stockholders may recommend nominees to our Board of Directors from thoseprocedures set forth in our Proxy Statement for our 2021 Annual Meeting of Stockholders, filed with the SEC on December 7, 2022.56ITEM 11. EXECUTIVE COMPENSATIONSummary Compensation TableThe following sets forth the compensation paid by us to our named executive officers, during the years ended December 31, 2022 and December 31, 2021.Name and Principal PositionYearSalary($) (1)Bonus($)StockAwards($)OptionAwards($) (2)All OtherCompensation($)Total($)Ronen Luzon2022173,000223,0008,000126,000530,000Chief Executive Officer2021194,0005,00023,00097,000319,000Or Kles2022123,00053,0007,00071,000254,000Chief Financial Officer2021123,0008,00030,00061,000222,000Billy Pardo2022134,00053,0007,000100,00294,000Chief Operating Officer2021162,0007,00018,00074,000261,000(1) Salary for the years 2022 and 2021 are based on average US$/NIS representative exchange rates of NIS 3.358 and NIS 3.11 respectively.(2) Amounts in this column represent the grant date fair value of options granted to the named executive officers during 2022 and 2021, computed in accordance withFASB ASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the named executive officers. The assumptionsmade in valuing the options reported in this column are discussed in Note 11 to our audited financial statements for the year ended December 31, 2021 and Note 4 toour condensed consolidated interim financial statements for the quarterly period ended September 30, 2022.All Other Compensation TableThe “All Other Compensation” amounts set forth in the Summary Compensation Table above consist of the following:NameYearAutomobileRelatedExpenses($)Manager’sInsurance*($)EducationFund*($)Othersocialbenefits**($)Total($)Ronen Luzon202232,00031,00015,00048,000126,000202133,00033,00015,00016,00097,000Or Kles202215,00021,00010,00025,00071,000202114,00019,0009,00019,00061,000Billy Pardo202216,00025,00013,00046,000100,000202117,00024,00012,00021,00074,000* Manager’s insurance and education funds are customary benefits provided to employees based in Israel. Manager’s insurance is a combination of severancesavings (in accordance with Israeli law), defined contribution taxqualified pension savings and disability insurance premiums. An education fund is a savings fundof pretax contributions to be used after a specified period of time for educational or other permitted purposes.** Other social benefits for 2022 and 2021 for all named individuals includes tax payments in respect of social benefits.57Agreements with Named Executive OfficersRonen LuzonOn November 18, 2018, My Size Israel, our wholly owned subsidiary, entered into an employment agreement with Ronen Luzon, or the Luzon EmploymentAgreement, pursuant to which Mr. Luzon will serve as our Chief Executive Officer. Pursuant to the terms of the Luzon Employment Agreement, Mr. Luzon receivesNIS 55,000 per month as his base salary and shall be eligible to receive such bonus as determined by us. In addition, Mr. Luzon shall be entitled social benefits andto other benefits, including, but not limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, includinginsurance in case of disability, annual vacation days, sick leave and expense reimbursement. Pursuant to the terms of the Luzon Employment Agreement and subjectto certain conditions, payments made by the Company to the pension fund or manager’s insurance fund shall be made in lieu of severance payments due to Mr.Luzon. The term of the Luzon Employment Agreement shall be effective as of September 1, 2018 and shall continue until such time either party provides writtennotice to the other party at least 75 days in advance of the termination of such agreement. We may also terminate Mr. Luzon’s employment without prior writtennotice (or payment in lieu of such notice) for Cause (as defined in the Luzon Employment Agreement).Or KlesOn November 18, 2018, My Size Israel entered into an employment agreement with Or Kles, or the Kles Employment Agreement, pursuant to which Mr. Kleswill serve as our Chief Financial Officer. Pursuant to the terms of the Kles Employment Agreement, Mr. Kles receives NIS 38,000 per month as his base salary andshall be eligible to receive such bonus as determined by us. In addition, Mr. Kles shall be entitled to social benefits and other benefits, including, but not limited to,contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annual vacation days,sick leave and expense reimbursement. Pursuant to the terms of the Kles Employment Agreement and subject to certain conditions, payments made by us to thepension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Mr. Kles. The term of the Kles Employment Agreement shall beeffective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days in advance of thetermination of such agreement. We may also terminate Mr. Kles’s employment without prior written notice (or payment in lieu of such notice) for Cause (as defined inthe Kles Employment Agreement).Billy PardoOn November 18, 2018, My Size Israel entered into an employment agreement with Billy Pardo, or the Pardo Employment Agreement, pursuant to which Ms.Pardo will serve as our Chief Product Officer. Pursuant to the terms of the Pardo Employment Agreement, Ms. Pardo receives NIS 47,500 per month as her basesalary and shall be eligible to receive such bonus as determined by us. In addition, Ms. Pardo shall be entitled to social benefits and other benefits, including, butnot limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annualvacation days, sick leave and expense reimbursement. Pursuant to the terms of the Pardo Employment Agreement and subject to certain conditions, payments madeby us to the pension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Ms. Pardo. The term of the Pardo EmploymentAgreement shall be effective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days inadvance of the termination of such agreement. We may also terminate Ms. Pardo’s employment without prior written notice (or payment in lieu of such notice) forCause (as defined in the Pardo Employment Agreement).58Outstanding Equity Awards at Fiscal YearEndThe following table provides information regarding options held by each of our named executive officers that were outstanding as of December 31, 2022.Option AwardsStock AwardsName and Principal PositionNumber ofSecuritiesUnderlyingUnexercisedOptionsExercisableNumber ofSecuritiesUnderlyingUnexercisedOptionsUnexercisableOptionExercisePriceOptionExpirationDateEquityincentiveplan awards:Number ofUnearnedShares that HaveNot VestedEquityincentiveplan awards:Market Value ofUnearnedShares, That Have Not VestedRonen Luzon Chief Executive Officer400(1)$26(8)7/24/20231,601(2)$26(8)5/29/20256,400(3)$268/10/2025100,000(9)100,000$511,250Or Kles – Chief Financial Officer227(4)$26(8)7/24/2023427(5)$26(8)5/29/20255,200(6)$268/10/202524,000(10)24,000$122,700Billy Pardo Chief Operating Officer400(1)$26(8)7/24/2023894(7)$26(8)5/29/20255,200(6)$268/10/202524,000(11)24,000$122,700(1) The option has a grant date of July 24, 2017 and vested in full on January 24, 2018.(2) The option has a grant date of May 29, 2019. 267 options vested immediately upon grant, 445 options vested on January 24, 2019, 445 options vested on January24, 2020 and 444 options vested on January 24, 2021.(3) The option has a grant date of October 8, 2020, 1,600 options vested on November 26, 2020, 1,600 options vested on May 26, 2021, 1,600 options vested onNovember 26, 2021, and 1,600 options vested on May 26, 2022.(4) The option has a grant date of July 24, 2017. 76 options vested immediately upon grant, 76 options vested on May 1, 2018 and 75 options vested on May 1, 2019.(5) The option has a grant date of May 29, 2019. 160 options vested immediately upon grant, 445 options vested on May 1, 2020, 445 options vested on May 21, 2021and 444 options vested on May 1, 2022.(6) The option has a grant date of October 8, 2020, 1,300 options vested on November 26, 2020, 1,300 options vested on May 26, 2021, 1,300 options vested onNovember 26, 2021, and 1,300 options vested on May 26, 2022.(7) The option has a grant date of May 29, 2019. 214 options vested immediately upon grant, 227 options vested on January 24, 2019, 227 options vested on January24, 2020 and 226 options vested on January 24, 2021.(8) On May 25, 2020, the compensation committee of the Board of Directors of the Company reduced the exercise price of outstanding options of employees anddirectors of the Company for the purchase of an aggregate of 5,610 shares of common stock of the Company (with exercise prices ranging between $453.75 and$228.75) to $26 per share, which was the closing price for the Company’s common stock on May 22, 2020, and extended the term of the foregoing options for anadditional one year from the original date of expiration.(9) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(10) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(11) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.59Director CompensationThe following table sets forth compensation information for our nonemployee directors for the year ended December 31, 2022.NameFees earned orpaid incash ($)(1)Optionawards($)(1)(2)Total($)Oren Elmalih15,078 15,078Oron Barnitzky15,34715,347Arik Kaufman14,44114,441Guy Zimmerman13,03313,033(1)Fees for the year 2022 are based on average US$/NIS representative exchange rates of NIS 3.519.(2)Amounts in this column represent the grant date fair value of options granted to the nonemployee directors during 2022 computed in accordance with FASBASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the nonemployee directors. The assumptions made invaluing the options reported in this column are discussed in Note 11 to our financial statements for the year ended December 31, 2022.We compensate our nonemployee directors for their service as a member of our board. Mr. Luzon received no separate compensation for board service. Mr.Luzon’s compensation is set forth above in the Summary Compensation Table.Each nonemployee director is entitled to receive a per meeting fee of $318. Nonemployee directors are also reimbursed for their travel and reasonable outofpocket expenses incurred in connection with attending board and committee meetings, to the extent that attendance is required by the board or the committee(s)on which that director serves.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurity Ownership of Certain Beneficial Holders and ManagementThe following table sets forth certain information regarding beneficial ownership of shares of our common stock as of March 31, 2023 by (i) each personknown to beneficially own more than 5% of our outstanding common stock, (ii) each of our directors, (iii) each of our executive officers, and (iv) all of our directorsand executive officers as a group. Except as otherwise indicated, the persons named in the table below have sole voting and investment power with respect to allshares beneficially owned, subject to community property laws, where applicable.Beneficial Owner(1)Shares ofCommon StockBeneficiallyOwnedPercentage(2)Executive officers and directors:Ronen Luzon143,578(3)5.8%Or Kles29,854(4)1.2%Billy Pardo143,578(5)5.8%Ezequiel Javier Brandwain12,000(6)*Ilia Turchinsky18,313(7)*Arik Kaufman1,294(8)*Oren Elmaliah1,294(9)*Oron Branitzky1,294(10)*Guy ZimmermanAll Executive Officers and Directors as a Group (9 persons)207,6268.4%*Less than 1%(1) The address of each person is c/o My Size, Inc., 4 HaYarden St., P.O.B. 1026, Airport City, Israel 7010000 unless otherwise indicated herein.60(2) The calculation in this column is based upon 2,446,780 shares of common stock outstanding on March 31, 2023. Beneficial ownership is determined in accordancewith the rules of the SEC and generally includes voting or investment power with respect to the subject securities. Shares of common stock that are currentlyexercisable or exercisable within 60 days of March 31, 2023 are deemed to be beneficially owned by the person holding such securities for the purpose of computingthe percentage beneficial ownership of such person, but are not treated as outstanding for the purpose of computing the percentage beneficial ownership of anyother person(3) Consists of (i) 100,000 shares of restricted stock granted under the 2017 Plan, (ii) 4,683 shares of common stock, (iii) options to purchase up to 8,401 shares of ourcommon stock, and (iv) 24,000 shares of restricted stock and options to purchase up to 6,494 shares of our common stock which are held by Billy Pardo, RonenLuzon’s spouse. Mr. Luzon may be deemed to beneficially hold the securities of us held by Ms. Pardo.(4) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, and (ii) an option to purchase 5,854 shares of our common stock. Does not includean aggregate of 119,760 shares of restricted stock over which Mr. Kles has been designated the initial proxy to vote such shares pursuant to a voting agreemententered into between Whitehole S.L., Twinbel S.L. and EGI Acceleration, S.L.(5) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, (ii) options to purchase up to 6,494 shares of our common stock, (iii) 100,000 sharesof restricted stock which are held by Ronen Luzon, Billy Pardo’s spouse (iii) 8,401 shares of common stock which are held by Mr. Luzon, and (iii) options to purchaseup to 4,683 shares of our common stock which are held by Mr. Luzon. Ms. Pardo may be deemed to beneficially hold the securities of the Company held by Mr.Luzon.(6) Consists of 12,000 shares of restricted stock granted under the 2017 Plan.(7) Consists of (i) 16,000 shares of restricted stock granted under the 2017 Plan, and (ii) options to purchase up to 2,313 shares of our common stock.(8) Consists of options to purchase up to 1,294 shares of our common stock.(9) Consists of options to purchase up to 1,294 shares of our common stock.(10) Consists of options to purchase up to 1,294 shares of our common stock.Change in ControlWe are not aware of any arrangement that might result in a change in control in the future. We have no knowledge of any arrangements, including anypledge by any person of our securities, the operation of which may at a subsequent date result in a change in the Company’s control.Securities Authorized for Issuance Under Equity Compensation PlansOn January 29, 2017, our Board of Directors approved the 2017 Equity Incentive Plan and the 2017 Consultant Equity Incentive Plan, which were approvedby our stockholders on March 21, 2017. In addition, on January 29, 2017, our Board of Directors approved the Stock Option Plan Israel Grantees SubPlan. The 2017Equity Incentive Plan initially authorized the issuance of up to 5,334 shares of common stock under the plan and the 2017 Consultant Equity Incentive Plan initiallyauthorized the issuance of up to 8,000 shares of common stock under the plan.On February 12, 2018, our stockholders approved an amendment to the 2017 Consultant Equity Incentive Plan to increase the maximum number of shares ofour common stock available for issuance under the plan from 8,000 to 12,000. On July 3, 2018, our stockholders approved an amendment to the 2017 Equity IncentivePlan to increase the maximum number of shares of our common stock available for issuance under the plan from 5,334 to 8,000 and an amendment to the 2017Consultant Equity Incentive Plan to increase the maximum number of shares of our common stock available for issuance under the plan from 12,000 to 18,667.On May 25, 2020, our Board reduced the exercise price of outstanding options of our employees and directors for the purchase of an aggregate of 140,237of our common stock (with exercise prices ranging between $453.75 and $228.75) to $26.0 per share, and extended the term of the foregoing options for an additionalone year from the original date of expiration.61On August 10, 2020, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 80,000 to 58,000shares, and a decrease of the numbers of shares available for issuance under the 2017 Consultant Incentive Plan to 8,667 shares from 18,667 shares.On December 30, 2021, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 58,000 sharesto 230,800 shares.On December 7, 2022, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Plan from 230,800 shares to 289,000shares.The following table summarizes information about our equity compensation plans and individual compensation arrangements as of December 31, 2022.Number of securities to be issued upon exercise of outstanding options, warrants and rights(a)Weighted average exercise price of outstandingoptions, warrants and rights (b)Number of securities remaining availablefor future issuanceunder equity compensationplans (excludingsecurities reflected in column (a) (c)Equity compensation plans approved by security holders43,49724.7477,455Equity compensation plans not approved by security holdersTotal43,49724.7477,455ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEDuring years ended December 31, 2022 and 2021, except for compensation arrangements described elsewhere herein and the transactions described below,we did not participate in any transaction, and we are not currently participating in any proposed transaction, or series of transactions, in which the amount involvedexceeded the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years, and in which, to our knowledge,any of our directors, officers, five percent beneficial security holders, or any member of the immediate family of the foregoing persons had, or will have, a direct orindirect material interest.Compensation arrangements for our named executive officers and directors are described in the section entitled “Executive Compensation.”Employment AgreementsWe have entered into written employment agreements with each of our executive officers. These agreements generally provide for notice periods of varyingduration for termination of the agreement by us or by the relevant executive officer, during which time the executive officer will continue to receive base salary andbenefits. We have also entered into customary noncompetition, confidentiality of information and ownership of inventions arrangements with our executiveofficers. However, the enforceability of the noncompetition provisions may be limited under applicable law.OptionsSince our inception we have granted options to purchase our common stock to our officers and directors. Such option agreements may contain accelerationprovisions upon certain merger, acquisition, or change of control transactions.62Restricted Stock GrantsOn September 29, 2022, our compensation committee approved grants of restricted share awards under our 2017 Plan to Ronen Luzon, Or Kles, Billy Pardo,Ilia Turchinsky and Ezequiel Javier Brandwain, pursuant to which they were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000restricted shares and 12,000 restricted shares, respectively. The restricted shares shall vest in three equal installments on January 1, 2023, January 1, 2024 andJanuary 1, 2025, conditioned upon continuous employment with us, and subject to accelerated vesting upon a change in control of the Company.Shareholder ActivismIn May 2021, we received notice from Custodian Ventures, LLC, or Custodian, of its intention to nominate four candidates to stand for election to our Boardof Directors at our 2021 annual meeting of stockholders. Custodian subsequently made a book and records request and has made public statements calling forchanges to our management.On September 22, 2021, Custodian, commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v. Mysize,Inc., C.A. No. 20210817LWW, or the Delaware Action. In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting. As further described below, on November 4, 2021, we entered into asettlement agreement, or the Settlement Agreement, with Custodian, Activist Investing LLC, David Aboudi, Partick Loney and David Natan, collectively, the LazarParties, settling and dismissing the Delaware Action.On October 19, 2021, we commenced an action in the United States District Court for the Southern District of New York captioned My Size, Inc. v. DavidLazar, Custodian Ventures LLC, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, Civil Action No, 1:21cv08585, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, andcertain rules promulgated thereunder, or the SDNY Action. The complaint sought, among other things, declaratory and injunctive relief related to defendants’ effortsto nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed “group” for purposes ofSection 13 (d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. In addition, the complaint alleged that thedefendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules in connection with their efforts to elect a slate of directorsto our Board of Directors. On October 20, 2021, the Court signed an order granting a hearing on an anticipated motion for a preliminary injunction and expeditedscheduling and discovery in aid thereof, and scheduled that hearing for December 2, 2021. As further described below, on November 4, 2021, we entered into theSettlement Agreement with the Lazar Parties settling and dismissing the claims asserted in the SDNY Action and the Delaware Action against one another. OnNovember 8, 2021, the remaining defendants in the SDNY Action filed and answer and counterclaim asserting a claim against us pursuant to New York Civil RightsLaw Section 70a, also known as New York’s antiSLAPP statute.On November 4, 2021, we entered into the Settlement Agreement, or the Lazar Settlement Agreement, with the Lazar Parties. Pursuant to the LazarSettlement Agreement, we and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the LazarSettlement Agreement, we reimbursed Custodian for out of pocket expenses and in consideration for the dismissal and release of claims against the Company anaggregate amount equal to $275,000. With respect to our 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) itsMay 12, 2021 notice of stockholder nominations of four director candidates with respect to our 2021 annual meeting of stockholders, (ii) the notice dated October 28,2021 submitted by Custodian to us notifying us of Custodian’s continued intent to bring its nomination of four director candidates before our stockholders at the2021 annual meeting, and (iii) any and all related materials and notices submitted to us in connection therewith or related thereto and to not take any further action inconnection with the solicitation of any proxies in connection with us. Custodian also agreed to cease any and all solicitation and other activities in connection withthe 2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effective date of theAgreement, or the Standstill Period. The Lazar Settlement Agreement also provides that during the Standstill Period, the Lazar Parties will vote all shares of ourcommon stock it beneficially owns in accordance with any proposal or recommendation made by us or our Board of Directors that is submitted to our stockholders,unless to do so would violate applicable law and except with respect to certain extraordinary transactions. The Lazar Settlement Agreement also contains nondisparagement and confidentiality provisions, subject to certain exceptions.63On December 9, 2021, we subsequently entered into a Settlement Agreement, or the Ault Settlement Agreement, with Milton C. Ault III, Ault Alpha LP, AultAlpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed to withdraw the SDNY Action against the AultParties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that action against the Company. In addition, pursuant to the SettlementAgreement, we paid $70,000 to the Ault Parties in consideration for the releases and other good and valuable consideration as set forth in the Ault SettlementAgreement.Naiz Bespoke Technologies AcquisitionOn October 7, 2022, we entered into the Naiz Agreement with the Naiz Sellers, pursuant to which the Naiz Sellers agreed to sell to us all of the issued andoutstanding equity of Naiz. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) ) the Naiz EquityConsideration and (ii) up the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the Equity Value Averaging Period) is less than $1,650,000, My Size shall pay the Shortfall Value to the Naiz Sellers within 45days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period, it wasdetermined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement)).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers will be subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into the LockUp Agreement with My Size, (ii) Whitehole, Twinbel and EGIentered into the Voting Agreement with My Size and (iii) each of the Key Persons entered into employment agreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonth period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonth “dribbleout” provisionthat provides following the expiration of the initial sixmonth lockup period, without My Size’s prior written consent (which My Size shall be permitted to withholdat its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than the average dailytrading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.64The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Indemnification Agreements and Directors’ and Officers’ Liability InsuranceWe have entered into indemnification agreements with each of our directors and executive officers. These agreements, among other things, require us toindemnify these individuals and, in certain cases, affiliates of such individuals, to the fullest extent permitted by Delaware law against liabilities that may arise byreason of their service to us or at our direction, and to advance expenses incurred as a result of any proceedings against them as to which they could beindemnified. We also maintain an insurance policy that insures our directors and officers against certain liabilities, including liabilities arising under applicablesecurities laws.Director IndependenceSee “Item 10. Directors, Executive Officers and Corporate Governance; Corporate Governance, Board Composition” above for a discussion regarding theindependence of the members of our board of directors.ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICESSomekh Chaikin, a member firm of KPMG International, located in Tel Aviv, Israel, PCAOB ID 1057, has served as our independent registered publicaccounting firm for 2022 and 2021. The following are Somekh Chaikin’s fees for professional services in each of the respective fiscal years:Fee Category20222021Audit Fees198,910298,300Tax Fees30,66729,300Auditrelated Fees18,000Total Fees247,577327,600Audit Fees:Audit Fees consist of fees billed for professional services performed by Somekh Chaikin for the audit of our annual financial statements, thereview of interim consolidated financial statements, and related services that are normally provided in connection with registration statements, including theregistration statement for S1 and S3.Tax Fees: Tax Fees may consist of fees for professional services, including tax and VAT consulting and compliance performed by an independent registeredpublic accounting provided during the period.PreApproval Policies and ProceduresIn accordance with the SarbanesOxley Act of 2002, as amended, our audit committee charter requires the audit committee to preapprove all audit andpermitted nonaudit services provided by our independent registered public accounting firm, including the review and approval in advance of our independentregistered public accounting firm’s annual engagement letter and the proposed fees contained therein. The audit committee has the ability to delegate the authorityto preapprove nonaudit services to one or more designated members of the audit committee. If such authority is delegated, such delegated members of the auditcommittee must report to the full audit committee at the next audit committee meeting all items preapproved by such delegated members. In the fiscal years endedDecember 31, 2022 and December 31, 2021 all of the services performed by our independent registered public accounting firm were preapproved by the auditcommittee.65PART IVITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES(a)Financial StatementsThe financial statements required by this Item are included beginning at page F1.(b)ExhibitsSee Exhibit IndexITEM 16. FORM 10K SUMMARYNot applicableEXHIBIT INDEXExhibitNumberDescription3.1Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Form on Form8K filed on March 23, 2017)3.2Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10K filed onMarch 4, 2016)3.3Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’s Current Report onForm 8K filed on February 20, 2018)3.4Second Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8K filedon April 24, 2018)3.5Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’sCurrent Report on Form 8K filed on November 18, 2019)3.6Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on January 7, 2022)3.7Amendment No. 1 to Second Amended and Restated ByLaws (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8K filed on January 7, 2022)3.8Certificate of Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on December 7, 2022)4.1Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S3/A filed onNovember 14, 2016)4.2Form of Warrant to Purchase Common Stock issued on February 2, 2018 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report onForm 10K filed on March 27, 2019)4.3Description of Securities Registered under Section 12 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report on Form 10K filedon March 19, 2020)4.4Form of Warrant (incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S1, Amendment No. 1, filed with the SECon May 5, 2020.)4.5Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)4.6Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.1My Size, Inc. 2017 Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement on Schedule DEF 14Afiled on March 2, 2017)10.2My Size, Inc. 2017 Consultant Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement onSchedule DEF 14A filed on March 2, 2017)10.3My Size, Inc. 2017 Stock Option Plan Israel Grantees SubPlan (incorporated by reference to Exhibit 10.3 to the Company’s Annual Report on Form10K filed on March 27, 2019)6610.4Purchase Agreement between My Size, Inc. and Shoshana Zigdon dated as of February 16, 2014 (incorporated by reference to Exhibit 10.2 to theCompany’s Annual Report on Form 10K filed on March 4, 2016)10.5 +Employment Agreement between My Size Israel 2014 Ltd. and Ronen Luzon dated November 18, 2018 (incorporated by reference to Exhibit 10.1 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.6 +Employment Agreement between My Size Israel 2014 Ltd. and Or Kles dated November 18, 2018 (incorporated by reference to Exhibit 10.2 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.7 +Employment Agreement between My Size Israel 2014 Ltd. and Billy Pardo dated November 18, 2018 (incorporated by reference to Exhibit 10.3 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.8Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on January 15,2020)10.9Form of Warrant (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.10Form of Placement Agent Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.11Securities Purchase Agreement (incorporated by reference to Exhibit 10.30 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.12Underwriting Agreement, dated January 5, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on January 7, 2021)10.13Underwriting Agreement, dated March 22, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on March 25, 2021)10.14Amendment to Purchase Agreement between My Size Israel 2014 Ltd., My Size, Inc. and Shoshana Zigdon (incorporated by reference to Exhibit 10.1to the Company’s Quarterly Report on Form 10Q on August 16, 2021)10.15Form of Registered Direct Offering Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.16Form of PIPE Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.17Form of Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.18Form of Placement Agent Warrant issued by the Company on October 28, 2021 (incorporated by reference to Exhibit 10.22 to the Company’s Form S1filed on November 12, 2021)10.19Form of Registration Rights Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.4 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.20Engagement Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference to Exhibit 10.5 to theCompany’s Current Report on Form 8K filed on October 28, 2021)10.21Settlement Agreement dated November 4, 2021, among My Size, Inc., David Lazar and certain of his affiliates (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on November 5, 2021)10.22Share Purchase Agreement dated as of February 7, 2022 between My Size Israel 2014 Ltd. and Amar Guy Shalom and Elad Bretfeld (incorporated byreference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SEC on February 8, 2022)10.23Employment Agreement between My Size Israel 2014 Ltd. and Ezequiel Javier Brandwain dated January 27, 2022 (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on February 1, 2022)10.24Form of Section 102 Capital Gain Restricted Stock Award Agreement under the Company’s 2017 Equity Incentive Plan (incorporated by reference toExhibit 10.1 to the Company’s Quarterly Report on Form 10Q, filed with the SEC on November 14, 2022)10.25Share Purchase Agreement, dated as of October 6, 2022, by and among My Size, Inc., Borja Cembrero Saralegui, Artiz Toree Garcia, Whitehold, S.L.,Twinbel, S.L., and EGI Acceleration, S.L. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SECon October 12, 2022)10.26Form of LockUp Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)10.27Form of Voting Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.3 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)6710.28My Size, Inc. Amendment to the My Size, Inc. 2017 Equity Plan (incorporated by reference to Appendix B to the Company’s definitive proxystatement filed with the SEC on November 4, 2022)10.29Form of Registered Direct Offering Securities Purchase Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.1 to theCompany’s Current Report on Form 8K filed with the SEC on January 12, 2023)10.30Form of PIPE Securities Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8Kfiled with the SEC on January 12, 2023)10.31Form of Registered Direct PreFunded Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.32Form of Series A and Series B Warrant (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8K filed with the SEC onJanuary 12, 2023)10.33Form of Private Placement PreFunded Warrant (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.34Form of Registration Rights Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form8K filed with the SEC on January 12, 2023)10.35Engagement Agreement, dated December 5, 2022 (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8K filed withthe SEC on January 12, 2023)10.36*Form of Placement Agent Warrant21.1*List of Subsidiaries23.1*Consent of Somekh Chaikin, a member firm of KPMG International, registered public accounting firm31.1*Certification of the Chief Executive Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200231.2*Certification of the Chief Financial Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200232.1*Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a14(b) of the Exchange Act and 18 U.S.C. Section 1350, asadopted pursuant to Section 906 of the SarbanesOxley Act of 2002101.INS*Inline XBRL Instance Document101.SCH*Inline XBRL Taxonomy Schema101.CAL*Inline XBRL Taxonomy Calculation Linkbase101.DEF*Inline XBRL Taxonomy Definition Linkbase101.LAB*Inline XBRL Taxonomy Label Linkbase101.PRE*Inline XBRL Taxonomy Presentation Linkbase104Cover Page Interactive Data File (formatted as Inline XBRL document and contained in Exhibit 101)*Filed herewith.+Indicates a management contract or any compensatory plan, contract or arrangement68SIGNATURESPursuant to the requirements of Section 13 and 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10K to be signed on its behalf by the undersigned, thereunto duly authorized on this 14th day of April, 2023.MY SIZE, INC./s/ Ronen LuzonRonen LuzonChief Executive Officer (Principle Executive Officer)/s/ Or KlesOr KlesChief Financial Officer(Principal Financial and Accounting Officer)Pursuant to the requirements of the Securities Act of 1934, this annual report on Form 10K has been signed below by the following persons on behalf ofthe registrant and in the capacities and on the dates indicated.SignatureTitleDate/s/ Ronen LuzonChief Executive Officer and DirectorApril 14, 2023Ronen Luzon(Principle Executive Officer)/s/ Or KlesChief Financial OfficerApril 14, 2023Or Kles(Principal Financial and Accounting Officer)/s/ Oren ElmaliahDirectorApril 14, 2023Oren Elmaliah/s/ Arik KaufmanDirectorApril 14, 2023Arik Kaufman/s/ Oron BranitzkyDirectorApril 14, 2023Oron Branitzky/s/ Guy ZimmermanDirectorApril 14, 2023Guy Zimmerman69EX10.36 2 ex1036.htmExhibit 10.36NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES ANDEXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THESECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO ANEFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTIONNOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGINACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.PLACEMENT AGENT COMMON STOCK PURCHASE WARRANTMY SIZE, INC.Warrant Shares: _______Issue Date: January 12, 2023Initial Exercise Date: January 12, 2023THIS PLACEMENT AGENT COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _____________ or itsassigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the dateset forth above (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on January 10, 2028 (the “Termination Date”) but not thereafter, tosubscribe for and purchase from My Size, Inc., a Delaware corporation (the “Company”), up to ______ shares (as subject to adjustment hereunder, the “WarrantShares”) of the Company’s Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined inSection 2(b). This Warrant is issued pursuant to that certain engagement letter, dated as of December 5, 2022, by and between the Company and H.C. Wainwright &Co., LLC.Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities PurchaseAgreement (the “Purchase Agreement”), dated January 10, 2023, among the Company and the purchasers signatory thereto.1Section 2. Exercise.a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or afterthe Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted by email (or emailattachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the numberof Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shalldeliver the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on aUnited States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No inkoriginalNotice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required.Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder haspurchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrantto the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercisesof this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering theoutstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder andthe Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver anyobjection to any Notice of Exercise within one (1) Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant,acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, thenumber of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.b) Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $3.8188, subject to adjustment hereunder (the“Exercise Price”).c) Cashless Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein isnot available for the issuance or resale of the Warrant Shares to or by the Holder, then this Warrant may also be exercised, in whole or in part, at such timeby means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing[(AB) (X)] by (A), where:(A) =as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice ofExercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed anddelivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) ofRegulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAPon the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on theprincipal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s execution of the applicable Notice ofExercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hoursthereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii)the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice ofExercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;(B) =the Exercise Price of this Warrant, as adjusted hereunder; and(X) =the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if suchexercise were by means of a cash exercise rather than a cashless exercise.2“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which theCommon Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York Citytime)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest precedingdate) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for theCommon Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the mostrecent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by anindependent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to theCompany, the fees and expenses of which shall be paid by the Company.“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the TradingMarket on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or thenearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and ifprices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reportingprices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock asdetermined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonablyacceptable to the Company, the fees and expenses of which shall be paid by the Company.If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of theSecurities Act, the Warrant Shares shall take on the characteristics of the Warrants being exercised, and the holding period of the Warrant Shares beingissued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section 2(c).3d) Mechanics of Exercise.i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to betransmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with TheDepository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant insuch system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of theWarrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or mannerofsale limitationspursuant to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, registered in theCompany’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitledpursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2)Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate ExercisePrice to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Companyof the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall bedeemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant hasbeen exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (otherthan in the case of a cashless exercise) is received by the Warrant Share Delivery Date. If the Company fails for any reason to deliver tothe Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder,in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP ofthe Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifthTrading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share Delivery Date until such WarrantShares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FASTprogram so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standardsettlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stockas in effect on the date of delivery of the Notice of Exercise.4ii.Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the requestof a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a newWarrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrantshall in all other respects be identical with this Warrant; provided, however, that the Holder shall be required to return any WarrantShares subject to any such rescinded exercise notice concurrently with the return to Holder of the aggregate Exercise Price paid to theCompany for such Warrant Shares and the restoration of Holder’s right to acquire such Warrant Shares pursuant to this Warrant(including, issuance of a replacement warrant certificate evidencing such restored right).iii. Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant toSection 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.iv. Compensation for BuyIn on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights availableto the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with theprovisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date theHolder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwisepurchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipatedreceiving upon such exercise (a “BuyIn”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) theHolder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) theamount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connectionwith the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at theoption of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was nothonored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock thatwould have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holderpurchases Common Stock having a total purchase price of $11,000 to cover a BuyIn with respect to an attempted exercise of shares ofCommon Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediatelypreceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written noticeindicating the amounts payable to the Holder in respect of the BuyIn and, upon request of the Company, evidence of the amount of suchloss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including,without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver sharesof Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.5v. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise ofthis Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Companyshall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by theExercise Price or round up to the next whole share.vi. Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue ortransfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paidby the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by theHolder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, thisWarrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder andthe Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.The Company shall pay all Transfer Agent fees required for sameday processing of any Notice of Exercise and all fees to the DepositoryTrust Company (or another established clearing corporation performing similar functions) required for sameday electronic delivery of theWarrant Shares.vii. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timelyexercise of this Warrant, pursuant to the terms hereof.6e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise anyportion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicableNotice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of theHolder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). Forpurposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Partiesshall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, butshall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrantbeneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion ofany other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exerciseanalogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in thepreceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act andthe rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that suchcalculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed inaccordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (inrelation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisableshall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether thisWarrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of thisWarrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm theaccuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number ofoutstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s mostrecent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recentwritten notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request ofa Holder, the Company shall within one (1) Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock thenoutstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise ofsecurities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number ofoutstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stockoutstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice tothe Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial OwnershipLimitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares ofCommon Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in theBeneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shallbe construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portionhereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplementsnecessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of thisWarrant.7Section 3. Certain Adjustments.a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes adistribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which,for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstandingshares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into asmaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case theExercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any)outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately aftersuch event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of thisWarrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for thedetermination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case ofa subdivision, combination or reclassification.b) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sellsany Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares ofCommon Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregatePurchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise ofthis Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before thedate on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the recordholders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that to the extent that theHolder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall notbe entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Rightto such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not resultin the Holder exceeding the Beneficial Ownership Limitation).c) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend (other than cash) orother distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including,without limitation, any distribution of stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement,scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holdershall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number ofshares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including withoutlimitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken,the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, thatto the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, thenthe Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a resultof such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as itsright thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).8d) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more relatedtransactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease,license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, director indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of CommonStock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more ofthe outstanding Common Stock or 50% or more of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in oneor more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchangepursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly orindirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, withoutlimitation, a reorganization, recapitalization, spinoff, merger or scheme of arrangement) with another Person or group of Persons whereby such otherPerson or group acquires more than 50% of the outstanding shares of Common Stock or 50% or more of the voting power of the common equity of theCompany (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for eachWarrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of theHolder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor oracquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as aresult of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior tosuch Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, thedetermination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of AlternateConsideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Priceamong the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. Ifholders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall begiven the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at theHolder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date ofthe public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cashequal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of suchFundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company’s control, including not approved by theCompany’s Board of Directors, the Holder shall only be entitled to receive from the Company or any Successor Entity the same type or form ofconsideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to theholders of Common Stock of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, stock or anycombination thereof, or whether the holders of Common Stock are given the choice to receive from among alternative forms of consideration in connectionwith the Fundamental Transaction; provided, further, that if holders of Common Stock of the Company are not offered or paid any consideration in suchFundamental Transaction, such holders of Common Stock will be deemed to have received common stock of the Successor Entity (which Entity may be theCompany following such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on theBlackScholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day of consummation of the applicableFundamental Transaction for pricing purposes and reflecting (A) a riskfree interest rate corresponding to the U.S. Treasury rate for a period equal to thetime between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expectedvolatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualizationfactor) as of the Trading Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlyingprice per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any noncashconsideration, if any, being offered in such Fundamental Transaction and (ii) the highest VWAP during the period beginning on the Trading Dayimmediately preceding the public announcement of the applicable contemplated Fundamental Transaction (or the consummation of the applicableFundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant to this Section 3(e) and (D) a remaining option timeequal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date and (E) azero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds (or such other consideration)within the later of (i) five Business Days of the Holder’s election and (ii) the date of consummation of the Fundamental Transaction. The Company shallcause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of theobligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant towritten agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to suchFundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entityevidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares ofcapital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of thisWarrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which appliesthe exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to suchFundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for thepurpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which isreasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall beadded to the term “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction, each andevery provision of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to each of the Company and theSuccessor Entity or Successor Entities, jointly and severally), and the Successor Entity or Successor Entities, jointly and severally with the Company, mayexercise every right and power of the Company prior thereto and the Successor Entity or Successor Entities shall assume all of the obligations of theCompany prior thereto under this Warrant and the other Transaction Documents with the same effect as if the Company and such Successor Entity orSuccessor Entities, jointly and severally, had been named as the Company herein.e) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. Forpurposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the numberof shares of Common Stock (excluding treasury shares, if any) issued and outstanding.9f) Notice to Holder.i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, theCompany shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resultingadjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form)on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C)the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any sharesof capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection withany reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all orsubstantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into othersecurities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of theaffairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as itshall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective datehereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to beentitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification,consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expectedthat holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or otherproperty deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure todeliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to bespecified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, nonpublic informationregarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to aCurrent Report on Form 8K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of suchnotice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.10Section 4. Transfer of Warrant.a) Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and to theprovisions of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights) aretransferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a writtenassignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay anytransfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a newWarrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument ofassignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly becancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unlessthe Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of thedate on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordanceherewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company,together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent orattorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute anddeliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issuedon transfers or exchanges shall be dated the Issue Date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Sharesissuable pursuant thereto.c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “WarrantRegister”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as theabsolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to thecontrary.d) Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrantshall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue skylaws or (ii) eligible for resale without volume or mannerofsale restrictions or current public information requirements pursuant to Rule 144, the Companymay require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, comply with the provisions ofSection 5.7 of the Purchase Agreement.11e) Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon anyexercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling suchWarrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exemptedunder the Securities Act.Section 5. Miscellaneous.a) No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends orother rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Withoutlimiting the rights of a Holder to receive Warrant Shares on a “cashless exercise,” and to receive the cash payments contemplated pursuant to Sections 2(d)(i) and 2(d)(iv), in no event will the Company be required to net cash settle an exercise of this Warrant.a.In July 2019, the Company entered into a threeyear agreement with a consultant (“Consultant14”) to provide services to the Company includingassisting the Company to promote, market and sell the Company’s technology to potential customers. Pursuant to such agreement and in partialconsideration for such consulting services, the Company agreed to issue to Consultant14 options to purchase up to 107 shares of the Company’scommon stock upon execution of the agreement. The options are exercisable at $375.00 per share and shall vest in 3 equal instalments every twelvemonths starting July 2019. Unexercised options shall expire 4 years from the effective date.In addition, the Company agreed to issue to Consultant14 options to purchase up to 890 shares of the Company’s common stock upon executionof the agreement. The options are exercisable at $27.00 per share and shall vest in 4 equal instalments every six months starting September 2020.Unexercised options shall expire 5 years from the effective date.During 2022 and 2021, an amount of $7 and $14 respectively, were recorded by the Company as stockbased equity awards with respect to Consultant14.F24MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The Company’s outstanding options granted to consultants as of December 31, 2022 are as follows:Issuance dateOptions forCommon stockWeightedAverageexercise priceper shareOptionsexercisableExpirationdateFebruary 201815USD528.7515February 2023August 2018December 2018531USD352.38264August 2023 December 2023July 2020107USD375107July 2023SeptemberOctober 20201,488USD27.201,288October 2024 September 2025Total2,1411,674The Company uses the Black Scholes model to measure the fair value of the stock options with the assistance of a third party valuation.No stock options were granted during 2022 to consultants.The fair value of the Company’s stock options granted to nonemployees was calculated using the following weighted average assumptions:20222021GrantsGrantsDividend yield0%Expected volatility125.15%Riskfree interest0.16%Contractual term of up to (years)1.52F25MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Stock Option Plan for employeesIn March 2017, the Company adopted a stock option plan (the “Plan”) pursuant to which the Company’s Board of Directors may grant stock options toofficers and key employees. The total number of options which may be granted to directors, officers, employees under this plan, is limited to 289,000options. Stock options can be granted with an exercise price equal to or less than the stock’s fair market value at the date of grant.The fair value of each option award is estimated on the date of grant using the Binomial optionpricing model that used the weighted averageassumptions in the following table. The risk free rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the timeof grant.2022Grants2021GrantsDividend yield0%0%Expected volatility96.52%98.47%Riskfree interest4.06%0.96%expected life522.27In the years ended December 31, 2022 and 2021, 10,000 and 3,900 options, respectively, were granted.On December 7, 2022, the Company’s stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from230,800 shares to 289,000 shares.On September 29, 2022, the Compensation Committee of the Company approved grants of restricted share awards under the Company’s 2017 EquityIncentive Plan to Ronen Luzon (CEO), Or Kles (CFO), Billy Pardo (COO), Ilia Turchinsky (CTO) and Ezequiel Javier Brandwain (CCO), pursuant towhich were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000 restricted shares and 12,000 restricted shares,respectively. Each restricted share awarded under section 102 Capital Gain Restricted Stock Award Agreement (the “Agreement”). The restrictedshares shall vest in three equal installments on January 1, 2023, January 1, 2024 and January 1, 2025 for Ronen Luzon, Or Kles, Billy Pardo and IliaTurchinsky and on January 27, 2023, January 27, 2024 and January 27, 2025 for Ezequiel Javier Brandwain, conditioned upon continuous employmentwith the Company, and subject to accelerated vesting upon a change in control of the Company.On the same day, the Company granted fiveyears options to purchase up to 10,000 ordinary shares to other employees of the Company at an exerciseprice of $0.21 per share. The options vesting period is over three years in three equal portions from the vesting commencement date.F26MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The total stock option compensation expense in the year ended December 31, 2022 amounted to $448as follows: Research and development expensesamounted to $151, sales and marketing expenses amounted to $119and general and administrative expenses amounted to $178.The total stock option compensation expense in the year ended December 31, 2021 amounted to $252 as follows: Research and development expensesamounted to $94, sales and marketing expenses amounted to $97 and general and administrative expenses amounted to $61.As of December 31, 2022, there was a total of $530 unrecognized compensation cost relating to nonvested sharebased compensation arrangements.That cost is expected to be recognized over a weightedaverage period of 2.0 years.Share option activity during 2022 is as follows:2022Number ofoptionsWeightedaverageexerciseprice US$Outstanding as of January 135,74226.5Granted10,0005.25ExercisedExpired(4,136)Outstanding as of year end41,60622.48Vested as of year end33,20825.17Share option activity during 2021 is as follows:2021Number ofoptionsWeightedaverageExerciseprice US$Outstanding as of January 139,094$26.0Granted3,90032.0Exercised(751)Expired(6,501)Outstanding as of year end35,74226.5Vested as of year end27,06326.5F27MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 15 CONTINGENCIES AND COMMITMENTSa.On August 7, 2018, the Company commenced an action against North Empire LLC (“North Empire”) in the Supreme Court of the State of New York,County of New York for breach of a Securities Purchase Agreement (the “Agreement”) in which it is seeking damages in an amount to bedetermined at trial, but in no event less than $616. On August 2, 2018, North Empire filed a Summons with Notice against the Company, also in thesame Court, in which they allege damages in an amount of $11.4 million arising from an alleged breach of the Agreement. On September 6, 2018North Empire filed a Notice of Discontinuance of the action it had filed on August 2, 2018. On September 27, 2018, North Empire filed an answerand asserted counterclaims in the action commenced by the Company against them, alleging that the Company failed to deliver stock certificatesto North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against theCompany’s CEO and now former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018,the Company filed a reply to North Empire’s counterclaims. On November 15, 2018, the Company’s CEO and now former Chairman of the Boardfiled a motion to dismiss North Empire’s thirdparty complaint. On January 6, 2020, the Court granted the motion and dismissed the thirdpartycomplaint. Discovery has been completed and both parties have filed motions for summary judgment in connection with the claims andcounterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summary judgment, arguing there werefactual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision. The appealmust be fully perfected and filed by July 26, 2022. On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying theCompany’s motion for summary judgment. North Empire will file its opposition papers on or before March 31, 2022, and the Company will file replypapers on April 29, 2022. On or about September 12, 2022, the Court issued its Decision and Order denying the Company’s motion to reargue.North Empire filed its opposing brief on December 7, 2022. Both sides were given an opportunity to file a reply brief. The Company filed our replybrief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. The Appellate Court has scheduled oral argument for the appealfor February 7, 2023. Oral argument was held before the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Courtfiled its Decision and Order, which affirmed the lower court’s decisions regarding both My Size and North Empire’s motions for summary judgmentand sent the case back to the Supreme Court.On or about March 13, 2023, the Supreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date forthe mediation has not yet been set. The Company intends to vigorously defend any claims made by North Empire.The Company believes it is more likely than not that the counterclaims will be denied.b.In May 2021, the Company received notice from Custodian Ventures, LLC (“Custodian”) of its intention to nominate four candidates to stand forelection to our Board of Directors at the Company’s 2021 annual meeting of stockholders. Custodian subsequently made a book and recordsrequest and has made public statements calling for changes to our management.On September 22, 2021, Custodian commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v.MySize, Inc. (the “Delaware Action”). In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting.On October 19, 2021, the Company commenced an action in the United States District Court for the Southern District of New York againstCustodian, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, and certain rulespromulgated thereunder (the “SDNY Action”). The complaint sought, among other things, declaratory and injunctive relief related to defendants’efforts to nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed“group” for purposes of Section 13(d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. Inaddition, the complaint alleged that the defendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules inconnection with their efforts to elect a slate of directors to the Company’s Board of Directors. On October 20, 2021, the Court signed an ordergranting a hearing on an anticipated motion for a preliminary injunction and expedited scheduling and discovery in aid thereof, and scheduled thathearing for December 2, 2021.On November 4, 2021, the Company entered into the Settlement Agreement with the Lazar Parties. Pursuant to the Settlement Agreement, theCompany and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the SettlementAgreement, the Company agreed to reimburse Custodian for out of pocket expenses and in consideration for the dismissal and release of claimsagainst the Company an aggregate amount equal to $275, to be paid within three business days of the effective date of the Settlement Agreement.With respect to the Company’s 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) its May 12,2021 notice of stockholder nominations of four director candidates with respect to the Company’s 2021 annual meeting of stockholders, (ii) thenotice dated October 28, 2021 submitted by Custodian to the Company notifying the Company of Custodian’s continued intent to bring itsnomination of four director candidates before the Company’s stockholders at the 2021 annual meeting, and (iii) any and all related materials andnotices submitted to the Company in connection therewith or related thereto and to not take any further action in connection with the solicitationof any proxies in connection with the Company. Custodian also agreed to cease any and all solicitation and other activities in connection with the2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effectivedate of the Agreement (the “Standstill Period”). The Settlement Agreement also provides that during the Standstill Period, the Lazar Parties willvote all shares of common stock of the Company it beneficially owns in in accordance with any proposal or recommendation made by theCompany or the Board of Directors of the Company that is submitted to the stockholders of the Company, unless to do so would violateapplicable law and except with respect to certain extraordinary transactions. The Settlement Agreement also contains nondisparagement andconfidentiality provisions, subject to certain exceptions.On December 9, 2021, the Company subsequently entered into a Settlement Agreement (the “Ault Settlement Agreement”), with Milton C. Ault III,Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed towithdraw the SDNY Action against the Ault Parties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that actionagainst the Company. In addition, pursuant to the Settlement Agreement, the Company paid $70 to the Ault Parties in consideration for thereleases and other good and valuable consideration as set forth in the Ault Settlement Agreement.c.On July 5, 2021, the Company was served with a legal complaint filed by Fidelity Venture Capital Ltd. and Dror Atzmon in the Magistrate’s Court inTel Aviv for a monetary award in an amount of NIS 1,436,679 (approximately $450) and a declaratory relief. The plaintiffs allege that the Companybreached its contractual obligations to pay them for services allegedly rendered to the Company by the plaintiffs under a certain consultingagreement dated July 2, 2014, in an amount of NIS 819,000 (approximately $256). Additionally, the plaintiffs allege that the Company shouldcompensate them for losses allegedly incurred by them following their investment in the Company’s shares issued under a certain private offering.In the alternative, the plaintiffs move that the court will declare the investment agreement void with full restitution of plaintiffs’ original investmentin an amount of NIS 1,329,650(approximately $415). The Company filed its statement of defense on October 25, 2021. The first preliminary courthearing of the case is scheduled for January 23, 2022.The first court preliminary hearing was held on March 1, 2022.Following the first preliminary hearing and the Court’s comments and recommendation, the Plaintiffs filed a motion to strike out the claim withoutprejudice.On March 8, 2022 the Court ordered dismissal without prejudice of the claim.F28MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATIONAcquisition of OrgadOn February 7, 2022, the Company acquired 100% of the shares and voting interests in Orgad an omnichannel ecommerce platform. The acquisitionwas designed to create an additional revenue stream for the Company by becoming a direct ecommerce seller while leveraging the synergies betweenMySizeID and Orgad’s ecommerce platform.Unaudited proforma informationThe results of operations of Orgad have been included in the consolidated financial statements since the acquisition date of February 7, 2022. Orgadrevenues included in the Company’s consolidated statement of operations from February 7, 2022 through December 31, 2022 were $4,132. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,662 and $2,850 respectively, and the net loss after tax would have been $8,519 and $10,149 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash (*)300Issuance of shares of common stock (69,752 shares) (**)457Total consideration transferred757(*)The cash payment is subject to working capital adjustments.(**)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Orgad, on the twoyear and the threeyear anniversary of the closing, $350in each ofthese years provided that in the case of the second and third instalments certain revenue targets are met and subject further to certain downward postclosing adjustment. Furthermore, 69,752shares of common stock will be issued in eight equal quarterly instalments until the lapse of two years fromclosing. Additional earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023 will also be paid. All of these payments aresubject to the former owners being actively engaged with Orgad at the date such payment is due, and therefore were not taken as part of theconsideration for the business combination.During the year ended December 31, 2022 an amount of $456and $319was recorded in respect of the cash instalments and in respect of stocksissuance, respectively in Cost Of Goods, Sales and Marketing and General and Administrative expenses as shown in the following table:2022Stockbased compensation expense – Cost of goods194Stockbased compensation expense Sales and marketing271Stockbased compensation expense General and administrative310775(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the preliminary estimates of their fair values, which were determined using generally accepted valuation techniques based onestimates and assumptions made by management at the time of the acquisition. Such estimates are subject to change during the measurement periodwhich is not expected to exceed one year. The purchase price allocation was not finalized duo to examination of the net working capital of Orgad at theacquisition date. Any adjustments to the preliminary purchase price allocation identified during the measurement period will be recognized in theperiod in which the adjustments are determined.The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and Cash EquivalentTrade receivables364PP&E55Inventory864Longterm financial investment31Selling platform378Goodwill152Shortterm accruals and deferrals(181)Trade payables(668)Long term provision(13)Longterm debt(138)Deferred Taxes(87)Total net assets acquired757F29MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)(c)Acquisitionrelated costsThe Company incurred transaction costs of approximately $40and none during twelvemonth period ended December 31, 2022 which were included ingeneral and administrative expenses in the consolidated statements of income (loss).Acquisition of Naiz Bespoke Technologies, S.L. (“Naiz”)On October 11, 2022, the Company acquired 100% of the shares and voting interests in Naiz a provider of SaaS technology solutions that solve sizeand fit issues for fashion ecommerce companies. The acquisition was designed to allow Naiz’s customers benefit from MySize’s deep understanding ofthe fashion ecommerce retail landscape, while creating an additional revenue stream for the Company.Unaudited proforma informationThe results of operations of Naiz have been included in the consolidated financial statements since the acquisition date of October 11, 2022. Naizrevenues included in the Company’s consolidated statement of operations from October 11, 2022 through December 31, 2022 were $103. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,738 and $379 respectively and the net loss after tax would have been $8,695 and $10,717 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash503Issuance of shares of common stock (240,000 shares) (*)1,008Total consideration transferred1,511(*)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Naiz, additional cash consideration (up to $1,550) in four instalments subject to thefollowing conditions:(i)Continuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result ofa Good Reason; and(ii)Naiz’s Revenues reaching or exceeding the respective Target Revenues defined in the agreement. The revenues will be calculated in four periods:(1) January 1, 2022 – December 31, 2022; (2) January 1, 2023 – June 30, 2023; (3) July 1, 2023 – December 31, 2023; (4) January 1, 2024 – December31, 2024.Former owners of Naiz are entitled to additional cash consideration following December 31, 2025 (up to $1,650) in an event when the actual value of theequity consideration is less than $1,650, subject to completion of a Target Revenue for the period of January 1, 2025 – December 31, 2025 andcontinuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result of aGood Reason;F30MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)During the year ended December 31, 2022 an amount of $283 was recorded in respect of the additional cash consideration.(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the estimates of their fair values, which were determined using generally accepted valuation techniques based on estimates andassumptions made by management at the time of the acquisition.The following table summarizes the fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and cash equivalent36Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Total net assets acquired1,511(c)Acquisitionrelated costsDuring 2022, the Company incurred transaction costs of approximately $75 which were included in general and administrative expenses in theconsolidated statements of income (loss).F31MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)Note 17 – Operating SegmentsDuring the year ended December 31, 2021, the Company had one reportable segment. As a result of the business combinations in the reporting period(see note 13), the Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificialintelligence driven measurement solutions and (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions and. The fashionand equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. Orgad has onecustomer that is responsible for 37.9% of the Company consolidated revenues. The SaaS based innovative artificial intelligence driven measurementsolutions, or SaaS Solutions operating segment consists of My Size Inc and My Size Israel and My Size LLC.Information related to the operations of the Company’s reportable operating segments is set forth below:Fashion andequipment ecommerce platformSaaSSolutionsNaizTotalAs of the year ended December 31, 2022Revenues from external customers4,1322241034,459Operating (loss) income(591)(7,181)(338)(8,110)Financial income (expense), net(236)Net loss before tax(8,346)Fashion andequipment ecommerce platformSaasSolutionNaizAs of December 31, 2022:Assets2,0225,9661,691Amortization of intangible assets(114)(34)(46)The Company elected to present geographic information in respect with revenues generated from external customers based on the location of the selling entity:All the revenues of the fashion and equipment ecommerce platform segment are generated by Orgad, located in Israel.All the revenues of the Naiz segment are generated by Naiz, located in Spain.The revenues of the Saas Solutions segment are generated by My Size Ltd. located in Israel (approximately 75% of the segment revenues) and by My Size Inc.located in the U.S. (approximately 25% of the segment revenues).NOTE 18 SALES AND MARKETINGYear endedDecember 31,20222021Salaries836574Consultants and subcontractors5831,086Marketing481283Selling fees489Share based payments post Orgad acquisition (*)271Share based payments for consultants and employees127180Travel21142Other1451713,1432,336(*) See note 16.NOTE 19 GENERAL AND ADMINISTRATIVE EXPENSESYear endedDecember 31,20222021Salaries1,007461Professional services7051,832Share based payments for consultants, directors and employees18098Rent, office expenses and communication442372Insurance564627cash liability and equity liability expenses related to Orgad acquisition310cash liability expenses related to Naiz acquisition217Settlement fees (*)345Directors8259Other3933303,9004,124(*)See note 15(b)F32MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 20 FINANCIAL INCOME (EXPENSE), NETA.Financial incomeYear endedDecember 31,20222021Revaluation investment in marketable securities49Other26172666B.Financial expenseYear endedDecember 31,20222021Exchange rate differences33Revaluation of loan granted100Revaluation investment in marketable securities62Other6792629NOTE 21 EVENTS SUBSEQUENT TO THE BALANCE SHEET DATEa.On January 2, 2023, Orgad experienced a fire at its warehouse in Israel. The Company is not aware of any casualties or injuries associated with thefire. The Company shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450.The Company believes that this incident did not affect the future sales results of Orgad for the year 2023. The inventory was not insured and it istoo early to determine the potential impact of this incident on the other parties that were involved in the incident (lessor and others that leasedproperties near the warehouse).b.On January 10, 2023, the Company entered into a securities purchase agreement pursuant to which the Company sold an aggregate of 162,000ofthe Company’s shares of common stock and prefunded warrants to purchase up to 278,899shares of common stock and, in a concurrent privateplacement, unregistered warrants to purchase up to883,798 shares of common stock, consisting of Series A warrants to purchase up to 441,899shares of common stock and Series B warrants to purchase up to 441,899shares of common stock, at an offering price of $3.055per share ofcommon stock and associated Series A and Series B warrants and an offering price of $3.054per prefunded warrant and associated Series A andSeries B warrants.In addition, the Company entered into a securities purchase agreement pursuant to which the Company agreed to sell and issue in a privateplacement an aggregate of up to 540,098 unregistered prefunded warrants and unregistered warrants to purchase up to an aggregate of 1,080,196shares of common stock, consisting of Series A warrants to purchase up to 540,098 shares of common stock and Series B warrants to purchase upto 540,098 shares of common stock at an offering price of $3.054 per prefunded warrant and associated Series A and Series B warrants.As of March 31,2023 all the pre funded warrants were exercised by the investor.F33ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSUREThere were no disagreements with accountants on accounting and financial disclosure of a type described in Item 304 (a)(1)(iv) or any reportable event asdescribed in Item 304 (a)(1)(v) of Regulation SK.ITEM 9A. CONTROLS AND PROCEDURESDisclosure ControlsWe carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief FinancialOfficer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) as of December 31, 2022. Basedupon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this Annual Report on Form10K, our disclosure controls and procedures were effective to ensure that information required to be disclosed in reports filed under the Exchange Act, as amended,is recorded, processed, summarized and reported within the required time periods specified in the SEC’s rules and forms and is accumulated and communicated toour management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.Management’s Report on Internal Control Over Financial ReportingOur internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records, that, in reasonable detail,accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only inaccordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition, use or disposition of our assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance withthe policies or procedures may deteriorate.Our management, including our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financialreporting at December 31, 2022. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the TreadwayCommission (COSO) in Internal Control—Integrated Framework (2013). Based on that assessment under those criteria, management has determined that, as ofDecember 31, 2022, our internal control over financial reporting was effective.This Annual Report on Form 10K does not include an attestation report of our registered public accounting firm regarding internal control over financialreporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to the exemption provided to issuersthat are not “large accelerated filers” nor “accelerated filers” under the DoddFrank Wall Street Reform and Consumer Protection Act.Changes in Internal Control Over Financial ReportingDuring the year ended December 31, 2022, we made two acquisitions, as discussed in Note 1a and Note 16 of the audited consolidated financial statementsfor the year ended December 31, 2022 included in this Annual Report on Form 10K. As a result, we made additions and/or modifications to policies, procedures,systems and controls that have materially affected our internal control over financial reporting from the acquisitions, including new controls for consolidationprocess that relates to accounting policies and procedures, operational processes and documentation practices. Management excluded the acquired businessesfrom management’s report on internal control over financial reporting. ITEM 9B. OTHER INFORMATIONNone.ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNot applicable.51PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe following table sets forth the name, age and positions of our executive officers and directors.NAMEAgePOSITIONRonen Luzon52Chief Executive Officer and Class III DirectorOr Kles40Chief Financial OfficerBilly Pardo47Chief Operating Officer and Chief Product OfficerIlia Turchinsky35Chief Technology OfficerEzequiel Javier Brandwain53Chief Commercial OfficerOron Branitzky (1)(2)(3)*63Class II DirectorOren Elmaliah (1)(2)(3)*38Class I DirectorArik Kaufman (1)(2)(3)*41Class I DirectorGuy Zimmerman*53Class II Director(1)Member of our audit committee(2)Member of our nominating and corporate governance committee(3)Member of our compensation committee* Independent as that term is defined by the rules of the Nasdaq Stock Market.The business background and certain other information about our directors and executive officers is set forth below:Ronen Luzon has served as our Chief Executive Officer and a member of our board of directors since September 2013. Since 2006, Mr. Luzon hasadditionally served as Chief Executive Officer and founder of Malers Ltd., a company in the global security solutions market which provides technological solutionsfor integrated communication infrastructures, security and control systems. Prior to Malers, he held several senior marketing, sales management and professionalservices positions in a variety of international high tech companies including VP marketing of GA Tech and Professional Services Manager of Eldat Communication.Mr. Luzon graduated from Middlesex University in London with a B.S. in IT and Business Information Systems. We believe that Mr. Luzon is qualified to serve as amember of our board of directors because of his more than 20 years of experience in the technology sector.Or Kles has served as our Chief Financial Officer since May 2016. He is a certified public accountant with a broad, diverse financial background. From May2013 until April 2016 he served as Assistant Controller of Shikun and BinuiSolel Boneh Infrastructure Ltd. and from December 2010 until May 2013 he served as anAssociate at KPMG. Mr. Kles holds an MBA and a B.A. in Business Management and Accounting (specializing in financing) from The College of ManagementAcademic Studies. Mr. Kles is a certified public accountant in Israel.Billy Pardo has served as our Chief Product Officer since May 2014 and Chief Operating Officer since April 2019. From April 2010 until August 2013, Ms.Pardo served as Senior Director of Product Management of Fourier Education. Among her areas of expertise are launching products from concept to successfuldelivery in various methodologies, including Fourier Education’s awardwinning einstein™ Science Tablet. Prior to that Ms. Pardo served in various productmanagement positions including, Project Manager of Time to Know, Product Marketing Manager of RiT Technologies, Product Manager of Pricer AB and R&DTeam Leader at Pricer AB. Ms. Pardo previously served as Software Engineer at Eldat Communication Ltd., and QA Engineer at NICE Systems. Ms. Pardo receivedan MBA from The Interdisciplinary Center and a B.A. in Computer Science from The Academic College of TelAvivYaffo.Ilia Turchinsky has served as our Chief Technology Officer since April 2019 and from July 2018 until April 2019 as our Director of Technology. Prior tojoining us, from 2013 until 2018, Mr. Turchinsky served in various roles, most recently Chief Technology Officer, at MonkeyTech Ltd., a company that providesdesign, development and characterization of mobile applications. Prior to that, Mr. Turchinsky served in various roles including development course instructor atIQLine, was a founder of Arnavsoft and was a software developer for MintLab and a political party. Mr. Turchinsky holds a B.Sc. from the Ben Gurion University inComputer Science and an M.Sc. from the Open University of Israel in Computer Science.52Ezequiel Javier Brandwain has served as our Chief Commercial Officer since February 2022. Mr. Brandwain brings more than two decades of globalexperience in retail and the fashion industry, mainly in business development, operations, and international markets. Before joining the Company, Mr. Brandwainheld positions of increasing responsibility at several companies, including between June 2017 and November 2020, at 7 For All Mankind International, where heserved as Director, Latin America and Caribbean, managing business development and operations across Latin America and the Caribbean. Before that, betweenMay 2016 and June 2017, Mr. Brandwain served as Chief Business Development Officer at Replay – Fashion Box SPA, where he oversaw business development andoperations, expansion and control in the Americas, the Caribbean, and NorthEast Asia. Prior this role, between September 2015 and May 2016, he served as theReplay’s Managing Director in Latin America and the Caribbean, leading the company’s international expansion in these regions. Prior to that, between April 2015and September 2015, Mr. Brandwain served as Managing Director, Latin America and Caribbean at Authentic Brands Group LLC, where he led that company’soperations, business developments and international expansion within these regions, and served as the direct liaison with the company’s headquarters in New York.Prior to that, between April 2015 and September 2015, Mr. Brandwain served as Chief Operating Officer, Latin America and Caribbean at Flemingo International Ltd.,overseeing operations, as well as projected operations in the travel retail field across these regions. Prior to that, between December 2010 and February 2014, Mr.Brandwain served as Regional Director, Southern Hemisphere at Calvin Klein, where he was responsible for defining and implementing the operational andcommercial strategy for Southern Hemisphere, as well as overseeing the retail, travel retail, concession, and wholesale businesses of the company. During his tenureat Calvin Klein, Mr. Brandwain also served as Travel Retail Director, Latin America, where he built the travel retail business and developed operations. Prior to that,between July 2010 and November 2010, Mr. Brandwain served as Business Director, Latin America and Caribbean at Givenchy Latin America, and between January2010 and June 2010 he served as Commercial Director, Latin America and Caribbean at Nautica Latin America. During December 2004 and December 2009, Mr.Brandwain served as Vice President, International Business Development at Report Collection/Modextil, Inc., where he was in charge of business and operationalexpansion, global growth, and brand extensions. Prior to that, between 2003 and October 2004, Mr. Brandwain served as General Manager at Andrew KoenigInternational, Inc. Between September 2019 and November 2020, Mr. Brandwain served as a member of the Board of Directors of 7 For All Mankind BrazilImportacao, Comercio E Distribuicao S.A. Mr. Brandwain earned a Bachelor degree in architecture from the University of the Republic (Uruguay).Oron Branitzky has served as a member of our board of directors since March 2017. Mr. Barnitzky has vast experience in retail technology. SinceNovember 2017, Mr. Branitzky has served as Global Retail Business Development at Superup, and from January 2007 until December 2014 he served as VicePresident of Sales and Marketing at Pricer AB. Prior to that, Mr. Branitzky has served as VP Marketing and Sales at Eldat Communication and Sarin TechnologiesLtd. Since January 2015, Mr. Branitzky has served as chairman of the board of directors of WiseShelf Ltd. and from May 2015 until March 2016, Mr. Branitzky servedas an advisory board member of ciValue. Mr. Branitzky received a B.S. from the Hebrew University of Jerusalem and an MBA in International Marketing from TelAviv University. We believe that Mr. Branitzky is qualified to serve as a member of our board of directors because of his more than 20 years of experience inmanaging the sales of hitech solutions to retailers across the globe.Oren Elmaliah, has served as a member of our board of directors since May 2017. In September 2015, Oren Elmaliah founded Accounting Team IL and hasacted as Account Manager since then. Accounting Team IL is a financial consultancy and service provider to public companies traded in Israel and abroad. SinceFebruary 2017, Mr. Elmaliah has served as controller of Enlivex Therapeutics Ltd., and since January 2017 he has served as Chief Financial Officer of Presstek Israel.In addition, since September 2015, Mr. Elmaliah has served as an Israel Authorities Reporting Officer of LG Electronics Israel and since September 2015 he hasserved as Local Financial Report Consultant of Chiasma. From July 2011 until August 2015, Mr. Elmaliah served as CPA, Financial Director of CFO Director Ltd andfrom June 2010 until July 2011 he served as Risk Management Consultant of RSM International Limited. Mr. Elmaliah holds a B.A. in Accounting/Economics and aMsc. in Finance/Accounting from Tel Aviv University, Israel. He is a licensed Certified Public Accountant in Israel. We believe that Mr. Elmaliah is qualified to serveas a member of our board of directors because of his vast finance experience and public company management and administration in the fields of finance,accounting, and financial regulation.53Arik Kaufman has served as a member of our board of directors since June 2017. Mr. Kaufman is an attorney specializing in the fields of commercial law,corporate law and capital markets and since 2016 runs his own law office in Israel. He has vast experience in the fields of financial reporting and financial regulation.Mr. Kaufman serves as the Chief Executive Officer of Steakholder Foods since January 2022. From September 2017 until January 2022, Mr. Kaufman served as VPBusiness Development of Mor Research Applications. Mr. Kaufman holds an LLB in Law from the Interdisciplinary Center, Herzliya, and is admitted to the IsraeliBar. We believe that Mr. Kaufman is qualified to serve as a member of our board of directors based upon his experience of assisting with the completion of numerousventure capital financings, mergers, acquisitions, and strategic relationships. In addition, he has served as a member of the board of various publicly tradedcompanies, including companies that operate in the same industry as us.Guy Zimmerman has served as a member of our board of directors since August 2021. Previously, Mr. Zimmerman served as Founder and CEO ofManuFuture, an online b2b engineering market place, since February 2021. Prior to that from 2017 to 2021, Mr. Zimmerman acted as a consultant to severaltechnology startups and was a founding partner of a business travel online platform. From 2013 to 2017, Mr. Zimmerman served as EVP of Marketing and BusinessDevelopment of Kornit Digital and was part of the IPO leadership. Prior to that, Mr. Zimmerman served as VP of Global Sales and Business Development at TefronLtd., a provider of seamless garment technology, where he led the $100m sales and sales support organization serving global retail and fashion brands. Prior to thathe served as Vice President of Strategy and Business Development at Tnuva Group, Israel’s largest food manufacturer and spent eight years at McKinsey &Company. Mr. Zimmerman previously led a software startup in the field of operational healthcare management systems. Mr. Zimmerman holds a B.Sc. in IndustrialEngineering from Tel Aviv University in Israel. We believe that Mr. Zimmerman is qualified to serve as a member of our board of directors because of his experiencein business development in the technology and retail sectors.Board Diversity MatrixThe table below provides certain information regarding the diversity of our board of directors as of the date of this annual report.Board Diversity Matrix (As of March 31, 2023)Total Number of Directors5FemaleMaleNonBinaryDid Not DiscloseGenderPart I: Gender IdentityDirectors#5##Part II: Demographic BackgroundAfrican American or Black####Alaskan Native or Native American####Asian####Hispanic or Latinx####Native Hawaiian or Pacific Islander####White#1##Two or More Races or Ethnicities#2##LGBTQ+0Did Not Disclose Demographic Background2Family RelationshipsRonen Luzon, the Chief Executive Officer and a member of our board of directors, and Billy Pardo, the Chief Product Officer and Chief Operating Officer, arehusband and wife. There are no other family relationships among any of our current or former directors or executive officers.Involvement in Certain Legal ProceedingsWe are not aware of any of our directors or officers being involved in any legal proceedings in the past ten years relating to any matters in bankruptcy,insolvency, criminal proceedings (other than traffic and other minor offenses), or being subject to any of the items set forth under Item 401(f) of Regulation SK.Arrangements between Officers and DirectorsTo our knowledge, there is no arrangement or understanding between any of our officers and any other person, including directors, pursuant to which theofficer was selected to serve as an officer.Board of DirectorsThere are no agreements with respect to the election of directors.On January 6, 2022, we filed with the Secretary of State of Delaware a Certificate of Amendment to our Amended and Restated Certificate of Incorporationproviding for a classified Board. Following filing of the Certificate of Amendment, members of our board are now classified into three classes with staggered threeyear terms (with the exception of the expiration of the initial Class I and Class II directors), as follows:●Class I, comprised of two directors, initially Arik Kaufman and Oren Elmaliah (with their initial terms expiring at our 2022 annual meeting of stockholders andmembers of such class serving successive threeyear terms);●Class II, comprised of two directors, initially Oron Branitzky and Guy Zimmerman (with their initial terms expiring at our 2023 annual meeting of stockholdersand members of such class serving successive threeyear terms); and●Class III, comprised of one director, initially Ronen Luzon (with his initial term expiring at our 2024 annual meeting of stockholders and members of suchclass serving successive threeyear terms).54To preserve the classified Board structure, a director elected by the Board of Directors to fill a vacancy holds office until the next election of the class forwhich such director has been chosen, and until that director’s successor has been elected and qualified or until his or her earlier death, resignation, retirement orremoval.Our board of directors has reviewed the materiality of any relationship that each of our directors has with us, either directly or indirectly. Based upon thisreview, we believe that Arik Kaufman, Oren Elmaliach, Oron Branitzky and Guy Zimmerman qualify as independent directors in accordance with the standards set bythe Nasdaq and Rule 10A3 promulgated under the Exchange Act.Committees of the BoardAudit CommitteeOur audit committee is comprised of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Elmaliah serves as chairman of the audit committee. The auditcommittee is responsible for retaining and overseeing our independent registered public accounting firm, approving the services performed by our independentregistered public accounting firm and reviewing our annual financial statements, accounting policies and our system of internal controls. The audit committee actsunder a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the audit committee’s composition and meetings.The audit committee charter is available on our website www.mysizeid.com.The Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by applicable SEC rules. Inaddition, the Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by the rules of the Nasdaq StockMarket.The Board of Directors has determined that Oren Elmaliah is an “audit committee financial expert” serving on its audit committee, and is independent, as theSEC has defined that term in Item 407 of Regulation SK.Compensation CommitteeOur compensation committee consists of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Branitzky serves as chairman of the compensationcommittee.The compensation committee’s roles and responsibilities include making recommendations to the Board of Directors regarding the compensation for ourexecutives, the role and performance of our executive officers, and appropriate compensation levels for our CEO, which are determined without the CEO present, andother executives. Our compensation committee also administers our 2017 Equity Incentive Plan and our 2017 Consultant Equity Incentive Plan. The compensationcommittee acts under a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the compensation committee’scomposition and meetings. The compensation committee charter is available on our website www.mysizeid.com.Our Board of Directors has determined that all of the members of the compensation committee are “independent” as that term is defined by the rules of theNasdaq Stock Market.Nominating and Corporate Governance CommitteeThe members of the nominating and corporate governance committee are Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Kaufman serves aschairman of the corporate governance and nominations committee. The nominating and corporate governance committee acts under a written charter, which morespecifically sets forth its responsibilities and duties, as well as requirements for the nominating and corporate governance committee’s composition and meetings.The nominating and corporate governance committee charter is available on our website www.mysizeid.com.The nominating and corporate governance committee develops, recommends and oversees implementation of corporate governance principles for us andconsiders recommendations for director nominees. The nominating and corporate governance committee also considers stockholder recommendations for directornominees that are properly received in accordance with applicable rules and regulations of the SEC. Our stockholders that wish to nominate a director for election tothe Board of Directors should follow the procedures set forth in our bylaws.55The nominating and corporate governance committee will consider persons identified by its members, management, stockholders, investment bankers andothers. The guidelines for selecting nominees, which are specified in the nominating committee charter, generally provide that persons to be nominated:●should be accomplished in his or her field and have a reputation, both personal and professional, that is consistent with our image and reputation;●should have relevant experience and expertise and would be able to provide insights and practical wisdom based upon that experience and expertise; and●should be of high moral and ethical character and would be willing to apply sound, objective and independent business judgment, and to assume broadfiduciary responsibility.The nominating and corporate governance committee will consider a number of qualifications relating to management and leadership experience,background and integrity and professionalism in evaluating a person’s candidacy for membership on the Board of Directors. The nominating and corporategovernance committee may require certain skills or attributes, such as financial or accounting experience, to meet specific Board needs that arise from time to timeand will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of Board of Directors members. The nominating andcorporate governance committee will not distinguish among nominees recommended by stockholders and other persons.Our Board of Directors has determined that all of the members of the nominating and corporate governance committee are “independent” as that term isdefined by the rules of the Nasdaq Stock Market.Code of Conduct and EthicsWe have a Code of Business Conduct and Ethics that applies to all our employees. The text of the Code of Business Conduct and Ethics is publiclyavailable on our website at www.mysizeid.com. Information contained on, or that can be accessed through, our website does not constitute a part of this report andis not incorporated by reference herein. Disclosure regarding any amendments to, or waivers from, provisions of the code of conduct and ethics that apply to ourdirectors, principal executive and financial officers will be posted on the “InvestorsCorporate Governance” section of our website at www.mysizeid.com or will beincluded in a Current Report on Form 8K, which we will file within four business days following the date of the amendment or waiver.Change in Procedures for Recommending DirectorsThere have been no material changes to the procedures by which our stockholders may recommend nominees to our Board of Directors from thoseprocedures set forth in our Proxy Statement for our 2021 Annual Meeting of Stockholders, filed with the SEC on December 7, 2022.56ITEM 11. EXECUTIVE COMPENSATIONSummary Compensation TableThe following sets forth the compensation paid by us to our named executive officers, during the years ended December 31, 2022 and December 31, 2021.Name and Principal PositionYearSalary($) (1)Bonus($)StockAwards($)OptionAwards($) (2)All OtherCompensation($)Total($)Ronen Luzon2022173,000223,0008,000126,000530,000Chief Executive Officer2021194,0005,00023,00097,000319,000Or Kles2022123,00053,0007,00071,000254,000Chief Financial Officer2021123,0008,00030,00061,000222,000Billy Pardo2022134,00053,0007,000100,00294,000Chief Operating Officer2021162,0007,00018,00074,000261,000(1) Salary for the years 2022 and 2021 are based on average US$/NIS representative exchange rates of NIS 3.358 and NIS 3.11 respectively.(2) Amounts in this column represent the grant date fair value of options granted to the named executive officers during 2022 and 2021, computed in accordance withFASB ASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the named executive officers. The assumptionsmade in valuing the options reported in this column are discussed in Note 11 to our audited financial statements for the year ended December 31, 2021 and Note 4 toour condensed consolidated interim financial statements for the quarterly period ended September 30, 2022.All Other Compensation TableThe “All Other Compensation” amounts set forth in the Summary Compensation Table above consist of the following:NameYearAutomobileRelatedExpenses($)Manager’sInsurance*($)EducationFund*($)Othersocialbenefits**($)Total($)Ronen Luzon202232,00031,00015,00048,000126,000202133,00033,00015,00016,00097,000Or Kles202215,00021,00010,00025,00071,000202114,00019,0009,00019,00061,000Billy Pardo202216,00025,00013,00046,000100,000202117,00024,00012,00021,00074,000* Manager’s insurance and education funds are customary benefits provided to employees based in Israel. Manager’s insurance is a combination of severancesavings (in accordance with Israeli law), defined contribution taxqualified pension savings and disability insurance premiums. An education fund is a savings fundof pretax contributions to be used after a specified period of time for educational or other permitted purposes.** Other social benefits for 2022 and 2021 for all named individuals includes tax payments in respect of social benefits.57Agreements with Named Executive OfficersRonen LuzonOn November 18, 2018, My Size Israel, our wholly owned subsidiary, entered into an employment agreement with Ronen Luzon, or the Luzon EmploymentAgreement, pursuant to which Mr. Luzon will serve as our Chief Executive Officer. Pursuant to the terms of the Luzon Employment Agreement, Mr. Luzon receivesNIS 55,000 per month as his base salary and shall be eligible to receive such bonus as determined by us. In addition, Mr. Luzon shall be entitled social benefits andto other benefits, including, but not limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, includinginsurance in case of disability, annual vacation days, sick leave and expense reimbursement. Pursuant to the terms of the Luzon Employment Agreement and subjectto certain conditions, payments made by the Company to the pension fund or manager’s insurance fund shall be made in lieu of severance payments due to Mr.Luzon. The term of the Luzon Employment Agreement shall be effective as of September 1, 2018 and shall continue until such time either party provides writtennotice to the other party at least 75 days in advance of the termination of such agreement. We may also terminate Mr. Luzon’s employment without prior writtennotice (or payment in lieu of such notice) for Cause (as defined in the Luzon Employment Agreement).Or KlesOn November 18, 2018, My Size Israel entered into an employment agreement with Or Kles, or the Kles Employment Agreement, pursuant to which Mr. Kleswill serve as our Chief Financial Officer. Pursuant to the terms of the Kles Employment Agreement, Mr. Kles receives NIS 38,000 per month as his base salary andshall be eligible to receive such bonus as determined by us. In addition, Mr. Kles shall be entitled to social benefits and other benefits, including, but not limited to,contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annual vacation days,sick leave and expense reimbursement. Pursuant to the terms of the Kles Employment Agreement and subject to certain conditions, payments made by us to thepension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Mr. Kles. The term of the Kles Employment Agreement shall beeffective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days in advance of thetermination of such agreement. We may also terminate Mr. Kles’s employment without prior written notice (or payment in lieu of such notice) for Cause (as defined inthe Kles Employment Agreement).Billy PardoOn November 18, 2018, My Size Israel entered into an employment agreement with Billy Pardo, or the Pardo Employment Agreement, pursuant to which Ms.Pardo will serve as our Chief Product Officer. Pursuant to the terms of the Pardo Employment Agreement, Ms. Pardo receives NIS 47,500 per month as her basesalary and shall be eligible to receive such bonus as determined by us. In addition, Ms. Pardo shall be entitled to social benefits and other benefits, including, butnot limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annualvacation days, sick leave and expense reimbursement. Pursuant to the terms of the Pardo Employment Agreement and subject to certain conditions, payments madeby us to the pension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Ms. Pardo. The term of the Pardo EmploymentAgreement shall be effective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days inadvance of the termination of such agreement. We may also terminate Ms. Pardo’s employment without prior written notice (or payment in lieu of such notice) forCause (as defined in the Pardo Employment Agreement).58Outstanding Equity Awards at Fiscal YearEndThe following table provides information regarding options held by each of our named executive officers that were outstanding as of December 31, 2022.Option AwardsStock AwardsName and Principal PositionNumber ofSecuritiesUnderlyingUnexercisedOptionsExercisableNumber ofSecuritiesUnderlyingUnexercisedOptionsUnexercisableOptionExercisePriceOptionExpirationDateEquityincentiveplan awards:Number ofUnearnedShares that HaveNot VestedEquityincentiveplan awards:Market Value ofUnearnedShares, That Have Not VestedRonen Luzon Chief Executive Officer400(1)$26(8)7/24/20231,601(2)$26(8)5/29/20256,400(3)$268/10/2025100,000(9)100,000$511,250Or Kles – Chief Financial Officer227(4)$26(8)7/24/2023427(5)$26(8)5/29/20255,200(6)$268/10/202524,000(10)24,000$122,700Billy Pardo Chief Operating Officer400(1)$26(8)7/24/2023894(7)$26(8)5/29/20255,200(6)$268/10/202524,000(11)24,000$122,700(1) The option has a grant date of July 24, 2017 and vested in full on January 24, 2018.(2) The option has a grant date of May 29, 2019. 267 options vested immediately upon grant, 445 options vested on January 24, 2019, 445 options vested on January24, 2020 and 444 options vested on January 24, 2021.(3) The option has a grant date of October 8, 2020, 1,600 options vested on November 26, 2020, 1,600 options vested on May 26, 2021, 1,600 options vested onNovember 26, 2021, and 1,600 options vested on May 26, 2022.(4) The option has a grant date of July 24, 2017. 76 options vested immediately upon grant, 76 options vested on May 1, 2018 and 75 options vested on May 1, 2019.(5) The option has a grant date of May 29, 2019. 160 options vested immediately upon grant, 445 options vested on May 1, 2020, 445 options vested on May 21, 2021and 444 options vested on May 1, 2022.(6) The option has a grant date of October 8, 2020, 1,300 options vested on November 26, 2020, 1,300 options vested on May 26, 2021, 1,300 options vested onNovember 26, 2021, and 1,300 options vested on May 26, 2022.(7) The option has a grant date of May 29, 2019. 214 options vested immediately upon grant, 227 options vested on January 24, 2019, 227 options vested on January24, 2020 and 226 options vested on January 24, 2021.(8) On May 25, 2020, the compensation committee of the Board of Directors of the Company reduced the exercise price of outstanding options of employees anddirectors of the Company for the purchase of an aggregate of 5,610 shares of common stock of the Company (with exercise prices ranging between $453.75 and$228.75) to $26 per share, which was the closing price for the Company’s common stock on May 22, 2020, and extended the term of the foregoing options for anadditional one year from the original date of expiration.(9) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(10) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(11) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.59Director CompensationThe following table sets forth compensation information for our nonemployee directors for the year ended December 31, 2022.NameFees earned orpaid incash ($)(1)Optionawards($)(1)(2)Total($)Oren Elmalih15,078 15,078Oron Barnitzky15,34715,347Arik Kaufman14,44114,441Guy Zimmerman13,03313,033(1)Fees for the year 2022 are based on average US$/NIS representative exchange rates of NIS 3.519.(2)Amounts in this column represent the grant date fair value of options granted to the nonemployee directors during 2022 computed in accordance with FASBASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the nonemployee directors. The assumptions made invaluing the options reported in this column are discussed in Note 11 to our financial statements for the year ended December 31, 2022.We compensate our nonemployee directors for their service as a member of our board. Mr. Luzon received no separate compensation for board service. Mr.Luzon’s compensation is set forth above in the Summary Compensation Table.Each nonemployee director is entitled to receive a per meeting fee of $318. Nonemployee directors are also reimbursed for their travel and reasonable outofpocket expenses incurred in connection with attending board and committee meetings, to the extent that attendance is required by the board or the committee(s)on which that director serves.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurity Ownership of Certain Beneficial Holders and ManagementThe following table sets forth certain information regarding beneficial ownership of shares of our common stock as of March 31, 2023 by (i) each personknown to beneficially own more than 5% of our outstanding common stock, (ii) each of our directors, (iii) each of our executive officers, and (iv) all of our directorsand executive officers as a group. Except as otherwise indicated, the persons named in the table below have sole voting and investment power with respect to allshares beneficially owned, subject to community property laws, where applicable.Beneficial Owner(1)Shares ofCommon StockBeneficiallyOwnedPercentage(2)Executive officers and directors:Ronen Luzon143,578(3)5.8%Or Kles29,854(4)1.2%Billy Pardo143,578(5)5.8%Ezequiel Javier Brandwain12,000(6)*Ilia Turchinsky18,313(7)*Arik Kaufman1,294(8)*Oren Elmaliah1,294(9)*Oron Branitzky1,294(10)*Guy ZimmermanAll Executive Officers and Directors as a Group (9 persons)207,6268.4%*Less than 1%(1) The address of each person is c/o My Size, Inc., 4 HaYarden St., P.O.B. 1026, Airport City, Israel 7010000 unless otherwise indicated herein.60(2) The calculation in this column is based upon 2,446,780 shares of common stock outstanding on March 31, 2023. Beneficial ownership is determined in accordancewith the rules of the SEC and generally includes voting or investment power with respect to the subject securities. Shares of common stock that are currentlyexercisable or exercisable within 60 days of March 31, 2023 are deemed to be beneficially owned by the person holding such securities for the purpose of computingthe percentage beneficial ownership of such person, but are not treated as outstanding for the purpose of computing the percentage beneficial ownership of anyother person(3) Consists of (i) 100,000 shares of restricted stock granted under the 2017 Plan, (ii) 4,683 shares of common stock, (iii) options to purchase up to 8,401 shares of ourcommon stock, and (iv) 24,000 shares of restricted stock and options to purchase up to 6,494 shares of our common stock which are held by Billy Pardo, RonenLuzon’s spouse. Mr. Luzon may be deemed to beneficially hold the securities of us held by Ms. Pardo.(4) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, and (ii) an option to purchase 5,854 shares of our common stock. Does not includean aggregate of 119,760 shares of restricted stock over which Mr. Kles has been designated the initial proxy to vote such shares pursuant to a voting agreemententered into between Whitehole S.L., Twinbel S.L. and EGI Acceleration, S.L.(5) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, (ii) options to purchase up to 6,494 shares of our common stock, (iii) 100,000 sharesof restricted stock which are held by Ronen Luzon, Billy Pardo’s spouse (iii) 8,401 shares of common stock which are held by Mr. Luzon, and (iii) options to purchaseup to 4,683 shares of our common stock which are held by Mr. Luzon. Ms. Pardo may be deemed to beneficially hold the securities of the Company held by Mr.Luzon.(6) Consists of 12,000 shares of restricted stock granted under the 2017 Plan.(7) Consists of (i) 16,000 shares of restricted stock granted under the 2017 Plan, and (ii) options to purchase up to 2,313 shares of our common stock.(8) Consists of options to purchase up to 1,294 shares of our common stock.(9) Consists of options to purchase up to 1,294 shares of our common stock.(10) Consists of options to purchase up to 1,294 shares of our common stock.Change in ControlWe are not aware of any arrangement that might result in a change in control in the future. We have no knowledge of any arrangements, including anypledge by any person of our securities, the operation of which may at a subsequent date result in a change in the Company’s control.Securities Authorized for Issuance Under Equity Compensation PlansOn January 29, 2017, our Board of Directors approved the 2017 Equity Incentive Plan and the 2017 Consultant Equity Incentive Plan, which were approvedby our stockholders on March 21, 2017. In addition, on January 29, 2017, our Board of Directors approved the Stock Option Plan Israel Grantees SubPlan. The 2017Equity Incentive Plan initially authorized the issuance of up to 5,334 shares of common stock under the plan and the 2017 Consultant Equity Incentive Plan initiallyauthorized the issuance of up to 8,000 shares of common stock under the plan.On February 12, 2018, our stockholders approved an amendment to the 2017 Consultant Equity Incentive Plan to increase the maximum number of shares ofour common stock available for issuance under the plan from 8,000 to 12,000. On July 3, 2018, our stockholders approved an amendment to the 2017 Equity IncentivePlan to increase the maximum number of shares of our common stock available for issuance under the plan from 5,334 to 8,000 and an amendment to the 2017Consultant Equity Incentive Plan to increase the maximum number of shares of our common stock available for issuance under the plan from 12,000 to 18,667.On May 25, 2020, our Board reduced the exercise price of outstanding options of our employees and directors for the purchase of an aggregate of 140,237of our common stock (with exercise prices ranging between $453.75 and $228.75) to $26.0 per share, and extended the term of the foregoing options for an additionalone year from the original date of expiration.61On August 10, 2020, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 80,000 to 58,000shares, and a decrease of the numbers of shares available for issuance under the 2017 Consultant Incentive Plan to 8,667 shares from 18,667 shares.On December 30, 2021, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 58,000 sharesto 230,800 shares.On December 7, 2022, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Plan from 230,800 shares to 289,000shares.The following table summarizes information about our equity compensation plans and individual compensation arrangements as of December 31, 2022.Number of securities to be issued upon exercise of outstanding options, warrants and rights(a)Weighted average exercise price of outstandingoptions, warrants and rights (b)Number of securities remaining availablefor future issuanceunder equity compensationplans (excludingsecurities reflected in column (a) (c)Equity compensation plans approved by security holders43,49724.7477,455Equity compensation plans not approved by security holdersTotal43,49724.7477,455ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEDuring years ended December 31, 2022 and 2021, except for compensation arrangements described elsewhere herein and the transactions described below,we did not participate in any transaction, and we are not currently participating in any proposed transaction, or series of transactions, in which the amount involvedexceeded the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years, and in which, to our knowledge,any of our directors, officers, five percent beneficial security holders, or any member of the immediate family of the foregoing persons had, or will have, a direct orindirect material interest.Compensation arrangements for our named executive officers and directors are described in the section entitled “Executive Compensation.”Employment AgreementsWe have entered into written employment agreements with each of our executive officers. These agreements generally provide for notice periods of varyingduration for termination of the agreement by us or by the relevant executive officer, during which time the executive officer will continue to receive base salary andbenefits. We have also entered into customary noncompetition, confidentiality of information and ownership of inventions arrangements with our executiveofficers. However, the enforceability of the noncompetition provisions may be limited under applicable law.OptionsSince our inception we have granted options to purchase our common stock to our officers and directors. Such option agreements may contain accelerationprovisions upon certain merger, acquisition, or change of control transactions.62Restricted Stock GrantsOn September 29, 2022, our compensation committee approved grants of restricted share awards under our 2017 Plan to Ronen Luzon, Or Kles, Billy Pardo,Ilia Turchinsky and Ezequiel Javier Brandwain, pursuant to which they were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000restricted shares and 12,000 restricted shares, respectively. The restricted shares shall vest in three equal installments on January 1, 2023, January 1, 2024 andJanuary 1, 2025, conditioned upon continuous employment with us, and subject to accelerated vesting upon a change in control of the Company.Shareholder ActivismIn May 2021, we received notice from Custodian Ventures, LLC, or Custodian, of its intention to nominate four candidates to stand for election to our Boardof Directors at our 2021 annual meeting of stockholders. Custodian subsequently made a book and records request and has made public statements calling forchanges to our management.On September 22, 2021, Custodian, commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v. Mysize,Inc., C.A. No. 20210817LWW, or the Delaware Action. In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting. As further described below, on November 4, 2021, we entered into asettlement agreement, or the Settlement Agreement, with Custodian, Activist Investing LLC, David Aboudi, Partick Loney and David Natan, collectively, the LazarParties, settling and dismissing the Delaware Action.On October 19, 2021, we commenced an action in the United States District Court for the Southern District of New York captioned My Size, Inc. v. DavidLazar, Custodian Ventures LLC, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, Civil Action No, 1:21cv08585, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, andcertain rules promulgated thereunder, or the SDNY Action. The complaint sought, among other things, declaratory and injunctive relief related to defendants’ effortsto nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed “group” for purposes ofSection 13 (d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. In addition, the complaint alleged that thedefendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules in connection with their efforts to elect a slate of directorsto our Board of Directors. On October 20, 2021, the Court signed an order granting a hearing on an anticipated motion for a preliminary injunction and expeditedscheduling and discovery in aid thereof, and scheduled that hearing for December 2, 2021. As further described below, on November 4, 2021, we entered into theSettlement Agreement with the Lazar Parties settling and dismissing the claims asserted in the SDNY Action and the Delaware Action against one another. OnNovember 8, 2021, the remaining defendants in the SDNY Action filed and answer and counterclaim asserting a claim against us pursuant to New York Civil RightsLaw Section 70a, also known as New York’s antiSLAPP statute.On November 4, 2021, we entered into the Settlement Agreement, or the Lazar Settlement Agreement, with the Lazar Parties. Pursuant to the LazarSettlement Agreement, we and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the LazarSettlement Agreement, we reimbursed Custodian for out of pocket expenses and in consideration for the dismissal and release of claims against the Company anaggregate amount equal to $275,000. With respect to our 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) itsMay 12, 2021 notice of stockholder nominations of four director candidates with respect to our 2021 annual meeting of stockholders, (ii) the notice dated October 28,2021 submitted by Custodian to us notifying us of Custodian’s continued intent to bring its nomination of four director candidates before our stockholders at the2021 annual meeting, and (iii) any and all related materials and notices submitted to us in connection therewith or related thereto and to not take any further action inconnection with the solicitation of any proxies in connection with us. Custodian also agreed to cease any and all solicitation and other activities in connection withthe 2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effective date of theAgreement, or the Standstill Period. The Lazar Settlement Agreement also provides that during the Standstill Period, the Lazar Parties will vote all shares of ourcommon stock it beneficially owns in accordance with any proposal or recommendation made by us or our Board of Directors that is submitted to our stockholders,unless to do so would violate applicable law and except with respect to certain extraordinary transactions. The Lazar Settlement Agreement also contains nondisparagement and confidentiality provisions, subject to certain exceptions.63On December 9, 2021, we subsequently entered into a Settlement Agreement, or the Ault Settlement Agreement, with Milton C. Ault III, Ault Alpha LP, AultAlpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed to withdraw the SDNY Action against the AultParties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that action against the Company. In addition, pursuant to the SettlementAgreement, we paid $70,000 to the Ault Parties in consideration for the releases and other good and valuable consideration as set forth in the Ault SettlementAgreement.Naiz Bespoke Technologies AcquisitionOn October 7, 2022, we entered into the Naiz Agreement with the Naiz Sellers, pursuant to which the Naiz Sellers agreed to sell to us all of the issued andoutstanding equity of Naiz. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) ) the Naiz EquityConsideration and (ii) up the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the Equity Value Averaging Period) is less than $1,650,000, My Size shall pay the Shortfall Value to the Naiz Sellers within 45days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period, it wasdetermined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement)).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers will be subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into the LockUp Agreement with My Size, (ii) Whitehole, Twinbel and EGIentered into the Voting Agreement with My Size and (iii) each of the Key Persons entered into employment agreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonth period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonth “dribbleout” provisionthat provides following the expiration of the initial sixmonth lockup period, without My Size’s prior written consent (which My Size shall be permitted to withholdat its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than the average dailytrading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.64The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Indemnification Agreements and Directors’ and Officers’ Liability InsuranceWe have entered into indemnification agreements with each of our directors and executive officers. These agreements, among other things, require us toindemnify these individuals and, in certain cases, affiliates of such individuals, to the fullest extent permitted by Delaware law against liabilities that may arise byreason of their service to us or at our direction, and to advance expenses incurred as a result of any proceedings against them as to which they could beindemnified. We also maintain an insurance policy that insures our directors and officers against certain liabilities, including liabilities arising under applicablesecurities laws.Director IndependenceSee “Item 10. Directors, Executive Officers and Corporate Governance; Corporate Governance, Board Composition” above for a discussion regarding theindependence of the members of our board of directors.ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICESSomekh Chaikin, a member firm of KPMG International, located in Tel Aviv, Israel, PCAOB ID 1057, has served as our independent registered publicaccounting firm for 2022 and 2021. The following are Somekh Chaikin’s fees for professional services in each of the respective fiscal years:Fee Category20222021Audit Fees198,910298,300Tax Fees30,66729,300Auditrelated Fees18,000Total Fees247,577327,600Audit Fees:Audit Fees consist of fees billed for professional services performed by Somekh Chaikin for the audit of our annual financial statements, thereview of interim consolidated financial statements, and related services that are normally provided in connection with registration statements, including theregistration statement for S1 and S3.Tax Fees: Tax Fees may consist of fees for professional services, including tax and VAT consulting and compliance performed by an independent registeredpublic accounting provided during the period.PreApproval Policies and ProceduresIn accordance with the SarbanesOxley Act of 2002, as amended, our audit committee charter requires the audit committee to preapprove all audit andpermitted nonaudit services provided by our independent registered public accounting firm, including the review and approval in advance of our independentregistered public accounting firm’s annual engagement letter and the proposed fees contained therein. The audit committee has the ability to delegate the authorityto preapprove nonaudit services to one or more designated members of the audit committee. If such authority is delegated, such delegated members of the auditcommittee must report to the full audit committee at the next audit committee meeting all items preapproved by such delegated members. In the fiscal years endedDecember 31, 2022 and December 31, 2021 all of the services performed by our independent registered public accounting firm were preapproved by the auditcommittee.65PART IVITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES(a)Financial StatementsThe financial statements required by this Item are included beginning at page F1.(b)ExhibitsSee Exhibit IndexITEM 16. FORM 10K SUMMARYNot applicableEXHIBIT INDEXExhibitNumberDescription3.1Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Form on Form8K filed on March 23, 2017)3.2Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10K filed onMarch 4, 2016)3.3Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’s Current Report onForm 8K filed on February 20, 2018)3.4Second Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8K filedon April 24, 2018)3.5Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’sCurrent Report on Form 8K filed on November 18, 2019)3.6Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on January 7, 2022)3.7Amendment No. 1 to Second Amended and Restated ByLaws (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8K filed on January 7, 2022)3.8Certificate of Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on December 7, 2022)4.1Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S3/A filed onNovember 14, 2016)4.2Form of Warrant to Purchase Common Stock issued on February 2, 2018 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report onForm 10K filed on March 27, 2019)4.3Description of Securities Registered under Section 12 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report on Form 10K filedon March 19, 2020)4.4Form of Warrant (incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S1, Amendment No. 1, filed with the SECon May 5, 2020.)4.5Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)4.6Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.1My Size, Inc. 2017 Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement on Schedule DEF 14Afiled on March 2, 2017)10.2My Size, Inc. 2017 Consultant Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement onSchedule DEF 14A filed on March 2, 2017)10.3My Size, Inc. 2017 Stock Option Plan Israel Grantees SubPlan (incorporated by reference to Exhibit 10.3 to the Company’s Annual Report on Form10K filed on March 27, 2019)6610.4Purchase Agreement between My Size, Inc. and Shoshana Zigdon dated as of February 16, 2014 (incorporated by reference to Exhibit 10.2 to theCompany’s Annual Report on Form 10K filed on March 4, 2016)10.5 +Employment Agreement between My Size Israel 2014 Ltd. and Ronen Luzon dated November 18, 2018 (incorporated by reference to Exhibit 10.1 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.6 +Employment Agreement between My Size Israel 2014 Ltd. and Or Kles dated November 18, 2018 (incorporated by reference to Exhibit 10.2 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.7 +Employment Agreement between My Size Israel 2014 Ltd. and Billy Pardo dated November 18, 2018 (incorporated by reference to Exhibit 10.3 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.8Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on January 15,2020)10.9Form of Warrant (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.10Form of Placement Agent Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.11Securities Purchase Agreement (incorporated by reference to Exhibit 10.30 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.12Underwriting Agreement, dated January 5, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on January 7, 2021)10.13Underwriting Agreement, dated March 22, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on March 25, 2021)10.14Amendment to Purchase Agreement between My Size Israel 2014 Ltd., My Size, Inc. and Shoshana Zigdon (incorporated by reference to Exhibit 10.1to the Company’s Quarterly Report on Form 10Q on August 16, 2021)10.15Form of Registered Direct Offering Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.16Form of PIPE Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.17Form of Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.18Form of Placement Agent Warrant issued by the Company on October 28, 2021 (incorporated by reference to Exhibit 10.22 to the Company’s Form S1filed on November 12, 2021)10.19Form of Registration Rights Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.4 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.20Engagement Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference to Exhibit 10.5 to theCompany’s Current Report on Form 8K filed on October 28, 2021)10.21Settlement Agreement dated November 4, 2021, among My Size, Inc., David Lazar and certain of his affiliates (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on November 5, 2021)10.22Share Purchase Agreement dated as of February 7, 2022 between My Size Israel 2014 Ltd. and Amar Guy Shalom and Elad Bretfeld (incorporated byreference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SEC on February 8, 2022)10.23Employment Agreement between My Size Israel 2014 Ltd. and Ezequiel Javier Brandwain dated January 27, 2022 (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on February 1, 2022)10.24Form of Section 102 Capital Gain Restricted Stock Award Agreement under the Company’s 2017 Equity Incentive Plan (incorporated by reference toExhibit 10.1 to the Company’s Quarterly Report on Form 10Q, filed with the SEC on November 14, 2022)10.25Share Purchase Agreement, dated as of October 6, 2022, by and among My Size, Inc., Borja Cembrero Saralegui, Artiz Toree Garcia, Whitehold, S.L.,Twinbel, S.L., and EGI Acceleration, S.L. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SECon October 12, 2022)10.26Form of LockUp Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)10.27Form of Voting Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.3 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)6710.28My Size, Inc. Amendment to the My Size, Inc. 2017 Equity Plan (incorporated by reference to Appendix B to the Company’s definitive proxystatement filed with the SEC on November 4, 2022)10.29Form of Registered Direct Offering Securities Purchase Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.1 to theCompany’s Current Report on Form 8K filed with the SEC on January 12, 2023)10.30Form of PIPE Securities Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8Kfiled with the SEC on January 12, 2023)10.31Form of Registered Direct PreFunded Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.32Form of Series A and Series B Warrant (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8K filed with the SEC onJanuary 12, 2023)10.33Form of Private Placement PreFunded Warrant (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.34Form of Registration Rights Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form8K filed with the SEC on January 12, 2023)10.35Engagement Agreement, dated December 5, 2022 (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8K filed withthe SEC on January 12, 2023)10.36*Form of Placement Agent Warrant21.1*List of Subsidiaries23.1*Consent of Somekh Chaikin, a member firm of KPMG International, registered public accounting firm31.1*Certification of the Chief Executive Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200231.2*Certification of the Chief Financial Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200232.1*Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a14(b) of the Exchange Act and 18 U.S.C. Section 1350, asadopted pursuant to Section 906 of the SarbanesOxley Act of 2002101.INS*Inline XBRL Instance Document101.SCH*Inline XBRL Taxonomy Schema101.CAL*Inline XBRL Taxonomy Calculation Linkbase101.DEF*Inline XBRL Taxonomy Definition Linkbase101.LAB*Inline XBRL Taxonomy Label Linkbase101.PRE*Inline XBRL Taxonomy Presentation Linkbase104Cover Page Interactive Data File (formatted as Inline XBRL document and contained in Exhibit 101)*Filed herewith.+Indicates a management contract or any compensatory plan, contract or arrangement68SIGNATURESPursuant to the requirements of Section 13 and 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10K to be signed on its behalf by the undersigned, thereunto duly authorized on this 14th day of April, 2023.MY SIZE, INC./s/ Ronen LuzonRonen LuzonChief Executive Officer (Principle Executive Officer)/s/ Or KlesOr KlesChief Financial Officer(Principal Financial and Accounting Officer)Pursuant to the requirements of the Securities Act of 1934, this annual report on Form 10K has been signed below by the following persons on behalf ofthe registrant and in the capacities and on the dates indicated.SignatureTitleDate/s/ Ronen LuzonChief Executive Officer and DirectorApril 14, 2023Ronen Luzon(Principle Executive Officer)/s/ Or KlesChief Financial OfficerApril 14, 2023Or Kles(Principal Financial and Accounting Officer)/s/ Oren ElmaliahDirectorApril 14, 2023Oren Elmaliah/s/ Arik KaufmanDirectorApril 14, 2023Arik Kaufman/s/ Oron BranitzkyDirectorApril 14, 2023Oron Branitzky/s/ Guy ZimmermanDirectorApril 14, 2023Guy Zimmerman69EX10.36 2 ex1036.htmExhibit 10.36NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES ANDEXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THESECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO ANEFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTIONNOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGINACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.PLACEMENT AGENT COMMON STOCK PURCHASE WARRANTMY SIZE, INC.Warrant Shares: _______Issue Date: January 12, 2023Initial Exercise Date: January 12, 2023THIS PLACEMENT AGENT COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _____________ or itsassigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the dateset forth above (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on January 10, 2028 (the “Termination Date”) but not thereafter, tosubscribe for and purchase from My Size, Inc., a Delaware corporation (the “Company”), up to ______ shares (as subject to adjustment hereunder, the “WarrantShares”) of the Company’s Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined inSection 2(b). This Warrant is issued pursuant to that certain engagement letter, dated as of December 5, 2022, by and between the Company and H.C. Wainwright &Co., LLC.Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities PurchaseAgreement (the “Purchase Agreement”), dated January 10, 2023, among the Company and the purchasers signatory thereto.1Section 2. Exercise.a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or afterthe Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted by email (or emailattachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the numberof Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shalldeliver the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on aUnited States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No inkoriginalNotice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required.Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder haspurchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrantto the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercisesof this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering theoutstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder andthe Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver anyobjection to any Notice of Exercise within one (1) Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant,acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, thenumber of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.b) Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $3.8188, subject to adjustment hereunder (the“Exercise Price”).c) Cashless Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein isnot available for the issuance or resale of the Warrant Shares to or by the Holder, then this Warrant may also be exercised, in whole or in part, at such timeby means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing[(AB) (X)] by (A), where:(A) =as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice ofExercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed anddelivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) ofRegulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAPon the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on theprincipal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s execution of the applicable Notice ofExercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hoursthereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii)the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice ofExercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;(B) =the Exercise Price of this Warrant, as adjusted hereunder; and(X) =the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if suchexercise were by means of a cash exercise rather than a cashless exercise.2“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which theCommon Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York Citytime)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest precedingdate) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for theCommon Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the mostrecent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by anindependent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to theCompany, the fees and expenses of which shall be paid by the Company.“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the TradingMarket on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or thenearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and ifprices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reportingprices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock asdetermined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonablyacceptable to the Company, the fees and expenses of which shall be paid by the Company.If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of theSecurities Act, the Warrant Shares shall take on the characteristics of the Warrants being exercised, and the holding period of the Warrant Shares beingissued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section 2(c).3d) Mechanics of Exercise.i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to betransmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with TheDepository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant insuch system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of theWarrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or mannerofsale limitationspursuant to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, registered in theCompany’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitledpursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2)Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate ExercisePrice to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Companyof the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall bedeemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant hasbeen exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (otherthan in the case of a cashless exercise) is received by the Warrant Share Delivery Date. If the Company fails for any reason to deliver tothe Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder,in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP ofthe Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifthTrading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share Delivery Date until such WarrantShares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FASTprogram so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standardsettlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stockas in effect on the date of delivery of the Notice of Exercise.4ii.Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the requestof a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a newWarrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrantshall in all other respects be identical with this Warrant; provided, however, that the Holder shall be required to return any WarrantShares subject to any such rescinded exercise notice concurrently with the return to Holder of the aggregate Exercise Price paid to theCompany for such Warrant Shares and the restoration of Holder’s right to acquire such Warrant Shares pursuant to this Warrant(including, issuance of a replacement warrant certificate evidencing such restored right).iii. Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant toSection 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.iv. Compensation for BuyIn on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights availableto the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with theprovisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date theHolder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwisepurchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipatedreceiving upon such exercise (a “BuyIn”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) theHolder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) theamount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connectionwith the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at theoption of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was nothonored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock thatwould have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holderpurchases Common Stock having a total purchase price of $11,000 to cover a BuyIn with respect to an attempted exercise of shares ofCommon Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediatelypreceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written noticeindicating the amounts payable to the Holder in respect of the BuyIn and, upon request of the Company, evidence of the amount of suchloss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including,without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver sharesof Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.5v. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise ofthis Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Companyshall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by theExercise Price or round up to the next whole share.vi. Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue ortransfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paidby the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by theHolder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, thisWarrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder andthe Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.The Company shall pay all Transfer Agent fees required for sameday processing of any Notice of Exercise and all fees to the DepositoryTrust Company (or another established clearing corporation performing similar functions) required for sameday electronic delivery of theWarrant Shares.vii. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timelyexercise of this Warrant, pursuant to the terms hereof.6e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise anyportion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicableNotice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of theHolder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). Forpurposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Partiesshall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, butshall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrantbeneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion ofany other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exerciseanalogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in thepreceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act andthe rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that suchcalculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed inaccordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (inrelation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisableshall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether thisWarrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of thisWarrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm theaccuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number ofoutstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s mostrecent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recentwritten notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request ofa Holder, the Company shall within one (1) Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock thenoutstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise ofsecurities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number ofoutstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stockoutstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice tothe Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial OwnershipLimitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares ofCommon Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in theBeneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shallbe construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portionhereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplementsnecessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of thisWarrant.7Section 3. Certain Adjustments.a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes adistribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which,for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstandingshares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into asmaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case theExercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any)outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately aftersuch event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of thisWarrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for thedetermination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case ofa subdivision, combination or reclassification.b) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sellsany Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares ofCommon Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregatePurchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise ofthis Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before thedate on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the recordholders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that to the extent that theHolder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall notbe entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Rightto such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not resultin the Holder exceeding the Beneficial Ownership Limitation).c) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend (other than cash) orother distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including,without limitation, any distribution of stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement,scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holdershall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number ofshares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including withoutlimitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken,the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, thatto the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, thenthe Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a resultof such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as itsright thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).8d) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more relatedtransactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease,license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, director indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of CommonStock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more ofthe outstanding Common Stock or 50% or more of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in oneor more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchangepursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly orindirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, withoutlimitation, a reorganization, recapitalization, spinoff, merger or scheme of arrangement) with another Person or group of Persons whereby such otherPerson or group acquires more than 50% of the outstanding shares of Common Stock or 50% or more of the voting power of the common equity of theCompany (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for eachWarrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of theHolder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor oracquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as aresult of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior tosuch Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, thedetermination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of AlternateConsideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Priceamong the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. Ifholders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall begiven the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at theHolder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date ofthe public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cashequal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of suchFundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company’s control, including not approved by theCompany’s Board of Directors, the Holder shall only be entitled to receive from the Company or any Successor Entity the same type or form ofconsideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to theholders of Common Stock of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, stock or anycombination thereof, or whether the holders of Common Stock are given the choice to receive from among alternative forms of consideration in connectionwith the Fundamental Transaction; provided, further, that if holders of Common Stock of the Company are not offered or paid any consideration in suchFundamental Transaction, such holders of Common Stock will be deemed to have received common stock of the Successor Entity (which Entity may be theCompany following such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on theBlackScholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day of consummation of the applicableFundamental Transaction for pricing purposes and reflecting (A) a riskfree interest rate corresponding to the U.S. Treasury rate for a period equal to thetime between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expectedvolatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualizationfactor) as of the Trading Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlyingprice per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any noncashconsideration, if any, being offered in such Fundamental Transaction and (ii) the highest VWAP during the period beginning on the Trading Dayimmediately preceding the public announcement of the applicable contemplated Fundamental Transaction (or the consummation of the applicableFundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant to this Section 3(e) and (D) a remaining option timeequal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date and (E) azero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds (or such other consideration)within the later of (i) five Business Days of the Holder’s election and (ii) the date of consummation of the Fundamental Transaction. The Company shallcause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of theobligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant towritten agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to suchFundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entityevidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares ofcapital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of thisWarrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which appliesthe exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to suchFundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for thepurpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which isreasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall beadded to the term “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction, each andevery provision of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to each of the Company and theSuccessor Entity or Successor Entities, jointly and severally), and the Successor Entity or Successor Entities, jointly and severally with the Company, mayexercise every right and power of the Company prior thereto and the Successor Entity or Successor Entities shall assume all of the obligations of theCompany prior thereto under this Warrant and the other Transaction Documents with the same effect as if the Company and such Successor Entity orSuccessor Entities, jointly and severally, had been named as the Company herein.e) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. Forpurposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the numberof shares of Common Stock (excluding treasury shares, if any) issued and outstanding.9f) Notice to Holder.i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, theCompany shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resultingadjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form)on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C)the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any sharesof capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection withany reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all orsubstantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into othersecurities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of theaffairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as itshall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective datehereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to beentitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification,consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expectedthat holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or otherproperty deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure todeliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to bespecified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, nonpublic informationregarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to aCurrent Report on Form 8K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of suchnotice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.10Section 4. Transfer of Warrant.a) Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and to theprovisions of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights) aretransferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a writtenassignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay anytransfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a newWarrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument ofassignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly becancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unlessthe Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of thedate on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordanceherewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company,together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent orattorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute anddeliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issuedon transfers or exchanges shall be dated the Issue Date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Sharesissuable pursuant thereto.c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “WarrantRegister”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as theabsolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to thecontrary.d) Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrantshall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue skylaws or (ii) eligible for resale without volume or mannerofsale restrictions or current public information requirements pursuant to Rule 144, the Companymay require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, comply with the provisions ofSection 5.7 of the Purchase Agreement.11e) Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon anyexercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling suchWarrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exemptedunder the Securities Act.Section 5. Miscellaneous.a) No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends orother rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Withoutlimiting the rights of a Holder to receive Warrant Shares on a “cashless exercise,” and to receive the cash payments contemplated pursuant to Sections 2(d)(i) and 2(d)(iv), in no event will the Company be required to net cash settle an exercise of this Warrant.a.In July 2019, the Company entered into a threeyear agreement with a consultant (“Consultant14”) to provide services to the Company includingassisting the Company to promote, market and sell the Company’s technology to potential customers. Pursuant to such agreement and in partialconsideration for such consulting services, the Company agreed to issue to Consultant14 options to purchase up to 107 shares of the Company’scommon stock upon execution of the agreement. The options are exercisable at $375.00 per share and shall vest in 3 equal instalments every twelvemonths starting July 2019. Unexercised options shall expire 4 years from the effective date.In addition, the Company agreed to issue to Consultant14 options to purchase up to 890 shares of the Company’s common stock upon executionof the agreement. The options are exercisable at $27.00 per share and shall vest in 4 equal instalments every six months starting September 2020.Unexercised options shall expire 5 years from the effective date.During 2022 and 2021, an amount of $7 and $14 respectively, were recorded by the Company as stockbased equity awards with respect to Consultant14.F24MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The Company’s outstanding options granted to consultants as of December 31, 2022 are as follows:Issuance dateOptions forCommon stockWeightedAverageexercise priceper shareOptionsexercisableExpirationdateFebruary 201815USD528.7515February 2023August 2018December 2018531USD352.38264August 2023 December 2023July 2020107USD375107July 2023SeptemberOctober 20201,488USD27.201,288October 2024 September 2025Total2,1411,674The Company uses the Black Scholes model to measure the fair value of the stock options with the assistance of a third party valuation.No stock options were granted during 2022 to consultants.The fair value of the Company’s stock options granted to nonemployees was calculated using the following weighted average assumptions:20222021GrantsGrantsDividend yield0%Expected volatility125.15%Riskfree interest0.16%Contractual term of up to (years)1.52F25MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Stock Option Plan for employeesIn March 2017, the Company adopted a stock option plan (the “Plan”) pursuant to which the Company’s Board of Directors may grant stock options toofficers and key employees. The total number of options which may be granted to directors, officers, employees under this plan, is limited to 289,000options. Stock options can be granted with an exercise price equal to or less than the stock’s fair market value at the date of grant.The fair value of each option award is estimated on the date of grant using the Binomial optionpricing model that used the weighted averageassumptions in the following table. The risk free rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the timeof grant.2022Grants2021GrantsDividend yield0%0%Expected volatility96.52%98.47%Riskfree interest4.06%0.96%expected life522.27In the years ended December 31, 2022 and 2021, 10,000 and 3,900 options, respectively, were granted.On December 7, 2022, the Company’s stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from230,800 shares to 289,000 shares.On September 29, 2022, the Compensation Committee of the Company approved grants of restricted share awards under the Company’s 2017 EquityIncentive Plan to Ronen Luzon (CEO), Or Kles (CFO), Billy Pardo (COO), Ilia Turchinsky (CTO) and Ezequiel Javier Brandwain (CCO), pursuant towhich were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000 restricted shares and 12,000 restricted shares,respectively. Each restricted share awarded under section 102 Capital Gain Restricted Stock Award Agreement (the “Agreement”). The restrictedshares shall vest in three equal installments on January 1, 2023, January 1, 2024 and January 1, 2025 for Ronen Luzon, Or Kles, Billy Pardo and IliaTurchinsky and on January 27, 2023, January 27, 2024 and January 27, 2025 for Ezequiel Javier Brandwain, conditioned upon continuous employmentwith the Company, and subject to accelerated vesting upon a change in control of the Company.On the same day, the Company granted fiveyears options to purchase up to 10,000 ordinary shares to other employees of the Company at an exerciseprice of $0.21 per share. The options vesting period is over three years in three equal portions from the vesting commencement date.F26MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The total stock option compensation expense in the year ended December 31, 2022 amounted to $448as follows: Research and development expensesamounted to $151, sales and marketing expenses amounted to $119and general and administrative expenses amounted to $178.The total stock option compensation expense in the year ended December 31, 2021 amounted to $252 as follows: Research and development expensesamounted to $94, sales and marketing expenses amounted to $97 and general and administrative expenses amounted to $61.As of December 31, 2022, there was a total of $530 unrecognized compensation cost relating to nonvested sharebased compensation arrangements.That cost is expected to be recognized over a weightedaverage period of 2.0 years.Share option activity during 2022 is as follows:2022Number ofoptionsWeightedaverageexerciseprice US$Outstanding as of January 135,74226.5Granted10,0005.25ExercisedExpired(4,136)Outstanding as of year end41,60622.48Vested as of year end33,20825.17Share option activity during 2021 is as follows:2021Number ofoptionsWeightedaverageExerciseprice US$Outstanding as of January 139,094$26.0Granted3,90032.0Exercised(751)Expired(6,501)Outstanding as of year end35,74226.5Vested as of year end27,06326.5F27MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 15 CONTINGENCIES AND COMMITMENTSa.On August 7, 2018, the Company commenced an action against North Empire LLC (“North Empire”) in the Supreme Court of the State of New York,County of New York for breach of a Securities Purchase Agreement (the “Agreement”) in which it is seeking damages in an amount to bedetermined at trial, but in no event less than $616. On August 2, 2018, North Empire filed a Summons with Notice against the Company, also in thesame Court, in which they allege damages in an amount of $11.4 million arising from an alleged breach of the Agreement. On September 6, 2018North Empire filed a Notice of Discontinuance of the action it had filed on August 2, 2018. On September 27, 2018, North Empire filed an answerand asserted counterclaims in the action commenced by the Company against them, alleging that the Company failed to deliver stock certificatesto North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against theCompany’s CEO and now former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018,the Company filed a reply to North Empire’s counterclaims. On November 15, 2018, the Company’s CEO and now former Chairman of the Boardfiled a motion to dismiss North Empire’s thirdparty complaint. On January 6, 2020, the Court granted the motion and dismissed the thirdpartycomplaint. Discovery has been completed and both parties have filed motions for summary judgment in connection with the claims andcounterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summary judgment, arguing there werefactual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision. The appealmust be fully perfected and filed by July 26, 2022. On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying theCompany’s motion for summary judgment. North Empire will file its opposition papers on or before March 31, 2022, and the Company will file replypapers on April 29, 2022. On or about September 12, 2022, the Court issued its Decision and Order denying the Company’s motion to reargue.North Empire filed its opposing brief on December 7, 2022. Both sides were given an opportunity to file a reply brief. The Company filed our replybrief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. The Appellate Court has scheduled oral argument for the appealfor February 7, 2023. Oral argument was held before the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Courtfiled its Decision and Order, which affirmed the lower court’s decisions regarding both My Size and North Empire’s motions for summary judgmentand sent the case back to the Supreme Court.On or about March 13, 2023, the Supreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date forthe mediation has not yet been set. The Company intends to vigorously defend any claims made by North Empire.The Company believes it is more likely than not that the counterclaims will be denied.b.In May 2021, the Company received notice from Custodian Ventures, LLC (“Custodian”) of its intention to nominate four candidates to stand forelection to our Board of Directors at the Company’s 2021 annual meeting of stockholders. Custodian subsequently made a book and recordsrequest and has made public statements calling for changes to our management.On September 22, 2021, Custodian commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v.MySize, Inc. (the “Delaware Action”). In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting.On October 19, 2021, the Company commenced an action in the United States District Court for the Southern District of New York againstCustodian, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, and certain rulespromulgated thereunder (the “SDNY Action”). The complaint sought, among other things, declaratory and injunctive relief related to defendants’efforts to nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed“group” for purposes of Section 13(d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. Inaddition, the complaint alleged that the defendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules inconnection with their efforts to elect a slate of directors to the Company’s Board of Directors. On October 20, 2021, the Court signed an ordergranting a hearing on an anticipated motion for a preliminary injunction and expedited scheduling and discovery in aid thereof, and scheduled thathearing for December 2, 2021.On November 4, 2021, the Company entered into the Settlement Agreement with the Lazar Parties. Pursuant to the Settlement Agreement, theCompany and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the SettlementAgreement, the Company agreed to reimburse Custodian for out of pocket expenses and in consideration for the dismissal and release of claimsagainst the Company an aggregate amount equal to $275, to be paid within three business days of the effective date of the Settlement Agreement.With respect to the Company’s 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) its May 12,2021 notice of stockholder nominations of four director candidates with respect to the Company’s 2021 annual meeting of stockholders, (ii) thenotice dated October 28, 2021 submitted by Custodian to the Company notifying the Company of Custodian’s continued intent to bring itsnomination of four director candidates before the Company’s stockholders at the 2021 annual meeting, and (iii) any and all related materials andnotices submitted to the Company in connection therewith or related thereto and to not take any further action in connection with the solicitationof any proxies in connection with the Company. Custodian also agreed to cease any and all solicitation and other activities in connection with the2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effectivedate of the Agreement (the “Standstill Period”). The Settlement Agreement also provides that during the Standstill Period, the Lazar Parties willvote all shares of common stock of the Company it beneficially owns in in accordance with any proposal or recommendation made by theCompany or the Board of Directors of the Company that is submitted to the stockholders of the Company, unless to do so would violateapplicable law and except with respect to certain extraordinary transactions. The Settlement Agreement also contains nondisparagement andconfidentiality provisions, subject to certain exceptions.On December 9, 2021, the Company subsequently entered into a Settlement Agreement (the “Ault Settlement Agreement”), with Milton C. Ault III,Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed towithdraw the SDNY Action against the Ault Parties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that actionagainst the Company. In addition, pursuant to the Settlement Agreement, the Company paid $70 to the Ault Parties in consideration for thereleases and other good and valuable consideration as set forth in the Ault Settlement Agreement.c.On July 5, 2021, the Company was served with a legal complaint filed by Fidelity Venture Capital Ltd. and Dror Atzmon in the Magistrate’s Court inTel Aviv for a monetary award in an amount of NIS 1,436,679 (approximately $450) and a declaratory relief. The plaintiffs allege that the Companybreached its contractual obligations to pay them for services allegedly rendered to the Company by the plaintiffs under a certain consultingagreement dated July 2, 2014, in an amount of NIS 819,000 (approximately $256). Additionally, the plaintiffs allege that the Company shouldcompensate them for losses allegedly incurred by them following their investment in the Company’s shares issued under a certain private offering.In the alternative, the plaintiffs move that the court will declare the investment agreement void with full restitution of plaintiffs’ original investmentin an amount of NIS 1,329,650(approximately $415). The Company filed its statement of defense on October 25, 2021. The first preliminary courthearing of the case is scheduled for January 23, 2022.The first court preliminary hearing was held on March 1, 2022.Following the first preliminary hearing and the Court’s comments and recommendation, the Plaintiffs filed a motion to strike out the claim withoutprejudice.On March 8, 2022 the Court ordered dismissal without prejudice of the claim.F28MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATIONAcquisition of OrgadOn February 7, 2022, the Company acquired 100% of the shares and voting interests in Orgad an omnichannel ecommerce platform. The acquisitionwas designed to create an additional revenue stream for the Company by becoming a direct ecommerce seller while leveraging the synergies betweenMySizeID and Orgad’s ecommerce platform.Unaudited proforma informationThe results of operations of Orgad have been included in the consolidated financial statements since the acquisition date of February 7, 2022. Orgadrevenues included in the Company’s consolidated statement of operations from February 7, 2022 through December 31, 2022 were $4,132. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,662 and $2,850 respectively, and the net loss after tax would have been $8,519 and $10,149 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash (*)300Issuance of shares of common stock (69,752 shares) (**)457Total consideration transferred757(*)The cash payment is subject to working capital adjustments.(**)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Orgad, on the twoyear and the threeyear anniversary of the closing, $350in each ofthese years provided that in the case of the second and third instalments certain revenue targets are met and subject further to certain downward postclosing adjustment. Furthermore, 69,752shares of common stock will be issued in eight equal quarterly instalments until the lapse of two years fromclosing. Additional earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023 will also be paid. All of these payments aresubject to the former owners being actively engaged with Orgad at the date such payment is due, and therefore were not taken as part of theconsideration for the business combination.During the year ended December 31, 2022 an amount of $456and $319was recorded in respect of the cash instalments and in respect of stocksissuance, respectively in Cost Of Goods, Sales and Marketing and General and Administrative expenses as shown in the following table:2022Stockbased compensation expense – Cost of goods194Stockbased compensation expense Sales and marketing271Stockbased compensation expense General and administrative310775(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the preliminary estimates of their fair values, which were determined using generally accepted valuation techniques based onestimates and assumptions made by management at the time of the acquisition. Such estimates are subject to change during the measurement periodwhich is not expected to exceed one year. The purchase price allocation was not finalized duo to examination of the net working capital of Orgad at theacquisition date. Any adjustments to the preliminary purchase price allocation identified during the measurement period will be recognized in theperiod in which the adjustments are determined.The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and Cash EquivalentTrade receivables364PP&E55Inventory864Longterm financial investment31Selling platform378Goodwill152Shortterm accruals and deferrals(181)Trade payables(668)Long term provision(13)Longterm debt(138)Deferred Taxes(87)Total net assets acquired757F29MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)(c)Acquisitionrelated costsThe Company incurred transaction costs of approximately $40and none during twelvemonth period ended December 31, 2022 which were included ingeneral and administrative expenses in the consolidated statements of income (loss).Acquisition of Naiz Bespoke Technologies, S.L. (“Naiz”)On October 11, 2022, the Company acquired 100% of the shares and voting interests in Naiz a provider of SaaS technology solutions that solve sizeand fit issues for fashion ecommerce companies. The acquisition was designed to allow Naiz’s customers benefit from MySize’s deep understanding ofthe fashion ecommerce retail landscape, while creating an additional revenue stream for the Company.Unaudited proforma informationThe results of operations of Naiz have been included in the consolidated financial statements since the acquisition date of October 11, 2022. Naizrevenues included in the Company’s consolidated statement of operations from October 11, 2022 through December 31, 2022 were $103. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,738 and $379 respectively and the net loss after tax would have been $8,695 and $10,717 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash503Issuance of shares of common stock (240,000 shares) (*)1,008Total consideration transferred1,511(*)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Naiz, additional cash consideration (up to $1,550) in four instalments subject to thefollowing conditions:(i)Continuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result ofa Good Reason; and(ii)Naiz’s Revenues reaching or exceeding the respective Target Revenues defined in the agreement. The revenues will be calculated in four periods:(1) January 1, 2022 – December 31, 2022; (2) January 1, 2023 – June 30, 2023; (3) July 1, 2023 – December 31, 2023; (4) January 1, 2024 – December31, 2024.Former owners of Naiz are entitled to additional cash consideration following December 31, 2025 (up to $1,650) in an event when the actual value of theequity consideration is less than $1,650, subject to completion of a Target Revenue for the period of January 1, 2025 – December 31, 2025 andcontinuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result of aGood Reason;F30MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)During the year ended December 31, 2022 an amount of $283 was recorded in respect of the additional cash consideration.(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the estimates of their fair values, which were determined using generally accepted valuation techniques based on estimates andassumptions made by management at the time of the acquisition.The following table summarizes the fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and cash equivalent36Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Total net assets acquired1,511(c)Acquisitionrelated costsDuring 2022, the Company incurred transaction costs of approximately $75 which were included in general and administrative expenses in theconsolidated statements of income (loss).F31MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)Note 17 – Operating SegmentsDuring the year ended December 31, 2021, the Company had one reportable segment. As a result of the business combinations in the reporting period(see note 13), the Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificialintelligence driven measurement solutions and (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions and. The fashionand equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. Orgad has onecustomer that is responsible for 37.9% of the Company consolidated revenues. The SaaS based innovative artificial intelligence driven measurementsolutions, or SaaS Solutions operating segment consists of My Size Inc and My Size Israel and My Size LLC.Information related to the operations of the Company’s reportable operating segments is set forth below:Fashion andequipment ecommerce platformSaaSSolutionsNaizTotalAs of the year ended December 31, 2022Revenues from external customers4,1322241034,459Operating (loss) income(591)(7,181)(338)(8,110)Financial income (expense), net(236)Net loss before tax(8,346)Fashion andequipment ecommerce platformSaasSolutionNaizAs of December 31, 2022:Assets2,0225,9661,691Amortization of intangible assets(114)(34)(46)The Company elected to present geographic information in respect with revenues generated from external customers based on the location of the selling entity:All the revenues of the fashion and equipment ecommerce platform segment are generated by Orgad, located in Israel.All the revenues of the Naiz segment are generated by Naiz, located in Spain.The revenues of the Saas Solutions segment are generated by My Size Ltd. located in Israel (approximately 75% of the segment revenues) and by My Size Inc.located in the U.S. (approximately 25% of the segment revenues).NOTE 18 SALES AND MARKETINGYear endedDecember 31,20222021Salaries836574Consultants and subcontractors5831,086Marketing481283Selling fees489Share based payments post Orgad acquisition (*)271Share based payments for consultants and employees127180Travel21142Other1451713,1432,336(*) See note 16.NOTE 19 GENERAL AND ADMINISTRATIVE EXPENSESYear endedDecember 31,20222021Salaries1,007461Professional services7051,832Share based payments for consultants, directors and employees18098Rent, office expenses and communication442372Insurance564627cash liability and equity liability expenses related to Orgad acquisition310cash liability expenses related to Naiz acquisition217Settlement fees (*)345Directors8259Other3933303,9004,124(*)See note 15(b)F32MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 20 FINANCIAL INCOME (EXPENSE), NETA.Financial incomeYear endedDecember 31,20222021Revaluation investment in marketable securities49Other26172666B.Financial expenseYear endedDecember 31,20222021Exchange rate differences33Revaluation of loan granted100Revaluation investment in marketable securities62Other6792629NOTE 21 EVENTS SUBSEQUENT TO THE BALANCE SHEET DATEa.On January 2, 2023, Orgad experienced a fire at its warehouse in Israel. The Company is not aware of any casualties or injuries associated with thefire. The Company shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450.The Company believes that this incident did not affect the future sales results of Orgad for the year 2023. The inventory was not insured and it istoo early to determine the potential impact of this incident on the other parties that were involved in the incident (lessor and others that leasedproperties near the warehouse).b.On January 10, 2023, the Company entered into a securities purchase agreement pursuant to which the Company sold an aggregate of 162,000ofthe Company’s shares of common stock and prefunded warrants to purchase up to 278,899shares of common stock and, in a concurrent privateplacement, unregistered warrants to purchase up to883,798 shares of common stock, consisting of Series A warrants to purchase up to 441,899shares of common stock and Series B warrants to purchase up to 441,899shares of common stock, at an offering price of $3.055per share ofcommon stock and associated Series A and Series B warrants and an offering price of $3.054per prefunded warrant and associated Series A andSeries B warrants.In addition, the Company entered into a securities purchase agreement pursuant to which the Company agreed to sell and issue in a privateplacement an aggregate of up to 540,098 unregistered prefunded warrants and unregistered warrants to purchase up to an aggregate of 1,080,196shares of common stock, consisting of Series A warrants to purchase up to 540,098 shares of common stock and Series B warrants to purchase upto 540,098 shares of common stock at an offering price of $3.054 per prefunded warrant and associated Series A and Series B warrants.As of March 31,2023 all the pre funded warrants were exercised by the investor.F33ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSUREThere were no disagreements with accountants on accounting and financial disclosure of a type described in Item 304 (a)(1)(iv) or any reportable event asdescribed in Item 304 (a)(1)(v) of Regulation SK.ITEM 9A. CONTROLS AND PROCEDURESDisclosure ControlsWe carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief FinancialOfficer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) as of December 31, 2022. Basedupon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this Annual Report on Form10K, our disclosure controls and procedures were effective to ensure that information required to be disclosed in reports filed under the Exchange Act, as amended,is recorded, processed, summarized and reported within the required time periods specified in the SEC’s rules and forms and is accumulated and communicated toour management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.Management’s Report on Internal Control Over Financial ReportingOur internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records, that, in reasonable detail,accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only inaccordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition, use or disposition of our assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance withthe policies or procedures may deteriorate.Our management, including our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financialreporting at December 31, 2022. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the TreadwayCommission (COSO) in Internal Control—Integrated Framework (2013). Based on that assessment under those criteria, management has determined that, as ofDecember 31, 2022, our internal control over financial reporting was effective.This Annual Report on Form 10K does not include an attestation report of our registered public accounting firm regarding internal control over financialreporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to the exemption provided to issuersthat are not “large accelerated filers” nor “accelerated filers” under the DoddFrank Wall Street Reform and Consumer Protection Act.Changes in Internal Control Over Financial ReportingDuring the year ended December 31, 2022, we made two acquisitions, as discussed in Note 1a and Note 16 of the audited consolidated financial statementsfor the year ended December 31, 2022 included in this Annual Report on Form 10K. As a result, we made additions and/or modifications to policies, procedures,systems and controls that have materially affected our internal control over financial reporting from the acquisitions, including new controls for consolidationprocess that relates to accounting policies and procedures, operational processes and documentation practices. Management excluded the acquired businessesfrom management’s report on internal control over financial reporting. ITEM 9B. OTHER INFORMATIONNone.ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNot applicable.51PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe following table sets forth the name, age and positions of our executive officers and directors.NAMEAgePOSITIONRonen Luzon52Chief Executive Officer and Class III DirectorOr Kles40Chief Financial OfficerBilly Pardo47Chief Operating Officer and Chief Product OfficerIlia Turchinsky35Chief Technology OfficerEzequiel Javier Brandwain53Chief Commercial OfficerOron Branitzky (1)(2)(3)*63Class II DirectorOren Elmaliah (1)(2)(3)*38Class I DirectorArik Kaufman (1)(2)(3)*41Class I DirectorGuy Zimmerman*53Class II Director(1)Member of our audit committee(2)Member of our nominating and corporate governance committee(3)Member of our compensation committee* Independent as that term is defined by the rules of the Nasdaq Stock Market.The business background and certain other information about our directors and executive officers is set forth below:Ronen Luzon has served as our Chief Executive Officer and a member of our board of directors since September 2013. Since 2006, Mr. Luzon hasadditionally served as Chief Executive Officer and founder of Malers Ltd., a company in the global security solutions market which provides technological solutionsfor integrated communication infrastructures, security and control systems. Prior to Malers, he held several senior marketing, sales management and professionalservices positions in a variety of international high tech companies including VP marketing of GA Tech and Professional Services Manager of Eldat Communication.Mr. Luzon graduated from Middlesex University in London with a B.S. in IT and Business Information Systems. We believe that Mr. Luzon is qualified to serve as amember of our board of directors because of his more than 20 years of experience in the technology sector.Or Kles has served as our Chief Financial Officer since May 2016. He is a certified public accountant with a broad, diverse financial background. From May2013 until April 2016 he served as Assistant Controller of Shikun and BinuiSolel Boneh Infrastructure Ltd. and from December 2010 until May 2013 he served as anAssociate at KPMG. Mr. Kles holds an MBA and a B.A. in Business Management and Accounting (specializing in financing) from The College of ManagementAcademic Studies. Mr. Kles is a certified public accountant in Israel.Billy Pardo has served as our Chief Product Officer since May 2014 and Chief Operating Officer since April 2019. From April 2010 until August 2013, Ms.Pardo served as Senior Director of Product Management of Fourier Education. Among her areas of expertise are launching products from concept to successfuldelivery in various methodologies, including Fourier Education’s awardwinning einstein™ Science Tablet. Prior to that Ms. Pardo served in various productmanagement positions including, Project Manager of Time to Know, Product Marketing Manager of RiT Technologies, Product Manager of Pricer AB and R&DTeam Leader at Pricer AB. Ms. Pardo previously served as Software Engineer at Eldat Communication Ltd., and QA Engineer at NICE Systems. Ms. Pardo receivedan MBA from The Interdisciplinary Center and a B.A. in Computer Science from The Academic College of TelAvivYaffo.Ilia Turchinsky has served as our Chief Technology Officer since April 2019 and from July 2018 until April 2019 as our Director of Technology. Prior tojoining us, from 2013 until 2018, Mr. Turchinsky served in various roles, most recently Chief Technology Officer, at MonkeyTech Ltd., a company that providesdesign, development and characterization of mobile applications. Prior to that, Mr. Turchinsky served in various roles including development course instructor atIQLine, was a founder of Arnavsoft and was a software developer for MintLab and a political party. Mr. Turchinsky holds a B.Sc. from the Ben Gurion University inComputer Science and an M.Sc. from the Open University of Israel in Computer Science.52Ezequiel Javier Brandwain has served as our Chief Commercial Officer since February 2022. Mr. Brandwain brings more than two decades of globalexperience in retail and the fashion industry, mainly in business development, operations, and international markets. Before joining the Company, Mr. Brandwainheld positions of increasing responsibility at several companies, including between June 2017 and November 2020, at 7 For All Mankind International, where heserved as Director, Latin America and Caribbean, managing business development and operations across Latin America and the Caribbean. Before that, betweenMay 2016 and June 2017, Mr. Brandwain served as Chief Business Development Officer at Replay – Fashion Box SPA, where he oversaw business development andoperations, expansion and control in the Americas, the Caribbean, and NorthEast Asia. Prior this role, between September 2015 and May 2016, he served as theReplay’s Managing Director in Latin America and the Caribbean, leading the company’s international expansion in these regions. Prior to that, between April 2015and September 2015, Mr. Brandwain served as Managing Director, Latin America and Caribbean at Authentic Brands Group LLC, where he led that company’soperations, business developments and international expansion within these regions, and served as the direct liaison with the company’s headquarters in New York.Prior to that, between April 2015 and September 2015, Mr. Brandwain served as Chief Operating Officer, Latin America and Caribbean at Flemingo International Ltd.,overseeing operations, as well as projected operations in the travel retail field across these regions. Prior to that, between December 2010 and February 2014, Mr.Brandwain served as Regional Director, Southern Hemisphere at Calvin Klein, where he was responsible for defining and implementing the operational andcommercial strategy for Southern Hemisphere, as well as overseeing the retail, travel retail, concession, and wholesale businesses of the company. During his tenureat Calvin Klein, Mr. Brandwain also served as Travel Retail Director, Latin America, where he built the travel retail business and developed operations. Prior to that,between July 2010 and November 2010, Mr. Brandwain served as Business Director, Latin America and Caribbean at Givenchy Latin America, and between January2010 and June 2010 he served as Commercial Director, Latin America and Caribbean at Nautica Latin America. During December 2004 and December 2009, Mr.Brandwain served as Vice President, International Business Development at Report Collection/Modextil, Inc., where he was in charge of business and operationalexpansion, global growth, and brand extensions. Prior to that, between 2003 and October 2004, Mr. Brandwain served as General Manager at Andrew KoenigInternational, Inc. Between September 2019 and November 2020, Mr. Brandwain served as a member of the Board of Directors of 7 For All Mankind BrazilImportacao, Comercio E Distribuicao S.A. Mr. Brandwain earned a Bachelor degree in architecture from the University of the Republic (Uruguay).Oron Branitzky has served as a member of our board of directors since March 2017. Mr. Barnitzky has vast experience in retail technology. SinceNovember 2017, Mr. Branitzky has served as Global Retail Business Development at Superup, and from January 2007 until December 2014 he served as VicePresident of Sales and Marketing at Pricer AB. Prior to that, Mr. Branitzky has served as VP Marketing and Sales at Eldat Communication and Sarin TechnologiesLtd. Since January 2015, Mr. Branitzky has served as chairman of the board of directors of WiseShelf Ltd. and from May 2015 until March 2016, Mr. Branitzky servedas an advisory board member of ciValue. Mr. Branitzky received a B.S. from the Hebrew University of Jerusalem and an MBA in International Marketing from TelAviv University. We believe that Mr. Branitzky is qualified to serve as a member of our board of directors because of his more than 20 years of experience inmanaging the sales of hitech solutions to retailers across the globe.Oren Elmaliah, has served as a member of our board of directors since May 2017. In September 2015, Oren Elmaliah founded Accounting Team IL and hasacted as Account Manager since then. Accounting Team IL is a financial consultancy and service provider to public companies traded in Israel and abroad. SinceFebruary 2017, Mr. Elmaliah has served as controller of Enlivex Therapeutics Ltd., and since January 2017 he has served as Chief Financial Officer of Presstek Israel.In addition, since September 2015, Mr. Elmaliah has served as an Israel Authorities Reporting Officer of LG Electronics Israel and since September 2015 he hasserved as Local Financial Report Consultant of Chiasma. From July 2011 until August 2015, Mr. Elmaliah served as CPA, Financial Director of CFO Director Ltd andfrom June 2010 until July 2011 he served as Risk Management Consultant of RSM International Limited. Mr. Elmaliah holds a B.A. in Accounting/Economics and aMsc. in Finance/Accounting from Tel Aviv University, Israel. He is a licensed Certified Public Accountant in Israel. We believe that Mr. Elmaliah is qualified to serveas a member of our board of directors because of his vast finance experience and public company management and administration in the fields of finance,accounting, and financial regulation.53Arik Kaufman has served as a member of our board of directors since June 2017. Mr. Kaufman is an attorney specializing in the fields of commercial law,corporate law and capital markets and since 2016 runs his own law office in Israel. He has vast experience in the fields of financial reporting and financial regulation.Mr. Kaufman serves as the Chief Executive Officer of Steakholder Foods since January 2022. From September 2017 until January 2022, Mr. Kaufman served as VPBusiness Development of Mor Research Applications. Mr. Kaufman holds an LLB in Law from the Interdisciplinary Center, Herzliya, and is admitted to the IsraeliBar. We believe that Mr. Kaufman is qualified to serve as a member of our board of directors based upon his experience of assisting with the completion of numerousventure capital financings, mergers, acquisitions, and strategic relationships. In addition, he has served as a member of the board of various publicly tradedcompanies, including companies that operate in the same industry as us.Guy Zimmerman has served as a member of our board of directors since August 2021. Previously, Mr. Zimmerman served as Founder and CEO ofManuFuture, an online b2b engineering market place, since February 2021. Prior to that from 2017 to 2021, Mr. Zimmerman acted as a consultant to severaltechnology startups and was a founding partner of a business travel online platform. From 2013 to 2017, Mr. Zimmerman served as EVP of Marketing and BusinessDevelopment of Kornit Digital and was part of the IPO leadership. Prior to that, Mr. Zimmerman served as VP of Global Sales and Business Development at TefronLtd., a provider of seamless garment technology, where he led the $100m sales and sales support organization serving global retail and fashion brands. Prior to thathe served as Vice President of Strategy and Business Development at Tnuva Group, Israel’s largest food manufacturer and spent eight years at McKinsey &Company. Mr. Zimmerman previously led a software startup in the field of operational healthcare management systems. Mr. Zimmerman holds a B.Sc. in IndustrialEngineering from Tel Aviv University in Israel. We believe that Mr. Zimmerman is qualified to serve as a member of our board of directors because of his experiencein business development in the technology and retail sectors.Board Diversity MatrixThe table below provides certain information regarding the diversity of our board of directors as of the date of this annual report.Board Diversity Matrix (As of March 31, 2023)Total Number of Directors5FemaleMaleNonBinaryDid Not DiscloseGenderPart I: Gender IdentityDirectors#5##Part II: Demographic BackgroundAfrican American or Black####Alaskan Native or Native American####Asian####Hispanic or Latinx####Native Hawaiian or Pacific Islander####White#1##Two or More Races or Ethnicities#2##LGBTQ+0Did Not Disclose Demographic Background2Family RelationshipsRonen Luzon, the Chief Executive Officer and a member of our board of directors, and Billy Pardo, the Chief Product Officer and Chief Operating Officer, arehusband and wife. There are no other family relationships among any of our current or former directors or executive officers.Involvement in Certain Legal ProceedingsWe are not aware of any of our directors or officers being involved in any legal proceedings in the past ten years relating to any matters in bankruptcy,insolvency, criminal proceedings (other than traffic and other minor offenses), or being subject to any of the items set forth under Item 401(f) of Regulation SK.Arrangements between Officers and DirectorsTo our knowledge, there is no arrangement or understanding between any of our officers and any other person, including directors, pursuant to which theofficer was selected to serve as an officer.Board of DirectorsThere are no agreements with respect to the election of directors.On January 6, 2022, we filed with the Secretary of State of Delaware a Certificate of Amendment to our Amended and Restated Certificate of Incorporationproviding for a classified Board. Following filing of the Certificate of Amendment, members of our board are now classified into three classes with staggered threeyear terms (with the exception of the expiration of the initial Class I and Class II directors), as follows:●Class I, comprised of two directors, initially Arik Kaufman and Oren Elmaliah (with their initial terms expiring at our 2022 annual meeting of stockholders andmembers of such class serving successive threeyear terms);●Class II, comprised of two directors, initially Oron Branitzky and Guy Zimmerman (with their initial terms expiring at our 2023 annual meeting of stockholdersand members of such class serving successive threeyear terms); and●Class III, comprised of one director, initially Ronen Luzon (with his initial term expiring at our 2024 annual meeting of stockholders and members of suchclass serving successive threeyear terms).54To preserve the classified Board structure, a director elected by the Board of Directors to fill a vacancy holds office until the next election of the class forwhich such director has been chosen, and until that director’s successor has been elected and qualified or until his or her earlier death, resignation, retirement orremoval.Our board of directors has reviewed the materiality of any relationship that each of our directors has with us, either directly or indirectly. Based upon thisreview, we believe that Arik Kaufman, Oren Elmaliach, Oron Branitzky and Guy Zimmerman qualify as independent directors in accordance with the standards set bythe Nasdaq and Rule 10A3 promulgated under the Exchange Act.Committees of the BoardAudit CommitteeOur audit committee is comprised of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Elmaliah serves as chairman of the audit committee. The auditcommittee is responsible for retaining and overseeing our independent registered public accounting firm, approving the services performed by our independentregistered public accounting firm and reviewing our annual financial statements, accounting policies and our system of internal controls. The audit committee actsunder a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the audit committee’s composition and meetings.The audit committee charter is available on our website www.mysizeid.com.The Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by applicable SEC rules. Inaddition, the Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by the rules of the Nasdaq StockMarket.The Board of Directors has determined that Oren Elmaliah is an “audit committee financial expert” serving on its audit committee, and is independent, as theSEC has defined that term in Item 407 of Regulation SK.Compensation CommitteeOur compensation committee consists of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Branitzky serves as chairman of the compensationcommittee.The compensation committee’s roles and responsibilities include making recommendations to the Board of Directors regarding the compensation for ourexecutives, the role and performance of our executive officers, and appropriate compensation levels for our CEO, which are determined without the CEO present, andother executives. Our compensation committee also administers our 2017 Equity Incentive Plan and our 2017 Consultant Equity Incentive Plan. The compensationcommittee acts under a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the compensation committee’scomposition and meetings. The compensation committee charter is available on our website www.mysizeid.com.Our Board of Directors has determined that all of the members of the compensation committee are “independent” as that term is defined by the rules of theNasdaq Stock Market.Nominating and Corporate Governance CommitteeThe members of the nominating and corporate governance committee are Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Kaufman serves aschairman of the corporate governance and nominations committee. The nominating and corporate governance committee acts under a written charter, which morespecifically sets forth its responsibilities and duties, as well as requirements for the nominating and corporate governance committee’s composition and meetings.The nominating and corporate governance committee charter is available on our website www.mysizeid.com.The nominating and corporate governance committee develops, recommends and oversees implementation of corporate governance principles for us andconsiders recommendations for director nominees. The nominating and corporate governance committee also considers stockholder recommendations for directornominees that are properly received in accordance with applicable rules and regulations of the SEC. Our stockholders that wish to nominate a director for election tothe Board of Directors should follow the procedures set forth in our bylaws.55The nominating and corporate governance committee will consider persons identified by its members, management, stockholders, investment bankers andothers. The guidelines for selecting nominees, which are specified in the nominating committee charter, generally provide that persons to be nominated:●should be accomplished in his or her field and have a reputation, both personal and professional, that is consistent with our image and reputation;●should have relevant experience and expertise and would be able to provide insights and practical wisdom based upon that experience and expertise; and●should be of high moral and ethical character and would be willing to apply sound, objective and independent business judgment, and to assume broadfiduciary responsibility.The nominating and corporate governance committee will consider a number of qualifications relating to management and leadership experience,background and integrity and professionalism in evaluating a person’s candidacy for membership on the Board of Directors. The nominating and corporategovernance committee may require certain skills or attributes, such as financial or accounting experience, to meet specific Board needs that arise from time to timeand will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of Board of Directors members. The nominating andcorporate governance committee will not distinguish among nominees recommended by stockholders and other persons.Our Board of Directors has determined that all of the members of the nominating and corporate governance committee are “independent” as that term isdefined by the rules of the Nasdaq Stock Market.Code of Conduct and EthicsWe have a Code of Business Conduct and Ethics that applies to all our employees. The text of the Code of Business Conduct and Ethics is publiclyavailable on our website at www.mysizeid.com. Information contained on, or that can be accessed through, our website does not constitute a part of this report andis not incorporated by reference herein. Disclosure regarding any amendments to, or waivers from, provisions of the code of conduct and ethics that apply to ourdirectors, principal executive and financial officers will be posted on the “InvestorsCorporate Governance” section of our website at www.mysizeid.com or will beincluded in a Current Report on Form 8K, which we will file within four business days following the date of the amendment or waiver.Change in Procedures for Recommending DirectorsThere have been no material changes to the procedures by which our stockholders may recommend nominees to our Board of Directors from thoseprocedures set forth in our Proxy Statement for our 2021 Annual Meeting of Stockholders, filed with the SEC on December 7, 2022.56ITEM 11. EXECUTIVE COMPENSATIONSummary Compensation TableThe following sets forth the compensation paid by us to our named executive officers, during the years ended December 31, 2022 and December 31, 2021.Name and Principal PositionYearSalary($) (1)Bonus($)StockAwards($)OptionAwards($) (2)All OtherCompensation($)Total($)Ronen Luzon2022173,000223,0008,000126,000530,000Chief Executive Officer2021194,0005,00023,00097,000319,000Or Kles2022123,00053,0007,00071,000254,000Chief Financial Officer2021123,0008,00030,00061,000222,000Billy Pardo2022134,00053,0007,000100,00294,000Chief Operating Officer2021162,0007,00018,00074,000261,000(1) Salary for the years 2022 and 2021 are based on average US$/NIS representative exchange rates of NIS 3.358 and NIS 3.11 respectively.(2) Amounts in this column represent the grant date fair value of options granted to the named executive officers during 2022 and 2021, computed in accordance withFASB ASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the named executive officers. The assumptionsmade in valuing the options reported in this column are discussed in Note 11 to our audited financial statements for the year ended December 31, 2021 and Note 4 toour condensed consolidated interim financial statements for the quarterly period ended September 30, 2022.All Other Compensation TableThe “All Other Compensation” amounts set forth in the Summary Compensation Table above consist of the following:NameYearAutomobileRelatedExpenses($)Manager’sInsurance*($)EducationFund*($)Othersocialbenefits**($)Total($)Ronen Luzon202232,00031,00015,00048,000126,000202133,00033,00015,00016,00097,000Or Kles202215,00021,00010,00025,00071,000202114,00019,0009,00019,00061,000Billy Pardo202216,00025,00013,00046,000100,000202117,00024,00012,00021,00074,000* Manager’s insurance and education funds are customary benefits provided to employees based in Israel. Manager’s insurance is a combination of severancesavings (in accordance with Israeli law), defined contribution taxqualified pension savings and disability insurance premiums. An education fund is a savings fundof pretax contributions to be used after a specified period of time for educational or other permitted purposes.** Other social benefits for 2022 and 2021 for all named individuals includes tax payments in respect of social benefits.57Agreements with Named Executive OfficersRonen LuzonOn November 18, 2018, My Size Israel, our wholly owned subsidiary, entered into an employment agreement with Ronen Luzon, or the Luzon EmploymentAgreement, pursuant to which Mr. Luzon will serve as our Chief Executive Officer. Pursuant to the terms of the Luzon Employment Agreement, Mr. Luzon receivesNIS 55,000 per month as his base salary and shall be eligible to receive such bonus as determined by us. In addition, Mr. Luzon shall be entitled social benefits andto other benefits, including, but not limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, includinginsurance in case of disability, annual vacation days, sick leave and expense reimbursement. Pursuant to the terms of the Luzon Employment Agreement and subjectto certain conditions, payments made by the Company to the pension fund or manager’s insurance fund shall be made in lieu of severance payments due to Mr.Luzon. The term of the Luzon Employment Agreement shall be effective as of September 1, 2018 and shall continue until such time either party provides writtennotice to the other party at least 75 days in advance of the termination of such agreement. We may also terminate Mr. Luzon’s employment without prior writtennotice (or payment in lieu of such notice) for Cause (as defined in the Luzon Employment Agreement).Or KlesOn November 18, 2018, My Size Israel entered into an employment agreement with Or Kles, or the Kles Employment Agreement, pursuant to which Mr. Kleswill serve as our Chief Financial Officer. Pursuant to the terms of the Kles Employment Agreement, Mr. Kles receives NIS 38,000 per month as his base salary andshall be eligible to receive such bonus as determined by us. In addition, Mr. Kles shall be entitled to social benefits and other benefits, including, but not limited to,contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annual vacation days,sick leave and expense reimbursement. Pursuant to the terms of the Kles Employment Agreement and subject to certain conditions, payments made by us to thepension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Mr. Kles. The term of the Kles Employment Agreement shall beeffective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days in advance of thetermination of such agreement. We may also terminate Mr. Kles’s employment without prior written notice (or payment in lieu of such notice) for Cause (as defined inthe Kles Employment Agreement).Billy PardoOn November 18, 2018, My Size Israel entered into an employment agreement with Billy Pardo, or the Pardo Employment Agreement, pursuant to which Ms.Pardo will serve as our Chief Product Officer. Pursuant to the terms of the Pardo Employment Agreement, Ms. Pardo receives NIS 47,500 per month as her basesalary and shall be eligible to receive such bonus as determined by us. In addition, Ms. Pardo shall be entitled to social benefits and other benefits, including, butnot limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annualvacation days, sick leave and expense reimbursement. Pursuant to the terms of the Pardo Employment Agreement and subject to certain conditions, payments madeby us to the pension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Ms. Pardo. The term of the Pardo EmploymentAgreement shall be effective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days inadvance of the termination of such agreement. We may also terminate Ms. Pardo’s employment without prior written notice (or payment in lieu of such notice) forCause (as defined in the Pardo Employment Agreement).58Outstanding Equity Awards at Fiscal YearEndThe following table provides information regarding options held by each of our named executive officers that were outstanding as of December 31, 2022.Option AwardsStock AwardsName and Principal PositionNumber ofSecuritiesUnderlyingUnexercisedOptionsExercisableNumber ofSecuritiesUnderlyingUnexercisedOptionsUnexercisableOptionExercisePriceOptionExpirationDateEquityincentiveplan awards:Number ofUnearnedShares that HaveNot VestedEquityincentiveplan awards:Market Value ofUnearnedShares, That Have Not VestedRonen Luzon Chief Executive Officer400(1)$26(8)7/24/20231,601(2)$26(8)5/29/20256,400(3)$268/10/2025100,000(9)100,000$511,250Or Kles – Chief Financial Officer227(4)$26(8)7/24/2023427(5)$26(8)5/29/20255,200(6)$268/10/202524,000(10)24,000$122,700Billy Pardo Chief Operating Officer400(1)$26(8)7/24/2023894(7)$26(8)5/29/20255,200(6)$268/10/202524,000(11)24,000$122,700(1) The option has a grant date of July 24, 2017 and vested in full on January 24, 2018.(2) The option has a grant date of May 29, 2019. 267 options vested immediately upon grant, 445 options vested on January 24, 2019, 445 options vested on January24, 2020 and 444 options vested on January 24, 2021.(3) The option has a grant date of October 8, 2020, 1,600 options vested on November 26, 2020, 1,600 options vested on May 26, 2021, 1,600 options vested onNovember 26, 2021, and 1,600 options vested on May 26, 2022.(4) The option has a grant date of July 24, 2017. 76 options vested immediately upon grant, 76 options vested on May 1, 2018 and 75 options vested on May 1, 2019.(5) The option has a grant date of May 29, 2019. 160 options vested immediately upon grant, 445 options vested on May 1, 2020, 445 options vested on May 21, 2021and 444 options vested on May 1, 2022.(6) The option has a grant date of October 8, 2020, 1,300 options vested on November 26, 2020, 1,300 options vested on May 26, 2021, 1,300 options vested onNovember 26, 2021, and 1,300 options vested on May 26, 2022.(7) The option has a grant date of May 29, 2019. 214 options vested immediately upon grant, 227 options vested on January 24, 2019, 227 options vested on January24, 2020 and 226 options vested on January 24, 2021.(8) On May 25, 2020, the compensation committee of the Board of Directors of the Company reduced the exercise price of outstanding options of employees anddirectors of the Company for the purchase of an aggregate of 5,610 shares of common stock of the Company (with exercise prices ranging between $453.75 and$228.75) to $26 per share, which was the closing price for the Company’s common stock on May 22, 2020, and extended the term of the foregoing options for anadditional one year from the original date of expiration.(9) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(10) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(11) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.59Director CompensationThe following table sets forth compensation information for our nonemployee directors for the year ended December 31, 2022.NameFees earned orpaid incash ($)(1)Optionawards($)(1)(2)Total($)Oren Elmalih15,078 15,078Oron Barnitzky15,34715,347Arik Kaufman14,44114,441Guy Zimmerman13,03313,033(1)Fees for the year 2022 are based on average US$/NIS representative exchange rates of NIS 3.519.(2)Amounts in this column represent the grant date fair value of options granted to the nonemployee directors during 2022 computed in accordance with FASBASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the nonemployee directors. The assumptions made invaluing the options reported in this column are discussed in Note 11 to our financial statements for the year ended December 31, 2022.We compensate our nonemployee directors for their service as a member of our board. Mr. Luzon received no separate compensation for board service. Mr.Luzon’s compensation is set forth above in the Summary Compensation Table.Each nonemployee director is entitled to receive a per meeting fee of $318. Nonemployee directors are also reimbursed for their travel and reasonable outofpocket expenses incurred in connection with attending board and committee meetings, to the extent that attendance is required by the board or the committee(s)on which that director serves.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurity Ownership of Certain Beneficial Holders and ManagementThe following table sets forth certain information regarding beneficial ownership of shares of our common stock as of March 31, 2023 by (i) each personknown to beneficially own more than 5% of our outstanding common stock, (ii) each of our directors, (iii) each of our executive officers, and (iv) all of our directorsand executive officers as a group. Except as otherwise indicated, the persons named in the table below have sole voting and investment power with respect to allshares beneficially owned, subject to community property laws, where applicable.Beneficial Owner(1)Shares ofCommon StockBeneficiallyOwnedPercentage(2)Executive officers and directors:Ronen Luzon143,578(3)5.8%Or Kles29,854(4)1.2%Billy Pardo143,578(5)5.8%Ezequiel Javier Brandwain12,000(6)*Ilia Turchinsky18,313(7)*Arik Kaufman1,294(8)*Oren Elmaliah1,294(9)*Oron Branitzky1,294(10)*Guy ZimmermanAll Executive Officers and Directors as a Group (9 persons)207,6268.4%*Less than 1%(1) The address of each person is c/o My Size, Inc., 4 HaYarden St., P.O.B. 1026, Airport City, Israel 7010000 unless otherwise indicated herein.60(2) The calculation in this column is based upon 2,446,780 shares of common stock outstanding on March 31, 2023. Beneficial ownership is determined in accordancewith the rules of the SEC and generally includes voting or investment power with respect to the subject securities. Shares of common stock that are currentlyexercisable or exercisable within 60 days of March 31, 2023 are deemed to be beneficially owned by the person holding such securities for the purpose of computingthe percentage beneficial ownership of such person, but are not treated as outstanding for the purpose of computing the percentage beneficial ownership of anyother person(3) Consists of (i) 100,000 shares of restricted stock granted under the 2017 Plan, (ii) 4,683 shares of common stock, (iii) options to purchase up to 8,401 shares of ourcommon stock, and (iv) 24,000 shares of restricted stock and options to purchase up to 6,494 shares of our common stock which are held by Billy Pardo, RonenLuzon’s spouse. Mr. Luzon may be deemed to beneficially hold the securities of us held by Ms. Pardo.(4) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, and (ii) an option to purchase 5,854 shares of our common stock. Does not includean aggregate of 119,760 shares of restricted stock over which Mr. Kles has been designated the initial proxy to vote such shares pursuant to a voting agreemententered into between Whitehole S.L., Twinbel S.L. and EGI Acceleration, S.L.(5) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, (ii) options to purchase up to 6,494 shares of our common stock, (iii) 100,000 sharesof restricted stock which are held by Ronen Luzon, Billy Pardo’s spouse (iii) 8,401 shares of common stock which are held by Mr. Luzon, and (iii) options to purchaseup to 4,683 shares of our common stock which are held by Mr. Luzon. Ms. Pardo may be deemed to beneficially hold the securities of the Company held by Mr.Luzon.(6) Consists of 12,000 shares of restricted stock granted under the 2017 Plan.(7) Consists of (i) 16,000 shares of restricted stock granted under the 2017 Plan, and (ii) options to purchase up to 2,313 shares of our common stock.(8) Consists of options to purchase up to 1,294 shares of our common stock.(9) Consists of options to purchase up to 1,294 shares of our common stock.(10) Consists of options to purchase up to 1,294 shares of our common stock.Change in ControlWe are not aware of any arrangement that might result in a change in control in the future. We have no knowledge of any arrangements, including anypledge by any person of our securities, the operation of which may at a subsequent date result in a change in the Company’s control.Securities Authorized for Issuance Under Equity Compensation PlansOn January 29, 2017, our Board of Directors approved the 2017 Equity Incentive Plan and the 2017 Consultant Equity Incentive Plan, which were approvedby our stockholders on March 21, 2017. In addition, on January 29, 2017, our Board of Directors approved the Stock Option Plan Israel Grantees SubPlan. The 2017Equity Incentive Plan initially authorized the issuance of up to 5,334 shares of common stock under the plan and the 2017 Consultant Equity Incentive Plan initiallyauthorized the issuance of up to 8,000 shares of common stock under the plan.On February 12, 2018, our stockholders approved an amendment to the 2017 Consultant Equity Incentive Plan to increase the maximum number of shares ofour common stock available for issuance under the plan from 8,000 to 12,000. On July 3, 2018, our stockholders approved an amendment to the 2017 Equity IncentivePlan to increase the maximum number of shares of our common stock available for issuance under the plan from 5,334 to 8,000 and an amendment to the 2017Consultant Equity Incentive Plan to increase the maximum number of shares of our common stock available for issuance under the plan from 12,000 to 18,667.On May 25, 2020, our Board reduced the exercise price of outstanding options of our employees and directors for the purchase of an aggregate of 140,237of our common stock (with exercise prices ranging between $453.75 and $228.75) to $26.0 per share, and extended the term of the foregoing options for an additionalone year from the original date of expiration.61On August 10, 2020, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 80,000 to 58,000shares, and a decrease of the numbers of shares available for issuance under the 2017 Consultant Incentive Plan to 8,667 shares from 18,667 shares.On December 30, 2021, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 58,000 sharesto 230,800 shares.On December 7, 2022, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Plan from 230,800 shares to 289,000shares.The following table summarizes information about our equity compensation plans and individual compensation arrangements as of December 31, 2022.Number of securities to be issued upon exercise of outstanding options, warrants and rights(a)Weighted average exercise price of outstandingoptions, warrants and rights (b)Number of securities remaining availablefor future issuanceunder equity compensationplans (excludingsecurities reflected in column (a) (c)Equity compensation plans approved by security holders43,49724.7477,455Equity compensation plans not approved by security holdersTotal43,49724.7477,455ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEDuring years ended December 31, 2022 and 2021, except for compensation arrangements described elsewhere herein and the transactions described below,we did not participate in any transaction, and we are not currently participating in any proposed transaction, or series of transactions, in which the amount involvedexceeded the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years, and in which, to our knowledge,any of our directors, officers, five percent beneficial security holders, or any member of the immediate family of the foregoing persons had, or will have, a direct orindirect material interest.Compensation arrangements for our named executive officers and directors are described in the section entitled “Executive Compensation.”Employment AgreementsWe have entered into written employment agreements with each of our executive officers. These agreements generally provide for notice periods of varyingduration for termination of the agreement by us or by the relevant executive officer, during which time the executive officer will continue to receive base salary andbenefits. We have also entered into customary noncompetition, confidentiality of information and ownership of inventions arrangements with our executiveofficers. However, the enforceability of the noncompetition provisions may be limited under applicable law.OptionsSince our inception we have granted options to purchase our common stock to our officers and directors. Such option agreements may contain accelerationprovisions upon certain merger, acquisition, or change of control transactions.62Restricted Stock GrantsOn September 29, 2022, our compensation committee approved grants of restricted share awards under our 2017 Plan to Ronen Luzon, Or Kles, Billy Pardo,Ilia Turchinsky and Ezequiel Javier Brandwain, pursuant to which they were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000restricted shares and 12,000 restricted shares, respectively. The restricted shares shall vest in three equal installments on January 1, 2023, January 1, 2024 andJanuary 1, 2025, conditioned upon continuous employment with us, and subject to accelerated vesting upon a change in control of the Company.Shareholder ActivismIn May 2021, we received notice from Custodian Ventures, LLC, or Custodian, of its intention to nominate four candidates to stand for election to our Boardof Directors at our 2021 annual meeting of stockholders. Custodian subsequently made a book and records request and has made public statements calling forchanges to our management.On September 22, 2021, Custodian, commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v. Mysize,Inc., C.A. No. 20210817LWW, or the Delaware Action. In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting. As further described below, on November 4, 2021, we entered into asettlement agreement, or the Settlement Agreement, with Custodian, Activist Investing LLC, David Aboudi, Partick Loney and David Natan, collectively, the LazarParties, settling and dismissing the Delaware Action.On October 19, 2021, we commenced an action in the United States District Court for the Southern District of New York captioned My Size, Inc. v. DavidLazar, Custodian Ventures LLC, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, Civil Action No, 1:21cv08585, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, andcertain rules promulgated thereunder, or the SDNY Action. The complaint sought, among other things, declaratory and injunctive relief related to defendants’ effortsto nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed “group” for purposes ofSection 13 (d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. In addition, the complaint alleged that thedefendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules in connection with their efforts to elect a slate of directorsto our Board of Directors. On October 20, 2021, the Court signed an order granting a hearing on an anticipated motion for a preliminary injunction and expeditedscheduling and discovery in aid thereof, and scheduled that hearing for December 2, 2021. As further described below, on November 4, 2021, we entered into theSettlement Agreement with the Lazar Parties settling and dismissing the claims asserted in the SDNY Action and the Delaware Action against one another. OnNovember 8, 2021, the remaining defendants in the SDNY Action filed and answer and counterclaim asserting a claim against us pursuant to New York Civil RightsLaw Section 70a, also known as New York’s antiSLAPP statute.On November 4, 2021, we entered into the Settlement Agreement, or the Lazar Settlement Agreement, with the Lazar Parties. Pursuant to the LazarSettlement Agreement, we and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the LazarSettlement Agreement, we reimbursed Custodian for out of pocket expenses and in consideration for the dismissal and release of claims against the Company anaggregate amount equal to $275,000. With respect to our 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) itsMay 12, 2021 notice of stockholder nominations of four director candidates with respect to our 2021 annual meeting of stockholders, (ii) the notice dated October 28,2021 submitted by Custodian to us notifying us of Custodian’s continued intent to bring its nomination of four director candidates before our stockholders at the2021 annual meeting, and (iii) any and all related materials and notices submitted to us in connection therewith or related thereto and to not take any further action inconnection with the solicitation of any proxies in connection with us. Custodian also agreed to cease any and all solicitation and other activities in connection withthe 2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effective date of theAgreement, or the Standstill Period. The Lazar Settlement Agreement also provides that during the Standstill Period, the Lazar Parties will vote all shares of ourcommon stock it beneficially owns in accordance with any proposal or recommendation made by us or our Board of Directors that is submitted to our stockholders,unless to do so would violate applicable law and except with respect to certain extraordinary transactions. The Lazar Settlement Agreement also contains nondisparagement and confidentiality provisions, subject to certain exceptions.63On December 9, 2021, we subsequently entered into a Settlement Agreement, or the Ault Settlement Agreement, with Milton C. Ault III, Ault Alpha LP, AultAlpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed to withdraw the SDNY Action against the AultParties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that action against the Company. In addition, pursuant to the SettlementAgreement, we paid $70,000 to the Ault Parties in consideration for the releases and other good and valuable consideration as set forth in the Ault SettlementAgreement.Naiz Bespoke Technologies AcquisitionOn October 7, 2022, we entered into the Naiz Agreement with the Naiz Sellers, pursuant to which the Naiz Sellers agreed to sell to us all of the issued andoutstanding equity of Naiz. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) ) the Naiz EquityConsideration and (ii) up the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the Equity Value Averaging Period) is less than $1,650,000, My Size shall pay the Shortfall Value to the Naiz Sellers within 45days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period, it wasdetermined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement)).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers will be subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into the LockUp Agreement with My Size, (ii) Whitehole, Twinbel and EGIentered into the Voting Agreement with My Size and (iii) each of the Key Persons entered into employment agreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonth period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonth “dribbleout” provisionthat provides following the expiration of the initial sixmonth lockup period, without My Size’s prior written consent (which My Size shall be permitted to withholdat its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than the average dailytrading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.64The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Indemnification Agreements and Directors’ and Officers’ Liability InsuranceWe have entered into indemnification agreements with each of our directors and executive officers. These agreements, among other things, require us toindemnify these individuals and, in certain cases, affiliates of such individuals, to the fullest extent permitted by Delaware law against liabilities that may arise byreason of their service to us or at our direction, and to advance expenses incurred as a result of any proceedings against them as to which they could beindemnified. We also maintain an insurance policy that insures our directors and officers against certain liabilities, including liabilities arising under applicablesecurities laws.Director IndependenceSee “Item 10. Directors, Executive Officers and Corporate Governance; Corporate Governance, Board Composition” above for a discussion regarding theindependence of the members of our board of directors.ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICESSomekh Chaikin, a member firm of KPMG International, located in Tel Aviv, Israel, PCAOB ID 1057, has served as our independent registered publicaccounting firm for 2022 and 2021. The following are Somekh Chaikin’s fees for professional services in each of the respective fiscal years:Fee Category20222021Audit Fees198,910298,300Tax Fees30,66729,300Auditrelated Fees18,000Total Fees247,577327,600Audit Fees:Audit Fees consist of fees billed for professional services performed by Somekh Chaikin for the audit of our annual financial statements, thereview of interim consolidated financial statements, and related services that are normally provided in connection with registration statements, including theregistration statement for S1 and S3.Tax Fees: Tax Fees may consist of fees for professional services, including tax and VAT consulting and compliance performed by an independent registeredpublic accounting provided during the period.PreApproval Policies and ProceduresIn accordance with the SarbanesOxley Act of 2002, as amended, our audit committee charter requires the audit committee to preapprove all audit andpermitted nonaudit services provided by our independent registered public accounting firm, including the review and approval in advance of our independentregistered public accounting firm’s annual engagement letter and the proposed fees contained therein. The audit committee has the ability to delegate the authorityto preapprove nonaudit services to one or more designated members of the audit committee. If such authority is delegated, such delegated members of the auditcommittee must report to the full audit committee at the next audit committee meeting all items preapproved by such delegated members. In the fiscal years endedDecember 31, 2022 and December 31, 2021 all of the services performed by our independent registered public accounting firm were preapproved by the auditcommittee.65PART IVITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES(a)Financial StatementsThe financial statements required by this Item are included beginning at page F1.(b)ExhibitsSee Exhibit IndexITEM 16. FORM 10K SUMMARYNot applicableEXHIBIT INDEXExhibitNumberDescription3.1Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Form on Form8K filed on March 23, 2017)3.2Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10K filed onMarch 4, 2016)3.3Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’s Current Report onForm 8K filed on February 20, 2018)3.4Second Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8K filedon April 24, 2018)3.5Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’sCurrent Report on Form 8K filed on November 18, 2019)3.6Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on January 7, 2022)3.7Amendment No. 1 to Second Amended and Restated ByLaws (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8K filed on January 7, 2022)3.8Certificate of Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on December 7, 2022)4.1Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S3/A filed onNovember 14, 2016)4.2Form of Warrant to Purchase Common Stock issued on February 2, 2018 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report onForm 10K filed on March 27, 2019)4.3Description of Securities Registered under Section 12 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report on Form 10K filedon March 19, 2020)4.4Form of Warrant (incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S1, Amendment No. 1, filed with the SECon May 5, 2020.)4.5Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)4.6Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.1My Size, Inc. 2017 Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement on Schedule DEF 14Afiled on March 2, 2017)10.2My Size, Inc. 2017 Consultant Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement onSchedule DEF 14A filed on March 2, 2017)10.3My Size, Inc. 2017 Stock Option Plan Israel Grantees SubPlan (incorporated by reference to Exhibit 10.3 to the Company’s Annual Report on Form10K filed on March 27, 2019)6610.4Purchase Agreement between My Size, Inc. and Shoshana Zigdon dated as of February 16, 2014 (incorporated by reference to Exhibit 10.2 to theCompany’s Annual Report on Form 10K filed on March 4, 2016)10.5 +Employment Agreement between My Size Israel 2014 Ltd. and Ronen Luzon dated November 18, 2018 (incorporated by reference to Exhibit 10.1 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.6 +Employment Agreement between My Size Israel 2014 Ltd. and Or Kles dated November 18, 2018 (incorporated by reference to Exhibit 10.2 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.7 +Employment Agreement between My Size Israel 2014 Ltd. and Billy Pardo dated November 18, 2018 (incorporated by reference to Exhibit 10.3 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.8Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on January 15,2020)10.9Form of Warrant (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.10Form of Placement Agent Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.11Securities Purchase Agreement (incorporated by reference to Exhibit 10.30 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.12Underwriting Agreement, dated January 5, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on January 7, 2021)10.13Underwriting Agreement, dated March 22, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on March 25, 2021)10.14Amendment to Purchase Agreement between My Size Israel 2014 Ltd., My Size, Inc. and Shoshana Zigdon (incorporated by reference to Exhibit 10.1to the Company’s Quarterly Report on Form 10Q on August 16, 2021)10.15Form of Registered Direct Offering Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.16Form of PIPE Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.17Form of Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.18Form of Placement Agent Warrant issued by the Company on October 28, 2021 (incorporated by reference to Exhibit 10.22 to the Company’s Form S1filed on November 12, 2021)10.19Form of Registration Rights Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.4 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.20Engagement Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference to Exhibit 10.5 to theCompany’s Current Report on Form 8K filed on October 28, 2021)10.21Settlement Agreement dated November 4, 2021, among My Size, Inc., David Lazar and certain of his affiliates (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on November 5, 2021)10.22Share Purchase Agreement dated as of February 7, 2022 between My Size Israel 2014 Ltd. and Amar Guy Shalom and Elad Bretfeld (incorporated byreference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SEC on February 8, 2022)10.23Employment Agreement between My Size Israel 2014 Ltd. and Ezequiel Javier Brandwain dated January 27, 2022 (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on February 1, 2022)10.24Form of Section 102 Capital Gain Restricted Stock Award Agreement under the Company’s 2017 Equity Incentive Plan (incorporated by reference toExhibit 10.1 to the Company’s Quarterly Report on Form 10Q, filed with the SEC on November 14, 2022)10.25Share Purchase Agreement, dated as of October 6, 2022, by and among My Size, Inc., Borja Cembrero Saralegui, Artiz Toree Garcia, Whitehold, S.L.,Twinbel, S.L., and EGI Acceleration, S.L. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SECon October 12, 2022)10.26Form of LockUp Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)10.27Form of Voting Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.3 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)6710.28My Size, Inc. Amendment to the My Size, Inc. 2017 Equity Plan (incorporated by reference to Appendix B to the Company’s definitive proxystatement filed with the SEC on November 4, 2022)10.29Form of Registered Direct Offering Securities Purchase Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.1 to theCompany’s Current Report on Form 8K filed with the SEC on January 12, 2023)10.30Form of PIPE Securities Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8Kfiled with the SEC on January 12, 2023)10.31Form of Registered Direct PreFunded Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.32Form of Series A and Series B Warrant (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8K filed with the SEC onJanuary 12, 2023)10.33Form of Private Placement PreFunded Warrant (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.34Form of Registration Rights Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form8K filed with the SEC on January 12, 2023)10.35Engagement Agreement, dated December 5, 2022 (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8K filed withthe SEC on January 12, 2023)10.36*Form of Placement Agent Warrant21.1*List of Subsidiaries23.1*Consent of Somekh Chaikin, a member firm of KPMG International, registered public accounting firm31.1*Certification of the Chief Executive Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200231.2*Certification of the Chief Financial Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200232.1*Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a14(b) of the Exchange Act and 18 U.S.C. Section 1350, asadopted pursuant to Section 906 of the SarbanesOxley Act of 2002101.INS*Inline XBRL Instance Document101.SCH*Inline XBRL Taxonomy Schema101.CAL*Inline XBRL Taxonomy Calculation Linkbase101.DEF*Inline XBRL Taxonomy Definition Linkbase101.LAB*Inline XBRL Taxonomy Label Linkbase101.PRE*Inline XBRL Taxonomy Presentation Linkbase104Cover Page Interactive Data File (formatted as Inline XBRL document and contained in Exhibit 101)*Filed herewith.+Indicates a management contract or any compensatory plan, contract or arrangement68SIGNATURESPursuant to the requirements of Section 13 and 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10K to be signed on its behalf by the undersigned, thereunto duly authorized on this 14th day of April, 2023.MY SIZE, INC./s/ Ronen LuzonRonen LuzonChief Executive Officer (Principle Executive Officer)/s/ Or KlesOr KlesChief Financial Officer(Principal Financial and Accounting Officer)Pursuant to the requirements of the Securities Act of 1934, this annual report on Form 10K has been signed below by the following persons on behalf ofthe registrant and in the capacities and on the dates indicated.SignatureTitleDate/s/ Ronen LuzonChief Executive Officer and DirectorApril 14, 2023Ronen Luzon(Principle Executive Officer)/s/ Or KlesChief Financial OfficerApril 14, 2023Or Kles(Principal Financial and Accounting Officer)/s/ Oren ElmaliahDirectorApril 14, 2023Oren Elmaliah/s/ Arik KaufmanDirectorApril 14, 2023Arik Kaufman/s/ Oron BranitzkyDirectorApril 14, 2023Oron Branitzky/s/ Guy ZimmermanDirectorApril 14, 2023Guy Zimmerman69EX10.36 2 ex1036.htmExhibit 10.36NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES ANDEXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THESECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO ANEFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTIONNOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGINACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.PLACEMENT AGENT COMMON STOCK PURCHASE WARRANTMY SIZE, INC.Warrant Shares: _______Issue Date: January 12, 2023Initial Exercise Date: January 12, 2023THIS PLACEMENT AGENT COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _____________ or itsassigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the dateset forth above (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on January 10, 2028 (the “Termination Date”) but not thereafter, tosubscribe for and purchase from My Size, Inc., a Delaware corporation (the “Company”), up to ______ shares (as subject to adjustment hereunder, the “WarrantShares”) of the Company’s Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined inSection 2(b). This Warrant is issued pursuant to that certain engagement letter, dated as of December 5, 2022, by and between the Company and H.C. Wainwright &Co., LLC.Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities PurchaseAgreement (the “Purchase Agreement”), dated January 10, 2023, among the Company and the purchasers signatory thereto.1Section 2. Exercise.a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or afterthe Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted by email (or emailattachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the numberof Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shalldeliver the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on aUnited States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No inkoriginalNotice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required.Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder haspurchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrantto the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercisesof this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering theoutstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder andthe Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver anyobjection to any Notice of Exercise within one (1) Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant,acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, thenumber of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.b) Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $3.8188, subject to adjustment hereunder (the“Exercise Price”).c) Cashless Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein isnot available for the issuance or resale of the Warrant Shares to or by the Holder, then this Warrant may also be exercised, in whole or in part, at such timeby means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing[(AB) (X)] by (A), where:(A) =as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice ofExercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed anddelivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) ofRegulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAPon the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on theprincipal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s execution of the applicable Notice ofExercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hoursthereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii)the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice ofExercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;(B) =the Exercise Price of this Warrant, as adjusted hereunder; and(X) =the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if suchexercise were by means of a cash exercise rather than a cashless exercise.2“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which theCommon Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York Citytime)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest precedingdate) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for theCommon Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the mostrecent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by anindependent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to theCompany, the fees and expenses of which shall be paid by the Company.“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the TradingMarket on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or thenearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and ifprices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reportingprices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock asdetermined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonablyacceptable to the Company, the fees and expenses of which shall be paid by the Company.If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of theSecurities Act, the Warrant Shares shall take on the characteristics of the Warrants being exercised, and the holding period of the Warrant Shares beingissued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section 2(c).3d) Mechanics of Exercise.i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to betransmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with TheDepository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant insuch system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of theWarrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or mannerofsale limitationspursuant to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, registered in theCompany’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitledpursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2)Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate ExercisePrice to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Companyof the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall bedeemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant hasbeen exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (otherthan in the case of a cashless exercise) is received by the Warrant Share Delivery Date. If the Company fails for any reason to deliver tothe Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder,in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP ofthe Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifthTrading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share Delivery Date until such WarrantShares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FASTprogram so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standardsettlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stockas in effect on the date of delivery of the Notice of Exercise.4ii.Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the requestof a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a newWarrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrantshall in all other respects be identical with this Warrant; provided, however, that the Holder shall be required to return any WarrantShares subject to any such rescinded exercise notice concurrently with the return to Holder of the aggregate Exercise Price paid to theCompany for such Warrant Shares and the restoration of Holder’s right to acquire such Warrant Shares pursuant to this Warrant(including, issuance of a replacement warrant certificate evidencing such restored right).iii. Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant toSection 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.iv. Compensation for BuyIn on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights availableto the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with theprovisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date theHolder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwisepurchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipatedreceiving upon such exercise (a “BuyIn”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) theHolder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) theamount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connectionwith the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at theoption of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was nothonored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock thatwould have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holderpurchases Common Stock having a total purchase price of $11,000 to cover a BuyIn with respect to an attempted exercise of shares ofCommon Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediatelypreceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written noticeindicating the amounts payable to the Holder in respect of the BuyIn and, upon request of the Company, evidence of the amount of suchloss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including,without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver sharesof Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.5v. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise ofthis Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Companyshall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by theExercise Price or round up to the next whole share.vi. Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue ortransfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paidby the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by theHolder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, thisWarrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder andthe Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.The Company shall pay all Transfer Agent fees required for sameday processing of any Notice of Exercise and all fees to the DepositoryTrust Company (or another established clearing corporation performing similar functions) required for sameday electronic delivery of theWarrant Shares.vii. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timelyexercise of this Warrant, pursuant to the terms hereof.6e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise anyportion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicableNotice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of theHolder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). Forpurposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Partiesshall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, butshall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrantbeneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion ofany other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exerciseanalogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in thepreceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act andthe rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that suchcalculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed inaccordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (inrelation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisableshall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether thisWarrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of thisWarrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm theaccuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number ofoutstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s mostrecent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recentwritten notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request ofa Holder, the Company shall within one (1) Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock thenoutstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise ofsecurities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number ofoutstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stockoutstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice tothe Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial OwnershipLimitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares ofCommon Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in theBeneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shallbe construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portionhereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplementsnecessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of thisWarrant.7Section 3. Certain Adjustments.a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes adistribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which,for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstandingshares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into asmaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case theExercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any)outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately aftersuch event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of thisWarrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for thedetermination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case ofa subdivision, combination or reclassification.b) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sellsany Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares ofCommon Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregatePurchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise ofthis Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before thedate on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the recordholders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that to the extent that theHolder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall notbe entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Rightto such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not resultin the Holder exceeding the Beneficial Ownership Limitation).c) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend (other than cash) orother distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including,without limitation, any distribution of stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement,scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holdershall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number ofshares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including withoutlimitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken,the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, thatto the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, thenthe Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a resultof such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as itsright thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).8d) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more relatedtransactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease,license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, director indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of CommonStock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more ofthe outstanding Common Stock or 50% or more of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in oneor more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchangepursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly orindirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, withoutlimitation, a reorganization, recapitalization, spinoff, merger or scheme of arrangement) with another Person or group of Persons whereby such otherPerson or group acquires more than 50% of the outstanding shares of Common Stock or 50% or more of the voting power of the common equity of theCompany (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for eachWarrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of theHolder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor oracquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as aresult of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior tosuch Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, thedetermination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of AlternateConsideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Priceamong the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. Ifholders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall begiven the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at theHolder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date ofthe public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cashequal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of suchFundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company’s control, including not approved by theCompany’s Board of Directors, the Holder shall only be entitled to receive from the Company or any Successor Entity the same type or form ofconsideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to theholders of Common Stock of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, stock or anycombination thereof, or whether the holders of Common Stock are given the choice to receive from among alternative forms of consideration in connectionwith the Fundamental Transaction; provided, further, that if holders of Common Stock of the Company are not offered or paid any consideration in suchFundamental Transaction, such holders of Common Stock will be deemed to have received common stock of the Successor Entity (which Entity may be theCompany following such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on theBlackScholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day of consummation of the applicableFundamental Transaction for pricing purposes and reflecting (A) a riskfree interest rate corresponding to the U.S. Treasury rate for a period equal to thetime between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expectedvolatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualizationfactor) as of the Trading Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlyingprice per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any noncashconsideration, if any, being offered in such Fundamental Transaction and (ii) the highest VWAP during the period beginning on the Trading Dayimmediately preceding the public announcement of the applicable contemplated Fundamental Transaction (or the consummation of the applicableFundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant to this Section 3(e) and (D) a remaining option timeequal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date and (E) azero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds (or such other consideration)within the later of (i) five Business Days of the Holder’s election and (ii) the date of consummation of the Fundamental Transaction. The Company shallcause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of theobligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant towritten agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to suchFundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entityevidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares ofcapital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of thisWarrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which appliesthe exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to suchFundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for thepurpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which isreasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall beadded to the term “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction, each andevery provision of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to each of the Company and theSuccessor Entity or Successor Entities, jointly and severally), and the Successor Entity or Successor Entities, jointly and severally with the Company, mayexercise every right and power of the Company prior thereto and the Successor Entity or Successor Entities shall assume all of the obligations of theCompany prior thereto under this Warrant and the other Transaction Documents with the same effect as if the Company and such Successor Entity orSuccessor Entities, jointly and severally, had been named as the Company herein.e) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. Forpurposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the numberof shares of Common Stock (excluding treasury shares, if any) issued and outstanding.9f) Notice to Holder.i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, theCompany shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resultingadjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form)on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C)the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any sharesof capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection withany reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all orsubstantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into othersecurities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of theaffairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as itshall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective datehereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to beentitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification,consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expectedthat holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or otherproperty deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure todeliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to bespecified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, nonpublic informationregarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to aCurrent Report on Form 8K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of suchnotice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.10Section 4. Transfer of Warrant.a) Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and to theprovisions of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights) aretransferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a writtenassignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay anytransfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a newWarrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument ofassignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly becancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unlessthe Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of thedate on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordanceherewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company,together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent orattorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute anddeliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issuedon transfers or exchanges shall be dated the Issue Date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Sharesissuable pursuant thereto.c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “WarrantRegister”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as theabsolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to thecontrary.d) Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrantshall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue skylaws or (ii) eligible for resale without volume or mannerofsale restrictions or current public information requirements pursuant to Rule 144, the Companymay require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, comply with the provisions ofSection 5.7 of the Purchase Agreement.11e) Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon anyexercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling suchWarrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exemptedunder the Securities Act.Section 5. Miscellaneous.a) No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends orother rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Withoutlimiting the rights of a Holder to receive Warrant Shares on a “cashless exercise,” and to receive the cash payments contemplated pursuant to Sections 2(d)(i) and 2(d)(iv), in no event will the Company be required to net cash settle an exercise of this Warrant.a.In July 2019, the Company entered into a threeyear agreement with a consultant (“Consultant14”) to provide services to the Company includingassisting the Company to promote, market and sell the Company’s technology to potential customers. Pursuant to such agreement and in partialconsideration for such consulting services, the Company agreed to issue to Consultant14 options to purchase up to 107 shares of the Company’scommon stock upon execution of the agreement. The options are exercisable at $375.00 per share and shall vest in 3 equal instalments every twelvemonths starting July 2019. Unexercised options shall expire 4 years from the effective date.In addition, the Company agreed to issue to Consultant14 options to purchase up to 890 shares of the Company’s common stock upon executionof the agreement. The options are exercisable at $27.00 per share and shall vest in 4 equal instalments every six months starting September 2020.Unexercised options shall expire 5 years from the effective date.During 2022 and 2021, an amount of $7 and $14 respectively, were recorded by the Company as stockbased equity awards with respect to Consultant14.F24MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The Company’s outstanding options granted to consultants as of December 31, 2022 are as follows:Issuance dateOptions forCommon stockWeightedAverageexercise priceper shareOptionsexercisableExpirationdateFebruary 201815USD528.7515February 2023August 2018December 2018531USD352.38264August 2023 December 2023July 2020107USD375107July 2023SeptemberOctober 20201,488USD27.201,288October 2024 September 2025Total2,1411,674The Company uses the Black Scholes model to measure the fair value of the stock options with the assistance of a third party valuation.No stock options were granted during 2022 to consultants.The fair value of the Company’s stock options granted to nonemployees was calculated using the following weighted average assumptions:20222021GrantsGrantsDividend yield0%Expected volatility125.15%Riskfree interest0.16%Contractual term of up to (years)1.52F25MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Stock Option Plan for employeesIn March 2017, the Company adopted a stock option plan (the “Plan”) pursuant to which the Company’s Board of Directors may grant stock options toofficers and key employees. The total number of options which may be granted to directors, officers, employees under this plan, is limited to 289,000options. Stock options can be granted with an exercise price equal to or less than the stock’s fair market value at the date of grant.The fair value of each option award is estimated on the date of grant using the Binomial optionpricing model that used the weighted averageassumptions in the following table. The risk free rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the timeof grant.2022Grants2021GrantsDividend yield0%0%Expected volatility96.52%98.47%Riskfree interest4.06%0.96%expected life522.27In the years ended December 31, 2022 and 2021, 10,000 and 3,900 options, respectively, were granted.On December 7, 2022, the Company’s stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from230,800 shares to 289,000 shares.On September 29, 2022, the Compensation Committee of the Company approved grants of restricted share awards under the Company’s 2017 EquityIncentive Plan to Ronen Luzon (CEO), Or Kles (CFO), Billy Pardo (COO), Ilia Turchinsky (CTO) and Ezequiel Javier Brandwain (CCO), pursuant towhich were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000 restricted shares and 12,000 restricted shares,respectively. Each restricted share awarded under section 102 Capital Gain Restricted Stock Award Agreement (the “Agreement”). The restrictedshares shall vest in three equal installments on January 1, 2023, January 1, 2024 and January 1, 2025 for Ronen Luzon, Or Kles, Billy Pardo and IliaTurchinsky and on January 27, 2023, January 27, 2024 and January 27, 2025 for Ezequiel Javier Brandwain, conditioned upon continuous employmentwith the Company, and subject to accelerated vesting upon a change in control of the Company.On the same day, the Company granted fiveyears options to purchase up to 10,000 ordinary shares to other employees of the Company at an exerciseprice of $0.21 per share. The options vesting period is over three years in three equal portions from the vesting commencement date.F26MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The total stock option compensation expense in the year ended December 31, 2022 amounted to $448as follows: Research and development expensesamounted to $151, sales and marketing expenses amounted to $119and general and administrative expenses amounted to $178.The total stock option compensation expense in the year ended December 31, 2021 amounted to $252 as follows: Research and development expensesamounted to $94, sales and marketing expenses amounted to $97 and general and administrative expenses amounted to $61.As of December 31, 2022, there was a total of $530 unrecognized compensation cost relating to nonvested sharebased compensation arrangements.That cost is expected to be recognized over a weightedaverage period of 2.0 years.Share option activity during 2022 is as follows:2022Number ofoptionsWeightedaverageexerciseprice US$Outstanding as of January 135,74226.5Granted10,0005.25ExercisedExpired(4,136)Outstanding as of year end41,60622.48Vested as of year end33,20825.17Share option activity during 2021 is as follows:2021Number ofoptionsWeightedaverageExerciseprice US$Outstanding as of January 139,094$26.0Granted3,90032.0Exercised(751)Expired(6,501)Outstanding as of year end35,74226.5Vested as of year end27,06326.5F27MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 15 CONTINGENCIES AND COMMITMENTSa.On August 7, 2018, the Company commenced an action against North Empire LLC (“North Empire”) in the Supreme Court of the State of New York,County of New York for breach of a Securities Purchase Agreement (the “Agreement”) in which it is seeking damages in an amount to bedetermined at trial, but in no event less than $616. On August 2, 2018, North Empire filed a Summons with Notice against the Company, also in thesame Court, in which they allege damages in an amount of $11.4 million arising from an alleged breach of the Agreement. On September 6, 2018North Empire filed a Notice of Discontinuance of the action it had filed on August 2, 2018. On September 27, 2018, North Empire filed an answerand asserted counterclaims in the action commenced by the Company against them, alleging that the Company failed to deliver stock certificatesto North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against theCompany’s CEO and now former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018,the Company filed a reply to North Empire’s counterclaims. On November 15, 2018, the Company’s CEO and now former Chairman of the Boardfiled a motion to dismiss North Empire’s thirdparty complaint. On January 6, 2020, the Court granted the motion and dismissed the thirdpartycomplaint. Discovery has been completed and both parties have filed motions for summary judgment in connection with the claims andcounterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summary judgment, arguing there werefactual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision. The appealmust be fully perfected and filed by July 26, 2022. On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying theCompany’s motion for summary judgment. North Empire will file its opposition papers on or before March 31, 2022, and the Company will file replypapers on April 29, 2022. On or about September 12, 2022, the Court issued its Decision and Order denying the Company’s motion to reargue.North Empire filed its opposing brief on December 7, 2022. Both sides were given an opportunity to file a reply brief. The Company filed our replybrief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. The Appellate Court has scheduled oral argument for the appealfor February 7, 2023. Oral argument was held before the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Courtfiled its Decision and Order, which affirmed the lower court’s decisions regarding both My Size and North Empire’s motions for summary judgmentand sent the case back to the Supreme Court.On or about March 13, 2023, the Supreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date forthe mediation has not yet been set. The Company intends to vigorously defend any claims made by North Empire.The Company believes it is more likely than not that the counterclaims will be denied.b.In May 2021, the Company received notice from Custodian Ventures, LLC (“Custodian”) of its intention to nominate four candidates to stand forelection to our Board of Directors at the Company’s 2021 annual meeting of stockholders. Custodian subsequently made a book and recordsrequest and has made public statements calling for changes to our management.On September 22, 2021, Custodian commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v.MySize, Inc. (the “Delaware Action”). In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting.On October 19, 2021, the Company commenced an action in the United States District Court for the Southern District of New York againstCustodian, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, and certain rulespromulgated thereunder (the “SDNY Action”). The complaint sought, among other things, declaratory and injunctive relief related to defendants’efforts to nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed“group” for purposes of Section 13(d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. Inaddition, the complaint alleged that the defendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules inconnection with their efforts to elect a slate of directors to the Company’s Board of Directors. On October 20, 2021, the Court signed an ordergranting a hearing on an anticipated motion for a preliminary injunction and expedited scheduling and discovery in aid thereof, and scheduled thathearing for December 2, 2021.On November 4, 2021, the Company entered into the Settlement Agreement with the Lazar Parties. Pursuant to the Settlement Agreement, theCompany and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the SettlementAgreement, the Company agreed to reimburse Custodian for out of pocket expenses and in consideration for the dismissal and release of claimsagainst the Company an aggregate amount equal to $275, to be paid within three business days of the effective date of the Settlement Agreement.With respect to the Company’s 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) its May 12,2021 notice of stockholder nominations of four director candidates with respect to the Company’s 2021 annual meeting of stockholders, (ii) thenotice dated October 28, 2021 submitted by Custodian to the Company notifying the Company of Custodian’s continued intent to bring itsnomination of four director candidates before the Company’s stockholders at the 2021 annual meeting, and (iii) any and all related materials andnotices submitted to the Company in connection therewith or related thereto and to not take any further action in connection with the solicitationof any proxies in connection with the Company. Custodian also agreed to cease any and all solicitation and other activities in connection with the2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effectivedate of the Agreement (the “Standstill Period”). The Settlement Agreement also provides that during the Standstill Period, the Lazar Parties willvote all shares of common stock of the Company it beneficially owns in in accordance with any proposal or recommendation made by theCompany or the Board of Directors of the Company that is submitted to the stockholders of the Company, unless to do so would violateapplicable law and except with respect to certain extraordinary transactions. The Settlement Agreement also contains nondisparagement andconfidentiality provisions, subject to certain exceptions.On December 9, 2021, the Company subsequently entered into a Settlement Agreement (the “Ault Settlement Agreement”), with Milton C. Ault III,Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed towithdraw the SDNY Action against the Ault Parties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that actionagainst the Company. In addition, pursuant to the Settlement Agreement, the Company paid $70 to the Ault Parties in consideration for thereleases and other good and valuable consideration as set forth in the Ault Settlement Agreement.c.On July 5, 2021, the Company was served with a legal complaint filed by Fidelity Venture Capital Ltd. and Dror Atzmon in the Magistrate’s Court inTel Aviv for a monetary award in an amount of NIS 1,436,679 (approximately $450) and a declaratory relief. The plaintiffs allege that the Companybreached its contractual obligations to pay them for services allegedly rendered to the Company by the plaintiffs under a certain consultingagreement dated July 2, 2014, in an amount of NIS 819,000 (approximately $256). Additionally, the plaintiffs allege that the Company shouldcompensate them for losses allegedly incurred by them following their investment in the Company’s shares issued under a certain private offering.In the alternative, the plaintiffs move that the court will declare the investment agreement void with full restitution of plaintiffs’ original investmentin an amount of NIS 1,329,650(approximately $415). The Company filed its statement of defense on October 25, 2021. The first preliminary courthearing of the case is scheduled for January 23, 2022.The first court preliminary hearing was held on March 1, 2022.Following the first preliminary hearing and the Court’s comments and recommendation, the Plaintiffs filed a motion to strike out the claim withoutprejudice.On March 8, 2022 the Court ordered dismissal without prejudice of the claim.F28MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATIONAcquisition of OrgadOn February 7, 2022, the Company acquired 100% of the shares and voting interests in Orgad an omnichannel ecommerce platform. The acquisitionwas designed to create an additional revenue stream for the Company by becoming a direct ecommerce seller while leveraging the synergies betweenMySizeID and Orgad’s ecommerce platform.Unaudited proforma informationThe results of operations of Orgad have been included in the consolidated financial statements since the acquisition date of February 7, 2022. Orgadrevenues included in the Company’s consolidated statement of operations from February 7, 2022 through December 31, 2022 were $4,132. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,662 and $2,850 respectively, and the net loss after tax would have been $8,519 and $10,149 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash (*)300Issuance of shares of common stock (69,752 shares) (**)457Total consideration transferred757(*)The cash payment is subject to working capital adjustments.(**)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Orgad, on the twoyear and the threeyear anniversary of the closing, $350in each ofthese years provided that in the case of the second and third instalments certain revenue targets are met and subject further to certain downward postclosing adjustment. Furthermore, 69,752shares of common stock will be issued in eight equal quarterly instalments until the lapse of two years fromclosing. Additional earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023 will also be paid. All of these payments aresubject to the former owners being actively engaged with Orgad at the date such payment is due, and therefore were not taken as part of theconsideration for the business combination.During the year ended December 31, 2022 an amount of $456and $319was recorded in respect of the cash instalments and in respect of stocksissuance, respectively in Cost Of Goods, Sales and Marketing and General and Administrative expenses as shown in the following table:2022Stockbased compensation expense – Cost of goods194Stockbased compensation expense Sales and marketing271Stockbased compensation expense General and administrative310775(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the preliminary estimates of their fair values, which were determined using generally accepted valuation techniques based onestimates and assumptions made by management at the time of the acquisition. Such estimates are subject to change during the measurement periodwhich is not expected to exceed one year. The purchase price allocation was not finalized duo to examination of the net working capital of Orgad at theacquisition date. Any adjustments to the preliminary purchase price allocation identified during the measurement period will be recognized in theperiod in which the adjustments are determined.The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and Cash EquivalentTrade receivables364PP&E55Inventory864Longterm financial investment31Selling platform378Goodwill152Shortterm accruals and deferrals(181)Trade payables(668)Long term provision(13)Longterm debt(138)Deferred Taxes(87)Total net assets acquired757F29MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)(c)Acquisitionrelated costsThe Company incurred transaction costs of approximately $40and none during twelvemonth period ended December 31, 2022 which were included ingeneral and administrative expenses in the consolidated statements of income (loss).Acquisition of Naiz Bespoke Technologies, S.L. (“Naiz”)On October 11, 2022, the Company acquired 100% of the shares and voting interests in Naiz a provider of SaaS technology solutions that solve sizeand fit issues for fashion ecommerce companies. The acquisition was designed to allow Naiz’s customers benefit from MySize’s deep understanding ofthe fashion ecommerce retail landscape, while creating an additional revenue stream for the Company.Unaudited proforma informationThe results of operations of Naiz have been included in the consolidated financial statements since the acquisition date of October 11, 2022. Naizrevenues included in the Company’s consolidated statement of operations from October 11, 2022 through December 31, 2022 were $103. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,738 and $379 respectively and the net loss after tax would have been $8,695 and $10,717 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash503Issuance of shares of common stock (240,000 shares) (*)1,008Total consideration transferred1,511(*)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Naiz, additional cash consideration (up to $1,550) in four instalments subject to thefollowing conditions:(i)Continuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result ofa Good Reason; and(ii)Naiz’s Revenues reaching or exceeding the respective Target Revenues defined in the agreement. The revenues will be calculated in four periods:(1) January 1, 2022 – December 31, 2022; (2) January 1, 2023 – June 30, 2023; (3) July 1, 2023 – December 31, 2023; (4) January 1, 2024 – December31, 2024.Former owners of Naiz are entitled to additional cash consideration following December 31, 2025 (up to $1,650) in an event when the actual value of theequity consideration is less than $1,650, subject to completion of a Target Revenue for the period of January 1, 2025 – December 31, 2025 andcontinuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result of aGood Reason;F30MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)During the year ended December 31, 2022 an amount of $283 was recorded in respect of the additional cash consideration.(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the estimates of their fair values, which were determined using generally accepted valuation techniques based on estimates andassumptions made by management at the time of the acquisition.The following table summarizes the fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and cash equivalent36Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Total net assets acquired1,511(c)Acquisitionrelated costsDuring 2022, the Company incurred transaction costs of approximately $75 which were included in general and administrative expenses in theconsolidated statements of income (loss).F31MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)Note 17 – Operating SegmentsDuring the year ended December 31, 2021, the Company had one reportable segment. As a result of the business combinations in the reporting period(see note 13), the Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificialintelligence driven measurement solutions and (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions and. The fashionand equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. Orgad has onecustomer that is responsible for 37.9% of the Company consolidated revenues. The SaaS based innovative artificial intelligence driven measurementsolutions, or SaaS Solutions operating segment consists of My Size Inc and My Size Israel and My Size LLC.Information related to the operations of the Company’s reportable operating segments is set forth below:Fashion andequipment ecommerce platformSaaSSolutionsNaizTotalAs of the year ended December 31, 2022Revenues from external customers4,1322241034,459Operating (loss) income(591)(7,181)(338)(8,110)Financial income (expense), net(236)Net loss before tax(8,346)Fashion andequipment ecommerce platformSaasSolutionNaizAs of December 31, 2022:Assets2,0225,9661,691Amortization of intangible assets(114)(34)(46)The Company elected to present geographic information in respect with revenues generated from external customers based on the location of the selling entity:All the revenues of the fashion and equipment ecommerce platform segment are generated by Orgad, located in Israel.All the revenues of the Naiz segment are generated by Naiz, located in Spain.The revenues of the Saas Solutions segment are generated by My Size Ltd. located in Israel (approximately 75% of the segment revenues) and by My Size Inc.located in the U.S. (approximately 25% of the segment revenues).NOTE 18 SALES AND MARKETINGYear endedDecember 31,20222021Salaries836574Consultants and subcontractors5831,086Marketing481283Selling fees489Share based payments post Orgad acquisition (*)271Share based payments for consultants and employees127180Travel21142Other1451713,1432,336(*) See note 16.NOTE 19 GENERAL AND ADMINISTRATIVE EXPENSESYear endedDecember 31,20222021Salaries1,007461Professional services7051,832Share based payments for consultants, directors and employees18098Rent, office expenses and communication442372Insurance564627cash liability and equity liability expenses related to Orgad acquisition310cash liability expenses related to Naiz acquisition217Settlement fees (*)345Directors8259Other3933303,9004,124(*)See note 15(b)F32MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 20 FINANCIAL INCOME (EXPENSE), NETA.Financial incomeYear endedDecember 31,20222021Revaluation investment in marketable securities49Other26172666B.Financial expenseYear endedDecember 31,20222021Exchange rate differences33Revaluation of loan granted100Revaluation investment in marketable securities62Other6792629NOTE 21 EVENTS SUBSEQUENT TO THE BALANCE SHEET DATEa.On January 2, 2023, Orgad experienced a fire at its warehouse in Israel. The Company is not aware of any casualties or injuries associated with thefire. The Company shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450.The Company believes that this incident did not affect the future sales results of Orgad for the year 2023. The inventory was not insured and it istoo early to determine the potential impact of this incident on the other parties that were involved in the incident (lessor and others that leasedproperties near the warehouse).b.On January 10, 2023, the Company entered into a securities purchase agreement pursuant to which the Company sold an aggregate of 162,000ofthe Company’s shares of common stock and prefunded warrants to purchase up to 278,899shares of common stock and, in a concurrent privateplacement, unregistered warrants to purchase up to883,798 shares of common stock, consisting of Series A warrants to purchase up to 441,899shares of common stock and Series B warrants to purchase up to 441,899shares of common stock, at an offering price of $3.055per share ofcommon stock and associated Series A and Series B warrants and an offering price of $3.054per prefunded warrant and associated Series A andSeries B warrants.In addition, the Company entered into a securities purchase agreement pursuant to which the Company agreed to sell and issue in a privateplacement an aggregate of up to 540,098 unregistered prefunded warrants and unregistered warrants to purchase up to an aggregate of 1,080,196shares of common stock, consisting of Series A warrants to purchase up to 540,098 shares of common stock and Series B warrants to purchase upto 540,098 shares of common stock at an offering price of $3.054 per prefunded warrant and associated Series A and Series B warrants.As of March 31,2023 all the pre funded warrants were exercised by the investor.F33ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSUREThere were no disagreements with accountants on accounting and financial disclosure of a type described in Item 304 (a)(1)(iv) or any reportable event asdescribed in Item 304 (a)(1)(v) of Regulation SK.ITEM 9A. CONTROLS AND PROCEDURESDisclosure ControlsWe carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief FinancialOfficer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) as of December 31, 2022. Basedupon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this Annual Report on Form10K, our disclosure controls and procedures were effective to ensure that information required to be disclosed in reports filed under the Exchange Act, as amended,is recorded, processed, summarized and reported within the required time periods specified in the SEC’s rules and forms and is accumulated and communicated toour management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.Management’s Report on Internal Control Over Financial ReportingOur internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records, that, in reasonable detail,accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only inaccordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition, use or disposition of our assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance withthe policies or procedures may deteriorate.Our management, including our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financialreporting at December 31, 2022. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the TreadwayCommission (COSO) in Internal Control—Integrated Framework (2013). Based on that assessment under those criteria, management has determined that, as ofDecember 31, 2022, our internal control over financial reporting was effective.This Annual Report on Form 10K does not include an attestation report of our registered public accounting firm regarding internal control over financialreporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to the exemption provided to issuersthat are not “large accelerated filers” nor “accelerated filers” under the DoddFrank Wall Street Reform and Consumer Protection Act.Changes in Internal Control Over Financial ReportingDuring the year ended December 31, 2022, we made two acquisitions, as discussed in Note 1a and Note 16 of the audited consolidated financial statementsfor the year ended December 31, 2022 included in this Annual Report on Form 10K. As a result, we made additions and/or modifications to policies, procedures,systems and controls that have materially affected our internal control over financial reporting from the acquisitions, including new controls for consolidationprocess that relates to accounting policies and procedures, operational processes and documentation practices. Management excluded the acquired businessesfrom management’s report on internal control over financial reporting. ITEM 9B. OTHER INFORMATIONNone.ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNot applicable.51PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe following table sets forth the name, age and positions of our executive officers and directors.NAMEAgePOSITIONRonen Luzon52Chief Executive Officer and Class III DirectorOr Kles40Chief Financial OfficerBilly Pardo47Chief Operating Officer and Chief Product OfficerIlia Turchinsky35Chief Technology OfficerEzequiel Javier Brandwain53Chief Commercial OfficerOron Branitzky (1)(2)(3)*63Class II DirectorOren Elmaliah (1)(2)(3)*38Class I DirectorArik Kaufman (1)(2)(3)*41Class I DirectorGuy Zimmerman*53Class II Director(1)Member of our audit committee(2)Member of our nominating and corporate governance committee(3)Member of our compensation committee* Independent as that term is defined by the rules of the Nasdaq Stock Market.The business background and certain other information about our directors and executive officers is set forth below:Ronen Luzon has served as our Chief Executive Officer and a member of our board of directors since September 2013. Since 2006, Mr. Luzon hasadditionally served as Chief Executive Officer and founder of Malers Ltd., a company in the global security solutions market which provides technological solutionsfor integrated communication infrastructures, security and control systems. Prior to Malers, he held several senior marketing, sales management and professionalservices positions in a variety of international high tech companies including VP marketing of GA Tech and Professional Services Manager of Eldat Communication.Mr. Luzon graduated from Middlesex University in London with a B.S. in IT and Business Information Systems. We believe that Mr. Luzon is qualified to serve as amember of our board of directors because of his more than 20 years of experience in the technology sector.Or Kles has served as our Chief Financial Officer since May 2016. He is a certified public accountant with a broad, diverse financial background. From May2013 until April 2016 he served as Assistant Controller of Shikun and BinuiSolel Boneh Infrastructure Ltd. and from December 2010 until May 2013 he served as anAssociate at KPMG. Mr. Kles holds an MBA and a B.A. in Business Management and Accounting (specializing in financing) from The College of ManagementAcademic Studies. Mr. Kles is a certified public accountant in Israel.Billy Pardo has served as our Chief Product Officer since May 2014 and Chief Operating Officer since April 2019. From April 2010 until August 2013, Ms.Pardo served as Senior Director of Product Management of Fourier Education. Among her areas of expertise are launching products from concept to successfuldelivery in various methodologies, including Fourier Education’s awardwinning einstein™ Science Tablet. Prior to that Ms. Pardo served in various productmanagement positions including, Project Manager of Time to Know, Product Marketing Manager of RiT Technologies, Product Manager of Pricer AB and R&DTeam Leader at Pricer AB. Ms. Pardo previously served as Software Engineer at Eldat Communication Ltd., and QA Engineer at NICE Systems. Ms. Pardo receivedan MBA from The Interdisciplinary Center and a B.A. in Computer Science from The Academic College of TelAvivYaffo.Ilia Turchinsky has served as our Chief Technology Officer since April 2019 and from July 2018 until April 2019 as our Director of Technology. Prior tojoining us, from 2013 until 2018, Mr. Turchinsky served in various roles, most recently Chief Technology Officer, at MonkeyTech Ltd., a company that providesdesign, development and characterization of mobile applications. Prior to that, Mr. Turchinsky served in various roles including development course instructor atIQLine, was a founder of Arnavsoft and was a software developer for MintLab and a political party. Mr. Turchinsky holds a B.Sc. from the Ben Gurion University inComputer Science and an M.Sc. from the Open University of Israel in Computer Science.52Ezequiel Javier Brandwain has served as our Chief Commercial Officer since February 2022. Mr. Brandwain brings more than two decades of globalexperience in retail and the fashion industry, mainly in business development, operations, and international markets. Before joining the Company, Mr. Brandwainheld positions of increasing responsibility at several companies, including between June 2017 and November 2020, at 7 For All Mankind International, where heserved as Director, Latin America and Caribbean, managing business development and operations across Latin America and the Caribbean. Before that, betweenMay 2016 and June 2017, Mr. Brandwain served as Chief Business Development Officer at Replay – Fashion Box SPA, where he oversaw business development andoperations, expansion and control in the Americas, the Caribbean, and NorthEast Asia. Prior this role, between September 2015 and May 2016, he served as theReplay’s Managing Director in Latin America and the Caribbean, leading the company’s international expansion in these regions. Prior to that, between April 2015and September 2015, Mr. Brandwain served as Managing Director, Latin America and Caribbean at Authentic Brands Group LLC, where he led that company’soperations, business developments and international expansion within these regions, and served as the direct liaison with the company’s headquarters in New York.Prior to that, between April 2015 and September 2015, Mr. Brandwain served as Chief Operating Officer, Latin America and Caribbean at Flemingo International Ltd.,overseeing operations, as well as projected operations in the travel retail field across these regions. Prior to that, between December 2010 and February 2014, Mr.Brandwain served as Regional Director, Southern Hemisphere at Calvin Klein, where he was responsible for defining and implementing the operational andcommercial strategy for Southern Hemisphere, as well as overseeing the retail, travel retail, concession, and wholesale businesses of the company. During his tenureat Calvin Klein, Mr. Brandwain also served as Travel Retail Director, Latin America, where he built the travel retail business and developed operations. Prior to that,between July 2010 and November 2010, Mr. Brandwain served as Business Director, Latin America and Caribbean at Givenchy Latin America, and between January2010 and June 2010 he served as Commercial Director, Latin America and Caribbean at Nautica Latin America. During December 2004 and December 2009, Mr.Brandwain served as Vice President, International Business Development at Report Collection/Modextil, Inc., where he was in charge of business and operationalexpansion, global growth, and brand extensions. Prior to that, between 2003 and October 2004, Mr. Brandwain served as General Manager at Andrew KoenigInternational, Inc. Between September 2019 and November 2020, Mr. Brandwain served as a member of the Board of Directors of 7 For All Mankind BrazilImportacao, Comercio E Distribuicao S.A. Mr. Brandwain earned a Bachelor degree in architecture from the University of the Republic (Uruguay).Oron Branitzky has served as a member of our board of directors since March 2017. Mr. Barnitzky has vast experience in retail technology. SinceNovember 2017, Mr. Branitzky has served as Global Retail Business Development at Superup, and from January 2007 until December 2014 he served as VicePresident of Sales and Marketing at Pricer AB. Prior to that, Mr. Branitzky has served as VP Marketing and Sales at Eldat Communication and Sarin TechnologiesLtd. Since January 2015, Mr. Branitzky has served as chairman of the board of directors of WiseShelf Ltd. and from May 2015 until March 2016, Mr. Branitzky servedas an advisory board member of ciValue. Mr. Branitzky received a B.S. from the Hebrew University of Jerusalem and an MBA in International Marketing from TelAviv University. We believe that Mr. Branitzky is qualified to serve as a member of our board of directors because of his more than 20 years of experience inmanaging the sales of hitech solutions to retailers across the globe.Oren Elmaliah, has served as a member of our board of directors since May 2017. In September 2015, Oren Elmaliah founded Accounting Team IL and hasacted as Account Manager since then. Accounting Team IL is a financial consultancy and service provider to public companies traded in Israel and abroad. SinceFebruary 2017, Mr. Elmaliah has served as controller of Enlivex Therapeutics Ltd., and since January 2017 he has served as Chief Financial Officer of Presstek Israel.In addition, since September 2015, Mr. Elmaliah has served as an Israel Authorities Reporting Officer of LG Electronics Israel and since September 2015 he hasserved as Local Financial Report Consultant of Chiasma. From July 2011 until August 2015, Mr. Elmaliah served as CPA, Financial Director of CFO Director Ltd andfrom June 2010 until July 2011 he served as Risk Management Consultant of RSM International Limited. Mr. Elmaliah holds a B.A. in Accounting/Economics and aMsc. in Finance/Accounting from Tel Aviv University, Israel. He is a licensed Certified Public Accountant in Israel. We believe that Mr. Elmaliah is qualified to serveas a member of our board of directors because of his vast finance experience and public company management and administration in the fields of finance,accounting, and financial regulation.53Arik Kaufman has served as a member of our board of directors since June 2017. Mr. Kaufman is an attorney specializing in the fields of commercial law,corporate law and capital markets and since 2016 runs his own law office in Israel. He has vast experience in the fields of financial reporting and financial regulation.Mr. Kaufman serves as the Chief Executive Officer of Steakholder Foods since January 2022. From September 2017 until January 2022, Mr. Kaufman served as VPBusiness Development of Mor Research Applications. Mr. Kaufman holds an LLB in Law from the Interdisciplinary Center, Herzliya, and is admitted to the IsraeliBar. We believe that Mr. Kaufman is qualified to serve as a member of our board of directors based upon his experience of assisting with the completion of numerousventure capital financings, mergers, acquisitions, and strategic relationships. In addition, he has served as a member of the board of various publicly tradedcompanies, including companies that operate in the same industry as us.Guy Zimmerman has served as a member of our board of directors since August 2021. Previously, Mr. Zimmerman served as Founder and CEO ofManuFuture, an online b2b engineering market place, since February 2021. Prior to that from 2017 to 2021, Mr. Zimmerman acted as a consultant to severaltechnology startups and was a founding partner of a business travel online platform. From 2013 to 2017, Mr. Zimmerman served as EVP of Marketing and BusinessDevelopment of Kornit Digital and was part of the IPO leadership. Prior to that, Mr. Zimmerman served as VP of Global Sales and Business Development at TefronLtd., a provider of seamless garment technology, where he led the $100m sales and sales support organization serving global retail and fashion brands. Prior to thathe served as Vice President of Strategy and Business Development at Tnuva Group, Israel’s largest food manufacturer and spent eight years at McKinsey &Company. Mr. Zimmerman previously led a software startup in the field of operational healthcare management systems. Mr. Zimmerman holds a B.Sc. in IndustrialEngineering from Tel Aviv University in Israel. We believe that Mr. Zimmerman is qualified to serve as a member of our board of directors because of his experiencein business development in the technology and retail sectors.Board Diversity MatrixThe table below provides certain information regarding the diversity of our board of directors as of the date of this annual report.Board Diversity Matrix (As of March 31, 2023)Total Number of Directors5FemaleMaleNonBinaryDid Not DiscloseGenderPart I: Gender IdentityDirectors#5##Part II: Demographic BackgroundAfrican American or Black####Alaskan Native or Native American####Asian####Hispanic or Latinx####Native Hawaiian or Pacific Islander####White#1##Two or More Races or Ethnicities#2##LGBTQ+0Did Not Disclose Demographic Background2Family RelationshipsRonen Luzon, the Chief Executive Officer and a member of our board of directors, and Billy Pardo, the Chief Product Officer and Chief Operating Officer, arehusband and wife. There are no other family relationships among any of our current or former directors or executive officers.Involvement in Certain Legal ProceedingsWe are not aware of any of our directors or officers being involved in any legal proceedings in the past ten years relating to any matters in bankruptcy,insolvency, criminal proceedings (other than traffic and other minor offenses), or being subject to any of the items set forth under Item 401(f) of Regulation SK.Arrangements between Officers and DirectorsTo our knowledge, there is no arrangement or understanding between any of our officers and any other person, including directors, pursuant to which theofficer was selected to serve as an officer.Board of DirectorsThere are no agreements with respect to the election of directors.On January 6, 2022, we filed with the Secretary of State of Delaware a Certificate of Amendment to our Amended and Restated Certificate of Incorporationproviding for a classified Board. Following filing of the Certificate of Amendment, members of our board are now classified into three classes with staggered threeyear terms (with the exception of the expiration of the initial Class I and Class II directors), as follows:●Class I, comprised of two directors, initially Arik Kaufman and Oren Elmaliah (with their initial terms expiring at our 2022 annual meeting of stockholders andmembers of such class serving successive threeyear terms);●Class II, comprised of two directors, initially Oron Branitzky and Guy Zimmerman (with their initial terms expiring at our 2023 annual meeting of stockholdersand members of such class serving successive threeyear terms); and●Class III, comprised of one director, initially Ronen Luzon (with his initial term expiring at our 2024 annual meeting of stockholders and members of suchclass serving successive threeyear terms).54To preserve the classified Board structure, a director elected by the Board of Directors to fill a vacancy holds office until the next election of the class forwhich such director has been chosen, and until that director’s successor has been elected and qualified or until his or her earlier death, resignation, retirement orremoval.Our board of directors has reviewed the materiality of any relationship that each of our directors has with us, either directly or indirectly. Based upon thisreview, we believe that Arik Kaufman, Oren Elmaliach, Oron Branitzky and Guy Zimmerman qualify as independent directors in accordance with the standards set bythe Nasdaq and Rule 10A3 promulgated under the Exchange Act.Committees of the BoardAudit CommitteeOur audit committee is comprised of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Elmaliah serves as chairman of the audit committee. The auditcommittee is responsible for retaining and overseeing our independent registered public accounting firm, approving the services performed by our independentregistered public accounting firm and reviewing our annual financial statements, accounting policies and our system of internal controls. The audit committee actsunder a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the audit committee’s composition and meetings.The audit committee charter is available on our website www.mysizeid.com.The Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by applicable SEC rules. Inaddition, the Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by the rules of the Nasdaq StockMarket.The Board of Directors has determined that Oren Elmaliah is an “audit committee financial expert” serving on its audit committee, and is independent, as theSEC has defined that term in Item 407 of Regulation SK.Compensation CommitteeOur compensation committee consists of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Branitzky serves as chairman of the compensationcommittee.The compensation committee’s roles and responsibilities include making recommendations to the Board of Directors regarding the compensation for ourexecutives, the role and performance of our executive officers, and appropriate compensation levels for our CEO, which are determined without the CEO present, andother executives. Our compensation committee also administers our 2017 Equity Incentive Plan and our 2017 Consultant Equity Incentive Plan. The compensationcommittee acts under a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the compensation committee’scomposition and meetings. The compensation committee charter is available on our website www.mysizeid.com.Our Board of Directors has determined that all of the members of the compensation committee are “independent” as that term is defined by the rules of theNasdaq Stock Market.Nominating and Corporate Governance CommitteeThe members of the nominating and corporate governance committee are Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Kaufman serves aschairman of the corporate governance and nominations committee. The nominating and corporate governance committee acts under a written charter, which morespecifically sets forth its responsibilities and duties, as well as requirements for the nominating and corporate governance committee’s composition and meetings.The nominating and corporate governance committee charter is available on our website www.mysizeid.com.The nominating and corporate governance committee develops, recommends and oversees implementation of corporate governance principles for us andconsiders recommendations for director nominees. The nominating and corporate governance committee also considers stockholder recommendations for directornominees that are properly received in accordance with applicable rules and regulations of the SEC. Our stockholders that wish to nominate a director for election tothe Board of Directors should follow the procedures set forth in our bylaws.55The nominating and corporate governance committee will consider persons identified by its members, management, stockholders, investment bankers andothers. The guidelines for selecting nominees, which are specified in the nominating committee charter, generally provide that persons to be nominated:●should be accomplished in his or her field and have a reputation, both personal and professional, that is consistent with our image and reputation;●should have relevant experience and expertise and would be able to provide insights and practical wisdom based upon that experience and expertise; and●should be of high moral and ethical character and would be willing to apply sound, objective and independent business judgment, and to assume broadfiduciary responsibility.The nominating and corporate governance committee will consider a number of qualifications relating to management and leadership experience,background and integrity and professionalism in evaluating a person’s candidacy for membership on the Board of Directors. The nominating and corporategovernance committee may require certain skills or attributes, such as financial or accounting experience, to meet specific Board needs that arise from time to timeand will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of Board of Directors members. The nominating andcorporate governance committee will not distinguish among nominees recommended by stockholders and other persons.Our Board of Directors has determined that all of the members of the nominating and corporate governance committee are “independent” as that term isdefined by the rules of the Nasdaq Stock Market.Code of Conduct and EthicsWe have a Code of Business Conduct and Ethics that applies to all our employees. The text of the Code of Business Conduct and Ethics is publiclyavailable on our website at www.mysizeid.com. Information contained on, or that can be accessed through, our website does not constitute a part of this report andis not incorporated by reference herein. Disclosure regarding any amendments to, or waivers from, provisions of the code of conduct and ethics that apply to ourdirectors, principal executive and financial officers will be posted on the “InvestorsCorporate Governance” section of our website at www.mysizeid.com or will beincluded in a Current Report on Form 8K, which we will file within four business days following the date of the amendment or waiver.Change in Procedures for Recommending DirectorsThere have been no material changes to the procedures by which our stockholders may recommend nominees to our Board of Directors from thoseprocedures set forth in our Proxy Statement for our 2021 Annual Meeting of Stockholders, filed with the SEC on December 7, 2022.56ITEM 11. EXECUTIVE COMPENSATIONSummary Compensation TableThe following sets forth the compensation paid by us to our named executive officers, during the years ended December 31, 2022 and December 31, 2021.Name and Principal PositionYearSalary($) (1)Bonus($)StockAwards($)OptionAwards($) (2)All OtherCompensation($)Total($)Ronen Luzon2022173,000223,0008,000126,000530,000Chief Executive Officer2021194,0005,00023,00097,000319,000Or Kles2022123,00053,0007,00071,000254,000Chief Financial Officer2021123,0008,00030,00061,000222,000Billy Pardo2022134,00053,0007,000100,00294,000Chief Operating Officer2021162,0007,00018,00074,000261,000(1) Salary for the years 2022 and 2021 are based on average US$/NIS representative exchange rates of NIS 3.358 and NIS 3.11 respectively.(2) Amounts in this column represent the grant date fair value of options granted to the named executive officers during 2022 and 2021, computed in accordance withFASB ASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the named executive officers. The assumptionsmade in valuing the options reported in this column are discussed in Note 11 to our audited financial statements for the year ended December 31, 2021 and Note 4 toour condensed consolidated interim financial statements for the quarterly period ended September 30, 2022.All Other Compensation TableThe “All Other Compensation” amounts set forth in the Summary Compensation Table above consist of the following:NameYearAutomobileRelatedExpenses($)Manager’sInsurance*($)EducationFund*($)Othersocialbenefits**($)Total($)Ronen Luzon202232,00031,00015,00048,000126,000202133,00033,00015,00016,00097,000Or Kles202215,00021,00010,00025,00071,000202114,00019,0009,00019,00061,000Billy Pardo202216,00025,00013,00046,000100,000202117,00024,00012,00021,00074,000* Manager’s insurance and education funds are customary benefits provided to employees based in Israel. Manager’s insurance is a combination of severancesavings (in accordance with Israeli law), defined contribution taxqualified pension savings and disability insurance premiums. An education fund is a savings fundof pretax contributions to be used after a specified period of time for educational or other permitted purposes.** Other social benefits for 2022 and 2021 for all named individuals includes tax payments in respect of social benefits.57Agreements with Named Executive OfficersRonen LuzonOn November 18, 2018, My Size Israel, our wholly owned subsidiary, entered into an employment agreement with Ronen Luzon, or the Luzon EmploymentAgreement, pursuant to which Mr. Luzon will serve as our Chief Executive Officer. Pursuant to the terms of the Luzon Employment Agreement, Mr. Luzon receivesNIS 55,000 per month as his base salary and shall be eligible to receive such bonus as determined by us. In addition, Mr. Luzon shall be entitled social benefits andto other benefits, including, but not limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, includinginsurance in case of disability, annual vacation days, sick leave and expense reimbursement. Pursuant to the terms of the Luzon Employment Agreement and subjectto certain conditions, payments made by the Company to the pension fund or manager’s insurance fund shall be made in lieu of severance payments due to Mr.Luzon. The term of the Luzon Employment Agreement shall be effective as of September 1, 2018 and shall continue until such time either party provides writtennotice to the other party at least 75 days in advance of the termination of such agreement. We may also terminate Mr. Luzon’s employment without prior writtennotice (or payment in lieu of such notice) for Cause (as defined in the Luzon Employment Agreement).Or KlesOn November 18, 2018, My Size Israel entered into an employment agreement with Or Kles, or the Kles Employment Agreement, pursuant to which Mr. Kleswill serve as our Chief Financial Officer. Pursuant to the terms of the Kles Employment Agreement, Mr. Kles receives NIS 38,000 per month as his base salary andshall be eligible to receive such bonus as determined by us. In addition, Mr. Kles shall be entitled to social benefits and other benefits, including, but not limited to,contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annual vacation days,sick leave and expense reimbursement. Pursuant to the terms of the Kles Employment Agreement and subject to certain conditions, payments made by us to thepension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Mr. Kles. The term of the Kles Employment Agreement shall beeffective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days in advance of thetermination of such agreement. We may also terminate Mr. Kles’s employment without prior written notice (or payment in lieu of such notice) for Cause (as defined inthe Kles Employment Agreement).Billy PardoOn November 18, 2018, My Size Israel entered into an employment agreement with Billy Pardo, or the Pardo Employment Agreement, pursuant to which Ms.Pardo will serve as our Chief Product Officer. Pursuant to the terms of the Pardo Employment Agreement, Ms. Pardo receives NIS 47,500 per month as her basesalary and shall be eligible to receive such bonus as determined by us. In addition, Ms. Pardo shall be entitled to social benefits and other benefits, including, butnot limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annualvacation days, sick leave and expense reimbursement. Pursuant to the terms of the Pardo Employment Agreement and subject to certain conditions, payments madeby us to the pension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Ms. Pardo. The term of the Pardo EmploymentAgreement shall be effective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days inadvance of the termination of such agreement. We may also terminate Ms. Pardo’s employment without prior written notice (or payment in lieu of such notice) forCause (as defined in the Pardo Employment Agreement).58Outstanding Equity Awards at Fiscal YearEndThe following table provides information regarding options held by each of our named executive officers that were outstanding as of December 31, 2022.Option AwardsStock AwardsName and Principal PositionNumber ofSecuritiesUnderlyingUnexercisedOptionsExercisableNumber ofSecuritiesUnderlyingUnexercisedOptionsUnexercisableOptionExercisePriceOptionExpirationDateEquityincentiveplan awards:Number ofUnearnedShares that HaveNot VestedEquityincentiveplan awards:Market Value ofUnearnedShares, That Have Not VestedRonen Luzon Chief Executive Officer400(1)$26(8)7/24/20231,601(2)$26(8)5/29/20256,400(3)$268/10/2025100,000(9)100,000$511,250Or Kles – Chief Financial Officer227(4)$26(8)7/24/2023427(5)$26(8)5/29/20255,200(6)$268/10/202524,000(10)24,000$122,700Billy Pardo Chief Operating Officer400(1)$26(8)7/24/2023894(7)$26(8)5/29/20255,200(6)$268/10/202524,000(11)24,000$122,700(1) The option has a grant date of July 24, 2017 and vested in full on January 24, 2018.(2) The option has a grant date of May 29, 2019. 267 options vested immediately upon grant, 445 options vested on January 24, 2019, 445 options vested on January24, 2020 and 444 options vested on January 24, 2021.(3) The option has a grant date of October 8, 2020, 1,600 options vested on November 26, 2020, 1,600 options vested on May 26, 2021, 1,600 options vested onNovember 26, 2021, and 1,600 options vested on May 26, 2022.(4) The option has a grant date of July 24, 2017. 76 options vested immediately upon grant, 76 options vested on May 1, 2018 and 75 options vested on May 1, 2019.(5) The option has a grant date of May 29, 2019. 160 options vested immediately upon grant, 445 options vested on May 1, 2020, 445 options vested on May 21, 2021and 444 options vested on May 1, 2022.(6) The option has a grant date of October 8, 2020, 1,300 options vested on November 26, 2020, 1,300 options vested on May 26, 2021, 1,300 options vested onNovember 26, 2021, and 1,300 options vested on May 26, 2022.(7) The option has a grant date of May 29, 2019. 214 options vested immediately upon grant, 227 options vested on January 24, 2019, 227 options vested on January24, 2020 and 226 options vested on January 24, 2021.(8) On May 25, 2020, the compensation committee of the Board of Directors of the Company reduced the exercise price of outstanding options of employees anddirectors of the Company for the purchase of an aggregate of 5,610 shares of common stock of the Company (with exercise prices ranging between $453.75 and$228.75) to $26 per share, which was the closing price for the Company’s common stock on May 22, 2020, and extended the term of the foregoing options for anadditional one year from the original date of expiration.(9) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(10) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(11) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.59Director CompensationThe following table sets forth compensation information for our nonemployee directors for the year ended December 31, 2022.NameFees earned orpaid incash ($)(1)Optionawards($)(1)(2)Total($)Oren Elmalih15,078 15,078Oron Barnitzky15,34715,347Arik Kaufman14,44114,441Guy Zimmerman13,03313,033(1)Fees for the year 2022 are based on average US$/NIS representative exchange rates of NIS 3.519.(2)Amounts in this column represent the grant date fair value of options granted to the nonemployee directors during 2022 computed in accordance with FASBASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the nonemployee directors. The assumptions made invaluing the options reported in this column are discussed in Note 11 to our financial statements for the year ended December 31, 2022.We compensate our nonemployee directors for their service as a member of our board. Mr. Luzon received no separate compensation for board service. Mr.Luzon’s compensation is set forth above in the Summary Compensation Table.Each nonemployee director is entitled to receive a per meeting fee of $318. Nonemployee directors are also reimbursed for their travel and reasonable outofpocket expenses incurred in connection with attending board and committee meetings, to the extent that attendance is required by the board or the committee(s)on which that director serves.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurity Ownership of Certain Beneficial Holders and ManagementThe following table sets forth certain information regarding beneficial ownership of shares of our common stock as of March 31, 2023 by (i) each personknown to beneficially own more than 5% of our outstanding common stock, (ii) each of our directors, (iii) each of our executive officers, and (iv) all of our directorsand executive officers as a group. Except as otherwise indicated, the persons named in the table below have sole voting and investment power with respect to allshares beneficially owned, subject to community property laws, where applicable.Beneficial Owner(1)Shares ofCommon StockBeneficiallyOwnedPercentage(2)Executive officers and directors:Ronen Luzon143,578(3)5.8%Or Kles29,854(4)1.2%Billy Pardo143,578(5)5.8%Ezequiel Javier Brandwain12,000(6)*Ilia Turchinsky18,313(7)*Arik Kaufman1,294(8)*Oren Elmaliah1,294(9)*Oron Branitzky1,294(10)*Guy ZimmermanAll Executive Officers and Directors as a Group (9 persons)207,6268.4%*Less than 1%(1) The address of each person is c/o My Size, Inc., 4 HaYarden St., P.O.B. 1026, Airport City, Israel 7010000 unless otherwise indicated herein.60(2) The calculation in this column is based upon 2,446,780 shares of common stock outstanding on March 31, 2023. Beneficial ownership is determined in accordancewith the rules of the SEC and generally includes voting or investment power with respect to the subject securities. Shares of common stock that are currentlyexercisable or exercisable within 60 days of March 31, 2023 are deemed to be beneficially owned by the person holding such securities for the purpose of computingthe percentage beneficial ownership of such person, but are not treated as outstanding for the purpose of computing the percentage beneficial ownership of anyother person(3) Consists of (i) 100,000 shares of restricted stock granted under the 2017 Plan, (ii) 4,683 shares of common stock, (iii) options to purchase up to 8,401 shares of ourcommon stock, and (iv) 24,000 shares of restricted stock and options to purchase up to 6,494 shares of our common stock which are held by Billy Pardo, RonenLuzon’s spouse. Mr. Luzon may be deemed to beneficially hold the securities of us held by Ms. Pardo.(4) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, and (ii) an option to purchase 5,854 shares of our common stock. Does not includean aggregate of 119,760 shares of restricted stock over which Mr. Kles has been designated the initial proxy to vote such shares pursuant to a voting agreemententered into between Whitehole S.L., Twinbel S.L. and EGI Acceleration, S.L.(5) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, (ii) options to purchase up to 6,494 shares of our common stock, (iii) 100,000 sharesof restricted stock which are held by Ronen Luzon, Billy Pardo’s spouse (iii) 8,401 shares of common stock which are held by Mr. Luzon, and (iii) options to purchaseup to 4,683 shares of our common stock which are held by Mr. Luzon. Ms. Pardo may be deemed to beneficially hold the securities of the Company held by Mr.Luzon.(6) Consists of 12,000 shares of restricted stock granted under the 2017 Plan.(7) Consists of (i) 16,000 shares of restricted stock granted under the 2017 Plan, and (ii) options to purchase up to 2,313 shares of our common stock.(8) Consists of options to purchase up to 1,294 shares of our common stock.(9) Consists of options to purchase up to 1,294 shares of our common stock.(10) Consists of options to purchase up to 1,294 shares of our common stock.Change in ControlWe are not aware of any arrangement that might result in a change in control in the future. We have no knowledge of any arrangements, including anypledge by any person of our securities, the operation of which may at a subsequent date result in a change in the Company’s control.Securities Authorized for Issuance Under Equity Compensation PlansOn January 29, 2017, our Board of Directors approved the 2017 Equity Incentive Plan and the 2017 Consultant Equity Incentive Plan, which were approvedby our stockholders on March 21, 2017. In addition, on January 29, 2017, our Board of Directors approved the Stock Option Plan Israel Grantees SubPlan. The 2017Equity Incentive Plan initially authorized the issuance of up to 5,334 shares of common stock under the plan and the 2017 Consultant Equity Incentive Plan initiallyauthorized the issuance of up to 8,000 shares of common stock under the plan.On February 12, 2018, our stockholders approved an amendment to the 2017 Consultant Equity Incentive Plan to increase the maximum number of shares ofour common stock available for issuance under the plan from 8,000 to 12,000. On July 3, 2018, our stockholders approved an amendment to the 2017 Equity IncentivePlan to increase the maximum number of shares of our common stock available for issuance under the plan from 5,334 to 8,000 and an amendment to the 2017Consultant Equity Incentive Plan to increase the maximum number of shares of our common stock available for issuance under the plan from 12,000 to 18,667.On May 25, 2020, our Board reduced the exercise price of outstanding options of our employees and directors for the purchase of an aggregate of 140,237of our common stock (with exercise prices ranging between $453.75 and $228.75) to $26.0 per share, and extended the term of the foregoing options for an additionalone year from the original date of expiration.61On August 10, 2020, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 80,000 to 58,000shares, and a decrease of the numbers of shares available for issuance under the 2017 Consultant Incentive Plan to 8,667 shares from 18,667 shares.On December 30, 2021, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 58,000 sharesto 230,800 shares.On December 7, 2022, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Plan from 230,800 shares to 289,000shares.The following table summarizes information about our equity compensation plans and individual compensation arrangements as of December 31, 2022.Number of securities to be issued upon exercise of outstanding options, warrants and rights(a)Weighted average exercise price of outstandingoptions, warrants and rights (b)Number of securities remaining availablefor future issuanceunder equity compensationplans (excludingsecurities reflected in column (a) (c)Equity compensation plans approved by security holders43,49724.7477,455Equity compensation plans not approved by security holdersTotal43,49724.7477,455ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEDuring years ended December 31, 2022 and 2021, except for compensation arrangements described elsewhere herein and the transactions described below,we did not participate in any transaction, and we are not currently participating in any proposed transaction, or series of transactions, in which the amount involvedexceeded the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years, and in which, to our knowledge,any of our directors, officers, five percent beneficial security holders, or any member of the immediate family of the foregoing persons had, or will have, a direct orindirect material interest.Compensation arrangements for our named executive officers and directors are described in the section entitled “Executive Compensation.”Employment AgreementsWe have entered into written employment agreements with each of our executive officers. These agreements generally provide for notice periods of varyingduration for termination of the agreement by us or by the relevant executive officer, during which time the executive officer will continue to receive base salary andbenefits. We have also entered into customary noncompetition, confidentiality of information and ownership of inventions arrangements with our executiveofficers. However, the enforceability of the noncompetition provisions may be limited under applicable law.OptionsSince our inception we have granted options to purchase our common stock to our officers and directors. Such option agreements may contain accelerationprovisions upon certain merger, acquisition, or change of control transactions.62Restricted Stock GrantsOn September 29, 2022, our compensation committee approved grants of restricted share awards under our 2017 Plan to Ronen Luzon, Or Kles, Billy Pardo,Ilia Turchinsky and Ezequiel Javier Brandwain, pursuant to which they were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000restricted shares and 12,000 restricted shares, respectively. The restricted shares shall vest in three equal installments on January 1, 2023, January 1, 2024 andJanuary 1, 2025, conditioned upon continuous employment with us, and subject to accelerated vesting upon a change in control of the Company.Shareholder ActivismIn May 2021, we received notice from Custodian Ventures, LLC, or Custodian, of its intention to nominate four candidates to stand for election to our Boardof Directors at our 2021 annual meeting of stockholders. Custodian subsequently made a book and records request and has made public statements calling forchanges to our management.On September 22, 2021, Custodian, commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v. Mysize,Inc., C.A. No. 20210817LWW, or the Delaware Action. In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting. As further described below, on November 4, 2021, we entered into asettlement agreement, or the Settlement Agreement, with Custodian, Activist Investing LLC, David Aboudi, Partick Loney and David Natan, collectively, the LazarParties, settling and dismissing the Delaware Action.On October 19, 2021, we commenced an action in the United States District Court for the Southern District of New York captioned My Size, Inc. v. DavidLazar, Custodian Ventures LLC, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, Civil Action No, 1:21cv08585, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, andcertain rules promulgated thereunder, or the SDNY Action. The complaint sought, among other things, declaratory and injunctive relief related to defendants’ effortsto nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed “group” for purposes ofSection 13 (d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. In addition, the complaint alleged that thedefendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules in connection with their efforts to elect a slate of directorsto our Board of Directors. On October 20, 2021, the Court signed an order granting a hearing on an anticipated motion for a preliminary injunction and expeditedscheduling and discovery in aid thereof, and scheduled that hearing for December 2, 2021. As further described below, on November 4, 2021, we entered into theSettlement Agreement with the Lazar Parties settling and dismissing the claims asserted in the SDNY Action and the Delaware Action against one another. OnNovember 8, 2021, the remaining defendants in the SDNY Action filed and answer and counterclaim asserting a claim against us pursuant to New York Civil RightsLaw Section 70a, also known as New York’s antiSLAPP statute.On November 4, 2021, we entered into the Settlement Agreement, or the Lazar Settlement Agreement, with the Lazar Parties. Pursuant to the LazarSettlement Agreement, we and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the LazarSettlement Agreement, we reimbursed Custodian for out of pocket expenses and in consideration for the dismissal and release of claims against the Company anaggregate amount equal to $275,000. With respect to our 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) itsMay 12, 2021 notice of stockholder nominations of four director candidates with respect to our 2021 annual meeting of stockholders, (ii) the notice dated October 28,2021 submitted by Custodian to us notifying us of Custodian’s continued intent to bring its nomination of four director candidates before our stockholders at the2021 annual meeting, and (iii) any and all related materials and notices submitted to us in connection therewith or related thereto and to not take any further action inconnection with the solicitation of any proxies in connection with us. Custodian also agreed to cease any and all solicitation and other activities in connection withthe 2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effective date of theAgreement, or the Standstill Period. The Lazar Settlement Agreement also provides that during the Standstill Period, the Lazar Parties will vote all shares of ourcommon stock it beneficially owns in accordance with any proposal or recommendation made by us or our Board of Directors that is submitted to our stockholders,unless to do so would violate applicable law and except with respect to certain extraordinary transactions. The Lazar Settlement Agreement also contains nondisparagement and confidentiality provisions, subject to certain exceptions.63On December 9, 2021, we subsequently entered into a Settlement Agreement, or the Ault Settlement Agreement, with Milton C. Ault III, Ault Alpha LP, AultAlpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed to withdraw the SDNY Action against the AultParties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that action against the Company. In addition, pursuant to the SettlementAgreement, we paid $70,000 to the Ault Parties in consideration for the releases and other good and valuable consideration as set forth in the Ault SettlementAgreement.Naiz Bespoke Technologies AcquisitionOn October 7, 2022, we entered into the Naiz Agreement with the Naiz Sellers, pursuant to which the Naiz Sellers agreed to sell to us all of the issued andoutstanding equity of Naiz. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) ) the Naiz EquityConsideration and (ii) up the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the Equity Value Averaging Period) is less than $1,650,000, My Size shall pay the Shortfall Value to the Naiz Sellers within 45days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period, it wasdetermined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement)).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers will be subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into the LockUp Agreement with My Size, (ii) Whitehole, Twinbel and EGIentered into the Voting Agreement with My Size and (iii) each of the Key Persons entered into employment agreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonth period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonth “dribbleout” provisionthat provides following the expiration of the initial sixmonth lockup period, without My Size’s prior written consent (which My Size shall be permitted to withholdat its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than the average dailytrading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.64The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Indemnification Agreements and Directors’ and Officers’ Liability InsuranceWe have entered into indemnification agreements with each of our directors and executive officers. These agreements, among other things, require us toindemnify these individuals and, in certain cases, affiliates of such individuals, to the fullest extent permitted by Delaware law against liabilities that may arise byreason of their service to us or at our direction, and to advance expenses incurred as a result of any proceedings against them as to which they could beindemnified. We also maintain an insurance policy that insures our directors and officers against certain liabilities, including liabilities arising under applicablesecurities laws.Director IndependenceSee “Item 10. Directors, Executive Officers and Corporate Governance; Corporate Governance, Board Composition” above for a discussion regarding theindependence of the members of our board of directors.ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICESSomekh Chaikin, a member firm of KPMG International, located in Tel Aviv, Israel, PCAOB ID 1057, has served as our independent registered publicaccounting firm for 2022 and 2021. The following are Somekh Chaikin’s fees for professional services in each of the respective fiscal years:Fee Category20222021Audit Fees198,910298,300Tax Fees30,66729,300Auditrelated Fees18,000Total Fees247,577327,600Audit Fees:Audit Fees consist of fees billed for professional services performed by Somekh Chaikin for the audit of our annual financial statements, thereview of interim consolidated financial statements, and related services that are normally provided in connection with registration statements, including theregistration statement for S1 and S3.Tax Fees: Tax Fees may consist of fees for professional services, including tax and VAT consulting and compliance performed by an independent registeredpublic accounting provided during the period.PreApproval Policies and ProceduresIn accordance with the SarbanesOxley Act of 2002, as amended, our audit committee charter requires the audit committee to preapprove all audit andpermitted nonaudit services provided by our independent registered public accounting firm, including the review and approval in advance of our independentregistered public accounting firm’s annual engagement letter and the proposed fees contained therein. The audit committee has the ability to delegate the authorityto preapprove nonaudit services to one or more designated members of the audit committee. If such authority is delegated, such delegated members of the auditcommittee must report to the full audit committee at the next audit committee meeting all items preapproved by such delegated members. In the fiscal years endedDecember 31, 2022 and December 31, 2021 all of the services performed by our independent registered public accounting firm were preapproved by the auditcommittee.65PART IVITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES(a)Financial StatementsThe financial statements required by this Item are included beginning at page F1.(b)ExhibitsSee Exhibit IndexITEM 16. FORM 10K SUMMARYNot applicableEXHIBIT INDEXExhibitNumberDescription3.1Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Form on Form8K filed on March 23, 2017)3.2Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10K filed onMarch 4, 2016)3.3Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’s Current Report onForm 8K filed on February 20, 2018)3.4Second Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8K filedon April 24, 2018)3.5Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’sCurrent Report on Form 8K filed on November 18, 2019)3.6Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on January 7, 2022)3.7Amendment No. 1 to Second Amended and Restated ByLaws (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8K filed on January 7, 2022)3.8Certificate of Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on December 7, 2022)4.1Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S3/A filed onNovember 14, 2016)4.2Form of Warrant to Purchase Common Stock issued on February 2, 2018 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report onForm 10K filed on March 27, 2019)4.3Description of Securities Registered under Section 12 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report on Form 10K filedon March 19, 2020)4.4Form of Warrant (incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S1, Amendment No. 1, filed with the SECon May 5, 2020.)4.5Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)4.6Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.1My Size, Inc. 2017 Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement on Schedule DEF 14Afiled on March 2, 2017)10.2My Size, Inc. 2017 Consultant Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement onSchedule DEF 14A filed on March 2, 2017)10.3My Size, Inc. 2017 Stock Option Plan Israel Grantees SubPlan (incorporated by reference to Exhibit 10.3 to the Company’s Annual Report on Form10K filed on March 27, 2019)6610.4Purchase Agreement between My Size, Inc. and Shoshana Zigdon dated as of February 16, 2014 (incorporated by reference to Exhibit 10.2 to theCompany’s Annual Report on Form 10K filed on March 4, 2016)10.5 +Employment Agreement between My Size Israel 2014 Ltd. and Ronen Luzon dated November 18, 2018 (incorporated by reference to Exhibit 10.1 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.6 +Employment Agreement between My Size Israel 2014 Ltd. and Or Kles dated November 18, 2018 (incorporated by reference to Exhibit 10.2 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.7 +Employment Agreement between My Size Israel 2014 Ltd. and Billy Pardo dated November 18, 2018 (incorporated by reference to Exhibit 10.3 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.8Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on January 15,2020)10.9Form of Warrant (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.10Form of Placement Agent Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.11Securities Purchase Agreement (incorporated by reference to Exhibit 10.30 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.12Underwriting Agreement, dated January 5, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on January 7, 2021)10.13Underwriting Agreement, dated March 22, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on March 25, 2021)10.14Amendment to Purchase Agreement between My Size Israel 2014 Ltd., My Size, Inc. and Shoshana Zigdon (incorporated by reference to Exhibit 10.1to the Company’s Quarterly Report on Form 10Q on August 16, 2021)10.15Form of Registered Direct Offering Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.16Form of PIPE Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.17Form of Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.18Form of Placement Agent Warrant issued by the Company on October 28, 2021 (incorporated by reference to Exhibit 10.22 to the Company’s Form S1filed on November 12, 2021)10.19Form of Registration Rights Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.4 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.20Engagement Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference to Exhibit 10.5 to theCompany’s Current Report on Form 8K filed on October 28, 2021)10.21Settlement Agreement dated November 4, 2021, among My Size, Inc., David Lazar and certain of his affiliates (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on November 5, 2021)10.22Share Purchase Agreement dated as of February 7, 2022 between My Size Israel 2014 Ltd. and Amar Guy Shalom and Elad Bretfeld (incorporated byreference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SEC on February 8, 2022)10.23Employment Agreement between My Size Israel 2014 Ltd. and Ezequiel Javier Brandwain dated January 27, 2022 (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on February 1, 2022)10.24Form of Section 102 Capital Gain Restricted Stock Award Agreement under the Company’s 2017 Equity Incentive Plan (incorporated by reference toExhibit 10.1 to the Company’s Quarterly Report on Form 10Q, filed with the SEC on November 14, 2022)10.25Share Purchase Agreement, dated as of October 6, 2022, by and among My Size, Inc., Borja Cembrero Saralegui, Artiz Toree Garcia, Whitehold, S.L.,Twinbel, S.L., and EGI Acceleration, S.L. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SECon October 12, 2022)10.26Form of LockUp Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)10.27Form of Voting Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.3 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)6710.28My Size, Inc. Amendment to the My Size, Inc. 2017 Equity Plan (incorporated by reference to Appendix B to the Company’s definitive proxystatement filed with the SEC on November 4, 2022)10.29Form of Registered Direct Offering Securities Purchase Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.1 to theCompany’s Current Report on Form 8K filed with the SEC on January 12, 2023)10.30Form of PIPE Securities Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8Kfiled with the SEC on January 12, 2023)10.31Form of Registered Direct PreFunded Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.32Form of Series A and Series B Warrant (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8K filed with the SEC onJanuary 12, 2023)10.33Form of Private Placement PreFunded Warrant (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.34Form of Registration Rights Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form8K filed with the SEC on January 12, 2023)10.35Engagement Agreement, dated December 5, 2022 (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8K filed withthe SEC on January 12, 2023)10.36*Form of Placement Agent Warrant21.1*List of Subsidiaries23.1*Consent of Somekh Chaikin, a member firm of KPMG International, registered public accounting firm31.1*Certification of the Chief Executive Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200231.2*Certification of the Chief Financial Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200232.1*Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a14(b) of the Exchange Act and 18 U.S.C. Section 1350, asadopted pursuant to Section 906 of the SarbanesOxley Act of 2002101.INS*Inline XBRL Instance Document101.SCH*Inline XBRL Taxonomy Schema101.CAL*Inline XBRL Taxonomy Calculation Linkbase101.DEF*Inline XBRL Taxonomy Definition Linkbase101.LAB*Inline XBRL Taxonomy Label Linkbase101.PRE*Inline XBRL Taxonomy Presentation Linkbase104Cover Page Interactive Data File (formatted as Inline XBRL document and contained in Exhibit 101)*Filed herewith.+Indicates a management contract or any compensatory plan, contract or arrangement68SIGNATURESPursuant to the requirements of Section 13 and 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10K to be signed on its behalf by the undersigned, thereunto duly authorized on this 14th day of April, 2023.MY SIZE, INC./s/ Ronen LuzonRonen LuzonChief Executive Officer (Principle Executive Officer)/s/ Or KlesOr KlesChief Financial Officer(Principal Financial and Accounting Officer)Pursuant to the requirements of the Securities Act of 1934, this annual report on Form 10K has been signed below by the following persons on behalf ofthe registrant and in the capacities and on the dates indicated.SignatureTitleDate/s/ Ronen LuzonChief Executive Officer and DirectorApril 14, 2023Ronen Luzon(Principle Executive Officer)/s/ Or KlesChief Financial OfficerApril 14, 2023Or Kles(Principal Financial and Accounting Officer)/s/ Oren ElmaliahDirectorApril 14, 2023Oren Elmaliah/s/ Arik KaufmanDirectorApril 14, 2023Arik Kaufman/s/ Oron BranitzkyDirectorApril 14, 2023Oron Branitzky/s/ Guy ZimmermanDirectorApril 14, 2023Guy Zimmerman69EX10.36 2 ex1036.htmExhibit 10.36NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES ANDEXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THESECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO ANEFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTIONNOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGINACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.PLACEMENT AGENT COMMON STOCK PURCHASE WARRANTMY SIZE, INC.Warrant Shares: _______Issue Date: January 12, 2023Initial Exercise Date: January 12, 2023THIS PLACEMENT AGENT COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _____________ or itsassigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the dateset forth above (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on January 10, 2028 (the “Termination Date”) but not thereafter, tosubscribe for and purchase from My Size, Inc., a Delaware corporation (the “Company”), up to ______ shares (as subject to adjustment hereunder, the “WarrantShares”) of the Company’s Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined inSection 2(b). This Warrant is issued pursuant to that certain engagement letter, dated as of December 5, 2022, by and between the Company and H.C. Wainwright &Co., LLC.Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities PurchaseAgreement (the “Purchase Agreement”), dated January 10, 2023, among the Company and the purchasers signatory thereto.1Section 2. Exercise.a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or afterthe Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted by email (or emailattachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the numberof Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shalldeliver the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on aUnited States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No inkoriginalNotice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required.Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder haspurchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrantto the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercisesof this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering theoutstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder andthe Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver anyobjection to any Notice of Exercise within one (1) Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant,acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, thenumber of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.b) Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $3.8188, subject to adjustment hereunder (the“Exercise Price”).c) Cashless Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein isnot available for the issuance or resale of the Warrant Shares to or by the Holder, then this Warrant may also be exercised, in whole or in part, at such timeby means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing[(AB) (X)] by (A), where:(A) =as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice ofExercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed anddelivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) ofRegulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAPon the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on theprincipal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s execution of the applicable Notice ofExercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hoursthereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii)the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice ofExercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;(B) =the Exercise Price of this Warrant, as adjusted hereunder; and(X) =the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if suchexercise were by means of a cash exercise rather than a cashless exercise.2“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which theCommon Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York Citytime)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest precedingdate) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for theCommon Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the mostrecent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by anindependent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to theCompany, the fees and expenses of which shall be paid by the Company.“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the TradingMarket on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or thenearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and ifprices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reportingprices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock asdetermined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonablyacceptable to the Company, the fees and expenses of which shall be paid by the Company.If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of theSecurities Act, the Warrant Shares shall take on the characteristics of the Warrants being exercised, and the holding period of the Warrant Shares beingissued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section 2(c).3d) Mechanics of Exercise.i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to betransmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with TheDepository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant insuch system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of theWarrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or mannerofsale limitationspursuant to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, registered in theCompany’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitledpursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2)Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate ExercisePrice to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Companyof the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall bedeemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant hasbeen exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (otherthan in the case of a cashless exercise) is received by the Warrant Share Delivery Date. If the Company fails for any reason to deliver tothe Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder,in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP ofthe Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifthTrading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share Delivery Date until such WarrantShares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FASTprogram so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standardsettlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stockas in effect on the date of delivery of the Notice of Exercise.4ii.Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the requestof a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a newWarrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrantshall in all other respects be identical with this Warrant; provided, however, that the Holder shall be required to return any WarrantShares subject to any such rescinded exercise notice concurrently with the return to Holder of the aggregate Exercise Price paid to theCompany for such Warrant Shares and the restoration of Holder’s right to acquire such Warrant Shares pursuant to this Warrant(including, issuance of a replacement warrant certificate evidencing such restored right).iii. Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant toSection 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.iv. Compensation for BuyIn on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights availableto the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with theprovisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date theHolder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwisepurchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipatedreceiving upon such exercise (a “BuyIn”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) theHolder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) theamount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connectionwith the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at theoption of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was nothonored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock thatwould have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holderpurchases Common Stock having a total purchase price of $11,000 to cover a BuyIn with respect to an attempted exercise of shares ofCommon Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediatelypreceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written noticeindicating the amounts payable to the Holder in respect of the BuyIn and, upon request of the Company, evidence of the amount of suchloss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including,without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver sharesof Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.5v. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise ofthis Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Companyshall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by theExercise Price or round up to the next whole share.vi. Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue ortransfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paidby the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by theHolder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, thisWarrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder andthe Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.The Company shall pay all Transfer Agent fees required for sameday processing of any Notice of Exercise and all fees to the DepositoryTrust Company (or another established clearing corporation performing similar functions) required for sameday electronic delivery of theWarrant Shares.vii. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timelyexercise of this Warrant, pursuant to the terms hereof.6e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise anyportion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicableNotice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of theHolder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). Forpurposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Partiesshall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, butshall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrantbeneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion ofany other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exerciseanalogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in thepreceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act andthe rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that suchcalculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed inaccordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (inrelation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisableshall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether thisWarrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of thisWarrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm theaccuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number ofoutstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s mostrecent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recentwritten notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request ofa Holder, the Company shall within one (1) Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock thenoutstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise ofsecurities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number ofoutstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stockoutstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice tothe Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial OwnershipLimitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares ofCommon Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in theBeneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shallbe construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portionhereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplementsnecessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of thisWarrant.7Section 3. Certain Adjustments.a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes adistribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which,for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstandingshares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into asmaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case theExercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any)outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately aftersuch event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of thisWarrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for thedetermination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case ofa subdivision, combination or reclassification.b) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sellsany Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares ofCommon Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregatePurchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise ofthis Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before thedate on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the recordholders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that to the extent that theHolder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall notbe entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Rightto such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not resultin the Holder exceeding the Beneficial Ownership Limitation).c) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend (other than cash) orother distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including,without limitation, any distribution of stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement,scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holdershall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number ofshares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including withoutlimitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken,the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, thatto the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, thenthe Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a resultof such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as itsright thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).8d) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more relatedtransactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease,license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, director indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of CommonStock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more ofthe outstanding Common Stock or 50% or more of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in oneor more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchangepursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly orindirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, withoutlimitation, a reorganization, recapitalization, spinoff, merger or scheme of arrangement) with another Person or group of Persons whereby such otherPerson or group acquires more than 50% of the outstanding shares of Common Stock or 50% or more of the voting power of the common equity of theCompany (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for eachWarrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of theHolder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor oracquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as aresult of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior tosuch Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, thedetermination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of AlternateConsideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Priceamong the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. Ifholders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall begiven the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at theHolder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date ofthe public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cashequal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of suchFundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company’s control, including not approved by theCompany’s Board of Directors, the Holder shall only be entitled to receive from the Company or any Successor Entity the same type or form ofconsideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to theholders of Common Stock of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, stock or anycombination thereof, or whether the holders of Common Stock are given the choice to receive from among alternative forms of consideration in connectionwith the Fundamental Transaction; provided, further, that if holders of Common Stock of the Company are not offered or paid any consideration in suchFundamental Transaction, such holders of Common Stock will be deemed to have received common stock of the Successor Entity (which Entity may be theCompany following such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on theBlackScholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day of consummation of the applicableFundamental Transaction for pricing purposes and reflecting (A) a riskfree interest rate corresponding to the U.S. Treasury rate for a period equal to thetime between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expectedvolatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualizationfactor) as of the Trading Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlyingprice per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any noncashconsideration, if any, being offered in such Fundamental Transaction and (ii) the highest VWAP during the period beginning on the Trading Dayimmediately preceding the public announcement of the applicable contemplated Fundamental Transaction (or the consummation of the applicableFundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant to this Section 3(e) and (D) a remaining option timeequal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date and (E) azero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds (or such other consideration)within the later of (i) five Business Days of the Holder’s election and (ii) the date of consummation of the Fundamental Transaction. The Company shallcause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of theobligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant towritten agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to suchFundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entityevidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares ofcapital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of thisWarrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which appliesthe exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to suchFundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for thepurpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which isreasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall beadded to the term “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction, each andevery provision of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to each of the Company and theSuccessor Entity or Successor Entities, jointly and severally), and the Successor Entity or Successor Entities, jointly and severally with the Company, mayexercise every right and power of the Company prior thereto and the Successor Entity or Successor Entities shall assume all of the obligations of theCompany prior thereto under this Warrant and the other Transaction Documents with the same effect as if the Company and such Successor Entity orSuccessor Entities, jointly and severally, had been named as the Company herein.e) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. Forpurposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the numberof shares of Common Stock (excluding treasury shares, if any) issued and outstanding.9f) Notice to Holder.i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, theCompany shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resultingadjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form)on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C)the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any sharesof capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection withany reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all orsubstantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into othersecurities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of theaffairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as itshall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective datehereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to beentitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification,consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expectedthat holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or otherproperty deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure todeliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to bespecified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, nonpublic informationregarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to aCurrent Report on Form 8K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of suchnotice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.10Section 4. Transfer of Warrant.a) Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and to theprovisions of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights) aretransferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a writtenassignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay anytransfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a newWarrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument ofassignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly becancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unlessthe Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of thedate on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordanceherewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company,together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent orattorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute anddeliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issuedon transfers or exchanges shall be dated the Issue Date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Sharesissuable pursuant thereto.c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “WarrantRegister”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as theabsolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to thecontrary.d) Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrantshall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue skylaws or (ii) eligible for resale without volume or mannerofsale restrictions or current public information requirements pursuant to Rule 144, the Companymay require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, comply with the provisions ofSection 5.7 of the Purchase Agreement.11e) Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon anyexercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling suchWarrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exemptedunder the Securities Act.Section 5. Miscellaneous.a) No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends orother rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Withoutlimiting the rights of a Holder to receive Warrant Shares on a “cashless exercise,” and to receive the cash payments contemplated pursuant to Sections 2(d)(i) and 2(d)(iv), in no event will the Company be required to net cash settle an exercise of this Warrant.a.In July 2019, the Company entered into a threeyear agreement with a consultant (“Consultant14”) to provide services to the Company includingassisting the Company to promote, market and sell the Company’s technology to potential customers. Pursuant to such agreement and in partialconsideration for such consulting services, the Company agreed to issue to Consultant14 options to purchase up to 107 shares of the Company’scommon stock upon execution of the agreement. The options are exercisable at $375.00 per share and shall vest in 3 equal instalments every twelvemonths starting July 2019. Unexercised options shall expire 4 years from the effective date.In addition, the Company agreed to issue to Consultant14 options to purchase up to 890 shares of the Company’s common stock upon executionof the agreement. The options are exercisable at $27.00 per share and shall vest in 4 equal instalments every six months starting September 2020.Unexercised options shall expire 5 years from the effective date.During 2022 and 2021, an amount of $7 and $14 respectively, were recorded by the Company as stockbased equity awards with respect to Consultant14.F24MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The Company’s outstanding options granted to consultants as of December 31, 2022 are as follows:Issuance dateOptions forCommon stockWeightedAverageexercise priceper shareOptionsexercisableExpirationdateFebruary 201815USD528.7515February 2023August 2018December 2018531USD352.38264August 2023 December 2023July 2020107USD375107July 2023SeptemberOctober 20201,488USD27.201,288October 2024 September 2025Total2,1411,674The Company uses the Black Scholes model to measure the fair value of the stock options with the assistance of a third party valuation.No stock options were granted during 2022 to consultants.The fair value of the Company’s stock options granted to nonemployees was calculated using the following weighted average assumptions:20222021GrantsGrantsDividend yield0%Expected volatility125.15%Riskfree interest0.16%Contractual term of up to (years)1.52F25MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Stock Option Plan for employeesIn March 2017, the Company adopted a stock option plan (the “Plan”) pursuant to which the Company’s Board of Directors may grant stock options toofficers and key employees. The total number of options which may be granted to directors, officers, employees under this plan, is limited to 289,000options. Stock options can be granted with an exercise price equal to or less than the stock’s fair market value at the date of grant.The fair value of each option award is estimated on the date of grant using the Binomial optionpricing model that used the weighted averageassumptions in the following table. The risk free rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the timeof grant.2022Grants2021GrantsDividend yield0%0%Expected volatility96.52%98.47%Riskfree interest4.06%0.96%expected life522.27In the years ended December 31, 2022 and 2021, 10,000 and 3,900 options, respectively, were granted.On December 7, 2022, the Company’s stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from230,800 shares to 289,000 shares.On September 29, 2022, the Compensation Committee of the Company approved grants of restricted share awards under the Company’s 2017 EquityIncentive Plan to Ronen Luzon (CEO), Or Kles (CFO), Billy Pardo (COO), Ilia Turchinsky (CTO) and Ezequiel Javier Brandwain (CCO), pursuant towhich were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000 restricted shares and 12,000 restricted shares,respectively. Each restricted share awarded under section 102 Capital Gain Restricted Stock Award Agreement (the “Agreement”). The restrictedshares shall vest in three equal installments on January 1, 2023, January 1, 2024 and January 1, 2025 for Ronen Luzon, Or Kles, Billy Pardo and IliaTurchinsky and on January 27, 2023, January 27, 2024 and January 27, 2025 for Ezequiel Javier Brandwain, conditioned upon continuous employmentwith the Company, and subject to accelerated vesting upon a change in control of the Company.On the same day, the Company granted fiveyears options to purchase up to 10,000 ordinary shares to other employees of the Company at an exerciseprice of $0.21 per share. The options vesting period is over three years in three equal portions from the vesting commencement date.F26MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The total stock option compensation expense in the year ended December 31, 2022 amounted to $448as follows: Research and development expensesamounted to $151, sales and marketing expenses amounted to $119and general and administrative expenses amounted to $178.The total stock option compensation expense in the year ended December 31, 2021 amounted to $252 as follows: Research and development expensesamounted to $94, sales and marketing expenses amounted to $97 and general and administrative expenses amounted to $61.As of December 31, 2022, there was a total of $530 unrecognized compensation cost relating to nonvested sharebased compensation arrangements.That cost is expected to be recognized over a weightedaverage period of 2.0 years.Share option activity during 2022 is as follows:2022Number ofoptionsWeightedaverageexerciseprice US$Outstanding as of January 135,74226.5Granted10,0005.25ExercisedExpired(4,136)Outstanding as of year end41,60622.48Vested as of year end33,20825.17Share option activity during 2021 is as follows:2021Number ofoptionsWeightedaverageExerciseprice US$Outstanding as of January 139,094$26.0Granted3,90032.0Exercised(751)Expired(6,501)Outstanding as of year end35,74226.5Vested as of year end27,06326.5F27MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 15 CONTINGENCIES AND COMMITMENTSa.On August 7, 2018, the Company commenced an action against North Empire LLC (“North Empire”) in the Supreme Court of the State of New York,County of New York for breach of a Securities Purchase Agreement (the “Agreement”) in which it is seeking damages in an amount to bedetermined at trial, but in no event less than $616. On August 2, 2018, North Empire filed a Summons with Notice against the Company, also in thesame Court, in which they allege damages in an amount of $11.4 million arising from an alleged breach of the Agreement. On September 6, 2018North Empire filed a Notice of Discontinuance of the action it had filed on August 2, 2018. On September 27, 2018, North Empire filed an answerand asserted counterclaims in the action commenced by the Company against them, alleging that the Company failed to deliver stock certificatesto North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against theCompany’s CEO and now former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018,the Company filed a reply to North Empire’s counterclaims. On November 15, 2018, the Company’s CEO and now former Chairman of the Boardfiled a motion to dismiss North Empire’s thirdparty complaint. On January 6, 2020, the Court granted the motion and dismissed the thirdpartycomplaint. Discovery has been completed and both parties have filed motions for summary judgment in connection with the claims andcounterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summary judgment, arguing there werefactual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision. The appealmust be fully perfected and filed by July 26, 2022. On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying theCompany’s motion for summary judgment. North Empire will file its opposition papers on or before March 31, 2022, and the Company will file replypapers on April 29, 2022. On or about September 12, 2022, the Court issued its Decision and Order denying the Company’s motion to reargue.North Empire filed its opposing brief on December 7, 2022. Both sides were given an opportunity to file a reply brief. The Company filed our replybrief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. The Appellate Court has scheduled oral argument for the appealfor February 7, 2023. Oral argument was held before the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Courtfiled its Decision and Order, which affirmed the lower court’s decisions regarding both My Size and North Empire’s motions for summary judgmentand sent the case back to the Supreme Court.On or about March 13, 2023, the Supreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date forthe mediation has not yet been set. The Company intends to vigorously defend any claims made by North Empire.The Company believes it is more likely than not that the counterclaims will be denied.b.In May 2021, the Company received notice from Custodian Ventures, LLC (“Custodian”) of its intention to nominate four candidates to stand forelection to our Board of Directors at the Company’s 2021 annual meeting of stockholders. Custodian subsequently made a book and recordsrequest and has made public statements calling for changes to our management.On September 22, 2021, Custodian commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v.MySize, Inc. (the “Delaware Action”). In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting.On October 19, 2021, the Company commenced an action in the United States District Court for the Southern District of New York againstCustodian, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, and certain rulespromulgated thereunder (the “SDNY Action”). The complaint sought, among other things, declaratory and injunctive relief related to defendants’efforts to nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed“group” for purposes of Section 13(d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. Inaddition, the complaint alleged that the defendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules inconnection with their efforts to elect a slate of directors to the Company’s Board of Directors. On October 20, 2021, the Court signed an ordergranting a hearing on an anticipated motion for a preliminary injunction and expedited scheduling and discovery in aid thereof, and scheduled thathearing for December 2, 2021.On November 4, 2021, the Company entered into the Settlement Agreement with the Lazar Parties. Pursuant to the Settlement Agreement, theCompany and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the SettlementAgreement, the Company agreed to reimburse Custodian for out of pocket expenses and in consideration for the dismissal and release of claimsagainst the Company an aggregate amount equal to $275, to be paid within three business days of the effective date of the Settlement Agreement.With respect to the Company’s 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) its May 12,2021 notice of stockholder nominations of four director candidates with respect to the Company’s 2021 annual meeting of stockholders, (ii) thenotice dated October 28, 2021 submitted by Custodian to the Company notifying the Company of Custodian’s continued intent to bring itsnomination of four director candidates before the Company’s stockholders at the 2021 annual meeting, and (iii) any and all related materials andnotices submitted to the Company in connection therewith or related thereto and to not take any further action in connection with the solicitationof any proxies in connection with the Company. Custodian also agreed to cease any and all solicitation and other activities in connection with the2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effectivedate of the Agreement (the “Standstill Period”). The Settlement Agreement also provides that during the Standstill Period, the Lazar Parties willvote all shares of common stock of the Company it beneficially owns in in accordance with any proposal or recommendation made by theCompany or the Board of Directors of the Company that is submitted to the stockholders of the Company, unless to do so would violateapplicable law and except with respect to certain extraordinary transactions. The Settlement Agreement also contains nondisparagement andconfidentiality provisions, subject to certain exceptions.On December 9, 2021, the Company subsequently entered into a Settlement Agreement (the “Ault Settlement Agreement”), with Milton C. Ault III,Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed towithdraw the SDNY Action against the Ault Parties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that actionagainst the Company. In addition, pursuant to the Settlement Agreement, the Company paid $70 to the Ault Parties in consideration for thereleases and other good and valuable consideration as set forth in the Ault Settlement Agreement.c.On July 5, 2021, the Company was served with a legal complaint filed by Fidelity Venture Capital Ltd. and Dror Atzmon in the Magistrate’s Court inTel Aviv for a monetary award in an amount of NIS 1,436,679 (approximately $450) and a declaratory relief. The plaintiffs allege that the Companybreached its contractual obligations to pay them for services allegedly rendered to the Company by the plaintiffs under a certain consultingagreement dated July 2, 2014, in an amount of NIS 819,000 (approximately $256). Additionally, the plaintiffs allege that the Company shouldcompensate them for losses allegedly incurred by them following their investment in the Company’s shares issued under a certain private offering.In the alternative, the plaintiffs move that the court will declare the investment agreement void with full restitution of plaintiffs’ original investmentin an amount of NIS 1,329,650(approximately $415). The Company filed its statement of defense on October 25, 2021. The first preliminary courthearing of the case is scheduled for January 23, 2022.The first court preliminary hearing was held on March 1, 2022.Following the first preliminary hearing and the Court’s comments and recommendation, the Plaintiffs filed a motion to strike out the claim withoutprejudice.On March 8, 2022 the Court ordered dismissal without prejudice of the claim.F28MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATIONAcquisition of OrgadOn February 7, 2022, the Company acquired 100% of the shares and voting interests in Orgad an omnichannel ecommerce platform. The acquisitionwas designed to create an additional revenue stream for the Company by becoming a direct ecommerce seller while leveraging the synergies betweenMySizeID and Orgad’s ecommerce platform.Unaudited proforma informationThe results of operations of Orgad have been included in the consolidated financial statements since the acquisition date of February 7, 2022. Orgadrevenues included in the Company’s consolidated statement of operations from February 7, 2022 through December 31, 2022 were $4,132. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,662 and $2,850 respectively, and the net loss after tax would have been $8,519 and $10,149 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash (*)300Issuance of shares of common stock (69,752 shares) (**)457Total consideration transferred757(*)The cash payment is subject to working capital adjustments.(**)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Orgad, on the twoyear and the threeyear anniversary of the closing, $350in each ofthese years provided that in the case of the second and third instalments certain revenue targets are met and subject further to certain downward postclosing adjustment. Furthermore, 69,752shares of common stock will be issued in eight equal quarterly instalments until the lapse of two years fromclosing. Additional earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023 will also be paid. All of these payments aresubject to the former owners being actively engaged with Orgad at the date such payment is due, and therefore were not taken as part of theconsideration for the business combination.During the year ended December 31, 2022 an amount of $456and $319was recorded in respect of the cash instalments and in respect of stocksissuance, respectively in Cost Of Goods, Sales and Marketing and General and Administrative expenses as shown in the following table:2022Stockbased compensation expense – Cost of goods194Stockbased compensation expense Sales and marketing271Stockbased compensation expense General and administrative310775(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the preliminary estimates of their fair values, which were determined using generally accepted valuation techniques based onestimates and assumptions made by management at the time of the acquisition. Such estimates are subject to change during the measurement periodwhich is not expected to exceed one year. The purchase price allocation was not finalized duo to examination of the net working capital of Orgad at theacquisition date. Any adjustments to the preliminary purchase price allocation identified during the measurement period will be recognized in theperiod in which the adjustments are determined.The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and Cash EquivalentTrade receivables364PP&E55Inventory864Longterm financial investment31Selling platform378Goodwill152Shortterm accruals and deferrals(181)Trade payables(668)Long term provision(13)Longterm debt(138)Deferred Taxes(87)Total net assets acquired757F29MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)(c)Acquisitionrelated costsThe Company incurred transaction costs of approximately $40and none during twelvemonth period ended December 31, 2022 which were included ingeneral and administrative expenses in the consolidated statements of income (loss).Acquisition of Naiz Bespoke Technologies, S.L. (“Naiz”)On October 11, 2022, the Company acquired 100% of the shares and voting interests in Naiz a provider of SaaS technology solutions that solve sizeand fit issues for fashion ecommerce companies. The acquisition was designed to allow Naiz’s customers benefit from MySize’s deep understanding ofthe fashion ecommerce retail landscape, while creating an additional revenue stream for the Company.Unaudited proforma informationThe results of operations of Naiz have been included in the consolidated financial statements since the acquisition date of October 11, 2022. Naizrevenues included in the Company’s consolidated statement of operations from October 11, 2022 through December 31, 2022 were $103. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,738 and $379 respectively and the net loss after tax would have been $8,695 and $10,717 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash503Issuance of shares of common stock (240,000 shares) (*)1,008Total consideration transferred1,511(*)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Naiz, additional cash consideration (up to $1,550) in four instalments subject to thefollowing conditions:(i)Continuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result ofa Good Reason; and(ii)Naiz’s Revenues reaching or exceeding the respective Target Revenues defined in the agreement. The revenues will be calculated in four periods:(1) January 1, 2022 – December 31, 2022; (2) January 1, 2023 – June 30, 2023; (3) July 1, 2023 – December 31, 2023; (4) January 1, 2024 – December31, 2024.Former owners of Naiz are entitled to additional cash consideration following December 31, 2025 (up to $1,650) in an event when the actual value of theequity consideration is less than $1,650, subject to completion of a Target Revenue for the period of January 1, 2025 – December 31, 2025 andcontinuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result of aGood Reason;F30MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)During the year ended December 31, 2022 an amount of $283 was recorded in respect of the additional cash consideration.(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the estimates of their fair values, which were determined using generally accepted valuation techniques based on estimates andassumptions made by management at the time of the acquisition.The following table summarizes the fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and cash equivalent36Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Total net assets acquired1,511(c)Acquisitionrelated costsDuring 2022, the Company incurred transaction costs of approximately $75 which were included in general and administrative expenses in theconsolidated statements of income (loss).F31MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)Note 17 – Operating SegmentsDuring the year ended December 31, 2021, the Company had one reportable segment. As a result of the business combinations in the reporting period(see note 13), the Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificialintelligence driven measurement solutions and (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions and. The fashionand equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. Orgad has onecustomer that is responsible for 37.9% of the Company consolidated revenues. The SaaS based innovative artificial intelligence driven measurementsolutions, or SaaS Solutions operating segment consists of My Size Inc and My Size Israel and My Size LLC.Information related to the operations of the Company’s reportable operating segments is set forth below:Fashion andequipment ecommerce platformSaaSSolutionsNaizTotalAs of the year ended December 31, 2022Revenues from external customers4,1322241034,459Operating (loss) income(591)(7,181)(338)(8,110)Financial income (expense), net(236)Net loss before tax(8,346)Fashion andequipment ecommerce platformSaasSolutionNaizAs of December 31, 2022:Assets2,0225,9661,691Amortization of intangible assets(114)(34)(46)The Company elected to present geographic information in respect with revenues generated from external customers based on the location of the selling entity:All the revenues of the fashion and equipment ecommerce platform segment are generated by Orgad, located in Israel.All the revenues of the Naiz segment are generated by Naiz, located in Spain.The revenues of the Saas Solutions segment are generated by My Size Ltd. located in Israel (approximately 75% of the segment revenues) and by My Size Inc.located in the U.S. (approximately 25% of the segment revenues).NOTE 18 SALES AND MARKETINGYear endedDecember 31,20222021Salaries836574Consultants and subcontractors5831,086Marketing481283Selling fees489Share based payments post Orgad acquisition (*)271Share based payments for consultants and employees127180Travel21142Other1451713,1432,336(*) See note 16.NOTE 19 GENERAL AND ADMINISTRATIVE EXPENSESYear endedDecember 31,20222021Salaries1,007461Professional services7051,832Share based payments for consultants, directors and employees18098Rent, office expenses and communication442372Insurance564627cash liability and equity liability expenses related to Orgad acquisition310cash liability expenses related to Naiz acquisition217Settlement fees (*)345Directors8259Other3933303,9004,124(*)See note 15(b)F32MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 20 FINANCIAL INCOME (EXPENSE), NETA.Financial incomeYear endedDecember 31,20222021Revaluation investment in marketable securities49Other26172666B.Financial expenseYear endedDecember 31,20222021Exchange rate differences33Revaluation of loan granted100Revaluation investment in marketable securities62Other6792629NOTE 21 EVENTS SUBSEQUENT TO THE BALANCE SHEET DATEa.On January 2, 2023, Orgad experienced a fire at its warehouse in Israel. The Company is not aware of any casualties or injuries associated with thefire. The Company shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450.The Company believes that this incident did not affect the future sales results of Orgad for the year 2023. The inventory was not insured and it istoo early to determine the potential impact of this incident on the other parties that were involved in the incident (lessor and others that leasedproperties near the warehouse).b.On January 10, 2023, the Company entered into a securities purchase agreement pursuant to which the Company sold an aggregate of 162,000ofthe Company’s shares of common stock and prefunded warrants to purchase up to 278,899shares of common stock and, in a concurrent privateplacement, unregistered warrants to purchase up to883,798 shares of common stock, consisting of Series A warrants to purchase up to 441,899shares of common stock and Series B warrants to purchase up to 441,899shares of common stock, at an offering price of $3.055per share ofcommon stock and associated Series A and Series B warrants and an offering price of $3.054per prefunded warrant and associated Series A andSeries B warrants.In addition, the Company entered into a securities purchase agreement pursuant to which the Company agreed to sell and issue in a privateplacement an aggregate of up to 540,098 unregistered prefunded warrants and unregistered warrants to purchase up to an aggregate of 1,080,196shares of common stock, consisting of Series A warrants to purchase up to 540,098 shares of common stock and Series B warrants to purchase upto 540,098 shares of common stock at an offering price of $3.054 per prefunded warrant and associated Series A and Series B warrants.As of March 31,2023 all the pre funded warrants were exercised by the investor.F33ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSUREThere were no disagreements with accountants on accounting and financial disclosure of a type described in Item 304 (a)(1)(iv) or any reportable event asdescribed in Item 304 (a)(1)(v) of Regulation SK.ITEM 9A. CONTROLS AND PROCEDURESDisclosure ControlsWe carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief FinancialOfficer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) as of December 31, 2022. Basedupon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this Annual Report on Form10K, our disclosure controls and procedures were effective to ensure that information required to be disclosed in reports filed under the Exchange Act, as amended,is recorded, processed, summarized and reported within the required time periods specified in the SEC’s rules and forms and is accumulated and communicated toour management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.Management’s Report on Internal Control Over Financial ReportingOur internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records, that, in reasonable detail,accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only inaccordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition, use or disposition of our assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance withthe policies or procedures may deteriorate.Our management, including our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financialreporting at December 31, 2022. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the TreadwayCommission (COSO) in Internal Control—Integrated Framework (2013). Based on that assessment under those criteria, management has determined that, as ofDecember 31, 2022, our internal control over financial reporting was effective.This Annual Report on Form 10K does not include an attestation report of our registered public accounting firm regarding internal control over financialreporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to the exemption provided to issuersthat are not “large accelerated filers” nor “accelerated filers” under the DoddFrank Wall Street Reform and Consumer Protection Act.Changes in Internal Control Over Financial ReportingDuring the year ended December 31, 2022, we made two acquisitions, as discussed in Note 1a and Note 16 of the audited consolidated financial statementsfor the year ended December 31, 2022 included in this Annual Report on Form 10K. As a result, we made additions and/or modifications to policies, procedures,systems and controls that have materially affected our internal control over financial reporting from the acquisitions, including new controls for consolidationprocess that relates to accounting policies and procedures, operational processes and documentation practices. Management excluded the acquired businessesfrom management’s report on internal control over financial reporting. ITEM 9B. OTHER INFORMATIONNone.ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNot applicable.51PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe following table sets forth the name, age and positions of our executive officers and directors.NAMEAgePOSITIONRonen Luzon52Chief Executive Officer and Class III DirectorOr Kles40Chief Financial OfficerBilly Pardo47Chief Operating Officer and Chief Product OfficerIlia Turchinsky35Chief Technology OfficerEzequiel Javier Brandwain53Chief Commercial OfficerOron Branitzky (1)(2)(3)*63Class II DirectorOren Elmaliah (1)(2)(3)*38Class I DirectorArik Kaufman (1)(2)(3)*41Class I DirectorGuy Zimmerman*53Class II Director(1)Member of our audit committee(2)Member of our nominating and corporate governance committee(3)Member of our compensation committee* Independent as that term is defined by the rules of the Nasdaq Stock Market.The business background and certain other information about our directors and executive officers is set forth below:Ronen Luzon has served as our Chief Executive Officer and a member of our board of directors since September 2013. Since 2006, Mr. Luzon hasadditionally served as Chief Executive Officer and founder of Malers Ltd., a company in the global security solutions market which provides technological solutionsfor integrated communication infrastructures, security and control systems. Prior to Malers, he held several senior marketing, sales management and professionalservices positions in a variety of international high tech companies including VP marketing of GA Tech and Professional Services Manager of Eldat Communication.Mr. Luzon graduated from Middlesex University in London with a B.S. in IT and Business Information Systems. We believe that Mr. Luzon is qualified to serve as amember of our board of directors because of his more than 20 years of experience in the technology sector.Or Kles has served as our Chief Financial Officer since May 2016. He is a certified public accountant with a broad, diverse financial background. From May2013 until April 2016 he served as Assistant Controller of Shikun and BinuiSolel Boneh Infrastructure Ltd. and from December 2010 until May 2013 he served as anAssociate at KPMG. Mr. Kles holds an MBA and a B.A. in Business Management and Accounting (specializing in financing) from The College of ManagementAcademic Studies. Mr. Kles is a certified public accountant in Israel.Billy Pardo has served as our Chief Product Officer since May 2014 and Chief Operating Officer since April 2019. From April 2010 until August 2013, Ms.Pardo served as Senior Director of Product Management of Fourier Education. Among her areas of expertise are launching products from concept to successfuldelivery in various methodologies, including Fourier Education’s awardwinning einstein™ Science Tablet. Prior to that Ms. Pardo served in various productmanagement positions including, Project Manager of Time to Know, Product Marketing Manager of RiT Technologies, Product Manager of Pricer AB and R&DTeam Leader at Pricer AB. Ms. Pardo previously served as Software Engineer at Eldat Communication Ltd., and QA Engineer at NICE Systems. Ms. Pardo receivedan MBA from The Interdisciplinary Center and a B.A. in Computer Science from The Academic College of TelAvivYaffo.Ilia Turchinsky has served as our Chief Technology Officer since April 2019 and from July 2018 until April 2019 as our Director of Technology. Prior tojoining us, from 2013 until 2018, Mr. Turchinsky served in various roles, most recently Chief Technology Officer, at MonkeyTech Ltd., a company that providesdesign, development and characterization of mobile applications. Prior to that, Mr. Turchinsky served in various roles including development course instructor atIQLine, was a founder of Arnavsoft and was a software developer for MintLab and a political party. Mr. Turchinsky holds a B.Sc. from the Ben Gurion University inComputer Science and an M.Sc. from the Open University of Israel in Computer Science.52Ezequiel Javier Brandwain has served as our Chief Commercial Officer since February 2022. Mr. Brandwain brings more than two decades of globalexperience in retail and the fashion industry, mainly in business development, operations, and international markets. Before joining the Company, Mr. Brandwainheld positions of increasing responsibility at several companies, including between June 2017 and November 2020, at 7 For All Mankind International, where heserved as Director, Latin America and Caribbean, managing business development and operations across Latin America and the Caribbean. Before that, betweenMay 2016 and June 2017, Mr. Brandwain served as Chief Business Development Officer at Replay – Fashion Box SPA, where he oversaw business development andoperations, expansion and control in the Americas, the Caribbean, and NorthEast Asia. Prior this role, between September 2015 and May 2016, he served as theReplay’s Managing Director in Latin America and the Caribbean, leading the company’s international expansion in these regions. Prior to that, between April 2015and September 2015, Mr. Brandwain served as Managing Director, Latin America and Caribbean at Authentic Brands Group LLC, where he led that company’soperations, business developments and international expansion within these regions, and served as the direct liaison with the company’s headquarters in New York.Prior to that, between April 2015 and September 2015, Mr. Brandwain served as Chief Operating Officer, Latin America and Caribbean at Flemingo International Ltd.,overseeing operations, as well as projected operations in the travel retail field across these regions. Prior to that, between December 2010 and February 2014, Mr.Brandwain served as Regional Director, Southern Hemisphere at Calvin Klein, where he was responsible for defining and implementing the operational andcommercial strategy for Southern Hemisphere, as well as overseeing the retail, travel retail, concession, and wholesale businesses of the company. During his tenureat Calvin Klein, Mr. Brandwain also served as Travel Retail Director, Latin America, where he built the travel retail business and developed operations. Prior to that,between July 2010 and November 2010, Mr. Brandwain served as Business Director, Latin America and Caribbean at Givenchy Latin America, and between January2010 and June 2010 he served as Commercial Director, Latin America and Caribbean at Nautica Latin America. During December 2004 and December 2009, Mr.Brandwain served as Vice President, International Business Development at Report Collection/Modextil, Inc., where he was in charge of business and operationalexpansion, global growth, and brand extensions. Prior to that, between 2003 and October 2004, Mr. Brandwain served as General Manager at Andrew KoenigInternational, Inc. Between September 2019 and November 2020, Mr. Brandwain served as a member of the Board of Directors of 7 For All Mankind BrazilImportacao, Comercio E Distribuicao S.A. Mr. Brandwain earned a Bachelor degree in architecture from the University of the Republic (Uruguay).Oron Branitzky has served as a member of our board of directors since March 2017. Mr. Barnitzky has vast experience in retail technology. SinceNovember 2017, Mr. Branitzky has served as Global Retail Business Development at Superup, and from January 2007 until December 2014 he served as VicePresident of Sales and Marketing at Pricer AB. Prior to that, Mr. Branitzky has served as VP Marketing and Sales at Eldat Communication and Sarin TechnologiesLtd. Since January 2015, Mr. Branitzky has served as chairman of the board of directors of WiseShelf Ltd. and from May 2015 until March 2016, Mr. Branitzky servedas an advisory board member of ciValue. Mr. Branitzky received a B.S. from the Hebrew University of Jerusalem and an MBA in International Marketing from TelAviv University. We believe that Mr. Branitzky is qualified to serve as a member of our board of directors because of his more than 20 years of experience inmanaging the sales of hitech solutions to retailers across the globe.Oren Elmaliah, has served as a member of our board of directors since May 2017. In September 2015, Oren Elmaliah founded Accounting Team IL and hasacted as Account Manager since then. Accounting Team IL is a financial consultancy and service provider to public companies traded in Israel and abroad. SinceFebruary 2017, Mr. Elmaliah has served as controller of Enlivex Therapeutics Ltd., and since January 2017 he has served as Chief Financial Officer of Presstek Israel.In addition, since September 2015, Mr. Elmaliah has served as an Israel Authorities Reporting Officer of LG Electronics Israel and since September 2015 he hasserved as Local Financial Report Consultant of Chiasma. From July 2011 until August 2015, Mr. Elmaliah served as CPA, Financial Director of CFO Director Ltd andfrom June 2010 until July 2011 he served as Risk Management Consultant of RSM International Limited. Mr. Elmaliah holds a B.A. in Accounting/Economics and aMsc. in Finance/Accounting from Tel Aviv University, Israel. He is a licensed Certified Public Accountant in Israel. We believe that Mr. Elmaliah is qualified to serveas a member of our board of directors because of his vast finance experience and public company management and administration in the fields of finance,accounting, and financial regulation.53Arik Kaufman has served as a member of our board of directors since June 2017. Mr. Kaufman is an attorney specializing in the fields of commercial law,corporate law and capital markets and since 2016 runs his own law office in Israel. He has vast experience in the fields of financial reporting and financial regulation.Mr. Kaufman serves as the Chief Executive Officer of Steakholder Foods since January 2022. From September 2017 until January 2022, Mr. Kaufman served as VPBusiness Development of Mor Research Applications. Mr. Kaufman holds an LLB in Law from the Interdisciplinary Center, Herzliya, and is admitted to the IsraeliBar. We believe that Mr. Kaufman is qualified to serve as a member of our board of directors based upon his experience of assisting with the completion of numerousventure capital financings, mergers, acquisitions, and strategic relationships. In addition, he has served as a member of the board of various publicly tradedcompanies, including companies that operate in the same industry as us.Guy Zimmerman has served as a member of our board of directors since August 2021. Previously, Mr. Zimmerman served as Founder and CEO ofManuFuture, an online b2b engineering market place, since February 2021. Prior to that from 2017 to 2021, Mr. Zimmerman acted as a consultant to severaltechnology startups and was a founding partner of a business travel online platform. From 2013 to 2017, Mr. Zimmerman served as EVP of Marketing and BusinessDevelopment of Kornit Digital and was part of the IPO leadership. Prior to that, Mr. Zimmerman served as VP of Global Sales and Business Development at TefronLtd., a provider of seamless garment technology, where he led the $100m sales and sales support organization serving global retail and fashion brands. Prior to thathe served as Vice President of Strategy and Business Development at Tnuva Group, Israel’s largest food manufacturer and spent eight years at McKinsey &Company. Mr. Zimmerman previously led a software startup in the field of operational healthcare management systems. Mr. Zimmerman holds a B.Sc. in IndustrialEngineering from Tel Aviv University in Israel. We believe that Mr. Zimmerman is qualified to serve as a member of our board of directors because of his experiencein business development in the technology and retail sectors.Board Diversity MatrixThe table below provides certain information regarding the diversity of our board of directors as of the date of this annual report.Board Diversity Matrix (As of March 31, 2023)Total Number of Directors5FemaleMaleNonBinaryDid Not DiscloseGenderPart I: Gender IdentityDirectors#5##Part II: Demographic BackgroundAfrican American or Black####Alaskan Native or Native American####Asian####Hispanic or Latinx####Native Hawaiian or Pacific Islander####White#1##Two or More Races or Ethnicities#2##LGBTQ+0Did Not Disclose Demographic Background2Family RelationshipsRonen Luzon, the Chief Executive Officer and a member of our board of directors, and Billy Pardo, the Chief Product Officer and Chief Operating Officer, arehusband and wife. There are no other family relationships among any of our current or former directors or executive officers.Involvement in Certain Legal ProceedingsWe are not aware of any of our directors or officers being involved in any legal proceedings in the past ten years relating to any matters in bankruptcy,insolvency, criminal proceedings (other than traffic and other minor offenses), or being subject to any of the items set forth under Item 401(f) of Regulation SK.Arrangements between Officers and DirectorsTo our knowledge, there is no arrangement or understanding between any of our officers and any other person, including directors, pursuant to which theofficer was selected to serve as an officer.Board of DirectorsThere are no agreements with respect to the election of directors.On January 6, 2022, we filed with the Secretary of State of Delaware a Certificate of Amendment to our Amended and Restated Certificate of Incorporationproviding for a classified Board. Following filing of the Certificate of Amendment, members of our board are now classified into three classes with staggered threeyear terms (with the exception of the expiration of the initial Class I and Class II directors), as follows:●Class I, comprised of two directors, initially Arik Kaufman and Oren Elmaliah (with their initial terms expiring at our 2022 annual meeting of stockholders andmembers of such class serving successive threeyear terms);●Class II, comprised of two directors, initially Oron Branitzky and Guy Zimmerman (with their initial terms expiring at our 2023 annual meeting of stockholdersand members of such class serving successive threeyear terms); and●Class III, comprised of one director, initially Ronen Luzon (with his initial term expiring at our 2024 annual meeting of stockholders and members of suchclass serving successive threeyear terms).54To preserve the classified Board structure, a director elected by the Board of Directors to fill a vacancy holds office until the next election of the class forwhich such director has been chosen, and until that director’s successor has been elected and qualified or until his or her earlier death, resignation, retirement orremoval.Our board of directors has reviewed the materiality of any relationship that each of our directors has with us, either directly or indirectly. Based upon thisreview, we believe that Arik Kaufman, Oren Elmaliach, Oron Branitzky and Guy Zimmerman qualify as independent directors in accordance with the standards set bythe Nasdaq and Rule 10A3 promulgated under the Exchange Act.Committees of the BoardAudit CommitteeOur audit committee is comprised of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Elmaliah serves as chairman of the audit committee. The auditcommittee is responsible for retaining and overseeing our independent registered public accounting firm, approving the services performed by our independentregistered public accounting firm and reviewing our annual financial statements, accounting policies and our system of internal controls. The audit committee actsunder a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the audit committee’s composition and meetings.The audit committee charter is available on our website www.mysizeid.com.The Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by applicable SEC rules. Inaddition, the Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by the rules of the Nasdaq StockMarket.The Board of Directors has determined that Oren Elmaliah is an “audit committee financial expert” serving on its audit committee, and is independent, as theSEC has defined that term in Item 407 of Regulation SK.Compensation CommitteeOur compensation committee consists of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Branitzky serves as chairman of the compensationcommittee.The compensation committee’s roles and responsibilities include making recommendations to the Board of Directors regarding the compensation for ourexecutives, the role and performance of our executive officers, and appropriate compensation levels for our CEO, which are determined without the CEO present, andother executives. Our compensation committee also administers our 2017 Equity Incentive Plan and our 2017 Consultant Equity Incentive Plan. The compensationcommittee acts under a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the compensation committee’scomposition and meetings. The compensation committee charter is available on our website www.mysizeid.com.Our Board of Directors has determined that all of the members of the compensation committee are “independent” as that term is defined by the rules of theNasdaq Stock Market.Nominating and Corporate Governance CommitteeThe members of the nominating and corporate governance committee are Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Kaufman serves aschairman of the corporate governance and nominations committee. The nominating and corporate governance committee acts under a written charter, which morespecifically sets forth its responsibilities and duties, as well as requirements for the nominating and corporate governance committee’s composition and meetings.The nominating and corporate governance committee charter is available on our website www.mysizeid.com.The nominating and corporate governance committee develops, recommends and oversees implementation of corporate governance principles for us andconsiders recommendations for director nominees. The nominating and corporate governance committee also considers stockholder recommendations for directornominees that are properly received in accordance with applicable rules and regulations of the SEC. Our stockholders that wish to nominate a director for election tothe Board of Directors should follow the procedures set forth in our bylaws.55The nominating and corporate governance committee will consider persons identified by its members, management, stockholders, investment bankers andothers. The guidelines for selecting nominees, which are specified in the nominating committee charter, generally provide that persons to be nominated:●should be accomplished in his or her field and have a reputation, both personal and professional, that is consistent with our image and reputation;●should have relevant experience and expertise and would be able to provide insights and practical wisdom based upon that experience and expertise; and●should be of high moral and ethical character and would be willing to apply sound, objective and independent business judgment, and to assume broadfiduciary responsibility.The nominating and corporate governance committee will consider a number of qualifications relating to management and leadership experience,background and integrity and professionalism in evaluating a person’s candidacy for membership on the Board of Directors. The nominating and corporategovernance committee may require certain skills or attributes, such as financial or accounting experience, to meet specific Board needs that arise from time to timeand will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of Board of Directors members. The nominating andcorporate governance committee will not distinguish among nominees recommended by stockholders and other persons.Our Board of Directors has determined that all of the members of the nominating and corporate governance committee are “independent” as that term isdefined by the rules of the Nasdaq Stock Market.Code of Conduct and EthicsWe have a Code of Business Conduct and Ethics that applies to all our employees. The text of the Code of Business Conduct and Ethics is publiclyavailable on our website at www.mysizeid.com. Information contained on, or that can be accessed through, our website does not constitute a part of this report andis not incorporated by reference herein. Disclosure regarding any amendments to, or waivers from, provisions of the code of conduct and ethics that apply to ourdirectors, principal executive and financial officers will be posted on the “InvestorsCorporate Governance” section of our website at www.mysizeid.com or will beincluded in a Current Report on Form 8K, which we will file within four business days following the date of the amendment or waiver.Change in Procedures for Recommending DirectorsThere have been no material changes to the procedures by which our stockholders may recommend nominees to our Board of Directors from thoseprocedures set forth in our Proxy Statement for our 2021 Annual Meeting of Stockholders, filed with the SEC on December 7, 2022.56ITEM 11. EXECUTIVE COMPENSATIONSummary Compensation TableThe following sets forth the compensation paid by us to our named executive officers, during the years ended December 31, 2022 and December 31, 2021.Name and Principal PositionYearSalary($) (1)Bonus($)StockAwards($)OptionAwards($) (2)All OtherCompensation($)Total($)Ronen Luzon2022173,000223,0008,000126,000530,000Chief Executive Officer2021194,0005,00023,00097,000319,000Or Kles2022123,00053,0007,00071,000254,000Chief Financial Officer2021123,0008,00030,00061,000222,000Billy Pardo2022134,00053,0007,000100,00294,000Chief Operating Officer2021162,0007,00018,00074,000261,000(1) Salary for the years 2022 and 2021 are based on average US$/NIS representative exchange rates of NIS 3.358 and NIS 3.11 respectively.(2) Amounts in this column represent the grant date fair value of options granted to the named executive officers during 2022 and 2021, computed in accordance withFASB ASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the named executive officers. The assumptionsmade in valuing the options reported in this column are discussed in Note 11 to our audited financial statements for the year ended December 31, 2021 and Note 4 toour condensed consolidated interim financial statements for the quarterly period ended September 30, 2022.All Other Compensation TableThe “All Other Compensation” amounts set forth in the Summary Compensation Table above consist of the following:NameYearAutomobileRelatedExpenses($)Manager’sInsurance*($)EducationFund*($)Othersocialbenefits**($)Total($)Ronen Luzon202232,00031,00015,00048,000126,000202133,00033,00015,00016,00097,000Or Kles202215,00021,00010,00025,00071,000202114,00019,0009,00019,00061,000Billy Pardo202216,00025,00013,00046,000100,000202117,00024,00012,00021,00074,000* Manager’s insurance and education funds are customary benefits provided to employees based in Israel. Manager’s insurance is a combination of severancesavings (in accordance with Israeli law), defined contribution taxqualified pension savings and disability insurance premiums. An education fund is a savings fundof pretax contributions to be used after a specified period of time for educational or other permitted purposes.** Other social benefits for 2022 and 2021 for all named individuals includes tax payments in respect of social benefits.57Agreements with Named Executive OfficersRonen LuzonOn November 18, 2018, My Size Israel, our wholly owned subsidiary, entered into an employment agreement with Ronen Luzon, or the Luzon EmploymentAgreement, pursuant to which Mr. Luzon will serve as our Chief Executive Officer. Pursuant to the terms of the Luzon Employment Agreement, Mr. Luzon receivesNIS 55,000 per month as his base salary and shall be eligible to receive such bonus as determined by us. In addition, Mr. Luzon shall be entitled social benefits andto other benefits, including, but not limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, includinginsurance in case of disability, annual vacation days, sick leave and expense reimbursement. Pursuant to the terms of the Luzon Employment Agreement and subjectto certain conditions, payments made by the Company to the pension fund or manager’s insurance fund shall be made in lieu of severance payments due to Mr.Luzon. The term of the Luzon Employment Agreement shall be effective as of September 1, 2018 and shall continue until such time either party provides writtennotice to the other party at least 75 days in advance of the termination of such agreement. We may also terminate Mr. Luzon’s employment without prior writtennotice (or payment in lieu of such notice) for Cause (as defined in the Luzon Employment Agreement).Or KlesOn November 18, 2018, My Size Israel entered into an employment agreement with Or Kles, or the Kles Employment Agreement, pursuant to which Mr. Kleswill serve as our Chief Financial Officer. Pursuant to the terms of the Kles Employment Agreement, Mr. Kles receives NIS 38,000 per month as his base salary andshall be eligible to receive such bonus as determined by us. In addition, Mr. Kles shall be entitled to social benefits and other benefits, including, but not limited to,contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annual vacation days,sick leave and expense reimbursement. Pursuant to the terms of the Kles Employment Agreement and subject to certain conditions, payments made by us to thepension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Mr. Kles. The term of the Kles Employment Agreement shall beeffective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days in advance of thetermination of such agreement. We may also terminate Mr. Kles’s employment without prior written notice (or payment in lieu of such notice) for Cause (as defined inthe Kles Employment Agreement).Billy PardoOn November 18, 2018, My Size Israel entered into an employment agreement with Billy Pardo, or the Pardo Employment Agreement, pursuant to which Ms.Pardo will serve as our Chief Product Officer. Pursuant to the terms of the Pardo Employment Agreement, Ms. Pardo receives NIS 47,500 per month as her basesalary and shall be eligible to receive such bonus as determined by us. In addition, Ms. Pardo shall be entitled to social benefits and other benefits, including, butnot limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annualvacation days, sick leave and expense reimbursement. Pursuant to the terms of the Pardo Employment Agreement and subject to certain conditions, payments madeby us to the pension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Ms. Pardo. The term of the Pardo EmploymentAgreement shall be effective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days inadvance of the termination of such agreement. We may also terminate Ms. Pardo’s employment without prior written notice (or payment in lieu of such notice) forCause (as defined in the Pardo Employment Agreement).58Outstanding Equity Awards at Fiscal YearEndThe following table provides information regarding options held by each of our named executive officers that were outstanding as of December 31, 2022.Option AwardsStock AwardsName and Principal PositionNumber ofSecuritiesUnderlyingUnexercisedOptionsExercisableNumber ofSecuritiesUnderlyingUnexercisedOptionsUnexercisableOptionExercisePriceOptionExpirationDateEquityincentiveplan awards:Number ofUnearnedShares that HaveNot VestedEquityincentiveplan awards:Market Value ofUnearnedShares, That Have Not VestedRonen Luzon Chief Executive Officer400(1)$26(8)7/24/20231,601(2)$26(8)5/29/20256,400(3)$268/10/2025100,000(9)100,000$511,250Or Kles – Chief Financial Officer227(4)$26(8)7/24/2023427(5)$26(8)5/29/20255,200(6)$268/10/202524,000(10)24,000$122,700Billy Pardo Chief Operating Officer400(1)$26(8)7/24/2023894(7)$26(8)5/29/20255,200(6)$268/10/202524,000(11)24,000$122,700(1) The option has a grant date of July 24, 2017 and vested in full on January 24, 2018.(2) The option has a grant date of May 29, 2019. 267 options vested immediately upon grant, 445 options vested on January 24, 2019, 445 options vested on January24, 2020 and 444 options vested on January 24, 2021.(3) The option has a grant date of October 8, 2020, 1,600 options vested on November 26, 2020, 1,600 options vested on May 26, 2021, 1,600 options vested onNovember 26, 2021, and 1,600 options vested on May 26, 2022.(4) The option has a grant date of July 24, 2017. 76 options vested immediately upon grant, 76 options vested on May 1, 2018 and 75 options vested on May 1, 2019.(5) The option has a grant date of May 29, 2019. 160 options vested immediately upon grant, 445 options vested on May 1, 2020, 445 options vested on May 21, 2021and 444 options vested on May 1, 2022.(6) The option has a grant date of October 8, 2020, 1,300 options vested on November 26, 2020, 1,300 options vested on May 26, 2021, 1,300 options vested onNovember 26, 2021, and 1,300 options vested on May 26, 2022.(7) The option has a grant date of May 29, 2019. 214 options vested immediately upon grant, 227 options vested on January 24, 2019, 227 options vested on January24, 2020 and 226 options vested on January 24, 2021.(8) On May 25, 2020, the compensation committee of the Board of Directors of the Company reduced the exercise price of outstanding options of employees anddirectors of the Company for the purchase of an aggregate of 5,610 shares of common stock of the Company (with exercise prices ranging between $453.75 and$228.75) to $26 per share, which was the closing price for the Company’s common stock on May 22, 2020, and extended the term of the foregoing options for anadditional one year from the original date of expiration.(9) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(10) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(11) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.59Director CompensationThe following table sets forth compensation information for our nonemployee directors for the year ended December 31, 2022.NameFees earned orpaid incash ($)(1)Optionawards($)(1)(2)Total($)Oren Elmalih15,078 15,078Oron Barnitzky15,34715,347Arik Kaufman14,44114,441Guy Zimmerman13,03313,033(1)Fees for the year 2022 are based on average US$/NIS representative exchange rates of NIS 3.519.(2)Amounts in this column represent the grant date fair value of options granted to the nonemployee directors during 2022 computed in accordance with FASBASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the nonemployee directors. The assumptions made invaluing the options reported in this column are discussed in Note 11 to our financial statements for the year ended December 31, 2022.We compensate our nonemployee directors for their service as a member of our board. Mr. Luzon received no separate compensation for board service. Mr.Luzon’s compensation is set forth above in the Summary Compensation Table.Each nonemployee director is entitled to receive a per meeting fee of $318. Nonemployee directors are also reimbursed for their travel and reasonable outofpocket expenses incurred in connection with attending board and committee meetings, to the extent that attendance is required by the board or the committee(s)on which that director serves.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurity Ownership of Certain Beneficial Holders and ManagementThe following table sets forth certain information regarding beneficial ownership of shares of our common stock as of March 31, 2023 by (i) each personknown to beneficially own more than 5% of our outstanding common stock, (ii) each of our directors, (iii) each of our executive officers, and (iv) all of our directorsand executive officers as a group. Except as otherwise indicated, the persons named in the table below have sole voting and investment power with respect to allshares beneficially owned, subject to community property laws, where applicable.Beneficial Owner(1)Shares ofCommon StockBeneficiallyOwnedPercentage(2)Executive officers and directors:Ronen Luzon143,578(3)5.8%Or Kles29,854(4)1.2%Billy Pardo143,578(5)5.8%Ezequiel Javier Brandwain12,000(6)*Ilia Turchinsky18,313(7)*Arik Kaufman1,294(8)*Oren Elmaliah1,294(9)*Oron Branitzky1,294(10)*Guy ZimmermanAll Executive Officers and Directors as a Group (9 persons)207,6268.4%*Less than 1%(1) The address of each person is c/o My Size, Inc., 4 HaYarden St., P.O.B. 1026, Airport City, Israel 7010000 unless otherwise indicated herein.60(2) The calculation in this column is based upon 2,446,780 shares of common stock outstanding on March 31, 2023. Beneficial ownership is determined in accordancewith the rules of the SEC and generally includes voting or investment power with respect to the subject securities. Shares of common stock that are currentlyexercisable or exercisable within 60 days of March 31, 2023 are deemed to be beneficially owned by the person holding such securities for the purpose of computingthe percentage beneficial ownership of such person, but are not treated as outstanding for the purpose of computing the percentage beneficial ownership of anyother person(3) Consists of (i) 100,000 shares of restricted stock granted under the 2017 Plan, (ii) 4,683 shares of common stock, (iii) options to purchase up to 8,401 shares of ourcommon stock, and (iv) 24,000 shares of restricted stock and options to purchase up to 6,494 shares of our common stock which are held by Billy Pardo, RonenLuzon’s spouse. Mr. Luzon may be deemed to beneficially hold the securities of us held by Ms. Pardo.(4) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, and (ii) an option to purchase 5,854 shares of our common stock. Does not includean aggregate of 119,760 shares of restricted stock over which Mr. Kles has been designated the initial proxy to vote such shares pursuant to a voting agreemententered into between Whitehole S.L., Twinbel S.L. and EGI Acceleration, S.L.(5) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, (ii) options to purchase up to 6,494 shares of our common stock, (iii) 100,000 sharesof restricted stock which are held by Ronen Luzon, Billy Pardo’s spouse (iii) 8,401 shares of common stock which are held by Mr. Luzon, and (iii) options to purchaseup to 4,683 shares of our common stock which are held by Mr. Luzon. Ms. Pardo may be deemed to beneficially hold the securities of the Company held by Mr.Luzon.(6) Consists of 12,000 shares of restricted stock granted under the 2017 Plan.(7) Consists of (i) 16,000 shares of restricted stock granted under the 2017 Plan, and (ii) options to purchase up to 2,313 shares of our common stock.(8) Consists of options to purchase up to 1,294 shares of our common stock.(9) Consists of options to purchase up to 1,294 shares of our common stock.(10) Consists of options to purchase up to 1,294 shares of our common stock.Change in ControlWe are not aware of any arrangement that might result in a change in control in the future. We have no knowledge of any arrangements, including anypledge by any person of our securities, the operation of which may at a subsequent date result in a change in the Company’s control.Securities Authorized for Issuance Under Equity Compensation PlansOn January 29, 2017, our Board of Directors approved the 2017 Equity Incentive Plan and the 2017 Consultant Equity Incentive Plan, which were approvedby our stockholders on March 21, 2017. In addition, on January 29, 2017, our Board of Directors approved the Stock Option Plan Israel Grantees SubPlan. The 2017Equity Incentive Plan initially authorized the issuance of up to 5,334 shares of common stock under the plan and the 2017 Consultant Equity Incentive Plan initiallyauthorized the issuance of up to 8,000 shares of common stock under the plan.On February 12, 2018, our stockholders approved an amendment to the 2017 Consultant Equity Incentive Plan to increase the maximum number of shares ofour common stock available for issuance under the plan from 8,000 to 12,000. On July 3, 2018, our stockholders approved an amendment to the 2017 Equity IncentivePlan to increase the maximum number of shares of our common stock available for issuance under the plan from 5,334 to 8,000 and an amendment to the 2017Consultant Equity Incentive Plan to increase the maximum number of shares of our common stock available for issuance under the plan from 12,000 to 18,667.On May 25, 2020, our Board reduced the exercise price of outstanding options of our employees and directors for the purchase of an aggregate of 140,237of our common stock (with exercise prices ranging between $453.75 and $228.75) to $26.0 per share, and extended the term of the foregoing options for an additionalone year from the original date of expiration.61On August 10, 2020, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 80,000 to 58,000shares, and a decrease of the numbers of shares available for issuance under the 2017 Consultant Incentive Plan to 8,667 shares from 18,667 shares.On December 30, 2021, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 58,000 sharesto 230,800 shares.On December 7, 2022, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Plan from 230,800 shares to 289,000shares.The following table summarizes information about our equity compensation plans and individual compensation arrangements as of December 31, 2022.Number of securities to be issued upon exercise of outstanding options, warrants and rights(a)Weighted average exercise price of outstandingoptions, warrants and rights (b)Number of securities remaining availablefor future issuanceunder equity compensationplans (excludingsecurities reflected in column (a) (c)Equity compensation plans approved by security holders43,49724.7477,455Equity compensation plans not approved by security holdersTotal43,49724.7477,455ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEDuring years ended December 31, 2022 and 2021, except for compensation arrangements described elsewhere herein and the transactions described below,we did not participate in any transaction, and we are not currently participating in any proposed transaction, or series of transactions, in which the amount involvedexceeded the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years, and in which, to our knowledge,any of our directors, officers, five percent beneficial security holders, or any member of the immediate family of the foregoing persons had, or will have, a direct orindirect material interest.Compensation arrangements for our named executive officers and directors are described in the section entitled “Executive Compensation.”Employment AgreementsWe have entered into written employment agreements with each of our executive officers. These agreements generally provide for notice periods of varyingduration for termination of the agreement by us or by the relevant executive officer, during which time the executive officer will continue to receive base salary andbenefits. We have also entered into customary noncompetition, confidentiality of information and ownership of inventions arrangements with our executiveofficers. However, the enforceability of the noncompetition provisions may be limited under applicable law.OptionsSince our inception we have granted options to purchase our common stock to our officers and directors. Such option agreements may contain accelerationprovisions upon certain merger, acquisition, or change of control transactions.62Restricted Stock GrantsOn September 29, 2022, our compensation committee approved grants of restricted share awards under our 2017 Plan to Ronen Luzon, Or Kles, Billy Pardo,Ilia Turchinsky and Ezequiel Javier Brandwain, pursuant to which they were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000restricted shares and 12,000 restricted shares, respectively. The restricted shares shall vest in three equal installments on January 1, 2023, January 1, 2024 andJanuary 1, 2025, conditioned upon continuous employment with us, and subject to accelerated vesting upon a change in control of the Company.Shareholder ActivismIn May 2021, we received notice from Custodian Ventures, LLC, or Custodian, of its intention to nominate four candidates to stand for election to our Boardof Directors at our 2021 annual meeting of stockholders. Custodian subsequently made a book and records request and has made public statements calling forchanges to our management.On September 22, 2021, Custodian, commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v. Mysize,Inc., C.A. No. 20210817LWW, or the Delaware Action. In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting. As further described below, on November 4, 2021, we entered into asettlement agreement, or the Settlement Agreement, with Custodian, Activist Investing LLC, David Aboudi, Partick Loney and David Natan, collectively, the LazarParties, settling and dismissing the Delaware Action.On October 19, 2021, we commenced an action in the United States District Court for the Southern District of New York captioned My Size, Inc. v. DavidLazar, Custodian Ventures LLC, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, Civil Action No, 1:21cv08585, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, andcertain rules promulgated thereunder, or the SDNY Action. The complaint sought, among other things, declaratory and injunctive relief related to defendants’ effortsto nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed “group” for purposes ofSection 13 (d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. In addition, the complaint alleged that thedefendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules in connection with their efforts to elect a slate of directorsto our Board of Directors. On October 20, 2021, the Court signed an order granting a hearing on an anticipated motion for a preliminary injunction and expeditedscheduling and discovery in aid thereof, and scheduled that hearing for December 2, 2021. As further described below, on November 4, 2021, we entered into theSettlement Agreement with the Lazar Parties settling and dismissing the claims asserted in the SDNY Action and the Delaware Action against one another. OnNovember 8, 2021, the remaining defendants in the SDNY Action filed and answer and counterclaim asserting a claim against us pursuant to New York Civil RightsLaw Section 70a, also known as New York’s antiSLAPP statute.On November 4, 2021, we entered into the Settlement Agreement, or the Lazar Settlement Agreement, with the Lazar Parties. Pursuant to the LazarSettlement Agreement, we and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the LazarSettlement Agreement, we reimbursed Custodian for out of pocket expenses and in consideration for the dismissal and release of claims against the Company anaggregate amount equal to $275,000. With respect to our 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) itsMay 12, 2021 notice of stockholder nominations of four director candidates with respect to our 2021 annual meeting of stockholders, (ii) the notice dated October 28,2021 submitted by Custodian to us notifying us of Custodian’s continued intent to bring its nomination of four director candidates before our stockholders at the2021 annual meeting, and (iii) any and all related materials and notices submitted to us in connection therewith or related thereto and to not take any further action inconnection with the solicitation of any proxies in connection with us. Custodian also agreed to cease any and all solicitation and other activities in connection withthe 2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effective date of theAgreement, or the Standstill Period. The Lazar Settlement Agreement also provides that during the Standstill Period, the Lazar Parties will vote all shares of ourcommon stock it beneficially owns in accordance with any proposal or recommendation made by us or our Board of Directors that is submitted to our stockholders,unless to do so would violate applicable law and except with respect to certain extraordinary transactions. The Lazar Settlement Agreement also contains nondisparagement and confidentiality provisions, subject to certain exceptions.63On December 9, 2021, we subsequently entered into a Settlement Agreement, or the Ault Settlement Agreement, with Milton C. Ault III, Ault Alpha LP, AultAlpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed to withdraw the SDNY Action against the AultParties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that action against the Company. In addition, pursuant to the SettlementAgreement, we paid $70,000 to the Ault Parties in consideration for the releases and other good and valuable consideration as set forth in the Ault SettlementAgreement.Naiz Bespoke Technologies AcquisitionOn October 7, 2022, we entered into the Naiz Agreement with the Naiz Sellers, pursuant to which the Naiz Sellers agreed to sell to us all of the issued andoutstanding equity of Naiz. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) ) the Naiz EquityConsideration and (ii) up the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the Equity Value Averaging Period) is less than $1,650,000, My Size shall pay the Shortfall Value to the Naiz Sellers within 45days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period, it wasdetermined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement)).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers will be subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into the LockUp Agreement with My Size, (ii) Whitehole, Twinbel and EGIentered into the Voting Agreement with My Size and (iii) each of the Key Persons entered into employment agreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonth period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonth “dribbleout” provisionthat provides following the expiration of the initial sixmonth lockup period, without My Size’s prior written consent (which My Size shall be permitted to withholdat its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than the average dailytrading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.64The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Indemnification Agreements and Directors’ and Officers’ Liability InsuranceWe have entered into indemnification agreements with each of our directors and executive officers. These agreements, among other things, require us toindemnify these individuals and, in certain cases, affiliates of such individuals, to the fullest extent permitted by Delaware law against liabilities that may arise byreason of their service to us or at our direction, and to advance expenses incurred as a result of any proceedings against them as to which they could beindemnified. We also maintain an insurance policy that insures our directors and officers against certain liabilities, including liabilities arising under applicablesecurities laws.Director IndependenceSee “Item 10. Directors, Executive Officers and Corporate Governance; Corporate Governance, Board Composition” above for a discussion regarding theindependence of the members of our board of directors.ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICESSomekh Chaikin, a member firm of KPMG International, located in Tel Aviv, Israel, PCAOB ID 1057, has served as our independent registered publicaccounting firm for 2022 and 2021. The following are Somekh Chaikin’s fees for professional services in each of the respective fiscal years:Fee Category20222021Audit Fees198,910298,300Tax Fees30,66729,300Auditrelated Fees18,000Total Fees247,577327,600Audit Fees:Audit Fees consist of fees billed for professional services performed by Somekh Chaikin for the audit of our annual financial statements, thereview of interim consolidated financial statements, and related services that are normally provided in connection with registration statements, including theregistration statement for S1 and S3.Tax Fees: Tax Fees may consist of fees for professional services, including tax and VAT consulting and compliance performed by an independent registeredpublic accounting provided during the period.PreApproval Policies and ProceduresIn accordance with the SarbanesOxley Act of 2002, as amended, our audit committee charter requires the audit committee to preapprove all audit andpermitted nonaudit services provided by our independent registered public accounting firm, including the review and approval in advance of our independentregistered public accounting firm’s annual engagement letter and the proposed fees contained therein. The audit committee has the ability to delegate the authorityto preapprove nonaudit services to one or more designated members of the audit committee. If such authority is delegated, such delegated members of the auditcommittee must report to the full audit committee at the next audit committee meeting all items preapproved by such delegated members. In the fiscal years endedDecember 31, 2022 and December 31, 2021 all of the services performed by our independent registered public accounting firm were preapproved by the auditcommittee.65PART IVITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES(a)Financial StatementsThe financial statements required by this Item are included beginning at page F1.(b)ExhibitsSee Exhibit IndexITEM 16. FORM 10K SUMMARYNot applicableEXHIBIT INDEXExhibitNumberDescription3.1Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Form on Form8K filed on March 23, 2017)3.2Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10K filed onMarch 4, 2016)3.3Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’s Current Report onForm 8K filed on February 20, 2018)3.4Second Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8K filedon April 24, 2018)3.5Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’sCurrent Report on Form 8K filed on November 18, 2019)3.6Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on January 7, 2022)3.7Amendment No. 1 to Second Amended and Restated ByLaws (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8K filed on January 7, 2022)3.8Certificate of Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on December 7, 2022)4.1Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S3/A filed onNovember 14, 2016)4.2Form of Warrant to Purchase Common Stock issued on February 2, 2018 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report onForm 10K filed on March 27, 2019)4.3Description of Securities Registered under Section 12 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report on Form 10K filedon March 19, 2020)4.4Form of Warrant (incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S1, Amendment No. 1, filed with the SECon May 5, 2020.)4.5Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)4.6Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.1My Size, Inc. 2017 Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement on Schedule DEF 14Afiled on March 2, 2017)10.2My Size, Inc. 2017 Consultant Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement onSchedule DEF 14A filed on March 2, 2017)10.3My Size, Inc. 2017 Stock Option Plan Israel Grantees SubPlan (incorporated by reference to Exhibit 10.3 to the Company’s Annual Report on Form10K filed on March 27, 2019)6610.4Purchase Agreement between My Size, Inc. and Shoshana Zigdon dated as of February 16, 2014 (incorporated by reference to Exhibit 10.2 to theCompany’s Annual Report on Form 10K filed on March 4, 2016)10.5 +Employment Agreement between My Size Israel 2014 Ltd. and Ronen Luzon dated November 18, 2018 (incorporated by reference to Exhibit 10.1 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.6 +Employment Agreement between My Size Israel 2014 Ltd. and Or Kles dated November 18, 2018 (incorporated by reference to Exhibit 10.2 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.7 +Employment Agreement between My Size Israel 2014 Ltd. and Billy Pardo dated November 18, 2018 (incorporated by reference to Exhibit 10.3 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.8Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on January 15,2020)10.9Form of Warrant (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.10Form of Placement Agent Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.11Securities Purchase Agreement (incorporated by reference to Exhibit 10.30 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.12Underwriting Agreement, dated January 5, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on January 7, 2021)10.13Underwriting Agreement, dated March 22, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on March 25, 2021)10.14Amendment to Purchase Agreement between My Size Israel 2014 Ltd., My Size, Inc. and Shoshana Zigdon (incorporated by reference to Exhibit 10.1to the Company’s Quarterly Report on Form 10Q on August 16, 2021)10.15Form of Registered Direct Offering Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.16Form of PIPE Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.17Form of Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.18Form of Placement Agent Warrant issued by the Company on October 28, 2021 (incorporated by reference to Exhibit 10.22 to the Company’s Form S1filed on November 12, 2021)10.19Form of Registration Rights Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.4 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.20Engagement Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference to Exhibit 10.5 to theCompany’s Current Report on Form 8K filed on October 28, 2021)10.21Settlement Agreement dated November 4, 2021, among My Size, Inc., David Lazar and certain of his affiliates (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on November 5, 2021)10.22Share Purchase Agreement dated as of February 7, 2022 between My Size Israel 2014 Ltd. and Amar Guy Shalom and Elad Bretfeld (incorporated byreference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SEC on February 8, 2022)10.23Employment Agreement between My Size Israel 2014 Ltd. and Ezequiel Javier Brandwain dated January 27, 2022 (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on February 1, 2022)10.24Form of Section 102 Capital Gain Restricted Stock Award Agreement under the Company’s 2017 Equity Incentive Plan (incorporated by reference toExhibit 10.1 to the Company’s Quarterly Report on Form 10Q, filed with the SEC on November 14, 2022)10.25Share Purchase Agreement, dated as of October 6, 2022, by and among My Size, Inc., Borja Cembrero Saralegui, Artiz Toree Garcia, Whitehold, S.L.,Twinbel, S.L., and EGI Acceleration, S.L. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SECon October 12, 2022)10.26Form of LockUp Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)10.27Form of Voting Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.3 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)6710.28My Size, Inc. Amendment to the My Size, Inc. 2017 Equity Plan (incorporated by reference to Appendix B to the Company’s definitive proxystatement filed with the SEC on November 4, 2022)10.29Form of Registered Direct Offering Securities Purchase Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.1 to theCompany’s Current Report on Form 8K filed with the SEC on January 12, 2023)10.30Form of PIPE Securities Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8Kfiled with the SEC on January 12, 2023)10.31Form of Registered Direct PreFunded Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.32Form of Series A and Series B Warrant (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8K filed with the SEC onJanuary 12, 2023)10.33Form of Private Placement PreFunded Warrant (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.34Form of Registration Rights Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form8K filed with the SEC on January 12, 2023)10.35Engagement Agreement, dated December 5, 2022 (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8K filed withthe SEC on January 12, 2023)10.36*Form of Placement Agent Warrant21.1*List of Subsidiaries23.1*Consent of Somekh Chaikin, a member firm of KPMG International, registered public accounting firm31.1*Certification of the Chief Executive Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200231.2*Certification of the Chief Financial Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200232.1*Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a14(b) of the Exchange Act and 18 U.S.C. Section 1350, asadopted pursuant to Section 906 of the SarbanesOxley Act of 2002101.INS*Inline XBRL Instance Document101.SCH*Inline XBRL Taxonomy Schema101.CAL*Inline XBRL Taxonomy Calculation Linkbase101.DEF*Inline XBRL Taxonomy Definition Linkbase101.LAB*Inline XBRL Taxonomy Label Linkbase101.PRE*Inline XBRL Taxonomy Presentation Linkbase104Cover Page Interactive Data File (formatted as Inline XBRL document and contained in Exhibit 101)*Filed herewith.+Indicates a management contract or any compensatory plan, contract or arrangement68SIGNATURESPursuant to the requirements of Section 13 and 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10K to be signed on its behalf by the undersigned, thereunto duly authorized on this 14th day of April, 2023.MY SIZE, INC./s/ Ronen LuzonRonen LuzonChief Executive Officer (Principle Executive Officer)/s/ Or KlesOr KlesChief Financial Officer(Principal Financial and Accounting Officer)Pursuant to the requirements of the Securities Act of 1934, this annual report on Form 10K has been signed below by the following persons on behalf ofthe registrant and in the capacities and on the dates indicated.SignatureTitleDate/s/ Ronen LuzonChief Executive Officer and DirectorApril 14, 2023Ronen Luzon(Principle Executive Officer)/s/ Or KlesChief Financial OfficerApril 14, 2023Or Kles(Principal Financial and Accounting Officer)/s/ Oren ElmaliahDirectorApril 14, 2023Oren Elmaliah/s/ Arik KaufmanDirectorApril 14, 2023Arik Kaufman/s/ Oron BranitzkyDirectorApril 14, 2023Oron Branitzky/s/ Guy ZimmermanDirectorApril 14, 2023Guy Zimmerman69EX10.36 2 ex1036.htmExhibit 10.36NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES ANDEXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THESECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO ANEFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTIONNOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGINACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.PLACEMENT AGENT COMMON STOCK PURCHASE WARRANTMY SIZE, INC.Warrant Shares: _______Issue Date: January 12, 2023Initial Exercise Date: January 12, 2023THIS PLACEMENT AGENT COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _____________ or itsassigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the dateset forth above (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on January 10, 2028 (the “Termination Date”) but not thereafter, tosubscribe for and purchase from My Size, Inc., a Delaware corporation (the “Company”), up to ______ shares (as subject to adjustment hereunder, the “WarrantShares”) of the Company’s Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined inSection 2(b). This Warrant is issued pursuant to that certain engagement letter, dated as of December 5, 2022, by and between the Company and H.C. Wainwright &Co., LLC.Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities PurchaseAgreement (the “Purchase Agreement”), dated January 10, 2023, among the Company and the purchasers signatory thereto.1Section 2. Exercise.a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or afterthe Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted by email (or emailattachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the numberof Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shalldeliver the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on aUnited States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No inkoriginalNotice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required.Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder haspurchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrantto the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercisesof this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering theoutstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder andthe Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver anyobjection to any Notice of Exercise within one (1) Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant,acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, thenumber of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.b) Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $3.8188, subject to adjustment hereunder (the“Exercise Price”).c) Cashless Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein isnot available for the issuance or resale of the Warrant Shares to or by the Holder, then this Warrant may also be exercised, in whole or in part, at such timeby means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing[(AB) (X)] by (A), where:(A) =as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice ofExercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed anddelivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) ofRegulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAPon the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on theprincipal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s execution of the applicable Notice ofExercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hoursthereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii)the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice ofExercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;(B) =the Exercise Price of this Warrant, as adjusted hereunder; and(X) =the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if suchexercise were by means of a cash exercise rather than a cashless exercise.2“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which theCommon Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York Citytime)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest precedingdate) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for theCommon Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the mostrecent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by anindependent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to theCompany, the fees and expenses of which shall be paid by the Company.“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the TradingMarket on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or thenearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and ifprices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reportingprices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock asdetermined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonablyacceptable to the Company, the fees and expenses of which shall be paid by the Company.If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of theSecurities Act, the Warrant Shares shall take on the characteristics of the Warrants being exercised, and the holding period of the Warrant Shares beingissued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section 2(c).3d) Mechanics of Exercise.i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to betransmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with TheDepository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant insuch system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of theWarrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or mannerofsale limitationspursuant to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, registered in theCompany’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitledpursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2)Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate ExercisePrice to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Companyof the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall bedeemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant hasbeen exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (otherthan in the case of a cashless exercise) is received by the Warrant Share Delivery Date. If the Company fails for any reason to deliver tothe Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder,in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP ofthe Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifthTrading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share Delivery Date until such WarrantShares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FASTprogram so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standardsettlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stockas in effect on the date of delivery of the Notice of Exercise.4ii.Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the requestof a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a newWarrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrantshall in all other respects be identical with this Warrant; provided, however, that the Holder shall be required to return any WarrantShares subject to any such rescinded exercise notice concurrently with the return to Holder of the aggregate Exercise Price paid to theCompany for such Warrant Shares and the restoration of Holder’s right to acquire such Warrant Shares pursuant to this Warrant(including, issuance of a replacement warrant certificate evidencing such restored right).iii. Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant toSection 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.iv. Compensation for BuyIn on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights availableto the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with theprovisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date theHolder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwisepurchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipatedreceiving upon such exercise (a “BuyIn”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) theHolder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) theamount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connectionwith the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at theoption of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was nothonored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock thatwould have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holderpurchases Common Stock having a total purchase price of $11,000 to cover a BuyIn with respect to an attempted exercise of shares ofCommon Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediatelypreceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written noticeindicating the amounts payable to the Holder in respect of the BuyIn and, upon request of the Company, evidence of the amount of suchloss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including,without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver sharesof Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.5v. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise ofthis Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Companyshall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by theExercise Price or round up to the next whole share.vi. Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue ortransfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paidby the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by theHolder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, thisWarrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder andthe Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.The Company shall pay all Transfer Agent fees required for sameday processing of any Notice of Exercise and all fees to the DepositoryTrust Company (or another established clearing corporation performing similar functions) required for sameday electronic delivery of theWarrant Shares.vii. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timelyexercise of this Warrant, pursuant to the terms hereof.6e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise anyportion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicableNotice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of theHolder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). Forpurposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Partiesshall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, butshall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrantbeneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion ofany other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exerciseanalogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in thepreceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act andthe rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that suchcalculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed inaccordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (inrelation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisableshall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether thisWarrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of thisWarrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm theaccuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number ofoutstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s mostrecent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recentwritten notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request ofa Holder, the Company shall within one (1) Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock thenoutstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise ofsecurities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number ofoutstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stockoutstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice tothe Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial OwnershipLimitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares ofCommon Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in theBeneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shallbe construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portionhereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplementsnecessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of thisWarrant.7Section 3. Certain Adjustments.a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes adistribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which,for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstandingshares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into asmaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case theExercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any)outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately aftersuch event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of thisWarrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for thedetermination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case ofa subdivision, combination or reclassification.b) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sellsany Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares ofCommon Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregatePurchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise ofthis Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before thedate on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the recordholders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that to the extent that theHolder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall notbe entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Rightto such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not resultin the Holder exceeding the Beneficial Ownership Limitation).c) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend (other than cash) orother distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including,without limitation, any distribution of stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement,scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holdershall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number ofshares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including withoutlimitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken,the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, thatto the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, thenthe Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a resultof such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as itsright thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).8d) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more relatedtransactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease,license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, director indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of CommonStock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more ofthe outstanding Common Stock or 50% or more of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in oneor more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchangepursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly orindirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, withoutlimitation, a reorganization, recapitalization, spinoff, merger or scheme of arrangement) with another Person or group of Persons whereby such otherPerson or group acquires more than 50% of the outstanding shares of Common Stock or 50% or more of the voting power of the common equity of theCompany (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for eachWarrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of theHolder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor oracquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as aresult of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior tosuch Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, thedetermination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of AlternateConsideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Priceamong the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. Ifholders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall begiven the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at theHolder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date ofthe public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cashequal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of suchFundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company’s control, including not approved by theCompany’s Board of Directors, the Holder shall only be entitled to receive from the Company or any Successor Entity the same type or form ofconsideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to theholders of Common Stock of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, stock or anycombination thereof, or whether the holders of Common Stock are given the choice to receive from among alternative forms of consideration in connectionwith the Fundamental Transaction; provided, further, that if holders of Common Stock of the Company are not offered or paid any consideration in suchFundamental Transaction, such holders of Common Stock will be deemed to have received common stock of the Successor Entity (which Entity may be theCompany following such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on theBlackScholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day of consummation of the applicableFundamental Transaction for pricing purposes and reflecting (A) a riskfree interest rate corresponding to the U.S. Treasury rate for a period equal to thetime between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expectedvolatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualizationfactor) as of the Trading Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlyingprice per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any noncashconsideration, if any, being offered in such Fundamental Transaction and (ii) the highest VWAP during the period beginning on the Trading Dayimmediately preceding the public announcement of the applicable contemplated Fundamental Transaction (or the consummation of the applicableFundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant to this Section 3(e) and (D) a remaining option timeequal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date and (E) azero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds (or such other consideration)within the later of (i) five Business Days of the Holder’s election and (ii) the date of consummation of the Fundamental Transaction. The Company shallcause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of theobligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant towritten agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to suchFundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entityevidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares ofcapital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of thisWarrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which appliesthe exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to suchFundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for thepurpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which isreasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall beadded to the term “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction, each andevery provision of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to each of the Company and theSuccessor Entity or Successor Entities, jointly and severally), and the Successor Entity or Successor Entities, jointly and severally with the Company, mayexercise every right and power of the Company prior thereto and the Successor Entity or Successor Entities shall assume all of the obligations of theCompany prior thereto under this Warrant and the other Transaction Documents with the same effect as if the Company and such Successor Entity orSuccessor Entities, jointly and severally, had been named as the Company herein.e) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. Forpurposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the numberof shares of Common Stock (excluding treasury shares, if any) issued and outstanding.9f) Notice to Holder.i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, theCompany shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resultingadjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form)on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C)the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any sharesof capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection withany reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all orsubstantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into othersecurities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of theaffairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as itshall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective datehereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to beentitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification,consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expectedthat holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or otherproperty deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure todeliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to bespecified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, nonpublic informationregarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to aCurrent Report on Form 8K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of suchnotice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.10Section 4. Transfer of Warrant.a) Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and to theprovisions of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights) aretransferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a writtenassignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay anytransfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a newWarrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument ofassignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly becancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unlessthe Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of thedate on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordanceherewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company,together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent orattorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute anddeliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issuedon transfers or exchanges shall be dated the Issue Date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Sharesissuable pursuant thereto.c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “WarrantRegister”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as theabsolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to thecontrary.d) Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrantshall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue skylaws or (ii) eligible for resale without volume or mannerofsale restrictions or current public information requirements pursuant to Rule 144, the Companymay require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, comply with the provisions ofSection 5.7 of the Purchase Agreement.11e) Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon anyexercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling suchWarrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exemptedunder the Securities Act.Section 5. Miscellaneous.a) No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends orother rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Withoutlimiting the rights of a Holder to receive Warrant Shares on a “cashless exercise,” and to receive the cash payments contemplated pursuant to Sections 2(d)(i) and 2(d)(iv), in no event will the Company be required to net cash settle an exercise of this Warrant.a.In July 2019, the Company entered into a threeyear agreement with a consultant (“Consultant14”) to provide services to the Company includingassisting the Company to promote, market and sell the Company’s technology to potential customers. Pursuant to such agreement and in partialconsideration for such consulting services, the Company agreed to issue to Consultant14 options to purchase up to 107 shares of the Company’scommon stock upon execution of the agreement. The options are exercisable at $375.00 per share and shall vest in 3 equal instalments every twelvemonths starting July 2019. Unexercised options shall expire 4 years from the effective date.In addition, the Company agreed to issue to Consultant14 options to purchase up to 890 shares of the Company’s common stock upon executionof the agreement. The options are exercisable at $27.00 per share and shall vest in 4 equal instalments every six months starting September 2020.Unexercised options shall expire 5 years from the effective date.During 2022 and 2021, an amount of $7 and $14 respectively, were recorded by the Company as stockbased equity awards with respect to Consultant14.F24MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The Company’s outstanding options granted to consultants as of December 31, 2022 are as follows:Issuance dateOptions forCommon stockWeightedAverageexercise priceper shareOptionsexercisableExpirationdateFebruary 201815USD528.7515February 2023August 2018December 2018531USD352.38264August 2023 December 2023July 2020107USD375107July 2023SeptemberOctober 20201,488USD27.201,288October 2024 September 2025Total2,1411,674The Company uses the Black Scholes model to measure the fair value of the stock options with the assistance of a third party valuation.No stock options were granted during 2022 to consultants.The fair value of the Company’s stock options granted to nonemployees was calculated using the following weighted average assumptions:20222021GrantsGrantsDividend yield0%Expected volatility125.15%Riskfree interest0.16%Contractual term of up to (years)1.52F25MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Stock Option Plan for employeesIn March 2017, the Company adopted a stock option plan (the “Plan”) pursuant to which the Company’s Board of Directors may grant stock options toofficers and key employees. The total number of options which may be granted to directors, officers, employees under this plan, is limited to 289,000options. Stock options can be granted with an exercise price equal to or less than the stock’s fair market value at the date of grant.The fair value of each option award is estimated on the date of grant using the Binomial optionpricing model that used the weighted averageassumptions in the following table. The risk free rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the timeof grant.2022Grants2021GrantsDividend yield0%0%Expected volatility96.52%98.47%Riskfree interest4.06%0.96%expected life522.27In the years ended December 31, 2022 and 2021, 10,000 and 3,900 options, respectively, were granted.On December 7, 2022, the Company’s stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from230,800 shares to 289,000 shares.On September 29, 2022, the Compensation Committee of the Company approved grants of restricted share awards under the Company’s 2017 EquityIncentive Plan to Ronen Luzon (CEO), Or Kles (CFO), Billy Pardo (COO), Ilia Turchinsky (CTO) and Ezequiel Javier Brandwain (CCO), pursuant towhich were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000 restricted shares and 12,000 restricted shares,respectively. Each restricted share awarded under section 102 Capital Gain Restricted Stock Award Agreement (the “Agreement”). The restrictedshares shall vest in three equal installments on January 1, 2023, January 1, 2024 and January 1, 2025 for Ronen Luzon, Or Kles, Billy Pardo and IliaTurchinsky and on January 27, 2023, January 27, 2024 and January 27, 2025 for Ezequiel Javier Brandwain, conditioned upon continuous employmentwith the Company, and subject to accelerated vesting upon a change in control of the Company.On the same day, the Company granted fiveyears options to purchase up to 10,000 ordinary shares to other employees of the Company at an exerciseprice of $0.21 per share. The options vesting period is over three years in three equal portions from the vesting commencement date.F26MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The total stock option compensation expense in the year ended December 31, 2022 amounted to $448as follows: Research and development expensesamounted to $151, sales and marketing expenses amounted to $119and general and administrative expenses amounted to $178.The total stock option compensation expense in the year ended December 31, 2021 amounted to $252 as follows: Research and development expensesamounted to $94, sales and marketing expenses amounted to $97 and general and administrative expenses amounted to $61.As of December 31, 2022, there was a total of $530 unrecognized compensation cost relating to nonvested sharebased compensation arrangements.That cost is expected to be recognized over a weightedaverage period of 2.0 years.Share option activity during 2022 is as follows:2022Number ofoptionsWeightedaverageexerciseprice US$Outstanding as of January 135,74226.5Granted10,0005.25ExercisedExpired(4,136)Outstanding as of year end41,60622.48Vested as of year end33,20825.17Share option activity during 2021 is as follows:2021Number ofoptionsWeightedaverageExerciseprice US$Outstanding as of January 139,094$26.0Granted3,90032.0Exercised(751)Expired(6,501)Outstanding as of year end35,74226.5Vested as of year end27,06326.5F27MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 15 CONTINGENCIES AND COMMITMENTSa.On August 7, 2018, the Company commenced an action against North Empire LLC (“North Empire”) in the Supreme Court of the State of New York,County of New York for breach of a Securities Purchase Agreement (the “Agreement”) in which it is seeking damages in an amount to bedetermined at trial, but in no event less than $616. On August 2, 2018, North Empire filed a Summons with Notice against the Company, also in thesame Court, in which they allege damages in an amount of $11.4 million arising from an alleged breach of the Agreement. On September 6, 2018North Empire filed a Notice of Discontinuance of the action it had filed on August 2, 2018. On September 27, 2018, North Empire filed an answerand asserted counterclaims in the action commenced by the Company against them, alleging that the Company failed to deliver stock certificatesto North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against theCompany’s CEO and now former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018,the Company filed a reply to North Empire’s counterclaims. On November 15, 2018, the Company’s CEO and now former Chairman of the Boardfiled a motion to dismiss North Empire’s thirdparty complaint. On January 6, 2020, the Court granted the motion and dismissed the thirdpartycomplaint. Discovery has been completed and both parties have filed motions for summary judgment in connection with the claims andcounterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summary judgment, arguing there werefactual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision. The appealmust be fully perfected and filed by July 26, 2022. On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying theCompany’s motion for summary judgment. North Empire will file its opposition papers on or before March 31, 2022, and the Company will file replypapers on April 29, 2022. On or about September 12, 2022, the Court issued its Decision and Order denying the Company’s motion to reargue.North Empire filed its opposing brief on December 7, 2022. Both sides were given an opportunity to file a reply brief. The Company filed our replybrief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. The Appellate Court has scheduled oral argument for the appealfor February 7, 2023. Oral argument was held before the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Courtfiled its Decision and Order, which affirmed the lower court’s decisions regarding both My Size and North Empire’s motions for summary judgmentand sent the case back to the Supreme Court.On or about March 13, 2023, the Supreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date forthe mediation has not yet been set. The Company intends to vigorously defend any claims made by North Empire.The Company believes it is more likely than not that the counterclaims will be denied.b.In May 2021, the Company received notice from Custodian Ventures, LLC (“Custodian”) of its intention to nominate four candidates to stand forelection to our Board of Directors at the Company’s 2021 annual meeting of stockholders. Custodian subsequently made a book and recordsrequest and has made public statements calling for changes to our management.On September 22, 2021, Custodian commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v.MySize, Inc. (the “Delaware Action”). In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting.On October 19, 2021, the Company commenced an action in the United States District Court for the Southern District of New York againstCustodian, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, and certain rulespromulgated thereunder (the “SDNY Action”). The complaint sought, among other things, declaratory and injunctive relief related to defendants’efforts to nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed“group” for purposes of Section 13(d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. Inaddition, the complaint alleged that the defendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules inconnection with their efforts to elect a slate of directors to the Company’s Board of Directors. On October 20, 2021, the Court signed an ordergranting a hearing on an anticipated motion for a preliminary injunction and expedited scheduling and discovery in aid thereof, and scheduled thathearing for December 2, 2021.On November 4, 2021, the Company entered into the Settlement Agreement with the Lazar Parties. Pursuant to the Settlement Agreement, theCompany and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the SettlementAgreement, the Company agreed to reimburse Custodian for out of pocket expenses and in consideration for the dismissal and release of claimsagainst the Company an aggregate amount equal to $275, to be paid within three business days of the effective date of the Settlement Agreement.With respect to the Company’s 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) its May 12,2021 notice of stockholder nominations of four director candidates with respect to the Company’s 2021 annual meeting of stockholders, (ii) thenotice dated October 28, 2021 submitted by Custodian to the Company notifying the Company of Custodian’s continued intent to bring itsnomination of four director candidates before the Company’s stockholders at the 2021 annual meeting, and (iii) any and all related materials andnotices submitted to the Company in connection therewith or related thereto and to not take any further action in connection with the solicitationof any proxies in connection with the Company. Custodian also agreed to cease any and all solicitation and other activities in connection with the2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effectivedate of the Agreement (the “Standstill Period”). The Settlement Agreement also provides that during the Standstill Period, the Lazar Parties willvote all shares of common stock of the Company it beneficially owns in in accordance with any proposal or recommendation made by theCompany or the Board of Directors of the Company that is submitted to the stockholders of the Company, unless to do so would violateapplicable law and except with respect to certain extraordinary transactions. The Settlement Agreement also contains nondisparagement andconfidentiality provisions, subject to certain exceptions.On December 9, 2021, the Company subsequently entered into a Settlement Agreement (the “Ault Settlement Agreement”), with Milton C. Ault III,Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed towithdraw the SDNY Action against the Ault Parties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that actionagainst the Company. In addition, pursuant to the Settlement Agreement, the Company paid $70 to the Ault Parties in consideration for thereleases and other good and valuable consideration as set forth in the Ault Settlement Agreement.c.On July 5, 2021, the Company was served with a legal complaint filed by Fidelity Venture Capital Ltd. and Dror Atzmon in the Magistrate’s Court inTel Aviv for a monetary award in an amount of NIS 1,436,679 (approximately $450) and a declaratory relief. The plaintiffs allege that the Companybreached its contractual obligations to pay them for services allegedly rendered to the Company by the plaintiffs under a certain consultingagreement dated July 2, 2014, in an amount of NIS 819,000 (approximately $256). Additionally, the plaintiffs allege that the Company shouldcompensate them for losses allegedly incurred by them following their investment in the Company’s shares issued under a certain private offering.In the alternative, the plaintiffs move that the court will declare the investment agreement void with full restitution of plaintiffs’ original investmentin an amount of NIS 1,329,650(approximately $415). The Company filed its statement of defense on October 25, 2021. The first preliminary courthearing of the case is scheduled for January 23, 2022.The first court preliminary hearing was held on March 1, 2022.Following the first preliminary hearing and the Court’s comments and recommendation, the Plaintiffs filed a motion to strike out the claim withoutprejudice.On March 8, 2022 the Court ordered dismissal without prejudice of the claim.F28MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATIONAcquisition of OrgadOn February 7, 2022, the Company acquired 100% of the shares and voting interests in Orgad an omnichannel ecommerce platform. The acquisitionwas designed to create an additional revenue stream for the Company by becoming a direct ecommerce seller while leveraging the synergies betweenMySizeID and Orgad’s ecommerce platform.Unaudited proforma informationThe results of operations of Orgad have been included in the consolidated financial statements since the acquisition date of February 7, 2022. Orgadrevenues included in the Company’s consolidated statement of operations from February 7, 2022 through December 31, 2022 were $4,132. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,662 and $2,850 respectively, and the net loss after tax would have been $8,519 and $10,149 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash (*)300Issuance of shares of common stock (69,752 shares) (**)457Total consideration transferred757(*)The cash payment is subject to working capital adjustments.(**)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Orgad, on the twoyear and the threeyear anniversary of the closing, $350in each ofthese years provided that in the case of the second and third instalments certain revenue targets are met and subject further to certain downward postclosing adjustment. Furthermore, 69,752shares of common stock will be issued in eight equal quarterly instalments until the lapse of two years fromclosing. Additional earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023 will also be paid. All of these payments aresubject to the former owners being actively engaged with Orgad at the date such payment is due, and therefore were not taken as part of theconsideration for the business combination.During the year ended December 31, 2022 an amount of $456and $319was recorded in respect of the cash instalments and in respect of stocksissuance, respectively in Cost Of Goods, Sales and Marketing and General and Administrative expenses as shown in the following table:2022Stockbased compensation expense – Cost of goods194Stockbased compensation expense Sales and marketing271Stockbased compensation expense General and administrative310775(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the preliminary estimates of their fair values, which were determined using generally accepted valuation techniques based onestimates and assumptions made by management at the time of the acquisition. Such estimates are subject to change during the measurement periodwhich is not expected to exceed one year. The purchase price allocation was not finalized duo to examination of the net working capital of Orgad at theacquisition date. Any adjustments to the preliminary purchase price allocation identified during the measurement period will be recognized in theperiod in which the adjustments are determined.The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and Cash EquivalentTrade receivables364PP&E55Inventory864Longterm financial investment31Selling platform378Goodwill152Shortterm accruals and deferrals(181)Trade payables(668)Long term provision(13)Longterm debt(138)Deferred Taxes(87)Total net assets acquired757F29MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)(c)Acquisitionrelated costsThe Company incurred transaction costs of approximately $40and none during twelvemonth period ended December 31, 2022 which were included ingeneral and administrative expenses in the consolidated statements of income (loss).Acquisition of Naiz Bespoke Technologies, S.L. (“Naiz”)On October 11, 2022, the Company acquired 100% of the shares and voting interests in Naiz a provider of SaaS technology solutions that solve sizeand fit issues for fashion ecommerce companies. The acquisition was designed to allow Naiz’s customers benefit from MySize’s deep understanding ofthe fashion ecommerce retail landscape, while creating an additional revenue stream for the Company.Unaudited proforma informationThe results of operations of Naiz have been included in the consolidated financial statements since the acquisition date of October 11, 2022. Naizrevenues included in the Company’s consolidated statement of operations from October 11, 2022 through December 31, 2022 were $103. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,738 and $379 respectively and the net loss after tax would have been $8,695 and $10,717 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash503Issuance of shares of common stock (240,000 shares) (*)1,008Total consideration transferred1,511(*)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Naiz, additional cash consideration (up to $1,550) in four instalments subject to thefollowing conditions:(i)Continuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result ofa Good Reason; and(ii)Naiz’s Revenues reaching or exceeding the respective Target Revenues defined in the agreement. The revenues will be calculated in four periods:(1) January 1, 2022 – December 31, 2022; (2) January 1, 2023 – June 30, 2023; (3) July 1, 2023 – December 31, 2023; (4) January 1, 2024 – December31, 2024.Former owners of Naiz are entitled to additional cash consideration following December 31, 2025 (up to $1,650) in an event when the actual value of theequity consideration is less than $1,650, subject to completion of a Target Revenue for the period of January 1, 2025 – December 31, 2025 andcontinuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result of aGood Reason;F30MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)During the year ended December 31, 2022 an amount of $283 was recorded in respect of the additional cash consideration.(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the estimates of their fair values, which were determined using generally accepted valuation techniques based on estimates andassumptions made by management at the time of the acquisition.The following table summarizes the fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and cash equivalent36Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Total net assets acquired1,511(c)Acquisitionrelated costsDuring 2022, the Company incurred transaction costs of approximately $75 which were included in general and administrative expenses in theconsolidated statements of income (loss).F31MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)Note 17 – Operating SegmentsDuring the year ended December 31, 2021, the Company had one reportable segment. As a result of the business combinations in the reporting period(see note 13), the Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificialintelligence driven measurement solutions and (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions and. The fashionand equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. Orgad has onecustomer that is responsible for 37.9% of the Company consolidated revenues. The SaaS based innovative artificial intelligence driven measurementsolutions, or SaaS Solutions operating segment consists of My Size Inc and My Size Israel and My Size LLC.Information related to the operations of the Company’s reportable operating segments is set forth below:Fashion andequipment ecommerce platformSaaSSolutionsNaizTotalAs of the year ended December 31, 2022Revenues from external customers4,1322241034,459Operating (loss) income(591)(7,181)(338)(8,110)Financial income (expense), net(236)Net loss before tax(8,346)Fashion andequipment ecommerce platformSaasSolutionNaizAs of December 31, 2022:Assets2,0225,9661,691Amortization of intangible assets(114)(34)(46)The Company elected to present geographic information in respect with revenues generated from external customers based on the location of the selling entity:All the revenues of the fashion and equipment ecommerce platform segment are generated by Orgad, located in Israel.All the revenues of the Naiz segment are generated by Naiz, located in Spain.The revenues of the Saas Solutions segment are generated by My Size Ltd. located in Israel (approximately 75% of the segment revenues) and by My Size Inc.located in the U.S. (approximately 25% of the segment revenues).NOTE 18 SALES AND MARKETINGYear endedDecember 31,20222021Salaries836574Consultants and subcontractors5831,086Marketing481283Selling fees489Share based payments post Orgad acquisition (*)271Share based payments for consultants and employees127180Travel21142Other1451713,1432,336(*) See note 16.NOTE 19 GENERAL AND ADMINISTRATIVE EXPENSESYear endedDecember 31,20222021Salaries1,007461Professional services7051,832Share based payments for consultants, directors and employees18098Rent, office expenses and communication442372Insurance564627cash liability and equity liability expenses related to Orgad acquisition310cash liability expenses related to Naiz acquisition217Settlement fees (*)345Directors8259Other3933303,9004,124(*)See note 15(b)F32MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 20 FINANCIAL INCOME (EXPENSE), NETA.Financial incomeYear endedDecember 31,20222021Revaluation investment in marketable securities49Other26172666B.Financial expenseYear endedDecember 31,20222021Exchange rate differences33Revaluation of loan granted100Revaluation investment in marketable securities62Other6792629NOTE 21 EVENTS SUBSEQUENT TO THE BALANCE SHEET DATEa.On January 2, 2023, Orgad experienced a fire at its warehouse in Israel. The Company is not aware of any casualties or injuries associated with thefire. The Company shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450.The Company believes that this incident did not affect the future sales results of Orgad for the year 2023. The inventory was not insured and it istoo early to determine the potential impact of this incident on the other parties that were involved in the incident (lessor and others that leasedproperties near the warehouse).b.On January 10, 2023, the Company entered into a securities purchase agreement pursuant to which the Company sold an aggregate of 162,000ofthe Company’s shares of common stock and prefunded warrants to purchase up to 278,899shares of common stock and, in a concurrent privateplacement, unregistered warrants to purchase up to883,798 shares of common stock, consisting of Series A warrants to purchase up to 441,899shares of common stock and Series B warrants to purchase up to 441,899shares of common stock, at an offering price of $3.055per share ofcommon stock and associated Series A and Series B warrants and an offering price of $3.054per prefunded warrant and associated Series A andSeries B warrants.In addition, the Company entered into a securities purchase agreement pursuant to which the Company agreed to sell and issue in a privateplacement an aggregate of up to 540,098 unregistered prefunded warrants and unregistered warrants to purchase up to an aggregate of 1,080,196shares of common stock, consisting of Series A warrants to purchase up to 540,098 shares of common stock and Series B warrants to purchase upto 540,098 shares of common stock at an offering price of $3.054 per prefunded warrant and associated Series A and Series B warrants.As of March 31,2023 all the pre funded warrants were exercised by the investor.F33ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSUREThere were no disagreements with accountants on accounting and financial disclosure of a type described in Item 304 (a)(1)(iv) or any reportable event asdescribed in Item 304 (a)(1)(v) of Regulation SK.ITEM 9A. CONTROLS AND PROCEDURESDisclosure ControlsWe carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief FinancialOfficer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) as of December 31, 2022. Basedupon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this Annual Report on Form10K, our disclosure controls and procedures were effective to ensure that information required to be disclosed in reports filed under the Exchange Act, as amended,is recorded, processed, summarized and reported within the required time periods specified in the SEC’s rules and forms and is accumulated and communicated toour management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.Management’s Report on Internal Control Over Financial ReportingOur internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records, that, in reasonable detail,accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only inaccordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition, use or disposition of our assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance withthe policies or procedures may deteriorate.Our management, including our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financialreporting at December 31, 2022. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the TreadwayCommission (COSO) in Internal Control—Integrated Framework (2013). Based on that assessment under those criteria, management has determined that, as ofDecember 31, 2022, our internal control over financial reporting was effective.This Annual Report on Form 10K does not include an attestation report of our registered public accounting firm regarding internal control over financialreporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to the exemption provided to issuersthat are not “large accelerated filers” nor “accelerated filers” under the DoddFrank Wall Street Reform and Consumer Protection Act.Changes in Internal Control Over Financial ReportingDuring the year ended December 31, 2022, we made two acquisitions, as discussed in Note 1a and Note 16 of the audited consolidated financial statementsfor the year ended December 31, 2022 included in this Annual Report on Form 10K. As a result, we made additions and/or modifications to policies, procedures,systems and controls that have materially affected our internal control over financial reporting from the acquisitions, including new controls for consolidationprocess that relates to accounting policies and procedures, operational processes and documentation practices. Management excluded the acquired businessesfrom management’s report on internal control over financial reporting. ITEM 9B. OTHER INFORMATIONNone.ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNot applicable.51PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe following table sets forth the name, age and positions of our executive officers and directors.NAMEAgePOSITIONRonen Luzon52Chief Executive Officer and Class III DirectorOr Kles40Chief Financial OfficerBilly Pardo47Chief Operating Officer and Chief Product OfficerIlia Turchinsky35Chief Technology OfficerEzequiel Javier Brandwain53Chief Commercial OfficerOron Branitzky (1)(2)(3)*63Class II DirectorOren Elmaliah (1)(2)(3)*38Class I DirectorArik Kaufman (1)(2)(3)*41Class I DirectorGuy Zimmerman*53Class II Director(1)Member of our audit committee(2)Member of our nominating and corporate governance committee(3)Member of our compensation committee* Independent as that term is defined by the rules of the Nasdaq Stock Market.The business background and certain other information about our directors and executive officers is set forth below:Ronen Luzon has served as our Chief Executive Officer and a member of our board of directors since September 2013. Since 2006, Mr. Luzon hasadditionally served as Chief Executive Officer and founder of Malers Ltd., a company in the global security solutions market which provides technological solutionsfor integrated communication infrastructures, security and control systems. Prior to Malers, he held several senior marketing, sales management and professionalservices positions in a variety of international high tech companies including VP marketing of GA Tech and Professional Services Manager of Eldat Communication.Mr. Luzon graduated from Middlesex University in London with a B.S. in IT and Business Information Systems. We believe that Mr. Luzon is qualified to serve as amember of our board of directors because of his more than 20 years of experience in the technology sector.Or Kles has served as our Chief Financial Officer since May 2016. He is a certified public accountant with a broad, diverse financial background. From May2013 until April 2016 he served as Assistant Controller of Shikun and BinuiSolel Boneh Infrastructure Ltd. and from December 2010 until May 2013 he served as anAssociate at KPMG. Mr. Kles holds an MBA and a B.A. in Business Management and Accounting (specializing in financing) from The College of ManagementAcademic Studies. Mr. Kles is a certified public accountant in Israel.Billy Pardo has served as our Chief Product Officer since May 2014 and Chief Operating Officer since April 2019. From April 2010 until August 2013, Ms.Pardo served as Senior Director of Product Management of Fourier Education. Among her areas of expertise are launching products from concept to successfuldelivery in various methodologies, including Fourier Education’s awardwinning einstein™ Science Tablet. Prior to that Ms. Pardo served in various productmanagement positions including, Project Manager of Time to Know, Product Marketing Manager of RiT Technologies, Product Manager of Pricer AB and R&DTeam Leader at Pricer AB. Ms. Pardo previously served as Software Engineer at Eldat Communication Ltd., and QA Engineer at NICE Systems. Ms. Pardo receivedan MBA from The Interdisciplinary Center and a B.A. in Computer Science from The Academic College of TelAvivYaffo.Ilia Turchinsky has served as our Chief Technology Officer since April 2019 and from July 2018 until April 2019 as our Director of Technology. Prior tojoining us, from 2013 until 2018, Mr. Turchinsky served in various roles, most recently Chief Technology Officer, at MonkeyTech Ltd., a company that providesdesign, development and characterization of mobile applications. Prior to that, Mr. Turchinsky served in various roles including development course instructor atIQLine, was a founder of Arnavsoft and was a software developer for MintLab and a political party. Mr. Turchinsky holds a B.Sc. from the Ben Gurion University inComputer Science and an M.Sc. from the Open University of Israel in Computer Science.52Ezequiel Javier Brandwain has served as our Chief Commercial Officer since February 2022. Mr. Brandwain brings more than two decades of globalexperience in retail and the fashion industry, mainly in business development, operations, and international markets. Before joining the Company, Mr. Brandwainheld positions of increasing responsibility at several companies, including between June 2017 and November 2020, at 7 For All Mankind International, where heserved as Director, Latin America and Caribbean, managing business development and operations across Latin America and the Caribbean. Before that, betweenMay 2016 and June 2017, Mr. Brandwain served as Chief Business Development Officer at Replay – Fashion Box SPA, where he oversaw business development andoperations, expansion and control in the Americas, the Caribbean, and NorthEast Asia. Prior this role, between September 2015 and May 2016, he served as theReplay’s Managing Director in Latin America and the Caribbean, leading the company’s international expansion in these regions. Prior to that, between April 2015and September 2015, Mr. Brandwain served as Managing Director, Latin America and Caribbean at Authentic Brands Group LLC, where he led that company’soperations, business developments and international expansion within these regions, and served as the direct liaison with the company’s headquarters in New York.Prior to that, between April 2015 and September 2015, Mr. Brandwain served as Chief Operating Officer, Latin America and Caribbean at Flemingo International Ltd.,overseeing operations, as well as projected operations in the travel retail field across these regions. Prior to that, between December 2010 and February 2014, Mr.Brandwain served as Regional Director, Southern Hemisphere at Calvin Klein, where he was responsible for defining and implementing the operational andcommercial strategy for Southern Hemisphere, as well as overseeing the retail, travel retail, concession, and wholesale businesses of the company. During his tenureat Calvin Klein, Mr. Brandwain also served as Travel Retail Director, Latin America, where he built the travel retail business and developed operations. Prior to that,between July 2010 and November 2010, Mr. Brandwain served as Business Director, Latin America and Caribbean at Givenchy Latin America, and between January2010 and June 2010 he served as Commercial Director, Latin America and Caribbean at Nautica Latin America. During December 2004 and December 2009, Mr.Brandwain served as Vice President, International Business Development at Report Collection/Modextil, Inc., where he was in charge of business and operationalexpansion, global growth, and brand extensions. Prior to that, between 2003 and October 2004, Mr. Brandwain served as General Manager at Andrew KoenigInternational, Inc. Between September 2019 and November 2020, Mr. Brandwain served as a member of the Board of Directors of 7 For All Mankind BrazilImportacao, Comercio E Distribuicao S.A. Mr. Brandwain earned a Bachelor degree in architecture from the University of the Republic (Uruguay).Oron Branitzky has served as a member of our board of directors since March 2017. Mr. Barnitzky has vast experience in retail technology. SinceNovember 2017, Mr. Branitzky has served as Global Retail Business Development at Superup, and from January 2007 until December 2014 he served as VicePresident of Sales and Marketing at Pricer AB. Prior to that, Mr. Branitzky has served as VP Marketing and Sales at Eldat Communication and Sarin TechnologiesLtd. Since January 2015, Mr. Branitzky has served as chairman of the board of directors of WiseShelf Ltd. and from May 2015 until March 2016, Mr. Branitzky servedas an advisory board member of ciValue. Mr. Branitzky received a B.S. from the Hebrew University of Jerusalem and an MBA in International Marketing from TelAviv University. We believe that Mr. Branitzky is qualified to serve as a member of our board of directors because of his more than 20 years of experience inmanaging the sales of hitech solutions to retailers across the globe.Oren Elmaliah, has served as a member of our board of directors since May 2017. In September 2015, Oren Elmaliah founded Accounting Team IL and hasacted as Account Manager since then. Accounting Team IL is a financial consultancy and service provider to public companies traded in Israel and abroad. SinceFebruary 2017, Mr. Elmaliah has served as controller of Enlivex Therapeutics Ltd., and since January 2017 he has served as Chief Financial Officer of Presstek Israel.In addition, since September 2015, Mr. Elmaliah has served as an Israel Authorities Reporting Officer of LG Electronics Israel and since September 2015 he hasserved as Local Financial Report Consultant of Chiasma. From July 2011 until August 2015, Mr. Elmaliah served as CPA, Financial Director of CFO Director Ltd andfrom June 2010 until July 2011 he served as Risk Management Consultant of RSM International Limited. Mr. Elmaliah holds a B.A. in Accounting/Economics and aMsc. in Finance/Accounting from Tel Aviv University, Israel. He is a licensed Certified Public Accountant in Israel. We believe that Mr. Elmaliah is qualified to serveas a member of our board of directors because of his vast finance experience and public company management and administration in the fields of finance,accounting, and financial regulation.53Arik Kaufman has served as a member of our board of directors since June 2017. Mr. Kaufman is an attorney specializing in the fields of commercial law,corporate law and capital markets and since 2016 runs his own law office in Israel. He has vast experience in the fields of financial reporting and financial regulation.Mr. Kaufman serves as the Chief Executive Officer of Steakholder Foods since January 2022. From September 2017 until January 2022, Mr. Kaufman served as VPBusiness Development of Mor Research Applications. Mr. Kaufman holds an LLB in Law from the Interdisciplinary Center, Herzliya, and is admitted to the IsraeliBar. We believe that Mr. Kaufman is qualified to serve as a member of our board of directors based upon his experience of assisting with the completion of numerousventure capital financings, mergers, acquisitions, and strategic relationships. In addition, he has served as a member of the board of various publicly tradedcompanies, including companies that operate in the same industry as us.Guy Zimmerman has served as a member of our board of directors since August 2021. Previously, Mr. Zimmerman served as Founder and CEO ofManuFuture, an online b2b engineering market place, since February 2021. Prior to that from 2017 to 2021, Mr. Zimmerman acted as a consultant to severaltechnology startups and was a founding partner of a business travel online platform. From 2013 to 2017, Mr. Zimmerman served as EVP of Marketing and BusinessDevelopment of Kornit Digital and was part of the IPO leadership. Prior to that, Mr. Zimmerman served as VP of Global Sales and Business Development at TefronLtd., a provider of seamless garment technology, where he led the $100m sales and sales support organization serving global retail and fashion brands. Prior to thathe served as Vice President of Strategy and Business Development at Tnuva Group, Israel’s largest food manufacturer and spent eight years at McKinsey &Company. Mr. Zimmerman previously led a software startup in the field of operational healthcare management systems. Mr. Zimmerman holds a B.Sc. in IndustrialEngineering from Tel Aviv University in Israel. We believe that Mr. Zimmerman is qualified to serve as a member of our board of directors because of his experiencein business development in the technology and retail sectors.Board Diversity MatrixThe table below provides certain information regarding the diversity of our board of directors as of the date of this annual report.Board Diversity Matrix (As of March 31, 2023)Total Number of Directors5FemaleMaleNonBinaryDid Not DiscloseGenderPart I: Gender IdentityDirectors#5##Part II: Demographic BackgroundAfrican American or Black####Alaskan Native or Native American####Asian####Hispanic or Latinx####Native Hawaiian or Pacific Islander####White#1##Two or More Races or Ethnicities#2##LGBTQ+0Did Not Disclose Demographic Background2Family RelationshipsRonen Luzon, the Chief Executive Officer and a member of our board of directors, and Billy Pardo, the Chief Product Officer and Chief Operating Officer, arehusband and wife. There are no other family relationships among any of our current or former directors or executive officers.Involvement in Certain Legal ProceedingsWe are not aware of any of our directors or officers being involved in any legal proceedings in the past ten years relating to any matters in bankruptcy,insolvency, criminal proceedings (other than traffic and other minor offenses), or being subject to any of the items set forth under Item 401(f) of Regulation SK.Arrangements between Officers and DirectorsTo our knowledge, there is no arrangement or understanding between any of our officers and any other person, including directors, pursuant to which theofficer was selected to serve as an officer.Board of DirectorsThere are no agreements with respect to the election of directors.On January 6, 2022, we filed with the Secretary of State of Delaware a Certificate of Amendment to our Amended and Restated Certificate of Incorporationproviding for a classified Board. Following filing of the Certificate of Amendment, members of our board are now classified into three classes with staggered threeyear terms (with the exception of the expiration of the initial Class I and Class II directors), as follows:●Class I, comprised of two directors, initially Arik Kaufman and Oren Elmaliah (with their initial terms expiring at our 2022 annual meeting of stockholders andmembers of such class serving successive threeyear terms);●Class II, comprised of two directors, initially Oron Branitzky and Guy Zimmerman (with their initial terms expiring at our 2023 annual meeting of stockholdersand members of such class serving successive threeyear terms); and●Class III, comprised of one director, initially Ronen Luzon (with his initial term expiring at our 2024 annual meeting of stockholders and members of suchclass serving successive threeyear terms).54To preserve the classified Board structure, a director elected by the Board of Directors to fill a vacancy holds office until the next election of the class forwhich such director has been chosen, and until that director’s successor has been elected and qualified or until his or her earlier death, resignation, retirement orremoval.Our board of directors has reviewed the materiality of any relationship that each of our directors has with us, either directly or indirectly. Based upon thisreview, we believe that Arik Kaufman, Oren Elmaliach, Oron Branitzky and Guy Zimmerman qualify as independent directors in accordance with the standards set bythe Nasdaq and Rule 10A3 promulgated under the Exchange Act.Committees of the BoardAudit CommitteeOur audit committee is comprised of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Elmaliah serves as chairman of the audit committee. The auditcommittee is responsible for retaining and overseeing our independent registered public accounting firm, approving the services performed by our independentregistered public accounting firm and reviewing our annual financial statements, accounting policies and our system of internal controls. The audit committee actsunder a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the audit committee’s composition and meetings.The audit committee charter is available on our website www.mysizeid.com.The Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by applicable SEC rules. Inaddition, the Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by the rules of the Nasdaq StockMarket.The Board of Directors has determined that Oren Elmaliah is an “audit committee financial expert” serving on its audit committee, and is independent, as theSEC has defined that term in Item 407 of Regulation SK.Compensation CommitteeOur compensation committee consists of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Branitzky serves as chairman of the compensationcommittee.The compensation committee’s roles and responsibilities include making recommendations to the Board of Directors regarding the compensation for ourexecutives, the role and performance of our executive officers, and appropriate compensation levels for our CEO, which are determined without the CEO present, andother executives. Our compensation committee also administers our 2017 Equity Incentive Plan and our 2017 Consultant Equity Incentive Plan. The compensationcommittee acts under a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the compensation committee’scomposition and meetings. The compensation committee charter is available on our website www.mysizeid.com.Our Board of Directors has determined that all of the members of the compensation committee are “independent” as that term is defined by the rules of theNasdaq Stock Market.Nominating and Corporate Governance CommitteeThe members of the nominating and corporate governance committee are Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Kaufman serves aschairman of the corporate governance and nominations committee. The nominating and corporate governance committee acts under a written charter, which morespecifically sets forth its responsibilities and duties, as well as requirements for the nominating and corporate governance committee’s composition and meetings.The nominating and corporate governance committee charter is available on our website www.mysizeid.com.The nominating and corporate governance committee develops, recommends and oversees implementation of corporate governance principles for us andconsiders recommendations for director nominees. The nominating and corporate governance committee also considers stockholder recommendations for directornominees that are properly received in accordance with applicable rules and regulations of the SEC. Our stockholders that wish to nominate a director for election tothe Board of Directors should follow the procedures set forth in our bylaws.55The nominating and corporate governance committee will consider persons identified by its members, management, stockholders, investment bankers andothers. The guidelines for selecting nominees, which are specified in the nominating committee charter, generally provide that persons to be nominated:●should be accomplished in his or her field and have a reputation, both personal and professional, that is consistent with our image and reputation;●should have relevant experience and expertise and would be able to provide insights and practical wisdom based upon that experience and expertise; and●should be of high moral and ethical character and would be willing to apply sound, objective and independent business judgment, and to assume broadfiduciary responsibility.The nominating and corporate governance committee will consider a number of qualifications relating to management and leadership experience,background and integrity and professionalism in evaluating a person’s candidacy for membership on the Board of Directors. The nominating and corporategovernance committee may require certain skills or attributes, such as financial or accounting experience, to meet specific Board needs that arise from time to timeand will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of Board of Directors members. The nominating andcorporate governance committee will not distinguish among nominees recommended by stockholders and other persons.Our Board of Directors has determined that all of the members of the nominating and corporate governance committee are “independent” as that term isdefined by the rules of the Nasdaq Stock Market.Code of Conduct and EthicsWe have a Code of Business Conduct and Ethics that applies to all our employees. The text of the Code of Business Conduct and Ethics is publiclyavailable on our website at www.mysizeid.com. Information contained on, or that can be accessed through, our website does not constitute a part of this report andis not incorporated by reference herein. Disclosure regarding any amendments to, or waivers from, provisions of the code of conduct and ethics that apply to ourdirectors, principal executive and financial officers will be posted on the “InvestorsCorporate Governance” section of our website at www.mysizeid.com or will beincluded in a Current Report on Form 8K, which we will file within four business days following the date of the amendment or waiver.Change in Procedures for Recommending DirectorsThere have been no material changes to the procedures by which our stockholders may recommend nominees to our Board of Directors from thoseprocedures set forth in our Proxy Statement for our 2021 Annual Meeting of Stockholders, filed with the SEC on December 7, 2022.56ITEM 11. EXECUTIVE COMPENSATIONSummary Compensation TableThe following sets forth the compensation paid by us to our named executive officers, during the years ended December 31, 2022 and December 31, 2021.Name and Principal PositionYearSalary($) (1)Bonus($)StockAwards($)OptionAwards($) (2)All OtherCompensation($)Total($)Ronen Luzon2022173,000223,0008,000126,000530,000Chief Executive Officer2021194,0005,00023,00097,000319,000Or Kles2022123,00053,0007,00071,000254,000Chief Financial Officer2021123,0008,00030,00061,000222,000Billy Pardo2022134,00053,0007,000100,00294,000Chief Operating Officer2021162,0007,00018,00074,000261,000(1) Salary for the years 2022 and 2021 are based on average US$/NIS representative exchange rates of NIS 3.358 and NIS 3.11 respectively.(2) Amounts in this column represent the grant date fair value of options granted to the named executive officers during 2022 and 2021, computed in accordance withFASB ASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the named executive officers. The assumptionsmade in valuing the options reported in this column are discussed in Note 11 to our audited financial statements for the year ended December 31, 2021 and Note 4 toour condensed consolidated interim financial statements for the quarterly period ended September 30, 2022.All Other Compensation TableThe “All Other Compensation” amounts set forth in the Summary Compensation Table above consist of the following:NameYearAutomobileRelatedExpenses($)Manager’sInsurance*($)EducationFund*($)Othersocialbenefits**($)Total($)Ronen Luzon202232,00031,00015,00048,000126,000202133,00033,00015,00016,00097,000Or Kles202215,00021,00010,00025,00071,000202114,00019,0009,00019,00061,000Billy Pardo202216,00025,00013,00046,000100,000202117,00024,00012,00021,00074,000* Manager’s insurance and education funds are customary benefits provided to employees based in Israel. Manager’s insurance is a combination of severancesavings (in accordance with Israeli law), defined contribution taxqualified pension savings and disability insurance premiums. An education fund is a savings fundof pretax contributions to be used after a specified period of time for educational or other permitted purposes.** Other social benefits for 2022 and 2021 for all named individuals includes tax payments in respect of social benefits.57Agreements with Named Executive OfficersRonen LuzonOn November 18, 2018, My Size Israel, our wholly owned subsidiary, entered into an employment agreement with Ronen Luzon, or the Luzon EmploymentAgreement, pursuant to which Mr. Luzon will serve as our Chief Executive Officer. Pursuant to the terms of the Luzon Employment Agreement, Mr. Luzon receivesNIS 55,000 per month as his base salary and shall be eligible to receive such bonus as determined by us. In addition, Mr. Luzon shall be entitled social benefits andto other benefits, including, but not limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, includinginsurance in case of disability, annual vacation days, sick leave and expense reimbursement. Pursuant to the terms of the Luzon Employment Agreement and subjectto certain conditions, payments made by the Company to the pension fund or manager’s insurance fund shall be made in lieu of severance payments due to Mr.Luzon. The term of the Luzon Employment Agreement shall be effective as of September 1, 2018 and shall continue until such time either party provides writtennotice to the other party at least 75 days in advance of the termination of such agreement. We may also terminate Mr. Luzon’s employment without prior writtennotice (or payment in lieu of such notice) for Cause (as defined in the Luzon Employment Agreement).Or KlesOn November 18, 2018, My Size Israel entered into an employment agreement with Or Kles, or the Kles Employment Agreement, pursuant to which Mr. Kleswill serve as our Chief Financial Officer. Pursuant to the terms of the Kles Employment Agreement, Mr. Kles receives NIS 38,000 per month as his base salary andshall be eligible to receive such bonus as determined by us. In addition, Mr. Kles shall be entitled to social benefits and other benefits, including, but not limited to,contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annual vacation days,sick leave and expense reimbursement. Pursuant to the terms of the Kles Employment Agreement and subject to certain conditions, payments made by us to thepension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Mr. Kles. The term of the Kles Employment Agreement shall beeffective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days in advance of thetermination of such agreement. We may also terminate Mr. Kles’s employment without prior written notice (or payment in lieu of such notice) for Cause (as defined inthe Kles Employment Agreement).Billy PardoOn November 18, 2018, My Size Israel entered into an employment agreement with Billy Pardo, or the Pardo Employment Agreement, pursuant to which Ms.Pardo will serve as our Chief Product Officer. Pursuant to the terms of the Pardo Employment Agreement, Ms. Pardo receives NIS 47,500 per month as her basesalary and shall be eligible to receive such bonus as determined by us. In addition, Ms. Pardo shall be entitled to social benefits and other benefits, including, butnot limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annualvacation days, sick leave and expense reimbursement. Pursuant to the terms of the Pardo Employment Agreement and subject to certain conditions, payments madeby us to the pension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Ms. Pardo. The term of the Pardo EmploymentAgreement shall be effective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days inadvance of the termination of such agreement. We may also terminate Ms. Pardo’s employment without prior written notice (or payment in lieu of such notice) forCause (as defined in the Pardo Employment Agreement).58Outstanding Equity Awards at Fiscal YearEndThe following table provides information regarding options held by each of our named executive officers that were outstanding as of December 31, 2022.Option AwardsStock AwardsName and Principal PositionNumber ofSecuritiesUnderlyingUnexercisedOptionsExercisableNumber ofSecuritiesUnderlyingUnexercisedOptionsUnexercisableOptionExercisePriceOptionExpirationDateEquityincentiveplan awards:Number ofUnearnedShares that HaveNot VestedEquityincentiveplan awards:Market Value ofUnearnedShares, That Have Not VestedRonen Luzon Chief Executive Officer400(1)$26(8)7/24/20231,601(2)$26(8)5/29/20256,400(3)$268/10/2025100,000(9)100,000$511,250Or Kles – Chief Financial Officer227(4)$26(8)7/24/2023427(5)$26(8)5/29/20255,200(6)$268/10/202524,000(10)24,000$122,700Billy Pardo Chief Operating Officer400(1)$26(8)7/24/2023894(7)$26(8)5/29/20255,200(6)$268/10/202524,000(11)24,000$122,700(1) The option has a grant date of July 24, 2017 and vested in full on January 24, 2018.(2) The option has a grant date of May 29, 2019. 267 options vested immediately upon grant, 445 options vested on January 24, 2019, 445 options vested on January24, 2020 and 444 options vested on January 24, 2021.(3) The option has a grant date of October 8, 2020, 1,600 options vested on November 26, 2020, 1,600 options vested on May 26, 2021, 1,600 options vested onNovember 26, 2021, and 1,600 options vested on May 26, 2022.(4) The option has a grant date of July 24, 2017. 76 options vested immediately upon grant, 76 options vested on May 1, 2018 and 75 options vested on May 1, 2019.(5) The option has a grant date of May 29, 2019. 160 options vested immediately upon grant, 445 options vested on May 1, 2020, 445 options vested on May 21, 2021and 444 options vested on May 1, 2022.(6) The option has a grant date of October 8, 2020, 1,300 options vested on November 26, 2020, 1,300 options vested on May 26, 2021, 1,300 options vested onNovember 26, 2021, and 1,300 options vested on May 26, 2022.(7) The option has a grant date of May 29, 2019. 214 options vested immediately upon grant, 227 options vested on January 24, 2019, 227 options vested on January24, 2020 and 226 options vested on January 24, 2021.(8) On May 25, 2020, the compensation committee of the Board of Directors of the Company reduced the exercise price of outstanding options of employees anddirectors of the Company for the purchase of an aggregate of 5,610 shares of common stock of the Company (with exercise prices ranging between $453.75 and$228.75) to $26 per share, which was the closing price for the Company’s common stock on May 22, 2020, and extended the term of the foregoing options for anadditional one year from the original date of expiration.(9) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(10) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(11) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.59Director CompensationThe following table sets forth compensation information for our nonemployee directors for the year ended December 31, 2022.NameFees earned orpaid incash ($)(1)Optionawards($)(1)(2)Total($)Oren Elmalih15,078 15,078Oron Barnitzky15,34715,347Arik Kaufman14,44114,441Guy Zimmerman13,03313,033(1)Fees for the year 2022 are based on average US$/NIS representative exchange rates of NIS 3.519.(2)Amounts in this column represent the grant date fair value of options granted to the nonemployee directors during 2022 computed in accordance with FASBASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the nonemployee directors. The assumptions made invaluing the options reported in this column are discussed in Note 11 to our financial statements for the year ended December 31, 2022.We compensate our nonemployee directors for their service as a member of our board. Mr. Luzon received no separate compensation for board service. Mr.Luzon’s compensation is set forth above in the Summary Compensation Table.Each nonemployee director is entitled to receive a per meeting fee of $318. Nonemployee directors are also reimbursed for their travel and reasonable outofpocket expenses incurred in connection with attending board and committee meetings, to the extent that attendance is required by the board or the committee(s)on which that director serves.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurity Ownership of Certain Beneficial Holders and ManagementThe following table sets forth certain information regarding beneficial ownership of shares of our common stock as of March 31, 2023 by (i) each personknown to beneficially own more than 5% of our outstanding common stock, (ii) each of our directors, (iii) each of our executive officers, and (iv) all of our directorsand executive officers as a group. Except as otherwise indicated, the persons named in the table below have sole voting and investment power with respect to allshares beneficially owned, subject to community property laws, where applicable.Beneficial Owner(1)Shares ofCommon StockBeneficiallyOwnedPercentage(2)Executive officers and directors:Ronen Luzon143,578(3)5.8%Or Kles29,854(4)1.2%Billy Pardo143,578(5)5.8%Ezequiel Javier Brandwain12,000(6)*Ilia Turchinsky18,313(7)*Arik Kaufman1,294(8)*Oren Elmaliah1,294(9)*Oron Branitzky1,294(10)*Guy ZimmermanAll Executive Officers and Directors as a Group (9 persons)207,6268.4%*Less than 1%(1) The address of each person is c/o My Size, Inc., 4 HaYarden St., P.O.B. 1026, Airport City, Israel 7010000 unless otherwise indicated herein.60(2) The calculation in this column is based upon 2,446,780 shares of common stock outstanding on March 31, 2023. Beneficial ownership is determined in accordancewith the rules of the SEC and generally includes voting or investment power with respect to the subject securities. Shares of common stock that are currentlyexercisable or exercisable within 60 days of March 31, 2023 are deemed to be beneficially owned by the person holding such securities for the purpose of computingthe percentage beneficial ownership of such person, but are not treated as outstanding for the purpose of computing the percentage beneficial ownership of anyother person(3) Consists of (i) 100,000 shares of restricted stock granted under the 2017 Plan, (ii) 4,683 shares of common stock, (iii) options to purchase up to 8,401 shares of ourcommon stock, and (iv) 24,000 shares of restricted stock and options to purchase up to 6,494 shares of our common stock which are held by Billy Pardo, RonenLuzon’s spouse. Mr. Luzon may be deemed to beneficially hold the securities of us held by Ms. Pardo.(4) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, and (ii) an option to purchase 5,854 shares of our common stock. Does not includean aggregate of 119,760 shares of restricted stock over which Mr. Kles has been designated the initial proxy to vote such shares pursuant to a voting agreemententered into between Whitehole S.L., Twinbel S.L. and EGI Acceleration, S.L.(5) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, (ii) options to purchase up to 6,494 shares of our common stock, (iii) 100,000 sharesof restricted stock which are held by Ronen Luzon, Billy Pardo’s spouse (iii) 8,401 shares of common stock which are held by Mr. Luzon, and (iii) options to purchaseup to 4,683 shares of our common stock which are held by Mr. Luzon. Ms. Pardo may be deemed to beneficially hold the securities of the Company held by Mr.Luzon.(6) Consists of 12,000 shares of restricted stock granted under the 2017 Plan.(7) Consists of (i) 16,000 shares of restricted stock granted under the 2017 Plan, and (ii) options to purchase up to 2,313 shares of our common stock.(8) Consists of options to purchase up to 1,294 shares of our common stock.(9) Consists of options to purchase up to 1,294 shares of our common stock.(10) Consists of options to purchase up to 1,294 shares of our common stock.Change in ControlWe are not aware of any arrangement that might result in a change in control in the future. We have no knowledge of any arrangements, including anypledge by any person of our securities, the operation of which may at a subsequent date result in a change in the Company’s control.Securities Authorized for Issuance Under Equity Compensation PlansOn January 29, 2017, our Board of Directors approved the 2017 Equity Incentive Plan and the 2017 Consultant Equity Incentive Plan, which were approvedby our stockholders on March 21, 2017. In addition, on January 29, 2017, our Board of Directors approved the Stock Option Plan Israel Grantees SubPlan. The 2017Equity Incentive Plan initially authorized the issuance of up to 5,334 shares of common stock under the plan and the 2017 Consultant Equity Incentive Plan initiallyauthorized the issuance of up to 8,000 shares of common stock under the plan.On February 12, 2018, our stockholders approved an amendment to the 2017 Consultant Equity Incentive Plan to increase the maximum number of shares ofour common stock available for issuance under the plan from 8,000 to 12,000. On July 3, 2018, our stockholders approved an amendment to the 2017 Equity IncentivePlan to increase the maximum number of shares of our common stock available for issuance under the plan from 5,334 to 8,000 and an amendment to the 2017Consultant Equity Incentive Plan to increase the maximum number of shares of our common stock available for issuance under the plan from 12,000 to 18,667.On May 25, 2020, our Board reduced the exercise price of outstanding options of our employees and directors for the purchase of an aggregate of 140,237of our common stock (with exercise prices ranging between $453.75 and $228.75) to $26.0 per share, and extended the term of the foregoing options for an additionalone year from the original date of expiration.61On August 10, 2020, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 80,000 to 58,000shares, and a decrease of the numbers of shares available for issuance under the 2017 Consultant Incentive Plan to 8,667 shares from 18,667 shares.On December 30, 2021, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 58,000 sharesto 230,800 shares.On December 7, 2022, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Plan from 230,800 shares to 289,000shares.The following table summarizes information about our equity compensation plans and individual compensation arrangements as of December 31, 2022.Number of securities to be issued upon exercise of outstanding options, warrants and rights(a)Weighted average exercise price of outstandingoptions, warrants and rights (b)Number of securities remaining availablefor future issuanceunder equity compensationplans (excludingsecurities reflected in column (a) (c)Equity compensation plans approved by security holders43,49724.7477,455Equity compensation plans not approved by security holdersTotal43,49724.7477,455ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEDuring years ended December 31, 2022 and 2021, except for compensation arrangements described elsewhere herein and the transactions described below,we did not participate in any transaction, and we are not currently participating in any proposed transaction, or series of transactions, in which the amount involvedexceeded the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years, and in which, to our knowledge,any of our directors, officers, five percent beneficial security holders, or any member of the immediate family of the foregoing persons had, or will have, a direct orindirect material interest.Compensation arrangements for our named executive officers and directors are described in the section entitled “Executive Compensation.”Employment AgreementsWe have entered into written employment agreements with each of our executive officers. These agreements generally provide for notice periods of varyingduration for termination of the agreement by us or by the relevant executive officer, during which time the executive officer will continue to receive base salary andbenefits. We have also entered into customary noncompetition, confidentiality of information and ownership of inventions arrangements with our executiveofficers. However, the enforceability of the noncompetition provisions may be limited under applicable law.OptionsSince our inception we have granted options to purchase our common stock to our officers and directors. Such option agreements may contain accelerationprovisions upon certain merger, acquisition, or change of control transactions.62Restricted Stock GrantsOn September 29, 2022, our compensation committee approved grants of restricted share awards under our 2017 Plan to Ronen Luzon, Or Kles, Billy Pardo,Ilia Turchinsky and Ezequiel Javier Brandwain, pursuant to which they were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000restricted shares and 12,000 restricted shares, respectively. The restricted shares shall vest in three equal installments on January 1, 2023, January 1, 2024 andJanuary 1, 2025, conditioned upon continuous employment with us, and subject to accelerated vesting upon a change in control of the Company.Shareholder ActivismIn May 2021, we received notice from Custodian Ventures, LLC, or Custodian, of its intention to nominate four candidates to stand for election to our Boardof Directors at our 2021 annual meeting of stockholders. Custodian subsequently made a book and records request and has made public statements calling forchanges to our management.On September 22, 2021, Custodian, commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v. Mysize,Inc., C.A. No. 20210817LWW, or the Delaware Action. In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting. As further described below, on November 4, 2021, we entered into asettlement agreement, or the Settlement Agreement, with Custodian, Activist Investing LLC, David Aboudi, Partick Loney and David Natan, collectively, the LazarParties, settling and dismissing the Delaware Action.On October 19, 2021, we commenced an action in the United States District Court for the Southern District of New York captioned My Size, Inc. v. DavidLazar, Custodian Ventures LLC, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, Civil Action No, 1:21cv08585, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, andcertain rules promulgated thereunder, or the SDNY Action. The complaint sought, among other things, declaratory and injunctive relief related to defendants’ effortsto nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed “group” for purposes ofSection 13 (d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. In addition, the complaint alleged that thedefendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules in connection with their efforts to elect a slate of directorsto our Board of Directors. On October 20, 2021, the Court signed an order granting a hearing on an anticipated motion for a preliminary injunction and expeditedscheduling and discovery in aid thereof, and scheduled that hearing for December 2, 2021. As further described below, on November 4, 2021, we entered into theSettlement Agreement with the Lazar Parties settling and dismissing the claims asserted in the SDNY Action and the Delaware Action against one another. OnNovember 8, 2021, the remaining defendants in the SDNY Action filed and answer and counterclaim asserting a claim against us pursuant to New York Civil RightsLaw Section 70a, also known as New York’s antiSLAPP statute.On November 4, 2021, we entered into the Settlement Agreement, or the Lazar Settlement Agreement, with the Lazar Parties. Pursuant to the LazarSettlement Agreement, we and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the LazarSettlement Agreement, we reimbursed Custodian for out of pocket expenses and in consideration for the dismissal and release of claims against the Company anaggregate amount equal to $275,000. With respect to our 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) itsMay 12, 2021 notice of stockholder nominations of four director candidates with respect to our 2021 annual meeting of stockholders, (ii) the notice dated October 28,2021 submitted by Custodian to us notifying us of Custodian’s continued intent to bring its nomination of four director candidates before our stockholders at the2021 annual meeting, and (iii) any and all related materials and notices submitted to us in connection therewith or related thereto and to not take any further action inconnection with the solicitation of any proxies in connection with us. Custodian also agreed to cease any and all solicitation and other activities in connection withthe 2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effective date of theAgreement, or the Standstill Period. The Lazar Settlement Agreement also provides that during the Standstill Period, the Lazar Parties will vote all shares of ourcommon stock it beneficially owns in accordance with any proposal or recommendation made by us or our Board of Directors that is submitted to our stockholders,unless to do so would violate applicable law and except with respect to certain extraordinary transactions. The Lazar Settlement Agreement also contains nondisparagement and confidentiality provisions, subject to certain exceptions.63On December 9, 2021, we subsequently entered into a Settlement Agreement, or the Ault Settlement Agreement, with Milton C. Ault III, Ault Alpha LP, AultAlpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed to withdraw the SDNY Action against the AultParties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that action against the Company. In addition, pursuant to the SettlementAgreement, we paid $70,000 to the Ault Parties in consideration for the releases and other good and valuable consideration as set forth in the Ault SettlementAgreement.Naiz Bespoke Technologies AcquisitionOn October 7, 2022, we entered into the Naiz Agreement with the Naiz Sellers, pursuant to which the Naiz Sellers agreed to sell to us all of the issued andoutstanding equity of Naiz. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) ) the Naiz EquityConsideration and (ii) up the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the Equity Value Averaging Period) is less than $1,650,000, My Size shall pay the Shortfall Value to the Naiz Sellers within 45days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period, it wasdetermined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement)).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers will be subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into the LockUp Agreement with My Size, (ii) Whitehole, Twinbel and EGIentered into the Voting Agreement with My Size and (iii) each of the Key Persons entered into employment agreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonth period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonth “dribbleout” provisionthat provides following the expiration of the initial sixmonth lockup period, without My Size’s prior written consent (which My Size shall be permitted to withholdat its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than the average dailytrading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.64The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Indemnification Agreements and Directors’ and Officers’ Liability InsuranceWe have entered into indemnification agreements with each of our directors and executive officers. These agreements, among other things, require us toindemnify these individuals and, in certain cases, affiliates of such individuals, to the fullest extent permitted by Delaware law against liabilities that may arise byreason of their service to us or at our direction, and to advance expenses incurred as a result of any proceedings against them as to which they could beindemnified. We also maintain an insurance policy that insures our directors and officers against certain liabilities, including liabilities arising under applicablesecurities laws.Director IndependenceSee “Item 10. Directors, Executive Officers and Corporate Governance; Corporate Governance, Board Composition” above for a discussion regarding theindependence of the members of our board of directors.ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICESSomekh Chaikin, a member firm of KPMG International, located in Tel Aviv, Israel, PCAOB ID 1057, has served as our independent registered publicaccounting firm for 2022 and 2021. The following are Somekh Chaikin’s fees for professional services in each of the respective fiscal years:Fee Category20222021Audit Fees198,910298,300Tax Fees30,66729,300Auditrelated Fees18,000Total Fees247,577327,600Audit Fees:Audit Fees consist of fees billed for professional services performed by Somekh Chaikin for the audit of our annual financial statements, thereview of interim consolidated financial statements, and related services that are normally provided in connection with registration statements, including theregistration statement for S1 and S3.Tax Fees: Tax Fees may consist of fees for professional services, including tax and VAT consulting and compliance performed by an independent registeredpublic accounting provided during the period.PreApproval Policies and ProceduresIn accordance with the SarbanesOxley Act of 2002, as amended, our audit committee charter requires the audit committee to preapprove all audit andpermitted nonaudit services provided by our independent registered public accounting firm, including the review and approval in advance of our independentregistered public accounting firm’s annual engagement letter and the proposed fees contained therein. The audit committee has the ability to delegate the authorityto preapprove nonaudit services to one or more designated members of the audit committee. If such authority is delegated, such delegated members of the auditcommittee must report to the full audit committee at the next audit committee meeting all items preapproved by such delegated members. In the fiscal years endedDecember 31, 2022 and December 31, 2021 all of the services performed by our independent registered public accounting firm were preapproved by the auditcommittee.65PART IVITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES(a)Financial StatementsThe financial statements required by this Item are included beginning at page F1.(b)ExhibitsSee Exhibit IndexITEM 16. FORM 10K SUMMARYNot applicableEXHIBIT INDEXExhibitNumberDescription3.1Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Form on Form8K filed on March 23, 2017)3.2Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10K filed onMarch 4, 2016)3.3Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’s Current Report onForm 8K filed on February 20, 2018)3.4Second Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8K filedon April 24, 2018)3.5Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’sCurrent Report on Form 8K filed on November 18, 2019)3.6Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on January 7, 2022)3.7Amendment No. 1 to Second Amended and Restated ByLaws (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8K filed on January 7, 2022)3.8Certificate of Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on December 7, 2022)4.1Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S3/A filed onNovember 14, 2016)4.2Form of Warrant to Purchase Common Stock issued on February 2, 2018 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report onForm 10K filed on March 27, 2019)4.3Description of Securities Registered under Section 12 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report on Form 10K filedon March 19, 2020)4.4Form of Warrant (incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S1, Amendment No. 1, filed with the SECon May 5, 2020.)4.5Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)4.6Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.1My Size, Inc. 2017 Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement on Schedule DEF 14Afiled on March 2, 2017)10.2My Size, Inc. 2017 Consultant Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement onSchedule DEF 14A filed on March 2, 2017)10.3My Size, Inc. 2017 Stock Option Plan Israel Grantees SubPlan (incorporated by reference to Exhibit 10.3 to the Company’s Annual Report on Form10K filed on March 27, 2019)6610.4Purchase Agreement between My Size, Inc. and Shoshana Zigdon dated as of February 16, 2014 (incorporated by reference to Exhibit 10.2 to theCompany’s Annual Report on Form 10K filed on March 4, 2016)10.5 +Employment Agreement between My Size Israel 2014 Ltd. and Ronen Luzon dated November 18, 2018 (incorporated by reference to Exhibit 10.1 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.6 +Employment Agreement between My Size Israel 2014 Ltd. and Or Kles dated November 18, 2018 (incorporated by reference to Exhibit 10.2 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.7 +Employment Agreement between My Size Israel 2014 Ltd. and Billy Pardo dated November 18, 2018 (incorporated by reference to Exhibit 10.3 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.8Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on January 15,2020)10.9Form of Warrant (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.10Form of Placement Agent Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.11Securities Purchase Agreement (incorporated by reference to Exhibit 10.30 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.12Underwriting Agreement, dated January 5, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on January 7, 2021)10.13Underwriting Agreement, dated March 22, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on March 25, 2021)10.14Amendment to Purchase Agreement between My Size Israel 2014 Ltd., My Size, Inc. and Shoshana Zigdon (incorporated by reference to Exhibit 10.1to the Company’s Quarterly Report on Form 10Q on August 16, 2021)10.15Form of Registered Direct Offering Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.16Form of PIPE Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.17Form of Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.18Form of Placement Agent Warrant issued by the Company on October 28, 2021 (incorporated by reference to Exhibit 10.22 to the Company’s Form S1filed on November 12, 2021)10.19Form of Registration Rights Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.4 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.20Engagement Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference to Exhibit 10.5 to theCompany’s Current Report on Form 8K filed on October 28, 2021)10.21Settlement Agreement dated November 4, 2021, among My Size, Inc., David Lazar and certain of his affiliates (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on November 5, 2021)10.22Share Purchase Agreement dated as of February 7, 2022 between My Size Israel 2014 Ltd. and Amar Guy Shalom and Elad Bretfeld (incorporated byreference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SEC on February 8, 2022)10.23Employment Agreement between My Size Israel 2014 Ltd. and Ezequiel Javier Brandwain dated January 27, 2022 (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on February 1, 2022)10.24Form of Section 102 Capital Gain Restricted Stock Award Agreement under the Company’s 2017 Equity Incentive Plan (incorporated by reference toExhibit 10.1 to the Company’s Quarterly Report on Form 10Q, filed with the SEC on November 14, 2022)10.25Share Purchase Agreement, dated as of October 6, 2022, by and among My Size, Inc., Borja Cembrero Saralegui, Artiz Toree Garcia, Whitehold, S.L.,Twinbel, S.L., and EGI Acceleration, S.L. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SECon October 12, 2022)10.26Form of LockUp Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)10.27Form of Voting Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.3 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)6710.28My Size, Inc. Amendment to the My Size, Inc. 2017 Equity Plan (incorporated by reference to Appendix B to the Company’s definitive proxystatement filed with the SEC on November 4, 2022)10.29Form of Registered Direct Offering Securities Purchase Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.1 to theCompany’s Current Report on Form 8K filed with the SEC on January 12, 2023)10.30Form of PIPE Securities Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8Kfiled with the SEC on January 12, 2023)10.31Form of Registered Direct PreFunded Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.32Form of Series A and Series B Warrant (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8K filed with the SEC onJanuary 12, 2023)10.33Form of Private Placement PreFunded Warrant (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.34Form of Registration Rights Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form8K filed with the SEC on January 12, 2023)10.35Engagement Agreement, dated December 5, 2022 (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8K filed withthe SEC on January 12, 2023)10.36*Form of Placement Agent Warrant21.1*List of Subsidiaries23.1*Consent of Somekh Chaikin, a member firm of KPMG International, registered public accounting firm31.1*Certification of the Chief Executive Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200231.2*Certification of the Chief Financial Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200232.1*Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a14(b) of the Exchange Act and 18 U.S.C. Section 1350, asadopted pursuant to Section 906 of the SarbanesOxley Act of 2002101.INS*Inline XBRL Instance Document101.SCH*Inline XBRL Taxonomy Schema101.CAL*Inline XBRL Taxonomy Calculation Linkbase101.DEF*Inline XBRL Taxonomy Definition Linkbase101.LAB*Inline XBRL Taxonomy Label Linkbase101.PRE*Inline XBRL Taxonomy Presentation Linkbase104Cover Page Interactive Data File (formatted as Inline XBRL document and contained in Exhibit 101)*Filed herewith.+Indicates a management contract or any compensatory plan, contract or arrangement68SIGNATURESPursuant to the requirements of Section 13 and 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10K to be signed on its behalf by the undersigned, thereunto duly authorized on this 14th day of April, 2023.MY SIZE, INC./s/ Ronen LuzonRonen LuzonChief Executive Officer (Principle Executive Officer)/s/ Or KlesOr KlesChief Financial Officer(Principal Financial and Accounting Officer)Pursuant to the requirements of the Securities Act of 1934, this annual report on Form 10K has been signed below by the following persons on behalf ofthe registrant and in the capacities and on the dates indicated.SignatureTitleDate/s/ Ronen LuzonChief Executive Officer and DirectorApril 14, 2023Ronen Luzon(Principle Executive Officer)/s/ Or KlesChief Financial OfficerApril 14, 2023Or Kles(Principal Financial and Accounting Officer)/s/ Oren ElmaliahDirectorApril 14, 2023Oren Elmaliah/s/ Arik KaufmanDirectorApril 14, 2023Arik Kaufman/s/ Oron BranitzkyDirectorApril 14, 2023Oron Branitzky/s/ Guy ZimmermanDirectorApril 14, 2023Guy Zimmerman69EX10.36 2 ex1036.htmExhibit 10.36NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES ANDEXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THESECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO ANEFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTIONNOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGINACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.PLACEMENT AGENT COMMON STOCK PURCHASE WARRANTMY SIZE, INC.Warrant Shares: _______Issue Date: January 12, 2023Initial Exercise Date: January 12, 2023THIS PLACEMENT AGENT COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _____________ or itsassigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the dateset forth above (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on January 10, 2028 (the “Termination Date”) but not thereafter, tosubscribe for and purchase from My Size, Inc., a Delaware corporation (the “Company”), up to ______ shares (as subject to adjustment hereunder, the “WarrantShares”) of the Company’s Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined inSection 2(b). This Warrant is issued pursuant to that certain engagement letter, dated as of December 5, 2022, by and between the Company and H.C. Wainwright &Co., LLC.Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities PurchaseAgreement (the “Purchase Agreement”), dated January 10, 2023, among the Company and the purchasers signatory thereto.1Section 2. Exercise.a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or afterthe Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted by email (or emailattachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the numberof Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shalldeliver the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on aUnited States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No inkoriginalNotice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required.Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder haspurchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrantto the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercisesof this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering theoutstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder andthe Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver anyobjection to any Notice of Exercise within one (1) Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant,acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, thenumber of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.b) Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $3.8188, subject to adjustment hereunder (the“Exercise Price”).c) Cashless Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein isnot available for the issuance or resale of the Warrant Shares to or by the Holder, then this Warrant may also be exercised, in whole or in part, at such timeby means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing[(AB) (X)] by (A), where:(A) =as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice ofExercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed anddelivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) ofRegulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAPon the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on theprincipal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s execution of the applicable Notice ofExercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hoursthereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii)the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice ofExercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;(B) =the Exercise Price of this Warrant, as adjusted hereunder; and(X) =the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if suchexercise were by means of a cash exercise rather than a cashless exercise.2“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which theCommon Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York Citytime)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest precedingdate) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for theCommon Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the mostrecent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by anindependent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to theCompany, the fees and expenses of which shall be paid by the Company.“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the TradingMarket on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or thenearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and ifprices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reportingprices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock asdetermined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonablyacceptable to the Company, the fees and expenses of which shall be paid by the Company.If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of theSecurities Act, the Warrant Shares shall take on the characteristics of the Warrants being exercised, and the holding period of the Warrant Shares beingissued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section 2(c).3d) Mechanics of Exercise.i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to betransmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with TheDepository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant insuch system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of theWarrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or mannerofsale limitationspursuant to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, registered in theCompany’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitledpursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2)Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate ExercisePrice to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Companyof the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall bedeemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant hasbeen exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (otherthan in the case of a cashless exercise) is received by the Warrant Share Delivery Date. If the Company fails for any reason to deliver tothe Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder,in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP ofthe Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifthTrading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share Delivery Date until such WarrantShares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FASTprogram so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standardsettlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stockas in effect on the date of delivery of the Notice of Exercise.4ii.Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the requestof a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a newWarrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrantshall in all other respects be identical with this Warrant; provided, however, that the Holder shall be required to return any WarrantShares subject to any such rescinded exercise notice concurrently with the return to Holder of the aggregate Exercise Price paid to theCompany for such Warrant Shares and the restoration of Holder’s right to acquire such Warrant Shares pursuant to this Warrant(including, issuance of a replacement warrant certificate evidencing such restored right).iii. Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant toSection 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.iv. Compensation for BuyIn on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights availableto the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with theprovisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date theHolder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwisepurchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipatedreceiving upon such exercise (a “BuyIn”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) theHolder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) theamount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connectionwith the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at theoption of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was nothonored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock thatwould have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holderpurchases Common Stock having a total purchase price of $11,000 to cover a BuyIn with respect to an attempted exercise of shares ofCommon Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediatelypreceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written noticeindicating the amounts payable to the Holder in respect of the BuyIn and, upon request of the Company, evidence of the amount of suchloss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including,without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver sharesof Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.5v. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise ofthis Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Companyshall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by theExercise Price or round up to the next whole share.vi. Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue ortransfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paidby the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by theHolder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, thisWarrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder andthe Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.The Company shall pay all Transfer Agent fees required for sameday processing of any Notice of Exercise and all fees to the DepositoryTrust Company (or another established clearing corporation performing similar functions) required for sameday electronic delivery of theWarrant Shares.vii. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timelyexercise of this Warrant, pursuant to the terms hereof.6e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise anyportion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicableNotice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of theHolder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). Forpurposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Partiesshall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, butshall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrantbeneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion ofany other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exerciseanalogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in thepreceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act andthe rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that suchcalculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed inaccordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (inrelation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisableshall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether thisWarrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of thisWarrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm theaccuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number ofoutstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s mostrecent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recentwritten notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request ofa Holder, the Company shall within one (1) Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock thenoutstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise ofsecurities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number ofoutstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stockoutstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice tothe Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial OwnershipLimitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares ofCommon Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in theBeneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shallbe construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portionhereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplementsnecessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of thisWarrant.7Section 3. Certain Adjustments.a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes adistribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which,for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstandingshares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into asmaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case theExercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any)outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately aftersuch event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of thisWarrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for thedetermination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case ofa subdivision, combination or reclassification.b) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sellsany Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares ofCommon Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregatePurchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise ofthis Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before thedate on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the recordholders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that to the extent that theHolder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall notbe entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Rightto such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not resultin the Holder exceeding the Beneficial Ownership Limitation).c) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend (other than cash) orother distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including,without limitation, any distribution of stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement,scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holdershall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number ofshares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including withoutlimitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken,the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, thatto the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, thenthe Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a resultof such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as itsright thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).8d) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more relatedtransactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease,license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, director indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of CommonStock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more ofthe outstanding Common Stock or 50% or more of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in oneor more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchangepursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly orindirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, withoutlimitation, a reorganization, recapitalization, spinoff, merger or scheme of arrangement) with another Person or group of Persons whereby such otherPerson or group acquires more than 50% of the outstanding shares of Common Stock or 50% or more of the voting power of the common equity of theCompany (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for eachWarrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of theHolder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor oracquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as aresult of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior tosuch Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, thedetermination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of AlternateConsideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Priceamong the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. Ifholders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall begiven the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at theHolder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date ofthe public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cashequal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of suchFundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company’s control, including not approved by theCompany’s Board of Directors, the Holder shall only be entitled to receive from the Company or any Successor Entity the same type or form ofconsideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to theholders of Common Stock of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, stock or anycombination thereof, or whether the holders of Common Stock are given the choice to receive from among alternative forms of consideration in connectionwith the Fundamental Transaction; provided, further, that if holders of Common Stock of the Company are not offered or paid any consideration in suchFundamental Transaction, such holders of Common Stock will be deemed to have received common stock of the Successor Entity (which Entity may be theCompany following such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on theBlackScholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day of consummation of the applicableFundamental Transaction for pricing purposes and reflecting (A) a riskfree interest rate corresponding to the U.S. Treasury rate for a period equal to thetime between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expectedvolatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualizationfactor) as of the Trading Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlyingprice per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any noncashconsideration, if any, being offered in such Fundamental Transaction and (ii) the highest VWAP during the period beginning on the Trading Dayimmediately preceding the public announcement of the applicable contemplated Fundamental Transaction (or the consummation of the applicableFundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant to this Section 3(e) and (D) a remaining option timeequal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date and (E) azero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds (or such other consideration)within the later of (i) five Business Days of the Holder’s election and (ii) the date of consummation of the Fundamental Transaction. The Company shallcause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of theobligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant towritten agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to suchFundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entityevidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares ofcapital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of thisWarrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which appliesthe exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to suchFundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for thepurpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which isreasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall beadded to the term “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction, each andevery provision of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to each of the Company and theSuccessor Entity or Successor Entities, jointly and severally), and the Successor Entity or Successor Entities, jointly and severally with the Company, mayexercise every right and power of the Company prior thereto and the Successor Entity or Successor Entities shall assume all of the obligations of theCompany prior thereto under this Warrant and the other Transaction Documents with the same effect as if the Company and such Successor Entity orSuccessor Entities, jointly and severally, had been named as the Company herein.e) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. Forpurposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the numberof shares of Common Stock (excluding treasury shares, if any) issued and outstanding.9f) Notice to Holder.i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, theCompany shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resultingadjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form)on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C)the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any sharesof capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection withany reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all orsubstantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into othersecurities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of theaffairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as itshall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective datehereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to beentitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification,consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expectedthat holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or otherproperty deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure todeliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to bespecified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, nonpublic informationregarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to aCurrent Report on Form 8K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of suchnotice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.10Section 4. Transfer of Warrant.a) Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and to theprovisions of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights) aretransferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a writtenassignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay anytransfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a newWarrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument ofassignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly becancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unlessthe Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of thedate on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordanceherewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company,together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent orattorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute anddeliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issuedon transfers or exchanges shall be dated the Issue Date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Sharesissuable pursuant thereto.c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “WarrantRegister”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as theabsolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to thecontrary.d) Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrantshall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue skylaws or (ii) eligible for resale without volume or mannerofsale restrictions or current public information requirements pursuant to Rule 144, the Companymay require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, comply with the provisions ofSection 5.7 of the Purchase Agreement.11e) Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon anyexercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling suchWarrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exemptedunder the Securities Act.Section 5. Miscellaneous.a) No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends orother rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Withoutlimiting the rights of a Holder to receive Warrant Shares on a “cashless exercise,” and to receive the cash payments contemplated pursuant to Sections 2(d)(i) and 2(d)(iv), in no event will the Company be required to net cash settle an exercise of this Warrant.a.In July 2019, the Company entered into a threeyear agreement with a consultant (“Consultant14”) to provide services to the Company includingassisting the Company to promote, market and sell the Company’s technology to potential customers. Pursuant to such agreement and in partialconsideration for such consulting services, the Company agreed to issue to Consultant14 options to purchase up to 107 shares of the Company’scommon stock upon execution of the agreement. The options are exercisable at $375.00 per share and shall vest in 3 equal instalments every twelvemonths starting July 2019. Unexercised options shall expire 4 years from the effective date.In addition, the Company agreed to issue to Consultant14 options to purchase up to 890 shares of the Company’s common stock upon executionof the agreement. The options are exercisable at $27.00 per share and shall vest in 4 equal instalments every six months starting September 2020.Unexercised options shall expire 5 years from the effective date.During 2022 and 2021, an amount of $7 and $14 respectively, were recorded by the Company as stockbased equity awards with respect to Consultant14.F24MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The Company’s outstanding options granted to consultants as of December 31, 2022 are as follows:Issuance dateOptions forCommon stockWeightedAverageexercise priceper shareOptionsexercisableExpirationdateFebruary 201815USD528.7515February 2023August 2018December 2018531USD352.38264August 2023 December 2023July 2020107USD375107July 2023SeptemberOctober 20201,488USD27.201,288October 2024 September 2025Total2,1411,674The Company uses the Black Scholes model to measure the fair value of the stock options with the assistance of a third party valuation.No stock options were granted during 2022 to consultants.The fair value of the Company’s stock options granted to nonemployees was calculated using the following weighted average assumptions:20222021GrantsGrantsDividend yield0%Expected volatility125.15%Riskfree interest0.16%Contractual term of up to (years)1.52F25MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)Stock Option Plan for employeesIn March 2017, the Company adopted a stock option plan (the “Plan”) pursuant to which the Company’s Board of Directors may grant stock options toofficers and key employees. The total number of options which may be granted to directors, officers, employees under this plan, is limited to 289,000options. Stock options can be granted with an exercise price equal to or less than the stock’s fair market value at the date of grant.The fair value of each option award is estimated on the date of grant using the Binomial optionpricing model that used the weighted averageassumptions in the following table. The risk free rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the timeof grant.2022Grants2021GrantsDividend yield0%0%Expected volatility96.52%98.47%Riskfree interest4.06%0.96%expected life522.27In the years ended December 31, 2022 and 2021, 10,000 and 3,900 options, respectively, were granted.On December 7, 2022, the Company’s stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from230,800 shares to 289,000 shares.On September 29, 2022, the Compensation Committee of the Company approved grants of restricted share awards under the Company’s 2017 EquityIncentive Plan to Ronen Luzon (CEO), Or Kles (CFO), Billy Pardo (COO), Ilia Turchinsky (CTO) and Ezequiel Javier Brandwain (CCO), pursuant towhich were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000 restricted shares and 12,000 restricted shares,respectively. Each restricted share awarded under section 102 Capital Gain Restricted Stock Award Agreement (the “Agreement”). The restrictedshares shall vest in three equal installments on January 1, 2023, January 1, 2024 and January 1, 2025 for Ronen Luzon, Or Kles, Billy Pardo and IliaTurchinsky and on January 27, 2023, January 27, 2024 and January 27, 2025 for Ezequiel Javier Brandwain, conditioned upon continuous employmentwith the Company, and subject to accelerated vesting upon a change in control of the Company.On the same day, the Company granted fiveyears options to purchase up to 10,000 ordinary shares to other employees of the Company at an exerciseprice of $0.21 per share. The options vesting period is over three years in three equal portions from the vesting commencement date.F26MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 14 STOCK BASED COMPENSATION (Cont.)The total stock option compensation expense in the year ended December 31, 2022 amounted to $448as follows: Research and development expensesamounted to $151, sales and marketing expenses amounted to $119and general and administrative expenses amounted to $178.The total stock option compensation expense in the year ended December 31, 2021 amounted to $252 as follows: Research and development expensesamounted to $94, sales and marketing expenses amounted to $97 and general and administrative expenses amounted to $61.As of December 31, 2022, there was a total of $530 unrecognized compensation cost relating to nonvested sharebased compensation arrangements.That cost is expected to be recognized over a weightedaverage period of 2.0 years.Share option activity during 2022 is as follows:2022Number ofoptionsWeightedaverageexerciseprice US$Outstanding as of January 135,74226.5Granted10,0005.25ExercisedExpired(4,136)Outstanding as of year end41,60622.48Vested as of year end33,20825.17Share option activity during 2021 is as follows:2021Number ofoptionsWeightedaverageExerciseprice US$Outstanding as of January 139,094$26.0Granted3,90032.0Exercised(751)Expired(6,501)Outstanding as of year end35,74226.5Vested as of year end27,06326.5F27MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 15 CONTINGENCIES AND COMMITMENTSa.On August 7, 2018, the Company commenced an action against North Empire LLC (“North Empire”) in the Supreme Court of the State of New York,County of New York for breach of a Securities Purchase Agreement (the “Agreement”) in which it is seeking damages in an amount to bedetermined at trial, but in no event less than $616. On August 2, 2018, North Empire filed a Summons with Notice against the Company, also in thesame Court, in which they allege damages in an amount of $11.4 million arising from an alleged breach of the Agreement. On September 6, 2018North Empire filed a Notice of Discontinuance of the action it had filed on August 2, 2018. On September 27, 2018, North Empire filed an answerand asserted counterclaims in the action commenced by the Company against them, alleging that the Company failed to deliver stock certificatesto North Empire causing damage to North Empire in the amount of $10,958,589. North Empire also filed a thirdparty complaint against theCompany’s CEO and now former Chairman of the Board asserting similar claims against them in their individual capacities. On October 17, 2018,the Company filed a reply to North Empire’s counterclaims. On November 15, 2018, the Company’s CEO and now former Chairman of the Boardfiled a motion to dismiss North Empire’s thirdparty complaint. On January 6, 2020, the Court granted the motion and dismissed the thirdpartycomplaint. Discovery has been completed and both parties have filed motions for summary judgment in connection with the claims andcounterclaims. On December 30, 2021, the Court denied both My Size and North Empire’s motions for summary judgment, arguing there werefactual issues to be determined at trial. On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision. The appealmust be fully perfected and filed by July 26, 2022. On February 3, 2022, the Company filed a motion to reargue the Court’s decision denying theCompany’s motion for summary judgment. North Empire will file its opposition papers on or before March 31, 2022, and the Company will file replypapers on April 29, 2022. On or about September 12, 2022, the Court issued its Decision and Order denying the Company’s motion to reargue.North Empire filed its opposing brief on December 7, 2022. Both sides were given an opportunity to file a reply brief. The Company filed our replybrief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023. The Appellate Court has scheduled oral argument for the appealfor February 7, 2023. Oral argument was held before the Appellate Court on February 7, 2023. On or about February 28, 2023, the Appellate Courtfiled its Decision and Order, which affirmed the lower court’s decisions regarding both My Size and North Empire’s motions for summary judgmentand sent the case back to the Supreme Court.On or about March 13, 2023, the Supreme Court referred the case to its Alternative Dispute Program and ordered the cases to mediate. A date forthe mediation has not yet been set. The Company intends to vigorously defend any claims made by North Empire.The Company believes it is more likely than not that the counterclaims will be denied.b.In May 2021, the Company received notice from Custodian Ventures, LLC (“Custodian”) of its intention to nominate four candidates to stand forelection to our Board of Directors at the Company’s 2021 annual meeting of stockholders. Custodian subsequently made a book and recordsrequest and has made public statements calling for changes to our management.On September 22, 2021, Custodian commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v.MySize, Inc. (the “Delaware Action”). In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting.On October 19, 2021, the Company commenced an action in the United States District Court for the Southern District of New York againstCustodian, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, and certain rulespromulgated thereunder (the “SDNY Action”). The complaint sought, among other things, declaratory and injunctive relief related to defendants’efforts to nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed“group” for purposes of Section 13(d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. Inaddition, the complaint alleged that the defendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules inconnection with their efforts to elect a slate of directors to the Company’s Board of Directors. On October 20, 2021, the Court signed an ordergranting a hearing on an anticipated motion for a preliminary injunction and expedited scheduling and discovery in aid thereof, and scheduled thathearing for December 2, 2021.On November 4, 2021, the Company entered into the Settlement Agreement with the Lazar Parties. Pursuant to the Settlement Agreement, theCompany and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the SettlementAgreement, the Company agreed to reimburse Custodian for out of pocket expenses and in consideration for the dismissal and release of claimsagainst the Company an aggregate amount equal to $275, to be paid within three business days of the effective date of the Settlement Agreement.With respect to the Company’s 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) its May 12,2021 notice of stockholder nominations of four director candidates with respect to the Company’s 2021 annual meeting of stockholders, (ii) thenotice dated October 28, 2021 submitted by Custodian to the Company notifying the Company of Custodian’s continued intent to bring itsnomination of four director candidates before the Company’s stockholders at the 2021 annual meeting, and (iii) any and all related materials andnotices submitted to the Company in connection therewith or related thereto and to not take any further action in connection with the solicitationof any proxies in connection with the Company. Custodian also agreed to cease any and all solicitation and other activities in connection with the2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effectivedate of the Agreement (the “Standstill Period”). The Settlement Agreement also provides that during the Standstill Period, the Lazar Parties willvote all shares of common stock of the Company it beneficially owns in in accordance with any proposal or recommendation made by theCompany or the Board of Directors of the Company that is submitted to the stockholders of the Company, unless to do so would violateapplicable law and except with respect to certain extraordinary transactions. The Settlement Agreement also contains nondisparagement andconfidentiality provisions, subject to certain exceptions.On December 9, 2021, the Company subsequently entered into a Settlement Agreement (the “Ault Settlement Agreement”), with Milton C. Ault III,Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed towithdraw the SDNY Action against the Ault Parties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that actionagainst the Company. In addition, pursuant to the Settlement Agreement, the Company paid $70 to the Ault Parties in consideration for thereleases and other good and valuable consideration as set forth in the Ault Settlement Agreement.c.On July 5, 2021, the Company was served with a legal complaint filed by Fidelity Venture Capital Ltd. and Dror Atzmon in the Magistrate’s Court inTel Aviv for a monetary award in an amount of NIS 1,436,679 (approximately $450) and a declaratory relief. The plaintiffs allege that the Companybreached its contractual obligations to pay them for services allegedly rendered to the Company by the plaintiffs under a certain consultingagreement dated July 2, 2014, in an amount of NIS 819,000 (approximately $256). Additionally, the plaintiffs allege that the Company shouldcompensate them for losses allegedly incurred by them following their investment in the Company’s shares issued under a certain private offering.In the alternative, the plaintiffs move that the court will declare the investment agreement void with full restitution of plaintiffs’ original investmentin an amount of NIS 1,329,650(approximately $415). The Company filed its statement of defense on October 25, 2021. The first preliminary courthearing of the case is scheduled for January 23, 2022.The first court preliminary hearing was held on March 1, 2022.Following the first preliminary hearing and the Court’s comments and recommendation, the Plaintiffs filed a motion to strike out the claim withoutprejudice.On March 8, 2022 the Court ordered dismissal without prejudice of the claim.F28MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATIONAcquisition of OrgadOn February 7, 2022, the Company acquired 100% of the shares and voting interests in Orgad an omnichannel ecommerce platform. The acquisitionwas designed to create an additional revenue stream for the Company by becoming a direct ecommerce seller while leveraging the synergies betweenMySizeID and Orgad’s ecommerce platform.Unaudited proforma informationThe results of operations of Orgad have been included in the consolidated financial statements since the acquisition date of February 7, 2022. Orgadrevenues included in the Company’s consolidated statement of operations from February 7, 2022 through December 31, 2022 were $4,132. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,662 and $2,850 respectively, and the net loss after tax would have been $8,519 and $10,149 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash (*)300Issuance of shares of common stock (69,752 shares) (**)457Total consideration transferred757(*)The cash payment is subject to working capital adjustments.(**)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Orgad, on the twoyear and the threeyear anniversary of the closing, $350in each ofthese years provided that in the case of the second and third instalments certain revenue targets are met and subject further to certain downward postclosing adjustment. Furthermore, 69,752shares of common stock will be issued in eight equal quarterly instalments until the lapse of two years fromclosing. Additional earnout payments of 10% of the operating profit of Orgad for the years 2022 and 2023 will also be paid. All of these payments aresubject to the former owners being actively engaged with Orgad at the date such payment is due, and therefore were not taken as part of theconsideration for the business combination.During the year ended December 31, 2022 an amount of $456and $319was recorded in respect of the cash instalments and in respect of stocksissuance, respectively in Cost Of Goods, Sales and Marketing and General and Administrative expenses as shown in the following table:2022Stockbased compensation expense – Cost of goods194Stockbased compensation expense Sales and marketing271Stockbased compensation expense General and administrative310775(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the preliminary estimates of their fair values, which were determined using generally accepted valuation techniques based onestimates and assumptions made by management at the time of the acquisition. Such estimates are subject to change during the measurement periodwhich is not expected to exceed one year. The purchase price allocation was not finalized duo to examination of the net working capital of Orgad at theacquisition date. Any adjustments to the preliminary purchase price allocation identified during the measurement period will be recognized in theperiod in which the adjustments are determined.The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and Cash EquivalentTrade receivables364PP&E55Inventory864Longterm financial investment31Selling platform378Goodwill152Shortterm accruals and deferrals(181)Trade payables(668)Long term provision(13)Longterm debt(138)Deferred Taxes(87)Total net assets acquired757F29MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)(c)Acquisitionrelated costsThe Company incurred transaction costs of approximately $40and none during twelvemonth period ended December 31, 2022 which were included ingeneral and administrative expenses in the consolidated statements of income (loss).Acquisition of Naiz Bespoke Technologies, S.L. (“Naiz”)On October 11, 2022, the Company acquired 100% of the shares and voting interests in Naiz a provider of SaaS technology solutions that solve sizeand fit issues for fashion ecommerce companies. The acquisition was designed to allow Naiz’s customers benefit from MySize’s deep understanding ofthe fashion ecommerce retail landscape, while creating an additional revenue stream for the Company.Unaudited proforma informationThe results of operations of Naiz have been included in the consolidated financial statements since the acquisition date of October 11, 2022. Naizrevenues included in the Company’s consolidated statement of operations from October 11, 2022 through December 31, 2022 were $103. If theacquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year ended December 31 2022 and2021 would have been $4,738 and $379 respectively and the net loss after tax would have been $8,695 and $10,717 respectively.(a)Consideration transferredThe following table summarizes the acquisition date fair value of each major class of consideration:USDThousandsCash503Issuance of shares of common stock (240,000 shares) (*)1,008Total consideration transferred1,511(*)Quoted price as of the acquisition dateIn addition, the Company agreed to pay to the former owners of Naiz, additional cash consideration (up to $1,550) in four instalments subject to thefollowing conditions:(i)Continuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result ofa Good Reason; and(ii)Naiz’s Revenues reaching or exceeding the respective Target Revenues defined in the agreement. The revenues will be calculated in four periods:(1) January 1, 2022 – December 31, 2022; (2) January 1, 2023 – June 30, 2023; (3) July 1, 2023 – December 31, 2023; (4) January 1, 2024 – December31, 2024.Former owners of Naiz are entitled to additional cash consideration following December 31, 2025 (up to $1,650) in an event when the actual value of theequity consideration is less than $1,650, subject to completion of a Target Revenue for the period of January 1, 2025 – December 31, 2025 andcontinuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result of aGood Reason;F30MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 16 BUSINESS COMBINATION (Cont.)During the year ended December 31, 2022 an amount of $283 was recorded in respect of the additional cash consideration.(b)Identifiable assets acquired and liabilities assumedUnder the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilitiesassumed based on the estimates of their fair values, which were determined using generally accepted valuation techniques based on estimates andassumptions made by management at the time of the acquisition.The following table summarizes the fair value of assets acquired and liabilities assumed as of the acquisition date:ThousandsUSDCash and cash equivalent36Trade receivables and other receivables41PP&E3Longterm financial investment8Customer Relationships726Technology286Trademark77Goodwill1,152Short Term accruals and deferrals(56)Trade payables(46)Shortterm provision(6)Short term debt(155)Long term debt(294)Deferred Taxes(261)Total net assets acquired1,511(c)Acquisitionrelated costsDuring 2022, the Company incurred transaction costs of approximately $75 which were included in general and administrative expenses in theconsolidated statements of income (loss).F31MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)Note 17 – Operating SegmentsDuring the year ended December 31, 2021, the Company had one reportable segment. As a result of the business combinations in the reporting period(see note 13), the Company has three reportable segments: (i) fashion and equipment ecommerce platform, and (ii) SaaS based innovative artificialintelligence driven measurement solutions and (iii) Naiz SaaS based innovative artificial intelligence driven measurement solutions and. The fashionand equipment ecommerce platform which represent Orgad’s activity that was acquired by the Company, mainly operates on Amazon. Orgad has onecustomer that is responsible for 37.9% of the Company consolidated revenues. The SaaS based innovative artificial intelligence driven measurementsolutions, or SaaS Solutions operating segment consists of My Size Inc and My Size Israel and My Size LLC.Information related to the operations of the Company’s reportable operating segments is set forth below:Fashion andequipment ecommerce platformSaaSSolutionsNaizTotalAs of the year ended December 31, 2022Revenues from external customers4,1322241034,459Operating (loss) income(591)(7,181)(338)(8,110)Financial income (expense), net(236)Net loss before tax(8,346)Fashion andequipment ecommerce platformSaasSolutionNaizAs of December 31, 2022:Assets2,0225,9661,691Amortization of intangible assets(114)(34)(46)The Company elected to present geographic information in respect with revenues generated from external customers based on the location of the selling entity:All the revenues of the fashion and equipment ecommerce platform segment are generated by Orgad, located in Israel.All the revenues of the Naiz segment are generated by Naiz, located in Spain.The revenues of the Saas Solutions segment are generated by My Size Ltd. located in Israel (approximately 75% of the segment revenues) and by My Size Inc.located in the U.S. (approximately 25% of the segment revenues).NOTE 18 SALES AND MARKETINGYear endedDecember 31,20222021Salaries836574Consultants and subcontractors5831,086Marketing481283Selling fees489Share based payments post Orgad acquisition (*)271Share based payments for consultants and employees127180Travel21142Other1451713,1432,336(*) See note 16.NOTE 19 GENERAL AND ADMINISTRATIVE EXPENSESYear endedDecember 31,20222021Salaries1,007461Professional services7051,832Share based payments for consultants, directors and employees18098Rent, office expenses and communication442372Insurance564627cash liability and equity liability expenses related to Orgad acquisition310cash liability expenses related to Naiz acquisition217Settlement fees (*)345Directors8259Other3933303,9004,124(*)See note 15(b)F32MY SIZE, INC. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. dollars in thousands (except share data and per share data)NOTE 20 FINANCIAL INCOME (EXPENSE), NETA.Financial incomeYear endedDecember 31,20222021Revaluation investment in marketable securities49Other26172666B.Financial expenseYear endedDecember 31,20222021Exchange rate differences33Revaluation of loan granted100Revaluation investment in marketable securities62Other6792629NOTE 21 EVENTS SUBSEQUENT TO THE BALANCE SHEET DATEa.On January 2, 2023, Orgad experienced a fire at its warehouse in Israel. The Company is not aware of any casualties or injuries associated with thefire. The Company shifted Orgad’s operation to its headquarters. The value of the inventory that was in the warehouse was approximately $450.The Company believes that this incident did not affect the future sales results of Orgad for the year 2023. The inventory was not insured and it istoo early to determine the potential impact of this incident on the other parties that were involved in the incident (lessor and others that leasedproperties near the warehouse).b.On January 10, 2023, the Company entered into a securities purchase agreement pursuant to which the Company sold an aggregate of 162,000ofthe Company’s shares of common stock and prefunded warrants to purchase up to 278,899shares of common stock and, in a concurrent privateplacement, unregistered warrants to purchase up to883,798 shares of common stock, consisting of Series A warrants to purchase up to 441,899shares of common stock and Series B warrants to purchase up to 441,899shares of common stock, at an offering price of $3.055per share ofcommon stock and associated Series A and Series B warrants and an offering price of $3.054per prefunded warrant and associated Series A andSeries B warrants.In addition, the Company entered into a securities purchase agreement pursuant to which the Company agreed to sell and issue in a privateplacement an aggregate of up to 540,098 unregistered prefunded warrants and unregistered warrants to purchase up to an aggregate of 1,080,196shares of common stock, consisting of Series A warrants to purchase up to 540,098 shares of common stock and Series B warrants to purchase upto 540,098 shares of common stock at an offering price of $3.054 per prefunded warrant and associated Series A and Series B warrants.As of March 31,2023 all the pre funded warrants were exercised by the investor.F33ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSUREThere were no disagreements with accountants on accounting and financial disclosure of a type described in Item 304 (a)(1)(iv) or any reportable event asdescribed in Item 304 (a)(1)(v) of Regulation SK.ITEM 9A. CONTROLS AND PROCEDURESDisclosure ControlsWe carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief FinancialOfficer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) as of December 31, 2022. Basedupon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this Annual Report on Form10K, our disclosure controls and procedures were effective to ensure that information required to be disclosed in reports filed under the Exchange Act, as amended,is recorded, processed, summarized and reported within the required time periods specified in the SEC’s rules and forms and is accumulated and communicated toour management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.Management’s Report on Internal Control Over Financial ReportingOur internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records, that, in reasonable detail,accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only inaccordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition, use or disposition of our assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance withthe policies or procedures may deteriorate.Our management, including our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financialreporting at December 31, 2022. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the TreadwayCommission (COSO) in Internal Control—Integrated Framework (2013). Based on that assessment under those criteria, management has determined that, as ofDecember 31, 2022, our internal control over financial reporting was effective.This Annual Report on Form 10K does not include an attestation report of our registered public accounting firm regarding internal control over financialreporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to the exemption provided to issuersthat are not “large accelerated filers” nor “accelerated filers” under the DoddFrank Wall Street Reform and Consumer Protection Act.Changes in Internal Control Over Financial ReportingDuring the year ended December 31, 2022, we made two acquisitions, as discussed in Note 1a and Note 16 of the audited consolidated financial statementsfor the year ended December 31, 2022 included in this Annual Report on Form 10K. As a result, we made additions and/or modifications to policies, procedures,systems and controls that have materially affected our internal control over financial reporting from the acquisitions, including new controls for consolidationprocess that relates to accounting policies and procedures, operational processes and documentation practices. Management excluded the acquired businessesfrom management’s report on internal control over financial reporting. ITEM 9B. OTHER INFORMATIONNone.ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNot applicable.51PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe following table sets forth the name, age and positions of our executive officers and directors.NAMEAgePOSITIONRonen Luzon52Chief Executive Officer and Class III DirectorOr Kles40Chief Financial OfficerBilly Pardo47Chief Operating Officer and Chief Product OfficerIlia Turchinsky35Chief Technology OfficerEzequiel Javier Brandwain53Chief Commercial OfficerOron Branitzky (1)(2)(3)*63Class II DirectorOren Elmaliah (1)(2)(3)*38Class I DirectorArik Kaufman (1)(2)(3)*41Class I DirectorGuy Zimmerman*53Class II Director(1)Member of our audit committee(2)Member of our nominating and corporate governance committee(3)Member of our compensation committee* Independent as that term is defined by the rules of the Nasdaq Stock Market.The business background and certain other information about our directors and executive officers is set forth below:Ronen Luzon has served as our Chief Executive Officer and a member of our board of directors since September 2013. Since 2006, Mr. Luzon hasadditionally served as Chief Executive Officer and founder of Malers Ltd., a company in the global security solutions market which provides technological solutionsfor integrated communication infrastructures, security and control systems. Prior to Malers, he held several senior marketing, sales management and professionalservices positions in a variety of international high tech companies including VP marketing of GA Tech and Professional Services Manager of Eldat Communication.Mr. Luzon graduated from Middlesex University in London with a B.S. in IT and Business Information Systems. We believe that Mr. Luzon is qualified to serve as amember of our board of directors because of his more than 20 years of experience in the technology sector.Or Kles has served as our Chief Financial Officer since May 2016. He is a certified public accountant with a broad, diverse financial background. From May2013 until April 2016 he served as Assistant Controller of Shikun and BinuiSolel Boneh Infrastructure Ltd. and from December 2010 until May 2013 he served as anAssociate at KPMG. Mr. Kles holds an MBA and a B.A. in Business Management and Accounting (specializing in financing) from The College of ManagementAcademic Studies. Mr. Kles is a certified public accountant in Israel.Billy Pardo has served as our Chief Product Officer since May 2014 and Chief Operating Officer since April 2019. From April 2010 until August 2013, Ms.Pardo served as Senior Director of Product Management of Fourier Education. Among her areas of expertise are launching products from concept to successfuldelivery in various methodologies, including Fourier Education’s awardwinning einstein™ Science Tablet. Prior to that Ms. Pardo served in various productmanagement positions including, Project Manager of Time to Know, Product Marketing Manager of RiT Technologies, Product Manager of Pricer AB and R&DTeam Leader at Pricer AB. Ms. Pardo previously served as Software Engineer at Eldat Communication Ltd., and QA Engineer at NICE Systems. Ms. Pardo receivedan MBA from The Interdisciplinary Center and a B.A. in Computer Science from The Academic College of TelAvivYaffo.Ilia Turchinsky has served as our Chief Technology Officer since April 2019 and from July 2018 until April 2019 as our Director of Technology. Prior tojoining us, from 2013 until 2018, Mr. Turchinsky served in various roles, most recently Chief Technology Officer, at MonkeyTech Ltd., a company that providesdesign, development and characterization of mobile applications. Prior to that, Mr. Turchinsky served in various roles including development course instructor atIQLine, was a founder of Arnavsoft and was a software developer for MintLab and a political party. Mr. Turchinsky holds a B.Sc. from the Ben Gurion University inComputer Science and an M.Sc. from the Open University of Israel in Computer Science.52Ezequiel Javier Brandwain has served as our Chief Commercial Officer since February 2022. Mr. Brandwain brings more than two decades of globalexperience in retail and the fashion industry, mainly in business development, operations, and international markets. Before joining the Company, Mr. Brandwainheld positions of increasing responsibility at several companies, including between June 2017 and November 2020, at 7 For All Mankind International, where heserved as Director, Latin America and Caribbean, managing business development and operations across Latin America and the Caribbean. Before that, betweenMay 2016 and June 2017, Mr. Brandwain served as Chief Business Development Officer at Replay – Fashion Box SPA, where he oversaw business development andoperations, expansion and control in the Americas, the Caribbean, and NorthEast Asia. Prior this role, between September 2015 and May 2016, he served as theReplay’s Managing Director in Latin America and the Caribbean, leading the company’s international expansion in these regions. Prior to that, between April 2015and September 2015, Mr. Brandwain served as Managing Director, Latin America and Caribbean at Authentic Brands Group LLC, where he led that company’soperations, business developments and international expansion within these regions, and served as the direct liaison with the company’s headquarters in New York.Prior to that, between April 2015 and September 2015, Mr. Brandwain served as Chief Operating Officer, Latin America and Caribbean at Flemingo International Ltd.,overseeing operations, as well as projected operations in the travel retail field across these regions. Prior to that, between December 2010 and February 2014, Mr.Brandwain served as Regional Director, Southern Hemisphere at Calvin Klein, where he was responsible for defining and implementing the operational andcommercial strategy for Southern Hemisphere, as well as overseeing the retail, travel retail, concession, and wholesale businesses of the company. During his tenureat Calvin Klein, Mr. Brandwain also served as Travel Retail Director, Latin America, where he built the travel retail business and developed operations. Prior to that,between July 2010 and November 2010, Mr. Brandwain served as Business Director, Latin America and Caribbean at Givenchy Latin America, and between January2010 and June 2010 he served as Commercial Director, Latin America and Caribbean at Nautica Latin America. During December 2004 and December 2009, Mr.Brandwain served as Vice President, International Business Development at Report Collection/Modextil, Inc., where he was in charge of business and operationalexpansion, global growth, and brand extensions. Prior to that, between 2003 and October 2004, Mr. Brandwain served as General Manager at Andrew KoenigInternational, Inc. Between September 2019 and November 2020, Mr. Brandwain served as a member of the Board of Directors of 7 For All Mankind BrazilImportacao, Comercio E Distribuicao S.A. Mr. Brandwain earned a Bachelor degree in architecture from the University of the Republic (Uruguay).Oron Branitzky has served as a member of our board of directors since March 2017. Mr. Barnitzky has vast experience in retail technology. SinceNovember 2017, Mr. Branitzky has served as Global Retail Business Development at Superup, and from January 2007 until December 2014 he served as VicePresident of Sales and Marketing at Pricer AB. Prior to that, Mr. Branitzky has served as VP Marketing and Sales at Eldat Communication and Sarin TechnologiesLtd. Since January 2015, Mr. Branitzky has served as chairman of the board of directors of WiseShelf Ltd. and from May 2015 until March 2016, Mr. Branitzky servedas an advisory board member of ciValue. Mr. Branitzky received a B.S. from the Hebrew University of Jerusalem and an MBA in International Marketing from TelAviv University. We believe that Mr. Branitzky is qualified to serve as a member of our board of directors because of his more than 20 years of experience inmanaging the sales of hitech solutions to retailers across the globe.Oren Elmaliah, has served as a member of our board of directors since May 2017. In September 2015, Oren Elmaliah founded Accounting Team IL and hasacted as Account Manager since then. Accounting Team IL is a financial consultancy and service provider to public companies traded in Israel and abroad. SinceFebruary 2017, Mr. Elmaliah has served as controller of Enlivex Therapeutics Ltd., and since January 2017 he has served as Chief Financial Officer of Presstek Israel.In addition, since September 2015, Mr. Elmaliah has served as an Israel Authorities Reporting Officer of LG Electronics Israel and since September 2015 he hasserved as Local Financial Report Consultant of Chiasma. From July 2011 until August 2015, Mr. Elmaliah served as CPA, Financial Director of CFO Director Ltd andfrom June 2010 until July 2011 he served as Risk Management Consultant of RSM International Limited. Mr. Elmaliah holds a B.A. in Accounting/Economics and aMsc. in Finance/Accounting from Tel Aviv University, Israel. He is a licensed Certified Public Accountant in Israel. We believe that Mr. Elmaliah is qualified to serveas a member of our board of directors because of his vast finance experience and public company management and administration in the fields of finance,accounting, and financial regulation.53Arik Kaufman has served as a member of our board of directors since June 2017. Mr. Kaufman is an attorney specializing in the fields of commercial law,corporate law and capital markets and since 2016 runs his own law office in Israel. He has vast experience in the fields of financial reporting and financial regulation.Mr. Kaufman serves as the Chief Executive Officer of Steakholder Foods since January 2022. From September 2017 until January 2022, Mr. Kaufman served as VPBusiness Development of Mor Research Applications. Mr. Kaufman holds an LLB in Law from the Interdisciplinary Center, Herzliya, and is admitted to the IsraeliBar. We believe that Mr. Kaufman is qualified to serve as a member of our board of directors based upon his experience of assisting with the completion of numerousventure capital financings, mergers, acquisitions, and strategic relationships. In addition, he has served as a member of the board of various publicly tradedcompanies, including companies that operate in the same industry as us.Guy Zimmerman has served as a member of our board of directors since August 2021. Previously, Mr. Zimmerman served as Founder and CEO ofManuFuture, an online b2b engineering market place, since February 2021. Prior to that from 2017 to 2021, Mr. Zimmerman acted as a consultant to severaltechnology startups and was a founding partner of a business travel online platform. From 2013 to 2017, Mr. Zimmerman served as EVP of Marketing and BusinessDevelopment of Kornit Digital and was part of the IPO leadership. Prior to that, Mr. Zimmerman served as VP of Global Sales and Business Development at TefronLtd., a provider of seamless garment technology, where he led the $100m sales and sales support organization serving global retail and fashion brands. Prior to thathe served as Vice President of Strategy and Business Development at Tnuva Group, Israel’s largest food manufacturer and spent eight years at McKinsey &Company. Mr. Zimmerman previously led a software startup in the field of operational healthcare management systems. Mr. Zimmerman holds a B.Sc. in IndustrialEngineering from Tel Aviv University in Israel. We believe that Mr. Zimmerman is qualified to serve as a member of our board of directors because of his experiencein business development in the technology and retail sectors.Board Diversity MatrixThe table below provides certain information regarding the diversity of our board of directors as of the date of this annual report.Board Diversity Matrix (As of March 31, 2023)Total Number of Directors5FemaleMaleNonBinaryDid Not DiscloseGenderPart I: Gender IdentityDirectors#5##Part II: Demographic BackgroundAfrican American or Black####Alaskan Native or Native American####Asian####Hispanic or Latinx####Native Hawaiian or Pacific Islander####White#1##Two or More Races or Ethnicities#2##LGBTQ+0Did Not Disclose Demographic Background2Family RelationshipsRonen Luzon, the Chief Executive Officer and a member of our board of directors, and Billy Pardo, the Chief Product Officer and Chief Operating Officer, arehusband and wife. There are no other family relationships among any of our current or former directors or executive officers.Involvement in Certain Legal ProceedingsWe are not aware of any of our directors or officers being involved in any legal proceedings in the past ten years relating to any matters in bankruptcy,insolvency, criminal proceedings (other than traffic and other minor offenses), or being subject to any of the items set forth under Item 401(f) of Regulation SK.Arrangements between Officers and DirectorsTo our knowledge, there is no arrangement or understanding between any of our officers and any other person, including directors, pursuant to which theofficer was selected to serve as an officer.Board of DirectorsThere are no agreements with respect to the election of directors.On January 6, 2022, we filed with the Secretary of State of Delaware a Certificate of Amendment to our Amended and Restated Certificate of Incorporationproviding for a classified Board. Following filing of the Certificate of Amendment, members of our board are now classified into three classes with staggered threeyear terms (with the exception of the expiration of the initial Class I and Class II directors), as follows:●Class I, comprised of two directors, initially Arik Kaufman and Oren Elmaliah (with their initial terms expiring at our 2022 annual meeting of stockholders andmembers of such class serving successive threeyear terms);●Class II, comprised of two directors, initially Oron Branitzky and Guy Zimmerman (with their initial terms expiring at our 2023 annual meeting of stockholdersand members of such class serving successive threeyear terms); and●Class III, comprised of one director, initially Ronen Luzon (with his initial term expiring at our 2024 annual meeting of stockholders and members of suchclass serving successive threeyear terms).54To preserve the classified Board structure, a director elected by the Board of Directors to fill a vacancy holds office until the next election of the class forwhich such director has been chosen, and until that director’s successor has been elected and qualified or until his or her earlier death, resignation, retirement orremoval.Our board of directors has reviewed the materiality of any relationship that each of our directors has with us, either directly or indirectly. Based upon thisreview, we believe that Arik Kaufman, Oren Elmaliach, Oron Branitzky and Guy Zimmerman qualify as independent directors in accordance with the standards set bythe Nasdaq and Rule 10A3 promulgated under the Exchange Act.Committees of the BoardAudit CommitteeOur audit committee is comprised of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Elmaliah serves as chairman of the audit committee. The auditcommittee is responsible for retaining and overseeing our independent registered public accounting firm, approving the services performed by our independentregistered public accounting firm and reviewing our annual financial statements, accounting policies and our system of internal controls. The audit committee actsunder a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the audit committee’s composition and meetings.The audit committee charter is available on our website www.mysizeid.com.The Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by applicable SEC rules. Inaddition, the Board of Directors has determined that each member of the audit committee is “independent,” as that term is defined by the rules of the Nasdaq StockMarket.The Board of Directors has determined that Oren Elmaliah is an “audit committee financial expert” serving on its audit committee, and is independent, as theSEC has defined that term in Item 407 of Regulation SK.Compensation CommitteeOur compensation committee consists of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Branitzky serves as chairman of the compensationcommittee.The compensation committee’s roles and responsibilities include making recommendations to the Board of Directors regarding the compensation for ourexecutives, the role and performance of our executive officers, and appropriate compensation levels for our CEO, which are determined without the CEO present, andother executives. Our compensation committee also administers our 2017 Equity Incentive Plan and our 2017 Consultant Equity Incentive Plan. The compensationcommittee acts under a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the compensation committee’scomposition and meetings. The compensation committee charter is available on our website www.mysizeid.com.Our Board of Directors has determined that all of the members of the compensation committee are “independent” as that term is defined by the rules of theNasdaq Stock Market.Nominating and Corporate Governance CommitteeThe members of the nominating and corporate governance committee are Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Kaufman serves aschairman of the corporate governance and nominations committee. The nominating and corporate governance committee acts under a written charter, which morespecifically sets forth its responsibilities and duties, as well as requirements for the nominating and corporate governance committee’s composition and meetings.The nominating and corporate governance committee charter is available on our website www.mysizeid.com.The nominating and corporate governance committee develops, recommends and oversees implementation of corporate governance principles for us andconsiders recommendations for director nominees. The nominating and corporate governance committee also considers stockholder recommendations for directornominees that are properly received in accordance with applicable rules and regulations of the SEC. Our stockholders that wish to nominate a director for election tothe Board of Directors should follow the procedures set forth in our bylaws.55The nominating and corporate governance committee will consider persons identified by its members, management, stockholders, investment bankers andothers. The guidelines for selecting nominees, which are specified in the nominating committee charter, generally provide that persons to be nominated:●should be accomplished in his or her field and have a reputation, both personal and professional, that is consistent with our image and reputation;●should have relevant experience and expertise and would be able to provide insights and practical wisdom based upon that experience and expertise; and●should be of high moral and ethical character and would be willing to apply sound, objective and independent business judgment, and to assume broadfiduciary responsibility.The nominating and corporate governance committee will consider a number of qualifications relating to management and leadership experience,background and integrity and professionalism in evaluating a person’s candidacy for membership on the Board of Directors. The nominating and corporategovernance committee may require certain skills or attributes, such as financial or accounting experience, to meet specific Board needs that arise from time to timeand will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of Board of Directors members. The nominating andcorporate governance committee will not distinguish among nominees recommended by stockholders and other persons.Our Board of Directors has determined that all of the members of the nominating and corporate governance committee are “independent” as that term isdefined by the rules of the Nasdaq Stock Market.Code of Conduct and EthicsWe have a Code of Business Conduct and Ethics that applies to all our employees. The text of the Code of Business Conduct and Ethics is publiclyavailable on our website at www.mysizeid.com. Information contained on, or that can be accessed through, our website does not constitute a part of this report andis not incorporated by reference herein. Disclosure regarding any amendments to, or waivers from, provisions of the code of conduct and ethics that apply to ourdirectors, principal executive and financial officers will be posted on the “InvestorsCorporate Governance” section of our website at www.mysizeid.com or will beincluded in a Current Report on Form 8K, which we will file within four business days following the date of the amendment or waiver.Change in Procedures for Recommending DirectorsThere have been no material changes to the procedures by which our stockholders may recommend nominees to our Board of Directors from thoseprocedures set forth in our Proxy Statement for our 2021 Annual Meeting of Stockholders, filed with the SEC on December 7, 2022.56ITEM 11. EXECUTIVE COMPENSATIONSummary Compensation TableThe following sets forth the compensation paid by us to our named executive officers, during the years ended December 31, 2022 and December 31, 2021.Name and Principal PositionYearSalary($) (1)Bonus($)StockAwards($)OptionAwards($) (2)All OtherCompensation($)Total($)Ronen Luzon2022173,000223,0008,000126,000530,000Chief Executive Officer2021194,0005,00023,00097,000319,000Or Kles2022123,00053,0007,00071,000254,000Chief Financial Officer2021123,0008,00030,00061,000222,000Billy Pardo2022134,00053,0007,000100,00294,000Chief Operating Officer2021162,0007,00018,00074,000261,000(1) Salary for the years 2022 and 2021 are based on average US$/NIS representative exchange rates of NIS 3.358 and NIS 3.11 respectively.(2) Amounts in this column represent the grant date fair value of options granted to the named executive officers during 2022 and 2021, computed in accordance withFASB ASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the named executive officers. The assumptionsmade in valuing the options reported in this column are discussed in Note 11 to our audited financial statements for the year ended December 31, 2021 and Note 4 toour condensed consolidated interim financial statements for the quarterly period ended September 30, 2022.All Other Compensation TableThe “All Other Compensation” amounts set forth in the Summary Compensation Table above consist of the following:NameYearAutomobileRelatedExpenses($)Manager’sInsurance*($)EducationFund*($)Othersocialbenefits**($)Total($)Ronen Luzon202232,00031,00015,00048,000126,000202133,00033,00015,00016,00097,000Or Kles202215,00021,00010,00025,00071,000202114,00019,0009,00019,00061,000Billy Pardo202216,00025,00013,00046,000100,000202117,00024,00012,00021,00074,000* Manager’s insurance and education funds are customary benefits provided to employees based in Israel. Manager’s insurance is a combination of severancesavings (in accordance with Israeli law), defined contribution taxqualified pension savings and disability insurance premiums. An education fund is a savings fundof pretax contributions to be used after a specified period of time for educational or other permitted purposes.** Other social benefits for 2022 and 2021 for all named individuals includes tax payments in respect of social benefits.57Agreements with Named Executive OfficersRonen LuzonOn November 18, 2018, My Size Israel, our wholly owned subsidiary, entered into an employment agreement with Ronen Luzon, or the Luzon EmploymentAgreement, pursuant to which Mr. Luzon will serve as our Chief Executive Officer. Pursuant to the terms of the Luzon Employment Agreement, Mr. Luzon receivesNIS 55,000 per month as his base salary and shall be eligible to receive such bonus as determined by us. In addition, Mr. Luzon shall be entitled social benefits andto other benefits, including, but not limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, includinginsurance in case of disability, annual vacation days, sick leave and expense reimbursement. Pursuant to the terms of the Luzon Employment Agreement and subjectto certain conditions, payments made by the Company to the pension fund or manager’s insurance fund shall be made in lieu of severance payments due to Mr.Luzon. The term of the Luzon Employment Agreement shall be effective as of September 1, 2018 and shall continue until such time either party provides writtennotice to the other party at least 75 days in advance of the termination of such agreement. We may also terminate Mr. Luzon’s employment without prior writtennotice (or payment in lieu of such notice) for Cause (as defined in the Luzon Employment Agreement).Or KlesOn November 18, 2018, My Size Israel entered into an employment agreement with Or Kles, or the Kles Employment Agreement, pursuant to which Mr. Kleswill serve as our Chief Financial Officer. Pursuant to the terms of the Kles Employment Agreement, Mr. Kles receives NIS 38,000 per month as his base salary andshall be eligible to receive such bonus as determined by us. In addition, Mr. Kles shall be entitled to social benefits and other benefits, including, but not limited to,contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annual vacation days,sick leave and expense reimbursement. Pursuant to the terms of the Kles Employment Agreement and subject to certain conditions, payments made by us to thepension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Mr. Kles. The term of the Kles Employment Agreement shall beeffective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days in advance of thetermination of such agreement. We may also terminate Mr. Kles’s employment without prior written notice (or payment in lieu of such notice) for Cause (as defined inthe Kles Employment Agreement).Billy PardoOn November 18, 2018, My Size Israel entered into an employment agreement with Billy Pardo, or the Pardo Employment Agreement, pursuant to which Ms.Pardo will serve as our Chief Product Officer. Pursuant to the terms of the Pardo Employment Agreement, Ms. Pardo receives NIS 47,500 per month as her basesalary and shall be eligible to receive such bonus as determined by us. In addition, Ms. Pardo shall be entitled to social benefits and other benefits, including, butnot limited to, contributions towards an education fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annualvacation days, sick leave and expense reimbursement. Pursuant to the terms of the Pardo Employment Agreement and subject to certain conditions, payments madeby us to the pension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Ms. Pardo. The term of the Pardo EmploymentAgreement shall be effective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party at least 75 days inadvance of the termination of such agreement. We may also terminate Ms. Pardo’s employment without prior written notice (or payment in lieu of such notice) forCause (as defined in the Pardo Employment Agreement).58Outstanding Equity Awards at Fiscal YearEndThe following table provides information regarding options held by each of our named executive officers that were outstanding as of December 31, 2022.Option AwardsStock AwardsName and Principal PositionNumber ofSecuritiesUnderlyingUnexercisedOptionsExercisableNumber ofSecuritiesUnderlyingUnexercisedOptionsUnexercisableOptionExercisePriceOptionExpirationDateEquityincentiveplan awards:Number ofUnearnedShares that HaveNot VestedEquityincentiveplan awards:Market Value ofUnearnedShares, That Have Not VestedRonen Luzon Chief Executive Officer400(1)$26(8)7/24/20231,601(2)$26(8)5/29/20256,400(3)$268/10/2025100,000(9)100,000$511,250Or Kles – Chief Financial Officer227(4)$26(8)7/24/2023427(5)$26(8)5/29/20255,200(6)$268/10/202524,000(10)24,000$122,700Billy Pardo Chief Operating Officer400(1)$26(8)7/24/2023894(7)$26(8)5/29/20255,200(6)$268/10/202524,000(11)24,000$122,700(1) The option has a grant date of July 24, 2017 and vested in full on January 24, 2018.(2) The option has a grant date of May 29, 2019. 267 options vested immediately upon grant, 445 options vested on January 24, 2019, 445 options vested on January24, 2020 and 444 options vested on January 24, 2021.(3) The option has a grant date of October 8, 2020, 1,600 options vested on November 26, 2020, 1,600 options vested on May 26, 2021, 1,600 options vested onNovember 26, 2021, and 1,600 options vested on May 26, 2022.(4) The option has a grant date of July 24, 2017. 76 options vested immediately upon grant, 76 options vested on May 1, 2018 and 75 options vested on May 1, 2019.(5) The option has a grant date of May 29, 2019. 160 options vested immediately upon grant, 445 options vested on May 1, 2020, 445 options vested on May 21, 2021and 444 options vested on May 1, 2022.(6) The option has a grant date of October 8, 2020, 1,300 options vested on November 26, 2020, 1,300 options vested on May 26, 2021, 1,300 options vested onNovember 26, 2021, and 1,300 options vested on May 26, 2022.(7) The option has a grant date of May 29, 2019. 214 options vested immediately upon grant, 227 options vested on January 24, 2019, 227 options vested on January24, 2020 and 226 options vested on January 24, 2021.(8) On May 25, 2020, the compensation committee of the Board of Directors of the Company reduced the exercise price of outstanding options of employees anddirectors of the Company for the purchase of an aggregate of 5,610 shares of common stock of the Company (with exercise prices ranging between $453.75 and$228.75) to $26 per share, which was the closing price for the Company’s common stock on May 22, 2020, and extended the term of the foregoing options for anadditional one year from the original date of expiration.(9) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(10) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.(11) The restricted share award has a grant date of September 29,2022 and shall vest in three equal installments on January 1,2023, January 1,2024, and January 1,2025.59Director CompensationThe following table sets forth compensation information for our nonemployee directors for the year ended December 31, 2022.NameFees earned orpaid incash ($)(1)Optionawards($)(1)(2)Total($)Oren Elmalih15,078 15,078Oron Barnitzky15,34715,347Arik Kaufman14,44114,441Guy Zimmerman13,03313,033(1)Fees for the year 2022 are based on average US$/NIS representative exchange rates of NIS 3.519.(2)Amounts in this column represent the grant date fair value of options granted to the nonemployee directors during 2022 computed in accordance with FASBASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the nonemployee directors. The assumptions made invaluing the options reported in this column are discussed in Note 11 to our financial statements for the year ended December 31, 2022.We compensate our nonemployee directors for their service as a member of our board. Mr. Luzon received no separate compensation for board service. Mr.Luzon’s compensation is set forth above in the Summary Compensation Table.Each nonemployee director is entitled to receive a per meeting fee of $318. Nonemployee directors are also reimbursed for their travel and reasonable outofpocket expenses incurred in connection with attending board and committee meetings, to the extent that attendance is required by the board or the committee(s)on which that director serves.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurity Ownership of Certain Beneficial Holders and ManagementThe following table sets forth certain information regarding beneficial ownership of shares of our common stock as of March 31, 2023 by (i) each personknown to beneficially own more than 5% of our outstanding common stock, (ii) each of our directors, (iii) each of our executive officers, and (iv) all of our directorsand executive officers as a group. Except as otherwise indicated, the persons named in the table below have sole voting and investment power with respect to allshares beneficially owned, subject to community property laws, where applicable.Beneficial Owner(1)Shares ofCommon StockBeneficiallyOwnedPercentage(2)Executive officers and directors:Ronen Luzon143,578(3)5.8%Or Kles29,854(4)1.2%Billy Pardo143,578(5)5.8%Ezequiel Javier Brandwain12,000(6)*Ilia Turchinsky18,313(7)*Arik Kaufman1,294(8)*Oren Elmaliah1,294(9)*Oron Branitzky1,294(10)*Guy ZimmermanAll Executive Officers and Directors as a Group (9 persons)207,6268.4%*Less than 1%(1) The address of each person is c/o My Size, Inc., 4 HaYarden St., P.O.B. 1026, Airport City, Israel 7010000 unless otherwise indicated herein.60(2) The calculation in this column is based upon 2,446,780 shares of common stock outstanding on March 31, 2023. Beneficial ownership is determined in accordancewith the rules of the SEC and generally includes voting or investment power with respect to the subject securities. Shares of common stock that are currentlyexercisable or exercisable within 60 days of March 31, 2023 are deemed to be beneficially owned by the person holding such securities for the purpose of computingthe percentage beneficial ownership of such person, but are not treated as outstanding for the purpose of computing the percentage beneficial ownership of anyother person(3) Consists of (i) 100,000 shares of restricted stock granted under the 2017 Plan, (ii) 4,683 shares of common stock, (iii) options to purchase up to 8,401 shares of ourcommon stock, and (iv) 24,000 shares of restricted stock and options to purchase up to 6,494 shares of our common stock which are held by Billy Pardo, RonenLuzon’s spouse. Mr. Luzon may be deemed to beneficially hold the securities of us held by Ms. Pardo.(4) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, and (ii) an option to purchase 5,854 shares of our common stock. Does not includean aggregate of 119,760 shares of restricted stock over which Mr. Kles has been designated the initial proxy to vote such shares pursuant to a voting agreemententered into between Whitehole S.L., Twinbel S.L. and EGI Acceleration, S.L.(5) Consists of (i) 24,000 shares of restricted stock granted under the 2017 Plan, (ii) options to purchase up to 6,494 shares of our common stock, (iii) 100,000 sharesof restricted stock which are held by Ronen Luzon, Billy Pardo’s spouse (iii) 8,401 shares of common stock which are held by Mr. Luzon, and (iii) options to purchaseup to 4,683 shares of our common stock which are held by Mr. Luzon. Ms. Pardo may be deemed to beneficially hold the securities of the Company held by Mr.Luzon.(6) Consists of 12,000 shares of restricted stock granted under the 2017 Plan.(7) Consists of (i) 16,000 shares of restricted stock granted under the 2017 Plan, and (ii) options to purchase up to 2,313 shares of our common stock.(8) Consists of options to purchase up to 1,294 shares of our common stock.(9) Consists of options to purchase up to 1,294 shares of our common stock.(10) Consists of options to purchase up to 1,294 shares of our common stock.Change in ControlWe are not aware of any arrangement that might result in a change in control in the future. We have no knowledge of any arrangements, including anypledge by any person of our securities, the operation of which may at a subsequent date result in a change in the Company’s control.Securities Authorized for Issuance Under Equity Compensation PlansOn January 29, 2017, our Board of Directors approved the 2017 Equity Incentive Plan and the 2017 Consultant Equity Incentive Plan, which were approvedby our stockholders on March 21, 2017. In addition, on January 29, 2017, our Board of Directors approved the Stock Option Plan Israel Grantees SubPlan. The 2017Equity Incentive Plan initially authorized the issuance of up to 5,334 shares of common stock under the plan and the 2017 Consultant Equity Incentive Plan initiallyauthorized the issuance of up to 8,000 shares of common stock under the plan.On February 12, 2018, our stockholders approved an amendment to the 2017 Consultant Equity Incentive Plan to increase the maximum number of shares ofour common stock available for issuance under the plan from 8,000 to 12,000. On July 3, 2018, our stockholders approved an amendment to the 2017 Equity IncentivePlan to increase the maximum number of shares of our common stock available for issuance under the plan from 5,334 to 8,000 and an amendment to the 2017Consultant Equity Incentive Plan to increase the maximum number of shares of our common stock available for issuance under the plan from 12,000 to 18,667.On May 25, 2020, our Board reduced the exercise price of outstanding options of our employees and directors for the purchase of an aggregate of 140,237of our common stock (with exercise prices ranging between $453.75 and $228.75) to $26.0 per share, and extended the term of the foregoing options for an additionalone year from the original date of expiration.61On August 10, 2020, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 80,000 to 58,000shares, and a decrease of the numbers of shares available for issuance under the 2017 Consultant Incentive Plan to 8,667 shares from 18,667 shares.On December 30, 2021, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Incentive Plan from 58,000 sharesto 230,800 shares.On December 7, 2022, our stockholders approved an increase in the shares available for issuance under the 2017 Equity Plan from 230,800 shares to 289,000shares.The following table summarizes information about our equity compensation plans and individual compensation arrangements as of December 31, 2022.Number of securities to be issued upon exercise of outstanding options, warrants and rights(a)Weighted average exercise price of outstandingoptions, warrants and rights (b)Number of securities remaining availablefor future issuanceunder equity compensationplans (excludingsecurities reflected in column (a) (c)Equity compensation plans approved by security holders43,49724.7477,455Equity compensation plans not approved by security holdersTotal43,49724.7477,455ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEDuring years ended December 31, 2022 and 2021, except for compensation arrangements described elsewhere herein and the transactions described below,we did not participate in any transaction, and we are not currently participating in any proposed transaction, or series of transactions, in which the amount involvedexceeded the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years, and in which, to our knowledge,any of our directors, officers, five percent beneficial security holders, or any member of the immediate family of the foregoing persons had, or will have, a direct orindirect material interest.Compensation arrangements for our named executive officers and directors are described in the section entitled “Executive Compensation.”Employment AgreementsWe have entered into written employment agreements with each of our executive officers. These agreements generally provide for notice periods of varyingduration for termination of the agreement by us or by the relevant executive officer, during which time the executive officer will continue to receive base salary andbenefits. We have also entered into customary noncompetition, confidentiality of information and ownership of inventions arrangements with our executiveofficers. However, the enforceability of the noncompetition provisions may be limited under applicable law.OptionsSince our inception we have granted options to purchase our common stock to our officers and directors. Such option agreements may contain accelerationprovisions upon certain merger, acquisition, or change of control transactions.62Restricted Stock GrantsOn September 29, 2022, our compensation committee approved grants of restricted share awards under our 2017 Plan to Ronen Luzon, Or Kles, Billy Pardo,Ilia Turchinsky and Ezequiel Javier Brandwain, pursuant to which they were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000restricted shares and 12,000 restricted shares, respectively. The restricted shares shall vest in three equal installments on January 1, 2023, January 1, 2024 andJanuary 1, 2025, conditioned upon continuous employment with us, and subject to accelerated vesting upon a change in control of the Company.Shareholder ActivismIn May 2021, we received notice from Custodian Ventures, LLC, or Custodian, of its intention to nominate four candidates to stand for election to our Boardof Directors at our 2021 annual meeting of stockholders. Custodian subsequently made a book and records request and has made public statements calling forchanges to our management.On September 22, 2021, Custodian, commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures, LLC v. Mysize,Inc., C.A. No. 20210817LWW, or the Delaware Action. In the Delaware Action, Custodian sought an order from the Court of Chancery pursuant to Section 211 ofthe General Corporation Law of the State of Delaware compelling us to hold an annual meeting. As further described below, on November 4, 2021, we entered into asettlement agreement, or the Settlement Agreement, with Custodian, Activist Investing LLC, David Aboudi, Partick Loney and David Natan, collectively, the LazarParties, settling and dismissing the Delaware Action.On October 19, 2021, we commenced an action in the United States District Court for the Southern District of New York captioned My Size, Inc. v. DavidLazar, Custodian Ventures LLC, Activist Investing LLC, Milton C. Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc.,David Aboudi, Patrick Loney and David Nathan, Civil Action No, 1:21cv08585, pursuant to Sections 13(d) and 14(a) of the Securities Exchange Act of 1934, andcertain rules promulgated thereunder, or the SDNY Action. The complaint sought, among other things, declaratory and injunctive relief related to defendants’ effortsto nominate a slate of directors for election at our next annual meeting. The complaint alleged that the defendants formed an undisclosed “group” for purposes ofSection 13 (d) and has misrepresented its true purpose in purchasing My Size, Inc. stock in filings made with the SEC. In addition, the complaint alleged that thedefendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules in connection with their efforts to elect a slate of directorsto our Board of Directors. On October 20, 2021, the Court signed an order granting a hearing on an anticipated motion for a preliminary injunction and expeditedscheduling and discovery in aid thereof, and scheduled that hearing for December 2, 2021. As further described below, on November 4, 2021, we entered into theSettlement Agreement with the Lazar Parties settling and dismissing the claims asserted in the SDNY Action and the Delaware Action against one another. OnNovember 8, 2021, the remaining defendants in the SDNY Action filed and answer and counterclaim asserting a claim against us pursuant to New York Civil RightsLaw Section 70a, also known as New York’s antiSLAPP statute.On November 4, 2021, we entered into the Settlement Agreement, or the Lazar Settlement Agreement, with the Lazar Parties. Pursuant to the LazarSettlement Agreement, we and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action. In addition, pursuant to the LazarSettlement Agreement, we reimbursed Custodian for out of pocket expenses and in consideration for the dismissal and release of claims against the Company anaggregate amount equal to $275,000. With respect to our 2021 annual meeting of stockholders, Custodian agreed to, among other things, withdraw or rescind (i) itsMay 12, 2021 notice of stockholder nominations of four director candidates with respect to our 2021 annual meeting of stockholders, (ii) the notice dated October 28,2021 submitted by Custodian to us notifying us of Custodian’s continued intent to bring its nomination of four director candidates before our stockholders at the2021 annual meeting, and (iii) any and all related materials and notices submitted to us in connection therewith or related thereto and to not take any further action inconnection with the solicitation of any proxies in connection with us. Custodian also agreed to cease any and all solicitation and other activities in connection withthe 2021 annual meeting. In addition, Custodian agreed to certain customary standstill provisions for a period of five years beginning on the effective date of theAgreement, or the Standstill Period. The Lazar Settlement Agreement also provides that during the Standstill Period, the Lazar Parties will vote all shares of ourcommon stock it beneficially owns in accordance with any proposal or recommendation made by us or our Board of Directors that is submitted to our stockholders,unless to do so would violate applicable law and except with respect to certain extraordinary transactions. The Lazar Settlement Agreement also contains nondisparagement and confidentiality provisions, subject to certain exceptions.63On December 9, 2021, we subsequently entered into a Settlement Agreement, or the Ault Settlement Agreement, with Milton C. Ault III, Ault Alpha LP, AultAlpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed to withdraw the SDNY Action against the AultParties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that action against the Company. In addition, pursuant to the SettlementAgreement, we paid $70,000 to the Ault Parties in consideration for the releases and other good and valuable consideration as set forth in the Ault SettlementAgreement.Naiz Bespoke Technologies AcquisitionOn October 7, 2022, we entered into the Naiz Agreement with the Naiz Sellers, pursuant to which the Naiz Sellers agreed to sell to us all of the issued andoutstanding equity of Naiz. The acquisition of Naiz was completed on October 11, 2022.In consideration of the purchase of the shares of Naiz, the Naiz Agreement provided that the Naiz Sellers are entitled to receive (i) ) the Naiz EquityConsideration and (ii) up the Naiz Cash Consideration.The Naiz Equity Consideration was issued to the Naiz Sellers at closing of the transaction of which 94,632 shares of My Size common stock were issued toWhitehole constituting 6.6% of our outstanding shares following such issuance. The Naiz Agreement also provides that, in the event that the actual value of theNaiz Equity Consideration (based on the Equity Value Averaging Period) is less than $1,650,000, My Size shall pay the Shortfall Value to the Naiz Sellers within 45days of our receipt of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging Period, it wasdetermined that the Shortfall Value is $459,240.The Naiz Cash Consideration is payable to the Naiz Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing, (ii)up to US$500,000 within 45 days of My Size’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000 within 45 days of My Size’s receipt of Naiz’sunaudited financial statements for the six months ended June 30, 2023, (iv) up to $350,000 within 45 days of My Size’s receipt of Naiz’s unaudited financialstatements for the six months ended December 31, 2023, and (v) up to $350,000 within 45 days of My Size’s receipt of Naiz’s 2024 audited financial statements;provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.The payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja and Aritz, orthe Key Persons, by or with Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the NaizAgreement)).The Naiz Agreement contains customary representations, warranties and indemnification provisions. In addition, the Naiz Sellers will be subject to noncompetition and nonsolicitation provisions pursuant to which they agree not to engage in competitive activities with respect to My Size’s business.In connection with the Naiz Agreement, (i) each of the Naiz Sellers entered into the LockUp Agreement with My Size, (ii) Whitehole, Twinbel and EGIentered into the Voting Agreement with My Size and (iii) each of the Key Persons entered into employment agreements and services agreements with Naiz.The LockUp Agreement provides that each Naiz Seller will not, for the sixmonth period following the closing of the transaction, (i) offer, pledge, sell,contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares in each case, that arecurrently or hereafter owned of record or beneficially (including holding as a custodian) by such Naiz Seller, or publicly disclose the intention to make any suchoffer, sale, pledge, grant, transfer or disposition; or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of theeconomic consequences of ownership of such Naiz Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is to besettled by delivery of Shares or such other securities, in cash or otherwise. The LockUp Agreement also contains an additional threemonth “dribbleout” provisionthat provides following the expiration of the initial sixmonth lockup period, without My Size’s prior written consent (which My Size shall be permitted to withholdat its sole discretion), each Naiz Seller shall not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than the average dailytrading volume of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.64The Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI, or the Naiz Acquisition Stockholders, will beexercised exclusively by a proxy designated by My Size’s board of directors from time to time, or the Proxy, and that each Naiz Acquisition Stockholder willirrevocably designate and appoint the thencurrent Proxy as its sole and exclusive attorneyinfact and proxy to vote and exercise all voting right with respect to theShares held by each Naiz Acquisition Stockholder. The Voting Agreement also provides that, if the voting power held by the Proxy, taking into account the proxiesgranted by the Naiz Acquisition Stockholders and the Shares owned by the Proxy, represents 20% or more of the voting power of My Size’s stockholders that willvote on an item, or the Voting Power, then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Sharesthat are voted by My Size’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such Naiz Acquisition Stockholderno longer owns the Shares, (ii) the sale of all or substantially all of the assets of My Size or the consolidation or merger of My Size with or into any other businessentity pursuant to which stockholders of My Size prior to such consolidation or merger hold less than 50% of the voting equity of the surviving or resulting entity,(iii) the liquidation, dissolution or winding up of the business operations of My Size, and (iv) the filing or consent to filing of any bankruptcy, insolvency orreorganization case or proceeding involving My Size or otherwise seeking any relief under any laws relating to relief from debts or protection of debtors.Indemnification Agreements and Directors’ and Officers’ Liability InsuranceWe have entered into indemnification agreements with each of our directors and executive officers. These agreements, among other things, require us toindemnify these individuals and, in certain cases, affiliates of such individuals, to the fullest extent permitted by Delaware law against liabilities that may arise byreason of their service to us or at our direction, and to advance expenses incurred as a result of any proceedings against them as to which they could beindemnified. We also maintain an insurance policy that insures our directors and officers against certain liabilities, including liabilities arising under applicablesecurities laws.Director IndependenceSee “Item 10. Directors, Executive Officers and Corporate Governance; Corporate Governance, Board Composition” above for a discussion regarding theindependence of the members of our board of directors.ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICESSomekh Chaikin, a member firm of KPMG International, located in Tel Aviv, Israel, PCAOB ID 1057, has served as our independent registered publicaccounting firm for 2022 and 2021. The following are Somekh Chaikin’s fees for professional services in each of the respective fiscal years:Fee Category20222021Audit Fees198,910298,300Tax Fees30,66729,300Auditrelated Fees18,000Total Fees247,577327,600Audit Fees:Audit Fees consist of fees billed for professional services performed by Somekh Chaikin for the audit of our annual financial statements, thereview of interim consolidated financial statements, and related services that are normally provided in connection with registration statements, including theregistration statement for S1 and S3.Tax Fees: Tax Fees may consist of fees for professional services, including tax and VAT consulting and compliance performed by an independent registeredpublic accounting provided during the period.PreApproval Policies and ProceduresIn accordance with the SarbanesOxley Act of 2002, as amended, our audit committee charter requires the audit committee to preapprove all audit andpermitted nonaudit services provided by our independent registered public accounting firm, including the review and approval in advance of our independentregistered public accounting firm’s annual engagement letter and the proposed fees contained therein. The audit committee has the ability to delegate the authorityto preapprove nonaudit services to one or more designated members of the audit committee. If such authority is delegated, such delegated members of the auditcommittee must report to the full audit committee at the next audit committee meeting all items preapproved by such delegated members. In the fiscal years endedDecember 31, 2022 and December 31, 2021 all of the services performed by our independent registered public accounting firm were preapproved by the auditcommittee.65PART IVITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES(a)Financial StatementsThe financial statements required by this Item are included beginning at page F1.(b)ExhibitsSee Exhibit IndexITEM 16. FORM 10K SUMMARYNot applicableEXHIBIT INDEXExhibitNumberDescription3.1Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Form on Form8K filed on March 23, 2017)3.2Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10K filed onMarch 4, 2016)3.3Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’s Current Report onForm 8K filed on February 20, 2018)3.4Second Amended and Restated ByLaws of My Size, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8K filedon April 24, 2018)3.5Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to the Company’sCurrent Report on Form 8K filed on November 18, 2019)3.6Certificate of Amendment of Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on January 7, 2022)3.7Amendment No. 1 to Second Amended and Restated ByLaws (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8K filed on January 7, 2022)3.8Certificate of Amendment to Amended and Restated Certificate of Incorporation of My Size, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8K filed on December 7, 2022)4.1Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S3/A filed onNovember 14, 2016)4.2Form of Warrant to Purchase Common Stock issued on February 2, 2018 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report onForm 10K filed on March 27, 2019)4.3Description of Securities Registered under Section 12 (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report on Form 10K filedon March 19, 2020)4.4Form of Warrant (incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S1, Amendment No. 1, filed with the SECon May 5, 2020.)4.5Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)4.6Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.1My Size, Inc. 2017 Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement on Schedule DEF 14Afiled on March 2, 2017)10.2My Size, Inc. 2017 Consultant Equity Incentive Plan (incorporated by reference as an exhibit to the Company’s Definitive Proxy Statement onSchedule DEF 14A filed on March 2, 2017)10.3My Size, Inc. 2017 Stock Option Plan Israel Grantees SubPlan (incorporated by reference to Exhibit 10.3 to the Company’s Annual Report on Form10K filed on March 27, 2019)6610.4Purchase Agreement between My Size, Inc. and Shoshana Zigdon dated as of February 16, 2014 (incorporated by reference to Exhibit 10.2 to theCompany’s Annual Report on Form 10K filed on March 4, 2016)10.5 +Employment Agreement between My Size Israel 2014 Ltd. and Ronen Luzon dated November 18, 2018 (incorporated by reference to Exhibit 10.1 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.6 +Employment Agreement between My Size Israel 2014 Ltd. and Or Kles dated November 18, 2018 (incorporated by reference to Exhibit 10.2 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.7 +Employment Agreement between My Size Israel 2014 Ltd. and Billy Pardo dated November 18, 2018 (incorporated by reference to Exhibit 10.3 to theCompany’s Quarterly Report on Form 10Q filed on November 19, 2018)10.8Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on January 15,2020)10.9Form of Warrant (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.10Form of Placement Agent Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on January 15, 2020)10.11Securities Purchase Agreement (incorporated by reference to Exhibit 10.30 to the Company’s Registration Statement on Form S1, Amendment No. 1,filed with the SEC on May 5, 2020)10.12Underwriting Agreement, dated January 5, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on January 7, 2021)10.13Underwriting Agreement, dated March 22, 2021, by and between the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 1.1 tothe Company’s Current Report on Form 8K filed on March 25, 2021)10.14Amendment to Purchase Agreement between My Size Israel 2014 Ltd., My Size, Inc. and Shoshana Zigdon (incorporated by reference to Exhibit 10.1to the Company’s Quarterly Report on Form 10Q on August 16, 2021)10.15Form of Registered Direct Offering Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.16Form of PIPE Securities Purchase Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.17Form of Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.18Form of Placement Agent Warrant issued by the Company on October 28, 2021 (incorporated by reference to Exhibit 10.22 to the Company’s Form S1filed on November 12, 2021)10.19Form of Registration Rights Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference toExhibit 10.4 to the Company’s Current Report on Form 8K filed on October 28, 2021)10.20Engagement Agreement, dated October 26, 2021, by and between the Company and the Purchasers (incorporated by reference to Exhibit 10.5 to theCompany’s Current Report on Form 8K filed on October 28, 2021)10.21Settlement Agreement dated November 4, 2021, among My Size, Inc., David Lazar and certain of his affiliates (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on November 5, 2021)10.22Share Purchase Agreement dated as of February 7, 2022 between My Size Israel 2014 Ltd. and Amar Guy Shalom and Elad Bretfeld (incorporated byreference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SEC on February 8, 2022)10.23Employment Agreement between My Size Israel 2014 Ltd. and Ezequiel Javier Brandwain dated January 27, 2022 (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8K filed on February 1, 2022)10.24Form of Section 102 Capital Gain Restricted Stock Award Agreement under the Company’s 2017 Equity Incentive Plan (incorporated by reference toExhibit 10.1 to the Company’s Quarterly Report on Form 10Q, filed with the SEC on November 14, 2022)10.25Share Purchase Agreement, dated as of October 6, 2022, by and among My Size, Inc., Borja Cembrero Saralegui, Artiz Toree Garcia, Whitehold, S.L.,Twinbel, S.L., and EGI Acceleration, S.L. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K, filed with the SECon October 12, 2022)10.26Form of LockUp Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)10.27Form of Voting Agreement by and among My Size, Inc. and the stockholders identified on the signature page thereto (incorporated by reference toExhibit 10.3 to the Company’s Current Report on Form 8K, filed with the SEC on October 12, 2022)6710.28My Size, Inc. Amendment to the My Size, Inc. 2017 Equity Plan (incorporated by reference to Appendix B to the Company’s definitive proxystatement filed with the SEC on November 4, 2022)10.29Form of Registered Direct Offering Securities Purchase Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.1 to theCompany’s Current Report on Form 8K filed with the SEC on January 12, 2023)10.30Form of PIPE Securities Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8Kfiled with the SEC on January 12, 2023)10.31Form of Registered Direct PreFunded Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.32Form of Series A and Series B Warrant (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8K filed with the SEC onJanuary 12, 2023)10.33Form of Private Placement PreFunded Warrant (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8K filed with theSEC on January 12, 2023)10.34Form of Registration Rights Agreement, dated January 10, 2023 (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form8K filed with the SEC on January 12, 2023)10.35Engagement Agreement, dated December 5, 2022 (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8K filed withthe SEC on January 12, 2023)10.36*Form of Placement Agent Warrant21.1*List of Subsidiaries23.1*Consent of Somekh Chaikin, a member firm of KPMG International, registered public accounting firm31.1*Certification of the Chief Executive Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200231.2*Certification of the Chief Financial Officer pursuant to Rule 13a14(a) of the Exchange Act, as adopted pursuant to Section 302 of the SarbanesOxleyAct of 200232.1*Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a14(b) of the Exchange Act and 18 U.S.C. Section 1350, asadopted pursuant to Section 906 of the SarbanesOxley Act of 2002101.INS*Inline XBRL Instance Document101.SCH*Inline XBRL Taxonomy Schema101.CAL*Inline XBRL Taxonomy Calculation Linkbase101.DEF*Inline XBRL Taxonomy Definition Linkbase101.LAB*Inline XBRL Taxonomy Label Linkbase101.PRE*Inline XBRL Taxonomy Presentation Linkbase104Cover Page Interactive Data File (formatted as Inline XBRL document and contained in Exhibit 101)*Filed herewith.+Indicates a management contract or any compensatory plan, contract or arrangement68SIGNATURESPursuant to the requirements of Section 13 and 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10K to be signed on its behalf by the undersigned, thereunto duly authorized on this 14th day of April, 2023.MY SIZE, INC./s/ Ronen LuzonRonen LuzonChief Executive Officer (Principle Executive Officer)/s/ Or KlesOr KlesChief Financial Officer(Principal Financial and Accounting Officer)Pursuant to the requirements of the Securities Act of 1934, this annual report on Form 10K has been signed below by the following persons on behalf ofthe registrant and in the capacities and on the dates indicated.SignatureTitleDate/s/ Ronen LuzonChief Executive Officer and DirectorApril 14, 2023Ronen Luzon(Principle Executive Officer)/s/ Or KlesChief Financial OfficerApril 14, 2023Or Kles(Principal Financial and Accounting Officer)/s/ Oren ElmaliahDirectorApril 14, 2023Oren Elmaliah/s/ Arik KaufmanDirectorApril 14, 2023Arik Kaufman/s/ Oron BranitzkyDirectorApril 14, 2023Oron Branitzky/s/ Guy ZimmermanDirectorApril 14, 2023Guy Zimmerman69EX10.36 2 ex1036.htmExhibit 10.36NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES ANDEXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THESECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO ANEFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTIONNOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGINACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.PLACEMENT AGENT COMMON STOCK PURCHASE WARRANTMY SIZE, INC.Warrant Shares: _______Issue Date: January 12, 2023Initial Exercise Date: January 12, 2023THIS PLACEMENT AGENT COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _____________ or itsassigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the dateset forth above (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on January 10, 2028 (the “Termination Date”) but not thereafter, tosubscribe for and purchase from My Size, Inc., a Delaware corporation (the “Company”), up to ______ shares (as subject to adjustment hereunder, the “WarrantShares”) of the Company’s Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined inSection 2(b). This Warrant is issued pursuant to that certain engagement letter, dated as of December 5, 2022, by and between the Company and H.C. Wainwright &Co., LLC.Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities PurchaseAgreement (the “Purchase Agreement”), dated January 10, 2023, among the Company and the purchasers signatory thereto.1Section 2. Exercise.a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or afterthe Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted by email (or emailattachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the numberof Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shalldeliver the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on aUnited States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No inkoriginalNotice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required.Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder haspurchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrantto the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercisesof this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering theoutstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder andthe Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver anyobjection to any Notice of Exercise within one (1) Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant,acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, thenumber of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.b) Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $3.8188, subject to adjustment hereunder (the“Exercise Price”).c) Cashless Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein isnot available for the issuance or resale of the Warrant Shares to or by the Holder, then this Warrant may also be exercised, in whole or in part, at such timeby means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing[(AB) (X)] by (A), where:(A) =as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice ofExercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed anddelivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) ofRegulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAPon the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on theprincipal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s execution of the applicable Notice ofExercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hoursthereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii)the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice ofExercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;(B) =the Exercise Price of this Warrant, as adjusted hereunder; and(X) =the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if suchexercise were by means of a cash exercise rather than a cashless exercise.2“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which theCommon Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York Citytime)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest precedingdate) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for theCommon Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the mostrecent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by anindependent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to theCompany, the fees and expenses of which shall be paid by the Company.“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the TradingMarket on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or thenearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and ifprices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reportingprices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock asdetermined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonablyacceptable to the Company, the fees and expenses of which shall be paid by the Company.If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of theSecurities Act, the Warrant Shares shall take on the characteristics of the Warrants being exercised, and the holding period of the Warrant Shares beingissued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section 2(c).3d) Mechanics of Exercise.i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to betransmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with TheDepository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant insuch system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of theWarrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or mannerofsale limitationspursuant to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, registered in theCompany’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitledpursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2)Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate ExercisePrice to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Companyof the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall bedeemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant hasbeen exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (otherthan in the case of a cashless exercise) is received by the Warrant Share Delivery Date. If the Company fails for any reason to deliver tothe Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder,in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP ofthe Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifthTrading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share Delivery Date until such WarrantShares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FASTprogram so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standardsettlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stockas in effect on the date of delivery of the Notice of Exercise.4ii.Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the requestof a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a newWarrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrantshall in all other respects be identical with this Warrant; provided, however, that the Holder shall be required to return any WarrantShares subject to any such rescinded exercise notice concurrently with the return to Holder of the aggregate Exercise Price paid to theCompany for such Warrant Shares and the restoration of Holder’s right to acquire such Warrant Shares pursuant to this Warrant(including, issuance of a replacement warrant certificate evidencing such restored right).iii. Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant toSection 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.iv. Compensation for BuyIn on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights availableto the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with theprovisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date theHolder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwisepurchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipatedreceiving upon such exercise (a “BuyIn”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) theHolder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) theamount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connectionwith the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at theoption of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was nothonored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock thatwould have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holderpurchases Common Stock having a total purchase price of $11,000 to cover a BuyIn with respect to an attempted exercise of shares ofCommon Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediatelypreceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written noticeindicating the amounts payable to the Holder in respect of the BuyIn and, upon request of the Company, evidence of the amount of suchloss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including,without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver sharesof Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.5v. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise ofthis Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Companyshall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by theExercise Price or round up to the next whole share.vi. Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue ortransfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paidby the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by theHolder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, thisWarrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder andthe Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.The Company shall pay all Transfer Agent fees required for sameday processing of any Notice of Exercise and all fees to the DepositoryTrust Company (or another established clearing corporation performing similar functions) required for sameday electronic delivery of theWarrant Shares.vii. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timelyexercise of this Warrant, pursuant to the terms hereof.6e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise anyportion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicableNotice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of theHolder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). Forpurposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Partiesshall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, butshall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrantbeneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion ofany other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exerciseanalogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in thepreceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act andthe rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that suchcalculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed inaccordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (inrelation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisableshall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether thisWarrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of thisWarrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm theaccuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number ofoutstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s mostrecent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recentwritten notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request ofa Holder, the Company shall within one (1) Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock thenoutstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise ofsecurities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number ofoutstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stockoutstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice tothe Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial OwnershipLimitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares ofCommon Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in theBeneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shallbe construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portionhereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplementsnecessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of thisWarrant.7Section 3. Certain Adjustments.a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes adistribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which,for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstandingshares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into asmaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case theExercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any)outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately aftersuch event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of thisWarrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for thedetermination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case ofa subdivision, combination or reclassification.b) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sellsany Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares ofCommon Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregatePurchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise ofthis Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before thedate on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the recordholders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that to the extent that theHolder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall notbe entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Rightto such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not resultin the Holder exceeding the Beneficial Ownership Limitation).c) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend (other than cash) orother distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including,without limitation, any distribution of stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement,scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holdershall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number ofshares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including withoutlimitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken,the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, thatto the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, thenthe Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a resultof such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as itsright thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).8d) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more relatedtransactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease,license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, director indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of CommonStock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more ofthe outstanding Common Stock or 50% or more of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in oneor more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchangepursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly orindirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, withoutlimitation, a reorganization, recapitalization, spinoff, merger or scheme of arrangement) with another Person or group of Persons whereby such otherPerson or group acquires more than 50% of the outstanding shares of Common Stock or 50% or more of the voting power of the common equity of theCompany (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for eachWarrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of theHolder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor oracquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as aresult of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior tosuch Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, thedetermination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of AlternateConsideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Priceamong the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. Ifholders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall begiven the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at theHolder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date ofthe public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cashequal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of suchFundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company’s control, including not approved by theCompany’s Board of Directors, the Holder shall only be entitled to receive from the Company or any Successor Entity the same type or form ofconsideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to theholders of Common Stock of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, stock or anycombination thereof, or whether the holders of Common Stock are given the choice to receive from among alternative forms of consideration in connectionwith the Fundamental Transaction; provided, further, that if holders of Common Stock of the Company are not offered or paid any consideration in suchFundamental Transaction, such holders of Common Stock will be deemed to have received common stock of the Successor Entity (which Entity may be theCompany following such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on theBlackScholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day of consummation of the applicableFundamental Transaction for pricing purposes and reflecting (A) a riskfree interest rate corresponding to the U.S. Treasury rate for a period equal to thetime between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expectedvolatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualizationfactor) as of the Trading Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlyingprice per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any noncashconsideration, if any, being offered in such Fundamental Transaction and (ii) the highest VWAP during the period beginning on the Trading Dayimmediately preceding the public announcement of the applicable contemplated Fundamental Transaction (or the consummation of the applicableFundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant to this Section 3(e) and (D) a remaining option timeequal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date and (E) azero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds (or such other consideration)within the later of (i) five Business Days of the Holder’s election and (ii) the date of consummation of the Fundamental Transaction. The Company shallcause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of theobligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant towritten agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to suchFundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entityevidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares ofcapital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of thisWarrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which appliesthe exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to suchFundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for thepurpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which isreasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall beadded to the term “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction, each andevery provision of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to each of the Company and theSuccessor Entity or Successor Entities, jointly and severally), and the Successor Entity or Successor Entities, jointly and severally with the Company, mayexercise every right and power of the Company prior thereto and the Successor Entity or Successor Entities shall assume all of the obligations of theCompany prior thereto under this Warrant and the other Transaction Documents with the same effect as if the Company and such Successor Entity orSuccessor Entities, jointly and severally, had been named as the Company herein.e) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. Forpurposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the numberof shares of Common Stock (excluding treasury shares, if any) issued and outstanding.9f) Notice to Holder.i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, theCompany shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resultingadjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form)on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C)the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any sharesof capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection withany reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all orsubstantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into othersecurities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of theaffairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as itshall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective datehereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to beentitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification,consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expectedthat holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or otherproperty deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure todeliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to bespecified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, nonpublic informationregarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to aCurrent Report on Form 8K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of suchnotice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.10Section 4. Transfer of Warrant.a) Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and to theprovisions of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights) aretransferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a writtenassignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay anytransfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a newWarrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument ofassignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly becancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unlessthe Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of thedate on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordanceherewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company,together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent orattorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute anddeliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issuedon transfers or exchanges shall be dated the Issue Date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Sharesissuable pursuant thereto.c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “WarrantRegister”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as theabsolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to thecontrary.d) Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrantshall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue skylaws or (ii) eligible for resale without volume or mannerofsale restrictions or current public information requirements pursuant to Rule 144, the Companymay require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, comply with the provisions ofSection 5.7 of the Purchase Agreement.11e) Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon anyexercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling suchWarrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exemptedunder the Securities Act.Section 5. Miscellaneous.a) No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends orother rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Withoutlimiting the rights of a Holder to receive Warrant Shares on a “cashless exercise,” and to receive the cash payments contemplated pursuant to Sections 2(d)(i) and 2(d)(iv), in no event will the Company be required to net cash settle an exercise of this Warrant.(i) and 2(d)(iv), in no event will the Company be required to net cash settle an exercise of this Warrant.b) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonablysatisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theftor destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), andupon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate oflike tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.c) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or grantedherein shall not be a Trading Day, then, such action may be taken or such right may be exercised on the next succeeding Trading Day.d) Authorized Shares.The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissuedCommon Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under thisWarrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with theduty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all suchreasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicablelaw or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that allWarrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchaserights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid andnonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of anytransfer occurring contemporaneously with such issue).12Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation,amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale ofsecurities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at alltimes in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protectthe rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) notincrease the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in parvalue, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid andnonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations,exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform itsobligations under this Warrant.Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or inthe Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from anypublic regulatory body or bodies having jurisdiction thereof.e) Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined inaccordance with the provisions of the Purchase Agreement.f) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holderdoes not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.g) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as awaiver of such right or otherwise prejudice the Holder’s rights, powers or remedies, notwithstanding the fact that the right to exercise this Warrantterminates on the Termination Date. Without limiting any other provision of this Warrant or the Purchase Agreement, if the Company willfully andknowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holdersuch amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellateproceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedieshereunder.13h) Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be deliveredto the address for the Holder that appears in the Company’s Warrant Register.i) Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase WarrantShares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of anyCommon Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.j) Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled tospecific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any lossincurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specificperformance that a remedy at law would be adequate.k) Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to thebenefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisionsof this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of WarrantShares.l) Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and theHolder.m) Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid underapplicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent ofsuch prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.n) Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of thisWarrant.********************(Signature Page Follows)14IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first aboveindicated.MY SIZE, INC.By:Name:Title:15NOTICE OF EXERCISETO: MY SIZE, INC.(1) The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only ifexercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.(2) Payment shall take the form of (check applicable box):☐in lawful money of the United States; or☐if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exerciseprocedure set forth in subsection 2(c).(3) Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:_______________________________The Warrant Shares shall be delivered to the following DWAC Account Number:____________________________________________________________________________________________________________________________(4) Accredited Investor. The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, asamended.[SIGNATURE OF HOLDER]Name of Investing Entity: _______________________________________________________________________Signature of Authorized Signatory of Investing Entity: _________________________________________________Name of Authorized Signatory: ___________________________________________________________________Title of Authorized Signatory: ____________________________________________________________________Date: _______________________________________________________________________________________EXHIBIT BASSIGNMENT FORM(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to exercise the Warrant to purchase shares.)FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned toName:(Please Print)Address:(Please Print)Phone Number:Email Address:Dated: _______________ __, ______Holder’s Signature:Holder’s Address:EX21.1 3 ex211.htmExhibit 21.1List of Subsidiaries of My Size, Inc.:NameJurisdiction of Incorporation/FormationMy Size Israel 2014 Ltd.IsraelTopspin Medical (Israel) Ltd.IsraelMy Size LLCRussian FederationOrgad International Marketing Ltd.IsraelNaiz Bespoke Technologies, S.LSpainEX23.1 4 ex231.htmExhibit 23.1Consent of Independent Registered Public Accounting FirmWe consent to the incorporation by reference in the registration statements No. 333257353, No. 333251679, No. 333223042, No. 333221199, No. 333216414, and333213727 on Form S3 and registration statements No. 333248237, No. 333227053, No. 333222537, and 333264249 on Form S8 and registration statements No.333261031, No. 333237959, No. 333237858 and 333269467 on Form S1 of our report dated April 14, 2023, with respect to the consolidated financial statements ofMy Size Inc./s/ Somekh ChaikinSomekh ChaikinMember Firm of KPMG InternationalTel Aviv, IsraelApril 14, 2023EX31.1 5 ex311.htmExhibit 31.1Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of theSarbanesOxley Act of 2002 and pursuant to Rule 13a14(a) and Rule 15d14 under the Securities Exchange Act of 1934I, Ronen Luzon certify that:1.I have reviewed this Annual Report on Form 10K of My Size, Inc.;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in ExchangeAct Rules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the registrant andhave:a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensurethat material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularlyduring the period in which this report is being prepared;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles;c.Evaluated the effectiveness of the registrant’s disclosure and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluations: andd.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscalquarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the registrant’s ability to record, process, summarize and report financial information; andb.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control overfinancial reporting.Date: April 14, 2023By:/s/ Ronen LuzonRonen LuzonChief Executive Officer(Principal Executive Officer)EX31.2 6 ex312.htmExhibit 31.2Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of theSarbanesOxley Act of 2002 and pursuant to Rule 13a14(a) and Rule 15d14 under the Securities Exchange Act of 1934I, Or Kles, certify that:1I have reviewed this Annual Report on Form 10K of My Size, Inc.;2Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in ExchangeAct Rules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the registrant andhave:a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensurethat material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularlyduring the period in which this report is being prepared;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles;c.Evaluated the effectiveness of the registrant’s disclosure and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluations: andd.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscalquarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the registrant’s ability to record, process, summarize and report financial information; andb.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control overfinancial reporting.Date: April 14, 2023By:/s/ Or KlesOr KlesChief Financial Officer(Principal Financial and Accounting Officer)EX32.1 7 ex321.htmExhibit 32.1CERTIFICATIONS PURSUANT TO SECTION 906 OF THE SARBANESOXLEY ACT OF 2002(18 U.S.C. SECTION 1350)In connection with the Annual Report of My Size, Inc. (the “Company”) on Form 10K for the year ended December 31, 2022 as filed with the Securities andExchange Commission on the date hereof (the “Report”), each of, Ronen Luzon and Or Kles, Chief Executive Officer and Chief Financial Officer of the Company,respectively, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the SarbanesOxley Act of 2002, that:(1) The Company’s Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.Date: April 14, 2023By:/s/ Ronen LuzonRonen LuzonChief Executive Officer(Principal Executive Officer)Date: April 14, 2023By:/s/ Or KlesOr KlesChief Financial Officer(Principal Financial and Accounting Officer)(i) and 2(d)(iv), in no event will the Company be required to net cash settle an exercise of this Warrant.b) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonablysatisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theftor destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), andupon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate oflike tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.c) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or grantedherein shall not be a Trading Day, then, such action may be taken or such right may be exercised on the next succeeding Trading Day.d) Authorized Shares.The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissuedCommon Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under thisWarrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with theduty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all suchreasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicablelaw or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that allWarrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchaserights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid andnonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of anytransfer occurring contemporaneously with such issue).12Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation,amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale ofsecurities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at alltimes in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protectthe rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) notincrease the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in parvalue, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid andnonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations,exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform itsobligations under this Warrant.Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or inthe Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from anypublic regulatory body or bodies having jurisdiction thereof.e) Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined inaccordance with the provisions of the Purchase Agreement.f) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holderdoes not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.g) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as awaiver of such right or otherwise prejudice the Holder’s rights, powers or remedies, notwithstanding the fact that the right to exercise this Warrantterminates on the Termination Date. Without limiting any other provision of this Warrant or the Purchase Agreement, if the Company willfully andknowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holdersuch amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellateproceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedieshereunder.13h) Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be deliveredto the address for the Holder that appears in the Company’s Warrant Register.i) Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase WarrantShares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of anyCommon Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.j) Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled tospecific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any lossincurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specificperformance that a remedy at law would be adequate.k) Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to thebenefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisionsof this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of WarrantShares.l) Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and theHolder.m) Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid underapplicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent ofsuch prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.n) Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of thisWarrant.********************(Signature Page Follows)14IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first aboveindicated.MY SIZE, INC.By:Name:Title:15NOTICE OF EXERCISETO: MY SIZE, INC.(1) The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only ifexercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.(2) Payment shall take the form of (check applicable box):☐in lawful money of the United States; or☐if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exerciseprocedure set forth in subsection 2(c).(3) Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:_______________________________The Warrant Shares shall be delivered to the following DWAC Account Number:____________________________________________________________________________________________________________________________(4) Accredited Investor. The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, asamended.[SIGNATURE OF HOLDER]Name of Investing Entity: _______________________________________________________________________Signature of Authorized Signatory of Investing Entity: _________________________________________________Name of Authorized Signatory: ___________________________________________________________________Title of Authorized Signatory: ____________________________________________________________________Date: _______________________________________________________________________________________EXHIBIT BASSIGNMENT FORM(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to exercise the Warrant to purchase shares.)FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned toName:(Please Print)Address:(Please Print)Phone Number:Email Address:Dated: _______________ __, ______Holder’s Signature:Holder’s Address:EX21.1 3 ex211.htmExhibit 21.1List of Subsidiaries of My Size, Inc.:NameJurisdiction of Incorporation/FormationMy Size Israel 2014 Ltd.IsraelTopspin Medical (Israel) Ltd.IsraelMy Size LLCRussian FederationOrgad International Marketing Ltd.IsraelNaiz Bespoke Technologies, S.LSpainEX23.1 4 ex231.htmExhibit 23.1Consent of Independent Registered Public Accounting FirmWe consent to the incorporation by reference in the registration statements No. 333257353, No. 333251679, No. 333223042, No. 333221199, No. 333216414, and333213727 on Form S3 and registration statements No. 333248237, No. 333227053, No. 333222537, and 333264249 on Form S8 and registration statements No.333261031, No. 333237959, No. 333237858 and 333269467 on Form S1 of our report dated April 14, 2023, with respect to the consolidated financial statements ofMy Size Inc./s/ Somekh ChaikinSomekh ChaikinMember Firm of KPMG InternationalTel Aviv, IsraelApril 14, 2023EX31.1 5 ex311.htmExhibit 31.1Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of theSarbanesOxley Act of 2002 and pursuant to Rule 13a14(a) and Rule 15d14 under the Securities Exchange Act of 1934I, Ronen Luzon certify that:1.I have reviewed this Annual Report on Form 10K of My Size, Inc.;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in ExchangeAct Rules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the registrant andhave:a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensurethat material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularlyduring the period in which this report is being prepared;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles;c.Evaluated the effectiveness of the registrant’s disclosure and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluations: andd.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscalquarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the registrant’s ability to record, process, summarize and report financial information; andb.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control overfinancial reporting.Date: April 14, 2023By:/s/ Ronen LuzonRonen LuzonChief Executive Officer(Principal Executive Officer)EX31.2 6 ex312.htmExhibit 31.2Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of theSarbanesOxley Act of 2002 and pursuant to Rule 13a14(a) and Rule 15d14 under the Securities Exchange Act of 1934I, Or Kles, certify that:1I have reviewed this Annual Report on Form 10K of My Size, Inc.;2Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in ExchangeAct Rules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the registrant andhave:a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensurethat material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularlyduring the period in which this report is being prepared;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles;c.Evaluated the effectiveness of the registrant’s disclosure and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluations: andd.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscalquarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the registrant’s ability to record, process, summarize and report financial information; andb.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control overfinancial reporting.Date: April 14, 2023By:/s/ Or KlesOr KlesChief Financial Officer(Principal Financial and Accounting Officer)EX32.1 7 ex321.htmExhibit 32.1CERTIFICATIONS PURSUANT TO SECTION 906 OF THE SARBANESOXLEY ACT OF 2002(18 U.S.C. SECTION 1350)In connection with the Annual Report of My Size, Inc. (the “Company”) on Form 10K for the year ended December 31, 2022 as filed with the Securities andExchange Commission on the date hereof (the “Report”), each of, Ronen Luzon and Or Kles, Chief Executive Officer and Chief Financial Officer of the Company,respectively, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the SarbanesOxley Act of 2002, that:(1) The Company’s Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.Date: April 14, 2023By:/s/ Ronen LuzonRonen LuzonChief Executive Officer(Principal Executive Officer)Date: April 14, 2023By:/s/ Or KlesOr KlesChief Financial Officer(Principal Financial and Accounting Officer)(i) and 2(d)(iv), in no event will the Company be required to net cash settle an exercise of this Warrant.b) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonablysatisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theftor destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), andupon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate oflike tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.c) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or grantedherein shall not be a Trading Day, then, such action may be taken or such right may be exercised on the next succeeding Trading Day.d) Authorized Shares.The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissuedCommon Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under thisWarrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with theduty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all suchreasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicablelaw or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that allWarrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchaserights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid andnonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of anytransfer occurring contemporaneously with such issue).12Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation,amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale ofsecurities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at alltimes in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protectthe rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) notincrease the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in parvalue, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid andnonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations,exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform itsobligations under this Warrant.Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or inthe Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from anypublic regulatory body or bodies having jurisdiction thereof.e) Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined inaccordance with the provisions of the Purchase Agreement.f) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holderdoes not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.g) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as awaiver of such right or otherwise prejudice the Holder’s rights, powers or remedies, notwithstanding the fact that the right to exercise this Warrantterminates on the Termination Date. Without limiting any other provision of this Warrant or the Purchase Agreement, if the Company willfully andknowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holdersuch amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellateproceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedieshereunder.13h) Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be deliveredto the address for the Holder that appears in the Company’s Warrant Register.i) Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase WarrantShares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of anyCommon Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.j) Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled tospecific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any lossincurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specificperformance that a remedy at law would be adequate.k) Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to thebenefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisionsof this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of WarrantShares.l) Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and theHolder.m) Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid underapplicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent ofsuch prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.n) Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of thisWarrant.********************(Signature Page Follows)14IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first aboveindicated.MY SIZE, INC.By:Name:Title:15NOTICE OF EXERCISETO: MY SIZE, INC.(1) The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only ifexercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.(2) Payment shall take the form of (check applicable box):☐in lawful money of the United States; or☐if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exerciseprocedure set forth in subsection 2(c).(3) Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:_______________________________The Warrant Shares shall be delivered to the following DWAC Account Number:____________________________________________________________________________________________________________________________(4) Accredited Investor. The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, asamended.[SIGNATURE OF HOLDER]Name of Investing Entity: _______________________________________________________________________Signature of Authorized Signatory of Investing Entity: _________________________________________________Name of Authorized Signatory: ___________________________________________________________________Title of Authorized Signatory: ____________________________________________________________________Date: _______________________________________________________________________________________EXHIBIT BASSIGNMENT FORM(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to exercise the Warrant to purchase shares.)FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned toName:(Please Print)Address:(Please Print)Phone Number:Email Address:Dated: _______________ __, ______Holder’s Signature:Holder’s Address:EX21.1 3 ex211.htmExhibit 21.1List of Subsidiaries of My Size, Inc.:NameJurisdiction of Incorporation/FormationMy Size Israel 2014 Ltd.IsraelTopspin Medical (Israel) Ltd.IsraelMy Size LLCRussian FederationOrgad International Marketing Ltd.IsraelNaiz Bespoke Technologies, S.LSpainEX23.1 4 ex231.htmExhibit 23.1Consent of Independent Registered Public Accounting FirmWe consent to the incorporation by reference in the registration statements No. 333257353, No. 333251679, No. 333223042, No. 333221199, No. 333216414, and333213727 on Form S3 and registration statements No. 333248237, No. 333227053, No. 333222537, and 333264249 on Form S8 and registration statements No.333261031, No. 333237959, No. 333237858 and 333269467 on Form S1 of our report dated April 14, 2023, with respect to the consolidated financial statements ofMy Size Inc./s/ Somekh ChaikinSomekh ChaikinMember Firm of KPMG InternationalTel Aviv, IsraelApril 14, 2023EX31.1 5 ex311.htmExhibit 31.1Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of theSarbanesOxley Act of 2002 and pursuant to Rule 13a14(a) and Rule 15d14 under the Securities Exchange Act of 1934I, Ronen Luzon certify that:1.I have reviewed this Annual Report on Form 10K of My Size, Inc.;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in ExchangeAct Rules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the registrant andhave:a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensurethat material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularlyduring the period in which this report is being prepared;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles;c.Evaluated the effectiveness of the registrant’s disclosure and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluations: andd.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscalquarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the registrant’s ability to record, process, summarize and report financial information; andb.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control overfinancial reporting.Date: April 14, 2023By:/s/ Ronen LuzonRonen LuzonChief Executive Officer(Principal Executive Officer)EX31.2 6 ex312.htmExhibit 31.2Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of theSarbanesOxley Act of 2002 and pursuant to Rule 13a14(a) and Rule 15d14 under the Securities Exchange Act of 1934I, Or Kles, certify that:1I have reviewed this Annual Report on Form 10K of My Size, Inc.;2Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in ExchangeAct Rules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the registrant andhave:a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensurethat material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularlyduring the period in which this report is being prepared;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles;c.Evaluated the effectiveness of the registrant’s disclosure and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluations: andd.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscalquarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the registrant’s ability to record, process, summarize and report financial information; andb.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control overfinancial reporting.Date: April 14, 2023By:/s/ Or KlesOr KlesChief Financial Officer(Principal Financial and Accounting Officer)EX32.1 7 ex321.htmExhibit 32.1CERTIFICATIONS PURSUANT TO SECTION 906 OF THE SARBANESOXLEY ACT OF 2002(18 U.S.C. SECTION 1350)In connection with the Annual Report of My Size, Inc. (the “Company”) on Form 10K for the year ended December 31, 2022 as filed with the Securities andExchange Commission on the date hereof (the “Report”), each of, Ronen Luzon and Or Kles, Chief Executive Officer and Chief Financial Officer of the Company,respectively, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the SarbanesOxley Act of 2002, that:(1) The Company’s Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.Date: April 14, 2023By:/s/ Ronen LuzonRonen LuzonChief Executive Officer(Principal Executive Officer)Date: April 14, 2023By:/s/ Or KlesOr KlesChief Financial Officer(Principal Financial and Accounting Officer)(i) and 2(d)(iv), in no event will the Company be required to net cash settle an exercise of this Warrant.b) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonablysatisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theftor destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), andupon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate oflike tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.c) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or grantedherein shall not be a Trading Day, then, such action may be taken or such right may be exercised on the next succeeding Trading Day.d) Authorized Shares.The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissuedCommon Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under thisWarrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with theduty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all suchreasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicablelaw or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that allWarrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchaserights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid andnonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of anytransfer occurring contemporaneously with such issue).12Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation,amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale ofsecurities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at alltimes in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protectthe rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) notincrease the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in parvalue, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid andnonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations,exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform itsobligations under this Warrant.Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or inthe Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from anypublic regulatory body or bodies having jurisdiction thereof.e) Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined inaccordance with the provisions of the Purchase Agreement.f) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holderdoes not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.g) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as awaiver of such right or otherwise prejudice the Holder’s rights, powers or remedies, notwithstanding the fact that the right to exercise this Warrantterminates on the Termination Date. Without limiting any other provision of this Warrant or the Purchase Agreement, if the Company willfully andknowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holdersuch amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellateproceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedieshereunder.13h) Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be deliveredto the address for the Holder that appears in the Company’s Warrant Register.i) Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase WarrantShares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of anyCommon Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.j) Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled tospecific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any lossincurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specificperformance that a remedy at law would be adequate.k) Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to thebenefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisionsof this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of WarrantShares.l) Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and theHolder.m) Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid underapplicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent ofsuch prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.n) Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of thisWarrant.********************(Signature Page Follows)14IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first aboveindicated.MY SIZE, INC.By:Name:Title:15NOTICE OF EXERCISETO: MY SIZE, INC.(1) The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only ifexercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.(2) Payment shall take the form of (check applicable box):☐in lawful money of the United States; or☐if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exerciseprocedure set forth in subsection 2(c).(3) Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:_______________________________The Warrant Shares shall be delivered to the following DWAC Account Number:____________________________________________________________________________________________________________________________(4) Accredited Investor. The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, asamended.[SIGNATURE OF HOLDER]Name of Investing Entity: _______________________________________________________________________Signature of Authorized Signatory of Investing Entity: _________________________________________________Name of Authorized Signatory: ___________________________________________________________________Title of Authorized Signatory: ____________________________________________________________________Date: _______________________________________________________________________________________EXHIBIT BASSIGNMENT FORM(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to exercise the Warrant to purchase shares.)FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned toName:(Please Print)Address:(Please Print)Phone Number:Email Address:Dated: _______________ __, ______Holder’s Signature:Holder’s Address:EX21.1 3 ex211.htmExhibit 21.1List of Subsidiaries of My Size, Inc.:NameJurisdiction of Incorporation/FormationMy Size Israel 2014 Ltd.IsraelTopspin Medical (Israel) Ltd.IsraelMy Size LLCRussian FederationOrgad International Marketing Ltd.IsraelNaiz Bespoke Technologies, S.LSpainEX23.1 4 ex231.htmExhibit 23.1Consent of Independent Registered Public Accounting FirmWe consent to the incorporation by reference in the registration statements No. 333257353, No. 333251679, No. 333223042, No. 333221199, No. 333216414, and333213727 on Form S3 and registration statements No. 333248237, No. 333227053, No. 333222537, and 333264249 on Form S8 and registration statements No.333261031, No. 333237959, No. 333237858 and 333269467 on Form S1 of our report dated April 14, 2023, with respect to the consolidated financial statements ofMy Size Inc./s/ Somekh ChaikinSomekh ChaikinMember Firm of KPMG InternationalTel Aviv, IsraelApril 14, 2023EX31.1 5 ex311.htmExhibit 31.1Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of theSarbanesOxley Act of 2002 and pursuant to Rule 13a14(a) and Rule 15d14 under the Securities Exchange Act of 1934I, Ronen Luzon certify that:1.I have reviewed this Annual Report on Form 10K of My Size, Inc.;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in ExchangeAct Rules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the registrant andhave:a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensurethat material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularlyduring the period in which this report is being prepared;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles;c.Evaluated the effectiveness of the registrant’s disclosure and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluations: andd.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscalquarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the registrant’s ability to record, process, summarize and report financial information; andb.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control overfinancial reporting.Date: April 14, 2023By:/s/ Ronen LuzonRonen LuzonChief Executive Officer(Principal Executive Officer)EX31.2 6 ex312.htmExhibit 31.2Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of theSarbanesOxley Act of 2002 and pursuant to Rule 13a14(a) and Rule 15d14 under the Securities Exchange Act of 1934I, Or Kles, certify that:1I have reviewed this Annual Report on Form 10K of My Size, Inc.;2Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in ExchangeAct Rules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the registrant andhave:a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensurethat material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularlyduring the period in which this report is being prepared;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles;c.Evaluated the effectiveness of the registrant’s disclosure and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluations: andd.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscalquarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the registrant’s ability to record, process, summarize and report financial information; andb.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control overfinancial reporting.Date: April 14, 2023By:/s/ Or KlesOr KlesChief Financial Officer(Principal Financial and Accounting Officer)EX32.1 7 ex321.htmExhibit 32.1CERTIFICATIONS PURSUANT TO SECTION 906 OF THE SARBANESOXLEY ACT OF 2002(18 U.S.C. SECTION 1350)In connection with the Annual Report of My Size, Inc. (the “Company”) on Form 10K for the year ended December 31, 2022 as filed with the Securities andExchange Commission on the date hereof (the “Report”), each of, Ronen Luzon and Or Kles, Chief Executive Officer and Chief Financial Officer of the Company,respectively, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the SarbanesOxley Act of 2002, that:(1) The Company’s Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.Date: April 14, 2023By:/s/ Ronen LuzonRonen LuzonChief Executive Officer(Principal Executive Officer)Date: April 14, 2023By:/s/ Or KlesOr KlesChief Financial Officer(Principal Financial and Accounting Officer)(i) and 2(d)(iv), in no event will the Company be required to net cash settle an exercise of this Warrant.b) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonablysatisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theftor destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), andupon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate oflike tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.c) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or grantedherein shall not be a Trading Day, then, such action may be taken or such right may be exercised on the next succeeding Trading Day.d) Authorized Shares.The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissuedCommon Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under thisWarrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with theduty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all suchreasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicablelaw or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that allWarrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchaserights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid andnonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of anytransfer occurring contemporaneously with such issue).12Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation,amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale ofsecurities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at alltimes in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protectthe rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) notincrease the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in parvalue, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid andnonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations,exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform itsobligations under this Warrant.Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or inthe Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from anypublic regulatory body or bodies having jurisdiction thereof.e) Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined inaccordance with the provisions of the Purchase Agreement.f) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holderdoes not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.g) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as awaiver of such right or otherwise prejudice the Holder’s rights, powers or remedies, notwithstanding the fact that the right to exercise this Warrantterminates on the Termination Date. Without limiting any other provision of this Warrant or the Purchase Agreement, if the Company willfully andknowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holdersuch amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellateproceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedieshereunder.13h) Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be deliveredto the address for the Holder that appears in the Company’s Warrant Register.i) Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase WarrantShares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of anyCommon Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.j) Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled tospecific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any lossincurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specificperformance that a remedy at law would be adequate.k) Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to thebenefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisionsof this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of WarrantShares.l) Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and theHolder.m) Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid underapplicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent ofsuch prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.n) Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of thisWarrant.********************(Signature Page Follows)14IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first aboveindicated.MY SIZE, INC.By:Name:Title:15NOTICE OF EXERCISETO: MY SIZE, INC.(1) The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only ifexercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.(2) Payment shall take the form of (check applicable box):☐in lawful money of the United States; or☐if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exerciseprocedure set forth in subsection 2(c).(3) Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:_______________________________The Warrant Shares shall be delivered to the following DWAC Account Number:____________________________________________________________________________________________________________________________(4) Accredited Investor. The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, asamended.[SIGNATURE OF HOLDER]Name of Investing Entity: _______________________________________________________________________Signature of Authorized Signatory of Investing Entity: _________________________________________________Name of Authorized Signatory: ___________________________________________________________________Title of Authorized Signatory: ____________________________________________________________________Date: _______________________________________________________________________________________EXHIBIT BASSIGNMENT FORM(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to exercise the Warrant to purchase shares.)FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned toName:(Please Print)Address:(Please Print)Phone Number:Email Address:Dated: _______________ __, ______Holder’s Signature:Holder’s Address:EX21.1 3 ex211.htmExhibit 21.1List of Subsidiaries of My Size, Inc.:NameJurisdiction of Incorporation/FormationMy Size Israel 2014 Ltd.IsraelTopspin Medical (Israel) Ltd.IsraelMy Size LLCRussian FederationOrgad International Marketing Ltd.IsraelNaiz Bespoke Technologies, S.LSpainEX23.1 4 ex231.htmExhibit 23.1Consent of Independent Registered Public Accounting FirmWe consent to the incorporation by reference in the registration statements No. 333257353, No. 333251679, No. 333223042, No. 333221199, No. 333216414, and333213727 on Form S3 and registration statements No. 333248237, No. 333227053, No. 333222537, and 333264249 on Form S8 and registration statements No.333261031, No. 333237959, No. 333237858 and 333269467 on Form S1 of our report dated April 14, 2023, with respect to the consolidated financial statements ofMy Size Inc./s/ Somekh ChaikinSomekh ChaikinMember Firm of KPMG InternationalTel Aviv, IsraelApril 14, 2023EX31.1 5 ex311.htmExhibit 31.1Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of theSarbanesOxley Act of 2002 and pursuant to Rule 13a14(a) and Rule 15d14 under the Securities Exchange Act of 1934I, Ronen Luzon certify that:1.I have reviewed this Annual Report on Form 10K of My Size, Inc.;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in ExchangeAct Rules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the registrant andhave:a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensurethat material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularlyduring the period in which this report is being prepared;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles;c.Evaluated the effectiveness of the registrant’s disclosure and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluations: andd.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscalquarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the registrant’s ability to record, process, summarize and report financial information; andb.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control overfinancial reporting.Date: April 14, 2023By:/s/ Ronen LuzonRonen LuzonChief Executive Officer(Principal Executive Officer)EX31.2 6 ex312.htmExhibit 31.2Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of theSarbanesOxley Act of 2002 and pursuant to Rule 13a14(a) and Rule 15d14 under the Securities Exchange Act of 1934I, Or Kles, certify that:1I have reviewed this Annual Report on Form 10K of My Size, Inc.;2Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in ExchangeAct Rules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the registrant andhave:a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensurethat material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularlyduring the period in which this report is being prepared;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles;c.Evaluated the effectiveness of the registrant’s disclosure and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluations: andd.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscalquarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the registrant’s ability to record, process, summarize and report financial information; andb.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control overfinancial reporting.Date: April 14, 2023By:/s/ Or KlesOr KlesChief Financial Officer(Principal Financial and Accounting Officer)EX32.1 7 ex321.htmExhibit 32.1CERTIFICATIONS PURSUANT TO SECTION 906 OF THE SARBANESOXLEY ACT OF 2002(18 U.S.C. SECTION 1350)In connection with the Annual Report of My Size, Inc. (the “Company”) on Form 10K for the year ended December 31, 2022 as filed with the Securities andExchange Commission on the date hereof (the “Report”), each of, Ronen Luzon and Or Kles, Chief Executive Officer and Chief Financial Officer of the Company,respectively, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the SarbanesOxley Act of 2002, that:(1) The Company’s Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.Date: April 14, 2023By:/s/ Ronen LuzonRonen LuzonChief Executive Officer(Principal Executive Officer)Date: April 14, 2023By:/s/ Or KlesOr KlesChief Financial Officer(Principal Financial and Accounting Officer)(i) and 2(d)(iv), in no event will the Company be required to net cash settle an exercise of this Warrant.b) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonablysatisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theftor destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), andupon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate oflike tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.c) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or grantedherein shall not be a Trading Day, then, such action may be taken or such right may be exercised on the next succeeding Trading Day.d) Authorized Shares.The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissuedCommon Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under thisWarrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with theduty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all suchreasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicablelaw or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that allWarrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchaserights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid andnonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of anytransfer occurring contemporaneously with such issue).12Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation,amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale ofsecurities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at alltimes in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protectthe rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) notincrease the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in parvalue, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid andnonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations,exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform itsobligations under this Warrant.Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or inthe Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from anypublic regulatory body or bodies having jurisdiction thereof.e) Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined inaccordance with the provisions of the Purchase Agreement.f) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holderdoes not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.g) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as awaiver of such right or otherwise prejudice the Holder’s rights, powers or remedies, notwithstanding the fact that the right to exercise this Warrantterminates on the Termination Date. Without limiting any other provision of this Warrant or the Purchase Agreement, if the Company willfully andknowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holdersuch amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellateproceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedieshereunder.13h) Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be deliveredto the address for the Holder that appears in the Company’s Warrant Register.i) Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase WarrantShares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of anyCommon Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.j) Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled tospecific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any lossincurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specificperformance that a remedy at law would be adequate.k) Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to thebenefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisionsof this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of WarrantShares.l) Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and theHolder.m) Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid underapplicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent ofsuch prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.n) Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of thisWarrant.********************(Signature Page Follows)14IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first aboveindicated.MY SIZE, INC.By:Name:Title:15NOTICE OF EXERCISETO: MY SIZE, INC.(1) The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only ifexercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.(2) Payment shall take the form of (check applicable box):☐in lawful money of the United States; or☐if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exerciseprocedure set forth in subsection 2(c).(3) Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:_______________________________The Warrant Shares shall be delivered to the following DWAC Account Number:____________________________________________________________________________________________________________________________(4) Accredited Investor. The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, asamended.[SIGNATURE OF HOLDER]Name of Investing Entity: _______________________________________________________________________Signature of Authorized Signatory of Investing Entity: _________________________________________________Name of Authorized Signatory: ___________________________________________________________________Title of Authorized Signatory: ____________________________________________________________________Date: _______________________________________________________________________________________EXHIBIT BASSIGNMENT FORM(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to exercise the Warrant to purchase shares.)FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned toName:(Please Print)Address:(Please Print)Phone Number:Email Address:Dated: _______________ __, ______Holder’s Signature:Holder’s Address:EX21.1 3 ex211.htmExhibit 21.1List of Subsidiaries of My Size, Inc.:NameJurisdiction of Incorporation/FormationMy Size Israel 2014 Ltd.IsraelTopspin Medical (Israel) Ltd.IsraelMy Size LLCRussian FederationOrgad International Marketing Ltd.IsraelNaiz Bespoke Technologies, S.LSpainEX23.1 4 ex231.htmExhibit 23.1Consent of Independent Registered Public Accounting FirmWe consent to the incorporation by reference in the registration statements No. 333257353, No. 333251679, No. 333223042, No. 333221199, No. 333216414, and333213727 on Form S3 and registration statements No. 333248237, No. 333227053, No. 333222537, and 333264249 on Form S8 and registration statements No.333261031, No. 333237959, No. 333237858 and 333269467 on Form S1 of our report dated April 14, 2023, with respect to the consolidated financial statements ofMy Size Inc./s/ Somekh ChaikinSomekh ChaikinMember Firm of KPMG InternationalTel Aviv, IsraelApril 14, 2023EX31.1 5 ex311.htmExhibit 31.1Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of theSarbanesOxley Act of 2002 and pursuant to Rule 13a14(a) and Rule 15d14 under the Securities Exchange Act of 1934I, Ronen Luzon certify that:1.I have reviewed this Annual Report on Form 10K of My Size, Inc.;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in ExchangeAct Rules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the registrant andhave:a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensurethat material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularlyduring the period in which this report is being prepared;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles;c.Evaluated the effectiveness of the registrant’s disclosure and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluations: andd.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscalquarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the registrant’s ability to record, process, summarize and report financial information; andb.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control overfinancial reporting.Date: April 14, 2023By:/s/ Ronen LuzonRonen LuzonChief Executive Officer(Principal Executive Officer)EX31.2 6 ex312.htmExhibit 31.2Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of theSarbanesOxley Act of 2002 and pursuant to Rule 13a14(a) and Rule 15d14 under the Securities Exchange Act of 1934I, Or Kles, certify that:1I have reviewed this Annual Report on Form 10K of My Size, Inc.;2Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in ExchangeAct Rules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the registrant andhave:a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensurethat material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularlyduring the period in which this report is being prepared;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles;c.Evaluated the effectiveness of the registrant’s disclosure and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluations: andd.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscalquarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the registrant’s ability to record, process, summarize and report financial information; andb.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control overfinancial reporting.Date: April 14, 2023By:/s/ Or KlesOr KlesChief Financial Officer(Principal Financial and Accounting Officer)EX32.1 7 ex321.htmExhibit 32.1CERTIFICATIONS PURSUANT TO SECTION 906 OF THE SARBANESOXLEY ACT OF 2002(18 U.S.C. SECTION 1350)In connection with the Annual Report of My Size, Inc. (the “Company”) on Form 10K for the year ended December 31, 2022 as filed with the Securities andExchange Commission on the date hereof (the “Report”), each of, Ronen Luzon and Or Kles, Chief Executive Officer and Chief Financial Officer of the Company,respectively, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the SarbanesOxley Act of 2002, that:(1) The Company’s Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.Date: April 14, 2023By:/s/ Ronen LuzonRonen LuzonChief Executive Officer(Principal Executive Officer)Date: April 14, 2023By:/s/ Or KlesOr KlesChief Financial Officer(Principal Financial and Accounting Officer)

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